Performance 6.2: roadmap for a digital future
“Modern businesses must account for digital disruption at every stage of their value chains and modify their strategic planning accordingly.”
“Digital disruption” is already a feature of the business world, presenting great opportunities and grave risks in equal measure. This article explores the digital trends that are having the biggest impact on business and argues that, for those companies that are forward-looking, the opportunities greatly outweigh the risks.
According to a survey conducted by Oxford Economics in 2011, the four areas of digital change that will have the greatest impact on businesses are:
- Cloud computing - Cloud has completely changed the way in which companies access computing facilities. Businesses no longer need to buy expensive software licenses; instead, they are able to use programs\ on a “pay as you go” basis, accessing them via the cloud. This can result in major savings and increased flexibility for businesses. Data storage in the cloud is also widely available, meaning that data can be used whenever it is needed.
- Data - The collection, storage and analysis of huge volumes of data is crucial to the operation of many parts of the modern business, and firms have access to more data than might have seemed possible only a few years ago.
- Social media - Social media has changed the way people interact with each other\ in the 21st century. From communicating directly with customers to gathering targeted, accurate data, social media offers businesses many opportunities. However, the rate of change in this sector, and its unpredictable nature, mean that it can be challenging for firms to keep abreast of the latest trends. The market for social media firms clearly demonstrates this unpredictability: many have been valued very highly indeed – even if, in their current form, they do not take much revenue. For instance, in February 2014, Facebook announced that it would be buying smartphone messaging company Whatsapp for US$19b.
- Mobile technology - The spread of the mobile has enabled some people in Africa, the Middle East and elsewhere to access banking facilities for the first time. For instance, M-Pesa, an African mobilemoney business, has more than 17 million customers in Kenya alone – from a population of around 40 million. And as smartphones become more affordable over the next few years, their use in emerging nations will expand. So the opportunities for businesses to access new data and new markets in the emerging world through mobile technology are almost endless.