Rory H D Cooper
SMEs - leveraging the Cloud
In a very well-written article by Phil Wainewright (@philww), foretelling the impacts of smartworking technologies on the modern firm (http://t.co/LgmrkJZ1CC), he uses the term 'frictionless enterprise' to describe the process-cum-structure of interconnected commercial transactions throughout which space-time separating the majority of the actors has been reduced, theoretically almost to the 'instant'. SaaS, PaaS and IaaS drive efficiency improvements and, as a direct result, force compression of the link between cause and effect. The making of informed decisions about how to respond adaptively to changes in the competitive environment has now become the crucial outcome of management's operating plan, rather than the periodic output from prolonged strategizing at the less-informed board-level. Real-time communications, both internal and external to the enterprise, drive innovation in the ways individuals and organisations manipulate their usage of the internet, as well as their representations on it. Greater awareness about how to cut up and analyse more information engenders constant revaluation of its utility to the business. Smaller enterprises can profit from positioning themselves in the supply-gaps that the slow-turning big boys fail to plug. The more adaptable larger firms take advantage of reducing transaction costs through rewiring administration and procedural pathways and by engaging with the quickest-responding suppliers. The contextual framework of Wainewright's insightful prognostications would appear to suggest that his main focus is on the large enterprise. However, the transformations brought about by the digital technology explosion have direct applicability to the small and medium-sized enterprise (SME) as well. Of his five key characteristics of 'frictionless enterprise' (note the lack of the definite or indefinite article, indicative of the multi-nodal connectivity of doing business on and through the internet), three appear to me to be SME-relevant: utilising 'on demand' services, having a 'real time' outlook and teaming up with others on the web to expand 'collaborative engagement'. On Demand - Most SMEs typically are not fully tooled up to provide all the services that they might need to be able to operate efficiently. Outsourcing 24/7/365 and the use of SaaS are therefore possible solutions, for example hiring the part-time services of a finance director or renting server space both to reduce IT costs and provide scalability when growth demands it. Cloud-computing keeps the parties linked, whenever and wherever they might be, so questions can be answered when responses are needed (space-time is also shrinking between defining problems and applying solutions). Real-time outlook - Customers increasingly want goods and services to be provided as quickly as the fastest means of delivery will allow. Who remembers phrases in ads like "Allow 21 days for delivery"? As was stated at the start of this blog, just as space-time in the commercial world diminishes because of digital advances, consumer expectations of what is a 'reasonable' lead-time decrease in parallel. This mentality pervades B2B markets as much as it does B2C exchanges, so SME owners need to have access to RTI (real-time information) about their finances, people, stocks and processes to support them in their decision-making. There are now zillions of apps and SaaS available to the ambitious SME owner which make keeping the books up to date (look at www.xero.com, for example), planning workload, customer relationship management and inventory control easier, quicker and more enjoyable to do. The benefit to the digitally-astute SME is being able to react more dynamically and responsively to customers' and suppliers' expectations. Collaborative engagement - Key to Wainewright's prediction of the nature of the enterprise's future is the evolution of the internet. It is being formed into not only a technological neo-cortex of interconnectivity which actively and expressly exists to facilitate ever more efficient economic conjunctions between like-minded businesses, but also, by dint of the unstoppable supernova of data that we are only now becoming capable of analysing, the internet is transforming itself into the most authoritative way by which we will all communicate. Business cards have become a ticket to check the bona fides of the giver - what does their website look like; are they using social media; do they have a real presence on the internet? For those SMEs who still believe that they can continue to support their operations with the most minimal bits of IT kit and software, who think that the Cloud is just a repository for their photos and music files or who disregard social media as routes to market, the time remaining before old-model businesses are eclipsed by the next generation of technologically informed entrepreneurs - who have a less risk-averse series of expectations about how the internet will do a lot more of their thinking and business analysis for them - has almost run out.