As featured in the Dec 2014 edition of Acuity Magazine, the monthly publication of CAANZ. http://www.charteredaccountantsanz.com/en/Site-Content/Innovative-Thinking/Acuity/December-2014/Darwinism-and-digital-disruption.aspx#.VH6MPDGUeqI
How to leverage opportunities in the new age.
Digital disruption = big opportunities.
Any business owner who denies, debates or argues with this statement is, I surmise, probably the kind of person who thought digital cameras would be a passing fad.
No longer just a theory or the subject matter of white papers, digital disruption is now the norm and, in reality, is an everyday – if not essential – part of running a business.
Why so? Well, my belief is that it’s because technology brings about change and this influences consumer behaviour so rapidly that businesses need to constantly disrupt the way they do what they do to stay ahead of the game.
The rapid rise and uptake of technology sees most people comfortable with it now, meaning that the way people transact has changed forever; this not only changes the way businesses operate but also changes what new technology is developed.
And herein lies the opportunity. Businesses that are able to respond to the changes in consumer behaviour will gain a competitive advantage as they deliver what consumers want faster than their competitors.
As Darwinian theory suggests, it is not the strongest who survives, not the most intelligent, but the one most responsive to change.
The key trends emerging that businesses can leverage
- consumers want to do business with you anywhere, anytime and on any device
- barriers to moving into new and/or overseas markets to sell products and/or services are reducing
- significant reductions in the cost of enterprise-grade software applications are occurring
- big data for all sizes of business is now accessible.
Generally speaking, the opportunities arising from these trends are internal and external. Internal opportunities are the ability to drive efficiency into your operations, to be able to scale with little capital expenditure and the ability to have real time data with which to make immediate operating decisions.
Externally, it is the ability move into new markets, reduce your marketing spend, capture new customers and to be able to transact 24/7. You can begin to connect with customers via a digital relationship.
Overall, to capitalise on digital disruption, a business must change the way it operates in order to be successful. To achieve both immediate and long-term results, the digital focus needs to be embedded into the culture of the business. While there may be key positions in the organisation that focus on this area, everyone needs to be engaged with operating in a digital environment.
So, what are some of the ways a business can leverage the trends and opportunities?
Ensure that your website is designed properly. It needs to be responsive so that it can be viewed on any device. Ease of use and easy navigation are paramount. Think about the new iPhone 6. For many people this may become their single way of accessing the internet. Your website needs to work on these devices.
The content, layout and information on your website must engage consumers to transact with you without the need for help. It must be a smooth user experience. How often have you moved to the next website in your search results when the first one hasn’t given you the experience you want? If you wouldn’t or can’t do business with your own website, why would anyone else?
Market your business in a cost efficient and effective way through the use of social media, search engine optimisation and smart tools like online newsletters. You do not need to spend excessive amounts on marketing to achieve a desired result and with many applications now also measuring the direct success of a campaign (ie tracking internet clicks) you can switch between methods easily depending on their effectiveness.
Look for new markets either in a new geographical location or possibly in a vertical market. For many service providers, a combination of high definition video conferencing tools and online real-time applications means they can deliver their consulting services to clients around the world “face to face”. Doing business is now a global opportunity and businesses will seek out the best providers regardless of their physical location.
When looking at vertical markets, think about products and/or services which possibly complement your current offerings. As an example many accountants and bookkeepers are now moving into cloud technology applications consulting, implementation and training.
Use online applications to run the back end of your business. Accounting, CRM, payroll, reporting and industry specific programs are available that when connected via the internet provide an enterprise-grade solution at a fraction of the cost, both initially and ongoing.
Embrace automation in your business. Look for any process that can be automated to drive efficiency. Then redeploy resources previously allocated to manual tasks into other areas such as sales or business development.
Constantly review the real-time data being captured by your online applications.
Use this big data for your business to make swift decisions to capitalise on any opportunities. Use experts (cloud integrators) to assist with setting up your big data systems to ensure that the information captured is correct.
Entrepreneur Ruslan Kogan stated in a recent article: “We interrogate our business model daily, which is why it’s completely different from a year ago. We view retail evolution as similar to Charles Darwin’s description of evolution.”
This use of big data is a key reason why Kogan has been so successful. In fact, he has embraced the true ethos of digital innovation – the process whereby applying a different set of values, modes and technologies that ultimately (and often unexpectedly) substantially impacts or overtakes an existing market.
As digital strategies and the customer experience are so critical to business success you should consider hiring a chief digital officer (CDO) or customer experience officer (CXO) to make sure that your digital and customer strategies are well thought out, properly implemented and regularly fine tuned. Or if your business isn’t large enough to accommodate a full-time role, either assign an existing employee to the role or outsource the role to experts (an external agency).
Foxtel is a prime example of a large business responding to digital disruption and seeing an opportunity to capture a new market. Traditionally only delivered to your TV via the Foxtel Box and with a lock-in contract (typically 12-24 months) at a premium price, it now offers Foxtel Play, a month-by-month internet-based streaming version of Foxtel, which you can view on multiple devices anywhere, anytime.
It has also reduced prices significantly in order to continue to remain competitive with traditional service delivery to TVs.
The Jack Welsh quote “if the rate of change inside an institution is less than the rate of change outside, the end is in sight” is an appropriate point to finish on. The greatest risk of digital disruption is the risk of doing nothing at all. Don’t make that mistake.