What is the connection between a freezing truck driver in the US and an Australian company in Victoria? In short, the answer is innovation.
Victorian-based Razor International is betting on its innovative products gaining a share of the rapidly changing US trucking market. Under pressure because of a lack of drivers – 48,000 at last count – US transport companies want to attract drivers who don’t fit the macho stereotype as well as retain existing drivers.
Since 1998, Razor has developed state-of-the-art electronic and automated control systems for semi-trailers and rigid trucks that aim to save operators time and money, and prevent physical injuries. For truckers who have to load, unload and unhook their prime movers, often in freezing, snow-driven, winter conditions, Razor’s products can make truck driving life a lot easier.
“Our products allow those tasks to be done from the cab wirelessly,” says Razor International CFO Adrian Siah. “That should appeal to drivers who do not want to open the cabin door and step out into blizzard-like conditions, or prospective drivers put off by the strenuous physical demands of trucking”.
Razor hopes its innovations will appeal to companies that are upgrading their fleets with automated control systems which allow drivers of all sizes to safely transport freight, whatever the weather conditions.
According to Siah, Razor invests 20 per cent of its revenues in to research and development, as part of its commitment to investing in innovation. “We are heading down the path where everything is automated,” he says.
Since mid-2015 the company has sold its products through three US-based distributors but is evaluating offshore production, to make their product more competitive in the US market.
Investing in innovation as a precursor to new products and markets was apparent in late 2015 when a survey by consulting firm Deloitte identified new products or markets, along with organic growth, as the most popular growth strategies for the year ahead. Nearly 60 per cent of the surveyed CFOs said this was their most likely option.
Indeed it seems that enterprises in the Australian middle-market are increasingly investing in innovation to boost their profits.
Matt Michalewicz, an entrepreneur and author with experience in the fields of technology, commercialisation and supply chain management, has established and sold several businesses in his career.
His latest venture is Complexica, a provider of artificial intelligence software. Fronted by the quaintly-named Larry, The Digital Analyst, the software automatically captures new revenue and margin opportunities through real-time customer analytics, insights and recommendations. And by automating complex analytical tasks and workflows, it claims to reduce labour costs.
“You’ve got to innovate around your customers,” says Michalewicz. “Their world is changing rapidly, which means that your customers and their needs, drivers, and priorities are also changing rapidly.” He added that innovative solutions will not always be discovered by a business focussing internally on its existing product or service range.
Many innovations these days are the result of new technologies that allow providers to implement change. Another case in point is the centuries old transaction of factoring. Leigh Dunsford and Simon Creighton own Trade Advance, a traditional invoice factoring company.
They acknowledged that the biggest issue for customers was the long application process, the administration and the invoice reconciliation required by bookkeepers and accountants. Their solution was to marry traditional invoicing with cloud computing in a new business called Waddle, launched last July.
Instead of providing invoice factoring or fixed term loans, Waddle offers a perpetual line of credit to SMEs, much like a credit card but based on the invoiced receivables of companies. In contrast, factoring involves buying these invoices in return for cash with the arrangement disclosed to customers.
“The service is only open to businesses with cloud accounting solutions as we are able to tap into the data online and do the automatic matching of the data,” Dunsford says. “Unsurprisingly, the application and approval process can be cut from weeks to hours.”
For several years, commentators warned businesses to be ready for “disruption” as new technology displaced established technology. Harvard Business School professor Clayton Christensen who coined the term, warned businesses against dismissing the value of a disruptive technology because it does not reinforce current company goals, only to be blindsided as the technology matures, gains a larger audience and market share, and threatens the status quo.
Already predictions have been made that 2016 will be a key year for companies to improve their ability to serve digitally savvy customers. If realised, companies with innovative strategies will see stronger growth and won’t be left out in the cold.