When was the last time you called a travel agent or visited a physical bank? Probably not recently. Life has been transformed by technology and we now live in what has been called the application economy.
Banks, for example, are pressed to make digital and mobility a core part of their strategy in order to prosper. Research analysts from IDC have predicted that American retail banks will spend $16.6 billion on digital transformation initiatives this year alone.
To put this further into context, BNP Paribas has more software developers than most software development companies.
Only last month, Atom Bank received its full licence from the Bank of England – a digital-only lender offering the same service as every other bank. The difference? Customers will be able to do everything via a mobile app, even opening a bank account.
Software really is becoming the cog to every wheel that keeps our world spinning. Not only that, software helps companies differentiate. In the automotive industry, Tesla recently rolled out new “smart” suspension and navigation features via a wireless software upgrade.
Consumers are embracing this change and are now the most demanding customer base ever as – the application economy empowers them, commoditises products and intensifies competition beyond the norm.
Customers are very discerning in how they spend their money; they know what a good customer experience is and expect nothing less. Delivering this high-value customer experience is imperative to survive.
So what does this mean for business? Every business is trying to understand how to use technology to disintermediate legacy businesses, find new ways to reach new markets, design faster and innovate more efficiently.
Recent research that CA Technologies commissioned with Oxford Economics showed that businesses are responding to the realities of the application economy and heavily investing in software to create new business opportunities.
Almost half (43%) of businesses surveyed said becoming software-driven is a critical driver to competitive advantage, up by a positive 78% in three years.
Europe is leading this charge, with 49% of businesses looking to put digital at their core – higher than the US market at 42%.
This highlights skills, specifically STEM skills, which are the core subjects required for the application economy. The study also showed that 40% of businesses plan to acquire technology companies to meet the skills requirement.
Businesses have to address the required skills for their future workforce. The taxi firm Addison Lee has half of its IT team skilled in application program interface (API) management.
All industries are being rewritten by software but businesses need the correct expertise to meet this new climate, or it will become increasingly difficult to stay on top.
Companies need to focus their efforts to become digital masters to remain competitive.
Sourced from Marco Comastri, CA Technologies