What can established businesses learn from start-up innovation?
By Martin Hosken, Chief Technologist, Cloud Services, VMware EMEA
Successful start-up businesses are all guided by their ability to rapid execute on ideas. Being able to keep up with the expectations of today’s customers has allowed them to steal market share from established players and forge deeper relationships with customers as they go.
Well-established organisations might believe that these younger, more agile organisations shouldn’t even be in a position to operate. Instead, they have become serious competition. Surely, if start-ups can innovate around a good idea, powered by the latest technologies – including the likes of AI, cloud computing, deep learning and IoT – then nothing should stop established players. Particularly when you consider that they have the financial firepower and existing competitive advantage, that should allow them to better experiment with ideas and reimagine business operations in a way that is more comprehensive that any new entrant.
In reality, as explained by Don Dodge of Google over a decade ago: “Start-ups play poker, big companies play chess.” Start-ups are willing to take far bigger risks as they operate and attempt to build market share, allowing them to plan ambitiously. They’re also in a stronger position to leverage important data and insights, and turn the learnings gained into streams of revenue at short notice. Ultimately, they are comfortable in powering business decisions using data.
While data is commonly held by organisations, some find it more difficult to leverage this knowledge into anything actionable as the business grows. This was the basis of VMware’s recent collaboration with Bayes Business School. The study revealed that nearly three-quarters (70%) of businesses are struggling to unlock the value of their data, directly impacting their ability to innovate. Moreover, 59% believe organisations who are prioritising data-led decision making are stealing market share, with 58% fearing they will fall behind the competition if they do not make better use of their data.
Regardless of the appetite from organisations to be digital-first, many are unable to use data to drive ideas to market. However, emerging technologies have facilitated new ways for data to be captured, analysed and used; and are helping business leaders to extract the most value from them.
Exeger and Convoy and other start-up businesses have used new methods and ideas, allowing them to create disruptive technologies and new business models. This decision-making process has been largely driven by data. For example, in the case of Convoy – they realised freight resembled the travelling salesman problem (in which the employee is given a list of cities and has to decide the shortest possible route between them), and built software that incorporates shipment criteria, with real-time supply and demand data, to generate matches with the fewest empty miles at the lowest price. Data-driven insight has enabled them to flip the freight business model on its head.
Maintaining an innovation sprint
In essence, all businesses are tracking towards the same end-goal, despite size or the industry that they are operating in. They want to ensure they’re offering the best customer experiences, continuing to win business and maximising operational efficiency. To this end, it’s fundamentally important to maintain the most appropriate cloud for the right app to manage, access and draw insights from. This can facilitate a competitive advantage, like lessening the time to market, and encourage growth.
While all of this poses the question, how can existing, large organisations seek to compete against rivals who are nimbler, and data-driven? There are four key ways that businesses can keep pace in the innovation race:
- Construct a strong multi-cloud strategy that enables seamless management of two or more public clouds, two or more private clouds or a combination of public, sovereign, private and edge clouds over which the company distributes applications and services with all the same tools.
- Leverage data in the best way. Companies should implement flexible and scalable digital architecture to consolidate, share and analyse all existing information. Informed decision making is reliant on this.
- Explore a host of different innovations to facilitate new opportunities and mitigate risk. With an unpredictable economy, successful organisations are taking a more iterative approach to innovation – adjusting along the way as needed rather than planning everything meticulously and diverting all resources into one intangible idea.
- Use partnerships, and employ external specialists to provide technologies, infrastructures, services and skills that will ensure an organisation’s digital capabilities stay cutting edge.
Given the growing volume of data that organisations will be forced to manage – with expectations that it will almost double in the next three years – continuing to extract value has become an increasingly challenging task. For organisations who are looking for an advantage, they should be questioning how their data is stored, managed and accessed across geographies, the best ways in which it can be leveraged to deliver a beneficial commercial outcome.
Using complexity as a competitive advantage
Depending on the app or workload, running multiple clouds can help organisations become more data-driven. An organisation’s most valuable assets – its data, apps, workforce and infrastructure – aren’t centralised in one location anymore. As such, a strong multi-cloud strategy has become the de-facto model of digital businesses. It enables development at scale by helping to reduce data inoperability and improving the affordability issues raised when organisations are overly reliant on a single cloud environment.
But if organisations want multiple different clouds, how do they manage that seamlessly? The best bet is a cloud-smart approach. This means selecting the best cloud environment for the right application, deciding which applications to re-architect, which to rebuild from scratch and which to lift, shift and modernise. With a business model that ensures cost controls in place, IT can innovate the business, automating workflows with benefits that quickly outweigh the investments.
A multi-cloud approach empowers established organisations to operate in much the same way as start-ups. Regardless of the size of the business, processes can be modernised for the digital age. The biggest investment is courage, effort and understanding. This is fundamental in establishing the future operations of the business and has to be considered with one question at the forefront – how we can maximise the data available to ensure we can innovate, at pace and deliver the experiences our customers want.