Digital technologies have been upending industry after industry, spawning big opportunities for long-established and new businesses alike. Over the last 10 years, a growing number of inventive companies have harnessed a 'perfect storm' of technologies — artificial intelligence, the Internet of Things, mobile devices, big data and analytics, and more – and vaulted ahead with superior business models and business processes. They've shown how many truths about customer behavior, competitive business models and competitive advantage that were previously held to be sacrosanct now no longer hold water.
Case in point: the automotive industry. At the beginning of this year, car giant GM invested US$500 million in ride-sharing start-up Lyft.Outfitted with self-driving technology, GM views Lyft as a service that will help usher in the concept of cars on demand – i.e., consumers who no longer have to buy or lease cars to get from Point A to Point B. Rather than feeling threatened by a transport revolution, the automobile maker is embracing a technology that may upend the notion that cars are made to be bought.
In the automotive and other industries that shift from selling their products to renting them on demand, companies will have to take a big leap: from perfecting their products to perfecting the experience customers have with those products.
This shift, which is beginning to occur almost every industry – from asset heavy to asset light – will force companies to make substantial changes. Specifically, they will have to become smarter, faster, and lighter.
What do we mean? And how can your business achieve this?
Companies are using Artificial Intelligence (AI) to turn ideas that for decades existed in the
realm of science fiction into reality. AI is helping them analyze huge amounts of digital data about the performance of their products and business processes. AI is also enabling companies to generate big insights on customer behavior: what makes them buy and remain loyal.
The expectations customers have about the companies they do business with – what they need to offer, and how they need to provide it — are escalating. In turn, that has prompted leading companies to rethink their customer journeys – the paths that customers take in purchasing their offerings. The digital nervous system at the heart of these companies is enterprise software – a foundational platform that provides the data they need to have world-class business processes for marketing, selling, serving customers, manufacturing and distribution.
Companies need to respond faster to threats from unexpected quarters, as well as integrate acquisitions quickly, which is becoming a fast route to acquiring new technology and talent.
This is about using cloud computing, automation, and Software-as-a-Service (SaaS) to reduce IT and business process costs. In doing so, companies can shift capital expenditures to operating expenditures, and free up resources for more creative and innovative tasks.
Of course, the transition to the cloud is not easy; success is not guaranteed. Your organization needs to let go of outdated processes, systems architectures, applications, and hardware that's weighing it down.
By adopting new business models, business processes and digital technologies, companies are becoming smarter, faster, and lighter. You can read more about this shift in the latest edition of our consulting journal Perspectives.