Company Survival Games 2020: Go Digital or Die!
By: Birgit Thümecke
Global tech consulting giant, Accenture, has ramped up its spending on tech companies during the first quarter of 2017, with ten new acquisitions year to date. This is in line with their focus on emerging tech trends that are crucial for a business to thrive in the digital economy.
Not since the industrial revolution has there been a more transformational impact on how we do business than the current digital revolution. The corporate extinction of household names and industry icons, irrespective of industry vertical or type, is no longer a mere prediction, it’s a stark reality.
Without a robust digital strategy in place businesses will increasingly run the risk of becoming obsolete. There’s nothing subtle about Accenture’s assessment of a digital future and their strategy to acquire and partner with digital first and tech-focused companies is leaving others in their wake.
Satya Patel and Hunter Walk, founders of Venture Capital firm, Homebrew, predicted this trend back in 2013:
“one of our bets for the coming decades was that non-traditional acquirers would become more aggressive in their pursuit of technology startups.”
They even came up with a term for the process calling it “outsourced R&D.”
Accenture is not the only global player getting into the tech game. Companies operating in older, more traditional industries have been actively pursuing tech opportunities to make sure they remain relevant in their markets. For example, in 2016, General Motors acquired self-driving tech startup, Cruise, for over $1 bn. Then there is Microsoft’s $26.2 billion buy-out of LinkedIn which has highlighted a sub-trend that is focusing on data rather than product when it comes to startup acquisition. Forbes commented on this sub-trend as follow:
“Companies that have data pertinent to their users will be able to automate the experience and dominate the market. With major innovation happening in the artificial technology space, companies will be able to capitalize on this data in ways not yet imagined.”
The good news is that there are plenty of opportunities for forward-thinking companies operating in traditional sectors and others lagging behind the digital curve. Partnering in an intelligent way with digital first, tech-orientated companies whose data, API offering, services or products complement your own, has been proven to be a highly cost-effective and time-efficient way to rejuvenate and future proof your business.
As Pierre Nanterme, the CEO of Accenture stated so brutally at the World Economic Forum:
“new digital business models are the principal reason why just over half of the names of companies on the Fortune 500 have disappeared since the year 2000.”
Or to put his words in even more succinct terms: Go digital or die!