Why business model reinvention is necessary
Why should a business consider digital reinvention, more specifically, a business model reinvention? What is driving this need for change? Recently, business models have dramatically changed. Consider for example, the rise of a company such as Netflix. Today, this start up company is worth millions of dollars. In only a few years, they have managed to completely disrupt their industry and make experts question the traditional business model in which they once sought solace.
The challenge, of course, is that most business owners have spent years and a great deal of money building their brand and developing a client base. Therefore, reinventing the business seems like a risky and time-consuming task.
In this article, we will attempt to answer WHY digital reinvention is necessary, and then, in three simple steps in our next post, show you HOW digital reinvention can be successfully achieved. Subscribe to our blog updates to be the first to access these insights.
Why a business should consider digital reinvention: the case for business model innovation
1. Improved efficiency: it’s possible to reduce the number of processes and systems within the business by leveraging newer, more efficient technology solutions.
2. Improved decision making: most businesses are inundated with data. But this is exactly what it is: data. What is required is the ability to transform this data into information and thereby make better informed decisions across the organization. With digitization, this process is simplified.
3. Improved reach: Traditionally, customers would consult a paperback business directory or contact a call centre and wait patiently in the queue to be assisted. Nowadays, if you don’t have a digital presence, you stand the chance of missing potential customers.
4. Improved customer satisfaction: with the rise of mobile and technology advancements, we’ve seen customer expectations change. The modern customer expects simplicity and demands instant gratification. Channels of communication have transformed over the years. This means that customers can reach out to you almost instantly if you have a social media presence or a communication portal such as a chat room on your website. In addition, tools such as “online package tracking” have allowed customers to be informed of the status of their online order every step of the way.
5. Improved profitability: companies that intensely embrace digital within their systems and business models can significantly increase revenue and company valuation, For example, digital marketing can be far more cost-efficient than traditional marketing. However, companies who implement digitization without effective change management will risk profitability.
The bottom line: business model reinvention is crucial
In short, digital reinvention is possible at any stage of your journey. However, the longer your business model is left unchanged, the greater the implications this will have on your competitive advantage.
As your competitors start to embrace the Internet of Things (IoT) the need for business model innovation is huge.
See our article 10 Reasons Why Your Business Should Be Online for more reasons as to why you should convert your business to digital. While reinventing businesses digitally could potentially be a costly and time-consuming task, as discussed earlier (and in the blog post linked above), it can also prove to be rewarding on a number of different levels.
There are many reasons to tweak your business model – or to try out a whole new one – that make perfect sense. If you reinvent thoughtfully, it could be the best business decision you ever make. In our next blog post, we will provide a simple guide to the art of reinventing your business in the digital world, using three simple themes. Subscribe to our blog to learn HOW you can reinvent your business in the digital world.
If you can’t wait until our next post, contact us to assess where your business can be found on the digital maturity curve and let’s explore your journey together.