If the success of trailblazers such as Airbnb, Snapgoods, and TaskRabbit is anything to go by, there is a huge opportunity in the sharing economy. Hot on their heels has been a host of other companies working in this space, many of them highly successful. Almost daily we hear about a new innovation in the sharing economy. Electric scooter sharing is one of the latest and companies are popping up all over the world. One thing all these companies have in common is the need for great business systems. They need software that can handle the new and dynamic nature of their business. Most modern business systems are agile and adaptable but is this enough?
The business systems will need to constantly flex and evolve to remain relevant in the sharing economy. Legacy systems are not going to be up to the job. Innovative systems are needed that can scale and adapt quickly to suit this business model. The sharing economy is showing no signs of slowing down and new startups are disrupting traditional business models that have been successful for many years.
What is the sharing economy?
Before we go any further, let's look at exactly what the sharing economy is. Being a fairly new and extremely dynamic business model it is challenging to define. Sometimes called the peer economy or collaborative consumption it is a peer-to-peer sharing system of exchange. It has largely been made possible by the growth of the internet and smartphone technology. Essentially, people borrow or rent goods or services from others rather than purchase them outright.
What does this mean for business systems?
These companies tend to be fast and extremely agile. As such, their business systems need to be the same. The software needs to be intuitive and anticipate needs and demand, often on a per second basis. The traditional system of adding new functions and features to old platforms will not work for them.
This is an outdated concept and not fast enough to cope with the rapidly changing markets and models used in the sharing economy. Fortunately, cloud-based solutions can solve this problem and allow the business systems to be completely flexible and updated on the fly.
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What will business systems need to cope?
There are a number of important considerations one needs to look at when evaluating business systems to be used in the sharing economy. Here are some of the most important:
- User interface
We are talking mainly about the customer interface here. Picture some of the people using apps such as Lyft or Airbnb. They are not all young tech-savvy users. In order for the model to work, the user interface needs to be extremely user-friendly. The good ones out there are incredibly easy to use.
You also want the admins or users of the systems to be able to pick it up quickly and be fairly self-reliant. As the companies scale, staff will be taken on board, often in multiple and widespread locations. Any training required needs to be in the form of online learning and support needs to be rapid and accessible where your employees are.
- Able to work on multiple devices and platforms
Not everyone has the same phone, tablet or laptop and they use a range of operating systems. It is therefore essential that the software will interface with a wide range of devices and operating systems. Mobility is essential for all modern software but particularly on systems for the sharing economy.
- Leveraging data
One of the key success factors in the sharing economy is the ability of the company to leverage the data that is available. Consider again, the example of a ridesharing platform. They are constantly updating their rates, availability, positions and many other factors. They generate millions of data points each day and they need to be able to use these to their advantage. A few seconds delay can give competitors the edge. Data has to be processed fast and accurately. This will ensure a good customer experience while at the same time, making the company more competitive and able to maximize profits.
It is fairly obvious that the business systems will need to be as flexible as the companies in the circular economy. As we said before, speed and agility are keys to success. This means that the market, business model, pricing, products, and numerous other variables could change in the blink of an eye.
The sharing economy is booming in most parts of the world and growing at a rapid pace. Many of the bigger players have an extremely healthy market valuation that would be the envy of many large and well-established companies. The sharing economy is and will continue to shake things up in pretty much any industry you can think of.
Those involved in this economy need business systems that work and think as they do. They need to be fast, responsive, intuitive and flexible. Any vendors not innovating their software offerings and evolving as fast as these companies do will not even be in the race.
While there are still a few hurdles this burgeoning economy has to deal with, there is no doubt it will continue to see exponential growth. Technology forms the backbone of these companies so they will select their business systems with great care. If the business system is not adapted to their model and able to adapt as they evolve and scale, they will not be considered.
This is a guest post by Sarah Williams. Sarah is a Berlin based entrepreneur, marketing and online communication specialist and tech geek who also manages Wingman Magazine - an online lifestyle magazine for men.