The crisis in Greece has all of Europe holding its breath right now. Although—or perhaps because—no one can predict the economic and social consequences of a possible Grexit, many people fear exiting the eurozone. However, there is an entirely different topic from an economic perspective that holds great opportunities for us, but could have a huge negative impact if we neglect it: the digitization of our economy and society.
Because the wave rolling toward us is massive and only leaves us with two possibilities: ride it or drown. Digital technologies have crystallized into the most important driver of growth and innovation, offering solutions for many major problems of our time such as carbon footprint reduction, smart energy grids, smart mobility concepts and innovative solutions in the healthcare sector.
The flip side of the coin: New digital companies have the potential to edge out established brands. But anyone who thinks that only outdated products are being replaced through digitization is very much mistaken, because digital offerings deliver significantly better functionalities and services as well as enable a comprehensive customer centricity unlike anything ever seen before. So the crucial question is this: Will the new digital players drive out classic firms or will those traditional companies manage the transformation in time?
The digital paradigm shift has long since passed the point of no return to the analog world. Anyone who doesn’t take this path is risking their future. So it is high time that digitization be placed at the very top of the business and political agenda in Germany and Europe!
The good news is that becoming a digital enterprise doesn’t take a miracle. What sets the new digital players apart can be summed up in three points: global entrepreneurial thinking, the right software expertise and real-time operational business transparency.
The first of these is easier to implement than ever before, thanks to the internet. For example, Flickr stored and marketed more photos in its 10-year history with only 50 employees than Kodak ever did in more than 100 years with 140,000 employees. While the former top camera equipment company failed, Flickr is thriving today.
Second, digital companies use the right software expertise by building their business models on an agile IT platform. Traditional application software as a silo solution that offers little to no insight into data is no basis for building a digital enterprise. It simply does not allow global business processes to be mapped, let alone offer new services for better customer centricity. Standard software has served its purpose as the name reveals: It only sets standards. Offering innovation is not its aim. Digital companies are built on fast, adaptable platforms that ensure flexibility. Unfortunately, many companies have lost the necessary software expertise in recent decades due to outsourcing as well as purchasing standard applications.
The third aspect is operational business transparency in real time. This includes capabilities for gathering and evaluating 360° customer feedback in the sense of total customer centricity. These are guiding principles that new digital companies follow for orientation. This is the only way they can keep their finger on society’s pulse and find the right answers to constantly changing customer wants and needs.
A glance at the list of the world’s most successful companies corroborates this strategy. Four of the ten most innovative brands in the world are digital companies. And market giants like Apple, Google, Amazon and Paypal have managed what every traditional company needs to achieve: They are fully digitized, customer centric and adaptable.
So it’s high time to take advantage of new potential through digitization, because everything that can be digitized will be digitized, and everything that can be networked will be networked. Digitization opens up enormous market opportunities for every company—not taking advantage of them will mean the end of those companies over the long term.