Digital business transformation. The only thing that will break the accumulative advantage rule is better technology

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  • March 24, 2019
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Digital business transformation. The only thing that will break the accumulative advantage rule is better technology

 

Recently, a digital business news-story caught my attention and made me rethink what I thought to be the rule, that the bigger you are and the greater distance you put between you and your competition, the harder your competition will be to narrow that gap and be a genuine contender. It is the Pareto rule of 80/20, the accumulative advantage of the bigger versus the smallest. There is an exception though.. the digital transformation.

Ocado, a British online-grocery company, is using air-traffic-control systems and AI technology to co-ordinate 700 factory robots. Its use of technology has made it a challenger to Amazon’s grocery-delivery business. One of the worlds largest considered monopolistic now is challenged by the new disrupting company. It is ironic when realizing that Amazon pioneered the robotics and now apparently the AI technology driven robots are giving them headaches.

So, what it takes to beat the monopoly of companies similar to Amazon? Apparently the only thing that will break the rule is better technology.

The MIT professor Stephanie Woerner, gave an interview recently to  knowledge.wharton.upenn.edu about pursuing digital transformation.

Six questions for companies and business leaders to consider when pursuing digital transformation according to Knowledge at Wharton

1. how strong is the digital threat or opportunity to your business model? [It’s helpful to figure out] where do you have competitors coming in, where are startups [and] what percentage of your revenues are under threat?

2. which business model is best for your enterprise’s future? (Authors) talk about the two dimensions that we have found most enterprises are looking to change.

“They have to develop new ways of working, really taking evidence into account when making decisions.”

3. what’s your key competitive advantage — are you going to focus on content, experience or platform?

4. is really thinking about technologies, especially digital technologies, and how are you going to use mobile and the internet of things to connect and learn? Then (…) the crucial capabilities to reinvent the enterprise. We have identified eight of them.

5. do you have the leadership at all levels to make the transformation happen?” – (Stephanie Woerner, 2018)

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(Article first published in 27 October 2018)