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Adapting your business to the changes in consumer technology

Five years ago did your business plan include the impact of smartphones? Responding to the rapid changes in consumer technology means adapting the way we run our businesses, says Bruce McKee, Industry Development, Financial Markets, Microsoft


Charles Darwin once 
said: “In the struggle
 for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment.” It is easy to forget that the world around us is changing all the time, in ways we didn’t imagine. Andy Grove, former CEO of Intel summed it up by saying: “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”

We all know some things are changing. We have seen the rise of Facebook and social media. Some will use social media for personal purposes, some may have attempted to tame it for business purposes. But do we ever sit back and take in exactly what is changing and how?

Gartner talks about the Nexus of forces to frame discussions on change. The forces changing our world are mobile, social, big data and cloud. When reading this you will say of course, it is obvious. But that is somewhat after the fact. The reality is the first quality smartphones were introduced in 2007, with no one really buying them until 2008/2009. That means the smartphone revolution is five years old. Can you remember a time before smartphones? What did you do differently? In your planning five years ago did you take into account smartphones and their impact? Did you really understand when you heard analysts talk about social just how pervasive the technology would become and how much of an impact it would have on society? Could the Arab Spring or the Occupy movement ever have happened without social communication tools?

When the GDP figures 
are released it reminds us that the UK is less reliant
on manufacturing, we have become a services-based economy. South East Asia is the manufacturing centre and we rely on financial services, architecture, legal and design services to now power our economy.

A service-based economy
In fact, the same can be said for most of the Western World. We are all becoming service- based economies, with the possible exception of Germany. As consumers we love services. No one buys houses outright, we have mortgages, cars are bought with financing, all paid off monthly. Insurance is paid by monthly direct debit, TV is paid via subscription, even music is now moving to subscription, asset light models with products such as Spotify or X-Box Music, where music is rented, not owned. We have all benefitted as it has allowed us all to consume more as we change a capital purchase to a cash flow based payment. We are on a consumption conveyer belt where we consume, and pay by direct debit.

The business models of all businesses are changing. Even the venerable Rolls-Royce engines are not sold as a one-off capital purchase, but they sell the airlines a contract for flying time, thus matching the needs of the client. Who actually wants to own and run an airline engine when actually what you want is to enable the transfer of clients from one place to another?

Technology has come of age. During the late 1990s and early 2000s technology promised a lot but the reality was somewhat underwhelming.

Pre broadband, the World Wide Web often was referred
to as the World Wide Wait. Now the products and solutions from technology companies have matured to the point where so much is out of the box you can just consume the service. We can all think of our favourite services at home; there are
48m people using X-Box Live globally to augment the gaming experience on X-Boxes, 400m users of e-mail, and 37m users of Netflix. But these are consumer services and we often hear these numbers touted about.

In the enterprise the technology has matured, and businesses have experience
of providing richer client experiences. But what about improving the systems in the back office? Enhanced back office services offer increased flexibility and service while reducing costs. E-mail, document management and CRM are obvious examples
of standard services that can
 be externalised and delivered
 as a service to your users. A number of companies already partner with hosting providers to access these services. This already removes the headaches of owning, managing, securing and upgrading these services for a regular fee. This is not cloud computing rather the ASP/ hosting model that has been around since the early 2000s.

The relatively new phenomena of cloud computing is a whole new scale. To enter the cloud computing market today takes a minimum $10bn of investment. A cloud provider needs centres globally dispersed with at least two datacentres per region (Europe would count as one region). For a modern datacentre to be cost efficient and competitive it needs to be a modular, often containerised affair with a low footprint of power and water. To get the economies of scale a new cloud provider datacentre is likely to cost in excess of £100m and be the size of 10 football pitches.

Microsoft is one of only a handful of businesses with the balance sheet, technology, capability and desire to invest
at this scale. This begs the question of how hosting providers will prosper in this new world?

The reality is the same with
all technology, it is Darwinian and numbers will merge or go out of business, and a smart few will innovate and provide new services. At Microsoft we are planning for private datacentres and hosting providing to be around for another 20 years, but the landscape will change dramatically during this time.

Your next three to five-year plan
The next time you sit down to review your three to five-year plan, look at it, does it make sense against the background of technology change I have described? Your biggest dependency is now technology. Technology enables you to service your customers, keep records and communicate with them. Everything to do with clients should be stored in
your central client relationship management (CRM) system. This in turn is integrated to a range of back-office and front-office systems to provide a cohesive service to your clients.

Clients are demanding. Their expectations are high, as the quality of solutions on offer to them has improved over the years. When we go home we see more technology than we often do in the office, and it is the same thought process that has led to corporate Bring Your Own Device strategies. If we can have so much technology at home, why is it so difficult to have a similar level of technology in the office? Turn that argument around again, if as an IFA you want to visit me, to impress me and gain the mandate for my business and you turn up to my technologically advanced house with a note book and pen, what do you think the chances are of gaining my business?

Managing money is sophisticated, if it wasn’t anyone could do it and at a lower price point. It starts with the brand, and the image you project at the point of meeting a potential client. Get the mix of image, brand, experience, expertise, and technology right then you have a client ready to sign up.

A number of IFAs have already experimented with iPads.
The concept of the tablet is a good starting point, it allows interaction and discussion based on information in 
the system, but there are a number of limitations. The 
iPad was never designed as an enterprise device, it doesn’t have a USB port for peripherals or storage devices. It doesn’t have security, such as hard disk encryption, and critically, it doesn’t have the Office suite with products such as Excel for managing and calculating data. A new range of Windows 8 devices, from touch screen ultrabooks to a range of tablets at competitive price points address these shortcomings. And there is a wide range of tablets of all shapes and sizes to choose from. For instance, there are the business tablets such as the 10.6” Surface Pro to the 8.1” Acer W3 Iconia, and growing range from HP and Dell; or a new category of large tablets that replace the traditional desktop and yet are portable if you want to take them into a meeting.

Smart decisions
The devices enable the conversation but core
 systems that drive the client on-boarding, fact find, balances, client communication and a range of other client centric processes are best exposed from the CRMs, such as Microsoft’s Dynamics CRM, that, in turn, may get their information from other systems. This gives a holistic view of
 the client and enables smart decisions to be made, as all 
the information is available 
at your fingertips. This is the service nirvana, which is now readily achievable. Previously single solutions claimed to offer a single view of the client, but actually it was often a partial view and then the problem rapidly became how to keep
the solution up to date. As an IFA your business is financial advice, not IT management. So spending time worrying about upgrades and product releases and integration removes your ability to focus on the workings of your business.

The cloud service model ensures applications are kept up-to-date with Microsoft doing the upgrade work, enabling
you to focus on your priorities. The invoicing is monthly, based on actual usage, enabling you to right size your business based on client demands at a particular time of the year. It is not a stretch of the imagination to conclude in the future all software will be consumed in this manner, as the benefits are compelling. Having a first mover advantage from reducing your costs, increasing your flexibility, improving your client service and matching your technology costs to your success, means one of your biggest operational dependencies becomes an opportunity.

A recent study showed that 85% of new businesses were opting for cloud-only delivery of services. As a green-field site consumption of new system such as Dynamics
 CRM or Office 365 (e-mail, document collaboration, instant messaging, and telephony) becomes much more attractive.

However, most companies have a range of in-house and/ or hosted solutions. The good news for Microsoft solutions
is all systems can work and integrate information across internal deployments, in-house, in the cloud or in a hybrid of all of these approaches. With the most up-to-date capabilities and the flexibility to scale with your business it removes the headaches and complexities of running the IT aspects of your business.

The world is moving on. Clients don’t demand, they expect. Work isn’t a nine to five thing; the lines between work and home have become blurred. Information needs to flow smoothly and securely, it is just expected that you can work anywhere and have the up-to-date information at the tip of your fingers. How else
 can you attract and retain the best staff? How much more difficult for your staff is it to provide excellent service with a significant technology limitation placed upon them? To enable your business to grow and adapt to changes that you don’t yet know about requires new thinking around the provision 
of core services. The answer 
lies in externalising where possible and this starts with Dynamics CRM and Office 365 services that actually enable you to run your business. These systems are critical to you. We all have core systems that run our businesses, but they only achieve part of what we need
 to accomplish on a day-to-day basis. We all augment these central systems with Dynamics CRM, Exchange e-mail, and SharePoint for collaboration and document management. These service offerings from Microsoft enable you to future proof your business. In a time of regulatory and client-driven change, that adaptability is key, focus on your core business, allow others to help. It may be a challenge to re-invent the processes of the past, but as General Eric Shinski said: “If you don’t like change, you’re going to like irrelevance even less.” So grasp the nettle and stay relevant in a changing world by providing excellent service and remove the technology dependency from your business.



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