Fac­ing storms of change, sav­ing your com­pany from cor­po­rate choles­terol

The Star Early Edition - - DIGITAL ECONOMY - Brett Parker Brett Parker is the man­ag­ing di­rec­tor at SAP Africa at SAP.

IF YOU fre­quent the con­fer­ences and launches held by tech­nol­ogy com­pa­nies, you would surely have come across state­ments sim­i­lar to the fol­low­ing: “Up to 40 per­cent of to­day’s For­tune 500 com­pa­nies will not be around in a decade’s time. They will have dis­ap­peared into merg­ers, ac­qui­si­tions or ex­tinc­tion.”

This is not a new trend. Ac­cord­ing to the Amer­i­can En­ter­prise In­sti­tute, nearly 90 per­cent of For­tune 500 com­pa­nies that ex­isted in 1955 are no longer with us. Mod­ern em­pha­sis re­sides on the speed at which com­pa­nies change and dis­ap­pear. This has in­creased the cor­po­rate burn rate which is in­deed run­ning at high lev­els.

Yet even here we are not in un­charted ter­ri­tory. A com­pany from the first half of the twentieth cen­tury could ex­pect a life­span of at least fifty years. By the seven­ties, that had dropped to roughly thirty years. We can look to the seven­ties as the first de­fin­able ma­jor mile­stone in this trend. The rise of busi­ness ma­chines, au­to­ma­tion and other tech­nolo­gies were cre­at­ing a new breed of com­pany.

Those were the years that saw the rise of Mi­crosoft, In­tel and other tech­nol­ogy gamechang­ers. The main­frame com­puter had grad­u­ated from high-end hard­ware used by mil­i­taries and gov­ern­ments to a main­stream busi­ness tool. Con­sumers were start­ing to en­hance their lifestyles with cheap tele­vi­sions, ATMs, mi­crowaves, eco­nom­i­cal cars and a bevy of other in­no­va­tions.

The world was chang­ing rapidly, and with it, com­pa­nies rose and fell on their abil­ity to re­spond.

The eight­ies and nineties be­came the eras of rapid pro­duc­tiv­ity. Based on US fig­ures from the Her­itage Foun­da­tion, pro­duc­tiv­ity has dou­bled while the av­er­age hourly rate has de­clined from 1970 to 2010. This is both good and bad, but it il­lus­trates with cer­tainty, the im­pact of pro­duc­tiv­ity tech­nolo­gies dur­ing the last decades of the twentieth cen­tury. From spread­sheets to e-mail to switch­boards to fax ma­chines to En­ter­prise Re­source Plan­ning suites: these were pro­duc­tiv­ity’s cat­a­lysts.

Even­tu­ally though, ev­ery pen­du­lum has to re­verse course. Those in­no­va­tions started at­tract­ing com­plex­ity. In the early nineties you were lucky to get an e-mail a day. To­day you are lucky if you can read a hun­dred e-mails and get through your daily work­load. The same sys­tems that have granted us more space to ac­com­plish, have also grown bloated. This is not new ei­ther: the rea­son why tech­nolo­gies in the seven­ties boosted pro­duc­tiv­ity is be­cause they were re­plac­ing over­whelm­ing com­plex­ity.

Cum­ber­some

The main­frame was so pop­u­lar since it was a lot sim­pler to use than the boxes of punch cards de­manded by older sys­tems. Then it be­came cum­ber­some, even­tu­ally chal­lenged by leaner desk­top and server PCs.

To­day we are at that stage again. The stand-alone server is be­ing re­placed by the cloud. E-mail is be­ing joined by col­lab­o­ra­tion suites and mes­sen­ger apps. The spread­sheet is mak­ing way for dash­boards and an­a­lyt­i­cal ma­chine learn­ing. Why? Be­cause com­plex­ity is at a sat­u­ra­tion point and the world is de­mand­ing sim­plic­ity to drive new lev­els of pro­duc­tiv­ity.

It is im­por­tant that we ap­pre­ci­ate the na­ture and in­evitabil­ity of the sea-change that com­pa­nies are cur­rently ex­pe­ri­enc­ing. Now to my point: your busi­ness pro­cesses have been born and honed through those pro­duc­tiv­ity tech­nolo­gies. Your fax ma­chine sits idle – all that has shifted to e-mail. If your e-mail ceases to func­tion, sev­eral of your pro­cesses will grind to a halt.

Thus, it is para­mount that you take stock of your pro­cesses, con­sider what pow­ers them, and see if there is a bet­ter way. Let’s con­sider the highly im­pact­ful ex­am­ple of data. Your com­pany gen­er­ates a lot of data, which un­til now, has likely lan­guished in stor­age or was sent to the af­ter­life of dele­tion. But to­day data is a dif­fer­en­tia­tor. Your abil­ity to un­der­stand your data is cru­cial to your suc­cess, while the speed at which you ac­cess those in­sights de­fines your pro­duc­tiv­ity. So it’s a sim­ple ques­tion: are you mak­ing use of your data?

There are many more ex­am­ples: can the cloud im­prove the speed and ex­pan­sion of your prod­ucts? Can ma­chine learn­ing au­to­mate man­ual pro­cesses, free­ing up your staff and time? How are you us­ing mobile de­vices to em­power your work­force and your­self? Do you un­der­stand the ben­e­fits of in-me­mory com­put­ing? Is there a role which tech­nolo­gies such as Blockchain can play in your or­gan­i­sa­tion?

What you are look­ing for is cor­po­rate choles­terol: the fatty bits that have started to nar­row your com­pany’s ar­ter­ies. What are those pro­cesses and tech­nolo­gies that once made the en­ter­prise’s heart beat, but now threaten to choke it off ?

Speed mat­ters

As a guide­line, I can rec­om­mend three ar­eas to con­sider. Firstly, look at how your cus­tomer ex­pe­ri­ence drives your strat­egy. Cus­tomers are of­ten fa­mil­iar with in­no­va­tions that make life eas­ier. If you aren’t ap­peal­ing to them, your pro­cesses are lag­ging. Se­condly, don’t view your de­ci­sion and the re­sult­ing trans­ac­tion as sep­a­rate en­ti­ties. They feed from each other, so rather pon­der on how you can en­hance that re­la­tion­ship and learn from it. Thirdly, re­mem­ber that data is the new cen­tre of grav­ity, and speed mat­ters. If your or­gan­i­sa­tion is not re­spond­ing as fast as your mar­ket ex­pects it to, you need to ad­dress that.

No such tran­si­tion is easy. There are chal­lenges in terms of se­cu­rity, reg­u­la­tion un­cer­tainty, skill-sets, cre­at­ing new mega-pro­cesses, dis­rup­tion and more. But the only peo­ple who ex­pe­ri­ence smooth sail­ing all the time are those who never leave the har­bour.

The storms of change can­not be avoided. How­ever, they are key to en­sur­ing busi­ness longevity.

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.