Connection, Interaction, and Collaboration: Is This All the Networked Economy Offers?
The Industrial Revolution. The IT Revolution. The Internet Revolution. Each of these historical periods of innovation and economic growth created a quantum leap of opportunities for companies. Now, we’re experiencing the beginning of the next global economic revolution – the “Networked Economy.” But, has the networked economy already peaked? Have we really realized the full potential of the networked economy in terms of using networks to drive speed, volume, and value in commerce?
of Customer Strategy at SAP; and Drew Hofler, director of Solutions Marketing for SAP Cloud and Network Solutions at Ariba, an SAP company.
You cannot discover new lands without consenting to lose sight of the shore
Vivek Bapat kicked off the conversation by musing how great new ideas and transformation can change everything. “The networked economy builds on the economic prowess of the past and is accelerated by the convergence of the social connectivity of 1.5 billion people worldwide, device-to-device connectivity, and business-to-business connectivity and collaboration. Although each of these trends has evolved over the last few years, cloud, social, mobile, and analytics technology is now providing the means for these areas to converge and exponentially build on each other,” he stated.
In the networked economy, growth is based on the connection not only between people, devices, and companies, but across each other. Bapat mentioned, “The networked economy includes everything that is digitized, tracked, connected, shared, and personalized. This has – and will continue to have – a fundamental impact on our individual lives, government, and the business world, driving efficiency and transformational growth.”
Companies shouldn’t wait for these changes to emerge organically. Bapat believes they should get started now to capture these new opportunities. Bapat provided this sage advice, “Organizations can move from providing opportunities for a privileged few to unleashing all human potential through collaboration, disaggregation of work, and rethinking traditional boundaries that have defined economic opportunities in the past. The networked economy is really about capturing the intellectual capacity on a global scale from everyone. This is going to lead to an unbelievable transformation in productivity and output. And it’s even going to change the global balance of power in the future.”
Those who learn to collaborate and improvise effectively prevail
Drew Hofler shared the importance of collaborative business networks that are changing the way companies operate and interact internally. “The networked economy is all about providing the right information to the right people at the right time to enable them to make the right decisions and drive the right business results. Through the growth of business networks and the networked economy, companies are starting to see the value of breaking down silos. They are realizing the power of systemically connecting – or even networking – different processes into long value chains or closed-loop feedback systems,” he reflected. As a result, each piece of a process in one silo informs and enhances another process elsewhere in the chain. And it does so because critical information is connected, automated, and available when needed.
Business networks are also taking this collaboration capability outside the physical office building and data firewalls to enable a level of collaboration between customers, suppliers, and partners that was once considered a dream that was highly unlikely to come true. According to Hofler, “In the world of commerce, companies do not simply interact with themselves. If they do, those companies will not last very long. They cannot exist as a self-sufficient island – instead, companies should rely on a collaborative relationship with their partners and supply chain to create win-win scenarios.”
Business networks are connecting data across silos and across partners within linked processes, making data more effective and useful. More important, they remove the barriers to discovering and connecting with new business, allowing companies to connect with customers at unprecedented levels.
There are no old roads to new places
Reuven Gorsht continued the discussion by noting how technology advancements and the ever-changing business environment and workforce are fundamentally shifting – or even disrupting – the way companies organize, operate, and collaborate. “Today’s business models are focused on networking. Companies are realizing that they are great at some things and mediocre at others – making them choose between collaborating with the right partners or accepting the status quo and the risk of being wiped out,” he commented.
Companies can no longer rely on innovation within the four walls of the office. Now that we’re in a new hyperconnected business environment, there’s a greater focus on knowledge sharing. In fact, a growing number of companies are using social media and business networks to improve collaboration within the enterprise and across the supply chain. Gorsht remarked, “Expertise now resides in fanatical customers. The world's best experts on your product or service don't work for your business. They are your customers, or, if you will, a hobby tribe. And the value of this network explodes as membership increases.”
Sharing data and insights within a network accelerates business and reduces risk, but it also shifts the balance of the power to the individual. Communities at every level of the buying chain can work together to solve some of the world’s biggest – and even the most minute – problems. And with this shift comes major disruptions across every industry.
Are you ready?
To listen to a replay of this edition of the Future of Business with Game Changers series, presented by SAP Radio, click here.