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AUTHOR

Fredrik Alstierna

CEO & Chairman of the board

2017-02-01

| Fredrik Alstierna

INSIGHT

What to consider in the increasingly digital environment

Some companies may feel that digital transformation does not apply to their business. However, the whole world is changing.

If you look at the consumer field, at what kind of behaviours we have privately and how we are using technology in our everyday lives, all of this change will have a huge impact on how we do business in the future.

To be sceptic today about this, and to not treat and use digital technology as a competitive advantage, will simply not be successful.

A favourite concrete case of digital transformation to follow is John Deere. A large, global corporation that has gone really far in the digitalisation of their products. By connecting and technologically enhancing their tractors and other equipment, they have enabled completely new functions for their target group to use and interact with, in turn creating new revenue streams for themselves.

There are of course many more examples, like tyre suppliers who use sensors that can pinpoint exactly when it is time to have wheels replaced or have the vehicle serviced.

However, the real challenge is not to find technology to improve your product. The real challenge is to find a profitable way to apply that technology. You can digitalise just about anything, but the question is: How much margin did you create? How much increased revenue did you get? Those are the key questions.

The core challenge for companies is to simply find a working business model, and we need to keep in mind: This starts now. After you have developed it, you need to maintain it, and keep that development going.

Traditionally, you have sales training for sales personnel, management training for management, and so forth. It is the same with this new chapter, the same principles apply in order to stay competitive. Technology is not going away. Now, when you are starting to build your new business, based on the possibilities offered by technology, you need to maintain it. There you have your challenge.

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Read previous: Beyond the buzz words

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