Is Software About To Destroy Your Business?

Is your business about to be decimated by a software application? Is it time to stop worrying about low-cost overseas competition and start preparing for the arrival of software which supersedes your business altogether?

If even part of your business operations involve the supply and/or processing of information, the answer to both of the above questions may well be yes. 

By Patrick Horsley @ flickr

Software eats part of the world, a recent article by John Hempton of Bronte Capital, provides numerous examples of how companies producing physical products are being "appified". By which he means, their business models are being dramatically undermined by newly emerging software applications. This process may be even more disruptive to professional service companies, whose competitive advantages often revolve around their handling of information.

There are already many examples of "software" businesses that have have changed whole industries. Just think of Amazon, Google, Netflix and Apple's iTunes. 

The time has now arrived when many more businesses are under the threat of having, at least, a part of their operations "appified". Three reasons why this impending treat must now be taken seriously by an ever increasing range of businesses are provided in an Essay by Marc Andreessen in the Wall Street Journal. The reasons are:

 By thomcochrane @ flickr

• Over two billion people already use broadband Internet.
• Within the decade over five billion people will own smartphones with Internet access.
• The cost of placing an application on the Internet and making it easily available to a worldwide market has now dropped to just $1,500 per month.

So how do you ensure your business continues to thrive? 

• Watch out for the emergence of software applications which could impact your business model. And don't underestimate which areas of your business may be effected.
• Embrace software which can make your business more effective. (You'll find some of my suggestions covered in this blog from time to time.)
• Focus your business on activities that are hard to replicate with software. These will include, in particular, activities based around personal relationships, collaboration, partnerships, combining skills and creativity.

What other ways are there to evolve a business in order to compete with the inevitable "digitisation" of traditional business processes? Your thoughts will be welcome.