The conversation around the experience economy is often wrapped around the idea of using large volumes of pure data to make processes more intelligent. But it is much more than that to users – whether they are employees, customers, suppliers, partners, or anyone else that business systems may touch.
What it comes down to is the delivery of outcomes that they can benefit from and never achieve anywhere else.
Essentially, providing experiences is the outcome of a long transition from commoditizing goods to delivering services as a competitive differentiator and revenue source. In 1997, the Harvard Business Review first introduced this concept by using birthday celebrations as an example. Back in the day, people would bake birthday cakes from scratch. Then came cake mixes and the arrival of bakeries at local grocery stores. Now, the whole process has been outsourced completely – including the celebration – to restaurants.
Businesses must focus on designing experiences that are engaging and valuable enough to command a fee. Think about Zipcar, Uber, Lyft, and Airbnb – the whole concept of experience as a service is becoming a way of life. Customers are no longer just renting a house, for example, to vacation in Italy. They are also taking cooking lessons in Tuscany, tasting wine in the Loire Valley, and heading to the French countryside to learn the art of cheese-making.
Unlocking the Economics of Experience with the Right Technology Foundation
An experience-focused business model may not be easy to create, establish, and run at first, but users demand it. I would even dare to say that users have long outgrown traditional IT infrastructures and business models. In return, businesses need a better way to keep up with user expectations while cutting through the complexity of innovating and implementing new digital capabilities on top of current IT software landscapes.
For businesses that do succeed in this landscape of value-generating experiences fueled by hyper-digitalization and continuous innovation, the secret often lies in how quickly companies use data and technology to create new experiences on a single platform. It is what allows them to tightly connect processes and ecosystems to improve customer experiences and streamline operations. They even actively use data and analytics for strategic ends while identifying risks and predicting business outcomes when there is still time to do something about them. SAP calls this the Business Technology Platform.
Business leaders realize that these capabilities lead to timely, confident decisions that boost workforce productivity and customer loyalty. In the same way, they also see significant opportunities, inspiring them to continuously invent new approaches and implement them rapidly in order to gain a greater competitive advantage.
Take, for example, a company that uses the full portfolio of the Business Technology Platform from SAP — everything from database and data management, application development, and integration to analytics and intelligent technology. All capabilities already work in concert, enabling the fastest way to innovate. This approach not only accelerates how data becomes business value, but it also bridges the gap between on-premise and cloud environments to give customers a choice of deployment options and enable them to transition at their own pace. The portfolio leverages existing digital investments while attaining a new level of intelligence to innovate and extend new business models, processes, and experiences on top of the platform.
A business technology platform sets the foundation needed to enhance cognitive, virtual, and physical experiences now and in the future. When it comes to competing in the experience economy, this is excellent news. Businesses can now give users everything they need to make better decisions, exploit information and applications to learn faster, and gain real-time, real-life insight to think and reason more critically.
Isabell Petzelt is global vice president of Customer Innovation and Strategy, Technology and Innovation, SAP.