Today we discussed this article from MIT Technology Review in our E-Business class: "Revolution in Progress: The Networked Economy"
The article describes a business and consumer eco-system that is more connected today than ever before. Product development times have shrunk and so have the inventory cycle times. With the advent of IoT, the inventory in the refrigerator may begin to get replenished just-in-time.
The networked economy is giving businesses more opportunities to engage with customers. Airbnb, Google Waze and eBay are some of the companies that are leveraging this networked economy to the fullest. A company today can shop from an entire gamut of suppliers listed on eBay rather than limiting itself to a traditional set. Airbnb allows you to list a room you have in your home as available for rent and share it with tourists visiting your city. Marissa Mayer highlighted the new sharing economy at DAVOS 2014 when she said "150,000 people let strangers stay at their home last year through Airbnb; 1.5 million people assigned tasks to strangers through TaskRabbit; 56 percent would consider renting out their cars to strangers." Google Waze allows drivers to share local real time traffic and road information.
Earning customer loyalty, enabling open innovation and enhancing resource optimization are 3 key pillars of success in the networked economy. For existing business models, the immediate challenges include preparing for the new workforce and identifying exactly which projects for improving customer experiences or optimizing capacity are most likely to yield fastest return on investment. Vivek Bapat, SAP's global vice president for portfolio and strategic marketing advises thus "Look for areas of quick wins - such as supply chain, procurement, or asset utilization - that may not even be noticeable to customers at first, but that will bring gains in efficiency and drive cost reduction."
This advice becomes particularly important as we are in the midst of major campaigns by the Modi government on Make In India, Digital India and Smart Cities. We need to be careful about what projects we choose to fund under these initiatives. We should look for sustainability and a good return on investment in projects that the government invests in. Well selected projects will give a positive return in the long run and poorly selected ones will produce a one time growth event in the economy.
We should be careful what we choose to spend on.
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