The convergence of key technology trends such as social, mobile, big data, analytics and cloud computing have enabled new business models that are already disrupting existing businesses. For example, who knew that Uber, a car service that connects drivers and riders through apps, would compete with taxis and limo car services? Or that Airbnb, an online and mobile site where people list, search for and book accommodations around the world, would grab market share from traditional vacation rentals or hotels? The same kind of disruption is about to happen for mid-market distributors, manufacturers and retailers in industries such as food, pharma/medical, automotive, industrial, and paper and janitorial supplies. This disruption is not limited to just big companies or enterprising start-ups—even the most deeply entrenched mid-market organizations can create breakthrough offerings that change the way we live with the bounty of new technologies currently available.
What’s making this happen for the mid-market? First, data is critical. Data is the backbone of this evolution, and we are all competing on it. By installing analytics and sensors, one can identify patterns and predict what will happen next, whether it’s in the warehouse, across the shop floor or at the cash register during the busy holiday season. Data using analytics gives mid-market companies the power to predict the future and plan ahead, all while saving millions owing to increased efficiencies.
Thanks to the power of data, retail and food recalls can now take minutes as opposed to months or weeks as it once did. This capability not only minimizes the overall risk profile of the recalling organization, it also significantly reduces the cost and duration of the recall while protecting the brand from damaging press coverage and industry gossip that typically engulfs a prolonged recall. With the right tools and data in place, an organization can quickly find and replace the defective products while making the correct fixes to the supply chain in real time.
These advances should make mid-market customers welcome disruption, not fear it. Think about it. What if you could “pull an Uber” and disrupt your industry by exciting customers with something they never thought was possible? Just like Uber eliminates the classic middle man—the taxi companies—and lets consumers immediately order a speedy ride that doesn’t require cash payment , you can think (and act) differently too.
To take advantage of this perfect storm of digital business disruption, each mid-market business should do three important things. The first is to think and act globally: globalization is here, so be prepared. Every day, your market is expanding with the advancement of technology. There has never been a better time to serve a broader range of customers all over the world. And the impact of globalization is immediate; you can create new markets and demand that wasn’t there previously. All you need is the right tools to help you track your data, improve your supply chain, increase your sales, and make and track the best expansion decisions and plans.
Next, go mobile. You can do just about anything on a mobile device, from checking statuses and managing workflows to sharing information, all on the go. If you adopt a targeted mobile strategy for your workforce, you will increase productivity by leaps and bounds because your employees can be in multiple places simultaneously. Furthermore, mobile can dramatically improve customer satisfaction, particularly if your customers can access order, product and billing information remotely on their terms.
Lastly, invest time and money in analytics—specifically in seizing, managing and harnessing actionable data for your organization. Knowledge really is power. Analytics will help you see existing patterns across your business, such as when it is the most profitable or least profitable and why, which employees are the most productive, which customers spend more and why, and which products/services are the most fruitful. Analytics can also provide greater insight into your specific industry by delivering data that shows which vertical and regional sectors are the most profitable and why, as well as which product brands are picking up steam while others are failing. With that knowledge, you can start to ask the right questions—and take the right actionable steps—to increase profits, save money and find new expansion opportunities.
We advise mid-market companies to embrace change. Fortune favors the adoptable, and that maxim is particularly true when you look at the impact of digital business disruption. Today’s hottest up-and-coming brands such as Warby Parker, Rue La La, Stumphouse Coffee Roasters and Jeni’s Ice Cream have risen to impressive heights and are competing against giant well-entrenched firms. They are all stunning examples of Davids beating the Goliaths because they were able to turn their original ideas into gold, thanks in part to the very same technologies that are available to you today.
These core disrupting technologies—cloud computing, analytics, Big Data and social—have all proven to be very successful for Fortune 500 firms, and now they are readily available to the mid-market. Late adopters need not fear; early adopters have already mastered these new technologies for you and worked out the kinks. Moreover, it’s never too late to try something new.
The time to start investing in digital disruption is now. With cloud, mobile and analytics on your side, your business will be more efficient, and you can do more with less while greatly improving your supply chain, expanding your operations and increase your market share.
About the Authors
Ray Wang is principal analyst and founder of Constellation Research.
Bob Vormittag is CEO of VAI.