The concept of “digital” is no longer just a set of sales and marketing channels, or a way of recording interactions with customers. It’s fundamental to your value proposition. It’s how you engage with customers—so said Brian Walker, Chief Strategy Office for SAP Hybris.
“We need to embed digital into the very fabric of the services that we design, build and deliver,” Walker said, during the second leg of SAP Hybris LIVE: Digital Summit 2017 from Munich. “Investing in technology is no longer a simple cost to business – it’s vital to set you apart from the competition.”
It’s time for brands to embed digital into the very products that they sell. Companies are thinking about how to design experiences that engage the customer from the moment they wake up in the morning to the minute their heads hit the pillow, and every moment in between.
And let’s not forget about disruptive new business models. The subscription model is taking hold, from shoes to razor blades. Our relationship with distribution channels and manufacturers will change, as we start to expect that the tools we use to get through life – coffee makers, refrigerators, cars – take care of themselves so we don’t have to.
Products will become services. BMW and Ford don’t think of themselves as car makers – they are providers of transport services. Some people feel owning a car is antiquated – instead, they just want to have access to a car through services like Lyft or Uber.
“Software will be at the heart of this digital transformation,” Walker said.
As disruption starts to occur, businesses in those industries will see an average drop of 11 percent of topline revenue and 4 percent in profitability. Companies that aggressively embrace disruption will emerge as the winners.
Those that wait will be disrupted. It’s an existential threat to business.
A culture change is required. Digital evangelists within companies are attempting convince management of benefits of disruption and the fundamental change that needs to happen within a business.
The challenges are significant. Companies will require agility and will need to be low-risk and low-cost—and they will need to fail and adapt quickly. Not every innovation will work, because it is difficult to predict how the end customer will react.
At the same time, Walker said, brands need to launch quickly and have the courage to pull innovations out of the marketplace when they don’t work. Businesses will need the ability to run at multiple speeds and switch gears quickly. From ERP to simplifying the front office to services in the cloud to manage your business interactions with your customers, the time to act is now.
For more on how digital disruption is affecting businesses of all types, see Rethink, Reimagine, And Reset The Mindset—And Skillset—For The Digital Age.