Digitisation affects every aspect of business and it can be complex, time consuming and expensive. This means it is essential that companies actively plan and monitor their digital investments in order to get their money’s worth out of the effort.
Ashish Panjabi, COO of Jacky’s Group of Companies discusses how businesses need to reevalute digital investment startegies and undestand how it needs to change given the changing business requirements.
What comes first – The chicken or the egg?
That was the conundrum many people had when it came to investing in digital evolution (note, I’m not a fan of the word “transformation”) investments. Those who were brave, followed the examples of the real estate market in the UAE where the philosophy was “build it and they will come.” The realists though probably looked at themselves and said, “do we have the scale or critical mass that would accept it if we have to build it?”
Given the fact that we’ve had people in real estate who followed the philosophy of the former, led us to see platforms like Noon.com arise in the region. However, you couldn’t really fault the latter because if we rewind the clock to eighteen months ago, nobody would have anticipated the sort of disruptions that we’ve come to witness.
What we’ve seen is a situation where you have a few chickens (investors) that were carefully placing their eggs (investments) in various digital investments expecting an evolution to happen. They had a willingness to see these as long term investments – knowing that the market would mature at the same pace. The fact that it happened as quickly as it did, surprised them as well.
For the rest, it was a case of having a chicken (incumbent business) but not laying an egg (in digital investments) because the business case just wasn’t clear.
So apart from Covid, what changed? The basic change that happened was a lot of the underlying assumptions we have been ingrained with were challenged or blown apart.
When and how you shop, eat, entertain, exercise, work or learn has all changed in this period, the assumptions that we worked under have had to change.
This means that if one had to look at how to plan business evolution strategies, the landscape has now changed where the eggs that were laid previously are stretched to their limits or that new eggs aren’t being laid fast enough. Added to this, the incumbents now find their own business models challenged, which means the chickens that were laying the eggs, may not be around much longer.
Hens and chickens
The difference in justifying an investment decision two years ago now has shifted dramatically because the core underlying assumptions underwent such a radical shift. The fact is, for any business to evolve, it needs to invest and it needs to invest now!
What is heartening in some senses to many CFO’s is that the nature of these investments have also moved to OPEX or subscription based investments instead of the cash heavy capital investments that they were typically averse to. Whilst, the CFO is happy to know they don’t need to depreciate this or worry about IFRS regulations on expensing assets, the investment leader has to make sure they invest in the right platforms so that they are able to keep adapting to ever-changing business requirements. There is no one system that does everything – rather it is about a suite of solutions and being able to select or deselect what to utilise as and when needed.
Putting all your eggs in one basket
The fact that you are bringing together all these solutions to implement your objectives, means you rely on collaboration more than ever – collaboration between platforms, departments within companies, vendors and other key stakeholders. The level of conversation you can expect to have and the ability to see change happen is faster than it has ever been. If one piece doesn’t quite fit or doesn’t change in the way that you want, it is far easier to make a change for that one component if you need to.
For example, if you were to launch a new e-commerce business today. You need to think about a cataloguing system, an e-commerce engine, a front-end website tool, a backend order management tool, a logistics platform to connect to, payment integration, marketing integration, CRM integration and much more. A few years ago, you may have look at two or three systems and looked at how can you build a system, put a major investment forward and hope it all works well. Today, you can select about a 6-8 different vendors focused on each segment, integrate them and rapidly change where needed. Since most work on a subscription model today, it is easier to swap out one component if it is holding you back.
The fact is Covid-19 has helped us in many ways. It broke us off from the shackles that held us and our beliefs in place. We’ve been liberated to the extent that we’ve been able to take all the eggs and crack them to make the omelette of our dreams.
About the author: Ashish Panjabi is the Chief Operating Officer of Jacky’s Group of Companies including Jacky’s Business Solutions, and Jacky’s Retail. He is also the President for the UAE Chapter of TiE (The Indus Entrepreneur) and a Board Member of the Dubai Computer Group (DCG) which represents the interests of the computer Industry in Dubai and is formed under the auspices of the Dubai Chamber of Commerce and Industry.
