Until recent years, the word “enterprise” has often been associated with large corporations and physical office spaces. In today’s fast growing digital world, this may not be the case anymore. Concepts such as remote working have proven that space, physical location, and even physical products in stores, are not as important anymore. The game changers of today harness the magic of the internet that holds a myriad of possibilities for both consumers and businesses today.
In Singapore, the internet penetration rate is 82.5% with over 4.5 million internet users. The Singapore government has also been a thought leader in moving towards a digital economy, making investments in technology over the past 20 years. If traditional enterprises can’t keep up, they will risk being left behind and eventually, replaced. In this article, we will discuss two aspects in which you can transform your traditional enterprise with technology: business processes and business models.
Digitization of business processes speeds up processes internally and can help you save on unnecessary manpower cost. By automating repetitive tasks, your employees can focus on more important aspects of your business, that truly require human attention.
As the information technology age starts to mature, we see the speed and amount of information increasing at an accelerating pace; to a point where humans no longer work fast enough to process an ever-growing influx of data that we need to make sense of. Today, most people are used to having instant access to information, at their fingertips, and companies need to find ways to keep up. By automating processes in the office, you allow employees to access information faster, speeding up internal processes and hence, deliver value at a quicker pace to your customers. We could go on, but instead, we’ll use two examples below to illustrate our point.
Customer Relationship Management
One of the fastest and most important ways to retain customers today is customer relationship management, which now goes beyond just company reputation but may cause rippling effects on revenue loss.
Technology improves customer relationship management by providing a faster and more accessible feedback system for companies. Consumers can provide feedback and get help from companies more efficiently through online channels and social media platforms. Moreover, there has been a shift to AI technology in recent years, which may see an increase in the use of chat bots to provide accurate and timely replies to customers in the near future.
Social media allows for continuous communication with your customers. Many people now turn to websites and social media to “rant”, share their views and review products and services. While this threatens brands, companies can also use this to their advantage. By using the large amount of views and opinions available online, media scanning can be carried out frequently to measure customer sentiment about your brand. Frequent checks of online sentiment give you a good gauge of your brand’s reputation, and if used correctly, can allow your company to identify potential crises and prevent them before they escalate. This can be done by reaching out to affected parties directly, to provide personalized customer service, which can quickly turn an unhappy customer into a loyal one.
No longer do you need to keep stacks of invoices and receipts to pass to an accountant at the end of the year, this can all be done on the cloud, yourself, with software like Quickbooks or Xero. You could even do one better by integrating your processes directly with these software. For example, linking your e-commerce billing with Xero, or linking your CRM to your accounting software. Such integrations reduce the time required for manual work like invoicing, data entry and data sharing across different teams. As a bonus, reporting also becomes less time consuming and more accurate.
If existing software in the market does not fit your business processes and model, maybe it is time to consider building your own. However, you should only do that if your business absolutely requires it. There are a few different ways you can go about doing this. Firstly, by building an application which integrates more than one function to suit the nature of your business.
However, since you may not want to build every function from scratch in your custom software (mainly due to cost), you can choose to integrate with other existing applications. For example, accounting software Xero allows for integration with over 500 other apps, allowing business owners better customized solutions. Another example is Salesforce which allows their clients to incorporate data from other systems such as SAP, Oracle and Microsoft. This allows their clients to either pick their preferred software provider for each aspect of their business and integrate it, or integrate existing software with custom-built ones to suit business needs.
Business models are the essence of an enterprise. Like it or not, whether or not you know what business model you are using, every business has one and it shows you how each stakeholder is involved in different aspects of the business, how your business runs and how you become profitable. While we’re not saying that you should change your business model entirely to suit the digital economy, it is time to evaluate whether your business model is still viable and competitive in today and tomorrow’s world.
Here are some business models that have been created in response to the affordances of technology, which may inspire you to create the next big business model.
Online selling methods such as e-commerce and m-commerce have given rise to new types of business models that have not been seen previously with traditional selling.
One example would be drop-shipping where retailers sell products online which are then manufactured and shipped by other parties. In this business model, a good relationship between the retailer and manufacturer is key as the retailer depends on the manufacturer to be trustworthy. This lowers the cost for the consumer, as the product comes directly from the manufacturer, yet allows the retailer to earn profits without needing to worry about buying and warehousing.
Another example will be wholesaling and warehousing which was previously used only in B2B companies. However, thanks to the internet, this can be made available to B2C companies as well, since there is no need for a physical store, and retailers can reach large numbers of customers using online platforms.
As seen above, the underlying reason for the success of these business models is that the element of physicality has been removed. Online selling has removed the need for physical shop spaces, locality and the presence of physical stocks. This effectively lowers the cost and amount of capital required to own a business which in turn lowers the price of goods and services for consumers. This is at least partially the reason why e-commerce gained popularity quickly.
Other than just e-commerce and m-commerce, technology has given rise to new business models. Mobile apps now have the same amount of power, if not more, to disrupt traditional industries. With the increasing use of smartphones, mobile apps play an increasingly larger role in people’s lives, as they are now constantly connected. What this constant connection means for brands is people can now be constantly connected to them as well: people are carrying a part of the brand with them everywhere they go. Many companies today have found ways to leverage on this to create new types of business models to replace traditional ones.
Uber is one of the most classic examples, where they use the power of existing resources (people with cars), and a mobile app to disrupt the taxi industry. Tapping onto this existing resource, Uber was able to create a convenient service for their consumers. One may even argue that today that there is an Uber for everything.
Tinkerbox has also helped local start-up Naildeck change things up within the beauty industry. Using a custom built colour picker, Naildeck iOS app allows women to take a photo of the shade of nail polish they want, or choose one from a colour picker.
The app will then match it to the closest available nail polish for them to purchase. Users can even choose to visualise the nail polish on a digital hand, matched to their skin tone.
Taken from www.instagram.com/naildeck
With technology, people can find new and creative ways of providing better services and products. In disrupting industries, people create new business models.
Though this article only covers two ways in which technology can be used in your business, the possibilities of technology is more far-reaching than we could imagine. The sooner companies realise the impact technology has on their business, the bigger their chances are of surviving in the digitalised world.
This is the second article of the mini series "Tinkerseries: The essentials for introducing technology into your business". To check for the latest updates regarding the series, please visit https://www.tinkerbox.com.sg/blog/2016/tinkerseries-the-essentials-for-introducing-technology-into-your-business.
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