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The bicycle of the mind for enterprises


The bicycle of the mind for enterprises

The omnipresence of computers in our everyday lives is something we as consumers have embraced, with no path back to a pre-digital existence. Computers and smartphones have become the norm and constitute an integral part of the world in which we live. But has the digital revolution changed enterprises to the same extent? As we will examine, we are still in the nascent stages of the shift to the intelligent enterprise.

Steve Jobs, the co-founder and former CEO of Apple Inc. (Nasdaq: AAPL), once mused on technology, noting that “what separates us from the high primates is we’re tool builders”. Jobs referenced a study which measured the efficiency of locomotion for various species on the planet:

The condor used the least energy to move a kilometre, and humans came in with a rather unimpressive showing of about a third of the way down the list. It was not too proud of a showing for the crown of creation. That didn’t look so good but somebody at Scientific American had the insight to test the efficiency of locomotion for a man on a bicycle. And a man on a bicycle, or a human on a bicycle, blew the condor away; completely off the top of the charts. And that’s what a computer is to me. What a computer is to me is it’s the most remarkable tool that we’ve ever come up with. And it’s the equivalent of a bicycle for our minds.”

There is no question that technology, via computers and the smartphone, have had profound changes on our lives as consumers. However, companies have been slower to embrace the power of digital technologies, and we are still in the beginning of the digitisation of the enterprise. As we can see below, the proportion of businesses using software tools such as ERP and CRM is still low, albeit increasing.

Screen Shot 2020-06-30 at 3.35.38 pm

The intelligent enterprise is a concept where businesses infuse technology into business processes and customer experiences to achieve greater connectedness within the organization to drive efficiencies. Newer technologies such as artificial intelligence (AI), machine learning (ML) and predictive analytics are enabling the automation of routine tasks, and freeing up the resources of a firm for higher-value tasks.

These new technologies also allow for the better use of a firm’s data to garner real-time insights. For example, the use of sensors to detect when a part on a machine is nearing the end of its life and due for replacement can improve the efficiency of maintenance cycles and reduce downtime.

The Montaka team seeks to identify and invest in the long term winners from this concept of the digitisation of the enterprise. Our view is that this theme will play out over the coming decades and a few select firms are well-positioned to benefit from this secular growth.

The Montgomery Global Funds and Montaka own shares in Apple. This article was prepared 30 June with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade Apple you should seek financial advice.


George joined MGIM in September 2015 as a Research Analyst. Prior to joining MGIM, George was an investment analyst at Private Portfolio Managers where he covered global equities across various industries, using a value investing framework. George’s prior experiences include equities research and investment banking roles at both Citi and Greenhill & Co.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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