Salwa F. Darraj is a senior consultant at Ernst and Young (EY), where she is the Women’s Network Champion. Darraj is a Member of the Board of Trustees of the American University of Beirut (AUB), the Alumni Advisory Board of Imperial College London where she was previously a guest lecturer and a startup mentor.
Everywhere we look, we seem to encounter some form of technology. We grab our morning coffee and pay the local vendor through the point of sale (POS) system. We order our ride through an app to get to work, where we use multiple software platfoms from several companies. We get bored, and what better than social media, games, and esports to keep us entertained. In the globalised world that we live in, we are bound to work abroad at least once in our life; with many things to do and so little time, we end up relying on a prop-tech app to scan through listed properties. The day is coming to an end, so we order a list of groceries online, including hydroponically grown vegetables. Thanks to big data and analytics, our preferences are already recorded and fintech lets us pay through our mobile. Finally, we are home, tired and not feeling well, so we check our vital signals through our digital wristband. We are then eager to take a hot water shower heated by solar panels. Now it’s time to order dinner from our favourite restaurant through a food delivery app. Our meal will be delivered in 40 minutes or less, so to make the best use of time, why not check that online Spanish 101 course we registered for. Food is here. We choose a rom-com from our on-demand watchlist and enjoy our meal after a long, tech-intensive day. All ready for bed, but before we dive into a world of dreams, we must not forget to set our morning alarm, sleeping monitor, and go-to-sleep music. Good night and sweet dreams.
If I described such a day to my grandmother fifteen years ago, her answer would have been: I am not a fan of sci-fi stories…let’s watch The Devil Wears Prada instead.
There is no doubt that technology has empowered us, but the question remains: are we getting too greedy for technology? Are we using and abusing this electronic giant to crush old school models?
Hercules vs. Iron Man
Technology-induced disruptions to every sector and operational business model cannot be denied. I am always fascinated by the complete operational transitions that some businesses go through, where the new models look great and make perfect sense, but only in hindsight. Nonetheless, I cannot help but feel that sometimes this is getting overdone, where a whole package of different technologies is integrated into a traditional business model, irrespective of whether it fits or not. When done right, technological integration equips businesses with new powers to outperform the conventional players, regardless of their size and historic strength. A clear example of this is what Netflix did to Blockbuster. A twenty-first century battle between Hercules and Iron Man (even the colours match), where digital technology beats the traditional, unpolished strength.
Digital rat race
Companies, especially startups, are sometimes racing to adopt advanced technologies that are beyond their needs and capabilities in an attempt to create a mysterious, sexy facade around their business model. The focus of investors on technology is exacerbating this “tech-rush”, where at times valuation is being predominantly tied to digital savviness. Technology adoption is a necessary element of the survival kit, but the key for every entrepreneur is to choose the right fit for their operational model and strategic goal.
Disruption taken to new levels: Adapt or be left behind
According to Google, disruption is defined as a “radical change to an existing industry or market due to technological innovation”. Over the past decade, we have seen how innovation through technology was an enabler of holistic operational model transformation in several sectors. Technology improved quality, efficiency, decreased long-term business expenses, and at times lowered the price tag for the end-user. Technology amplified the scale and effect of operational improvements and altered market expectations.
Despite the above, disruption has a dark side that is often overlooked. Businesses that challenged the existential necessity for development and pushed back when it was time to adapt were left behind. Their fall was expedited by the rising market need for technology adoption. It is always sentimental to see classic icons fade into the abyss……but at the end of the day, disruptors gotta disrupt.
Advanced digital solutions generally require a hefty capital investment upfront to develop state-of-the-art technology and a solid infrastructure to uphold the system together. Businesses that do not have the means to access the necessary funds are generally doomed to cater solely to the market segments that the disruptors are uninterested in. The only way around this sealed fate is to systematically and gradually integrate a tailored technology solution that is strategically justifiable.
Change, in all of its different forms, is difficult to embrace. Businesses operating in a cut-throat market are forced to get in the driver’s seat and take charge of their success, otherwise, they will be paving the way to their doom.
According to research data analysed by Wamda Research Lab, the first half of 2021 witnessed almost one billion USD investment in Mena-based tech startups. Investors' emphasis on technology as a means rather than just an end is sometimes misread by fresh entrepreneurs. This misalignment of perspectives is exacerbating the issue. Investors should keep the “tech-rush” under control to preserve the long-term sustainability of the entrepreneurial ecosystem. Entrepreneurs’ key focus should be to have innovations empowered and facilitated by technological advancements rather than a tech-hype.
Digitisation is key for the relevant existence of businesses. Any business that does not assess the integration of the right technology to its operations will be left behind. An understanding of the continuously evolving digital ecosystem is necessary to evolve and prosper. The question is not whether or not technology should be part of any business, but what technology and for which business. A systematic assessment of the business needs, capabilities, market shifts, and anticipation of customer preferences is essential to correctly choosing the right type and dosage of technology intake.
The views in this article are solely the author’s own.