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The role of digitalisation in the investment industry
The world of investment continues to grow at a rapid pace, due to the far-reaching influence of digitalisation. One of the key factors in the investment industry is business expansion which can be accelerated by digitalising key business processes, effectively making digitalisation a two-edged sword.
In addition to delivering greater efficiency, digitalisation brings with it the ability to provide thorough analysis to help determine ROI in specific business areas which, in turn, assists the company to respond and reinvest accordingly.
It is worth noting that assessment of corporate value has moved away from being solely based on traditional measures such as buildings, plants and inventory. Businesses are now considered in terms of their progress in terms of the digital journey and digitalisation as a future potential.
Four key factors must be considered when discussing the role of digitalisation in the investment industry.
The traditional business model has focussed on the acquisition of a company with the goal of expansion before acquiring another and merging both while adding incremental value. Increased efficiency is therefore essential and is mainly achieved by improving business processes.
Working digitally helps companies to identify gains and losses and to collaborate more effectively internally and externally. This approach can be applied to every area of business, including operations, marketing and logistics.
Assessment of a company’s value must incorporate the business’s level of digitalisation which highlights the need to employ highly skilled digital leaders who understand and embrace the technological progress like no other.
From the Michael Page Retail Study it is clear that the consumer market has experienced a rise in companies implementing an omni-channel approach to their business.
Having a physical presence alone simply isn’t sufficient in this digital era where 24/7 global presence via digital channels, chatbots and social media is essential. Strategic leaders with a digital mindset are vital to taking businesses into the new digital era. Take for example Amazon’s cashier-less grocery store in Seattle where purchases are automatically billed to customers’ accounts. Innovative concepts and models will continue to spearhead business change.
Private equity managers must keep up with innovation and realise its unlimited potential through digitalisation within their existing portfolio and planned acquisitions. Executive Director at Page Executive, Miquel Portillo, comments, ‘Companies have the power to change key roles in the businesses they control. Indeed, it is essential they implement such change to stay ahead of the curve.’
Vision and strategy continue to be major components of taking a business into the future and achieving a competitive edge. Most companies have employees working in digital roles but might not have considered appointing a Digital Manager.
Max Exweg, Associate Director at Page Executive and responsible for CFO practice and Financial Services, observes, ‘Sometimes we find that there is a matrix situation where the decision maker is unclear. The CFO reports to the CEO and there is the investor, who is also a key stakeholder, next to the CEO. But are all these leaders fully aware of what digital transformation can bring in terms of investment and do they have a shared cross-functional digital vision?’
Private equity companies need digital strategists who can understand, conceptualise and direct tactical implementation of a strategy.
Digitalisation has different faces depending on what region of the globe you focus on. In China, for example, digitalisation is a fundamental part of business culture.
Wenda Keijzer, Senior Associate at Page Executive Netherlands and responsible for the consumer practice and aspects of digital, explains, ‘The Chinese are far ahead on digitalisation, even in traditional markets such as insurance. They think of digital in terms of opportunities and partnerships. They are fast decision makers and able to innovate at speed. Their market is also very different compared to Europe with a mind-blowing mobile-only population and the use of WeChat as not just a messaging app but as a portal and platform.’
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