While there is no shortage of pundits making tech predictions for 2009, the University of Denver’s Daniels College of Business experts have taken a different tack in their predictions.
Information Technology department faculty Richard Scudder, Don McCubbrey, Paul Bauer and Amy Phillips have compiled a list of some of the most ingenious ways organizations use technologies to give them an advantage over their competition — key in the current challenging economic environment. The “winners” on this list have successfully integrated technologies to increase their revenues, decrease their operating costs and develop new business models, despite a declining economy.
TECHNOLOGY PROVIDING THE COMPETITIVE EDGE
Netflix, Inc. – The world’s largest online movie rental service has been using technology to gain a competitive advantage since they started their business 10 years ago. The company’s appeal and success have been built by keeping subscribers happy, which requires some heavyweight technology and continual innovation in business processes. Netflix has entered the on-demand market by allowing customers to use the “Watch Now” button via their website to watch movies and TV episodes instantly on a PC or by using the Netflix Player, which allows subscribers to instantly stream movies and television shows from their account directly onto their television. The results? In the fourth quarter of 2008, they posted a 45 percent increase in profits compared to 2007.
FreshDirect – Based in NYC, it has become one of the nation’s leading online delivery services offering fresh food, plus popular grocery brands, delivered right to the customer’s door for up to 25 percent less than supermarket prices. With well over 250,000 customers since opening for business, the company continues to experience tremendous growth. At the heart of FreshDirect’s operation — the company’s information technology infrastructure ensuring that the website is always available. The IT group manages hundreds of systems and servers that keep ordering, fulfillment, supply and other systems interconnected so shoppers have up-to-the-minute information about availability and pricing.
TECHNOLOGY MANAGING THE SUPPLY CHAIN
Zara – One of the largest international fashion companies in the world, and technology has been one of the leading reasons for putting them there. The technology-enabled strategy that Zara has unleashed breaks all of the rules in the fashion industry. The trendy Spanish specialist retailer ignores advertising, rarely runs sales, and in an industry where nearly every major player outsources manufacturing to low-cost countries, Zara is highly vertically integrated, keeping huge swaths of its production process in Spain. This is largely due to a technology-orchestrated coordination of suppliers, timely feedback on sales in their stores, just-in-time manufacturing and finely tuned logistics. In other words, Zara, motivated by how they wanted to operate, made their technology support their operations. In a difficult retail landscape, this made them a winner.
CROWDSOURCING
Crowdsourcing has been defined by Jeff Howe, founder of the blog crowdsourcing.com and an associate editor at Wired, as “the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.” Examples include:
Proctor & Gamble – In 2000, their CEO mandated that the company shift much more of its corporate innovation to external companies. To date, the company has successfully transitioned fully 50 percent of its innovations to have significant components originating from outside the company, ranging from packaging, formulation and devices to concepts, according to Silico Research. In effect, P&G’s active collaboration with outside experts leads to fresh ideas and innovations, without the cost of hiring additional in-house researchers.
Amazon.com has even created an online marketplace for crowdsourcing called Mechanical Turk. Anyone with a task to be completed or problem to be solved can put it up on Amazon, setting their price for completion or solution. For its role, Amazon takes a small cut of the transaction.
CLOUD COMPUTING
Cloud computing, a relatively new development to deliver information technology services, is a way to increase capacity or add capabilities on the fly without investing in new infrastructure, training new personnel or licensing new software. Under the cloud computing umbrella is a solution called Software-as-a-Service (SaaS) that is owned, delivered and managed remotely by a provider. In addition, SaaS allows a sharing of application processing and storage resources in a diverse environment on a pay-for-use basis, or as a subscription. Therefore, cloud computing encompasses any subscription-based or pay-per-use service (SaaS) that, in real time over the Internet, extends IT’s existing capabilities. In effect, it allows companies and individuals to take advantage of the latest developments in technology to advance their own business without having to make major capital investments. Examples include:
Google – One of the visionary organizations for cloud computing, most of their employees already use office tools, software and data that reside not on their desktop computer but on the Web. Google also encourages consumers to post some of their data to the Web, including pictures, calendars, YouTube video and Google docs.
24 Hour Fitness – The world’s largest privately owned and operated fitness chain has moved into the cloud — cloud computing, that is. The company needed to consolidate all corporate sales groups on one customer relationship management (CRM) platform and decided to team up with Salesforce.com to gain a competitive advantage in using their cloud computing infrastructure. The results? 24 Hour Fitness’s Corporate Sales Department’s business is up 30 percent year over year and Salesforce.com’s cloud computing advantage is providing a clear and consolidated view of the sales pipeline.
SUSTAINABILITY: CHANGING THE WAY WE DO BUSINESS
Teleconferencing – Cisco’s TelePresence teleconferencing has essentially redefined face-to-face meetings and business relationships. Through their combination of technology and design (and with classes of teleconferencing to make it affordable for a range of businesses), cross-cultural project teams across the globe are able to collaborate without being in the same physical room. Cisco refers to it as the “The travel less, save more effect.”
Telecommuting – Knowledge workers can work from anywhere. While telecommuting has been around for more than 20 years, it’s now becoming widely used and accepted. One of the reasons is that data is now available showing tangible savings with telecommuting. An estimated 1.35 billion gallons of gasoline could be saved annually if every U.S. worker with the ability to telecommute did so 1.6 days per week, according to a report released by the American Electronics Association. Research from the U.S. Department of Personnel Management estimates that, with telecommuting, decreased commuting, office rent and energy costs will result in considerable savings for organizations that adopt telework.
Flex Time - As technology and access to the Web become more ubiquitous, not only can people work from anywhere, they can also work anytime. Think about how much time is devoted to responding to email, IM conversations and requests for information. With small Web notebooks and smart phones, much of this work can be performed at any time. This can be a burden or a blessing. According to HR consultancy Watson Wyatt Worldwide, companies that employ it can expect to see shareholder returns of about 3.5 percent.
Routing using GPS mapping – Logistics companies like UPS now use computers and GPS technology to map the most economical, energy-efficient routes for delivery trucks. For example, one of the rules employed in developing routes is to avoid having trucks make left turns. In 2007, UPS estimated they saved 3 million gallons of gasoline and reduced carbon monoxide emissions by 32,000 metric tons, a clear example of how careful routing and sophisticated GPS technology can be applied in new, innovative ways to create value.
Source: University of Denver
