Business strategy: outside-in or inside-out?

Creating a coherent strategy for one’s business in this increasingly mobile and virtualised world may seem daunting, but once one understands the market drivers, the process becomes considerably easier. This is according to Keith Jones, director of Strategic Business Development at Unison.

He says the recent shifts in the communications market have been nothing short of seismic. “If you ask anyone on the globe to name the three largest emerging technology companies in recent years, they should name Apple, Google and Facebook.”

“It is no coincidence that these three organisations have emerged as the world market leaders. Based on the shifts that were driven by amongst other things, Moore’s Law, this dominance was inevitable. Hindsight is 20-20, and the only predictions I won’t guarantee are those about the future. The fact that I still have a day job means I didn’t buy these shares when I should have. Looking back, the market drivers are clear and will give us some insight into what is coming,” he explained.

The IT market has been driven inside-out, as that is where the budget has been. Large corporates were the only ones that had the budget to firstly buy the hardware, and secondly get the software installed and integrated. They called the shots and to a large extent, drove the future development efforts of the market.

The companies with the big Research and Development budgets like SAP, Microsoft, Oracle and IBM, either developed to capture an increasing share of the corporate wallet, or bought whoever they thought was going to capture some useful market share.

In the background, Moore’s Law was making more and more power available to the consumer and phones were becoming smarter. On top of this, bandwidth was increasing exponentially and the cloud was making top-end complex software solutions relatively easily available to companies and people that just would not historically have considered solutions of that level of functionality or complexity.

Jones says this all built up to a single and subtle but massively powerful tipping point. “The consumer became more empowered than the corporate. Apple, Google and Facebook exploded and the ‘me-too’ players like Linkedin and DropBox were not far behind. The consumers voted with their fingers and wallets as to where the market would go.”

“We have witnessed the birth of the single most powerful market driver we will possibly ever see in our working lives – Cloud plus Crowd. If you look at many businesses now, the consumer has access to more processing power than the business is prepared to pay for,” he added.

The ubiquity of smart phones, the nascent tablet market kicked off by the iPad and the inexorable progress of Moore’s Law making laptops more and more powerful. The advent of proper web-based offerings and the cloud has also driven down the need for large businesses to invest too much in the client-end of the technology process.

What the corporates did not realise is the extent that this shift would lead to the abdication of control of the all important Last Mile of the communication channel.

Jones says the Outside-In market is here. “There is a technical wrapper on most businesses that we are still figuring how to cope with. The first layer is the Smartphone and the second the Tablet market, so Bring Your Own Device (BYOD) is alive and thriving in your business, whether you support it or not.”

The technology shifts have outstripped business’ ability to manage, secure or control it. The consequences for the business are complex and far reaching, people are doing more with more, not more with less. The behavior shifts are apparent but the promised productivity gains are not.

According to Jones, the drive for mobility is forcing many businesses to rationalise their back end systems faster than planned, they simply cannot mobilise everything. “The shifts between email, VoIP, fixed line, social media, video and mobile mean we are not sure how to service our employees and drive customer intimacy.”

The Business to Employee (B2E), Business to Business (B2B) and Business to Consumer (B2C) markets require different focuses as they require different outcomes. Support costs are escalating as one is now supporting the same community through different platforms and across multiple communication channels.

He said the lunatics are running the asylum. “If we look at the market drivers above, we will see that the market is not going to settle or slow down. The only guarantee is that the market of the future will be more complex and the drivers more difficult to predict. Convergence means we have an ever increasing choice from an ever growing number of suppliers.”

The consumer is increasingly fickle and only just coming to terms with how to wield its new found power. There is no doubt that the technology and behavioural shifts will lead to huge opportunities for business, firstly to drive down costs and increase productivity and secondly to gain access and insight to markets and behaviours that one would normally not have gained access or insight to.

The businesses that move forward with managing this opportunity in a coherent, structured and proactive manner will reap the rewards, the rest will stand by and watch.

“What an exciting time to be doing business, I feel privileged to be, arguably, in my business prime in such a dynamic market, where the shifts are significant and the changes wrought lead to new markets and opportunities appearing on an almost monthly basis,” he finished.

By Keith Jones, director of Strategic Business Development at Unison.

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Business strategy: outside-in or inside-out?