Companies that use technology for competitive advantage will win in today's fast-paced business environment where all companies are becoming tech companies.
“Companies that best use technology to create competitive advantage will win.”
The five largest companies in the world by market capitalization are all software companies. But Alphabet, Amazon, Apple, Facebook and Microsoft are not the only important large technology companies today. As technologies become more and more pervasive across industries and functions, companies as varied as Goldman Sachs, Exxon, GE, Citi, and Walmart are all becoming technology companies as well.
How do established companies in traditional industries like finance, retail, manufacturing or other sectors evolve to become technology companies?
Today, the distinction between technology and non-technology companies is becoming less relevant. Is Tesla a technology company learning to become an automotive organization? Is Ford an automobile company learning to become a tech company?
Companies today need to change both their outlooks and their industries in order to compete and thrive. This is how Amazon became one of the most valuable companies on earth. Leveraging its expertise in logistics, it enabled consumers to order goods and have them on their doorsteps in two days or less. And, it applied those lessons to move into new businesses – e.g., how to run massive data centers at scale, creating the Amazon Web Services cloud computing service.
Similarly, Goldman Sachs has known for many years that technology is a key competitive advantage in financial services. The firm’s Chairman and CEO Lloyd Blankfein once said “Goldman Sachs is a technology firm” and pointed to the fact that, at the time, the company employed more engineers than companies such as Facebook, Twitter, or LinkedIn.
What are the key drivers and opportunities of organizations across industries becoming technology companies?
- A constantly connected world: Today’s 24/7/365 approach has connected customers expecting goods and services when and where they want them. The technology that has made this possible has revolutionized customer service and raised the bar on the customer relationship.
- The Internet of Everything: According to Cisco, there will be 50 billion connected devices in the world by 2020. The Internet of Things (which is fast becoming The Internet of Everything) offers enormous opportunity, as companies will be able to collect and understand behavior and intention data in new and different ways. Further, sensors will enable smart machines to communicate (when they need maintenance, for example) and provide data that increases efficiencies
- Innovation everywhere: Smart companies—like those we’ve cited earlier and many, many others—have begun to open up their organizations and their intellectual property (IP) to partner with smaller, more agile start-ups and speed the innovation process, while also making it less costly
Indeed, the race to become the market leader is accelerating among established companies as well as promising, young start-ups across a wide range of technologies, sectors and geographies. And while start-ups can learn from the management and financial practices of incumbents technology players can learn from start-ups as well. Regardless of age, companies that best use technology to create competitive advantage will win. Businesses that adopt fast growth alongside innovative principles and approaches will become more scalable and open than ever.
And tomorrow’s technology leaders will be those companies that master how to maintain and increase market share, manage globally dispersed supply chains, comply with multi-jurisdictional regulations, and overcome numerous operational and strategic hurdles. To provide insight into what defines success for companies in the Technology industry, Thomson Reuters developed the Top 100 Global Technology Leaders.
See Thomson Reuters 2018 Top 100 Global Technology Leaders and learn more about the program’s methodology in the full report.
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