Three strategies for a high-tech age
The importance of technology is growing steadily and quickly in the business world. At the end of 2013, IBM conducted a Global C-suite Study and had face-to-face interviews with 4,183 chief executives across 23 industries in 70 countries. According to this study, chief executives ranked “technology” over “market factors” as the most important external force shaping their organizations. The success of any business depends on how enterprises apply rapidly changing technologies to business strategies.
In the recent 2014 Global Forum on Creative Economy hosted by the Ministry of Science, ICT and Future Planning, technology was reinforced as the ultimate source for creating new markets and businesses. Minister Choi Mun-kee mentioned that technology is transforming the world beyond recognition, which, when applied in various ways, helps to form the creative economy
So what are the best strategies for enterprises to succeed in technology-driven business environments?
First, enterprises should open up to customer influences. Thanks to new technologies, today’s customers are armed with abundant information online, at home and on the move, and they expect customized service from businesses. The ever-stronger power of customers is overhauling industrial structures. In a study 10 years ago, the customer was sixth on a list of external forces that impact businesses. Now, 54 percent of global chief executives who joined the study say customer influence will go beyond new product development and expand into business strategy development. For example, Lego uses customers’ imagination in developing new products. ExoSuit, which is hailed as the Lego version of RoboCop, was made by a customer, and revenue increased 17 percent.
Second, businesses should integrate physical and digital strategies. Due to the emergence of social, mobile and digital networks, interacting with customers is changing, and business models are undergoing innovation. Fifty-two percent of the chief executives are already communicating with their customers in this way, and the percentage will increase to 88 percent in the future. Land Rover, an automobile manufacturer, is providing new customer experiences through physical-digital innovation. In its virtual experience system, customers can use tablet PCs to select the colors of a vehicle and the color of the automobile image changes. They can also rotate the car, open the doors to look inside and listen to the engine by pressing the start button.
Third, they should find ways to craft and utilize customer experiences. Increasingly, enterprises make investments into mobile technologies to provide customer-oriented experiences that are developed to meet different situations and requirements. Seven of 10 chief executives recognize the challenge of shifting to digital interactions. For example, Levi’s provides a tailor-made service that allows customers to have their jeans fitted whenever and wherever they want. In other words, the company is making products from the customers’ perspective.
It is encouraging that Korean enterprises are moving ahead of global competitors in new technology adoption, strategy changes and digital environment adaptation. This is a result of a survey of 105 Korean chief executives and their global counterparts through face-to-face interviews. Seventy-one percent of the Korean chief executives said they would use digital channels like mobile and social networking as core customer communication tools, and they said that in five years, the percentage would grow to 96 percent. Unfortunately, while global enterprises look at customers as individuals, Korean enterprises still see customers as a group.
Now that new “customer-activated enterprises have emerged, it is important to seek new decision-making processes, new value creation and new value delivery in order to become a smarter enterprise. Hence, in a complicated market environment, decisions should be made quickly based on information and analytics, new values should be created by means of intelligence systems, and tailor-made values should be provided to individual customers.
In particular, in a business environment where new technologies exert impact on business strategies and new business development, corporate leadership needs to be open to customer influences.
By Shirley Yu-Tsui, CEO of IBM Korea