Traditional enterprises, while presently successful by today's standards, are scrambling to make sense of business digitisation.
In order to stay relevant in the digital future, many are attempting to create new digital business models which will eventually cannibalise their traditional business, rather than capitulating to new disruptive digital start-ups.
This is according to Wayne Houghton, director of Growth Implementation Solutions at Frost & Sullivan Africa.
He explains a holistic digital transformation strategy, which considers the digital workforce along with the business model, process and customer channel dimensions, will be imperative for organisations wishing to remain relevant in the next 10 years.
"Every day new digital innovators are emerging to cause disintermediation and disruption across every industry imaginable, new business models like those of Uber and Alibaba, are already industry-shaping disruptors," notes Houghton.
Mark van Vuuren, chief operating officer at The Jasco Group, says companies need to stop "making do" with traditional business models in a market that insists that businesses evolve as quickly as their customers' demands do.
"Smart digitisation demands that companies look to disruptive business models to evolve and progress at the speed at which the market does. This does not need to be a complex and difficult process, nor is it reserved for large multinationals," he says.
Van Vuuren explains moving away from complexity allows the transition from old to new, to take place in an almost seamless manner.
"This may seem an impossible task, but new technologies are constantly emerging and can be applied innovatively to answer these problems," he adds.
He points out hyper disruptive business models from subscription models and Internet of things (IOT) engagement to ecosystem models, play an immense role on the perceived value that an organisation offers its customers.
"Increasing a company's value proposition requires that it implements an action plan to improve on, or even replace its current business models with ten-fold results, rather than settling for a mere 10% gain.
Products and services
Houghton says more and more companies are now also digitising their products and services, along with operational processes and customer channels.
"Over 70% of top fortune 500 companies have plans to offer their products as a digital service by 2020," he explains.
Presently, the 10 most valuable start-ups globally are estimated to have a value of $172.7 billion - all embracing digital platform based business models, reveals Houghton.
According to a report by global management consulting firm McKinsey & Company, customers expect every organisation to deliver products and services swiftly, with a seamless user experience.
"Customers want to log into their online electricity account and see a real-time report of their consumption. They expect to buy a phone from their telecommunications provider and have it activated and set up immediately out of the box.
"They want bank loans to be preapproved or approved in minutes. They expect all service providers to have automated access to all the data they provided earlier instead of asking the same questions over and over again," says the report.
Van Vuuren says customers no longer want just a product or service, and traditional methods of engaging with customers need to be reviewed. Disruptive business models allow companies to find new ways of giving their customers the experience they seek, which in turn drives new and return business, as well as revenue.
"With the customer experience overtaking product and service as the driving force behind engagement, forward-thinking organisations must look to delivering disruptive digital services and products in order to completely change and improve the way they engage with their clientele," he concludes.
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