Responding Quickly to changing Markets

Market change is relentless: ever-higher customer expectations, shrinking product life cycles, and new rivals on the scene all accelerate the pace. But small businesses and midsize companies have one distinct advantage over larger competitors: agility. With fewer organizational layers and less-rigid processes, smaller businesses can act much faster than the big-gun competition. When your business is poised to handle challenges with agility and speed, market changes become opportunities to excel.

Gone are the days when a company could settle into a predictable niche, perfect a process that would never change, and expect a stable business. In a global economy increasingly connected by the Web, no aspect of the marketplace stands still long enough
for that degree of comfort. Unpredictable economic shocks and market events, around town or across the ocean, can cause demand fluctuations far greater than seasonal cycles. Customers looking for the greatest value for their money – and routinely demanding lower prices, new product features, extended services, and faster deliveries – may turn to competitors offering cutthroat deals. Constant shifts of suppliers and employees keep you on the edge, while accelerated product life cycles squeeze development, making time to market a linchpin to success. You have to respond quickly to the changing market dynamics or risk losing your business to competition.

The fastest way to respond to change is to anticipate it. Many companies can’t predict changes simply because they can’t see “the big picture” within their own organization. With critical business information locked in different departments and systems, it’s hard to have enough accurate insight, let alone foresight, to anticipate rising demands. Furthermore, a company lacking cohesive
and streamlined internal operations is ill prepared to respond quickly to change. Disconnected functional areas can’t work together smoothly and swiftly. When a manufacturer relies on an assortment of spreadsheets, disparate databases, and manual processes, order spikes or downturns could result in materials shortfalls or excess inventory. Why? The impact of changing demand can’t work its way through the organization fast enough to make appropriate shifts in supply and safety stock levels.
Moreover, as small businesses and midsize companies grow, they often struggle with outdated and inflexible infrastructure. Even the slightest market fluctuation creates ebbs and flows in workload. Successful businesses scale to meet growing demands. When bottlenecks form around organizational structures and technologies, companies become too rigid to adapt quickly.

How can small businesses and midsize companies avoid these pitfalls, using nimble responsiveness to their advantage? By overhauling disconnected, manual, and redundant processes, and replacing them with flexible and efficient integrated business processes. Information technology such as integrated business management systems can also help provide you with the insight
to accurately forecast, and flexible processes can help you adapt quickly in response to changes.

Anticipate and Be Prepared for
Changing Customer Needs While customers have ever-increasing and often unpredictable expectations, you can anticipate their needs and plan ahead by collecting and analyzing complete information about their buying patterns. Integrated business management systems provide such critical information to help you accurately assess and forecast what customers will buy, and then recommend balanced stock levels to keep pace with customers’ changing tastes.

Streamline Operations to Accelerate Innovation and Delivery
Efficient, automated systems are simply faster – and that can mean shorter cycle times, an earlier and stronger competitive position in the market, and quicker turnarounds when market change calls for a course correction. Efficient operations accelerate both product innovation and time to market. With flexible software systems you can adapt business processes to meet your customers’ unique, frequently changing product or service specifications. You can also better accommodate customers with new products and innovative ways of doing business. For example, for customers who routinely request flexible ship dates, integrated business systems can help you streamline and automatically adjust order-to-ship process cycle times to meet delivery deadlines
with cost-effective production.

Build and Scale Infrastructure to Respond to Fluctuating Markets
For a small business or midsize company, the ability to flexibly scale operations is critical. If the markets you serve are cyclical or seasonal, this only adds to the demand swings affecting your business. You can quickly hire and train new employees to scale up customer call centers, but your production system and supply chain processes must be equally scalable to support sudden spikes in sales volume. When you need to switch course quickly – at the first hint of an emerging trend – integrated business systems adjust accordingly, and quickly, from human resources staffing to production capacity.

Adopt Technologies That Are as Adaptable as Your Business
“Nimble and adaptable” describe the essence of your business and should apply as well to your processes and IT systems. IT systems that are difficult to modify, time-consuming to adapt, and cumbersome to analyze can’t help you create flexible operations. Rather, an adaptable IT system must be easy to modify and configure to fit shifting needs, and readily extensible to grow with your business. When you start expanding your business to the overseas markets, for example, your existing IT system should be “intelligent” enough to natively and instantly accommodate new business requirements, from new languages and currencies to taxations and other local customary practices.

Reprinted by permission of SAP America Inc. All rights reserved.