Why corporate MUST become digital ?

Digital is the main reason just over half of the Fortune 500 companies have disappeared since the year 2000.

Pierre Nanterme, CEO, Accenture

Yes, it is true. Half of the most successful US companies are now gone. Reason is digitalization wave , but, I’ll mention something more than the term itself. It is, the speed of realization of different world and adopting to it as quickly as possible. This is what is critical. To see, understand and adapt for changing environment for corporate benefit. Half of most successful companies in US could not make it. They are now out of big boys league.

And, here is the catch. Everyone sells you images of digital company as pictures from paradise with rivers and fruit trees of unlimited tastes and shapes. This is modern reality and frankly saying, there is no valid competitive alternative to digitalisation. It is currently only path to go, but, we have to consider this as way of real corporate transformation. This transformation includes different aspects, including, culture shift.

Digitalization movement of 2000’s is far more different from now. Earlier one primarily targeted covering the opportunities, today it is principal to survive and get leverage in competition.

It is not question to digitalize or not. It is market reality and sooner companies adopt it better they are. It does not always mean that you have to transform your product and services into digital , but, to see, understand realities and get best out of it. Some transform only front part of their business (Marketing, sales, Customer Experience), others go ahead and do Operations, Product/Services reaching to Business Model digitalization. Here I want to list reasons why your company has to consider becoming digital.

Customer pressure

Purchase power shifts towards those born in 2000’s. They are now 20+ years old and becoming part of highly competitive early stage earners club. While earning they will be setting out demands on services where they are willing to spend. They have born in the era of internet and they are native digital generation. The pressure will rise more and more in over time since this generation will not only set the rules of game, but also, become capital holders or investors.

There is nice graph representation of customer wishes. It is called KANO analysis. I use it quite a lot while doing Lean Six Sigma projects. This is very useful to understand distribution of customer wishes or product features under vectors of user satisfaction and feature implementation level.

So far over the years digitalization started as a Delighter and companies enjoyed “WOW!” effect once providing it. Over time it became somewhat standard and level of digital services are compared by their performance. Trend is around becoming a baseline feature and without this feature your company will not be able start initial conversation with customer. This is huge moment of truth for many of companies. As it happened in early 2000s, most companies will still miss this window of opportunities and will be out of business.


Competition is becoming fierce ! While companies have to separate themselves on the customer experience they provide, at the end of the day what counts is cash on accounts. Shareholders will still push for long term sustainable growth and live cash flow. Story is even worse for public companies where not only private investors but also whole market place carefully watches all your business moves.

When it comes to competition, risk of not catching up with competitors is far more dangerous than start taking risks of change in the direction of digitalization.

Even if a company decides to stay and not digitalize the single factor of competition will push current status of cash flows and projections significantly down, overtime killing the business itself.

Competition will also drive new standards of doing business. Time required to change what considered as valley of death for most of companies. Therefore timing is critical. Start digital journey before it is late.

Effectiveness and Efficiency

Lets separate those two terms at the start. Most of the time those are well mus-undestood and misrepresented especially in CEO and executive speeches. Effectiveness about doing right stuff, while efficiency is about doing things right. If we make those terms together, we will get, “Doing right things right” which is the wish of any company outside.

Here you can find simple illustration of Effectiveness and Efficiency.

Copyright – https://www.insightsquared.com , Gareth Goh

Business strive to maximize their outcomes while minimizing their bottom line. It is no-brainer that they have to master both of upper mentioned terms. Here comes digitalization as opportunity. While you are digital you can make more smart and analytical decisions based on realtime insights of your business. Thus, eliminating wrong stuff that are not generating enough customer value and focusing on best possible execution upon things that really matters for business.

If you are not digital, you cannot measure your business performance well as digital ones, and thus lack of business intelligence will lead you to lack of business performance. We can consider it as start of end , while downward spiral will take company into the default state.

Automation and AI support

It is no surprise that we have all been observer of discussions of robots doing our jobs and our position against of that. Yes, there are risks of AI if we do not manage it right, (You can watch Elon Musk’s opinion about risks of AI), but, there are far more useful places where AI together with Automation efforts can drive the businesses to the next level.

Every CEO wishes to have high level of automation and smart realtime decision making support on every subject. According to my own observation for my whole 15+ years of corporate life, companies spend huge amount of time in executive meeting rooms because of decision making need in the state of lack of supportive information. So, basically it is annoying and stressful situation where everyone seeks for realtime and more intelligence injected decisions.

Here we have terms of automation of business processes and AI support to make it more agile and self learning. Automation make sure that business processes are being run autonomously while all needed corrections are done by system itself with little or any human presence. Having AI injected on top of the automation, gets the process to the next level where it learns many other factors of process and continuously improves the process itself.

Soon, we will have business processes self learning, self healing, self developing thanks to digitalization which made it first possible. And, now lets compare those companies with others who have processes developed from 5-10 years back and never changed or improved. Winner is obvious.

If you want to discuss this subject, please write me on twitter at @imranbagirov . Lets hold open discussions while helping everyone.

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