By Amit Dua, President & Global Head, SunTec Business Solutions
During one of my recent business travels to India, I was on a street food eating spree, my favourite being Panipuri. To my surprise, apart from the per-plate costing, the seller was also offering subscription based pricing. Panipuris were now available for daily, weekly and monthly subscription plans. This makes it amply clear, innovation is not a fancy term which is privy to the big enterprises with huge pockets, it is for every business to think and reinvent itself. It does not mean a thousands of dollars bill and can be as simple as the one which the Panipuri vendor has brought in.
The next important question is why now? Our customers are not the same anymore, our competition is not the same anymore and our market is not the same anymore. When everything is changing, does it still make sense for us to continue with the traditional ways of business?
The next critical question is how to hit the eye of the storm? The answer to this lies in our understanding of the storm itself. According to Moore’s law, computation power quadrapulates every 2 years, the growth is exponential. Today, imagination is the limit. A potent imagination can indispensably augment the pace of development. Companies which were prominent once are completely wiped out now. All this points to the need to reinvent so as to be relevant with the changing business landscape.
When we are reinventing, do the traditional business models still apply? Are the traditional KPIs the best measure? Should DOLLAR VALUE be the ultimate pursuit or should it be VALUE?
End-to-end business value chain are not equations today, they are a complex mesh where multiple businesses come together in a complex way to deliver end product to the customers. When there is an Ecosystem, value is generated at different points in the value chain. While dollar value only measures the tangible value, many businesses overlook the intangible value that is getting generated in the value chain. Can we afford to ignore this intangible value? It is this Value leakage that businesses should start measuring.
Let me take a simple example to further illustrate the importance of intangible value. Imagine, Bank A comes up with a value proposition where one can open a bank account in 3 minutes. Don’t you think it would interest a lot of people and there would be many signups? Of course yes. Here’s what it does for us – we could beat visiting the branch, avoid the hassle of standing in the queue and filling numerous forms and moving from counter to counter. What would be the best metric for Bank A to measure in such a business process? The bank measures the dollar value and new customer signups that it could achieve.
What about the experience value the customers enjoyed in being able to open an account in 3 minutes without any hassle? And this is just an example from a banking industry, this can be applied to any industry and any process flow.
To further highlight the importance of adopting value as the new currency, let us look at GAFA. With GAFA rising in prominence and the emergence of the new digital economy, business models are rapidly changing. For example, the core service of Google, i.e. search is absolutely free for the end customers and the revenue models are completely different. Another great example is Uber or Airbnb, they own no assets, they only enable people with requirements to connect with the people who have things to offer. These newer business models and the rise of digital economy makes it all the more important to focus on the value overall and not just dollar value.
While the technology is taking over and giving way to the new innovative world, it is time for us to introspect and take a leap into the journey of reinventing ourselves. Value is certainly the new currency!