5 Ways Digital Technology is Deranging Business Strategy

Digital technology

Executives are still figuring out how to use digital technology to advance their business strategy

Even though the internet has been around for nearly three decades, executives are still figuring out how to use digital technology to advance their business strategy. The new technology trends like artificial intelligence, data analytics, and the Internet of Things are the most commonly heard and used technologies that are changing the way executives think about strategy.

1. Data and Talent as Supreme

Previously, companies focused on the digital technology they owned and had exclusive rights to use it as a key to competitive advantage. But as it evolves, cutting-edge technology is developed that can be used as a shared resource, with the core digital technology freely available to anyone who wants to use it, and also presented as open source software. And today, in addition to digital technology, companies are also looking at their user data and technical staff as the main drivers of potential benefits to drive their business strategy.

2. Technology that drives transformation

Some of the companies view digital technology as a mere and different type of investment that does not affect the way they work. But on the other hand, companies are adopting new technology trends knowing that they have great potential to make significant changes in relation to customers and their experiences. Technology can transform the way the business can serve, the skills it uses, and add value to its organizational structures. The latter approach involves higher costs and time horizons with better and higher returns at the same time.

3. The key role of algorithms in pricing

Most companies are turning to pricing algorithms to set prices, especially to conjure up online markets with the blow of COVID-19. Price algorithms are able to enable more targeted prices, but they can also fundamentally change a company’s competitiveness in the market. The company uses a pricing algorithm that can change the nature of price competition. This can actually change the direction of a company, which requires additional investments in IT, changed production decisions, and other personnel, among other things.

4. Companies can test

With the help of technology, companies can now experiment in many ways, including making competitive decisions such as product positioning, pricing, and the markets to serve. Previously, these decisions were dependent on master plans and included time horizons measured in decades. But now there are online platforms, ubiquitous data, and algorithms that allow companies to test these decisions quickly, sometimes within months or weeks.

5. Cloud computing blocks access

Competition will intensify in many digitally-assisted industries as the cloud makes it even easier for competitors to enter a market, with Disney and HBO streaming competing with Netflix. The big cloud providers themselves will inevitably compete and threaten their own customers and partners if they expand their offerings. As companies face massive cloud usage costs that put their own profitability at risk, they should make sure they are not tied to a single cloud provider. Using multiple cloud providers ensures that you can always switch to the most cost-effective option.

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Analytics insight

Analytics Insight is an influential platform dedicated to insights, trends and opinions from the world of data-driven technologies. It monitors developments, recognitions, and achievements of artificial intelligence, big data, and analytics companies around the world.

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