Business leaders say they are under pressure to transform, and quickly. Four trends suggest where they will be focusing their efforts.
What’s driving competitive advantage in future business models? In the conversations with business leaders at SAPPHIRE NOW this year, we heard four common trends that suggest where companies’ efforts could be headed in the next few years.
1. Experience management
EY believes that experience management is one of the most significant areas of potential competitive advantage over the next few years. Although customer experience attracts the most press attention, there is growing recognition among companies that they need to place equal importance on the employee experience, which helps attract, motivate and empower the people who work for them. Not only does a compelling employee experience lead to an excellent customer experience, but it also creates stronger brand and product experiences.
SAP clearly understands the value of experiences. The company’s recent acquisition of Qualtrics has enabled SAP to introduce multiple experience management offerings that combine SAP-generated operational data with Qualtrics' experience data. EY teams are collaborating with SAP to leverage the power of Qualtrics to create new value propositions that help clients on their transformation journeys, and to infuse Qualtrics into EY solutions to unleash innovation on clients’ digital platforms with a particular focus on the employee experience. With this platform, companies will be able to generate insights that will help them become truly intelligent enterprises and deliver genuine personalization at scale.
2. The platform economy
Frenemies. Coopetition. Shared values. These are all the lingua franca of the platform economy, and many CEOs and C-suites now are planning, if not already executing, platform strategies. Platform partners co-create unique value for their customers, so managing alliance partners and ecosystems becomes a core capability of the intelligent enterprise.
On the technology side, organizations looking to kickstart their platform efforts will be focusing on starting with platforms that already have business content on them. Doing so helps organizations speed time to market, reduce custom code requirements and pay attention to their market strategy rather than construction and maintenance details. The platform economy is picking up steam, and will continue to reshape companies, ecosystems, markets and industries.
Those that are ready to invest and drive toward this vision of an intelligent enterprise that can create unique, differentiating experiences, will be far better positioned to outperform the market.
3. Alliance and ecosystem relationships
As the platform economy matures and business models evolve, the concept of ecosystems will quickly accelerate, expanding well beyond the simple alliance model so prevalent today. The clients and business leaders with whom EY teams speak, clearly understand that managing alliance and ecosystem relationships is a fundamental capability in the Transformative Age. Businesses will use their platforms to leverage all the components of their ecosystems including their mega-platform provider, alliance partners, service providers, IP partners, and other types of ecosystem relationships. And firms, such as EY organization, which can bring pre-integrated collections of these alliance and ecosystem relationships to quickly create new business value for clients, will become the norm.
In fact, given the swift evolution of the platform economy, “ecosystems integration” will likely become as important as systems integration, if not more so, as a company’s growth increasingly is tied to its ability to team with other entities to create value propositions far greater than they could develop on their own.
4. Risk and reward
The fourth major trend concerns minimizing risk while quickly maximizing return. One reason some companies have hesitated to fully embrace digital has been cost — few companies can afford a $100 million failure. Leaders also tell us they want to experience the benefits of digital not in years, but in months, yet they are not sure how to make that happen.
Because of this, we believe companies increasingly will focus their digital investments on solutions that enable them to customize the experiences they deliver to their stakeholders. For instance, instead of using their platforms to orchestrate an army of coders and script configuration, they will look to leverage technology that’s already built to quickly deliver business value (e.g., via automation) with minimal risk.
Indeed, SAP’s message to companies for years has been to let the software provide the best-in-class business process expertise and focus on what really differentiates themselves in the market. Now that the platform economy allows disrupters with global scale to literally pop up overnight, companies cannot afford to customize non-differentiated business processes. Capital and resources are better spent creating unique experiences that are magnets for customers and employees.
Moving forward from vision to action
Time and again, business leaders tell us about the pressure they feel to digitally transform — and quickly. Fortunately, there’s never been a better time to do so. With the emergence and maturation of cloud-based digital tools and platforms, companies’ ability to become more agile and quickly innovate is orders of magnitude higher than ever before. Those that are ready to invest and drive toward this vision of an intelligent enterprise that can create unique, differentiating experiences will be far better positioned to outperform the market than their competitors. And that will mean stronger growth over the longer term.
As they seek to transform their business, companies will be looking to experience management, platforms, and alliances and ecosystems to help them move quickly with less risk and more reward.