12:32 - 28/April/2021

Every day we witness the technology revolution with digitalization getting deeper into the material world

Every day we witness the technology revolution with digitalization getting deeper into the material world. With smartphones almost taking under control our lives, we prefer messages instead of face-to-face meetings, emails instead of calls, likes instead of words. Keeping up the pace, businesses worldwide have already digitalized the services. By 2025 the digital transformation market is expected to grow at a CAGR of 23%. Needless to say that digital skills are the topmost wanted in the labor market. Thus, according to Microsoft, over the next five years, the global workforce will count 149 million technology-oriented jobs. Those were the global statistics and overview of digital transformation, but what is the situation in Armenia? Are we digitalized, or are we going the way of digitalization? What are the business strategies to meet the needs, and what changes to expect in the business sphere in the nearest future? For the survey, we have invited the IT-sphere representatives to share their ideas and perspectives.

ProDigi, Ceo & Co-Founder Aida Vopyan

How did you come up with the business idea? Was the Armenian market ready for the product you offered?

We had come up with the business idea as soon as we felt that we had all the resources and knowledge to help businesses achieve their marketing goals in the digital sphere and contribute to the development of this field in Armenia. Of course, at the first time, we had difficulties because the local market still did not have enough information and did not realize the importance and advantages of digital transformation and digital services. We did a lot of work and spent tons of time introducing and "teaching" the market about various digital marketing tools and their measurement mechanisms.

What is your strategy? Do you prefer to work in the Armenian market or to look for resources in the international markets?

The best strategy is to start with the Armenian market and then opt for conquering new markets. Working only in the Armenian market limits the development of the organization. While the tools and directions of implementing digital marketing are broad and develop each day, the local market at some point limits the opportunities of digital marketing development, and the demand for digital services may also decrease. At the moment, we have achieved significant success in the markets of the US, UK, Singapore, Australia, and Canada. The experience and knowledge we get from international markets are later used to develop the Armenian market.

How would you assess the current situation in the business sector? What is the role of "digital" in our market? Do Armenian businesses correctly evaluate the need to get a virtual presence for their business?

Of course, the market is growing, and businesses are partially aware of the potential of digital transformation and the importance of digital presence. Unfortunately, Armenian companies are not yet fully aware of the role of digitization in business development. For most companies, being in the digital world means running a Facebook business page. Today the consumers are more digitalized than businesses. Consumer behavior has almost completely shifted to the digital platform. They make most of their purchasing decisions based on the information they receive on digital platforms. The digital transformation of businesses in Armenia is much slower than the digital transformation of consumers, and as a result, many companies start to lose their consumers. And the slow development of the digital transformation is reflected in both the external and internal activities of companies. We can now offer businesses state-of-the-art technologies and automation systems to organize business activities more effectively.

Are there relevant specialists to deliver quality service?

There are many digital marketing specialists, but the quantity doesn’t deliver quality. And it has a simple reason. Digital platforms are available to everyone. People think if they can easily use any of the social networks and activate ads, they may start making money and become a digital marketing specialists. But the profession of digital marketing, first of all, requires deep marketing knowledge that cannot be gained in a day and not even a week. A digital marketing specialist is qualified only when he/she can create a strategy based on consumer behavior, use different digital tools and trends, measure the effectiveness of each of the used tools with analytics tools. At ProDigi we are guided by this principle, and our specialists develop their knowledge daily and ensure measurable efficiency of delivered services for businesses.

Is the consumer ready to move to the digital platform?

Statistical data from all over the world prove that the consumer has been on the digital platform for a long time. Today businesses need to be ready to respond quickly to consumer demands, and if they fail, many companies will lose their regular consumers.

SMARTOLOFY DIGITAL BUSINESS ACADEMY, Founder Artak Harutyunyan

The digital transformation is now so dynamic that sometimes it is physically impossible to always keep up with the latest changes. For example, less than five years ago, we had no idea about deepfake, and we never thought of restricting the usage of personal videos. Today using deepfake technology it is possible to change the face of an actor in a porn movie with the face of a person we may know. With a simple trick, it is possible to ruin the reputation of a person. It is just a small episode of being or not being ready for digital transformation. In the digital world, people are becoming completely unprotected. Before smartphone penetration, one could keep its life private and had personal space. You could enter the room, lock the door, be completely alone. What do we have now? If a person is alone in a room but has a smartphone, no one can guarantee that person is alone.

How did you come up with the business idea? Was the Armenian market ready for the product you offered?

Back in 2014, there was less demand for digital marketing. Communication with digital platforms in the banking sector showed that the digital presence indeed was very important and that it would be crucial in the future. So I decided to start my own business of digital marketing. We cooperated with large companies like banks, telecoms who were the main customers of SMM and digital marketing in those days.

In general, the response of the Armenian market to the digital transformation and our new products depends on qualified specialists. Realizing that the demand for digital is increasing day by day, and there is a lack of qualified specialists, we founded our second company, Smartology, which provides digital marketing education services, teaches SMM and digital marketing.

When digital marketing was just an interesting term in the market, companies mostly turned to digital marketing services without quite realizing its role or function. Sometimes business owners opted for the services because it was trendy or their competitors had already got them. Over time, the market began to transform, forming more precise requirements and expectations. At last, we have a market with relatively progressive views where digital marketing eventually became one of the most important preconditions for business development.

What is your strategy? Do you prefer to work in the Armenian market or to look for resources in the international markets?

If we talk about profit and business opportunities, we should definitely consider foreign markets. For the same service Armenian market pays a much lower price, so why not use a chance to get higher revenue? Of course, to be noticeable in the foreign market, the company should come up with a product that will meet the requirements of the global market. Besides Europe and the USA, China, India, Singapore, Pakistan are now considered large markets with great potential. These are the markets where digital marketing plays a significant role.

For most business owners digital presence means having a Facebook business page. During the lockdown of the COVID-19 pandemic, the consumers and businesses started to appreciate the importance of e-commerce platforms and take advantage of them. Nevertheless, most business owners still think that investing in digital is an extra expense.

Not everyone understands the importance of digital presence and long-term usefulness. In that sense, we still have a lot to do in the Armenian market. There are very few businesses that have a clear focus on digital presence.

Are there relevant specialists to deliver quality service?

The Armenian labor market has a very interesting feature. Technically, the digital market specialists are divided into two main groups. The specialists of the first group have enough experience and skills. The newcomers are in the second group. The problem is that we do not have a middle-level. The thing is that any work in digital marketing is divided into two parts: high-performing and low-performing tasks. High-performing work includes launching ads, tracking, creating a customer journey map, etc. Low-performing activity is mostly associated with social media posts, stories, blog posts, etc. There are very few middle-level professionals who have to perform the low-performing activity, and it is the biggest issue of digital marketing agencies. The problem is that professionals can easily find higher-paying jobs on freelance websites. That's why they usually outsource.

Is the consumer ready to move to the digital platform?

Today we may even say that consumer has no choice to stay away from digital transformations. There are areas where the consumer is taken to the digital world “by force”. For example, to be allowed to leave the country or enter the country, you have to download the COVID-19 related app that tracks your activity. Once you get the app, you may need another one to make it work, and so on. Thus, eventually, consumers are taken to the digital world. Such "forced" means work only for the benefit of digital integration.

Arara Tour, Executive Director Nune Tatunts

How did you come up with the business idea? Was the Armenian market ready for the product you offered?

From the outset, our business was not targeted at the Armenian market. The idea was to represent Armenia to the other countries and to attract tourists. In other words, to sell or present Armenia as a product that should be very well packed. In a world that has already been transformed into digital, where people are eager to save time on shopping and tend to search for any information online, it was a great chance for us to reach out to our customers online and to work directly with them. If not for the digital literacy of our potential tourists, they will be able to only visit their local tourist offices to book travel packages. In this case, if you want to work in the tourism sector, all you have to do is establish partnerships with foreign travel agencies and host foreign groups. Digital presence helps to reach out and work directly with the customer.

What is your strategy? Do you prefer to work in the Armenian market or to look for resources in the international markets?

The answer to this question mostly depends on what product or service you offer. In any case, it is preferable to leave the Armenian market for its limitations or interact with both local and international markets for better engagement and larger presence.

The current situation in the business sector is not quite encouraging. The studies showed the GVA of an employee or organization in Armenia is very low. The reason is the almost complete absence of specialists with on-demand qualifications, business analysts, and data experts. Any organization should have such a specialist within the organization or apply to the paid services of an invited specialist. The function of the business analyst is to study the business processes, highlight those that do not create additional value, and achieve the maximum increase of the efficiency of the organization and the work of the employees.

When it comes to the role of “digital” in Armenian businesses, we face rather specific picture. For most companies, being digitally transformed means having a one-page business website with short information about the organization, address, and phone number. Digitalization, on the other hand, is a much broader concept that primarily relates to the organization's management, operations, and mindset. There are now many online applications, CRM - client relationship management, which help to effectively organize the work, and export various reports. Based on the reports and exported data, it is possible to build a marketing strategy and make the right decisions. In other words, digital presence is not limited by website or business page on Instagram and Facebook, but complex digital management, data management, and make decisions based on the analysis of that data.

The Armenian business sector is diverse. Modern IT companies are working on the international markets and less developed spheres. Compared to IT companies in Armenia agriculture or the light industry is poor. Here the education has a huge role and the demand for specialists. Today the labor market demands IT specialists, and no wonder why agriculture develops slower than IT.

Are there relevant specialists to deliver quality service?

I think some true professionals and companies can offer high-quality services for businesses. The only thing is to increase the business literacy so that they can use the digital services and tools offered. Not having a larger pool of demand on the local Armenian market, IT companies outsource services. As a result, we have a gap on both sides. Businesses do not know what they need, and IT is not offering what they have.

Is the consumer ready to move to the digital platform?

Both business and consumer can be classified according to age, level of education, and interests. Of course, younger and relatively more educated groups have been on digital platforms for a long time. When analyzing the consumer, one should also consider the 2020 pandemic, which took many people to the online platform and accelerated world digitalization. In Armenia, this was reflected in the sharp decline in the number of bank and mobile operator employees, as customers downloaded online banking apps and tried to solve their problems online by avoiding crowded places. Of course, Armenia lags far behind digitalization, but let’s hope it is moving in the right direction.

Digital Caramel, CEO Arsen Sultanyan

How did you come up with the business idea? Was the Armenian market ready for the product you offered?

Digital Caramel is currently working on delivering two products. Both are based on the principle of monetization, i.e, we help websites to earn money. Analyzing the market needs and the services offered we noticed a gap that could be filled with a new innovative solution. The “traditional” banner ads on websites were no longer productive and didn’t get appropriate user responses. We have come up with a new format of the ad network that was more appealing to visitors and more effective to advertisers. Now we are successfully selling the native format ad network in the Armenian market.

The second product is also related to monetization that we offer only for the foreign market. We can say that thanks to our innovative ideas we are now occupying significant positions in foreign markets.

What is your strategy? Do you prefer to work in the Armenian market or to look for resources in the international markets?

The choice of working either with local or foreign markets depends only on the level of expertise of the company. If the company's experience allows it to leave the Armenian market and broaden the geography it should consider new perspectives of foreign markets. For startups with no relevant experience or appropriate resources, the Armenian market can become a very good starting point.

Undoubtedly, the role of digital in business is huge. Even in Armenia, where global trends inflow is slower than needed, digitalization is gaining momentum. Local companies slowly but steadily are going the way of digitalization. They do understand that it is impossible to survive in the new reality without the digital presence. Businesses more readily invest in digital development, whether it be product promotion, service delivery, online sales or online payment. In any case, we notice the pace of digitalization, even if it is slower compared to global norms. After all, the businesses will come to the truth that no business will have customer retention in a competitive market without digitization. Those companies that are still offline and keep afloat at the expense of regular customers will soon be pushed out of the market by competitors.

The local market is responding to digitization not correctly. The incorrect evaluation may have two reasons. Those companies that had started a business before the world digital transformation, and successfully implemented business strategies, find it difficult to adapt to innovative changes. It is mostly a psychological issue that hinders applying new business models and strategies. In this case, conservatism can become disastrous for a business with potential. If a business owner is facing transformation difficulties and is not able to overcome them, he may step back and give space to the younger generation who knows the whole toolkit and may show the right approach to business transformation.

Is the consumer ready to move to the digital platform?

Just as companies are not yet fully ready for the new normal, so are not consumers. Still, there are some points about the consumer transformation. The market underwent more drastic changes during the Covid-19 lockdown, and the consumers reacted more sharply. They moved to the digital platform much more easily because they had no other option. Even after removing all lockdown restrictions, the consumers continued using digital tools, and functions. The consumers' readiness for digitization is a matter of generation; that is, the new generation, which is already living in a digital world, does not need to get used to the changes. They are more flexible and can adapt to any change. And the generation that is not used to the digital world and remains unaware, is simply not evaluated as a target audience.