| | March 2015 9CIOReviewBusiness in the Networked Economythan ever before. And the emergence of the Internet of Things and the explosion of sensor data mean, more data being fed into these networks. How will Businesses Operate in the Networked Economy?Social networks, such as Facebook and Twitter, or online merchants like eBay Amazon and Alibaba have made it easy for us to shop, share and consume information in previously unknown ways. When shopping on Amazon, we connect both with Amazon's own network and also outside to external merchants who are connected to Amazon's network ­ Amazon facilitates this, we don't worry about connecting to individual merchants, banks or credit card companies. It's all done within the network. Business networks do for business what these personal networks do for our personal lives. They provide an equally simple and scalable way for companies to discover, connect and collaborate with their trading partners in order to gather resources they need to operate. Like Amazon's marketplace, companies can shop for goods and services, place and manage orders and pay for them electronically. They can view and manage cost across all major categories and engage customers across multiple channels ­ all through a single, connected platform. Truly networked businesses will operate in three keys ways: Firstly, they will have the ability to amaze customers with highly personalized experiences. With ubiquitous mobile sensors and advanced real-time analytics, the idea of customer-centricity will advance leaps and bounds. Concepts such as the idea of connected retail, can not only tailor products at the point of transaction, but also seamlessly connect to supply chains while providing real time market intelligence to automatically adjust product allocations, pricing, and plans. Secondly, in a business climate which is still rebounding from years of recession, businesses will be able to optimize resources in order to maximize outcomes. A great example is the Port of Hamburg in Germany, where in order to increase container volume from 9 million to 25 million over the next 10 years they are working to connect every truck, container, crane and ship via sensors to a sophisticated scheduling application. The entire logistic chain is constantly updated and is optimized. This ability to anticipate, predict and prevent as more assets become equipped with sensors is a key benefit of the IoT and business networks. Thirdly, they'll unleash the power of people. Giving back time to employees through automation is not enough. To truly unleash the human potential for innovation, businesses must provide the right platform that enables people to collaborate better. As more companies rely on contingent workforces, networked businesses will use best-in-class solutions in order to streamline the process of procuring and managing flexible labor. They will also be masters of managing how money is spent across their networked businesses, from travel to expenses and invoices, all in an effort to increase productivity. Embracing the Networked EconomyAccording to a McKinsey study, businesses fully leveraging business networks can lead to greater market share and higher margins. This is because networked organizations have more fluid information flows, removing barriers to change. They can deploy talent more flexibly, and drive decision-making throughout the enterprise. The key lesson for businesses is: the more you embrace networks, the more you confront change and risk; the more you avoid networks, the faster you fall behind. Businesses should look to activate, optimize and transform. · Activate connections (connect your people, business partners, and asset resources)· Optimize resources (infrastructure, work-force, services and tie everything back to core processes and workflows that run your business)· Transform their business (by taking ad-vantage of the network effect to reinvent and automate processes in real time, simplify infra-structure and unleash human potential) The networked economy offers a faster, more cost-efficient and innovative model for do-ing business beyond the four walls of the enter-prise. This is the power of the business network, companies can shop amongst a massive global network in order to reduce costs, become more efficient and create econom-ic opportunities we have yet to imagine. CIO's have a unique position to identify opportunities in the networked economy, prepare the company for networked busi-ness and connect to the right platforms. As the business models change, so does the CIO's priorities and contributions.
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