Digital technology key to companies’ future business models – research firm

Companies that incorporate digital technology that is customer-centric are most likely to succeed in the business world of tomorrow, says research-based consultancy Forrester Consulting VP and principal analyst Nigel Fenwick.

In a presentation following the release of a paper titled ‘Business and Technology Leadership In a Post-Digital Era’ at the Huawei Connect information and communication technology (ICT) conference in Shanghai, China, earlier this week, Fenwick asserted that companies’ revenue would, in future, be impacted according to a business’s ability to leverage digital technology developments to add value for its customers, thereby driving sales volumes.

He pointed out that the business model of the future would recognise the customer’s digital experience as an essential element to deliver value in addition to the current business models, which focus on products and services.

He stated that the change towards business strategies focused on digital technologies was currently taking place across a number of industries, including manufacturing.

Fenwick noted that sensors were being introduced throughout the supply chain, which enabled machines to connect to each other in a digital ecosystem, not just within the individual company, but with those of suppliers as well.

The manufacturing ecosystem would also allow companies to tailor products to the requirements of customers rather than focus solely on mass production, which would radically change the operating model of manufacturing companies.

Cloud services would be an essential focus for business strategies in the future, as it would drive at least 40% of businesses’ revenue streams by 2040.

This is because cloud services will enable companies to quickly adapt to the constantly changing expectations of their customers.

Fenwick said only 4% of business leaders today completely understood their company’s digital business strategy and only 9% of technology leaders had full confidence in their company’s approach to the digital business.

He explained that the lack of understanding of digital business strategies was owing to rapidly changing digital technology, which made it difficult for business executives to keep up with developments.

Further, Fenwick noted that the mindset of business leaders regarding digital technology was also an inhibitor of digital business technology being applied in their companies.

Owing to the importance of digital technology, he asserted, chief information officers would play an increasingly important role in the business strategies of companies.

The ‘Business and Technology Leadership In a Post-Digital Era’ though leadership paper was commissioned by Huawei Technologies and surveyed 212 ICT and business managers in the US, the UK, India, Australia, South Africa, Mexico and Germany.