Lyn & Steve Aspey

Lyn & Steve Aspey

As a participant at the Techfest in Armidale this week, a regional effort to bolster the IT profile of the New England area, I was thinking about the characteristics of businesses I have seen over the last 20 years that have successfully  navigated the changes to their competitive and strategic markets wrought by the explosion of digital capability.

All exhibit some or all of these 7 characteristics.

It also seems that these traits of those who successfully  made transition, are made more obvious by those who had not survived, who had failed to navigate these hurdles.

It also seemed not to matter one bit if they were multinationals or the corner store.

  1. Pressure on prices and margins. The most obvious impact of digital is the relentlessly increasing pressure on prices and margins. Customer and consumers can check competitive offerings with a few swipes on a phone, and do  research on the relative value to them, of competitive offerings with consummate ease. Inevitably, prices are pushed down, and margins are squeezed in all cases where a business has failed to clearly differentiate itself from its competitors.
  2. Power has moved from the seller to the buyer. I have written about this phenomenon in several places, as it is a profound change in the way markets work. The buyer now has all the opportunities they want or need to make judgements about competitive offers before the seller even knows they are in a race for a sale.
  3. New competition emerges from unanticipated sources. Who would have expected a computer company to disrupt the music industry, or the business travel sector being eroded  by video conferencing. Emerging competitors also often have the effect of cherry picking, taking away the most profitable customer segments from incumbents, destabilising their position. Telecom is the primary example here, as private providers concentrate on dense urban areas, ignoring the “social compact” that existed previously of equal access. The incumbents are having a tough time.
  4. Business models have evolved very quickly.  Not only are there new businesses models, but they evolve almost on the run, with new businesses iterating to new models as they “pivot”  and find their way to markets that value what they can deliver.
  5. The war for talent. There are lots around who can do the simple stuff, and mouth the jargon, but a shortage of those who “think digital” but are able to translate that thinking into the sorts of innovations and processes that change customer and market behaviour. There is a substantial  competitive advantage that can accrue to those who have in their teams just a few of these rare people, and the competition of their services is substantial. Never was the cliché “our people are our greatest asset” truer, nor harder to maintain than now.
  6. Supply chains are now global, and transparent. Digital technology is national  border agnostic, resulting in the globalisation of supply chains. This simple factor has changed the manufacturing face of the first wold, and in this country led to the decimation of Australian manufacturing, something for which over time we will pay a very high price.
  7. Scale of operations has changed dramatically. It used to be that to build operational scale, you also needed a scaled management infrastructure to service that scale, but no longer. Scale can now be digitised, outsourced, and the capabilities of just a few people leveraged. At the same time the global nature of supply chains has strengthened large organisations able to make  the global leap, but paradoxically, has opened opportunities for local businesses not there before.

It also seems to me, and I have no evidence beyond the anecdotal and that of my own eyes, that we have become a society where the value of personal relationships has been diminished, at the same time in theory they have been made easier to maintain. It seems that we have substituted numbers or breadth  of relationships for the depth we used to have confirming again the theories of Robin Dunbar.

As I said, I am a participant at Techfest. This participation is via my 20 year old consulting business StrategyAudit, plus a new business in the throes of being launched, Intellicast, which is a partnership with Lyn Aspey of Imagehaven, and Steve Aspey of  In addition Lyn and Steve between them are prime movers in NETAG, the New England Technology Advisory Group, a small voluntary group of the aforementioned rare individuals who are prepared to offer their advice and experience to those in the area struggling with the digital revolution.

I hope the effort of a few deliver benefit to the region, and to the businesses in the region.