The main challenges faced by start-ups in embracing digitisation and its disruptions are twofold.
The first challenge is deploying certain types of technologies to ensure the start-up remains relevant to the needs of their client base in the world of IOT. The second challenge is the financial strain of running a highly digitised company.
This was according to Lazo Karapanagiotidis, senior manager of Digital Transformation at Accenture and associate at Scientia Institut. He was among the panellists addressing start-up owners at the SAP Start-up Focus Forum in Johannesburg last week.
During the discussion, titled "Lessons from the Trenches", Karapanagiotidis said start-ups that find themselves stuck in the "trenches" should make themselves familiar with the latest innovations and maximise the use of technology in order to take their business to the next level.
He added customers are living a digitised lifestyle and companies, including start-ups, should keep up with this need through their product offering in order to remain relevant.
"Customers are now living a fully digitalised lifestyle , they use smart phones, live in smart homes and have their cars connected to their homes, some even have their coffee cups connected to their alarm clocks, companies need to realise the direction in which their consumers are headed," he elaborated.
He pointed out if start-ups don't embrace digitisation, they will wake up one day and find themselves irrelevant.
We are yet to see many more disruptions from start-ups and companies who work in the financial and banking sector, as those companies are highly dependent on digitisation, he explained.
Karapanagiotidis highlighted the high costs of running a digitised organisation and how this can dampen the prospects of start-ups which may not be able to afford important IT infrastructure.
However, he warned that start-ups may depend on this very technology in order to move to the next level.
"If you observe the top five companies who are successful globally, these are the companies which were pretty much born in the cloud.
"Facebook, Google, Apple etc are all companies with significant scale because they embraced the lean cloud and traffic-style business models and through this they managed to trump the rest," observed Karapanagiotidis.
Dr Nikolaus Eberl, CEO of Ideas Management Academy, was also among the panellists. He said the biggest barriers which hinder businesses from adopting digitisation is they are battling to adopt the digital mindset required to move a business forward.
"Companies that are 15 years and older are faced with a culture problem which stops them from making the transition which will elevate them from operating from an old school to a new age approach," he said.
He pointed out start-up owners have to understand the new age customer in order to adopt this new mindset.
"This means adopting a mindset shift of becoming a 'go-giver' rather than being a 'go-getter' as a business.
"Start-ups need to create value for their client base, especially in this new economy.
"The benefits will show later but first entrepreneurs must use technology to create value for their clients," advised Eberl.
He explained the old transactional business model where a company is trying to sell something to customers for the sake of receiving money doesn't work anymore.
This means companies need to move from a transactional to transformational business model and disrupt themselves, he added.
Eberl said basic tech tools such as social media are undervalued by start-ups and yet these may be the best channel of marketing any business.
"The most important thing about social media is its ability to advance social listening skills and create a platform where you can understand and communicate with clients.
"Any company can stop all their marketing and advertising on other platforms if they can learn to maximise the full potential of their social media platforms - that's where the clients are," he said.
Eberl said in future company utility apps will bring about great opportunities to organisations.
"According to research, in the next five years the number of smart phones will double by 2020, especially in the developing countries within Africa and in India.
If you look at organisations in India, you will see the great opportunities brought about by the increase in company utility and productivity apps, it's about relevance and staying relevant in the future, he noted.
"The biggest opportunities will come from utility company apps which tackle real challenges within businesses. Technology is about being relevant and remaining relevant in the future," concluded Eberl.
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