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Why Enterprises Have a Love/Hate Relationship with Digital Natives

This article was updated on July 6, 2021

It's been more than a decade since the oldest millennials entered the workforce and the youngest members of Generation Z just graduated from college, yet leaders at traditional workplaces are still trying to get a handle on how to manage digital natives. What's the best tactic to address their increasing demands for flexibility, put to good use their constant need to challenge the status quo, and take advantage of their technological prowess? Sure, these youngsters have been disruptive, but they've also been useful.

The same is true for digital native companies. Because they are "born in the cloud," they already know the language and landscape. Their infrastructures are already cloud-based so they can easily adopt emerging cloud technologies — something that's proven harder for enterprises with their legacy technology, slower processes, and longer tech learning curves. Digital native organizations tend to be smaller, leaner, and more agile, which is great when they're a vendor or partner, but not so great when they're a competitor.

Take, for example, the retail industry. There are the digital native companies that brought stores revenue-boosting gems like email marketing, e-commerce websites, and social media. But other natives — ahem, Amazon — brought the industry to its knees and made everyone else go digital or go home.

Of course, traditional enterprises can adapt and even thrive. Many retailers have done so, even in the Amazon era. Just like baby boomers can master a smartphone, enterprises can master digital transformation. It just might take a little longer. Enterprises can also do what smart baby boomers do — shorten the technology learning curve by letting a digital native show them how it's done.

Don't Fear the Competition

There's no denying it: Digital native competitors are among the greatest threats to traditional enterprises. These technology-forward companies are in tune with industry trends and are successfully taking hold and reaping the benefits of unified communications and other emerging cloud technologies. They have proven to be the most aggressive adopters and drivers of digital solutions and, in doing so, effectively put the hurt on many traditional enterprises.

However, hope is not completely lost for the incumbents. Those that fully embrace digitization become at least as competitive as digital natives, according to a recent McKinsey report. Despite the impressive growth that cloud-born companies often boast, they're starting with a smaller market share — about 5 percent, on average. Meanwhile, traditional enterprises with a strong digital focus command about 20 percent and are twice as likely as other enterprises to report exceptional financial growth.

Still, most enterprises have some serious catching up to do. How can they compete with smaller, sleeker digital companies?


What Enterprises Can Learn from Digital Natives

What are all the cool kids doing these days, and how can their more mature counterparts get up to speed?

1. Work in the Cloud: Most enterprises have already moved at least some units, workloads, and communications features to the cloud, but few have achieved organization-wide adoption of these technologies the way digital-native organizations have. For that reason, few are getting the full cloud migration benefits, which include everything from scalability and mobility to improved analytics and lower costs.

Of course, the race to full cloud adoption isn't a fair one, considering digital native companies started at the finish line. Still, enterprises that are poised to catch up can give the new guys a run for their money.

2. Build Digital Ecosystems: Digital native decision-makers don't just look for digital solutions. They look for solutions that work together — platforms that combine different tools and can be integrated with other systems and databases using developer-friendly APIs.

For example, instead of investing in a cloud phone system from one vendor, an instant messaging tool from another, and secure texting from a third, they look for unified communications platforms that can streamline internal communications. Instead of having dozens of tools to interact with customers in real time, they use a communications platform-as-a-service — one that can be integrated with unified communications-as-a-service, CRM, and other communications software.

Put simply, rather than siloing data and communications, they build digital ecosystems that are increasingly connected. This streamlines operations and gives them a head start on adopting artificial intelligence, the IoT, and other emerging technologies.

3. Have a Truly Digital-first Mindset: For executives at these young companies, digital technology isn't just a tool. It's at the core of their business models, communications, workflows, operations, and talent management. It's not an expense: It's a strategic investment. It's not about keeping the lights on, it's about spending money to make money.

Granted, enterprises have to spend more up front to replace legacy systems and scale their efforts, but the long-term benefits are worth it. Along with the competitive advantage that digital-first organizations now have, cloud computing can cut IT costs by 25 to 50 percent, according to the World Economic Forum.

4. Stay Aware of the Latest Technology: Digital natives — both the human and corporate variety — know that technology changes rapidly. So, they stay up-to-date on the latest trends, emerging technologies, and advances that are still under development.

Not only are they avid consumers of information about these technologies, but they also work with innovative and knowledgeable vendors who can help them navigate the current trends and prepare for future disruptions.

Explore Vonage Business Cloud and discover how easily cloud communications can help your enterprise compete in an increasingly digital, cloud-based world.

Vonage Staff

Written by Vonage Staff

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