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Will you survive Business 2020? And can the enterprise strike back?

For some people (including, often, me), the year 2020 still represents a remote, science-fiction future, with flying cars, space colonies, and robotic cops. But of course, 2020 is now barely five years away. It is closer to us today than the introduction of the web-enabled smartphone. Extraordinary – and at one time unimaginable – transformations have taken place since the iPhone went on sale in 2007. And yet, due to the accelerating pace of change, we can be certain that the next five years will bring even more disruption, and additional unforeseeable changes. Predicting the future is hard, but we can sense the forces and trends that are operating today, and we can plot their impact on businesses up to 2020 and beyond.

Business 2020 isn’t a prediction about the conditions business will face in the future. It is a statement about what they must do today in order to have a future.

In my new DCG Insight Paper, “Business 2020: Six Key Dynamics Will Determine Success,” (now available for free download) I explore the origin, role, and interplay of these six factors. Namely:

  1. Digital makes information the currency of customer engagement. Competing for the attention and retention of buyers by providing the most relevant information and engaging experiences.
  2. The customer journey is the new cool app. Optimizing experiences across the entire customer journey, not fragmented exchanges
  3. Scale feeds insight – size matters (again). Using data and analytics – including input from the emerging Internet of Things – to inform and improve interactions, often in real time. (More on this point below.)
  4. The question mark trumps the exclamation point. Discovering and validating new customer needs with iterative experimentation.
  5. Business process management drives the transformations. Embracing business process management at a company-wide strategic level in order to drive the necessary transformations.
  6. Dispersed and heterogeneous teams work in concert. Drawing on and empowering the resources of flexible, dispersed, and heterogeneous teams that will include employees, partners, consumers, and potentially competitors.

The Enterprise Strikes Back?

Perhaps surprisingly, I argue that consumers’ growing expectation (i.e., demand) for what PwC calls “nearly perfect execution” of omnichannel experiences may actually favor (some, maybe only a few) of the large, legacy, incumbent enterprises that are today so often seen as dinosaurs,  bumbling their way to extinction.

Enterprises – large by definition and slow-moving by reputation – typically do not make rapid and agile transitions. According to the old analogy, it’s hard to turn a battleship. But what’s often overlooked is that once the battleship is turned and can train the full force of its weaponry on the task at hand, it is a very formidable opponent. Retooling and reorganizing to meet the demands of customer centricity will be difficult for any company. But given the role of enterprise information – and the need for a holistic, company-wide effort – enterprises have the opportunity to leverage their resources, scale, process expertise, and information assets and emerge as the leaders in this new era.

Yes, it’s hard to turn a battleship. But what’s often overlooked is that once the battleship is turned and can train the full force of its weaponry on the task at hand, it is a very formidable opponent.

Once unleashed by the force of digital disruption, the expectations and demands of empowered consumers race ahead like an unchecked nuclear reaction. The creative, agile start-up may burst on the scene with a cool point solution for, say, getting a ride across town or tracking calories and steps. But as buyers develop the appetite for the perfect execution of seamlessly cohesive omnichannel experiences, such isolated islands of customer delight are inadequate, if not counter-productive.

Business 2020 represents an opportunity — just a chance — for large, established businesses to outperform the upstart disruptors. With the proper response, enterprises can put their scope, accumulated expertise, and massive resources to work in order to deliver unified, holistic experiences that are beyond the ability of smaller, younger companies.

(Accenture has recently explored this theme; their 2014 Technology Vision is titled “Big is Back.” I also very highly recommend this (and every other!) episode of the Exponent podcasts, in which Ben Thompson and James Allworth debate (starting at about 21:00) whether established businesses ought to focus on quarterly revenues, optimizing profits, and “throwing off as much cash as possible” and leave innovation, disruption, and “crazy experimentation” to the startups. By the way, I sense that Ben underestimates the issue of those incumbent businesses that can no longer throw off cash, and need to adapt or die, although, to be fair, he’s trying to argue from a “societal perspective,” rather than that of individual companies.)

With respect to the six information-centric transformations shaping success in 2020, large enterprises can:

  1. Leverage the wealth of information they harbor or can source to create rich customer experiences.
  2. Draw on knowledge of and experience with broad, usually end-to-end customer journeys.
  3. Use their sheer scale to advantage in producing insights from big data, especially with regard to networking physical facilities and objects through the Internet of Things.
  4. Deploy human and other resources to enable iterative experimentation.
  5. Exploit their practical expertise with business process management to achieve “Big Process” transformations.
  6. Make use of their extensive experience with partner networks and vendor management to build the necessary teams, relationships, and networks.

Seizing this opportunity will not be easy. Few if any of the established skills or practices are directly transferable to the new and emerging requirements. Large-scale and wrenching transformations will be required in organizational structures, process and information flows, technologies, partnerships, and human capital management. Above all, organizations must act now to begin the transition, before the gap between the familiar and the necessary becomes too large to cross. 2020 is not even six years away. It starts today, if not yesterday.

Image credit: by jerrinator via deviantart.com http://fav.me/dghxuj

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