The On-Demand Enterprise


Posted by Antony Brydon

The on-demand economy is disrupting billion dollar consumer markets, from hailing a cab to booking a room to getting groceries and packages delivered. It's about to have an even more profound impact on the enterprise.

The shift to the on-demand enterprise is happening in two sequential waves. Salesforce.com led the first wave of the on-demand enterprise as on-demand technology disrupted a $344 billion worldwide enterprise software market [1] and changed how technology works. This wave will be dwarfed by the second wave of on-demand, as on-demand talent disrupts a $10 trillion market for enterprise talent [2] and changes how we work.

Consumer innovation led the first wave of on-demand, with companies like Amazon providing the frameworks for software as a service that were later applied to the enterprise. Consumer innovation is also leading this second wave, as companies like Uber use distributed workforces to disrupt a $60 billion local transportation market [3] (and put taxis out of business) and Google Local uses distributed workforces to disrupt a $300 billion local logistics market [4] (and challenge FedEx).

On-demand technology that offers “the immediate provisioning of goods and services” [5] will restructure the enterprise and enterprise workforce. Key drivers include companies increasingly opportunistic about contract and outsourced labor and a workforce that’s more social, mobile, and self-directed than ever before. It's about 5 billion smartphones and a billion millennials. By 2025, leading enterprises will operate on both dimensions of on-demand, using software and mobile devices to connect to global and distributed networks that perform an increasingly large share of work.

On-demand networks will displace business processes outsourcing (BPO) companies first, delivering higher performance at lower cost. Key innovations include web and mobile platforms to eliminate fixed infrastructure costs; social design to eliminate management and coordination costs; payment platforms to eliminate contract and payment processing costs; and a flexible workforce model that attracts a more skilled base of talent than BPO businesses. The disruption of the $1 trillion BPO market [6] is starting with outsourced services like customer care, back office transactions, IT and helpdesk operations, finance, accounting, and HR.

Employment has been and will continue to be the single most important issue in the developed [7] and developing world. The software, algorithms and networks that power on-demand networks and the on-demand enterprise will increasingly shape work in the 21st century.

Want to read the full paper? Download it here.

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[1] http://www.gartner.com/newsroom/id/2783517
[5] http://www.businessinsider.com/the-on-demand-economy-2014-7 
[6] http://www.statista.com/statistics/298574/bpo-and-it-services-market-breakdown-worldwide/ 
[7] http://www.gallup.com/poll/167873/americans-cite-jobs-economy-gov-top-problems.aspx