Digital Transformation and the role of Emerging companies

Digital Transformation and the role of Emerging companies

In 2020, Apple and Microsoft came closer to closing the gap with the oil company Saudi Aramco in the race to the world’s most significant market capitalisation. Yet another sign that we are on the brink of a digital revolution, fuelled by data, which is about to change the world and our lives as we know them. Even so, meaningful innovation often happens outside of large firms in what we call emerging companies. This article looks at how these actors can develop relationships beneficial for both.

The launch of the iPhone in 2007 marked a turning point in business history. Ever since, hand-held devices have made access to information exponentially easier and changed human behaviour for good. Access to real-time consumer information progressively changed the way businesses were run as well. What we call Digital Transformation is the companies’ focus to transform their business based on the insights provided by consumer data.

In the last decade, there has been a visible shift towards asset-light business models that are less capital intensive, focusing on problem-solving for the end consumer. Data sharing and collaborative platforms that bring different stakeholders together are more resilient and can adapt quickly to changes in the market. As consumers demand more experiences and solutions, rather than products and services, businesses that are not able to adapt rapidly, due to limited geographical and other traditional boundaries, are considered obsolete. In such a rapidly changing world, the ability to collect and use data is a powerful tool which might prove more relevant than long years of experiences for businesses.

Embracing digital technologies may not be an easy task, especially for traditional companies, but it is paramount to their survival; large companies have accepted it. Over 70% of global companies either have a digital transformation strategy in place or are working on one. And about 56% of CEOs say that digital improvements have contributed to a considerable increase in revenue and profitability. Executives say that the benefit of digital transformations are, improved operational efficiency (40%), faster time to market (36%) and the ability to meet customer expectations (35%) [1]. All these statistics point to an evident shift in the delivery mechanism – from that of a cost and geography-based delivery to a platform and ecosystem driven delivery, which gives the ability to react and respond to markets in real-time. Companies are now discovering new markets and innovative solutions in less time than ever before. Digital transformation is a driver of growth, and large enterprises know it.

Though pioneers like Microsoft, Apple and Google, were giants in Digital transformation, it became more challenging for them to continue innovating as they grew bigger. Disruptive innovation is usually brought on by smaller emerging companies’ eagerness to change the rules of the game. These emerging companies depend on an important strength, which large companies lose along the way – Agility. Emerging companies create out-of-the-box solutions at a speed that large enterprises cannot match. This clear difference in skills creates collaboration opportunities, all too often missed by innovative emerging companies and large enterprises alike.

Advisory firms and entrepreneurship champions can act as a catalyst to create better partnerships by developing a deep understanding of the interdependencies in the ecosystem. They keep track of the latest trends across technologies and markets and can help large companies, as well as innovators, extend their views towards shared and sustainable growth. In India, where digital innovators have started to rise in the last two decades, there is a considerable space for such collaboration.



About the Author

Akshay Sasikumar is the Managing Partner at, a firm that specializes in Capital Strategy and investment banking services for technology companies.

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