Strategies, practices and skills for competitiveness in the digital economy: a perspective on large companies in South Africa

Abstract

The impact of the digital developments of our time - new digital devices, new software, and new areas of applications - can be felt in more and more areas of life and work. In fact, in some areas of business the impact is transformational, changing an area or business sector to such an extent that it is hardly recognisable from what that area was like a decade or more ago. Business introduced information and communication technologies (ICTs) to automate certain processes, to achieve economies of scale (and the benefits associated with that) to involve both suppliers and customers, etc. The introduction of digital mobile devices (especially smartphones) over the past eight to ten years, and the current ubiquitous presence of these devices, brought about more changes to users' interaction with suppliers. Not only do these devices lead to improved communication with business and within business, but increasingly so in the areas of business these devices are used to establish new relationships with customers, both existing ones and potentially new ones. In such an increasingly hyperconnected world, employees become participants in a world beyond the boundaries of companies, thereby being in a position to gauge sentiments outside, to influence opinions and to make a contribution to the positioning of companies. A key factor that has to be taken into account is the wider availability of technology to all players in the ecosystem within which business functions, including the competition. Cloud-based services enable rapid deployment of services and scalability according to need. Just as access to technology, especially in the form of digital technology, holds the possibility of innovation for existing businesses, the same technology also creates the possibility for disruptive innovation and for new competition in the market. “Digital disruption describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves 'up market,' eventually displacing established competitors”1. Some commentators, as argued by Wladawsky- Berger2, refer to this changing scenario of access to cloud-based services as one characterised by “new economies of unscale”, a situation that could turn into a major disruption for established companies.