Innovation; the CEO’s solution for tough economic times

How does one drive business agility in these tough eco­nomic times? This was a question posed to the audience by Ade­bayo Sanni, Country Manag­ing Director of Oracle Nigeria, during the recently concluded Oracle CEO forum.

For today’s CEOs in Nigeria, certain challenges persist, such as how to increase market share or improve client relationships, or how to introduce innovative products into the market, to name a few. As earnings per share continue to decrease, cus­tomers’ demand for quality ser­vices on the other hand continue to increase. As a result, CEOs need to be creative in order to deliver services to their clients and gain market share, while at the same time reducing the costs of doing business.

To achieve these objectives, innovation was discussed as a key lever. Not just any kind of innovation however –Innova­tion still bears a cost and driving down cost is an essential com­ponent in a recession strategy. Disruptive innovation, one that will propel the business to become an outlier and create entirely new business and rev­enue lines, is what is needed. Recent examples in transportation such as Uber, hospitality such as Airbnb, entertainment such as Netflix, or in Nigeria e-commerce platforms such as Jumia and Konga, represent the kind of disruptors that are needed.

For businesses today, business as usual is no longer an acceptable norm. Change has arrived in Nigeria too, and only firms who are able to participate in the necessary transformation quickly will remain competitive.

The need for speed in adop­tion is essential, especially as competitive forces continue to push into the market shares of even the most celebrated dis­ruptors. For instance, disruptors such as Uber now have com­petitive spin-offs such as MyTaxi and GetTaxi. Hence the need for speed and agility in adopting in­novation remains necessary to retain number one positions and maximise market shares.

The “new” oil –data driving innovation.

Another competitive advan­tage that can be sought is through the innovative utilisation of data. Traditional industries such as manufacturing are using data to improve service delivery, thus cutting down time and costs. GE for instance is applying mainte­nance history data to predict and improve machine maintenance requirements. Airbus is taking a similar approach by using exist­ing data to improve time spent in the supply chain to repair aeroplanes, driving down time (and costs) from many weeks to now just a few.

Data is now driving innova­tion. It is important to be able to capture, manage and interpret or monetise the data to drive value through innovative solu­tions. However, certain chal­lenges exist within this process. First is the ability to attain the technical resources or required technology to store the data. Second it is important to have the human resources that can capture the data accurately and then interpret or monetise it.

As a result, data is becoming an essential part of corporate strategy. For firms to increase their market share, they need to either increase their revenues through cross selling products to new or existing clients, or through managing their costs by adopting strategies such as outsourcing solutions, strategic sourcing, head count optimisa­tion, process optimisation or capital productivity.

Designing the ideal corporate strategy means a reliance on data concerning the businesses –analysing the past to deter­mine the future. Innovation in data technology is thus a game changer for corporate strategy.

Technology adoption in real estate strategies

Firms in Nigeria, especially those with large portfolios like banking industry, have begun to understand the importance of accurate data and technology as innovative differentiators. Banks have begun to use technology to address their sourcing demands or manage their vendors. Some have developed in-house real estate databases to establish a real estate index and validate their pricing (price discovery).

Others have taken things a step further to conduct portfolio optimisation exercises to reduce their real estate footprint and costs. Requiring a large amount of internal and external market data, these optimisation exer­cises are designed to match the firm’s real estate to their busi­ness strategy. For banks, such a strategy could mean the elimi­nation of large floor plates and the adoption of a smaller more nimble branch network. Other banks have adopted technology into their internal processes.

Creating paperless environ­ments, and adopting video con­ferencing and other technology that increases mobility and con­nectivity between businesses and clients alike – while at the same time driving down costs.

Innovation in data and tech­nology will enable Nigeria to leapfrog over the current in­frastructure limitations and economic woes to a brighter and more sustainable future.