How Innovation Levels the Playing Field and Delivers Value
Over the past three decades, a digital revolution has transformed major sectors of the economy. According to a study by Bain & Company about Artificial Intelligence, many industries plan to increase investments in automation across the board using technologies like Machine Learning. While some might argue that this type of innovation will continue to fuel an unfair advantage for larger enterprises over smaller firms, I will spend some time to debunk this myth in this blog. I will highlight how innovation enabled by technology can help level the playing field and deliver value.
Opportunity Creation Enabled by Technological Innovation
Global trade has grown significantly over the past three decades with worldwide GDP increasing from USD 11.16 trillion in 1980 to USD 83.84 trillion in 2020 according to the International Monetary Fund DATAMAPPER. In a recent blog, Value Creation at Quantum Speeds, I have explored the scale and value of opportunities that have been created by businesses to transform value chains across industries such healthcare, higher education, retail, entertainment and banking.
A closer look at the makeup of the Fortune 500 companies between 1990 and 2020 reveals how new business models have emerged and how businesses have transformed to address changing market demands. Technological advances have enabled businesses to better serve their markets and thereby transformed several sectors of the economy. Let’s take a closer look at the role of technology in this transformation.
Rising Technology Tide or Tsunami
Customer and transaction data are increasingly shared by both individuals as well as sensors attached to devices. New technological innovations like machine learning have enabled companies to launch programs that tap into the vast amounts of customer data and transaction data. These programs are designed to understand the needs of individuals and offer them tailored products and services. The same programs have raised significant concerns about data privacy for individuals. To better address concerns about data privacy and how these insights are used for making decisions, regulations similar to the General Data Protection Regulation (GDPR) for the European Union are being embraced by many countries.
However, the continued growth of larger companies and their ability to mine customer and transaction data raises important questions about how these companies will impact societies. Can the rising tide help lift many boats, large and small or are we facing a tsunami where smaller companies get washed away leaving a few dominant players in charge?
A More Level Playing Field
Small and mid-sized businesses can be leading players in implementing digital innovation to better serve their customers and partners. Let us review some companies that are leading the way forward in their respective markets and using technology to level the playing field.
Climate change is at the top of the agenda for many government and business leaders. Meteo Protect offers insurance policy customization to help their customers better assess risk and mitigate against the risks of climate change. Meteo Protect team within the Cooper Gay Group, a leading wholesale pan-European Managing General Agent (MGA), is exclusively dedicated to the financial management of weather related risks and the development of parametric solutions.
In many countries, the construction industry continues to launch new projects to meet the growing demands of constituents. In Peru, Cementos Pacasmayo partnered with IBM and SAP to deliver a comprehensive construction program with offerings such as building roads and bridges, and many other concrete structures. This program complements their expertise in producing and distributing cement.
The pharmaceutical industry is undergoing major changes. Pharmaceutical companies are partnering with Enable Injections to allow patients to self-administer specific therapeutics at home, thereby avoiding a visit to a healthcare facility.
In a Wall Street Journal article, With Shopify, Small Businesses Strike Back at Amazon, the author describes how Shopify provides small and mid-sized merchants access to cloud-based third-party services such as payments and fulfillment for goods and services. The merchants retain more control of their branding and customer relationships instead of relinquishing control to larger providers like Amazon.
In conclusion, small and mid-sized businesses are using technology to level the playing field and delivering value to their customers.
Build Your Roadmap to Deliver Value
SAP has partnered with S&P Capital IQ to deliver a program that can help C-Suite leaders benchmark the maturity of their business models and business processes to peers in their industry and region. We believe this program offers small and mid-sized businesses the opportunity to identify opportunities for growth and steer their investments to maximize their return on investment (ROI). To learn more, about how small and medium sized business are using SAP to level the playing field and better serve their customers, visit here.
If you would like to learn more about how to build your roadmap for value creation, visit SAP Value Lifecycle Manager.