Bakeries already have an app ready – What about your business?

(Copyright © Cienpies Design/Shutterstock.com)

By Claus Rosenkrantz Hansen

Wouldn’t it be nice if an app existed allowing you to order your favourite bread ahead of time in the morning so when you show up at the bakery it’s still hot from the oven, paid in full and ready to pick up without having to spend time in line?

This scenario is already a reality. The people behind MobilePay are busy introducing an app that makes it a little easier for sleepy-eyed customers to pick up their fresh bread at the bakery on Sunday mornings.

The app is yet another example of how an imminent, significant digital development will affect businesses across the board. This new develop will radically change the way business is done, digitisation throwing everything in the air, consequently challenging old business practices or making them disappear altogether.

CBS Professor Jan Damsgaard does research on the impact of digitisation on business strategies and has just published the book, Den digitale omstilling (The Digital Transition), which is aimed at companies that have not yet taken up the digital challenge.

“All companies – public and private, large and small – are affected by this development so it doesn’t pay off to lean back in the belief that what’s happening will blow over because it won’t. In the future the road to success will involve responding to the market, which operates to a larger degree on digitisation’s terms,” explains Damsgaard.

Nine digital challenges
Even though it will be a question of survival for many companies, Damsgaard also emphasises the endless number of opportunities digitisation brings with it. But companies have to adjust to be prepared to grab those opportunities.

“That’s why the book has nine specific challenges companies basically need to consider. It’s a matter of tuning into the challenges that are particularly relevant to your company. Is it big data, the Internet of Things or social media that are most suitable for your company? The next step is to get started and gain some experience,” says Damsgaard.

He compares digital development to a pot full of water. The pot hasn’t started to boil yet but it’s steaming fiercely and when the pot final boils, it’ll already be too late. Competitors will take over a large share of the market over the next six months. One example is the introduction of MobilePay into the Danish payments market.

That’s why businesses need to get moving – digital ideas and experiments need to get underway.

“The time factor is critical. The digital pot hasn’t reached the boiling point yet, so it’s still not too late. But it will soon and when that happens, you’ve got to be ready,” stresses Damsgaard.

Fighting a doomed battle
Multiple examples ways in which digital development challenges traditional industries already exist. Two such examples of digital platforms that have created a stir among established, time-honoured industries are Uber and Airbnb. The former is a transportation network promoting rides for consumers, while the latter allows people to rent, list and find lodging.

These two platforms are a tremendous thorn in the side of hired car and hotel industries because they represent a serious threat to their revenues and earnings.

But it’s an unequal fight. Digital platforms like Uber and Airbnb are able to do something conventional industries can only dream of doing. Like other platforms Uber and Airbnb are incredibly good at matching suppliers with consumers – but also with low transaction costs.

“Digital solutions are good at matching supply and demand, which will leave long-established industries in the dust. Taxis and hotels will still exist in the future, but they’ll look much different and be less lucrative.  This development will also cost jobs, which stresses the importance of the Danish business community being geared to handle the digital transition,” adds Damsgaard.