Are you prepared for digital upheaval in your sector? Or could you fall victim to Digital Darwinism, when technology advances faster than your organization can adapt? Businesses that don’t adjust to the growing networked economy risk becoming irrelevant in their industry.
According to the SAP eBook, The Digital Economy: Reinventing the Business World, many companies must completely redesign their business models and processes in order to keep up with their customers, employees, suppliers, and competitors in the rapidly expanding digital economy.
This business reinvention usually involves digitalization – also called digital transformation – which is the process of becoming a digital business. Digitalization offers many opportunities, but it also creates perpetual disruption in the business landscape and challenges companies to constantly adjust and update their business models simply to remain competitive.
How Can You Keep Pace With the Digital Economy?
Early adopters are already out of the gate causing disruption in multiple industries, so how can traditional companies keep up? The SAP eBook and Capgemini’s article, fittest, recommend that traditional companies take the following action to survive in the digital age:
- Proactively identify customer pain points. How do you react to your customers’ pain points? The answer could be a telling indicator of your company’s adaptability. Disruptive startups are generally good at entering a market by finding unique ways to resolve customer pain points, while some existing companies simply try to downplay their importance. How does your company react? You could be opening an opportunity for a disruptor in your industry.
- Question your business model and the status quo. Sticking to a decades-old “tried-and-true” business model may be short-sighted in the digital era. Something that’s a competitive advantage today could be a burden tomorrow. Be willing to change direction.
- Reorganize and allocate resources around opportunities. In the digital economy, everything crosses boundaries. Traditional companies are often structured around business units or market segments, which can limit their ability to respond to new opportunities that don’t fall within an existing unit. That could leave the door open for an innovative competitor. Be flexible with your business model.
- Adopt an open innovation model. An open innovation model involves engaging with the startup mindset rather than fearing it. Learn to spot the early warnings signs of disruption to avoid being surprised. Take a proactive role with innovation rather than being reactive.
Defining Your Digital Strategy
You can begin a more proactive approach by asking some candid questions about your digital strategy, such as:
- What are our digital objectives?
- How can we innovate to become more agile?
- Can we still leverage our existing asset base?
- What areas should we focus on for business innovation?
Many companies use innovation labs or startup accelerators to explore new endeavors in their industry. If your company is not taking steps to move ahead with innovation in the digital economy, you can be sure that other competitors are. Do you want to be the one left behind?
Of course you don’t. Please share with us the steps you are taking or the challenges you face for forward progress in the digital economy. We may be able to help.