Market forces are changing business dynamics faster than ever. To keep up with impending seismic upheavals which may shake entire industries to their core, individual companies need to constantly re-evaluate their own business priorities.
In many cases, an organization’s best response to impactful change will be to shift its own core business focus. This may be a move from products to services or vice versa, a shift to source new or complementary products should that core product or service become commoditized, or to identify a different customer base or vertical niche.
How can companies future-proof their organizations in the face of an impending shift in their core business? Business management software that’s flexible and adaptable is one of the best tools firms can adopt to anticipate and adapt to change. It can help them rescale their businesses and focus on core operations, then position them to grow once they have made those adjustments.
In the past, on-premise business management systems were customized to accommodate the needs of a company at one fixed point in their business evolution. But as that organization grew or diversified, those older, rigid systems have acted as an obstacle to change, not an enabler.
Today’s cloud systems are built with flexibility at their core. They contain all the necessary business processes that can enable a product company to manage both its existing core business and a brand-new services operation using the same single system.
Cloud systems are also continually updated with new functionality – they function more as living-and-breathing entities in pace with the maturation of companies, rather than the ossified and restrictive on-premise alternative, which often went years between updates.
Change and adaptation have been a constant in business. What’s different now? In part, it’s the coming together of a variety of powerful market and technological forces which, once combined, are both accelerating the impact of and the fall-out from change. The acceleration in the rate of change means market incumbents have less and less time to respond to that change by adapting and adjusting their own operations.
Just consider the upsets we’ve witnessed in the space of the last decade with the fading away or demise of former market leaders in industries such as consumer electronics, media and entertainment, retail, telecommunication, and, of course, technology. They proved unable to refocus their core businesses as new ideas and start-ups entered and captured their markets.
There are four primary trends forcing change for business today: more educated and empowered customers; the proliferation and expectation of subscription or rental services; the rapid evolution of sensor technology; and the vast amount of data being generated and collected. Organizations should carefully evaluate how these trends are impacting their business now, what it means for the future and how their business management systems can keep pace.
The empowered customer
Today’s buyers can research purchases in advance via a wide range of sources, both factual and subjective. This means organizations have the opportunity to engage with more motivated buyers; but they also need to be acutely aware of what’s being said about their products and services. Ultimately, part of their core business may well become that of an educator as well as a generator and aggregator of online content.
Subscription or rental services
Customers are now eager to pay for their services by subscription, NetFlix and Spotify being some of the notable consumer examples. A subscriber equals a more engaged customer ripe for cross-selling and up-selling. Organizations that can package up existing services or create new ones are starting to take advantage. For instance, productizing an organization’s wealth of expertise about a particular vertical or niche market – a maker of doors might also begin selling a secure remote entry service, or a heavy equipment manufacturer could focus less on product sales and more on product rentals.
Embedded intelligent sensors
More and more products are now able to signal their status, usage, and need for repair back to the manufacturer. The emergence of the Internet of Things creates an opportunity to transform a business through new services that can convey this data back to partners or directly to customers. Additionally, the knowledge gained from intelligent sensors such as when and how products are used and when they break down can be funneled directly back into product design potentially resulting in changes to core offerings.
This treasury of historical and current information collected from customer behavior, services usage and sensor data remains largely untapped so far. The rise of sophisticated analytics is likely to provide companies with the means to mine the data for sources of future data services revenues. For instance, a utility that can alert businesses to their energy consumption and provide comparisons with the consumption patterns of peers in the same industry or region.
Any company, no matter which market it occupies, ignores these developments at their peril. The result may be new entrants challenging and potentially overwhelming market incumbents; or these forces can provide existing companies with the means to reinvent their core businesses. It will never be sufficient to emulate what start-ups may offer, market incumbents need to take stock of all their existing assets and consider how they may best be productized.
Re-imagining a company’s core business takes a combination of vision and courage, together with adaptable and flexible business management software as a platform to effect true business transformation.