Change is now happening faster than at any time in history. Think about it. Since the onset of the Industrial Revolution, winning enterprises competed on the size and scale of their physical assets. Bigger factories, supply chains, and workforces almost always led to larger economies of scale and efficiencies. That’s no longer true.
Today, leaders in the digital economy compete and succeed based on their speed and agility. The companies that are able to quickly pivot when markets and demand change are the ones that survive and grow. Those that cannot shift or change too slowly – think Kodak and Blockbuster – shrivel and die.
For the past 150 years, our ability to learn always exceeded the pace of change. Technology evolved, processes improved, and new products came to market, each catalyzing further change. But business leaders could see the shifts and react to them in time to make their own adjustments.
At that relatively slower pace, companies and industries engaged in thoughtful and deliberate strategic planning cycles. It was not unusual to create a 10-year strategic plan, execute on three- to five-year operating cycles, and plan for 18 months into the future.
No waiting in the digital economy
Now rapid-fire change is exceeding our ability to learn at a similar pace. Business models, technology innovations, and consumer demand shift so quickly and so frequently that enterprises struggle to keep up. Strategic, planning, and sales cycles have become compressed. Companies are challenged to commit to a specific direction without confidence in what the future may hold.
In the past, companies could excel by perfecting their business models, planning, and execution. No more. Paraphrasing Voltaire, “Perfect is the enemy of good.” In today’s world, it’s better to be good and first to market than to be perfect and last. Companies that wait until all conditions are exactly right before showing up at the starting line will find that the race is over before they begin. I think of these companies as sailors eager to navigate toward a new horizon, except that their anchors are dropped, preventing them from leaving the harbor.
That’s why a well-defined simplification strategy is so relevant to businesses now. Companies want to innovate but they need to do so with speed and agility. Complexity prevents this.
Success in the age of digitization
Digital transformation can be confusing and intimidating. But it also presents a new world of opportunity – to get closer to your customers, move with greater velocity, and create innovative offerings. We’re seeing transformation beginning in the 26 industries where we work, and the impact is revolutionary.
During an inspiring week at SAPPHIRE NOW, I had the opportunity to meet with several companies and discuss how SAP is helping them accelerate their digital transformation.
- Audio equipment retailer Skullcandy uses SAP Business ByDesign in the cloud to reach new markets, engage with customers via social media, and use feedback from consumers and retailers to drive the next round of product innovation.
- The Snohomish County Public Utility District relies on the SAP HANA platform to better understand customers, predict the information and services they need, and develop innovative new offerings.
- International insurance company Aegeas uses SAP solutions in the cloud to enhance speed and agility, setting up new insurance businesses in as little as five months.
In a digital world, rapid change is clearly shrinking windows of opportunity. The fastest, most agile competitors win. Are you ready to join these leading firms by using digital transformation to simplify your business?
Pat Bakey is President, Industry Cloud, at SAP. Connect with Pat on Twitter @pbakey