No one in today’s world doubts the impact that Amazon has had on the business community and now that impact has a name: The Amazon effect. The Amazon effect can be described as setting the bar for customer expectations in a way that no firm can avoid their services being compared. Amazon’s two-day delivery has forced competing companies to step up to match Amazon’s offering or risk falling by the wayside. A similar situation occurred when Whole Foods, with a large offering of craft cheeses and artisan breads, began to expand. Walk into almost any grocery store today and you will see what you didn’t ten or even five years ago; a section of the store dedicated to gourmet consumers. And that isn’t the only change Whole foods has externalized to other firms.
Change That’s Too Fast and Too Furious
Forced changes upon the marketplace by a particularly dynamic and innovative firm are the bedrock of competition; it’s what drives quality up and costs down and allow the consumer maximum benefit. On the other side of the coin, the supplier, is where the challenge lies. Another effect, called “The Whole Foods Effect”, describes a situation in which a particular firm drives unexpected massive growth in its suppliers. While we automatically assume growth is good for any business, the stresses of maintaining quality over volume and raising the necessary capital to invest in that growth come with their own respective challenges. If handled incorrectly, growth can be the thing that ironically destroys an otherwise successful company.
No Pain No Gain
Regardless of whether a particular firm literally competes with Amazon or Whole foods, it’s fair to say that in almost every industry there is figuratively one, the other, or both. There are external forces that don’t ask but demand change, and quickly. They key to making sure the transition doesn’t negatively affect a business is being aware of the tools at its disposal and what the market has come to offer in reducing the pain of growing.
Do I Feel Lucky?
The aforementioned issues drive some obvious yet not always easy to answer questions:
1. How do I scale for growth without breaking the bank?
2. How do I know the growth or change is permanent?
3. How do I maintain my quality when increasing quantity exponentially?
While the answer isn’t specifically the same for each industry, there is a great way in general to tackle these issues that is now easier than ever before due to changes in financial structuring and technology.
Maintaining Growth As A Service
The “as a service” model, while not entirely new, is more popular than ever before. Personal consumers engage in this more than ever, paying monthly fees for television, for music, for food delivery, for video games, and really for anything that can be bought. The business world is also making this transition with software and now even IT infrastructure being offered in an “as a service” model. The benefits of this model allow costs to be predictable, scalable, and non-permanent. When the cost for growth is operationalized, the bank-breaking capital expenditures don’t have to put a firm unexpectedly in serious debt. Doing this also allows for the scale to altered, reducing the risk of overextension or having to bet on permanent change in the marketplace. Additionally, when relying on service providers to manage growth, they come with staff, software, and expertise that is already operational and in use. Having to worry about onboarding new employees, investing in tools, and training becomes non-existent in the service model.
What Have You Done For Me Lately?
So, given all that information above, what questions should you be asking yourself?
Who is my Amazon? My Wholefoods?
Am I ready for growth? How much can occur until I’m overwhelmed?
If you’re not particularly confident in some of those answers, there isn’t a need to worry (yet!). As an IT consultant for Conversant Group, I’m always happy to have a conversation about managing growth and making informed decisions when it comes to planning for the future. And while not every company is an IT company, every company has IT. I’ve been happy to help many companies deal with unexpected growth by utilizing the expert engineers at Conversant Group to supplement and provide technology specific solutions. As stated above, our service model means that your costs are predictable and service management guarantee means that the growing pains of spacing projects around employee PTO and the like can cease to exist.
At Conversant Group, we specialize in delivering outstanding Managed Services for IT departments across North America. Whether its Network, Backups, Patching, or Disaster Recovery Solutions, we utilize the latest technology in automation and digital labor to reduce expenses and help firms scale when external forces demand change.
And make no mistake; the change is coming.