Most of us have felt the sudden application of G forces to our body from an amusement park ride, only to be whipped back in the opposite direction just as quickly.
That is what is about to happen to global businesses.
After shrinking 3 percent in 2020, the World Bank projects the global economy to grow by 4 percent in 2021. To prepare for this, progressive, smart businesses have been quietly investing in technology, not just to optimize their own operations, but to become ‘platform businesses’ by becoming so easy or attractive to work with that they can leverage a ‘network effect’ for competitive advantage.
Will you be one of them? Join us for this special premiere of the next major release from IFS on March 10 to see how IFS will help you get there.
We will discuss how IFS’s new product offering will provide a competitive advantage of the network effect and deliver more intuitive, valuable products or services, drastically lower price or cost and shorten response times. It will also help companies eliminate gaps that lead to supply shocks, which may be a factor periodically for some time to come as the world recovers from the pandemic in fits and starts.
What is the network effect? And how will IFS prepare you to ride the wave?
Network effect through reduced friction
A network effect occurs when a system becomes so easy to use that it drives greater adoption.
A third-party logistics provider (3PL), for instance, might have a software system that makes it easy for them to partner with multiple trading partners with automated, frictionless environments for trade. That frictionless environment, supported by proprietary software products, leads to greater adoption and more users. More users leads to greater utility for the platform.
The president of one 3PL, upon acquiring another, said that combining one company’s port-centric operations with the other’s fulfillment centers in gateway markets, the acquisition will unlock substantial efficiencies and “create a network effect of other streamlined processes.”
But achieving this network effect is becoming more important to every industry that has to balance supply, demand, capacity and other real-time dynamics critical to delivering successful customer experiences.
Even construction companies are becoming platform businesses that leverage technology to enable their business. Construction companies with systems that deliver greater utility when it comes to enabling collaboration, connecting demand signals from job sites and project planning to suppliers and subcontractors will be more attractive to work with and will therefore grow.
Manufacturers are getting in on the action as well, hoping to realize network effect benefits in areas like sustainability, or one-click manufacturing where ease and frictionless commerce could make winners and losers.
Software must provide group utility
While enterprise software for decades sought to reduce the friction of transactions within a company, we must now deliver software applications that do the same for ecosystems of trading partners, enabling our customers to become true platform businesses.
A 3PL may be able to grow by packaging up standard transactional systems shippers and customers find more useful than their competitors—in part because of the number of other trading partners the network gives them access to. But really any other manufacturer, a construction company, a service provider, must now also become platform businesses—easier to work with, driving more value, by virtue of their enterprise system.
Some manufacturers may be able to use their own systems to disrupt the market by providing greater value than competitors. Others, however, will need to work within another company’s platform, adding value to it in ways that again lets them disrupt the market by providing more value than other platform participants.
Sometimes that value can be as simple as direct visibility into the supply chain. Think of how Amazon.com customers can see how many of a given stock-keeping unit (SKU) are in stock, and how that influenced other e-tailers to ensure real-time visibility of inventory. Ensuring visibility across company boundaries, though drives greater utility than just giving your customer visibility into what is in your warehouse at a given moment, particularly with long lead time items.
“In fact, with an information feed from suppliers in China and visibility from the ocean carrier, the broker, and the intermodal carrier, this visibility combined with reliability reduces the need for speed,” Scott Szwast, international freight marketing manager with UPS Supply Chain Solutions told Materials Handling & Logistics.
Easy interoperability and automation
IFS has long helped many of our customers become true platform businesses, from defense contractors to field service organizations. Our new product will be all about driving this type of utility for any company, any business model, in the various industries we serve.
Join us March 10 to see how IFS will help you become a platform business and take advantage of the network effect by:
- Providing complete flexibility integrating with external parties at exactly the right point in a process flow to blow away barriers that would keep external stakeholders from seamlessly collaborating
- Facilitating, in a low-code environment, intelligent process automation not only within your business but with customers, vendors and other stakeholders.
See you there!
Do you have questions or comments?
We’d love to hear them so please leave us a message below.