In recent years, the world has faced the most challenging and fragile business environment for decades. And although uncertainty remains, the healing process is thankfully well underway.
The downturn coincided with significant structural and cultural changes in many walks of life and business, and what’s clear, as we emerge into the post-recession landscape, is that organisations are being forced to reassess what they know and how they work if they want to succeed in the reset economy. And in the UK, as public spending cuts take hold and the Big Society sees more work placed with private enterprises, the focus is stronger than ever on the private sector to deliver growth.
Even before the recession began, many industries were in a state of transition – especially those dependent on knowledge workers. The forces of globalisation and virtualisation, accelerated by the increasingly dominant nature of the internet, were already reshaping long-standing business models to accommodate factors such as cloud computing and e-commerce. As the recession ends, these technologies have evolved and developed to the extent where they have significantly disrupted many aspects of life and work.
A parallel can be drawn with the recession of the early 1990s, which coincided with its own fundamental technology shift as businesses shifted from minicomputers to a distributed PC architecture. This helped companies to function more effectively, sharing knowledge and resources to increase efficiency and performance. This time however, the changes are even greater and much more far-reaching, and the consequences of not adapting to them potentially more damaging.
Take media for example. Over the last few years, the ways in which we consume media have been totally transformed. From YouTube, BBC iPlayer and RSS feeds to iTunes, social networks and smartphones, we engage with media in a myriad more in-depth, personalised and real-time ways. We access content from anywhere in the world at any time, on any device of our choosing. It’s not hard to see how a traditional media company that tried to succeed in this new world without adapting its thinking would likely struggle.
The media industry is perhaps most evident in its changes, but it is by no means alone. Financial services companies also faced huge challenges as they found themselves in the centre of the economic instability, with some collapsing under the strain. With capital more difficult to access in the short term at least, fresh growth has to be funded by increased efficiency and innovation. For retail and high-street banks, customer preferences for online and mobile services have soared, again driving significant change.
If we look at the pharmaceutical industry, we have another example. After decades of pharma companies working in an entirely in-house and brand centric manner, we can now see them sharing services between brands, outsourcing any functions that are better performed elsewhere and building collaborative partnerships to improve common aspects of the drug lifecycle, such as clinical trials.
Continue looking across other industries and you will see many examples of companies still making do with business models that are based on technical, geographical and logistical realities from the last century. Keeping faith with these, or simply sticking to the recessionary mindset of cost-cutting is no longer enough. With confidence returning to the economy and a new cycle of growth set to begin, now is the time for companies to reassess, redefine and innovate, and IT is crucial to this.
Specific solutions and approaches will exist for different industries, but generally speaking, the first priority is for IT to be truly aligned with the business. It must be a seamless part of the business and be factored into all decisions, much in the same way that marketing or supply chain considerations would be. That way, IT can proactively make improvements and innovations throughout each process, rather than just act as an enabler at the end.