Digitalization has already dramatically changed the nature of many industries compared to what they were like some twenty or thirty years ago. And the current business landscape is in constant change, much of which is for sure due to digitalization and globalization . With technology developing at ever-greater pace, it is only natural to suggest that this trend will continue to go steady – especially considering the current worldwide coronavirus crisis that makes markets even more ruthless as every business is fighting tooth and nail to survive and is eager to use every slightest advantage over the competition.
It is also vital for executives to utilize key business insights in order to understand the current state of play and, ultimately, make effective decisions. Senior management needs to adopt digital business models in order to benefit from business insights and a single source of truth. By supporting senior executives with solutions offering data transparency in a centralized location, companies are able to react and profit from the changing market.
But how exactly does digitalization influence business models in 2021? Let us find out.
1. Client Is at the Center of Everything
“Customer is always right” is an old business maxim, but most companies were not truly client-centric until undergoing digital transformation. With an average human being bombarded with so many offers and free to choose any of them, modern businesses cannot but put the customer at the center of all their activities. In the past, if a business offered an excellent product or service and brought information about it to the customer, it usually did not have to worry about anything else. Today, it also has to make a customer’s experience as smooth, effortless, and pleasant as possible. Tools for that are primarily digital: instant messengers allowing for direct contact with business representatives, smartphone apps making the company’s services always just a swipe away, mobile payment solutions to ensure the client does not have to go out of his way to make a purchase and so on.
2. Rising Importance of Problem Solving Companies
Problem-solving businesses help individuals and organizations deal with issues outside of their sets of core competencies. It is a broad blanket term that includes law firms, analytical centers, certification agencies, architects, engineers, consultants, and the like. Of course, they have been around for a long time – but digitalization lets them shine and increases their competitiveness many times over. When such a service has access to digital tools, instant communication software, international databases, AI solutions utilizing big data and multi-function collaboration platforms, they are no longer tied to their physical location.
Setting up a company in another country to be operated digitally is common in today’s international business environment. However, this can be difficult given the current travel restrictions put in place to reduce the spread of COVID-19. One of the popular locations that allow entrepreneurs to incorporate a company remotely is the Republic of Ireland. Starting a business abroad is a viable option to effectively operate a successful company using digital means. The head offices of many international companies are based in it and they enjoy a low corporate tax rate and business policies that are welcoming to foreign investors.
Again, networking services existed for a long time in the spheres of transportation, stock exchange, banking, and the like, but wide-scale digitalization allows for its introduction into completely new areas with often unpredictable results. When we speak about the disruptive influence of new tech, we probably most often mean networking, because it allows for entirely new approaches to value creation and delivery. Companies like Netflix, Uber, and AirBnB went from nothing to being leaders in their respective industries precisely due to the disruptive effects of networking: they entered fields already dominated by other businesses without offering their own products or services and ended up on top because they relied on effective networking connecting multiple service and product suppliers.
4. Mass Customization
Industrial revolution meant to transfer from manual labor to mass production – individually made personalized products were replaced with cheap but nearly identical iterations of the same model. Today it seems that we are on the threshold of a new epoch, that of mass customization, combining the best from both these approaches. Technologies like 3D printing, robotics, automation of routine processes, AI and big data make it possible to break down the seemingly unshakable inverse proportion between scale and customization. However, these opportunities are accompanied by potential costs such as cognitive and/or tangible investments, learning, information and activity overload, and risks such as loss of privacy and performance uncertainty.
Their further development will allow for cheap local production of goods customized for each individual customer – and those who start early will reap all the benefits. At the same time, the changes do come with certain costs and risks, sometimes unforeseen. It is thus important to understand the opportunities and potential challenges surrounding value creation in digital environments for the various groups. We will more or less all be affected.
The world is changing – and the current crisis can force it to change faster. There is no doubt that we are living in turbulent times, but those who are willing to take some risk and who understand the basic principles of digital change and the impact of technologies will see a bright future.