Everyone knows business is increasingly connected. But the way we’re connected, and the value we derive from those connections, is changing. In particular, the knowledge that’s now intrinsic to our networks can drive innovation in products, processes, business models, and more. But to leverage network knowledge for innovation, you have to know where to find the knowledge and how to put it to use.
Business is increasingly complex, with greater globalization, market volatility, government regulations, and risk. It’s also increasingly networked and interdependent, requiring significant interaction with suppliers, trading partners, third-party experts, and customers.
Many of those interactions still rely on technologies and methods that have been available for a long time: phone, e-mail, and so on. But those means of interacting are inefficient, and they don’t scale well. What’s more, those connections tend to be with people and organizations you’re already connected to, limiting the potential value.
Today’s Networked Economy offers opportunities for connecting to a much broader set of parties, in much more effective ways. In addition to personal contacts, they bring together current and potential suppliers, partners, and customers across both the financial and physical value chains. And increasingly they include machine-to-machine sensors and devices.
These wider, denser networks hold vast amounts of knowledge. For example, if you’re entering a new market, how do you evaluate the associated risks? How do you determine what product modifications may be required to suit local tastes? You certainly have your own experts, as well as external market data. But your networks of suppliers, partners, and customers may hold much more valuable knowledge.
Connecting with that knowledge requires taking advantage of new channels and technologies. First are business networks. In the past, companies relied on one-to-one business networks, establishing a direct link between both parties. Today’s business networks provide much more scalable many-to-many approaches that build large communities. These allow organizations to make new contacts, share knowledge, conduct transactions, and much more. And the massive volumes of data flowing through these networks can be harnessed to derive new insights.
Second is the Internet of People, including public social media and enterprise social platforms. These allow organizations and the people within them to identify experts, share knowledge, and jointly solve problems.
Third is the Internet of Things. This is the rapidly growing network of sensors and devices that can automate the capture and analysis of data and that will increasingly generate new knowledge and insights.
Connect and create
The knowledge embedded in these networks delivers value in many ways, but chief among them is an enhanced ability to innovate. Specifically, network knowledge can drive innovation among internal teams, across corporate boundaries, and even with customers. Internal teams can leverage social collaboration tools for innovation. Let’s say you’re designing a new product. Your team may be highly talented and experienced. But if you can leverage networks to double the breadth and depth of that team, you can gain new data, insights, and solutions.
Participating in networks beyond your four walls is increasingly crucial to innovation. Carmakers and aircraft manufacturers, for example, have been doing this for years, working with select suppliers to improve engine and overall product design. But that kind of joint effort is limited to small numbers of strategic partners. Today, networks let you extend collaboration to many more categories with many more suppliers, including potential ones you previously were unaware of.
Not only that, but you can also expand beyond simply sourcing materials. Rather than specifying an exact design, you can communicate your requirements and allow suppliers to apply their own knowledge to meeting the needs of your business and your customers. This can lead to innovative solutions that better meet your needs or drastically reduce costs. Think crowdsourcing for B2B.
Finally, networks are bringing businesses closer to their customers, transforming both innovation and customer relationships. In the past, companies relied on focus groups and surveys to understand customer behaviors and desires. Today, social, mobile, and other linking technologies are enabling producer and consumer to exchange knowledge faster and more effectively than ever before.
This has led to the rise of prosumers who share their insights and participate in product creation. That results in more effective innovation, as well as the products and services that drive higher sales and greater market share. The combination of business networks, the Internet of People, and the Internet of Things is shaping how we work and live. And we’re just getting started. The Networked Economy will have a profound impact on our future.