The Goldilocks Effect of Automation: Finding the "Just Right" for Your Business

November 30, 2016 Lauren Ruef



Sears, the retail giant that stayed ahead of consumer trends for nearly a century, has a lesson for all companies entering the 21st century without a strategy for the digital age—"too big to fail" isn't just a saying. What was once a pillar among big box stores is now floundering in the competitive landscape of Walmart, Costco, and Amazon.

But it wasn't always this way. In 1925, Sears did something radical. They started a mail order catalog. Selling merchandise via direct mail reached far-flung rural populations with all the trappings of modern life: sewing machines, baby buggies, ready-made dresses, and household appliances. Sears, with one finger on the pulse of a hungry American consumer, pivoted from selling watches to Minnesotan farmers to becoming the first American retail giant.


The company that sold America "the dream"

Before other retailers could break ground, Sears was already constructing new stores to keep up with the urbanization of America. It arose to meet every household need from denim jeans to dishwashers through America's stable, post war years. And the introduction of reliable brands like Kenmore and Craftsman only cemented the company's overwhelming success.

But something changed. Like many retail giants at the height of success, Sears fell into a deep and comfortable rut. And as Ginni Rometty, CEO of IBM, says: "Growth and comfort never coexist."

The 1980s proved this for Sears. Revenue dipped as its traditional blue-collar audience began to shrink. New competitors moved into the retail landscape. By the early nineties, the digital age picked up speed and Sears reacted about as quickly as a fossil.


The "Goldilocks" effect

With the advent of the internet, consumer habits shifted by a landslide. With their collective $200 billion in buying power, Millennials are riding the online shopping wave all the way in. With an unprecedented selection of brands and subscription-based services to choose from, it isn't enough to just be the big kid on the block anymore, and Sears has struggled to recreate the highly individualized shopping experience that keeps Millennials loyal.

The "Goldilocks effect" is a demand for exactness from the things we buy and the brands we engage. Not too much, not too little, just right for me. This effect is evidenced by the rising popularity of personalized on-demand services like Amazon Prime, Netflix, and Uber.


Don't build it. Integrate it.

In a fast-moving era where a business's needs can change in the blink of an eye, it pays to take a page from the consumer's playbook when evaluating solutions. A software that tries to cater to every whim is far less desirable than a solution that does one thing really well. This trend in technology is evidenced by the move toward open-ended solutions (allowing several platforms to integrate and work together harmoniously).

More companies are hunting for a Goldilocks solution, and it's becoming easier to create that perfect solution from a partnership of several automation providers. Instead of looking to one company to meet every need—like Americans shopping at Sears in the 1950s—solutions are emerging to meet specific pain points.

For accounts payable automation, a Goldilocks solution looks like having one company automate your invoice capture and workflow and another handle payments. In a cloud-based environment, automation software won't be an end-to-end solution, and here's why: faster implementation. A simple plug-n-play solution that's painless to on-board is much preferred to an overhaul that will take months to implement. Not too hot, not to cold, just right.


Small disruptors cause giants to stumble

Automation partners that handle one piece of the puzzle can deliver faster implementation times. Software built around scalable cloud-based infrastructure makes this especially true. The ease with which automation providers can plug into existing legacy technology is unprecedented. Cloud-based providers can deliver solutions in a few days or a month, while an end-to-end provider might take up to a year or more.

With multiple automation solutions coexisting, it's also easier to isolate problems and identify areas where you need to scale than having a multi-layered solution that takes a lot of digging to find out where the problem lies.

As businesses are specializing more and catering less to those seeking a magic bullet that does it all, a best-in-class automation solution is the clear way forward. And it's these key shifts that are causing companies who once enjoyed the largest market share, to lose it. For Sears, the lesson has been particularly painful. With year-over-year shrinking revenues and store closings, some are forecasting the company is on a slow march to liquidation.

Even small market disruptions, like shifting consumer behavior, can cause giants to stumble. A "build it and they will come" mentality misses the dynamic indicators in the market that could have saved a big retailer like Sears. Not many companies "do it all" in the sense of their product offerings anymore and we're starting to see that as a good thing.



About the Author

Lauren Ruef

Lauren is a Research Analyst at Nvoicepay. She has six years of experience in the technology and B2B payments industries.

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