by Roger Trapp
Leaders Need To Embrace The Digital Revolution. For years now, business leaders have been told that they are living in the “age of disruption”. The rate of innovation means that no business or sector is immune from the threat of either entirely new entrants or existing businesses moving into new areas.
Of course, much of this is a result of the rapid growth of the internet, which has transformed how business is conducted. The ongoing challenges in retail illustrate this clearly. Department stores and supermarket chains have responded to the growth of purely online retailers, such as Amazon, by developing their own internet services and then linking them to their traditional “bricks and mortar” operations through the “click and collect” concept that is becoming a central part of the UK shopping experience. The problem has been that, in seeking to win customers through such means as free delivery, retailers are not always making as much money from online sales as they would like. Hence, the widely-reported move earlier this year by John Lewis, the venerable department store and grocery chain operator that has led the way in integrating traditional, online and mobile shopping, to introduce charges for click and collect. Managing director Andy Street argued that the change was necessary to make the service “sustainable”.
Another sector that is changing rapidly as a result of the internet is banking. The provisional findings (ahead of a full report due next year) of the investigation by the UK’s Competition and Markets Authority into current account and business banking may not have gone as far as many would have liked. But there is plenty of evidence that change is afoot anyway. Not only are the high-street banks constantly improving their online offerings, but new entrants are starting to nibble away at activities that have traditionally been lucrative for the existing players. For example, TransferWise, the London-based start-up, has grown rapidly through making a service increasingly in demand for individuals in a globalised economy (namely transferring money between countries) easier and cheaper than ever before. Today, a white paper written for the World Economic Forum’s Global Agenda Council on the Future of Finance & Capital by MBA students from Said Business School, Oxford says that financial technology companies are leading the way in disruptive innovation in financial services, helping to bridge a $2 trillion funding gap for millions of small and medium-sized enterprises seeking credit to expand their businesses. According to the paper, fintech entrepreneurs are disrupting SME financing by offering such tailored services to SMEs as invoice and supply chain financing, equity crowd funding and SME-to-SME lending.
Given all this, it would be easy to assume that the future lies entirely with technology. But, while it is obviously impossible to ignore the importance of the internet and related activities, it is equally clear that being in this field is no guarantee of success or indeed survival. The rapid rises and falls of the likes of Nokia and BlackBerry demonstrate that in technology life cycles are liable to be much shorter than in other areas of business. This is why new product launches from such companies as Apple and Samsung are so eagerly awaited. Any hint that a company is slipping behind its competitors is seized upon by commentators and can quickly escalate into serious trouble. This is the context in which the social media site Twitter finds itself after announcing redundancies. Analysts and others will be keeping a close eye on a company that was once a darling of the internet but is now being described as the first in its field to go through a restructuring.
Read More Here: https://www.forbes.com/sites/rogertrapp/2015/10/26/leaders-need-to-embrace-the-digital-revolution-but-be-wary-of-technologys-limitations/#4c0ac872568d