A few weeks ago, video-streaming providers Netflix and Amazon were awarded for the first time with Oscars for their original productions in several categories:
The fact that these streaming providers are not only eligible, but competitive for these awards shows that streaming providers have established themselves as independent producers in the film sector. Their business models confirm successes such as “House of Cards” (Netflix) weren’t flukes.
Instead, they are now serious competition for the traditional film and television industry—and an expression of digital change. After all, video and music streaming via smartphones and tablets have become anchored in our modern life. This is also shown by two polls from the Bitkom branch:
The issue of “streaming” illustrates the extent to which digital change influences daily life: rapid technological advances are reaching us at even shorter intervals and affecting different facets of our lives—from news consumption to communication habits to the modern working world.
Rapid developments in the digital world are forcing businesses to change constantly. Employees in all departments are learning to work with many different software programs that are continually being updated, re-evaluated, or replaced by even more modern solutions.
In addition to digital data processing, networked information and social communication channels are becoming more and more important. This applies, for example, to social media channels, which are now an integral part of company marketing and communications, or web-based cloud computing, which has established itself as a counter-model to classic on premise solutions.
All of these changes are transforming companies permanently. Not only do they affect individual IT systems, but entire processes across every industry. Even employees feel this change daily in their working environment.
These complex changes in processes have been discussed under the term “digital business transformation” for some time. The increasing digitalization of all business sectors is the core of this digital transformation. It is an important part of the so-called “business transformation” – the profound transformation of a company in its relationship to individuals and its economic and social environment.
This change affects almost every company, according to a survey conducted by: 93% of over 900 respondents said they were planning, implementing, or successfully tracking “business transformation”.
This shows that digital change affects not only every individual, but also almost every company. Transformation captures and connects every single step of the industry value chain – whether in logistics or services. Thus, change has become a constant in a company’s daily business. The consequence: constant reevaluating.
Reevaluation of the business model of video streaming providers led to companies such as Netflix and Amazon. It shows the speed with which innovative digital technologies reach and transform a market. On the basis of complex algorithms, the users are given individual film recommendations, which match their demonstrated viewing preferences. As a result, video streaming providers are improving the user experience of their customers compared to the classic TV and video industry. This in turn leads to higher customer loyalty: since they do not depend on the inclusion of advertising blocks, streaming providers are increasingly developing their own unconventional content formats. Yet, they can still compete with the productions of the classic film industry, as the Oscar award confirmed.
This development illustrates an important characteristic of digital transformation: new disruptive technologies lead to innovative business models. In turn, they also change the customer needs and, in the long term, the markets. At a fast pace, new disruptors with innovative solutions are entering the market and competing with established companies. In this highly dynamic environment, companies are faced with the challenge of proving themselves in the market. This is also an important opportunity.
shows what digitalization means for European industrial companies. As levers of digital transformation, the authors see:
These developments could help companies save time and money, or show them new business models and revenue potentials. As the authors of the study argue, a large profit is conceivable throughout Europe in the coming years. Provided that companies are constantly questioning their products and become more digital. This means that companies are forced to react to the fast-moving changes and move in the right direction.
Digital transformation has a direct impact on the employees, IT systems and processes of companies. Therefore, efficient processes are among the most important prerequisites for successful transformation projects; whether it is a new software or the institutional knowledge of the employees. More and more companies are using innovative technologies to model and optimize their processes. This makes it possible to react more quickly and flexibly to various changes with success; in current surveys such as the Manager Barometer 2016-17, executives see the greatest advantage of digitization in the simplification of their processes.
This is a great opportunity for digitization for companies. When it comes to digital technologies, simplifying everyday life is also an important argument – whether we watch movies, listen to music, or book a trip.
Would you like to learn more about how companies are constantly transforming? See our Whitepaper for more information about digital transformation!