The previous business model where companies were based in one place like Tel Aviv, London or Silicon Valley is now over. Technology companies can now operate from anywhere and are taking advantage of these opportunities by having staff based globally.Examples include Snapdeal and Flipkart which originated in India and Alibaba and Baidu which were originally from China.
And we can expect this progress to continue, with new technologies creating opportunities for fast-growth companies in the future, giving companies like Uber the chance to become industry leaders while companies choosing not to embrace these transformations are likely to fail.
Established companies are competing with technology companies that have the ability to set up new operations, source talent, and market to their customers online. They’re global from the day they launch, and IT solutions like the internet, mobile and the cloud mean that new business’ capital costs are much lower as they save on infrastructure expenses during their start up phase.
What does that mean for businesses hoping to compete with the newer, better-equipped kids on the block? Established companies will need to embrace new technologies and extend their operations globally to ensure that they don’t lose to the competition, who are constantly coming up with new technology, a disruptive approach, and a new way of doing things that makes their business more cost effective and allows them to attract key talent from around the world.
Location, Location, Location?
We all know that the best business decisions don’t occur in isolation, and as technology continues to advance, business services solutions and systems no longer depend on local storage, local processing power or local applications anymore. In fact, when you look at it from a cost-benefit perspective, location just doesn’t matter as much as it used to.
This is why more and more companies are beginning to rethink their offshoring and outsourcing strategies, recognising that a more integrated approach can unlock significant value for their business. Operational choices that once seemed straightforward may now be obsolete, which is why you may want to consider shifting your strategy to an integrated, global approach.
Businesses need to create flexible management practices and strategies that enable them to adapt to this rapidly changing world, and as globalisation makes it much easier for companies of all sizes to interact and work with different cultures, it’s becoming the new normal to have employees located in different parts of the world.
However, many business owners are still hesitant when it comes to implementing a global strategy. They’ve heard horror stories about outsourcing by companies who implemented it a decade ago, and now have data and functions scattered across the globe.
The problem is that many of these companies took a “let’s do what everyone else is doing” approach, instead of narrowing down the needs of their business and determining which shared services structure best supported them for future growth.
Like any decision, the choice to embrace a global business model is one that should be made carefully, while you take the time to evaluate exactly how your business will function day-to-day. But choosing to ignore globalisation puts businesses at a very big risk of being left behind.