10 Mar 2016
Farmers feed billions across the globe via precision agriculture – eliminating further depletion of increasingly scarce natural resources. Consumers collectively converge to transform a 130-year-old soft drink recipe for the better, driven by nutrition.
There’s no denying that hyperconnectivity and the data it generates is transforming our lives and upending the business world.
According to The Economist Intelligence Unit (EIU) study, “The Impact of Hyperconnectivity on Your Organization,” we are merely scratching the surface when it comes to realizing the full potential of the Digital Economy. Businesses which successfully integrate hyperconnectivity into their strategies are more likely to experience streamlined collaboration across divisions and geographies, adopt a data-driven approach to organizational decision-making, and accelerate process improvement. The real gains, however, lie in the transformative changes taking place across the enterprise.
Digital Economy imperative
Beyond how machines, people, processes, and things are connecting with one another, several business cases are proving that the Digital Economy is upending the business world. In the EIU study, 59% globally cite embracing hyperconnectivity as imperative to keep pace with ever-changing market demands – and 69% claim that a failure to adapt represents significant risk and missed opportunity.
Here in Indonesia, a report by the Indonesian Internet Service Providers Association (APJII) and the University of Indonesia’s Communication Studies Research Center, states that by the end of 2014, Indonesia already had 88,700,000 mobile Internet users. This number is projected to steadily increase to 112 million mobile Internet users by 2017. With this, Indonesia has significant potential to become a hub for new digital economy growth. This is further strengthened by Indonesia’s young and growing population, which is projected to reach 280 million by 2030, contributing to an average annual GDP growth of 2.4% from now until then.
As Indonesia’s population continues to grow, so too will their engagement with social media. These social media trends are popular among the middle class, which business leaders see as a positive development. Aside from its rapid growth and undeniable pervasiveness, it presents a substantial opportunity to engage with digitally connected consumers.
The Indonesian government and its stakeholders need to work closer to push for a sustainable growth of the Digital Economy. Indonesia is now starting to catch up with countries that focus on their digital economy, by beginning to increase the provision of broadband infrastructure, including fixed and mobile broadband, and the deployment of fourth-generation (4G) technology. The target of Indonesia’s Master Plan for the Acceleration and Expansion of Indonesia’s Economic Development (MP3EI) is to transform 135 cities/districts by 2019 as a legacy of the current President. This will further fuel Indonesia’s growth as a digital nation.
The Digital Economy is not only leveling the playing field, but also enabling every business regardless of size, industry, or geography. Here are four areas of any business responding favorably to the increased speed, collaboration, and insight hyperconnectivity brings:
1. Strategy and business development
Traditionally, expanding into international markets has been viewed as a risky move. Now, many businesses are capitalizing on the removal of barriers that once discouraged them.
According to the EIU study, while 39% remain apprehensive that moving forward will strain established markets, almost half of the respondents agree that their plans for global expansion are a strategic way to compete against ever-changing digital channels. Furthermore, knowing where to go next is only getting easier – 40% will be better able to identify new geographies ripe for their current offerings.
2. Product development
Today’s customers have a greater voice in how products are created and delivered than ever before. But the future will see customer and business relationships becoming even more intertwined through digital channels. The EIU study reports over 50% of respondents plan to customize products and services to meet individual needs. Even more striking, 41% foresee incorporating customers into the product development process.
The primary source of competitive pressure, however, does not come from customers. Rather, it’s the digital offerings of established rivals that loom largest. More than half (57%) admit to experiencing “moderate” or “severe” competitive pressure as a result of incumbents’ digital offerings. And there seems to be no relief in sight – with 69% expecting significant competition from the same established players.
3. Supply chain
Significant cost savings – at least for the 35% of respondents the EIU study cites. As more businesses seize the opportunity to expand their operations, 38% also find that hyperconnectivity empowers them to work just as effectively with international suppliers.
Why? Not only does the Digital Economy open doors to every supplier across the globe, it opens buyers to your products. As a result, businesses will become more selective about the suppliers they choose (39%) and increase the variety of materials purchased through the supply chain (27%).
4. Human resources
In the EIU study, the most cited impact of hyperconnectivity is the acceleration of business processes. In fact, 46% indicate the automation of business processes as their most adopted response to the interconnectedness of data, processes, and things. Going forward, almost half of respondents believe that hyperconnectivity can help their organizations become more agile and innovative while reducing centralized control.
Take PT Kereta Api Indonesia (Persero) for instance. The 151-year-old Indonesian state-owned enterprise that manages the railway transportation in Indonesia is currently aligning its business models with business processes brought about by the digital world.
By streamlining services through hyperconnectivity, PT Kereta Api Indonesia (Persero) is building customer trust by delivering what customers value most – reliable and responsive customer service, and competitive pricing.
PT Kereta Api Indonesia’s IT vision is to become a business driver in realizing the company’s vision of transforming into the best railway service provider. To reach this vision, the company’s management turned to SAP solutions to power their business. They implemented the key ERP solutions for their Railstar Project to enable improvements in railway infrastructure maintenance. This drive for improvement enabled effective changes for its administration and financial reporting processes, as well as better management of its receivables and payables, leading to increased efficiency.
No matter how you transform, automate or accelerate processes, people are always at the heart of such transformation. With the influence of hyperconnectivity, more than a third have introduced digital training to support such shifts as automated business processes (46%), outsourced functions (33%), and agile development practices (39%). However, this appears to merely be the tip of the iceberg.
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