In the relentless pursuit of success of today’s business world, change is the only constant. No industry remains untouched by this rapid digital transformation, especially the last mile delivery market, which was valued at $131.52 billion in 2021, and is expected to reach $288.87 billion by 2031.
Let’s try to visualize this $157.35 billion increase. If we consider the average cost of a new car in the United States was approximately $40,000 in 2021, this increase is equivalent to almost 4 billion new cars. That’s more than half of the world’s entire population in cars!
Companies relying on outdated technology are falling behind, hampered by inefficient manual processes, security risks, and limited scalability. Often, the challenge of change management leads to a state of inertia, trapping them in a cycle of inefficiency.
Meanwhile, customer expectations are rapidly evolving, demanding the agility that only constant tech upgrades to ensure their satisfaction.This is why outdated technology impedes growth by limiting competitiveness, and stifling scalability. Strategic digitalization is not an option—it’s a necessity to survive in this fast-paced, digitally-driven environment, effectively seizing market opportunities.
The Critical Role of Strategic Digitalization
In today’s digital age, merely keeping up with technological advancements is no longer enough. Strategic digitalization is no longer a choice but an absolute necessity. As evidenced by 70% of companies either implementing or actively working on digital transformation strategies, it has become clear that digital solutions are not just value-additions but fundamental for survival. This goes beyond hasty adoption of new gadgets or software; it requires a thoughtful and forward-looking approach, leveraging the transformative power of digital technologies.
Whether a budding startup or a well-established enterprise, adapting to technological shifts has become non-negotiable. The ability to foresee, adapt, and progress amidst these changes is the key distinction between innovation and obsolescence, making it imperative to cultivate a sense of urgency for comprehensive digitalization.
Understanding the Impact of Consumer Expectations
Consumer expectations regarding last-mile delivery services have reached unprecedented heights. Surveys reveal that timely deliveries play a vital role in consumer decision-making, with an overwhelming 96% of customers equating fast delivery with same-day delivery. This emphasizes the urgent need for businesses to adopt efficient digital solutions to meet these demands.
Also read: Seven Key Strategies To Keep Up With Changing Last-Mile Customer Expectations
The Importance of a Digitalization Strategy
Digitalization acts as a powerful tool to combat tech obsolescence. By embracing digital transformation, organizations can unlock benefits such as enhanced efficiency, superior customer experiences, and increased agility. A proactive approach to digitalization is essential for staying ahead in today’s rapidly evolving technological landscape.
Also read: How Digitalization can Revolutionize Your B2B E-commerce Business
Cost Considerations: Build vs. Buy
Comparing the costs of building and maintaining custom solutions versus purchasing off-the-shelf ones, it becomes evident that ongoing costs dominate the overall expenditure. Unforeseen challenges and project delays can significantly impact IT budgets. It is crucial for organizations to evaluate the risks and benefits associated with each approach when considering their digitalization strategy.
Dive deeper with our whitepaper: Buying vs. Building Logistics Software – How to Choose
Matching Pace With Innovation
Developing proprietary technology can be a massive expense, and the cost of maintaining it can be equally draining. Collaborating with established dispatch management platforms such as Locus can provide a strategic edge, enabling you to stay abreast of innovation and industry movements. Locus refines its offerings to guarantee alignment with the perpetually evolving market scenario. By refining and updating their technological proficiency, organizations can remain competitive and consistently deliver value to their customers.
Capitalizing on External Expertise
Choosing to “buy” technology rather than build it internally allows organizations to capitalize on the knowledge and skills of external providers like Locus. This strategic approach not only spreads the cost of maintenance but also helps in circumventing technical debt. As a result, businesses can streamline their operations and concentrate on their core competencies. The collective experience and wisdom of seasoned providers boost operational efficiency, thereby fueling long-term business success. It’s not just about cost-saving; it’s about enhancing your strategic capabilities to outperform in the digital age.
Opportunity Cost and Competitive Resilience
Being a first mover in a time-sensitive market is critical for organizations seeking a competitive edge. Many businesses lack the infrastructure and technology required to seize these opportunities. Locus can help eliminate opportunity costs and gain access to live functionalities, enabling them to be agile and responsive to market disruptions.
Also read: A Study of Unit Economics in Last Mile Delivery
Time to Value and Cost of Ownership
Balancing time to value and cost considerations is paramount. Building a custom solution typically requires a significant time investment, while platforms such as Locus offer faster deployment and quicker ROI recognition. Delays in decision-making can lead to cost overruns, making it essential for organizations to weigh the advantages of time to market against cost implications.
Also read: What is Time to Value in Last Mile Delivery
In an era of rapid technological advancements, a well-defined digitalization strategy is crucial for businesses aiming to combat tech obsolescence.
Organizations should consider several factors when deciding between building or buying a digital solution. Assessing unique requirements, leveraging industry best practices, and considering the expertise and experience are key. Informed decisions ensure that organizations develop a digitalization strategy that effectively combats tech obsolescence.
By understanding consumer expectations, assessing costs, and embracing innovation, organizations can navigate the “build vs buy” dilemma and leverage digital solutions to thrive in an ever-evolving marketplace. Embracing strategic digitalization ensures that businesses remain relevant, delivering exceptional experiences to their customers while staying ahead of the competition.
References:
https://www.alliedmarketresearch.com/last-mile-delivery-market
https://www.sourcedogg.com/insight/22-stats-on-digital-transformation-for-2022
https://www.worldbank.org/en/topic/digitaldevelopment/overview
https://www.invespcro.com/blog/same-day-delivery/