Times of Trouble? True the Wheels
The supply chain broke. Customers the world over found themselves without critical supplies. The wheels came off -- literally. Businesses ground to a halt. No one could remember anything like this happening before. And nobody, but nobody, was prepared for the long haul ahead.
Such was the stark reality that befell cyclists all across the United States in the Fall of 2019. A series of tariffs levied on China brought the cycling world to its knees. Even the most basic parts were nowhere to be found. Cycling fanatics learned the hard way that supply chains are fragile.
And then? COVID19 struck. Any hopes that US-China relations would soften, and thus ease up the tariff kerfuffle, faded. The impact ran the gamut of that industry: manufacturers unable to ship their parts; stores disrupted by not having what customers wanted; customers unhappy.
A positive aspect of all this disruption? Necessity remains the mother of invention. Dedicated professionals focused on what they could accomplish: improving operations, finding new sources of revenue, and carving out a path forward that would be more resilient to disruption.
While hard work was essential to the success of these survivors, technology surely played a part as well. And for those who are looking to transform their business models to not only subsist, but rather thrive in this new world, here are some ways that tech can help.
The Power of Now
While the cycling industry dates back 200 years, cloud computing is more like 40 years old, give or take. But the advances made in the last quarter of that recent history have revolutionized what's possible in business, as in life. A big part of that is the power of in-memory computing.
Early cloud-based solutions were built on spinning-disk technology, with the data persisted on old-fashioned hard drives. The more cutting-edge cloud of modern-day computing leverages solid-state drives and lots of high-speed Random Access Memory, aka RAM. That's a big deal.
The power of in-memory computing spans the entire spectrum of use cases. Take supply chain, for instance: with an old-fashioned, paper-based solution, suppliers are essentially working in the dark, unable to see across their matrix of manufacturers. This impedes business greatly.
But they're also unable to track dependencies, specifically which parts require which other parts; or which ones are not compatible with others. This is crucial information when trying to piece together the more expensive bikes that consumers want, assuming you know which those are.
Even in digitized supply chain solutions that are on-prem, getting that real-time view of what's possible is very difficult. And of course, there's the other side of the procurement process: all those manufacturers! The ideal scenario is a real-time system to which they all subscribe.
Best Laid Plans
Another critical function that can make or break a business involves forecasting and planning. With a good idea of how much revenue a company will get, executives can effectively manage inventory, personnel and other costs, both variable and fixed. Without a good idea? Good luck!
You can imagine that in times of trouble, this business function becomes crucial, especially for companies that sell bicycles or bicycle parts. The old way of doing forecasting and planning was decidedly manual, and took a significant amount of time to execute, usually weeks.
For a company that fosters an analytical culture, however, the process of forecasting and planning can by very dynamic. A business owner can run many scenarios -- called Monte Carlo simulations -- to better understand any number of market scenarios, within a few short hours!
As an example, a shop owner could run simulations to see what business would look like if parts came back online from this manufacturer but not that one; or if business spiked in this region (say, Florida) versus that one (California). The key is to gain insights into what's probable.
This helps in lots of ways. As President Dwight D. Eisenhower noted: "I've always found that plans are useless, but planning is indispensable." His point was that by engaging in the process of planning, one can attain great insights about the situation at hand, which is very useful.
Marketing Madness
Perhaps the most challenging nut to crack in the world of online sales is marketing. The MarTech 7,000 tracks the vast number of companies that provide software-as-a-service for sales and marketing automation. As the name suggests, there are more than 7,000 today!
Each one of these solutions has their own unique approach, their own data model, API, cost structure. They all have pluses and minuses. The key is therefore to stay on top of who offers what and at which price point. But perhaps more importantly? Being able to integrate them!
The ability to weave together basic functionality across job roles is extremely valuable, especially if you can do so in near-real-time. Consider how quickly someone makes a decision to purchase a product online. There are many ways that a vendor can optimize the process.
First, you could have a marketing automation system in place that tracks high-value customers. Getting to that point requires a lot of time and effort. But once you know, for example, that your long-time customer has come back on your site to look for something new, you have a clue!
A savvy company will have automated offers prepared and at-the-ready. The customer comes onto the site, looks at a few new models, and then leaves. What can you do? Send them an email with a promotion for that particular bike! This is an excellent way to increase sales.
But it also increases customer loyalty. Instead of pinging that customer every week or month with garden-variety offers, you've paid attention to their buying patterns, perhaps even enabled by some cutting-edge machine learning in the background. You were ready, and then acted.
Customers appreciate this attention to detail. And if you've got a well orchestrated marketing platform that's connected to your call centers, you're even better off still. Why? Because when that customer calls in for more details, you know they were just on your site earlier that day.
By closing the loop on these processes: from optimizing a digital supply chain, to streamlining your budgeting and forecasting; from doing your due diligence on marketing, to following through in customer service, you've enabled a next-generation business, COVID or otherwise.
--> Join me on Wednesday, March 31 @ 11 am ET for Ask Us Anything: SAP Business Technology Platform, a lively event also featuring Cecilia Huergo and Timo Elliott of SAP.