Companies need to do better
According to an article on the Mckinsey.com website, numerous traditional operating models are simply incompatible with the digital age.
1st pitfall: Wrong approach
Some leaders think that digital is only another stage of IT; in other words, it refers to some sort of enhanced version of IT. Or they assume it is mostly about marketing and selling online.
However, digital is primarily an instant and flawless way of connecting people and devices, regardless of their location. In 2025, 20 billion devices will be connected. When all the data produced have been obtained, they can be used for very strong analytics. And that will lead to automated processes and decisions.
2nd pitfall: Customers are the winners
With digitisation, bold movers are now attacking incumbents very quickly. That might result in a sharp decline for currently stable companies. Digital also renders products and services obsolete: there are cheaper forms of transport than traditional taxi, we no longer buy GPS …
So companies are losing value, while customers are gaining it. Companies must be first movers, or they at least need to catch up as quickly as possible; otherwise decline will be inevitable.
Digitisation enables customers to buy only what they need – products are being unbundled. Furthermore, many intermediaries are disappearing from the picture. Since marginal costs are very low, prices are being compressed and value shifted to giant players.
-jk-