Recent research found that businesses operating in developed markets risk falling behind businesses in emerging markets, who are moving fast to gain a technological edge over established players. The research conducted by MORAR Consulting and commissioned by Epicor Software, global provider of industry-specific enterprise software, has revealed that executives in emerging markets were more bullish about using technology to provide the requisite flexibility and agility to fuel growth as compared to their developed market counterparts.
While business growth remains essential, according to research, it’s more challenging given the uncertain global environment and ongoing disruption– a scenario that may be stalling developed world businesses’ efforts to expand operations globally. Given the determination of emerging market competition however, standing still could be a big mistake.
In this era of uncertainty, how can developed world businesses bolster their competitive position to keep emerging market businesses from overtaking them? Sabby Gill gives his top five tips.
1. Assess and account for international competition. Multi-national companies need to develop strategies to counter increasingly strong emerging-market rivals - both the strength and volume of which is growing says BCG. These “global challengers” are fuelled by high aspirations for global leadership. Companies should take some time to understand their competition, analyse potential impacts and formulate a plan to respond to these threats.
2. Be brave enough to grow globally. With Brexit generating a great deal of uncertainty here in the UK, it’s tempting to take a “wait and see” approach. However, business leaders can think globally and take advantage of the more sophisticated systems now available to assist in growth further afield than Europe.
To make sure they are in a strong position for business growth, companies should examine their systems to ensure they are, for example, prepared to deal with the large currency fluctuations which may occur should customers or suppliers need to work in multiple currencies, or have sophisticated tax engines assist with global tax determination . In preparing for potential expansion, making sure that functions such as multi-lingual support for customer-facing documents or social enterprise capabilities to support team collaboration across borders can ease the challenges of an international team environment further down the line.
3. Invest in mobile working. It’s clear that attraction and retention of skilled staff in manufacturing is a challenge in developed markets. Three-quarters (75 percent) of emerging market business execs said flexible working practices and technologies, such as mobile working, are significant in helping retain key people, compared to just 62 percent of those in developed countries. By enabling your workforce with flexible mobile technologies, you can gain a competitive advantage.
4. Cut down on manual work. Emerging market business execs were also more likely to see the value in using technology to liberate personnel from manual tasks to focus on higher value-added work activities. 75 percent of emerging market business leaders said this was a 'significant' contributor to their staff retention, compared to only 65 percent of developed market business leaders. With servitization tipped to give developed marketplaces an extra edge, every manual process automated frees up valuable hours for the development of additional services.
5. Investigate web-based products and services. One of the benefits that emerging market businesses have is they aren’t tied to old business processes and systems. They are free to implement modern present-day business systems and processes that use newer technologies such as mobile and cloud to improve agility and remove complexity.
Companies that offer web-based products and services are better prepared to excel in the global growth arena, simply because it’s easier and less expensive to port digital offerings across borders. Many organisations use e-commerce to give them a virtual presence and an additional sales channel with relatively minimal investment. Even outside of e-commerce, digital capabilities can streamline operational costs, eliminate inefficiencies and provide the global 'glue' to bind the extended organisation together and improve collaboration.
Today, buying and implementing new technology is easier and more cost effective than ever before, so organisations can quickly use these capabilities to give themselves a major competitive leg up.
However, the recent advent of cloud computing is a great global technology democratiser – making powerful technology affordable and accessible to organisations where previously it may have been out of reach. In addition, with ERP (enterprise resource planning) systems designed for global expansion that support both local and global requirements, powerful toolkits are available to all to support global growth.
The significance of this is far-reaching and developed world companies must be vigilant and aggressive in their use of new technology, lest they suddenly find themselves outflanked by upstart emerging market businesses, potentially shifting the nexus of power in the global economic and business landscape.
Sabby Gill is Executive Vice President at Epicor