Why is four-year old startup Uber valued at $41billion, more than the market cap of United Airlines or American Airlines, the two largest airlines in the world? Why has it been able to achieve this value in so little time?
Because Uber delivers value to all its stakeholders.
Whenever I jump into an Uber car I ask the driver, ‘how do you like it?’ They say they love it. It has reduced their idle time. They are not wandering around trying to look for passengers. They have significantly increased their income. It gives them a sense of belonging.
It’s valuable for me too. When I was on my way to the airport the other day the taxi company I booked called to say their car had just broken down, and asked if I could wait longer.
I said “No,” and instead pulled out my smartphone, requested a car using the Uber app, and in two minutes a black car was there waiting to take me to the airport.
As I said, Uber delivers value to all of its stakeholders.
What is value?
There’s no absolutely precise way of determining value. Value is a relative concept. What is valuable to some may be worthless to others. Value can have many dimensions, and those dimensions may vary over time. Value is indeed many things to many people.
How technology generates value for companies
At the end of the day technology is a tool. Uber didn’t start their business by saying “Let’s develop a cool app.” They started their business by identifying a fragmented industry and identifying a need on both sides of the spectrum.
And they were able to use technology very, very effectively.
That’s the idea behind the statement of value through technology: identify what is valuable for our customers, employees and other stakeholders, and use technology to enable that vision.
This is happening because of the unprecedented and rapid changes in technology. Your business and industry is changing. These changes affect the way you interact with customers, the way you interact with employees, the way you bring your products to market, and as a consequence, the way you procure IT services and technology.
Many of your products are turning into digital products. You can think about some of the most evident, like how Uber is delivering taxi service through an app-enabled experience.
But others less evident like how GE is building its next generation of products around the concept of the Industrial Internet; or how Tesla is leading the car industry not only in the electric vehicle space, but also in the concept of the connected car. Tesla can diagnose, repair and update its customers’ cars remotely, anytime.
But even though value is subjective, we can place the influence of technology into three essential categories: IT efficacy, business efficiency, and business transformation.
Stay tuned for the upcoming e-book, “3 Ways Technology Drives Value for the Enterprise,” with an in-depth discussion and examples of how technology is driving value through enhancing IT efficacy, business efficiency and enabling business transformations in various industries.