Surviving and thriving: what's the secret?
Welcome back to our blog!
The topic of today's post revolves around one thing that all businesses have in common: uncertainty.
It is becoming more and more difficult to cope with the challenges of today's world on a daily basis. Therefore, it is essential that companies are prepared to face any change. By adopting new technologies, businesses are able to respond more quickly to rapidly evolving stakeholder needs.
Embracing digital transformation can take many forms, and the journey will be different for each organization. As an example, a company can improve customer experience with artificial intelligence (AI) or cloud computing. Alternatively, it could redesign its supply chain to better utilize machine learning.
In every case, however, starting a digital transformation journey requires a distinct mentality. This is the opportunity to reinvent how companies operate, often from the ground up.
What is Digital Transformation?
Digital transformation is a wide transformation process that embraces an entire organization. At its core, digital transformation is the use of technology that helps make your business more efficient in today's dynamic environment. However, this change goes beyond IT or technology, it involves redefining your entire business strategy and even adapting the culture of your organization. The purpose of digital transformation is to make life easier for the company's employees and customers while also attracting new opportunities.
One of the great examples of digital transformation is the giant sports footwear manufacturer, Nike. The brand has revolutionized the shopping experience of its customers with advanced technologies based on recommendation algorithms and machine learning.
https://www.businessinsider.com/nike-foot-scanning-technology-perfect-shoe-size-2019-5?international=true&r=US&IR=T
With Nike's new technology, customers no longer need to try on shoes before choosing the one that suits them the best. Through the app’s foot-scanning feature, consumers now can scan their feet by using their smartphone's camera. The scanner takes 13 measurements, and a machine algorithm recommends what shoe would be most suitable based on those measurements.
https://www.cnbc.com/2019/05/08/nikes-app-is-getting-a-new-sizing-feature-heres-how-it-will-work.html
Through Nike's digital transformation, we can also see how innovation can modernize internal operations. By digitizing their footwear materials, the company design teams can work more quickly and efficiently. Additionally, Nike's application led to significant increases in sales and a reduction in returns. This had a direct positive effect in the speed of response to market needs.
The key point here is that digital transformation is a sociocultural process that involves adapting firms to the new organizational forms and skill sets needed to remain relevant in a digital landscape. Adapting to new demands, however, becomes difficult without a shared mindset within an organization.
Why Digital Transformation?
To survive.
Failing to keep up the pace with new technologies means that your organization can be easily blown away in a very short time.
Even so, many business leaders dislike the term due to their unfamiliarity with its efficiency or inability to clearly understand what it means.
In terms of IT value, business leaders’ views can range from being perceived as a cost and organization liability to having a central role as a strategic resource and organizational asset. However, in order to meet the demands of increasingly demanding customers who require flexibility and personalization of products and services, companies are under increasing pressure to alter both their existing and new business models.
Digitalization forced businesses to become more flexible and seek new economic activities. In order to make this happen, organizations must implement structural changes and dispose of sufficient funds. Therefore, being offline indicates that you are not on the market.
Adapt or Die
Throughout the discussion on this topic, it has become evident that technology is advancing and industries are changing. In order to grow, they must continually monitor the changing needs of their customers and adjust their business model accordingly.
A brief look at Netflix's victory over Blockbuster is all it takes to prove the power of digital transformation.
Once upon a time…
It was Blockbuster's ability to deliver entertainment to people's homes that made it successful at first. However, technologies change as we all know. Rather than investing their resources into finding innovative ways to serve their purpose, Blockbuster stagnated in time.
https://edition.cnn.com/2019/03/06/business/last-blockbuster-on-the-planet-trnd/index.html
In Netflix's case, the brand followed a different path.
Netflix’s movies, shows, video games and other types of media were initially mailed to customers via standard post as physical copies. However, through the rapid changes introduced by technology over time, Netflix adapted its business model on the back of its successful start. In place of hard copies, streaming became their primary method of distribution. Since then, Netflix has developed streaming technologies that have elevated and improved the company's overall business structure and revenue.
So even if you learn how to dominate a specific channel, you need to remember that all channels, no matter how popular they are today, could someday fade into oblivion…just like the traditional Blockbuster business did.
https://netflixlife.com/2022/05/07/what-was-the-first-netflix-dvd-ever-shipped/
Upon digging into the saga of Netflix vs. Blockbuster, it becomes evident that Blockbuster eventually recognized that the Netflix model was the future. But it's not easy or straightforward to radically change one's business model and organization in order to leverage new technology. In other words, it involves stepping out of one's comfort zone and possibly eliminating practices that employees and customers have become accustomed to.
https://tadesamson.medium.com/blockbuster-vs-netflix-c6e828361359
One Last Thought
Back in 2011, I still remember my excitement at being able to pick my own movie at the Blockbuster traditional locations. In the evenings after classes, my brother and I would get into my mom's car and on the way home, we needed to make a stop. The second the car was parked, the two of us quickly ran to our favorite section in Blockbuster. We would also get some snacks and sweets. We did the same thing every week.
But with the rise of new technology of home entertainment, we never went back to Blockbuster. Despite how much fun it was to go there, having our favorite movies available in just a few clicks seemed way more appealing and convenient for all of us. At that point, renting a movie for a couple of days seemed a bit strange.
The bottom line is that digital transformation is definitely one of business's biggest challenges and opportunities, as it involves the development and implementation of new business models and reevaluating the company's strategy, structure, and culture. On the other hand, it opens the way for a number of new opportunities to appear. It is up to the company to determine how digital technology can serve as a catalyst for disruption or transformation depending on its perspective and, more importantly, its ability to harness all the potential.
Hanbury, M. (2019, May
9). Nike reveals a new form of tech to find shoppers' perfect shoe size.
Opgehaald van Insider:
https://www.businessinsider.com/nike-foot-scanning-technology-perfect-shoe-size-2019-5?international=true&r=US&IR=T
Hansen, A. M.,
Kraemmergaard, P., & Mathiassen, L. (2011). Rapid Adaptation in Digital
Transformation: A Participatory Process for Engaging IS and Business Leaders .
MIS Quarterly Executive, Vol. 10, No. 4.
Lennon, M. (2022, May). What
was the first Netflix DVD ever shipped? (It might surprise you!).
Opgehaald van Fansided: https://netflixlife.com/2022/05/07/what-was-the-first-netflix-dvd-ever-shipped/
Lou, M., & Ahmed, S.
(2019, March 6). There’s now only one Blockbuster left on the planet.
Opgehaald van CNN:
https://edition.cnn.com/2019/03/06/business/last-blockbuster-on-the-planet-trnd/index.html
Qadeer, N. (2021, May-June).
The Dark Side of Apps. Opgehaald van Aurora:
https://aurora.dawn.com/news/1144132
Saarikko, T.,
Westergren, U. H., & Blomquist, T. (2020). Digital transformation: Five
recommendations for the digitally conscious firm. Business Horizons, Vol
63.
Samson, T. (2019, August
18). BlockBuster Vs Netflix. Opgehaald van Medium:
https://tadesamson.medium.com/blockbuster-vs-netflix-c6e828361359
Sloan, M. (2020, June
1). NETFLIX VS BLOCKBUSTER – 3 KEY TAKEAWAYS. Opgehaald van Drift:
https://www.drift.com/blog/netflix-vs-blockbuster/
Thomas, L. (2019, May
9). Nike’s app will soon be able to scan your foot and tell you your shoe
size. Here’s how it’ll work. Opgehaald van CNBC:
https://www.cnbc.com/2019/05/08/nikes-app-is-getting-a-new-sizing-feature-heres-how-it-will-work.html
Hanbury, M. (2019, May
9). Nike reveals a new form of tech to find shoppers' perfect shoe size.
Opgehaald van Insider:
https://www.businessinsider.com/nike-foot-scanning-technology-perfect-shoe-size-2019-5?international=true&r=US&IR=T
Hansen, A. M.,
Kraemmergaard, P., & Mathiassen, L. (2011). Rapid Adaptation in Digital
Transformation: A Participatory Process for Engaging IS and Business Leaders .
MIS Quarterly Executive, Vol. 10, No. 4.
Lennon, M. (2022, May). What
was the first Netflix DVD ever shipped? (It might surprise you!).
Opgehaald van Fansided: https://netflixlife.com/2022/05/07/what-was-the-first-netflix-dvd-ever-shipped/
Lou, M., & Ahmed, S.
(2019, March 6). There’s now only one Blockbuster left on the planet.
Opgehaald van CNN:
https://edition.cnn.com/2019/03/06/business/last-blockbuster-on-the-planet-trnd/index.html
Qadeer, N. (2021, May-June).
The Dark Side of Apps. Opgehaald van Aurora:
https://aurora.dawn.com/news/1144132
Saarikko, T.,
Westergren, U. H., & Blomquist, T. (2020). Digital transformation: Five
recommendations for the digitally conscious firm. Business Horizons, Vol
63.
Samson, T. (2019, August
18). BlockBuster Vs Netflix. Opgehaald van Medium:
https://tadesamson.medium.com/blockbuster-vs-netflix-c6e828361359
Sloan, M. (2020, June
1). NETFLIX VS BLOCKBUSTER – 3 KEY TAKEAWAYS. Opgehaald van Drift:
https://www.drift.com/blog/netflix-vs-blockbuster/
Thomas, L. (2019, May
9). Nike’s app will soon be able to scan your foot and tell you your shoe
size. Here’s how it’ll work. Opgehaald van CNBC:
https://www.cnbc.com/2019/05/08/nikes-app-is-getting-a-new-sizing-feature-heres-how-it-will-work.html
Comments