Master the Connected Economy – and Win
An eye-opening statistic caught my attention recently. Did you know that Tesla’s market capitalization per vehicle is $570,000, while that of General Motors is just $6000? Put another way, just one Tesla car generates as much market value as 100 GM cars! This is pretty amazing when you think about it. Both Tesla and General Motors sell cars, albeit powered by different sources. What is driving Tesla’s value?
The answer: Tesla is a pioneer in the Connected Economy. Tesla understands that new possibilities abound when people, devices, and machines all connect together. In the traditional automotive world, a car starts depreciating immediately – as soon as it leaves the dealership. But Tesla, whose cars are as much about software and data as they are about hardware, can send a new software update to each of its cars and give them enhanced capabilities. This is a paradigm shift; the capability of the car increases while it is on the road. This may well be why Tesla is considered so valuable relative to traditional automotive companies.
Apple is another example of a company that has mastered the Connected Economy. There’s a reason Apple is the most valuable company in the world! It’s moving beyond the old world of simple products and purely transactional business models. Take the wristwatch as an example. Old world: a manufacturer sells a watch to a consumer via a one-time payment. At this point the buyer/seller relationship effectively ends. Connected Economy: the manufacturer (Apple) sells the product to the consumer, who also purchases subscription services from Apple and other app providers, plus voice and data services from a telecommunications provider such as AT&T or Verizon. Now there’s a continuous relationship between manufacturer and consumer, plus similar relationships between the consumer and app makers and telecom providers, each with different payment and contractual terms.
Apple and Tesla are pioneers – but we’re going to see more and more companies transform traditional businesses by taking advantage of the Connected Economy. Disney, for example, has started giving bracelets to its theme park visitors that now connect each guest to the park and help them plan each activity according to their schedule. Disney uses the location information in the bracelet to suggest via personalized messages how to navigate congested areas or what the best the course of action might be if the guests are ahead of or behind schedule.
While the Connected Economy delivers unprecedented value, the challenge lies in how to manage these new business models, especially given the amount of coordination required. Compounding the problem is the fact that legacy ERP – the backbone used by most companies to run their operations – simply wasn’t designed for the Connected Economy. If companies are to derive value from the new possibilities of the Connected Economy, and win the future, they need a new generation ERP solution to support them.
Speaking of winning – at Kenandy we’re developing the next generation ERP solution – one that can coordinate the complex processes of the Connected Economy. As we extend our solution, we want to hear from you. What’s your experience with the Connected Economy? What do you think the Connected Economy requires? To provide us your perspective, please take about three minutes and complete this very short survey. As a thank you for your time, we’ll enter you in a drawing for a chance to win an Apple Watch (the quintessential early Connected Economy product!) or a $400 Amazon gift card.
Let us know your thoughts. Perhaps you can be a winner in more ways than one!