End of 2017 Year Reflection, FEM IPB Welcomes the Disruption Era
The outlook for business world in Indonesia in 2017 experienced a lot of changes, both sudden and predictable changes. New players come with new technologies and business processes capable of subverting an established market leader.
Due to the rapid pace of technological advancement, countries that harness digital technologies stand to reap significant economic benefits in the long run. Digital technologies offer ways to boost productivity across sectors and expand participation in the economy to all segments of the population. Mobile devices have overtaken fixed-line devices as the main gateway through which people access the Internet. Its revolution has revolutionized the business architecture in Indonesia, as the emergence of application-based transportation and the rapidly growing online store has become a daunting challenger for the major players. Conventional transportation should try hard to keep the market, while many retailers are falling either because of decreased purchasing power of society and because of changes in consumption behaviour of the society.
This was revealed in the Knowledge Sharing event organized by the Department of Management, of the Faculty of Economics and Management of Bogor Agricultural University (FEM IPB), on 27 December 2017. The event with the theme "Towards the Era of Disruption" is a series of year-end reflection activities from the academic community in IPB.
Chairman of the Department of Management of FEM IPB, Dr. Mukhamad Najib, explained that the current changes are rapid and destroying existing established orders, for business actors who are not ready for changings will soon be lost in time. Therefore, he suggested that business managers are always vigilant and try to keep their business relevant in the midst of sudden change, this is what is called disruption.
"We have seen Nokia, there's no problem with Nokia's quality. The durable brick phone became legend for its weeks-long battery life and almost unbreakable body. Nokia communicator is the best smart phone of its time. But suddenly the market hit by the tsunami Android and IOS, Nokia with its Symbian operating base was throwing a towel, unable to continue the fight with newcomers. It's not because Nokia's quality is bad, but its functions are considered irrelevant after Android and iOS come, "said Najib.
Knowledge Sharing was also attended by Dr. Abdul Basith who is a national motivator. Basith explained that 50 percent of the companies listed in Fortune'500 have disappeared since 2000. This is the result of disruptions that have changed the way people do business as well as have changed the lives of consumers.
Disruption, he argues, has caused the product life cycle to be shorter. One of the most profound changes in the last decade is the dramatic shrinkage of product life cycles. The collapse of life cycles means that replacing a product or service line every two years is becoming the norm across many industries. "The product is becoming obsolete quickly because new products are popping up very quickly. In this situation, if a business is not quick to introduce a product to market, it risks launching goods that have already been superseded by competitors, "Basith added.
According to him, in this disruption era not only the product or business will be lost, but also the profession. Today, technology is progressing at a record pace, and the fear is that many of the workers losing their jobs simply will not be able to find new employment in the IT economy. It is estimated that there are some professions that will likely be replaced by technology, such as sales counter, supermarket cashier, maybe even lecturers will also be lost. Today people can learn from the internet and companies no longer see competencies identical to the level and type of education.
" We are in the midst of a major technology revolution. Digital now dominates every sector of the economy – it is reshaping industries, disrupting businesses and introducing new operating models. Currently big companies focus more on what the competencies of the future employees. The leadership skills and disciplines the companies are assessing should be future-focused to ensure your high-potentials have capacity to execute a strategy moving forward. This ability does not have to be obtained from lecturers or educational institutions, but can be from anywhere including the internet, "said Basith.
Businesses that are not ready for this revolution will struggle in the near future. Although this disruption is terrible to those who are not ready, Basith himself suggests that we should not be too paranoid. There are several things a company can do to survive in a disrupted environment, such as companies must be able to offer experience-centric, for customer centric. Customer centricity is not just about offering great customer service, it means offering a great experience from the awareness stage, through the purchasing process and finally through the post-purchase process, it is a method that provides a positive customer experience before and after the sale in order to drive repeat business, customer loyalty and profits. Consumers can get a unique experience and want to consume again; sustainable innovation, where novelty becomes the key to pampering the boredom, and service oriented, where the business model is developed by focusing on customer satisfying services. (Wied).
