It seems like every week we receive a monotonously themed email from our bank, supermarket or that shop we bought a colleague’s secret Santa gift from 4 years ago, boasting about a new mobile app or online service – the ‘unsubscribe’ button hidden amongst the fine print.
However, as consumers, we demand digital front-end offerings. Because of this, we are beginning to see a trend where companies are hurriedly pumping investment into digitalisation. However some are like lemmings – perhaps heading for a cliff – due to lack of preplanning and consideration for long-term digital gain.
Following the close of the World Economic Forum it is clear that start-ups and Fortune 500 companies alike are prepared to go digital, but with a handful of worries about the risks of attempting to adapt legacy systems into digital back-ends. According to Fujitsu’s “Walking the Digital Tightrope” report, only 25% of businesses class themselves as ‘extremely confident’ with digital and almost two-thirds admit it’s difficult to know the right choices to make.
For businesses to truly thrive in this new, digital age, there needs to be synergy between digital front and back ends, innovative developments to satisfy actual consumer demand and scalable systems that act as foundation for any future endeavours. This entails thorough preplanning and strategizing to ensure IT budget is accurately spent.
The Tipping Point
As with any business decision, there are risks involved with taking the digital plunge. How complex is the shift to digital? How costly is the endeavour? What preparation and maintenance does it require?
Fujitsu’s report stated that 70% of businesses said digital projects were a gamble and 33% claimed they had overspent on digitalisation. Without specialists, it comes as no surprise that many businesses have avoided the shift. Why change what has worked for years? Is a digital back-end even necessary? 33% of businesses feel too great a focus is placed on digital innovation; it appears companies may have a fear of moving on.
According to the report 56% of businesses have unified IT and digital departments. Joint departments account for a joint budget – leaving little room for development after day-to-day IT management and support. These developments are associated with an opportunity cost too and unfortunately only one-in-three businesses surveyed agree that digital priorities are fully aligned with that of their organisation. Scared by the rate at which technology is developing, companies are continuing to defer investment.
Uber – start-up and buzzword of the year – exemplifies how the new kids on the block are covering all bases – offering customers the most up to date digital services, with fresh digital IT infrastructure. Benefiting from starting with a blank canvas, start-ups like Uber can design their businesses based on a ‘digital first’ foundation. In contrast heritage companies fear that a digital front-end is simply ‘lipstick on a pig’ and see a refresh to both the front and back ends a slow, costly and inefficient process.
Indeed, there are a handful of companies who have made digital work thus far. In fact, the Financial Services industry has excelled in supplying to consumers’ digital demands. According to Fujitsu research, investment in digital has catapulted Financial Services as the people’s hero in digital offerings.
One Small Step for Digital
Despite the management qualms surrounding digital, if done correctly, it can be a profitable investment. Not only does keeping up to date with consumer demand attract and retain custom, it also creates opportunity – allowing for future marketing developments such as personalised and intelligent advertising.
Before businesses begin to take the digital leap of faith however, they should stop to take a breath, plan, strategise and ensure budget is spent correctly with business goals always at the forefront of the agenda.
