BUSINESS TRANSFORMATION

Success comes from a mixed team of internal experts and external specialists.

Overview

Business Transformation in Global Supply Chain Group

Everyone accepts that the change is the new norm, not yet most people still get the basics of business transformation wrong. As a coping mechanism, business transformation has entered the corporate lexicon and become the talk of the town.
What exactly does transforming a business entail? Is it just a matter of waving a magic wand and suddenly the ragged Cinderella becomes a charming princess?

The Boom of Software and IT Solutions has caused both Disruption and Realignment.

For businesses, the boom of software and IT solutions has caused disruption and realignment, whether with good or bad connotations. Data mining and big data analytics have all seen exponential growth, carving out a larger chunk of a company’s budget.

The good thing is when business intelligence is implemented and used effectively, there is a real pay-off. On the other hand, if technology hinders growth, causing more havoc than in the first place, it signals a disconnection between IT strategy and other corporate strategies. Data security has also become a pressing issue for businesses as cyber-attacks and hacking incidents grow in terms of sophistication.

Nowadays, in many places, mobile devices have replaced traditional PCs as platforms to connect to the Internet. Indeed, new players taking advantage of this trend are sprouting like mushrooms after rain.
New technology start-ups catering to niche markets are becoming more and more common. There are opportunities, and risks everywhere.
A decade ago, Facebook or Twitter would not even enter our psyche, now along with other social technologies, it has been weaved into our daily life and work.
Socialmedia, or the broader significance of it (i.e. mobility and connectedness), have changed the way businesses interact with consumers and with each other. Some businesses have also been born entirely out of expertise in social technologies.
Another effect this could have on businesses is that social generations are actively taking part in building more agile business networks.
For a business transformation, the key question will be how IT can facilitate the process without everyone feeling enslaved by technology.

Are We Donning a Collapse-Proof Helmet?

The key takeaway for businesses wishing to undergo transformation is to re-consider the relationship, the dynamics and the degree of dependence on financial institutions to avoid being dragged down the muddy river.

First, let us take a look at the dynamics happening within the business environment nowadays. With memories of the financial collapse still fresh in our minds, the banking and finance industries have been subject to significant scrutiny.
Changes here will undoubtedly affect businesses, and the way business is conducted. Like three prongs of Poseidon’s trident, regulators, businesses and consumers have vocally expressed their desire for alternatives of banks and financial institutions.
Many have speculated that the prominence of banks in the future money map will decrease. Instead, new players such as telecommunication and software companies will be more aggressive with their offerings to boost the cashless society.
Digital wallets, payment portals and mobile banking will be even more ubiquitous. Moreover, state-subsidised firms and those that do not use cash are relatively safe from a financial collapse, should there be another in the future.

Technology is Designed to Move Forward, Not Back.

This century has seen immense technological advancement, so much so that it is hard to imagine how things used to be. The digital revolution has changed the way we live, work and play. Terms such as BYOD (bring your own device), plug-and-play, NFC (near field communication) and so on have entered the common lexicon of people around the world. Whether we are more connected or smart due to technology is another story.

There have been increasing regulatory guidelines for financial institutions, the majority of which focus on the systemic risk posed by some of the biggest networks of banks and funds in the world.
Meanwhile, these institutions are also adapting to the new regulatory requirements and treading more carefully than before to protect their returns.
Some of the trends in the field include imposing limits on executive pay along with stricter corporate governance, rising demands for transparency and consumer protection.
These have led many analysts to raise the question: “Who needs banks anyway?” Their view is that the financial system is essentially broken due to the pressures coming from three major stakeholders.

Time to Venture Outside The Home Turf.

In fact, this could well be the reason for a business transformation. So if a business wishes to go from books to clouds like Amazon, they need to start thinking about who to enlist as their company for the next venture.

When the going gets tough, the tough get going.
When eroding margins become a threat, companies look for ways to expand way beyond their original area of expertise.
This usually involves movements such as mergers and acquisitions.
The age of “unbundling”, where companies became highly specialized in one area of expertise, has now been superseded by “re-bundling.”
In my book The 5-Star Business Network, I have pointed out how businesses focus on what they know best and then collaborate successfully with a network of other businesses to make up for gaps in their businesses’ resource platforms. Companies such as Apple demonstrate this trend well.
Usually, they would acquire smaller businesses that possess world-class resources in a very specific domain and then re-bundle into a super networked business.
Consider the shopping spree of various tech giants in the world, Facebook buying WhatsApp, Microsoft purchasing Nokia, Apple acquiring Beats, and so on.

Are We Donning a Collapse-Proof Helmet?

Consumer power is increasing and businesses should find themselves orbiting around their target consumers like planets around the Sun. Consumer protection signifies legal obligations, while advocate groups, comparison and review sites have helped distribute more weight towards the buyer. As a result, collaboration with the customers themselves has become the way forward, and Supply Chain 3.0 was born with that very intention in mind.