I’m pretty sure that title scared away many of the finance people who might otherwise have read this post. But in a business climate where change is the norm, unpredictability is a part of life. And in the words of Taylor Swift,
“You have to embrace the unpredictability of life instead of fearing it.”
OK, on the one hand, it’s Taylor Swift. On the other hand, she just kicked Tim Cook’s butt from here to Cupertino without breaking a sweat. It might make some uncomfortable, but Ms. Swift’s advice is good advice for your business in the digital age.
Everything has changed – technology, customer preferences, competitive landscape – and will continue to change as we transition to digital business. The world your business competes in is becoming increasingly unpredictable. Did anyone see Uber coming before it happened? It used to be that you knew who your competitors were. But today, you don’t know where the next competitive challenge is coming from, which leaves a lot of CEO’s asking the question, “How do we avoid getting Uber’d?”
The answer is simple, but complex at the same time. The best way to avoid being Uber’d is to be ready for it – prepared in advance. But how do you prepare for the next challenge when you can’t imagine in your wildest dreams where it’s coming from?
This is something your IT team figured out years ago. Your business kept throwing requests at IT for more complex services and faster response times than they could deliver from a static 1989-style IT infrastructure. It just took too long to respond to changes in demand and to get new applications up and running, putting your business at a disadvantage.
Enter virtual computing. The whole point of virtual computing is to be prepared for unpredictable demand and growth. Virtual computing empowers flexibility and agility in provisioning computing services. Need new capacity to support a spike in usage? In the time it takes to hit a few mouse clicks, your IT team can shift capacity to your application. Need to bring up a new application? A few more clicks, maybe some console commands, and you have new virtual machines ready to go. If you don’t have the available capacity in house, you can quickly rent it from external cloud services. Software defined networking then allows IT to connect everything in minutes or hours, instead of the days and weeks it used to take. Admittedly, it’s not always quite that simple, but you get the point.
In virtual computing you don’t have to know in advance what’s coming. You have the tools in hand to respond to unpredictable changes.
Your lines of business need the same flexibility as your IT team. That starts with flexible monetization systems that allow you to go to market quickly with creative new offerings and new packaging of existing services, either ahead of or in response to your competition. You’ll need to reduce product development cycles to take advantage of the huge benefits of being first to market and to respond more quickly when a competitor surprises you, reducing their advantage. And you might need to decentralize control, giving line of business managers more autonomy to respond to market conditions with new offerings and price plans.
You can’t predict the future, no matter how much information you have. You don’t know where the next challenge is coming from, but you do know it’s coming. When consumer preferences change, be in position to be the first to respond. When a new challenger enters the market, instead of getting Uber’d, be in position to shake it off and provide an answer.
With the right business capabilities in place, the unpredictability of markets can actually become an advantage. Rather than worrying about unpredictability, embrace it. Take a lesson from your IT team, and put a business structure in place that allows you to take advantage of the unpredictable nature of digital business.