The world is changing, we all know that. We can even say that the perceived rate of change is faster than ever. Once again that seems pretty obvious. But how is it really changing?
The Institute of Mergers, Acquisitions and Alliances estimates that for 2017 there are going to be 17,385 mergers and acquisitions with a value close to $2.5 trillion dollars. And that’s just in North America. The number one merger in North America in since 2000? America Online taking over Time Warner. The number four merger? AT&T taking over Time Warner last year (still pending approval). Organizations are purchased, changed, purchased again like properties in Monopoly.
Isn’t that what is needed to survive though? Aren’t we living in an age, driven by investors, where if the company doesn’t grow quickly it gets purchased and absorbed or dismantled? From an organizational perspective companies change owners in the blink of an eye. From the consumers perspective, they don’t necessarily care, as long as they get what they want.
Has business changed? The National Retail Federation in the U.S. expects retail growth to be between 3.7% and 4.2% for 2017. Online commerce? The growth rate for online sales is between 8% and 12% for the same period. Triple the growth rate of traditional commerce. E-commerce is taking up a larger portion of sales every year and the failure to recognize and embrace that fact has caused a number of “institutions” to fail and will catch many more.
What has happened to the technology to support such a massive shift in the spending habits of North Americans?
The Age of the Customer. Jim Blasingame, in his book aptly named The Age of the Customer, attributes the shift in traditional brick-and-mortar sales to online sales due to the customer being better informed. It used to be that trying to find someone else who had information about the product you wanted to buy was difficult at best. The seller was one of the few people with the information you needed. With the Internet and the ratings game that everyone plays, it is easier to find reviews of products. Even niche products. It is now easier than ever to make informed opinions. And those companies that relied on an ignorant consumer? Dismantled or dead.
The first really popular smartphone, the Apple iPhone, started a trend that has continued to this day: mobile consumers. (M-commerce) In fact, the growth rate of online commerce through the desktop – PC Commerce – is expected to flatten sometime around 2019/2020. Yes, the e-commerce world is also experiencing a shift as the growth of mobile consumers will continue to outstrip “traditional” desktop based commerce.
This change is not relegated to just private sector organizations. Public sector organizations have had to be more responsive to their clients and provide on-line options for requesting services and even getting those services fulfilled. Taxes? File them and pay them online. Report cards for your children? View them online. Business permit? File it online.
Client expectations, citizen expectations are changing. No longer is a simple web page good enough, it need to be responsive, customized for me. I need to be able to view it on my PC, on my smartphone, on my tablet. It needs to remember me and not force me to type everything in again and again and again. I need the organization I am dealing with to have a connected ecosystem so that it doesn’t matter whether or not I am dealing with the original company, it feels like I am.
Within the business the group traditionally responsible for enabling that connectivity, for that initial touch with the customer, is the IT department. But IT departments are notoriously slow at changing. Card punches, reel-to-reel tapes, batch processing, single threaded applications, are all remnants of a computing environment that is thirty-five or forty years old.
Because the cost of computing was so high in the early days of IT a lot of processes were done to reduce the number of cycles consumed building and executing the final product. Don’t know the full requirements? Don’t worry, we’re not going to start coding until we know all of the requirements. And have them verified. And signed off. Then, only then are we going to start building. Better to be safe than sorry.
In an environment where the rate of change can be measured in decades that approach is probably the easiest approach to adopt. But as we’ve seen, that rate of change no longer exists. In months a company can go from top of the heap to a footnote in history. Organizations that thought they weathered the storm didn’t see the rocky coast until their ship was crushed between the waves and the rock. Safe is a choice that is no longer viable.
Even for the Public Sector.
The majority of North Americans believe that they can have on impact on government decisions … through the election process. If the citizenry is not happy with the services provided by the government they have the option to kick the government out in favour of a new group. Was it the elected official that caused the problem? Probably not, but that doesn’t mean that the populace won’t retaliate.
Keeping pace with expectations is critical to success. And survival.
With over 17,000 mergers and acquisitions in a year there is an opportunity for a fresh start in IT for those ventures. Within government there is always a reshuffling of resources from one department to another, one ministry to another. When that happens there is an opportunity to change, an opportunity to take the best of where you came from and the best of where you are going and grow, evolve, change.
If you find yourself in this situation, starting over, what do you do? Do you cater to the past and put in place a structure, a program that was old and tired before you saw it or do you completely throw it away and start new? Or is there a middle ground? A place that satisfies the immediate needs of the organization yet provides room for growth?
Like everything in life, extremism won’t work for most organizations so the middle ground is chosen. The needs of the organization are satisfied with the new structure, but those needs have to be put in context with the future. No, not the “tomorrow” future, but the future of two, three years from now. The world is continuing to change and if you are merely responding to events you will never catch up. You need to put in place an organization flexible enough to handle the business requirements, as they exist today, and the business requirements as they are going to exist in two years. Failure to do this means you’ve failed before you’ve even started.
No, you’re not a mind reader, but it doesn’t take a genius to know where the world is headed: cloud computing, mobile consumers, personalization, amongst other areas. None of these are old concepts, but their applicability towards your business may be new and understanding where these concepts are going is critical to your business. Critical to your survival. Don’t just respond to what is currently on the market, you need to look at what is coming to the market.
If given the opportunity for a fresh start, what will you do?