The “Tech” Business Spectrum
This is the first of 3 pieces compiled for a series titled “Understanding technology in business and its place in Africa”. The first article in this series looks to classify businesses in terms of their orientation toward adopting technology, specifically at customer touch points, and how this plays out in terms of market advantage.
From transportation to education, the last 10 years has seen the rise of many businesses who have leveraged the power of technology to change the game in their respective industries. Consider the impact that the likes of Uber has had on the taxi industry, or that of Coursera on tertiary education. The reality is that where some businesses cannot exist without technology, others simply use it as a mechanism to improve their offering.
In some cases, this does not involve an evolution but rather the birth of an entirely new market entrant. Borne with technology as its foundation, these businesses have been able to leapfrog competitors who have needed to make the evolution, a far slower and more considered process. Importantly, this ability to “leap-frog” the market has resulted in a significant competitive advantage, in cases allowing young businesses to supersede the industry incumbents.
Needless to say, technology is by no means the only value driver.
So, why then do we refer to this spectrum of businesses who have adopted “technology” and why should we care?
Well, if we can identify to what extent a business has innovated, we can begin to understand where growth opportunities may lie, whether in technology or not. It also becomes critical in understanding how much emphasis needs to be places on the evolution and enhancement of the technology for a business to retain its competitive advantage.
Don’t get me wrong, technology is by no means the only value driver. If a business cannot provide the underlying service to as high a quality as a competitor, then no level of technology is able to differentiate it. The role technology plays is simply as a conduit to efficiency and ease of use. In fact in many cases, it also makes the product or service more economical to the consumer – more on this in the second piece in this series.
Let’s look at the spectrum:
A Low/No Tech Business
In a “low or no tech” business, technology is at most a supporting tool but not critical (FastCompany, 2016).
Consider the likes of an automotive business who for years has conducted business without the assistance of digital tools and interfaces. Although this business can still take place without these interfaces, we have seen the adoption and implementation of tools and interfaces making the buying process far more pleasant. Customers are able to investigate, customise and even price their choice of vehicle before stepping on to a showroom floor to conclude the purchase.
A Tech Enabled Business
Tech Enabled businesses are reliant on technology to facilitate the connections but require or are enhanced by offline interactions (FastCompany, 2016)
Although some may place Uber at the very end of the spectrum as a “Tech driven” business, the reality is that there is still a real-world interaction which needs to take place to conclude the transaction, and so we deem this style of business a “tech-enabled” business. If the rides are expensive, the drivers late and the experience unsafe, no matter how much technology Uber use, the service will simply fail.
An example of an African business who shares a similar space on the spectrum is Zoona, originating in Zambia. Where technology has allowed the transfer of money within Zambias borders at a far lower cost and effort, there is still a need for a real-world interaction, where customers visit a kiosk in person to receive the money which they have been sent by family or friends.
A Tech Driven Business
Tech-driven business models are ones who leverage technology not just to connect users but also to complete the transaction without the need for offline interaction (FastCompany, 2016).
Tech-driven businesses cannot exist without digital interfaces/ solutions. Consider the likes of IndieGogo or Kickstarter who provide crowd-funding options to small start-ups or public service initiatives. These businesses enable a full end-to-end digital solution which never requires that the two parties interact outside of the digital realm.
Locally, we look to an example in GetSmarter. GetSmarter provide online courses accredited by global tertiary institutions. In this transaction, there is in fact never a need for the two parties to interact in the real world and without the digital realm, the business could not deliver the service which it delivers.
For some businesses, the need to remain on the forefront of the use of this technology is so much more critical as it is a key value driver in their service offering. For others, it is simply a business “enabler”.
The key take-out here is that in theory, all businesses can and will benefit from the adoption of technology. For some businesses, the need to remain on the forefront of the use of this technology is so much more critical as it is a key value driver in their service offering. For others, it is simply a business “enabler”.
The reality though is that no level of adoption will withstand poor product/ service standards. It is important for any business to find a healthy balance in managing both in their mission to unlock new growth through digital innovation.
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