Hyperconverged. Hyperconnected. Hyper-competition. Hyperbole?
Key insights
How can you manage hyper-everything?
Hyper-competition is the wave of the future
Start with your business and customers
From operations to innovation
Case Study
Expert Perspective
1. Hyperconnected convergence is made possible by the rapid advances seen in cloud computing and the commoditisation of hardware and software over the past few years, as well as the proliferation of devices on the Internet.
2. With the rapid advances we are seeing in quantum computing, the Internet of Things (IoT), artificial intelligence (AI), the metaverse and Web3, we are only at the beginning of the digital age.
3. For SMB CEOs in nearly every sector, the burning question is how they can futureproof their business to ensure ongoing relevance with the unpredictable trajectory of digital change.
4. Identify technology partners that are willing to share risks and rewards as the IT department is modernised.
5. Analyse the IT infrastructure, practices and team that the business has in place and how well they support its needs.
6. Look at ways for IT in an SMB to become an engine for innovation and revenue generation.
7. Consider adopting practices such as Lean, Agile, design thinking and DevOps to co-create business value with users.
8. Cloud computing and subscription/pay-per-use pricing are cornerstones of a future-facing IT environment so look at how to use standardisation, automation of IT operations and outsourcing to bring discipline and simplicity to the wider IT infrastructure.
9. The right technology is key—but the right people and culture are even more of a critical success factor.
Indulge us in some etymology. The Greek prefix, hyper, means beyond, above or in excess. Thirty years ago, we’d usually see it in the context of a hypermarket—a really big supermarket—or hyperactivity—the condition of being extremely active. And, in the IT industry, hyperbole, related to hype, has always been around. The literal meaning is to ‘throw over or beyond.’
So it’s understandable that small and medium business (SMBs) CEOs tune out when they hear buzzwords like ‘hyperconvergence’, ‘hyperconnectivity’ and ‘hyper-competition’ tossed about. These concepts seem remote when your production line has come to a grinding halt because of load shedding or your cost base has climbed 5% because of spiking oil prices.
Yet in these terms there are kernels of truth that are hard to ignore. Consider ‘hyperconvergence’—in its original sense, it refers to a software-centric IT architecture that combines storage, computing, and networking into a single system. But we can also think of other ways that the trend of convergence is going hyper as software eats the world and nearly anything you can imagine becomes an app.
Consider how the lines between industries are blurring as telcos become fintechs, banks start offering Internet connectivity and accounting software, and ecommerce retailers target B2B customers. Or look at how once discrete technologies and tools have come together on your smartphone—which is a digital camera, a GPS, a personal computer, and so much more.
All of this convergence is made possible by the rapid advances we have seen in cloud computing and the commoditisation of hardware and software over the past few years, as well as the proliferation of devices on the Internet. That’s hyperconnected—characterised by the widespread or habitual use of devices that have internet connectivity.
Indeed, we have yet to fully grasp how the billions of devices connected to the Internet will transform our world. Robert Metcalfe, the coinventor of Ethernet, posited in his famous law that the value of a telecommunications network is proportional to the square of the number of connected users of the system.1 We can imagine the value unleased when there are 100 billion devices connected to the ‘net.
And with the rapid advances we are seeing in quantum computing, the Internet of Things, artificial intelligence (AI), the metaverse and Web3, we are only at the beginning of the digital age. We can’t yet be certain how all of this will pan out, but the one thing that we can be reasonably sure of is that hyper-competition—enabled by technology—will be a fixture of the future.
That term was coined by Richard D'Aveni in 19943, but it has taken on increasing relevance as the pace of digital change has accelerated. Hyper-competition describes a business environment in which no advantage can be sustained for long. There is more competition than ever, it can come from nearly anywhere, and the rules of the game are changing so fast that only the quick and nimble will survive.
Consider an industry such as insurance, where incumbents for years resisted the imperative of digital transformation. Today, insurers face growing competition from agile InsurTechs that distribute their product on the web or via an app, use AI to price risk and process claims, and leverage cloud tech and agile methodologies to rapidly launch new products and features.
While traditional insurers are still protected to a large degree by regulatory barriers, many of the other advantages they built over years of investment have been rendered moot. The legacy IT systems, call centre infrastructure and broker distribution networks that were once their strengths have become expensive liabilities.
This is a story we have seen repeated across multiple industries in recent years, from video rental and traditional photography to print media and satnav. For SMB CEOs in nearly every sector, the burning question is how they can futureproof their business to ensure ongoing relevance when the trajectory of digital change is hard to predict.
Throughout this book, we have emphasised the importance of letting business needs and customer outcomes drive investment into technology. That raises the question, perhaps, of how an SMB can get technology and the business in lockstep, given that the business environment and customer needs are in constant flux.
A good place to start is by identifying technology partners that are willing to share risks and rewards with the SMB as it modernises its IT department and prepares for what comes next. Such a partner should bring both business and IT expertise to the table—it should be able to show ways of using technology to meet customer needs and drive better business performance.
The next step might be to analyse the IT infrastructure, practices and team that the business has in place and how well they support its needs. This isn’t just about the legacy technology in the business—it’s also about old ways of thinking. IT departments that once focused on keeping the lights on may need to reorient themselves around innovation and customer-centricity.
Rather than thinking of itself as a cost centre, IT in an SMB should start to look at ways to become an engine for innovation and revenue generation. The tech department should put the user at the centre of its design considerations, focusing on how it can meet the evolving needs of its internal and external customers. Achieving this shift in mindset is half the battle.
From that point, the enterprise can consider adopting practices such as Lean, Agile, design thinking and DevOps to co-create business value with users. These practices allow the business to simplify and speed up technology development and deployment, with hybrid cloud and consumption-based IT enabling them to rapidly flex and scale in response to business needs.
As we’ve mentioned in earlier chapters, cloud computing and subscription/pay-per-use pricing are cornerstones of a future-facing IT environment. They level the playing fields for SMBs, taking much of the risk and cost out of experimenting with and deploying new apps—helping them to compete more effectively with companies with larger IT budgets. What’s more, they can vastly reduce operating costs.
But the cloud comes with its own challenges, especially in businesses that can’t migrate from on-prem to the cloud overnight. SMBs should thus also look at how they can use standardisation, automation of IT operations and outsourcing to bring discipline and simplicity to their wider IT infrastructure. These steps can help to vastly reduce costs and put the business on a sound footing for the future.
It isn’t easy to create a future-facing technology capability. The SMBs that succeed find a delicate balance between optimising costs and operational efficiency, on the one hand, and deploying solutions that allow them to create new value streams on the other. The right technology is key—but the right people and culture are even more of a critical success factor.
In this book, we’ve discussed how digital technologies are changing business. But they’re not the only force shaking up the world. We’re seeing rapid advances in material sciences, genetics and energy, for example, which promise to change the face of society over the next decade. Consumer preferences, too, are evolving as younger generations focus on hot-button topics like sustainability and inclusivity.
Consider the list of mainstream product categories that didn’t exist just 15 years ago, or which were niche or expensive at that time: cannabis oil, non-alcoholic beers, gluten-free foods, beauty products for diverse skin tones and types, drones, electric vehicles and more. Innovation in the 21st century is thus not just about better products and services, but anticipating new customer needs and competition from other industries or new players.
Take food manufacturer Herbivore Earthfoods as an example. Founded more than eight years ago, the company has been laying the groundwork for a shift in consumer preferences. Though the founders initially struggled to get retailers to understand the product, their patience has paid off. Tiger Brands announced in 2022 that it would invest in Herbivore as part of its foray into the plant protein sector.6
Just like the high-profile US company, Beyond Foods, Herbivore anticipated the demand for plant proteins from Generations Y and Z as young adult consumers focus on sustainability, health and animal welfare. The goal is to offer products which are not just for existing committed vegans, but which taste great and which are affordable and indistinguishable from their dairy and meat counterparts.
Twenty years ago, Tiger Brands would most likely have seen vegan boerewors and dairy-free cheese as a niche offering rather than as a substitute and competitor for its flagship product ranges. According to Tiger, Africa’s plant protein market is forecast to grow at a compound annual growth rate of 6.5% to $560 million by 2023.
We are moving to a world where data is captured by the Internet of Things, managed by blockchain, actioned by AI, according to OpenExO. But are you ready?
It probably feels like you’re caught in the pouring rain, searching through a big bunch of keys. You’re soaking wet by the time you find the right key—and then you realise you’re at the wrong door. This is how most companies today try to innovate.
What if you had a system to help you find the right keys and the right door? To come up with new ways of thinking about your business and quickly validate ideas using data you can count on?
You don’t have to be like 98% of humans who have lost touch with their inborn creative genius. The right future-fit programmes will revolutionise your team’s thinking while also providing support for practical implementation to solve specific problems and overcome your company’s anti-innovation immune system.
Traditional business models are based on scarcity where value and power were derived from selling a product or service that is in limited supply, where large capital requirements created barriers to entry, where information was hidden and where people had to be commanded and controlled to perform.
The businesses that will thrive in the future are those with business models that are connected to abundance, where access to services and use of products is not limited by ownership, where lower capital requirements opens the gates for more players, where data-driven decision making empowers every person to perform and where learning velocity determines the winners.
— Rapelang Rabana, Partner FFWD Innovation 8
References
[1] IoT Connections to Reach 83 Billion by 2024: Report, CISO Mag, March 31, 2020.
[2] Metcalfe's Law, Wikipedia, retrieved March 29, 2022.
[3] Hypercompetition, Richard D'Aveni, March 28,1994
[4] New IDC Spending Guide Shows Continued Growth for Digital Transformation in 2020 as Organizations Focus on Strategic Priorities, BusinessWire, November 9, 2021.
[5] Investment in Artificial Intelligence Solutions Will Accelerate as Businesses Seek Insights, Efficiency, and Innovation, According to a New IDC Spending Guide, IDC, August 30, 2021.
[6] Herbivore Earthfoods Brand Banks Big Business Deal, IOL, April 3, 2022.
[7] Turning Corporations into Hyperscale Startups. Employees into Owners, Rapelang Rabana, February 18, 2021.