In almost every sector, whether it is retail, finance or manufacturing, we are seeing a growing trend towards making the customer experience digitised. Consumers are becoming more demanding and are no longer afraid to switch suppliers in an instant if they can find a more efficient and personalised experience elsewhere.
At the end of last year, I represented EMC and gave evidence to the Business, Innovation and Skills Select Committee of the UK Parliament House of Commons at its first Hearing into the Digital Economy. The committee sought to gather insights on the following: how to maximise opportunities and overcome the challenges the digital economy presents to UK businesses; what actions the government should take; and how to improve national productivity. It also investigated ways businesses can adapt in the rapidly changing environment, use digital infrastructure to improve performance, and the government’s role in ensuring the UK plays a leading role in leveraging digital technologies.
The Information Generation
Moderator Iain Wright MP led the inquiry and asked for a definition of the digital economy with Mike Cherry, Policy Director, Federation of Small Businesses (FSB), saying "it enables companies to conduct business differently using broadband and mobile connectivity to grow their business, engage with customers and employees, interact with government agencies, and reach new markets".
We are now firmly in the information generation. It’s not just about having a web presence and transacting online. Everything we do now is data driven. Everything we interact with is likely to be connected with a sensor that provides data and gives businesses meaningful insights. We are seeing companies with no inventory and no premises but a novel business idea use digital technologies to fundamentally impact business sectors.
CTOs and CIOs tell me that they are looking over their shoulders, afraid they’ll see another Airbnb in their industry. There is now the very real risk that they’ll be caught working with 20-year-old technology and business processes. This is a hugely opportune time, but also very disruptive one. In the finance industry, digital transformation means more than having a consumer portal via an app. To deliver a customer-centric capability, firms need to radically transform their IT processes and overhaul their infrastructure. Any business can transform and become digital, but it takes dedication, time and leadership.
Clusters of experts
I was not the only panellist to note that existing clusters of digital-savvy experts in the UK should be called upon to help local companies at various stages of their digital transformation journey. Initiatives such as Tech City UK and its Upscale and Tech North programs are great examples of how to accelerate the growth of digital business in the country, they said.
We need to be able to bridge the links between traditional organisations and new innovators. Creating a community where problem solvers meet the problems to create something new. This cluster and collaborative approach is sound as it allows you to share both your problems and learnings.
Barriers to success
Some of panellists pointed out that the challenges UK businesses face when trying to succeed in the digital economy include lack of digital and Big Data skillsets, cybersecurity, and fibre connectivity. You can class these barriers in three buckets — infrastructure, skills, and trust. The infrastructure is critical for adoption yet the skill set, to understand how to use data science to look at business problems differently, is missing.
With regards to trust, small businesses and consumers are concerned about data privacy and lack of clarity around it. The government needs to lead by example and make better use of public sector data, but also create an environment of trust. Businesses need to be more open when they suffer cyberattacks and share their experience with others so everybody can benefit.
The government has a responsibility to encourage more cluster models and should play a key role in driving and adopting emerging technologies. The government should also introduce a framework for data analytics. If organisations are compliant, then consumers can trust that their data is being stored, managed, and deleted at the appropriate time.
Are traditional measures of productivity still relevant? When you move to a no-inventory model and can still drive a huge digital business, traditional measures of productivity may no longer be appropriate. The government should consider making public sector data sets available through open APIs; the stovepipe model that exists today needs to be broken down.
When asked on a scale of one to 10, how well Britain’s businesses were addressing digital economic challenges and how I’d rate the government in allowing and helping businesses to adapt, I replied, "Six and five." I definitely believe that whilst there have been improvements, there is still more work to be done and 2016 is shaping up to be the year where digital will pave the way for business growth.