What does a boutique animation studio have in common with one of the world’s largest financial services provider? More than you would think. The pace of tech disruption continues to be relentless and impact all business types.
The cloud transformation of yesterday combined with today’s DevOps revolution is evolving into new conversations about customer centricity and business outcomes, and when we talk to businesses across the globe about tech disruption, we can see some distinct patterns emerging.
When it comes to Australia and New Zealand, there are themes common to the global market, but there are also some unique issues and barriers.
Here are some of the challenges that we’re seeing emerge – along with some strategies on how to best overcome them.
Liability of legacy and the attack on core business
One company we work with is an Australian-based animation studio – essentially a content creator. They have concerns about being tech disrupted.
The problem is that their past competitive advantage – having internally-created systems that enable high-quality production in less time and with fewer people than their competitors – is evaporating. Now, via the cloud, two people in a garage have access to the same computing and application power.
It’s not a unique problem to Australia: we see the same issue at one of the world’s largest financial services providers. Their bespoke applications, which were a significant advantage in the past, are now a liability.
They’re having to invest in maintaining these apps, whereas fintech disruptors have access to cloud infrastructure that’s faster to scale, easier to maintain and allows them to create better applications with a fraction of the staff.
This levels the playing field. A one-time competitive advantage becomes a competitive liability: an architecture that is outdated and expensive to upgrade and maintain.
Disrupters win market share in traditional market segments that are being simultaneously eroded by new ways of doing business, and this creates a dual threat – the loss of core revenues and the inability to lead in new markets.
New market opportunities: Lead or recede
There are many emerging business opportunities, but those who fail to innovate and execute won’t get a second chance. Over-the-top (OTT) streaming is a key example.
Major events like the FIFA World Cup or the Rugby World Cup represent new distribution opportunities. An entity like SBS might stream a large event, and to lead in this new reality, organisations like these must design architectures that are available, scalable, correct, fast, and secure while at the same time delivering the best digital customer experience possible.
Being bold and executing on disruption-driven opportunities vaults companies into a leadership position that generates more new business, thereby creating a virtuous cycle.
Many older organisations in Australia and New Zealand, as well as globally, are in danger of missing the boat when it comes to emerging technologies. There are startups providing better customer experiences, such as mobile interfaces to buy groceries.
We’re working with grocery chains and superannuation firms who are delivering market-changing customer experiences, but much is at stake.
Due to the emergence of mobile as a customer-preferred digital channel, a company’s brand experience shifts from the store or branch location to the mobile app, and support is needed at the backend for applications and infrastructure.
This forces teams to think differently, and as mobile increasingly becomes the brand interface, the change in user-to-brand interaction carries with it the risk (and opportunity) that a loyal customer of one brand may switch to another because they’ve experienced a difference in mobile quality experience.
As you see companies progress
OTT upends long-standing distribution relationships, giving different and new providers the opportunity to stream major events like the Rugby World Cup. Again, this new business opportunity is laden with risk.
If a broadcaster wins the rights to a major event and then fails to execute, users can’t access the stream or the stream has buffering or errors – then they might be frozen out of similar revenue opportunities in the future.
To meet the time-to-market pressure, many broadcasters turn to online video providers. This can be a great way to leverage industry-leading expertise while meeting customer experience and business goals. There are multiple risks here too.
Given the frantic pace of convergence in the media and entertainment industry, there are many examples of where online video providers (OVPs) have been purchased by large media companies to provide the OTT streaming platform for those companies.
This could leave the OVP’s previous customers scrambling to find another OVP partner, or work to bring the streaming architecture in-house.
Where to from here?
These new paradigms are creating new business opportunities, but Australian and New Zealand companies need to make sure that they’re ready for them. How can you do this?
You can develop technology yourself, build out your own architectures, or outsource, but ultimately the responsibility of the customer experience is down to you.
When it comes to
1. Getting the technology up and running
2. Knowing what the ideal customer experience is and making it available to your customers
3. Viewing customer experience in the context of business outcomes
Most Australian and New Zealand companies haven’t yet passed the second point, and when customer experience drives business outcomes, it’s the case that those who fail to grasp this as a concept won’t survive this new technology dynamic. Companies may outsource technology, but they can’t outsource the customer experience.
Andy Wetzel is New Relic’s Senior Director of Industry Solutions; a role he has held for the past four years. His career has seen him work with all levels of customers – from the developer to the CIO – and in roles as varied as an engineer, UI Designer, and manager.