Marketplaces and industries continuously adapt. The emergence of digital revolutions has changed the way that many companies do business. Despite this, many companies struggle to carry out meaningful advances to change their business model into something that is more practical for the digital landscape of today’s market.
The digital hurdle is the basis of nightmares for many executives. Not only does a business model that doesn’t involve a digital strategy suffer from the existential threat of a digital upstart decimating their industry (such as how Uber destroyed the cab industry), but it runs the risk of having their profit margins slowly dissolve over time. Here are the major fears that come with a fear of digitization
Slower Operations Leads to Being Less Competitive
Most business leaders in the United States believe that failing to properly digitize their business will cause them to be less competitive, and eventually fall behind. The reason for this is simple: a digital company can move faster than one that is digitally inept. As a business grows, the complexity required to run it also begins to expand, especially in the form of data. As new progressions in industry technology begin to exist in the digital realm, companies that don’t digitize will find that they are horribly unfit to take advantage of these benefits.
Customers Change Their Expectations
Digitization has created a new set of customer expectations. Updating your business to a digital strategy means that you need to address the customer experience with your company. Today, consumers have strict expectations about how they interact with businesses. They want to be able to address their needs and desires through the convenience of their smartphones. Any business that is unable to evolve their current model quickly and efficiently will find that they are unfit to progress with their competition.
Digitization Requires a Total Identity Change
One major aspect that makes so many business leaders afraid to take the leap into digitization is that it is a much more rigorous process than many want to deal with until profits begin to drop. However, at that point, a company will already have lost its competitive edge and will be playing catch-up. What makes this process so challenging is that it goes far beyond simply adding a new department to handle digital needs, or simply buying new technology for your company.
Digitization, to be truly effective and meaningful, must be implemented at the core of a business’ strategy. Things like ERP (enterprise resource planning software) and WMS (warehouse management systems) help businesses optimize their entire business around a digital structure that can improve their financial planning, financial reporting, inventory control, and nearly every aspect of their operations.