If you stand still, you fall behind.
Agility, adaptability, and innovation are lifeline for success of enterprises in the 21st century. From having shutters down on the ‘Kodak Moment’ for the 130-year-old George Eastman’s Kodak to closing curtains on many traditional business paradigms belabor that enterprises of the 21st century need to continually adapt their business models to survive the onslaught propelled by technology.Social, mobility, analytics, and cloud (SMAC) are convergent forces forcing enterprises to innovate and be agile and creative to survive in the race for existence. The rise of disruptive firms has challenged the existence of traditional businesses and created economic uncertainty loom over conventional business paradigms. Welcome to the digital era, powered by SMAC, where customer engagement and business model adaptations are top priority for enterprises to hold their ground.
Internet serves as a backbone to disruptive technology firms (firms that challenge the status quo in the technology market and influence their competitors) and these firms are vehemently challenging the hegemony of traditional businesses in the recent past. In 2013, Amazon.com acquired a 100-year-old newspaper Washington Post for $250 million as they lacked innovative and adaptive business model to thrive in the digital era. Numerous innovative products have flooded the market to engage with customers right in their bedroom and are forcing enterprises to either evolve or extinct, in this century. Let us focus on how SMAC is enabling enterprises to challenge traditional behemoths and driving customer value to the last mile.
Enabling New Business Paradigms
The rise of SMAC as a nexus of force has equipped disruptive enterprises to strengthen their technological innovation capabilities. Siemens is busy developing batteries and wind technologies that will increase Germany’s reliance on renewal power in future. Tablets and smartphone can control Philips innovative new bulb. Safaricom challenges traditional banking through its widely acclaimed mobile currency M-Pesa in Kenya. Vidyo, a technology firm poses challenge to giants like Cisco with the launch of high-definition video conferencing on smartphone. These use cases establish that social, mobility, analytics and cloud (SMAC) is the new normal and enterprises need to adapt their business models to succeed in this dynamic marketplace. Traditional behemoths have gradually become restless for existence. The tide has shifted from established to innovative firms. Forward-looking enterprises have engulfed traditional businesses and pushed them towards bankruptcy. Some of the leading business models which failed against disruptive firms are:
Blockbuster – Movie rental – Failed against Netflix, Youtube
Kodak – Photography – Failed against Flickr, Smartphone proliferation
Border – Book retailer – Failed against Amazon.com
HVM – Music retailer – Failed against Apple iTunes, Spotify
Enabling Customer engagement models
Customers are at the core of activity on social, mobility, analytics and cloud (SMAC). Disruptive firms center their business strategies around user activity on social media sites, mobility, analysis of the collated information through advanced analytical tools like Hadoop, NoSQL and Splunk etc. Just off the pan, acquisition of our time where Facebook acquired another disruptive technology firm Whatsapp for $19 billion is driven to get hold of 450 million users of Whatsapp. It is worth to note that every day Whatsapp registers more than 1 million users globally and will hit a billion in a year. An enterprise does not need anything more than just monetize the registration for a few dollars to keep this business model profitable. Firms like Facebook, Amazon, and Google are pioneers that have recognized every opportunity to reach their customers through multiple avenues.
Social – In less than a decade social networking sites have made significant impact on the marketing needs of traditional enterprises. Constant flow of information through likes, follow, post, video, check-ins, images etc. have created a web of information to understand the needs of each customer individually. Brands are busy customizing their marketing strategy everyday to satiate the needs of their interconnected consumers. Recently, Virgin America pioneered with the launch of its in-flight social networking app, Here on biz, to be accessed at the height of 35,000 ft. This app works by isolating the geo-location and unique IP of each Virgin America plane in the sky. Guests can connect with their fellow passengers, travelers on another Virgin America flight and guests at their destination airport, via the LinkedIn API. With this, Virgin America’s consumer engagement strategy leapfrog by empowering travelers to experience interconnectedness and initiate discussions. This also transforms the way a business traveler does prospecting in near future.
Mobility – The proliferation of enterprise network applications on mobile handsets has removed the barriers between remote and real workstation. According to a survey by CISCO, the number of Bring Your Own Devices (BYOD) devices will exceed 405 million in 6 major economies including the US, the UK, India, Brazil, China, and Germany. BYOD is also helping improve employee productivity by 81 minutes per week in the US. Realizing the potential of going mobile, Irvine CA based firm Tacobell is launching a smartphone app to aid their consumers through mobile ordering and payment processing through credit card or gift card. When the user enters a restaurant to pick up the order, the GPS locator notifies the kitchen when to estimate the customer’s arrival. In case the customer finds a long queue at the drive through, Taco bell will have in-store counter for mobile purchases to ease quick order fulfillment. Brands are busy strategizing consumer engagement processes with the help of technological opportunities offered by SMAC in the 21st century.
Analytics – “In their book, Big Data: A Revolution That Will Transform How We Live, Work, And Think, authors Viktor Mayer-Schonberger and Kenneth Cukier explain that the digital deluge on the globe is the tantamount to giving every human being on Earth 320 times as much information as is estimated to be stored in the Library of Alexandria (in 3rd century B.C. Ptolemy II of Egypt is believed to store every written transcripts existing on earth.)” The proliferation of data is the beginning of a major economic transformation in the 21st century. Enterprises analyze the data from all sources including social, mobile, and offline to understand their consumer behavior and targets them with specific offering. Big data is helping enterprises to understand the relation between available pieces of information, which were beyond our comprehensive earlier. Leading online firms like Amazon, Netflix, Pandora and Match.com (online dating site) uses analytics to recommend products, and services as per customer preferences.
Cloud – Cloud computing provides the scalability and agility to future proof enterprise business transactions. It provides startups and SMEs an advantage to compete against traditional enterprises. IDC predicts that public cloud services revenue will grow by 27% year-on –year until 2016 while private cloud services revenue will grow at 50% year-on-year until 2016. Internet giants such as Google, Facebook, and Amazon claim success of their business models over cloud. Cloud provides an opportunity for disruptive startups like Kickstarter, Coursera to go global and compete against business giants. At the core of SMAC, cloud helps enterprises engage with their consumers in their bedroom. Netflix and Youtube video streaming services are successful enterprises operating on cloud as part of their business model. It is worth to note that Netflix and Amazon.de pushed movie rental service provider Blockbuster and a large format retailer Westwild in Germany out of business.
Social, mobility, analytics and cloud (SMAC) has transformed the business model of many leading enterprises and is continually driving innovation for the global good. Let me know your thoughts on how SMAC will transform enterprise business models and drive consumer engagement in near future.
Featured Image courtesy: D.R.
Alok Ranjan is a marketing specialist and management consultant based in Mumbai, India. He believes, brands are caught in a maze of technology and economic dynamics, caused by disruptive forces, which are changing the way consumers interact with brands. Alok advises brands to shape consumer centric strategy and assists to develop a roadmap for businesses.