Business, we often hear, loves certainty and hates risk. Risk has always been something to be mitigated or avoided by business. But old ways of working are not necessarily the best ways when so much in the world is changing.
To truly succeed in the era of Business 4.0 – a perfect storm of new technologies including cloud computing, artificial intelligence, automation, big data and analytics, and the Internet of Things – companies are expected to continually adapt to new trends and more importantly, deliver innovation.
To do this they need to revaluate how they approach risk according to K. Ananth Krishnan, Executive Vice President and Chief Technology Officer of Tata Consultancy Services.
Speaking at this year’s TCS Innovation Forum, Krishnan explained, “Business 4.0 organizations actually embrace risk, with a boldness to take on strategies with risk levels that would have been considered unacceptable just 10 or 20 years back. This new risk threshold has become the table stakes if you want to compete.”
According to Krishnan, top performers such as Google and Alibaba have attained this level of success partly due to their ability to embrace risk.
This is not about taking reckless decisions or encouraging short-termism, it is about reducing the cost of failure while continuing to drive innovation.
Age of Abundance
Similarly, having a ‘mindset of abundance’ is another crucial component that feeds into this ‘unconstrained’ way of thinking.
Krishnan believes that most businesses are understandably hardwired to consider availability of resources, constraints and risks before formulating a plan.
But Business 4.0 enterprises consider which resources are in abundance that will help them achieve their goals faster, more efficiently and more competitively than others.
Agility, cloud computing and automation must be baked into the very DNA of companies in the future if they want to stay competitive.
An example of one company that has effectively made this change in mindset is UK supermarket Asda.
Like similar retailers across Europe, UK and the US, Asda’s established network of stores and distribution centers has been massively impacted by online retailers. So, the company decided to try something new by allowing its customers to collect and return products purchased from 3rd party retailers at its 600 stores. By taking this risk Asda was able to take advantage of an opportunity in the online retail market and deliver greater value to their own customers
In turn this generated a new revenue stream and increased the upsell in their traditional revenue stream.
TCS collaborated with Asda to support the digital makeover needed for the new service as part of its ‘Click & Collect’ digital transformation program named ‘Connect’.
The ‘ToYou’ service involved integrating order management, parcel tracking and contact-center systems. TCS also helped consolidate the data involved in providing reports on parcel tracking, sales and finance. Finally, a mobile app was developed for Asda employees to enable them to manage receipt of parcels and store and retrieve them more efficiently.
New ways of thinking
If Business 4.0 is about anything, it is about change and for many established companies change represents a big challenge.
Whether in the form of start-ups disrupting entire industries, or new technology transforming customer expectations, the reasons to change long-established ways of working are numerous and continuous.
The preference for the ‘tried and tested’ and the risk-mitigation mindset will need to undergo a drastic change if businesses want to thrive in this new era.
The good news is that if companies entrench a new way of thinking, they will not only be able to respond to threats, but also deliver new business capabilities faster.
This is a vital recipe for success in the world of Business 4.0.