With the penetration of consumer technology model, corporations are beginning to transform radically. A new IT architecture, which we call the “SMAC stack” (for social, mobile, analytics and cloud), is enabling the creation of hyper-intelligent software platforms that address myriad issues, from sales to customer service to the design of new products to the management process, thereby transforming the business model itself.
Consider the following examples:
• This year, there will be more than 10 times as many photographs taken than in 1992, and yet Kodak has become bankrupt.
• Newly emerged Netflix’s revenues shoot up causing fall over of highly established Blockbuster in America.
• In spite of ever-growing demand of information, Encyclopedia Britannica published its last physical version in early 2012.
What’s going on?
This clearly suggests that the industrial model “winners” such as Kodak, Borders, Britannica have crumbled under their own weight, with business models that no longer fit the new digital realities of their markets. “Widget winners” are being quickly — and painfully — usurped by “digit winners” such as Facebook, Apple, Netflix, Amazon, Google, etc.
The convergence of 4 emerging trends, Social, Media, Analytics and Cloud (SMAC) creates a multiplier effect (e.g., mobile inputs driving real-time analytics) and presents a huge opportunity for the IT Corporations to move up the value chain, mainly because:
• With over 1 billion social media subscribers globally spending more than 25% of the online time on social networking sites like Facebook, Twitter, social media helps in creating an exclusive platform of interested customers ,gaining insight into their exact requirements, brand building, easy customer management.
• In the light of 4.5 billion mobile subscribers globally, services have become available on the go, ultimately improving business interactions, efficiency and hence revenues.
• Every year, companies and individuals generate billions of gigabytes of data. Undoubtedly, companies which analyze and glean insights from this data can emerge as leaders. Industries like financial services, retail and pharma can benefit greatly from such developments.
• With ever-increasing data, the need to store it, access anytime-anywhere has paved the way for cloud computing..
By 2015, we will have roughly 10 billion computing devices in use, 1,800 Exabyte of data coupled with data explosion due to Internet of Things. A massive leap indeed!
SMAC stack provides solution by morphing tightly coupled value chains into loosely coupled value webs, creating boundary less ways of working. Communication and coordination expenses incurred by a firm will almost fade away, people and information will rarely be co-located, relationships will have a wider base and customer experience will be virtualized.
To begin with the SMAC stack model, first, look to processes based on knowledge-based (or digital) inputs and outputs. This involves 4 primary areas:
1. The customer interface: Next-generation marketing, selling and servicing.
• E.g.: Netflix’s 6 million subscribers now stream over one billion hours of video per month.
• Mobile commerce (retail transactions via smart phones)
• Introducing intelligent retail stores.
2. The machine interface: Seizing advantage with Smart Products and the Internet of Things.
• Cisco IBSG predicts the number of Internet-connected things will reach 50 billion by 2020, which equates to more than six devices for every person on Earth.
3. The partner interface: Collaboration and co-creation of products and services.
• The design and development of new products and services can truly be fruitful when the supply chain partners, customers collaborate..
• Some examples include Proctor & Gamble’s Connect + Develop programme, Wikipedia articles are entirely written by internet users.
4. The employee interface: Mastering the new management process in the social enterprise.
• Millennial don’t prefer to work in “command and control” management teams. Leveraging SMAC- based approaches which are naturally suited for the rich exchange of information and ideas can introduce flexibility, greater interactions to fully engage the new workforce.
An example of power of this disruptive business model is when a book is selected on Amazon, buyers are presented with recommendations, based on analytics and very sophisticated algorithms. Once chosen, the book is served up from “the cloud” to a mobile reader of choice for instant enjoyment. Afterwards, if so motivated, the buyer can then recommend the book to their social network.
What’s going on today is not the digitization of products, but the digitization (and resulting virtualization) of entire business models. If you are competing with an antiquated business model, you are at risk of facing your own Kodak moment.
Image Credits: exuberantsolutions.com