5 Ways To Help Your Business Survive Creative Destruction
December 5, 2018
The pace of business change is getting quicker. Of all the firms that started out on the Fortune 500 list in 1955, almost 90% were no longer on it by 2017. And since the year 2000, 52% of the list have gone.
Whatever the reasons for their decline or demise, one thing is becoming increasingly clear: the process of “creative destruction” — the term coined by economist Joseph Schumpeter — doesn’t wait for anyone and creates new economic structures (and winners) as it destroys the old ones.
Fast forward to today, and the positive impact of digital transformation on businesses around the world is even more dramatic than Schumpeter envisaged 75 years ago. IDC estimates that the worldwide market opportunity created by digitalization is worth a staggering $20 trillion — well over 20% of global GDP.
With such riches on offer, every business needs to simultaneously chart its future path while keeping an eye on the rear-view mirror to see who’s coming up in the fast lane. And those competitors may not be who you’d expect. It’s no longer just small, agile new companies doing the disrupting.
Bigger and longer-established businesses are actively embracing digital transformation and — in some cases — are disrupting themselves. To some extent, every business of every size in every industry and country is now a technology business— whether they’re building new native cloud applications, extending and streamlining existing business processes, or modernizing solutions with new user experiences. Their business model and technology choices will decide whether they’ll come out ahead or be left by the wayside.
Choose the right technology platform
Cloud is everything. You have to make sure that the platform you choose is fully cloud-enabled, or you’re working with yesterday’s technology.
Let’s assume cloud is a given. As a solution provider in this dynamic digital world, how do you determine the best technology platform — for you and your customers? Here are some things to consider when making your decision:
Aligning for success: Whether you’re a young company building a new business or an established one innovating in new areas, the choice of partner is critical. Ask yourself whether the platform provider has the technical and commercial resources to help you build and sell your solutions to a wide range of customers.
2. Enabling the intelligent enterprise: Today’s technology innovations are tomorrow’s mainstream capabilities. It‘s vital that the platform on which you build your solutions has the ability to take full advantage of intelligent technologies like artificial intelligence, machine learning, and deep learning. The notion of a truly intelligent enterprise is not just a theoretical abstraction; modern technologies can seamlessly integrate across applications and master data stores — supporting data of any type for any purpose — to deliver the automated outcomes your business needs.
3. Supporting new business models: The days of straightforward business models are over. Modern technology platforms spawn innovations and revenue streams that were unimaginable just a few years ago. Independent software vendors (ISVs) can now drive additional revenue using APIs that enable integration with other platforms — it’s important to ensure that the platform you build on allows you to automate while providing flexibility in terms of pricing, access, and reporting.
4. Digital marketplace: Business behavior inevitably follows consumer behavior, and enterprises are becoming increasingly comfortable getting all or most of the way to a decision point digitally. Look for a digital marketplace that promotes your apps, provides the ability to build good demos, and helps customers see apps within the context of their business so they can envision how those apps will work for them.
5. Cybersecurity comes standard: Much has been made of the threat of hacking and cybersecurity in the press, and rightly so. According to a study by the Insurance Journal, 53% of US businesses reported being hacked in 2016. Accenture also reports that ransomware attacks doubled between 2016 and 2017, accounting for 27% of all cyberattacks. Hackers exploit weak points in complex and ageing infrastructures — so make sure your technology provider offers high-level cybersecurity that is fully and seamlessly embedded into the fabric of their platform, so you and your customers can rest easy.
Disrupt or be disrupted
Companies around the world are leveraging the power of a leading business data platform to differentiate their solutions and services, create new business models and revenue streams, deliver a best-in-class user experience. Here are just a few examples of companies who are developing new business models and opportunities to ensure they’re aligned for success in the digital era.
It’s estimated that Americans waste about 30% of their food and medicine because of hugely inefficient supply chains. California-based Seeloz is committed to fixing the problem through intelligent technology. Leveraging artificial intelligence and powered by in-memory computing and a leading cloud platform, its Operational Optimization System (OOS) has already reduced product expirations by more than 50% and cut overall supply spend by five to 20% through intelligent supply chain solutions.
A powerful combination of technology and new DNA and genome data also promises to revolutionize patient treatments and outcomes. Every cancer diagnosis, for example, is unique and requires individualized treatment.
Molecular Health in Germany has developed a unique solution that mines and analyzes a wealth of data on each patient, their cancer, and relevant medical data to help oncologists quickly identify the most promising therapies. Along with this, of equal importance to the patient is making sure their data is secure. Every patient must be confident they’re getting the best medical care along with the most robust cybersecurity measures.
Construction and engineering is another industry ripe for enabling the Intelligent Enterprise. Projects can be huge and complex, involving a changing cast of partners and suppliers — and hefty penalties for late delivery. Berlin-based Sablono has created a state of the art web-platform and mobile application specifically designed to manage, document, and oversee complex construction and delivery management processes.
For the first time, project managers get access to real-time information about their detailed construction sequences to keep everything on schedule, resulting in tremendous time and cost savings and happier customers. And thanks to SK Solutions, a 3-D anti-collision software, they can also help protect the lives of their workers on site.
The brainchild of Internet of Things pioneer Dr Severin Kezeu: “My goal is to save lives. It was really unacceptable for me to see how many people were dying every day on construction sites. That inspired me to build a solution to avoid accidents. Besides safety, the software provides a critical layer of security and speeds up construction schedules.”
The energy industry is also facing huge changes as smart grids and the Internet of Things shake up the established order and support new business models. Speed, agility, and efficiency are crucial in this dynamic new world, and Enersis is helping energy companies of all sizes with easy-to-use mobile and cloud applications that enable decision makers to access real-time information in an easily digestible form on their iPads.
And technology has already transformed the retail industry. Digital marketplaces have redefined the customer experience and reset expectations, creating enormous challenges for retailers operating larger stores — but also opening a world of opportunity for entrepreneurs.
Indigo-Media is a futurist shopping solution that enables brands and retailers to set up ‘responsive shops’ that collect data to interpret the customer’s behavior in the store as they enjoy interactive shopping experiences. At the other end of the size spectrum, many gas station stores across the US are small, independently-run businesses — and digital transformation is now a matter of survival.
Pittsburgh-based Petrosoft’s cloud-based platform drives the adoption of new or enhanced business models by enabling these small retailers to completely modernize and streamline their on-site and back office operations to maintain profitable and sustainable businesses while continuing to serve the traveling public.
As these examples show, the opportunities are out there — so how do you get started? My advice would be to do some independent research and kick the tires on some of these programs. While it’s useful to read competitive benchmark reports, there is no substitute for hands-on exploration of vendor programs. Only then can you see if there is a fit for your unique technical or business needs.
Innovation is a tricky endeavor, but as Nelson Mandela said, “It always seems impossible until it is done.”