One only has to look at the brief
summary of Starbucks in the article to know why it is important for companies to
embrace digital technology. Digital technology has the potential to
dramatically increase the competitiveness of a company in a short period of
time. I believe the two main reasons why companies will have to utilize digital
technology are the exponential growth in the number of customer who have
smartphones; and, the access customers have to the internet from virtually any
location. Although many people still interact on social medial using laptop and
desktop computers, the majority of activity on social media is done via the
smartphone. This enables individuals to interact with businesses more
frequently, since people usually have their phone with them at all times.
Companies have to embrace this and offer mobile platforms that will enable this
interaction to meet customer expectations and demands. Companies will also have
to make resources available to facilitate the operation of these mobile
platforms and make sure they are continuously engaging the customers who are
using them. Successful use of this digital technology will help create a feeling
of participation from the customers and enable a more specialized level of
customer service. The expanded availability of the internet, especially through
telecommunication service providers, has also required companies to embrace the
use of digital technology. More customers, through their smartphones and other
mobile devices, now have a way to access the internet at any time and from any
location throughout their day. Again, companies who embrace this technology by
providing mobile platforms that allow customers to interact with them will
undoubtedly create a competitive advantage.
Many
benefits of digital transformation were identified from the survey responses in
the article. One of those benefits was an improved customer experience. Digital
technology gives customers access to a company’s products and services with the
convenience not available through traditional means. As the article states
regarding Starbucks, “soon, customers will order directly from their mobile
phones.” Enhancing existing products and services, and launching new products
and services were also benefits discussed in the article. Making a product or
service available through a mobile application will automatically enhance
either, if done correctly. General Electric is used as an example of a company
using digital technology to launch new products and services. They are offering
customers an enhanced experience with information about maintenance services on
the products they sell. If successfully implemented, customers would be able to
obtain information on scheduling maintenance services and preventing part failures.
This could potentially generate a significant amount of revenue for General
Electric.
Challenges
in implementing digital technology were also identified in the article. The main
challenge identified by survey respondents was no sense of urgency. The reason
identified for this was that older managers do not place the same value on
technology as younger individuals do, or as a survey respondent was quoted in
the article, “they know nothing about technology and its benefits and also don’t
want to learn.” There is no doubt that a majority of top managers do know the
importance of implementing new technology in their business, regardless of age.
However, implementing new technology can cause many problems when trying to
merge it with existing older “legacy technology.” This is another challenge
identified by the article that many companies are facing. The costs associated
with trying to undertake some digital projects can be staggering. I can see how
many managers would be risk averse to such projects given the implications an unsuccessful
project could have on the entire organization.
Source
Article:
Embracing
Digital Technology: A New Strategic Imperative
By: Michael
Fitzgerald, Nina Kruschwitz, Didier Bonnet and Michael Welch
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