Picture this, you’re a company that wants to grow. You have ambition and that’s great but you simply can not ignore the automation of processes. Ambition and software development are like yin and yang. Why is software development so important? And where should you start?
Experience counts
We live in a time where we prefer fast, cheap, and super-efficient services. If you’re a company with ambition, you need to make sure you are able to provide these kinds of services. Look at Facebook, Netflix, and home delivery services like Uber— all these companies make sure they are fast, affordable, efficient, and user-friendly. Those are the unique selling points of the modern world we live in, creating a new way of competing.
Before, it was mainly about price-quality. Today, the customer’s experience when buying a product or service has become very important. And if you don’t automate, you will fall behind. We have seen how companies like Tesla, Uber or Thuisbezorgd have overtaken the “traditional” companies in their industry. They succeeded mainly because they focused on digital innovation while also making processes simpler and more efficient. This allows them to offer their services at considerably lower prices. At the same time, thanks to their innovation, they are also able to meet more demand.
Scaling up and cutting costs
The latter is very interesting for an ambitious entrepreneur. Because ask yourself “How much does it cost me to serve an extra customer? How many extra costs do I have to incur?” That is an interesting KPI (Key Performance Indicator) for the scalability of a business.
As an example, let’s look at the baker around the corner, who rents a small building. He can supply X more people with bread. If he expands, and rents a larger building and hires more employees, he scales up linearly. But suppose instead he automates his processes, allowing him to bake many more sandwiches in much less time with the same amount of manpower, then he can scale up exponentially.
Automating processes allows you to serve more customers without increasing costs. That’s a model we’re all moving towards more and more. You can see that in Netflix where for every additional customer who purchases a subscription, no additional costs need to be incurred. Every customer uses the same system, which Netflix has only had to develop once. Perhaps at some point they will grow so much that they will need a new server, but that’s it. Scaling up without incurring additional costs is the ideal strategy. What Uber does is also very interesting in this context. They only incur additional costs per customer when the money has already been earned. After all, the driver doesn’t have to be paid until the customer has already ordered his ride.
Even if you work with material products, you can adjust your strategy so that you only incur costs per customer when the revenue is already in. For example, through dropshipping. This is actually a fancy term for “selling other people’s stuff. The purchase is fully automated by a software system. The advantage of this is that you never have to build up a stock.
Start with a digital vision
The above are all examples of how you can do innovative business in order to reduce costs. And this is made possible by the development of software systems. But suppose you, as a company, do indeed have the ambition to innovate digitally, where should you start? The starting point differs from company to company. Perhaps you have a company with certain processes that are currently done manually which you would like to automate. Or maybe you have a digital business that already works with certain software. Or you just want to start a business, and you haven’t actually mapped out your processes at all yet. In any case, it’s important to start from a digital vision. For example, first look at your competitors. What kind of processes do they have? And how have they automated them? And more importantly: How can you do those differently? The trick is to come up with something different from your competition. A copy of another company will not give you the position you want. You actually want to become the Tesla of your industry (we wrote this blog about that earlier). Because you want to leverage your innovation in such a way that you leave your competition far behind.