Businesses will have to make the move to digital or face becoming obsolete. Those are the stark words coming from ICT research company, Gartner at its yearly Symposium ITxpo, currently underway at the Cape Town Convention Centre.

Last year’s Gartner conference served as a wake-up call for IT divisions to change from simply keeping the plumbing going (the upkeep of all computing functionality in order to support business), to now also incorporate the ability to actually facilitate digital change in the company. This year, however, it is clear that Gartner urges companies themselves to actually make the same shift in order to become more digitally orientated. Digital growth needs to become a priority, or companies risk being replaced by others that are either faster to adapt to these digital changes (Gartner’s Nexus of Forces being a good example of this – Mobile, Information, Social and Cloud), or are new and simply do not have the baggage associated with analogue business.

Peter Sondergaard, Gartner Senior Vice President and Head of Research

Not the old, but the new

Gartner Senior Vice President and Head of Research, Peter Sondergaard was quick to point out that this does not mean companies should launch a digital model which simply builds on top of old business practices, rather they should be looking at what the user does. Although Uber might be a tried and tested example of disruption, Sondergaard noted that if one asked customers what they wanted before Uber existed, they would not have pointed to an Uber-like solution. Rather the question companies should be asking, is what is the problem the customer face? In the Uber reference this is that the person is at a specific location and needs transportation.

Furthermore, if Uber simply built a new digital gloss around the old mode of taxi dispatch, it would have looked at mimicking the call management system which is the technological foundation of traditional taxi companies. It didn’t, Sondergaard explained, rather the company built a new technology architecture designed  for the digital economy.

Outside the walls

Examples such as the above should spark a light for companies heading off on what can seem like a dark path to digital. Want to really switch on the lights? VP & Gartner Fellow, Mark Raskino believes it is fundamental for companies to start looking outside the four walls of their premises for inspiration. He states that all industries will be “digitally remastered” and as such it is fundamental for leaders inside the company to spend time with startups. Startups are born into a digital world, and thus behave differently and have a far better understanding of the current digital crossover. VP and Gartner Fellow, Hung LeHong, is similarly enthusiastic about cross pollination, urging companies thinking about going digital to consider what is happening in other industries and sectors, picking examples and applying them to their market.

Going all in

On the extreme end of the scale, Sondergaard notes that some companies faced with a going-digital problem, go all in – becoming venture investors themselves and purchasing startups that offer quick entry. Dubbed “techquisitions”, these companies then integrate these startups, adding business capability for a new digital platform. (On a side note, Sondergaard also mentioned that a large number of vendors created before 2000 will likely not be able to survive as growing companies through the next five years.)

David Willis, Gartner VP and Distinguished Analyst

Many companies cannot take such shortcuts when requiring a new digital business model. Perhaps more pertinent advice then comes from Gartner VP and Distinguished Analyst, David Willis. He notes companies should now, more than ever before, have a serious look at divesting from that which is not needed and which does not add value. This includes parts of physical IT infrastructure and even projects in development which are not getting off the ground. The money saved by divesting should be pushed into growing a digital business model. Willis stated that divestment is a business practice that great organisations embrace, with the best divestors producing a return on investment 1.8 times higher than average.

Everyone onboard

For those heading on the road to digital, it must be a company wide effort. Raskino notes that not only is leadership required from the CEO, but the whole company structure needs to sign up – the board, CIO, CFO, Legal, HR, etc.

Luckily, it is not just about blood, sweat and tears. While this digital makeover (not just make-up) can sound daunting, Raskino offers words of encouragement. He believes there is “immense opportunity” that lies in the digital space, and not just threats to survival. Not all businesses are Kodak, with many being a lot more resilient. “Your company has survived many major changes in the past, it will survive this one,” he concludes.