While many economists argue about the recovery the economy will have to post the pandemic, we are missing a historic moment in front of us – the post-pandemic economy has dramatically digitalized. The reality is now that, no matter the shape of the recovery, companies that do not embrace the digital transformation will be left behind and will indeed go out of business.
To start with, let us take a look at gyms. They currently host live fitness sessions for their members via their applications or social media platforms (Something earlier that would have been either cost-ineffective or close to impossible for customers to accept as a service). If this were not the case, the lack of imagination of these industries leaders would have been the reason that stopped them from going digital or taking one aspect of their business online. Banking has wholly gone online by internet banking and phone-banking applications. Hospitals have started incorporating online and app-based consultations more and more. Grocery and retail industries that have taken their businesses online have seen a growth of 100% and 40%, respectively. The list of transformations is endless.
Let’s look at Blockbuster, one of the most glaring examples of businesses that have resisted going digital, who have now gone bust. Even as their empire crumbled, they had an opportunity; Reed Hastings, CEO of Netflix, approached former Blockbuster CEO John Antioco in 2000 and asked him to purchase Netflix for $50 million. The problem was that John couldn’t visualize a world where people would order DVDs online (at that time, Netflix was a DVD mailing service where customers could order their choices online). He thought that the market was too niche and passed on the opportunity. Even as the data was screaming into his ear, he turned the other way. Their unwillingness to adopt digital practices ultimately led to their downfall. Today, Blockbuster is a necessary study for all CXO’s across the globe about what happens if you do not leap as an economy transforms.
Businesses’ usual misconception is that only B2C industries need to embrace digital innovations. We need to realize that going digital is not only to service consumer demand but also to enable remote working opportunities and cut down on overheads. Data now can be seamlessly collected and shared amongst the team, partners, vendors, customers through cloud platforms, and everything as a service. All of this at 1/10th the cost of doing business the traditional way. Manufacturing industries, usually represented by words such as slow-to-change and traditional, can automate and digitize their existing systems through IoT, AI, ML, etc. It has become possible to synergize digital platforms with engineering marvel, industry experience, and IPs. All it takes is a leap of confidence.
In our experience, the most common reason businesses have or are hesitant to adopt digital technologies or practices is usually because of the lack of familiarity with its concept. What they do not understand is that the cost of going out of business is unquestionably higher than upgrading your knowledge base, current processes, marketing efforts, and thought process.
It is also essential to understand that hiring and retaining valuable resources at your organization will become challenging. The largest demographic of the working population is now millennials and soon will be populated by Gen Z. Both these generations have grown up in a fully digitalized world where digital innovation is an expectation rather than a thought. If given a choice, they would choose to work for companies that embrace digital practices than those that do not. Take the case of UBER vs a traditional car service. As these car services fail to take the digital approach, they continue to lose staff in the long run. While these services are still available, the industry looks uncertain and unstable.
A clear roadmap will need to be drafted before a decision is taken. Digital transformation will need to start with a well-articulated plan that lays out the idea substantially. It would require the organization’s leaders to entirely reimagine business processes and a protocol to create digital services and product propositions. Digital transformation efforts need not be only for long-term business sustainability. It can be for short-term benefit as well. Short-term digital practices with tangible and quantifiable outcomes can be bolstered and adopted across the organization, guaranteeing long-term business sustainability.
Most importantly, it is vital to shift the organization culturally before actual process integration happens digitally. All of this can lead to compounded growth, just as Netflix is now witnessing. The easiest way is to look at what competitors are doing and only adopt the practices that would be most beneficial to your business. Ultimately, the businesses that adopt digital as part of their ongoing business activities are the ones reaping the rewards. In 2021, it is no longer an option to go digital; it is a necessity.