This is a guest contribution to Finance TnT by Carlos Ferrer, Vice President for Financial Industry and Head of Unisys Enterprise Solutions for Latin America. The views expressed are those of the author and not of Finance TnT.
The arrival of new digital business models has ruptured the market. Organizations that do not adapt to this new reality will miss out on opportunities to evolve their operations and gain market share. They will be left behind in a society in which the consumer is becoming more and more demanding.
But what can be done to avoid falling behind?
Digital transformation — just like a good meal — does not come about in the blink of an eye. It is planned out thoughtfully, divided into stages of preparation, and predicated upon the right ingredients. The quality of the outcome will depend on what goes into the process, and there are many different combinations that will lead to a superb result.
There is no singular solution for companies to be transformed into what today’s market demands. Every situation and company must be analyzed individually, taking into account its surroundings, tools, capacities, and needs. Different markets behave in different ways. A model designed for a transportation company cannot be applied in a security firm. What leads to good results for one company may be counterproductive for another and result in a wasted investment.
At its core, digital disruption is the moment when innovative strategies, platforms, and initiatives — like what is happening with fintech today — transform the market and apply pressure on other industry companies that have not reinvented themselves. The startups force stagnant companies to question their operations in order to better fulfill the customer’s changing expectations. The real challenge here is to adapt, even little by little, especially when the company’s structure does not make it easy.
This challenge is not just difficult — it is potentially devastating for enterprises that are caught off guard. And many of them are. A Global Center for Digital Business Transformation (DBT) study, for example, surveyed 941 business leaders from 12 industries. While the results showed that digital disruption will take half of the companies out of the market over the next five years, 45% of the companies said they do not see disruption as something to worry about. Enterprises are ignoring the digital reality — and in the process may be watching their businesses burn out little by little.
While the threat is very real and should trouble any businesspeople caught with their heads in the sand, these disruptive tendencies represent, in fact, an opportunity in the market. Ultimately, the emergence of digital disruptors illustrates the presence of a gap in the market where a more specialized service can be offered. But this innovation requires evolving into a 2.0 enterprise.
According to IDC Latin America, one out of every three CEOs of the 3,000 biggest companies in Latin America will place digital transformation as the basis of corporate strategy by 2017. This demonstrates the thinking of the present-day businessperson and the opportunities that businesses have to innovate and stay afloat in a digitalized market.
Upon implementing 2.0 technologies, companies start to modify, little by little. Each ingredient that is added brings them one step closer to offering a complete digitalized dish. The important factor here is to create your own recipe, to innovate with the ingredients and the ways of preparation, and to look for the flavors that go best together and help create the desired result.
You must be very careful how you cook up your 2.0 enterprise because, as they say, bread gets burned at the oven’s door. To offer a differentiated service, you have to innovate from the internal structure out and change the company’s mindset and way of working so that it can adapt to the present-day world. It is just before offering the product or solution that the company should evaluate whether or not it is prepared for that evolution. If it is not, it could be cooking up its own downfall.
An optimal digital transformation is something best achieved with patience, cooking little by little, and down-to-earth goals. You need objectives that can be measured in the short term and allow for flexibility by the company and the client. No, it is not easy to be in tune with everything that is going on in the modern world. But it is necessary to be evolving digitally if you want to keep yourself active and strong in the market.
The right ingredients exist. It’s up to the businesspeople to choose which ones to use when adapting their strategy. And the recipe you select for your transformation can be the difference between sitting down for a great meal to celebrate success or watching another company eat your lunch.