Ready or not, the world is changing – and your business models and processes must evolve to keep pace.
First, anything and everything that can be digitized will be, from your digital reputation that determines how quickly you get an Uber pickup to your toothpaste printed in 3D at home. Digitization is creating surprising new opportunities. For example, researchers are experimenting with ways to print food, pharmaceuticals, complex 3D components, discontinued parts, and even the structure of a lunar base station.
Second, eventually everything will be available as a service. (we might soon see the rise of yet another new acronym: EaaS.) Widespread service models will allow everyone to enjoy the benefits of elasticity and utility in the way they consume goods and services. The impact of everything-as-a-service will extend far beyond digital reputations and 3D printing.
In what Rachel Botsman calls the sharing economy, consumers can rent a Zipcar for specific trips rather than owning a vehicle. And the platform approach embraced by these service-oriented companies means that AirbnB allows the user to contract for cleaning, food, and other services, just like a traditional hotel.
Will IT be any different? Of course not.
Facing the change ahead
Digitization and everything-as-a-service shift the dynamic of how companies interact with customers – and how companies interact between themselves. As a result, the industry is headed toward what I call a Delight, Standardize, And Adopt model.
Here’s how I see it:
- If a customer is not delighted with your offering, they will switch to another service provider, because they can. Abundant digital choice and everything-as-a-service gives customers the upper hand. Always.
- If the services and solutions offered and consumed are not standard, your company cannot gain the benefits of scale (and best practice) in this market. Therefore, your company will be burdened by undue costs, complexity, and lack of agility.
- If services are not adopted in the world of everything-as-a-service, then your customers (and ours, too) will not pay. Adoption or usage will be the key driver for revenue.
A few enterprises are succeeding with Delight, Standardize, And adopt models. Think of Uber, the world’s largest taxi company (which owns no taxis), airbnb, the world’s largest hotelier (which has no rooms), and Facebook, the world’s largest publisher (which generates no content). All of these companies took traditional business models and turned them upside down through digitization and everything-as-a-service models.
How will your company respond to the challenge to delight, standardize, and adopt?
Reimagining your business
Most companies struggle to reimagine their future because they are burdened by existing assets, business models, and business processes, as well as previous commitments and past processes. That’s why niche startups are often more free to innovate. But there’s no need to let them have all the glory.
Here are four key steps to becoming completely digital and offering your products as services:
- Move from design thinking to a design mindset. Consider the opportunities from all angles, and imagine the possibilities. Look at what you offer from your customers’ perspective and from the view of your customers’ customers. How would they (re)imagine what you do – or how you might do things better?
- Redesign your business processes. Move beyond what your company has always done. Consider what your customers need, and reshape your processes to deliver on that in the most efficient, cost-effective way possible. Keep in mind that processes may increasingly be initiated by a device or a thing instead of a person or by someone in your extended ecosystem rather than from within your four walls.
- Rip out complexity by the roots. Simplify processes and solutions across the enterprise, with the goal of meeting your customers’ requirements rather than maintaining the status quo. If, as Leonardo da Vinci said, simplicity is the ultimate sophistication, then complexity is the enemy.
- Embrace fourth-generation technology and processes. High-velocity, digital enterprises need real-time insight and powerful processing to support the business. The right solutions and processes can serve as the backbone of a digital enterprise, enabling your business to blaze new paths.
Leading your enterprise to delight, standardize, and adopt takes skill, strategy, and the ability to embrace simplicity. Whether your business makes a radical shift to this new approach or slowly evolves, we’ll be here to help you navigate the changes.
Simon Paris is president of Industry Cloud at SAP
connect with Simon on Twitter: @simonmparis