Cisco Consulting Services
Cisco Consulting Services
In business today, industry disruption is a given and it’s only getting faster. Companies can’t afford to just manage the balance sheet and assume because the numbers look good, that everything is ok. I believe, the expression, “if it ain’t broke, don’t fix it” needs to be banned from today’s business vernacular. We should no longer assume that if something’s working adequately well, we should leave it alone. We need to think about what this pace of innovation means for tomorrow, and we need to start planning today.
The ability to ensure the success of your business’ future is dependent on successfully designing new business models – innovating before disruption hits. If you are not prepared, when it does hit, the knee jerk reaction will be to rationalize operations, to buckle down on the model that made you successful, even in the undeniable face of market transitions and new business dynamics.
We’ve already been to this movie. Borders Books was at the top of Forester’s Customer Experience Index the year it went bankrupt – failing to grasp the significance of the Internet as a way to deliver their product, not just sell it. A Kodak engineer invented the first digital camera in 1977. Knowing that the market was changing, Kodak; conducted an accurate assessment of the market shift and was able to produce a real technology breakthrough. But without the right business model, they still failed.
What’s fascinating about these examples is that both companies seemed to understand what was coming, but they didn’t change their operating model to be flexible to quickly adapt. When the game changed they kept playing by the old rules, failing to innovate on how they delivered their goods and services and instead only focused on what and who.
A large part of what’s driving today’s disruption is the ability to connect the physical world to the Internet – and by doing so fundamentally change the way we are able to interact with it. At Cisco we call this the Internet of Everything (IoE). IoE is the smart connection of people, process, data and things that enables a new level of digitization of processes. “Things” get smarter and more responsive to our needs, communicating between themselves, and acting on our behalf.
Disney has Magic Bands, Apple beams content to you based on where you are standing in the store. The German postal service is using drones to deliver mail while the City of Barcelona’s Smart Parking enables finding and paying for parking from a phone. We are connecting people in entirely new ways. The ability for companies to succeed in this new IoE world will depend upon their ability to put the tools in place to quickly execute ideas at scale.
The Internet of Everything Digital MethodologyIf hyperconnectivity is driving the need for new business models, then companies must also re-think their process for developing and implementing new ideas quickly. Any base process must include rapid prototyping to simulate the new processes and capabilities and modeling the impacts over time and scale. Prototyping enables the flexible and agile design necessary, while also providing a first hand experience of the desired future state that everyone can move toward.
Here are some other things to consider when developing new ideas and business models to ensure success the first time:
- “To Be” Process Simulations: By focusing on the customer’s ultimate need, and using process simulation tools to imagine various implementation scenarios. We can digitize the As-Is and To-Be Customer Experience for how to deliver those goods and services in new ways. For example, Uber was focused on “how do we better help people get from point A to B,” when they came up with the idea of the taxi coming to you rather than having to find one, imagine them quickly mapping out this process and now they continue to innovate.
- Design the Target Operating Model: Sometimes a seemingly simple change in the way things are done can have a significant impact on an organization. So it’s also critical to prototype different organizational capabilities and employee functions to deliver on the new processes. To complicate matters, IoE solutions often require an ecosystem of partners (some of them very new from the ones of the past). Bringing together all parties with a stake in the decision to explore implementation options is critical. Managing this ecosystem is no easy task as Disney found out when implementing their Magic Bands.
- Build a Business Case Modeling tool: No project will move forward to scale without a solid business case. You need to make sure that the results of all the process modeling and operating prototyping are integrated to identify the optimal ROI – and that the inputs are flexible enough to adjust for changes in market conditions. Create a business case tool that enables the entry of different variables to enable the identification of profitable outcomes.
The IoE era is accelerating the pace of change and innovation. Things that seemed fantastic only a few years ago are actually happening today. So don’t be in an “ain’t broke” mindset. Competitive advantage today is defined by the relative speed and ability of a company to change a business model – a model that adjusts faster when an enterprise is digital. As the world moves faster, it is even more important to ensure managing your “job to be done” is not just to meet those quarterly numbers. Lead with new tools that enable you to envision your future possibilities from tapping into the power of the Internet of Everything.