« One of the oldest business models in the world is using new technology to trample traditional businesses, drive innovation, and create new and immense sources of value. Matchmakers, the subject of our new book, make it easy for two or more groups of customers, like drivers and riders in the case of Uber, to get together and do business. They operate platforms that make it easy and efficient for participants to connect and exchange value. »
- they recruit participants, and then sell each group of participants access to the other group of participants.
- Gig economy companies connect workers with consumers who need them, such as home care workers with families that need help, while sharing economy ones match up unused capacity, like automobiles, with people who want to rent them.
- Matchmakers have to solve the hardest problem in business — a critical mass of two or more groups of participants who value the service will sign on only if they can get access to the other groups of participants.
- Many successful matchmakers violate the rules of pricing that every beginning econ student learns. They sell their services to one group for less than cost, maybe even giving it away for free, or perhaps providing rewards.
- Most significant matchmakers have something that no traditional business has — an elaborate governance system of laws, enforcement, and penalties to keep their participants in line
- Companies like Uber wouldn’t exist, for example, without the development of mobile broadband, mobile software platforms, and the internet.
We bring to bear great optimism that the turbocharged matchmakers will power a gale of creative destruction that will sweep across the economy and produce great social value.
- But our views are tempered with realism that most who try this business model will fail miserably, after burning through mountains of cash.
« This transformation has impacted, and will continue to impact, the business processes and systems that are required to remain competitive. It will change how we design, plan, make, ship, and operate our products and assets. »
- Customer-centricy: Customers demand a new type of experience. Omnichannel sales strategies have raised the bar when ordering products and services. You can now order goods from anywhere, on any device, at any time. But companies need to change business processes to ensure the same level of service in designing, producing, planning, and delivering these products.
- Personalized “lot size” of one: Businesses must be prepared to sell to a market of one. Closely aligned with customer-centricity are the design, manufacture, and distribution of individualized products. Design processes must deliver all practical configurations and combinations, planning and manufacturing processes geared to support “lot size of one” production and delivery processes that profitably support smaller and more frequent shipments.
- A network of networks to drive the sharing economy: As businesses expand globally, the ability to successfully operate within business networks will mean the difference between winning and losing. These networks – and networks of networks – will be the platforms on which successful businesses innovate, collaborate, grow, and continually evolve – at both speed and scale. For example, networked companies are 50% more likely than their peers to have increased sales and higher profit margins. Automated collaboration with suppliers can improve efficiency by 50%. Companies need to focus on being demand-driven and responsive, and thereby transforming their previously linear supply chain into a customer-centric demand network.
- Sustainability to mitigate resource scarcity: Sustainability is no longer a corporate social responsibility afterthought. It is a contemporary business imperative for addressing the global shortage of resources and talent. Sustainability includes innovation and design processes that deliver sustainable products to the market; a product stewardship network that manages global product safety and compliance throughout the product lifecycle; and track-and-trace solutions to ensure visibility from raw materials to finished products and contain the effects of product recalls.
« Financial services is certainly an interesting case study. The recent SAP and CIO Magazine ANZ Digital Transformation Research Report shows that all financial services respondents said they were focused on digital transformation to meet the objectives of outcome-based customer experience and improvements across all channels. »
- t. It’s not just about providing better customer service. It’s about updating IT platforms, preparing core business functions, building business networks, and tooling up internal workers, too.”
- Placing a “digital umbrella” over the whole organization, from back to front, is what will truly bring your digital transformation to life.
- with many companies complaining that cost and complexity is the biggest barrier to agility and success.
Phase 1 – Back-office automation to reduce the cost of running the business and support the potential to innovate into new services and business models
Phase 2 – An open digital ecosystem to be open to partnering with external organizations to provide a complete service to customers and employees; not all capabilities need to be built and provided in-house in the digital economy