When considered as an industry sector, the internet contributes 4.7% to U.S. GNP. Some have characterized that as a big number, bigger than all of the spending of the Federal government combined. Not to be a contrarian, but one could argue that 5% is a small number when you consider that the internet is still in its infancy.
It is time to change the narrative on technology. All successful businesses will ultimately become technology companies. Failure to understand this context will be catastrophic to those who are asleep at the wheel as the next wave of computer technologies emerge. Conversely, technology has become the most effective lever for gaining competitive advantage.
Many entrepreneurs get caught up in the buzzwords: cloud, big data, take your pick. Some even ignore technology because of their lack of understanding. Most think of technology in incremental terms. We look for ERP systems to inform us, and portals to improve the experience of our customers. My view is that thinking incrementally isn’t enough in today’s environment.
Today’s entrepreneur must harness the energy that technology offers us; to disrupt industries and make markets. While technology might be the great equalizer, it can also be the ultimate barrier to entry. It can cost millions to adhere to security and privacy standards required by large customers. But these technologies are small ball, they keep competitors at bay, but do not reframe the conversation.
The most formidable technologies are yet to come. Large B2C companies like WalMart and Amazon are building sophisticated algorithms to predict consumer behavior, such as what utensil a housewife will buy next. What happens when B2B companies are able to predict client behavior with similar accuracy? These technologies already exist and “Big Data” will only further enable such inter-connectivity. IT can not just be the place where we figure out how to allow customers to order their products online.
While logistic engines and portals are somewhat known, the ability to analyze streams of data is spreading like wild fire. For example, social media tools provide the ability to calculate return on marketing investment unlike any of the marketing tools used by past generations. B2B is on the cusp of a new dawn, where business analytics will be so powerful, that winners and losers will be dictated by who has the best information.
One of the sea changes that will occur is that access to information will change the way we manage. Today, decisions are forced to the top because relatively few people in small companies have access to information . When the minions have the same information as senior management, they will make better fact based decisions.
It is time to set the information free. Data needs to be treated like a strategic asset, the fiber of intellectual capital. It is not uncommon for our firm to have clients who spend 1-2% on technology and 8-10% on marketing. As technology and marketing morph into one, and the cost of technology falls, companies will have to recalibrate how such investments drive profitability.
We will also have to change the way we think about how our employees use technology. In the old world, IT dictated what technology we would use. Today, the employees decide which tools they need and on what devices. They can download them for free from an app store of their choosing in real time. We cannot harness technology if we are restricting it.
Will you be participating in the next Revolution?