How are entrepreneurs adapting their businesses to the rapidly changing world? Their working environment is anything but calm due to economic, political and social developments. They must have enormous adaptability because today's business model could be old-fashioned tomorrow.
Therefore, entrepreneurs need information systems that can quickly adapt to this new reality, says Ragnar van der Valk. He advises entrepreneurs daily on an appropriate strategy to eventually become a cloud-driven business. ‘To keep up with the speed of market developments, it is important for businesses to use modern technology platforms running in the cloud for their finance, supply chain or HR, for example. Older platforms are unable, or insufficiently able, to keep up with this new reality.’
‘During mergers, an IPO and, for example, when ESG (environmental, social, governance) rules are introduced, transformational demand also arises,’ Hagenaars adds. Like Van der Valk, he deals with transformation processes and in doing so uses the cloud. Whereas Van der Valk mainly guides strategic transformations, Hagenaars carries out transformations needed in times of exceptional change. Businesses are forced by external events to transform their operational models, processes and systems. ‘To be successful in that new world after such a major change, you have to transform at a digital level. I perform those transformations with my team.’
You talk about cloud-driven or cloud-powered businesses. Before you explain that, what is the advantage of using a platform in the cloud?
Van der Valk: ‘Elasticity and adaptability. You can quickly increase capacity. For example, a business that delivers directly to consumers can scale up quickly if it launches a campaign and generates traffic to its website. In addition, applications in the past had versions with frequencies that no longer match the speed of our current economy and society. Continuous adjustments are needed to keep clients, partners and employees happy.’
The future is cloud-powered. Can you explain that in more detail?
‘It has everything to do with making your organisation more agile,’ Van der Valk continues. ‘Where do you get your competitive advantage as a business? Who actually are you and what is your unique proposition in the market? There is a paradox when you talk about this: there are robust solutions for standard processes within your finance and HR departments that you can get from the cloud. Cloud for those standard solutions actually allows you to shift your focus to areas in your organisation where you want to be agile, where you want to gain competitive advantage.’
But a company is not an island. The cloud also builds bridges.
Van der Valk: ‘True, applications increasingly need to run in an ecosystem: horizontal and vertical supply-chain integrations, within and outside your own organisational boundaries. For example, for businesses, ESG reports are becoming increasingly important. The cloud helps to easily connect organisations that are not part of the same brand. Think of a value chain of businesses operating as links in the same chain. They have an interest in exchanging that data to measure their scope 1, 2 and 3 (relates to determining CO2 emissions/eds.) in order to drive improvement.’
What arguments do you use to convince a director to become a cloud-driven company? How should they prepare?
Van der Valk: ‘Transforming to the new reality cannot be achieved without technology. At the same time, transformation is not about technology, but about the organisation itself. Ask the questions: what is the position of your business in the total value chain? And what is your unique proposition? Adapting to this new world requires putting your organisation on the drawing board. I think a lot of the businesses that don't want to change, because they don't see that they need to become more agile, won't exist in 10 years’ time.'
‘A booking platform for hotels is a successful example. That platform has created a position in the value chain that was previously not possible, without technology. As a completely cloud-powered business, it ensured that parties in the value chain, hoteliers, had to change. The hotel chains were forced to reposition their customer experience to avoid becoming completely dependent on that booking platform, while the smaller hoteliers suddenly had the world at their feet.’
Can you give an example closer to home?
Van der Valk cites a Dutch rental company that took over a foreign peer three years ago, becoming one of the largest rental companies in Europe. ‘The organisation was already in the process of migrating their enterprise resource planning, or ERP system, but came to the conclusion that that improvement would not help them create their new future business in any way. No longer upgrading their system technically each time and taking their old thinking and customisation with them, but thinking about how they wanted to future-proof the organisation in a fundamental way. So together, we actually put the rental business back on the drawing board. What makes the business unique? How do you want to control the future of the business? Where can we adopt standards while ensuring that it remains agile enough so that branches in the Netherlands and abroad retain their unique character? Processes for finance and procurement for example are now standardised.’
Hagenaars also has an example from his practice. Unlike Van der Valk, he is mainly concerned with making start-ups and scale-ups ready for the future. Now he is involved in an IPO of a European business in America. ‘An exceptional change for this business. It has to comply with all kinds of strict legislation. These are smart entrepreneurs with a successful product, but in this case they really need us to eventually reap the benefits of that IPO. They do not have sufficient understanding of finance and IT. The company is not yet working in the cloud, so there is still transformation work to be carried out.’
Do you work with your own hardware and software suppliers?
Hagenaars: ‘In those transformation processes, we remain independent when it comes to hardware and software. We cannot allow ourselves to plug our own preferences for technology. At the European business we are guiding to a US IPO, we have to make do with the technology present and what is already running. It is up to us to get that ready for the future situation as successfully as possible.’
This article has also appeared on nrc.nl.
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