The sharing economy, collaborative consumption or on-demand economy, call it what you will, is a massive global phenomenon. There are several definitions – game changers, disruptors, show stealers, etc. In a broad sense, it is an organized effort to match the needs of people with the underutilized resources of another, normally making use of technology and for some sort of reward.
There have been more than enough success stories to prove that the sharing economy is a reality and will only grow from strength to strength, evolving and disrupting more and more traditional business models.
Consumer spending is changing and entry barriers that seemed impossible to challenge a few years ago are disappearing before our eyes. The key to success of these organizations is the management and leverage of data as well as how the enterprise interacts with their target market. Business systems need to acknowledge this and respond with fast, flexible, mobile and scalable platforms that users can interact with in the way they want to.
In many ways, the evolution of the sharing economy was inevitable. Mankind has always shared, in groups, families or communities. Some more than others sure, but we have always shared. What has not happened before is sharing on the sort of scale that Airbnb, Taskrabbit, Uber and other pioneers of the sharing economy, and many that have followed, have managed to achieve.
Certainly, those that took advantage of markets the rest of the world did not even realize existed, made it that much easier for those that followed. And despite their rapid rise to glory, these trailblazers have paid the costs along the way, and continue to do so.
What is at the core of the apparent success of these businesses, apart from extremely generous venture capitalists? There are numerous factors but two stand out:
The customer interface:
Compare the simplicity of requesting an Uber or Lyft to standing on the side of the road, trying to hail a cab or praying that one comes by. The Uber experience, while not perfect, is at least measurable in real time, somewhat intuitive and fairly predictable. It works.
The same can be said of any of the other big names. We are over the initial fear of the unknown, much like the early days of online shopping, something we have taken for granted in recent years. As soon as people became aware that it worked well for the most part, they realized they could be a bit more adventurous and trusting, even when less well-known names came along.
Calling a Lyft or booking on Airbnb is pretty simple. The user ratings give it credibility and a source of comfort. It also poses a major challenge for the providers, given that literally millions of people are publicly rating their service on an ongoing basis. Customer service has always been critical but this aspect has made it that much more important.
The other thing the big guys are good at is mining the massive amount of data points they deal with every minute of the day. Without timely, and I mean to the second, and accurate data, the system would never be able to work. As much as people might be irked by surge pricing, it a big part of what makes it work for the company and, believe it or not, for the users. Again, without a system to manage the data accurately and instantly, this could never work.
Without this new level of business intelligence, the process would not work smoothly, the customer experience would be poor, and it could not function at an optimum level.
Mining the data will allow them to forecast accurately and tweak supply and even demand when necessary. Not next week or tomorrow, but within seconds. It also, when done effectively, allows them to better understand shifts in demand and discover new opportunities.
Clearly, a one-size-fits-all approach will never work. As more companies start to engage in the sharing economy, enterprise systems have to be agile and adaptable. They will have to continuously evolve to deal with the ever-increasing amount of data and deliver sharp intuition.
This increased reliance on information technology will demand more from all aspects of IT teams. As much as the analytics and proprietary algorithms will need to be flawless, they cannot work in isolation. Key players like Kenandy who work and develop Enterprise resource planning, or ERP applications, for example, will have to continuously evolve to deal with the ever-increasing amount of data, and emerging company departments which are generating that data.
Every aspect of the business needs to integrate seamlessly and work as one. This isn’t an easy task when the clear majority of the people involved in the business are complete strangers. The only way for this to work is through the system that drives it and the insights it can provide.
As more traditional industries join the collaborative consumption movement and mutate into new beings, those developing the systems at the backend will have to answer questions that have never been asked.
If sharing is caring, you better hope your software systems give a damn.
This post is part of our contributor series. It is written and published independently of TNW.