Change is Inevitable – How Will Business Adapt Over the Coming 10-25 Years?
Without doubt we live in the most exciting business times since the Industrial Revolution. The Internet has created an unstoppable tide which will sweep across the business world transforming the way we live and work forever.
For some of us who have been working on creating products and services that enable this revolution it is clear and irrefutable but for many business owners it is a minefield and a period of worry and concern. Most business owners will know the terms ‘Cloud Computing’ some will have heard ‘Social Media’, ‘Digital Age’ or even ‘Digital marketing’, but few traditional business owners will yet understand what they mean to their business. Not knowing what these terms relate to and how they can be applied will leave many vulnerable and behind in the race for competitiveness.
Large businesses have the money to invest in Cloud technology projects and, begin dabbling with Social Media, but for Traditional SME’s (Small Medium sized businesses) they have neither the money nor the time to invest like the ‘big boys’.
There are two types of SME business that we need to consider as the paths they follow over the coming years will probably be very different. The first is an existing Traditional SME business with offices, staff and IT infrastructure with existing systems, the second are Solopreneurs, small Micro Businesses and start ups who work collaboratively using a myriad of Online services such as Google Email and Apps, Web based CRM, Online project management tools, shared filing etc.
Let us initially take a look at the Solopreneur or Micro Business start up. These in the main will be younger people with few financial resources behind them and where getting the job done for as little as possible will be the main objective. The Internet is ideal for low cost applications and services and so this arena suits their financial limitations. They will spend time (which they have), enthusiasm (Young and energetic) and the familiarity with Internet / Mobile technology to seek out and learn how to use web based services to achieve their goals. Being completely web savvy they will use Social Media platforms to find Customers, Suppliers (Collaboration partners globally) and spawn new JV (Joint Venture) businesses with like minded individuals they hook up with, wherever they happen to be (it doesn’t really matter does it?)…
For this group their entire businesses will be Web based, they will have no qualms over data location, security or trust, it is just the most sensible and cost effective method to get the results they need. There is in effect no limit to the size of business that can be created using these techniques, as a single person business might have 500 partners spread across the globe working together generating significant revenues.
Now let us look at the existing Traditional SME business, how can they embrace the Digital Revolution with all the existing baggage that they have and compete against the overwhelming benefits available to the new wave of low overhead, Online Socially mobile, tech savvy entrepreneurs of the future?
The first thing to avoid is panic… none of this will happen overnight, but it will happen over the coming years. The likelihood is that existing businesses will tackle the Digital Revolution in three main bites. These three changes will not all happen in parallel necessarily although combinations of them could.
The first step is to embrace Cloud Computing. This will do three things, firstly reduce the costs to the business of IT, secondly it will provide the opportunity for more flexible working practices and thirdly it will open the door to collaboration and interacting with other cloud services. This step moves the business onto the Web and starts the process of overhead reductions which can be introduced later on. It is a move which stabilises the business and enables it to operate more efficiently, improving service to clients whilst reducing the cost of processing each Order.
The second step is to build a Digital Marketing department. This requires a completely different strategy from traditional marketing and may under extreme circumstances be entirely outsourced. This step is about increasing the client base and generating higher revenues with much lower incremental costs, thus improving the profitability of the business.
The third step is to look at the business and examine whether component parts of the business may be better delivered by external Suppliers (Outsourced). Digital Marketing above is one such example but with the business now managed on a ‘Cloud platform’ controlled access to run parts of the business can be externalised to 3rd parties without compromising the business… this could be for example the entire ‘pick and pack’ operation to a specialised business who could process each order at a lower cost than if performed internally.
Having worked through the 3 steps above, the Traditional business has moved from the other end of the spectrum away from the conventional business model. Now the business could almost operate without an office and has converged into the same space occupied by the Solopreneur / Micro business. The ultimate destiny will be to have employees re-engaged as independent outsourced Suppliers. This would be the final stepping stone to the task orientated remuneration model of the future rather than the attendance model of the past 150 years.
In conclusion and some final thoughts, in all of the above the message that comes across loud and clear is, move the work to the people not the people to the work… By its very nature this enables individuals to work more efficiently (working without travelling) and takes large numbers of vehicles off the road.
By working smarter at least 10% of the traffic could be reduced which in most cases would mean far fewer queues and much quicker journeys for those that do have to travel. There would be the inevitable reduction in Carbon emissions but perhaps even more important a return to community and responsibility for where we live, work and play.
Two simple strategies that many governments could commit to very easily is (1) Introduce Fibre Optic infrastruture that provides the necessary data demands for today and the future… (£1bn could be diverted from the road building programme to achieve this)… and (2) provide tax breaks to businesses, both those moving to this method of working, and for those helping them to achieve it!