The old way of doing business is not going to work for much longer. Either digitalize your product or service, or someone else will – and you’ll be out of business.
By Dwayne Bragonier
Is your product or service completely digitalized? If not, what are you waiting for? It’s no secret that today’s consumers are digitally aware and can be highly demanding. They are used to 24/7 availability, online access to their accounts, real-time reporting of their current and previous purchases, personalized treatment, quick delivery with little to no personal contact and zero errors. They expect no less. What’s more, they are demanding that companies revisit each process to ensure that redundancy is removed, automated decision-making is deployed and that digitalization is constantly being evaluated.
What does this mean? Digitalization is the process of converting products and processes into a series of ones and zeros. It is the continued transformation of all aspects of our lives into data. This datafication lowers many costs associated with a product — from creation to production to distribution — to effectively zero, or as close to zero as possible. Here’s how.
Creation: Virtual reality, augmented reality, unlimited cloud storage, increased computational speeds and machine learning are now part of an agile creative process. Think virtual meetings, real-time language translation and the ability to work from anywhere, anytime and on any device. This allows for digitalized creative collaboration and is leading to unparalleled product development and new product offerings. That’s because very few physical products or prototypes have to be produced to test ideas. Virtual replicas can be created quickly and cheaply.
Production: It’s no secret that a key way to maximize profits is to cut costs. Thanks to digitalization in the form of 3D printing, the Internet of Things (IoT), self-driving trucks and robotics, production costs are being slashed. For example, 3D printing allows for on-demand production, eliminating the need to produce and store excess inventory. Robots are taking over routine tasks and automating costly manual labour. The IoT is taking over process control, warranty replacement and procurement protocols. Driverless trucks are predicted to decrease transportation costs by up to 50%.
Distribution: A digitalized product can be downloaded and delivered on demand, eliminating warehousing and delivery costs. That’s why 3D printing is having such a worldwide impact. You download the product design and produce it locally. Drones and robotic systems then handle the final delivery phase of the physical products.
Perhaps the biggest advantage of digitalization is that the world truly becomes your marketplace. Right now, there are more than three billion people who have daily access to online connections. It is estimated that within four to seven years, this will increase to eight billion people. What a gold mine! The market for products is going to double in the very near future.
These new consumers will never have uploaded or downloaded anything. They will quickly align themselves with products that offer a superior user experience at nearly free price points. They will want to purchase the product directly from the product creator and have it in their hands within a day or two. Digitalized companies will be primed for exponential growth.
Consider this your wake-up call. The old way of doing business is not going to work for much longer. Either digitalize your product or service and all the processes that surround its creation, production and distribution or someone else will and you’ll be out of business. Successful companies are questioning everything associated with an existing product or process. It’s not easy work, but it’s essential work.
Either embrace digitalization the way companies such as Netflix, Amazon and Google have and get ready to double or triple your business or push it off for another day and go the way of Blockbuster, Sears and Encyclopedia Britannica — it’s your choice.
Dwayne Bragonier, CPA, CA, CA•IT, is president of BAI Bragonier & Associates Inc. and the founding architect of the BAIWay.
This article was originally published in the December 2017 issue of CPA Magazine.