Digital disruption is changing the way business is done across the world but when should businesses get on the wave and will being an early adapter really help?
Antonio Diaz Andrade, a Senior Lecturer in Business Information Systems at AUT University, thinks so.
“Digital is everywhere now, it’s pervasive. You see businesses of every kind in New Zealand using digital technology,” he explains.
“Take a corner dairy shop for example. I don’t think they will do online transactions because of the nature of the business, but I’m sure in the back end they are using technology to manage relationships with suppliers, keep their inventories, and do their accounting. So even though they do not sell online, the technology is there, supporting their operations.”
Adapting your business to a digital era can be daunting, but studies show that if you don’t keep up, you inevitably fall behind.
“It’s not just a matter of investing in the latest technology. It could be simple technology. The importance is in recognising the value of technology,” Diaz Andrade said.
This is a statement that appears to be backed by the PwC 2014 Annual Digital IQ Survey, which lists investing in IT as just one of five interdependent digital behaviours that make leaders stand out from the stragglers:
- CEO actively championing digital
- Strong CIO-CMO relationship
- Outside-in approach to digital innovation (i.e., looking for innovation outside of the company)
- Significant new IT platform investments
- Viewing digital as an enterprise capability (i.e., stronger skills in crucial digital areas like enterprise architecture and user experience design)
PwC Partner and digital change specialist Paul Brabin concluded that “Simply put, you can’t afford to underestimate digital if you want to stay in business today."
"But how we use technology is everything. The question business leaders need to ask themselves is how can they use technology to boost company performance, improve products and services, and disrupt their business models and the market before competitors? And even more importantly, use technology well.”
One Kiwi company doing just that, Diaz Andrade points out, is clothing specialist Icebreaker.
“Icebreaker has been very creative in attracting the conscientious consumer using their technology, especially as they were facing the challenge of counterfeit products.
“They created a unique identifier, called a ‘Baacode’, on each garment so you could trace the origin of the item back to the farm it came from. Nothing extraordinary, just common sense using basic technology, but a great idea and a reason why they have been successful in differentiating their product.”
Not everyone knows the ins and outs of getting their business digital, and Diaz Andrade recommends a lot of analysis is done to determine the best way to proceed.
“We teach our students that information technology does not just happen. Before investing in it, businesses need to have a clear understanding of what they want to achieve. I would say that being realistic about what can be achieved and what you want to do with information technology is key.”
One of the more surprising findings from the PwC survey is that only 20% of businesses rated themselves as having an “excellent” digital IQ. This indicates there is still a space where an innovative and fast moving company, like Icebreaker, can stand out from their competitors.