The digital world keeps evolving over time, advancing performance, functionality and market reach. These are not news; for the past few years businesses have been trying to grapple with fast changing digital media, realtime-focused systems and services, and ever morphing customer demands. In fact, the concept of real-time has transformed with technological advances and intelligent tools. Today, everyone expects and demands instant information, any time any where. Customer interaction and digital lifestyles, service delivery expectations, and marketing of products have transformed through the use of social media, mobile devices and multimedia platforms.
For decades companies have become more efficient and lean while focusing on efforts to grow their revenues. Today, companies need to respond to the digital disruption that has permeated most sectors. To embrace the 'digital way' and stay competitive, organizations look at their entire value chain, put more weight into strategic alliances and partnerships, and also 'scout' for innovation. At the TM Forum in San Jose, CA this week four themed tracks covered the aspects of profitable services in a disruptive market and focused on leveraging new technologies and services from a business perspective. Tony Poulos (TM Forum), David Pleasance (Deloitte) and Duarte Begonha (McKinsey & Company) talked about the major drivers, opportunities, trends and risks for businesses in our evolving digital world.
As we move into the future, organizations need to look beyond the operational transformation digital technology offers. Companies need to constantly innovate and find the 'secret sauce' in combining business necessity with opportunity. A classic enterprise faces these challenges today:
- Constant pressure to lower costs
- Deliver faster
- Deliver newer and cooler products, services and programs
- Migrate to faster information processing cycles, or even real-time response,
- Dealing with more difficult questions
Becoming agile is the key to resilience, but companies must apply dexterity at the broader concept and throughout the business practices, the decision making processes and governance. The key is not only to develop flexible systems or to use agile project management methodologies, but also adapt to an agile management style, with quicker decision making, faster prioritization process, and performing with less-than-perfect indicators.
The modern customer is tech-savvy, with instant access to information, and has a number of devices. In both B2B (business-to-business) and B2C (business-to-consumer) models, customers can check the product or service, compare prices, access reviews, and, in retail for example, even gauge inventory levels at the local store. Customers expect real-time engagement and personalized offerings. The ‘batch’ processing mentality is of the past. Everything moves fast nowadays and companies need to change their business models to respond faster and in a flexible manner, shifting as needed to stay competitive, and maneuver around opportunities. Further, agility may provide opportunities to minimize the risk of investing in a complete full-cycle development of products, services or models, which later on - at launch - may have become outdated or less attractive due to the long maturation process. Executing a nimble approach starts with the strategy, enabling rapid decision making and being open to pivots.
How can companies become agile?
- Transitioning into an innovative culture is a challenge for many businesses. Corporations have set organizational structures and dynamics that have developed over many years, even decades. Recognizing that management styles and structures of the past have mostly encumbered innovation is key. Changing the culture is not easy and it takes time.
- Human capital; Encouraging creativity and innovation.
Finding and cultivating new skills internally is becoming important. Companies are realizing the value of investing in human capital - the business employees. Some corporations address innovation through the cultivation of smaller teams within the organization, and allowing such teams to thrive without facing the, most often, cumbersome existing company dynamics.
- Consolidating around core businesses; Being crisp of what can be changed.
Taking another approach, some businesses change their multi-directional strategy and focus on what they do best, letting go of other areas that do not align with the business mission, goals and core competencies. Cutting down on the families of products, consolidating technologies, and focusing the strategy, etc. are ways for businesses to be sustainable but also develop resiliency.
- Building alliances with other businesses is becoming more prevalent. When it comes to partnerships, public-private combinations might be effective and hold economic value in offering services.
- Strong leadership.
All of the above shifts progress toward resiliency. Such changes require powerful leadership and the type of management that is able to gain employees’ trust and capture internal enthusiasm at all levels of workers. Integrating the changes into the culture, the business models and internal operations require decisive and confident leadership.
- Gradual change; Changes in culture, in business focus and models take time.
Modularity and adaptability are key. Experts do not suggest to exercise a big-bang type of approach. The idea is gradual operational transformation, where everyone in the company and existing business partners can adapt.
To become game changers, some companies have realized that practicing agility is necessary and that is the future direction of business. ‘Living’ with uncertainty shapes the future of business operations and not everything can be put on a roadmap. The panelists noted these companies which were successful in transforming into an innovative culture: Google, Facebook, BSF, Skype, and Netflix.
According to TM Forum, Smart Energy solutions bring digital interpretation to the utilities industry. Smart Energy has the potential to reform efficiency in energy generation, management and usage. A broad range of connected devices and communication include smart meters, intelligent and interconnected devices, and the smart grid. The value of this market is expected to reach $100 billion by 2020.
TM Forum has over 900 member companies and is the largest global trade association focused on bringing together the digital ecosystem, including communication service providers, digital service providers and enterprises, with the goal of enabling an open digital world. The Forum delivers learnings and practical tools, including unique research, best practices and standards. Members engage to rapidly solve business issues in critical areas, such as business process optimization, big data analytics, cloud management, customer experience management and security. The Forum provides a neutral and open platform for collaboration between service providers, enterprises and their suppliers to overcome the barriers to an open digital economy. For example, working with the energy industry players, TM Forum explores common challenges, enables knowledge-share and the development of best practices.
TM Forum website: www.tmforum.org
TM Forum Smart Grid - http://www.tmforum.org/DigitalServices/13930/home.html