Would anyone use an iPhone to save dialing time on an old, corded telephone? If that was all you used it for, and ignoring the retro style aspect in this case, it would certainly be a waste of a great technology. After all, you would miss out on the true empowerment smartphones enable (not being tied to a cord being the most basic of many). You are certainly not that foolish, are you?
It seems that the natural tendency of most people when exposed to new technology is to do just that – apply it to do exactly what they did before, but better. This has benefits, no doubt, but generally misses the real opportunity. I saw this myself while running Ariba’s Spend Visibility solution. Some customers, upon finally having access to accurate data on their spend, suppliers and the market, would continue with business as usual, just using the spend data to fill in requests for proposals more quickly and accurately. That was an improvement, but missed the real potential to strategically look for and prioritize opportunities, assess risk and much more.
Technological advances in today’s networked economy are the latest example. Just look at business networks. Previously, companies would struggle connecting and collaborating with their suppliers and customers. The effort involved in building the 1-1 connections required meant that automation would only be enabled for a handful of strategic, high volume partners. That limited the value realized from their financial and purchasing systems since many purchase orders, invoices and other documents bypassed those systems, often manually and involving paper.
Many-many business networks address this challenge, extending corporate systems to a much broader swath of suppliers and customers. So companies increasingly leverage such networks to automate their purchase orders and invoices. But those companies whose use of business networks ends there just connected an iPhone to a corded telephone.
Why? Because business networks are not just mediums for exchanging documents electronically. They can and should serve as a platform for innovation across functions. Some examples of how you can innovate using business networks:
- Beat the market by earning a high, risk-free return on your cash via dynamic discounting. And improve your suppliers’ visibility and access to cash at the same time
- Discover new suppliers or customers across the globe to reduce costs, improve service or meet CSR or other objectives
- Crowdsource innovative solutions to your problems or product improvements from the network community
- Leverage network insights to reduce risk or better segment and serve your customers’ needs
- Improve the quality of and visibility into your contingent labor, reducing costs and improving quality.
- Expand your horizons and strategically manage your spend. Are you focused on capturing every last contracted supplier on your network? Nice, but what about the huge portion of your spend that is not contracted? Automate spot quotes and purchases for that spend, saving a multiple of what is possible on already managed spend.
So how do you help your company leverage business networks to innovate? Here are a few basic steps I recommend:
- Start early. You need to consider the full potential before evaluating providers and selecting a solution. Educate yourself on the capabilities available. Not all networks are created equal. Select the wrong one and you automatically limit the potential.
- Lean on business network providers. During and after evaluation, recruit vendor guidance on how to realize the full benefit and address change management. Have them connect you to innovative customers.
- Plan for change management. Establish a cross-functional team and build a change management plan into the overall project plan. Training will be critical.
Succeed, and you will have given your organization a huge competitive advantage. Fail, and you may prove Aldous Huxley correct when he wrote that “technological progress has merely provided us with more efficient means for going backwards.”
Want to learn more about innovation in the networked economy. Click here.