Fujitsu advises 'old fashioned' businesses to 'become digitalized', find value

Starbucks is showing the way

Starbucks

Lagging European businesses in "old fashioned" industries can find value by "becoming digitalized" using new technologies, according to Fujitsu CTO Joseph Reger.

Speaking at the Fujitsu Forum in Munich, Reger made the distinction between two types of businesses: digital, and digitalized. The former, he said, are those whose core product is "born digital" - such as MP3s - while the latter sees everything about the business go through a digital transformation except for its core product.

He said: "Everything connected to a digitalized product - the whole value chain - becomes digital even if the product is not. That can be from the maintenance after it's been manufactured to its lifecycle and supply chain, design, innovation and the big data that's generated both during its manufacturing and out in the field.

"There is an opportunity for companies in old fashioned industries in Europe - like cars, machine manufacturing and others - to go through a process of digital transformation and to try to turn and digitalize as much of its value chain and become better by doing so."

Star pupil

Reger pointed to US coffee outlet Starbucks as an example of how a traditionally "analogue" company can suceed by making the most of existing and emerging digital technologies.

He said: "In some respect, Starbucks is not a digital company. People tell you why its shares went up from eight dollars in 2008 to seventy-seven yesterday, and it's because it became a digital business. Its core product, coffee, is still very analogue, but that doesn't matter.

"The point is that Starbucks started with Wi-Fi, and then moved onto online meetings and downloadable software, focusing on the customer experience, IoT, social networks and big data analysis. They managed to turn the entire value chain - except for the coffee - into a digital product.

"In Europe, digitalized business is very important for the development of the region because whether you like it or not, Europe didn't become a leader in digital business."

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