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The Digital Economy: Disruption, Transformation, Opportunity

Source | Digitalist By SAP 

Bottom line: digitization and the Internet of Things (IoT) are changing the world at an unprecedented rate. Companies looking to succeed in the emerging digital economy must transform themselves by reinventing their business models, strategies, processes, and practices.

What is the digital economy? It′s the economic activity that results from billions of everyday online connections among people, businesses, devices, data, and processes. Knowing how to manage, extract value, and make decisions based on those connections may seem daunting, but it′s a crucial executive task. “Success will depend entirely on how companies can transform themselves digitally to harvest the opportunities of this data-driven, hyperconnected environment,” says Dinesh Sharma, Vice President of Portfolio Marketing at SAP.

Such transformation also requires ongoing enterprise reorganization and the blurring of once strictly defined employee roles. Even the nature of accountability is changing, Sharma says:

“New tools and processes will empower employees to routinely make crucial decisions with less—or no—red tape. This will help make organizations nimble enough to meet their customers′ ever-changing demands.”

A disruptive quartet.

The digital economy is driving disruption in four areas that business leaders must address:

1) Employees: CxOs must manage increasingly dynamic distributed workforces. For example, millennials—today′s youngest employees—are driving the growing contingent-labor trend because they expect to be able to work remotely or hold multiple jobs simultaneously. Organizations must also develop next-generation digital business processes and train all employees to use them effectively, from anywhere, at any time.

2) Customers: Today, B2B and B2C customers alike want companies to interact with them seamlessly, on demand, whenever and however it′s most convenient. They also crave direct, contextual, personalized experiences. That′s why all employees must be armed with the data they need to make real-time decisions. “The days of just selling a product and counting profits are gone,” Sharma notes. “Now, success is measured by customer loyalty, which must be earned every day.”

3) Suppliers: To enable truly next-generation commerce, enterprises must securely capture, analyze, and share data in real time and at multiple points of contact. “Today, businesses outsource tasks to specialty providers, so the single, integrated company of 20 years ago is history,” Sharma says. “But you must still enforce processes across the complete value chain.”

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