Saving Your Company with Business Model Innovation
Disruption is commonplace in today’s cutthroat business landscape and it is imperative for SMEs to keep up with such trends. But with great ideas few and scarce, how can local enterprises make sure that their business not only survives, but thrives in this cutthroat environment? The solution: Business Model Innovation (BMI).
Dr. Michael Teng explains what ‘Business Model Innovation’ means on Money FM 89.3’s segment Business Forward with Canon. You can listen to the podcast here. Dr. Teng is the CEO of the Singapore Innovation and Productivity Institute (SiPi), a subsidiary of the Singapore Manufacturing Federation. SiPi is a knowledge enterprise that champions excellence through innovation and productivity for Singapore’s manufacturing sector, helping progressive SMEs leverage on existing resources to emerge as strong contenders in the competitive business landscape.
What is ‘Business Model Innovation’?
It’s not enough to just have good products or services in today’s highly competitive business environment. Businesses need to compete with their business models – and that’s where BMI comes in, says Dr. Teng. BMI refers to how a company creates, captures, develops and delivers value to their customers and to the market. Essentially, it is how companies make money.
Many SMEs mediate between suppliers and consumers, says Dr. Teng, and their business model usually revolves around this. However, globalisation and the pervasiveness of the Internet have changed the practices within the global marketplace: SMEs are gradually becoming redundant as buyers can contact suppliers directly.
The Need for ‘Business Model Innovation’ in Singapore
For the last 30 to 40 years, Singapore has built her reputation as the entrepot and trading centre for neighboring countries. However, Industry 4.0 and the Internet of Things have changed this. Dr. Teng suggests that this is the ‘elephant in the room’ for local SMEs – many are feeling this sentiment but few are addressing it, and few are taking concrete action to save their business from obsolescence.
This is why Singapore needs to tap on the technological revolution and transform. The key thing to do now is “to re-intermediate, and find a new niche,” asserts Dr. Teng. Besides disrupting the middleman role, technological advancements can also help companies create new business models. But Dr. Teng warns that merely identifying new sources of revenue or new business models are not enough. He lists 2 other elements that are integral for companies to keep in mind when revamping themselves:
- Finding the right BMI for your company – the right business model not only generates money for the company but also aligns with the company’s corporate culture and values.
- Implementing BMI – actualising a business model is almost as important as its strategy. Many projects and businesses fail because plans were not enforced properly.
Dr. Teng specifies the importance of the latter point. For example, he commends the government’s efforts in actively pushing local companies towards digitisation and digitalisation (in short, digital transformation) through educational programmes and financial aid, but also acknowledges that digital transformation should also fall on the onus of companies themselves.
Digital Transformation: Small Companies, Big Changes
The scale of the company doesn’t affect digital transformation efforts, says Dr. Teng. Smaller enterprises may not necessarily ensure a seamless transition. He notes that many local SMEs understand the need to change, yet some still lag behind due to internal factors that stifle technological implementation. These consists of issues such as their digital strategy, corporate culture and project management, among others. “Project management will eat technology for lunch,” he muses, emphasising the importance of implementing digital transformation in itself.
Corporate culture is one such issue that may hinder a company’s digital transformation efforts. Resistance from existing employees can be managed through training and development. “The enemy is always within,” he notes. Without addressing this issue and changing mindsets, enforcing new technology and new ways of doing things in the company will be an uphill task.
Furthermore, Dr. Teng also highlights that some SMEs do not have the resources to transform their business. This includes lacking the right expertise, such as project managers, to overhaul their existing processes. To help SMEs get past this hurdle, the Singapore Manufacturing Federation, in collaboration with IMDA and ESG, is launching the SMEs Go Digital, a Digital Project Manager Service. By providing advice to SMEs looking to digitise, this programme aims to help small companies build stronger digital capabilities to flourish in our increasingly digital business landscape and to ensure that thier projects are executed well.
BMI: First Steps for SMEs
Having the thought to revamp your company with BMI is a great first step, says Dr. Teng. However, it’s not enough just to have this idea. Dr. Teng encourages businesses to “exploit and explore” – ‘exploit’ the resources you currently have to strengthen your current business model and explore other future-ready models so that you will not be disrupted.
Business owners should not be afraid to ask for help if resources are limited. External intervention may just be what your company needs to keep up with our evolving business environment. Working with the right partners like Canon Business Services (CBS), who have the technological resources and expertise, is key in this case. Comprising the specialist outsourcing and consultancy arm of Canon, CBS aims to help your company thrive in our digital economy by streamlining your business processes. Innovative solutions allow you to save time, money and energy so that you can focus on more important things to take your company to greater heights.
Transform your business with Canon Business Services today! Contact our customer service professionals here to find out more.
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