Why early adopters win in the digital age
The new business paradigm is digital, a global economy where the ability to embrace new machines and information-age business models is a key to good business. "The Work Ahead: Insights to Master the Digital Economy," a recent study from Cognizant's Center for the Future of Work revealed that early adopters win. Here's why.
It minimizes the 'Laggard Penalty'
Upgrading your approach early gives technology more time to return on the investment costs. Cognizant's study identified digital leaders based on what they've invested in going digital and the subsequent effect on revenue and costs over the last financial year. Firms were compared by their implementation of digital business strategies, processes, and services.
The difference between cost and revenue performance due to technology was dubbed the "Laggard Penalty." Businesses with a lower Laggard Penalty are the digital leaders, the visionary early-adopters. For non-leaders, the average penalty "paid" by each company studied is expected to be $692 million between 2015 and 2018.
It helps understand the customer's digital experience
Repackaging the business models of the past will not be enough. Customers expect convenient, user-friendly, intuitive interactions online and are willing to abandon a service entirely over perceived breaches of internet etiquette. Early adopters will have less competition in the beginning and better brand loyalty, leading to a superior, more reliable revenue stream.
Everything a company does in the digital age will be affected by society's transition from traditional transactions. As customers come to expect their access to goods and services to be facilitated by new technologies, going digital will be a must. Early-adopting businesses will be better adjusted and comfortable with digital, while late-blooming competitors struggle to catch up.
Automation can shrink costs
Early adopters will find that automation can drastically reduce costs, and free up revenue for reinvestment in tech, often addressing hidden inefficiencies. A more efficient office environment enables companies to attract - and retain - talent with better hours, more creative freedom, and higher salaries. Some say sales and marketing already live squarely in the digital age, yet back-of-the-house automation was a surprisingly unexplored application, according to the surveyed businesses.
There are some successful examples of cost-cutting automation being past the theoretical phase. Companies such as TriZetto, a Cognizant healthcare-software subsidiary, use software robots to decrease payer costs by as much as 90% for some middle-office business processes. Other companies, like Blue Prism, are applying bots to risk, fraud, claims processing, and loan management in banking to save millions. By using bots, AI, blockchain, and other software solutions, the automated back office will likely seem standard in the coming years.
Some may consider adopting new technologies counterintuitive. Risk is a persistent aspect of business, but the risk of going first can be uniquely daunting. Early adoption may make more sense when the quick-changing nature of technology is considered. Prioritizing adaptability and a love of technology will be the qualities of a strong business leader in the digital age.
This post is sponsored by Cognizant.
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