The internet has been around for a long time now, but in the last few years, executives and business owners have really leaned into what it might mean for their companies. Emerging technologies and an increasingly digital world mean that businesses cannot operate as they always have. They also can’t count on staying the same from here on, either. Things are constantly in flux, and as such, businesses have to be innovating in how they plan and construct business models. Emerging technologies have fundamentally changed the way we do business, and here’s what leaders need to stay out in front.
Businesses Must Adapt to Technology
One of the key aspects of an innovative business model in today’s world is how it approaches technology. Businesses should not be looking at technology as an investment with very little impact on how the business operates. All too often companies look at technology through the sphere of how they currently do business. Investments in technology should also indicate a willingness to fundamentally change the structures of the business itself. Customers are changing, and new technologies must be geared towards providing what customers need, whether that’s a new product or a better user experience on the website. Adopting new technologies to change the way a business operates will cost more upfront, but will pay off down the road.
Talent Is Crucial
Yes, talent is always crucial, but it’s never been more important to find exactly the right talent. What kind of talent do companies need? They need at least one person who doesn’t only use technology, but can also identify ways that it can be leveraged to help the business. They need to be innovative thinkers who see the potential in things and will help to make smart investments in the technologies that fit best. Companies can no longer own excluding rights to technologies, since they now tend to be shared resources that are open to any company that pays the licensing fees. That means companies need to be smart and strategic when choosing what will give them an advantage over the competition.
The Platform Economy is Here To Stay
Emerging technologies are changing business, there’s no doubt. However, technologies are also becoming businesses, too. The platform economy is massive. It provides the growth and proliferation of technologies to create connections between consumers and what they want and need. Amazon is a connection between retail and consumers, for example. When building their business plans, companies must account for platforms. Either they need to find a way that their product can be accessed through a platform, or they need to develop a platform for their services. Today’s consumers are looking for simple ways to make purchases, and businesses that add seemingly unnecessary layers to making those purchases will get left behind.
Platforms have become increasingly important for businesses to use to their own advantage, as well. For instance, an innovative business model should integrate open innovation into their plans and work culture. A platform can help achieve this. Through open integration platforms, companies can connect with those who are creating and developing the most cutting edge technologies. They can access the greatest minds in their industries, and build relationships that will help them grow for the future. These platforms make innovation easier, and if a company isn’t innovating, they will not be able to keep up.
Focus on Business Needs
Investment in technology should be about improving the business first, as opposed to simply chasing the newest technologies. This means putting the needs of the customers at the forefront of any business plan, and planning to have to innovate to anticipate needs down the road. Anticipating is an important distinction from reacting to customer demands. If you are reacting, your choices will not be creative or innovative enough. For instance, if Netflix had reacted to customer demand for faster turnaround times when it was mailing DVDs by sending them through courier, they would have failed quickly. Instead, they pivoted to providing content online, and are now a behemoth that has effectively ended in-person movie rentals.
Nevertheless, a company should not just invest in the latest technologies for the sake of it. There should be experimentation to see what works, but major investments should always be made when the business is certain of its impact. That’s why the right talent is so important to make these distinctions that anticipate what will truly be impactful going forward as opposed to the shiny new current fad.
Pricing Has Evolved
One of the lesser-known technologies that has had a major impact on business plans in many different sectors is pricing algorithms. Targeted prices offer a better experience for consumers with more options, and allows companies to be more efficient with their pricing. Algorithms get more sophisticated all the time, but they have the ability to calculate how much consumers will be willing to pay for certain products and services, and how that price can differ between products or with different options added in. Sports teams were early adopters of dynamic pricing algorithms that went beyond simple calculations for paying more for closer seats. They started charging more for important games, allowing customers to get cheaper prices to see sports, but only for games that were considered less desirable. They could still sell out the most expensive games, since they often involved rivalries and generated a lot of interest.
Testing to Make Decisions
One of the best things about innovative business models is that everything that is implemented can be tested. There are analytical tools for all sorts of business metrics that can help with decisions on pricing, marketing, manufacturing procedures, and everything in between. Innovative business models allow for pivoting when something isn’t testing well, and now those pivots can happen within days or weeks, as opposed to sometimes months and years in the past. Companies can be leaner, and better positioned to stay competitive, even if they make a mistake.
There’s no doubt that emerging technologies will continue to shape and change the way we do business. Companies must recognize this, and shift their business models to allow for more innovation and flexibility to meet consumer needs in a fast-paced and digital world.
