Business Transformation Special Report 2017

Issue link: https://raconteur.uberflip.com/i/792009

Contents of this Issue


Page 12 of 15

RACONTEUR.NET BUSINESS TRANSFORMATION 13 28 / 02 / 2017 world when it comes to The Now Economy. Our expectations have changed so much even in the last 18 to 24 months. Think about how we order meals, listen to music, find new relationships. Our every- day consumer world has been dis- rupted beyond belief. "In comparison the world of B2B can seem arcane, slow and frustratingly one size fits all. Too often B2B companies seem to be innovating around the edges as op- posed to fundamentally rethink- ing the opportunities that tech- nology can provide time-starved individuals. "The opportunities in the world of healthcare, law and talent are glaring. It's telling that all the fa- mous Now Economy cases are con- sumer ones. It absolutely shouldn't be the case." Even if B2C tech firms have grabbed the headlines, lots of B2B London New York Dubai India Singapore www.toriglobal.com Experienced Practitioners helping you to: YOUR ENTERPRISE DIGITISE CHANGE RUN CONTROL MANAGE demand instant gratifi cation Amazon has been a pioneer in so many areas of the business-to- consumer market from books and digital entertainment to clothing and groceries, but it has also developed a large business-to-business (B2B) cloud- computing operation. Amazon Web Services (AWS) has its origins in Amazon's own IT department as Jeff Bezos's online retailer invested in speeding up its own computer- processing systems. He realised Amazon could off er these cloud-computing and storage services to third parties and AWS has become a huge revenue driver since launching in 2006. Annual revenues from AWS doubled in two years from $4.6 billion in 2014 to $12.2 billion last year and are accelerating. Mr Bezos boasts it has grown faster than Amazon itself did in its first decade. AWS has more than one million corporate customers from Netflix and Snapchat to Condé Nast and Kellogg's. They sign up on a pay-as-you-go approach. The AWS sales pitch is "You pay only for the individual services you need, for as long as you use them, and without requiring long-term contracts or complex licensing" and is priced in a similar way "to how you pay for utilities like water or electricity". Mr Bezos believes AWS's success has come from being focused on constantly reinventing the customer experience. He explained in a letter to shareholders last year: "AWS is made up of many small teams with single-threaded owners, enabling rapid innovation. The team rolls out new functionality almost daily across 70 services and that new functionality just 'shows up' for customers – there's no upgrading." According to Mr Bezos, AWS has also cut prices 51 times in ten years and he has promised to introduce more and more capabilities that will make it easier and easier to collect, store and analyse data. This mindset of rapid and relentless innovation has made AWS the market leader and a prime example of a successful B2B company in The Now Economy. CASE STUDY AMAZON US President Donald Trump has taken a 'Now Economy' approach to policy- making using Twitter to put pressure on political opponents and businesses companies have been changing be- hind the scenes. "Supply chains are a great exam- ple of this," Mr Colville says. "In in- dustries like fashion, for example, the traditional four seasons have broken down – it's about getting designs into the shops the instant they hit the catwalk, seeing which ones take off, then doubling down on those orders. That means every- one across that supply chain has to be far more agile. "If you're a supplier in Bangla- desh, you need to be able to switch people instantly from making this T-shirt to that one as demand surges and then on to the next thing almost instantly. The prob- lem is that the faster and leaner your supply chains, the more vul- nerable they are to disruption." Sue Unerman, a strategy expert who was recently promoted to a newly created role as chief trans- formation officer at MediaCom, a media agency, says most busi- nesses need to transform them- selves and keep doing so on an ongoing basis, to suit this era of digital disruption. "I still come across situations where agility isn't built into the business fully," says Ms Unerman, whose agency looks after clients including Sky, Tesco and Deliv- eroo. "It's not just a question of buying into things being a bit fast- er. A B2B business might need to go through a complete redesign. Fur- thermore, culture has a huge part to play here." She quotes a recent study from the research firm Gartner that warns: "The biggest threat to in- novation is internal politics and an organisational culture which doesn't accept failure and/or doesn't accept ideas from outside, and/or cannot change." Innovators will steal a march on their rivals while laggards risk going out of business in The Now Economy. "If you're the business that's agile in your sector, the com- petitive advantage is real," Mr Un- erman says. Richard Shotton, deputy head of evidence at Manning Gottlieb OMD, a media agency whose cli- ents include John Lewis and Wait- rose, agrees agility is important, but says it should not be confused with speed at all costs. "Customers certainly claim they want things faster, so companies would be remiss not to consid- er speeding up their service," he says. "However, before investing funds, companies might want to consider whether there are better alternatives. For example, it's of- ten not the length of time that an- noys people, but the uncertainty. "A courier company will gain more customer satisfaction by updating their clients about the progress of the package and providing shorter arrival windows than delivering 15 minutes faster. Often, these improvements in cer- tainty are far simpler and cheaper to implement." Mr Daisley at T witter also be- lieves there are limits to The Now Economy, not least the potential toll on people and culture. "To some extent technology is making things increasingly stressful for all sides," he says. "In their book, A Beautiful Constraint, Adam Mor- gan and Mark Barden describe this phenomenon and the rise in 'un- reasonable' levels of consumer ex- pectation as 'U ber's children'." Automation, from smart energy in the home to self-driving cars to artificial intelligence (AI), is where some of the biggest oppor- tunities may lie. "Clearly anyone who can satisfy these demands will have an advantage," Mr Dais- ley says. Even then, AI and big data cannot hold all the answers. "Companies need to be cautious about using re- al-time data in their decision-mak- ing," Mr Shotton says. "Not all in- formation can be captured in real time so just relying on that can lead to a partial view of your busi- ness problem. This is compounded by the fact that once people have data they feel remiss, unprofes- sional even, not using it. So they end up making decisions based on data that is easily captured, rather than the data that is best suited to solving their problems." Mr Colville concludes: "In terms of B2B, the lesson is clear. You're either helping your customers do things really well or really quickly – and ideally, both. If the service you're providing isn't doing either of those things, then it's really hard to see how it's viable in the long term." Ian Masterton/Getty Images

Articles in this issue

Links on this page

Archives of this issue

view archives of Raconteur - Business Transformation Special Report 2017