Organisations must first understand the landscape in which they operate and understand what drives them to gain a competitive advantage and achieve financial success. Amitava Sengupta, Executive Vice President at HCL Technologies spoke to us about why it’s important for enterprises to adopt an integrated business and technology strategy.
As the world slowly moves towards a new normal, businesses have over a year’s worth of knowledge and lessons learned to digest in their strategy rooms. Staying afloat has become a recipe for preparing to fail. How should senior management teams wade through this new reality and what are the secrets of success that will make or break their businesses?
Understanding today’s business landscape
While some established businesses struggled to reopen after the first wave of lockdowns, many new entrants were disrupting the competitive landscape by leveraging technology to drive innovation and capitalise on new, evolving customer behaviours. Across industries, organisations also found themselves facing shock within the supply chain. HCL’s Digital Acceleration Report 2021 revealed that over 69% of businesses were negatively affected by supply chain disruptions. While technology helped reboot companies in the early stages, managing digital business with excellence didn’t come easily to most – as many were discovering the constraints that regulated digital business for the first time.
Clearly, we live in a completely different world today, where holding the position of leadership is becoming increasingly difficult. A McKinsey survey indicates that the middle 80% of firms make near-zero profits on an aggregate, while the lowest 10% of firms destroy as much value as the top 10% create. Doing business in the digital era is not an easy job – and the cost of opportunity is higher than ever before.
Understanding profitability in a constrained environment
While most companies are looking to reduce their operational spending after implementing their digital agendas, top performers aren’t only profitable but also innovating rapidly to deliver new value through deeper investments into digital. Last year also witnessed a shift in customers switching to companies excelling at digital delivery. At the same time, the top performers are also quick learners, who can gauge the life expectancy of existing business models – which has fallen from 15 years to five years – and proactively build upon them and implement new ones. It takes more than time and cost-competitiveness to stay profitable.
The secrets of the outperformers
The three key pillars of outperforming in the next decade include:
- From planning to adaptability: Learning at the pace of change and adapting rapidly will be critical.
- A fluid perception of the world: New technologies are blurring the boundaries between the physical and the digital worlds. Bringing this fluidity to business products and services is the key to both scalability and better customer centricity while bringing down costs in time and money.
- Resilience empowered by innovation: Maintaining availability and uptime will be crucial to keeping the doors open. Yet, innovation will be crucial for retaining traffic – both literally and figuratively, in the long run. This calls for a highly efficient operating model that will free up funds for experimentation and innovation.
Technology is at the heart of the next-generation business model
Successful organisations are ultimately driven by profitable business models. These successful models will be supported by nimble, yet powerful technologies – which will empower employees and allow for innovation on the go. In fact, delivering digitally at scale requires a solid technological core, which can be constantly reinvented by high ROI technologies, like robotic process automation (RPA) and Artificial Intelligence (AI). Moreover, the CIOs approach to transformation must shift from a linear, one-time method to an iterative, constant one – which is driven by modularity, scalability and focused on experience. However, making this leap will require a new technological focus in the boardroom.
Developing an integrated technology and business strategy
Digital excellence is no doubt one of the deciding factors of success today. What’s needed is for technology to be seamlessly merged into the overall business strategy. Whether it’s a change in the business model, a process improvement, or a question of talent – a strategic approach to decision making will be inevitably tied to digital technologies. Here are three easy ways in which companies can integrate technology into their business strategy and set themselves up for digital success:
- Accelerate digital change: As the lifespan of business models decreases, achieving rapid digital change is key to maintaining value propositions. The response to the pandemic has demonstrated that achieving new digital shifts such as remote work and collaboration was possible within a timeframe 40 times shorter than previously thought. Technological partnerships form an essential step in achieving targeted, accelerated and profitable transformations.
- Conceive a bionic company: The success of transformative technologies – like AI-assisted upselling or cross-selling, automated ticket generation and decision-making support – lies in a concurrent and parallel transformation of the workforce. As a result, digitally reinvented processes will succeed only once those at the helm have reinvented themselves. Therefore, business reinvention will be tied to an informed and calculated approach to technologically aligned workforce reinvention.
- Focus on the core enablers: Digital excellence will be impossible without a solid technological core underpinning advanced technologies. As a result, time and cost-conscious adoption of cloud and SaaS solutions will be critical to ensuring success. Strategic directives like cost-optimisation or process-reinvention will inevitably include a technological view of the business.
A new digital future
While digital excellence can seem a daunting and unachievable target for businesses living in the legacy world, a leap into the future will be impossible without integrating technology into the overall business strategy. As the performance gap between leaders and laggards widens, making this leap will only become even harder. The urgency is real – because the first-mover advantage is largely absent for core transformation initiatives. However, those who are committing to integrated technology and business strategy will ultimately be the most successful, no matter what their industry. In addition, digital excellence and leadership will thereafter become a matter of time and commitment to tireless innovation.