Platt Perspective on Business and Technology

Moving past early stage and the challenge of scalability 23: ubiquitous communications and computation as an enabler of business scalability 1

Posted in business and convergent technologies, startups by Timothy Platt on March 13, 2013

This is my twenty third installment in a series on building a business for scalability and long-term success (see Startups and Early Stage Businesses, postings 96 and scattered following for Parts 1-22.) Over the course of the immediately preceding four installments to this series: Parts 19-22, I discussed how to scale up and expand a business, there focusing on prototype testing operational changes that would, if successful, permit and sustain further smooth and efficient business growth. I turn in this installment to explicitly consider one of the defining facts of the 21st century that would impact upon this process with the emergence of ubiquitous computational, data sharing and communications interconnectedness as a global reality (for a general discussion of this emerging trend, see Ubiquitous Computing and Communications – everywhere all the time and its continuation page.)

I initially began discussing that topic area in this series in Part 8 where I looked into explicitly web 2.0 oriented business models. My focus there was on explicitly building a business model around web 2.0 and more generally around the emerging opportunities inherent to ubiquitous computing and communications. My goal here is to look at this as an emerging force that impacts upon all businesses and all markets. And I begin that by noting a fundamental truth, only half of which is generally acknowledged and discussed:

• Ubiquitous communications and computation enable even the smallest businesses to compete effectively with the biggest global enterprises. This emerging capability makes it possible for even a small business to succeed and even thrive, in what would otherwise be too narrow a niche market to be supportive as a source of revenue and as the basis for a sustaining market space. This is commonly appreciated.
• But these same forces also enable scalability and expansion too, so their primary impact is in fact to expand the overall scope of total sustainable business activity and of marketplace. Ubiquitous communications and computation increase the overall size of the pie and for all – or at least for businesses that can develop defining value from this new wellspring of opportunity.

My goal for this posting is to explicitly discuss this second and perhaps less frequently considered bullet point and its implications. And as a starting point for that I draw a distinction between businesses that specifically build and operate around an intentionally web 2.0 and ubiquitous connectivity-ready business model as discussed in Part 8, businesses that seek to develop and even optimize their ongoing non-web-ready business models and their ongoing operations and strategy in place to accommodate these new opportunities, and businesses that simply add in some web 2.0 and perhaps try twitter marketing, but largely through one-off, disconnected or disjointed efforts.

• Insofar as increased range and depth of connection with marketplaces and with supply chain and other partner businesses can improve business performance and capacity for smooth business expansion, the more fully a business prioritizes optimizing for this, the more value they will achieve from it.

Most businesses would be expected to fit into positions along a continuum for this, with the least effectively online and web 2.0-connected falling behind and becoming less competitive overall and the most effectively online and connected gaining real advantage. Many and in fact most businesses would be expected to fall in the middle here. They might in fact see no real changes in their relative competitive positions in their markets, as they and their direct competitors, for the most part, gain value at equal rates and to equal degrees from web 2.0 and related improvements. So even if their sales and business performance improve, they see more of a marginal change and their direct competitors for the most part are seeing comparable improvements too.

This series is explicitly about scalability and expansion, so to bring this line of reasoning into focus for that I note that smooth and effective business scalability, as an operational reality is largely driven by capacity to smoothly communicate, and to coordinately develop and share business information and knowledge. So:

• Those businesses that are less connected and less successful, are also more likely to face more and greater disconnects and difficulties when trying to expand and scale up. And that directly translates for them into greater expense and I add risk when seeking to significantly scale up too.
• Those businesses, on the other hand, that are more effectively online and ubiquitously connected and that build for this capability into their business models, or at least into their business model implementations, will scale up and expand more smoothly and fully, and on average at less cost and at lower overall risk in doing so.

I am going to take this discussion out of the abstract by reconsidering and further fleshing out a case study that I initially began developing in this series in Part 21 and Part 22, with discussion of the expansion of a chain retail business that I identified for purposes of this blog as You’reHome.

I focused in Part 21 on how implementing a new cloud-based database system for managing raw business data: individual consumer and sales information, inventory data and more, opened up new paths to overall business expansion. I noted at that time that prototype testing and implementing a new database system per se would most likely be only one element to a wider information management upgrade that would collectively drive scalability and overall business expansion, and I turn to consider that wider scope of change here.

• Scalability might very well depend upon and even critically require an improved capability of accumulating and organizing business data and of a wide variety of types, so it can be processed into actionable business knowledge and used in setting priorities and strategy, and for operational execution.
• For that point, just consider connecting sales and inventory management as a working example, where store A can find products in the overall You’reHome inventory when a customer wants to purchase them, and whether they are in that store already, in a local You’reHome or supplier warehouse or in store B of the same business and only a mile away.
• Bringing customers and desired products together makes for happier customers and repeat business, as well as positive word of mouth marketing with its potential for still greater business. And this also has the effect of reducing what might otherwise simply become excess and out of season inventory, that for failure of connection with customers in-season, would end up on sales tables and sold at or below cost.
• But I note one other detail here that I mentioned in passing in the You’reHome case study: potential limitations in “bandwidth availability at peak periods.” In order for You’reHome stores to effectively use this cloud-based database system, they have to be able to connect to it and even when many or even every other store in the system is busy sending in database queries and downloading responses. Improve the database system, and integrate what had been local and store by store data solutions into a single business-wide system, and the overall business gains tremendous value – but only if its stores and its employees who handle business transactions in them can access and use it when they need to, and at the moment their customers are looking for that product that is in the system but not readily visible on a shelf.
• Making this business web 2.0 ready, or for the focus of this example, overall interactive online-ready means addressing new potential bottlenecks that can and will arise as old ones are addressed and widened. And scalability in this becomes an ongoing process of looking for and addressing new bottlenecks and new potential information management systems slowdowns and disconnects and with appropriate backups and redundancies so as to limit single points of failure vulnerabilities. Improve the database system and you now have to improve network and internet connectivity. Improve that and new potential limiting factors arise that in turn need addressing and updating.
• And this, explicitly, is where systematic ubiquitous computing and communications planning and execution can lead to improved expandability and to increased range of simple, linear scalability.

I am going to continue this discussion in a next series installment, where I will focus on the impact of an expanding range of communications channels and user preferences as a route to increased diversity of scalability options. And I will specifically focus on the handheld device as a route to bringing the full strength of the business into the individual employee’s hands as a new path forward in this. Meanwhile, you can find this and related postings at Startups and Early Stage Businesses. You can also find related material at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2. You can also find this and related postings at Ubiquitous Computing and Communications – everywhere all the time and its continuation page.

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