I’m glad to see you’ve come back for the continuation of our Digital Disruption discussion. We focused on strategy and planning last time. Today we’ll do the same, but from more of a financial perspective.
The first aspect I want you to notice is revenue streams.
The following four Points must be Considered:
- What new revenue sources will be made available to that you and how can you exploit these? Examples of new revenue sources would be: new customer segments, distribution channels, product offerings and service offerings.
- Disruption of your business model can be caused by faster speeds—so use them to benefit your company. New applications to utilize those speeds and cheaper storage costs should also be used to your advantage.
- Right now, internet speeds aren’t fast enough in Bali to provide smooth cloud-based customer interface (such as order taking and bookings). But this will change. Are you ready to adapt?
- Over the past few years, fibre optic cables have been buried in orange plastic pipes along Bali’s roads. Regardless of when these cables will be operational, they will affect the economy dramatically. Universal access of up to 100MB per second means more opportunities for Bali.
What services are you ready to offer all these people who will soon have direct internet access? Example: As a recent trial, full high definition movie was downloaded in just 39 seconds. If you store movies electronically or currently rent them out from a shop, this will totally change your business model.
With business growth comes added expense. Let’s now take a look at how you should approach your business costs amidst this massive digital transformation.
The following Business Cost Factors should be Seriously Considered:
- Three cost base elements you should critically examine are staffing, supply chain and overheads.
- A shortage of trained people—especially in finance and accounting systems—currently has a large impact on business growth in Bali. What can you do to reduce the need for trained people in some of your processes? What can you do to move your processes to a cloud-based system? What does this do to your business model if you’re currently offering office services?
- Your supply chain—however simple or complicated it may be—involves the movement of products, information and money from supplier to customer. Product and information must travel together at the same speed. Your supply chain is only as fast as its slowest element.
- Create partnerships with your key suppliers. Gain a detailed understanding of their cost base and time constraints. Work with them to reduce their costs by improving their quality and reducing their lead times. Help them become more financially secure as a way to reduce your own risks. This will also help you become a more competitive and consistent supplier.
- See where you can pay your suppliers directly via internet banking. I’ve watched staff spend hours writing out bank transfer slips only to spend even more time queuing at the bank.
- One of my clients and I are working to dramatically increase productivity and value. The goal is to eliminate all duplicate processing. These include direct entry of sales, better computer linkage with key suppliers, and auto-matching of receipts for outstanding purchase orders. We are building business rules into the software so that there’s consistency, reduced operating costs and better management reporting. Small things make a big difference. Identify them and prioritise them.
Hopefully you now have a better idea of what to expect and how to handle it. Remember to look at these digital transformations as helpers for your business; not hindrances.
CEO and Co-Founder
neXtep Business Builder Community Pte Ltd
Singapore ACRA Business Registration Number: 201424522Z
80 Kitchener Road #09-09/10 Singapore 208539