A look at 2011

As 2010 winds down, it is time to look ahead to 2011. I have high expectations as the calendar turns, and I believe 2011 will be the year of adoption. I believe we’ve reached a point where cash will come off the sidelines and I expect to see technology investments focused on revenue generation and value creation. With that as a backdrop, I’ll Label 2011 as the year of collaboration and intelligence – the two areas that I believe align very well with pressing business priorities. So here are my thoughts on 2011.

Collaboration and tapping into all available intelligence grows in importance
I’ve been following the evolution of business collaboration for several years now. Team, intra-organization, and inter-organization collaboration have been common place for years.  In the late 1990’s and early 2000, the extended enterprise became synonymous with value chain collaboration: the inclusion of partners, customers, employees and others in end-to-end value chain processes. In this time period, collaboration technologies evolved and online market places were born in every industry. We’ve reached another defining moment in the evolution of business collaboration. The importance of collaboration in a business context continues to grow. Successful businesses involve all stakeholders including partners, employees, suppliers, customers, consumers, community members, shareholders, government and others. Collectively, this group represents the community, and there is no better way to bring a community together then through the use of social technology. As business processes expand to incorporate the community and its collective intelligence, enabling technology becomes even more critical. Social computing technology represents an enabler for one of the biggest business challenges of the next decade.

As these technologies better enable community conversations and content creation, the amount of unstructured data multiplies. The ease of collaboration therefore makes a higher percentage of critical intelligence available via unstructured data.  This represents a linkage between collaboration and emerging forms of analytics.

These two dynamics can be viewed on two axes: collaboration and intelligence. Successful enterprise strategies and architectures will move the enterprise forward on these two axes. They will move from internal, team-based relationships to collaborative relationships with everyone, and from traditional business intelligence to advanced analytics that deal with both structured and unstructured data. The higher up the collaborative axes you go, the more critical the need to effectively gather and leverage the resulting intelligence – and the more challenging the task becomes.

In 2011, expect to see the continued use of social technologies to drive collaboration and harness the power of people, while emerging forms of advanced analytics unleash the power of their collective intelligence. With this, knowledge workers interact with information and one another more effectively.

The Innovation process will continue to get attention
Generating faster and better innovation remains a key business imperative. When the collective intelligence of a community is tapped, new forms of innovation emerge and gets to market faster, forming the foundation for future competitive advantage. As a result, more companies will look to make employees, partners, customers, and other stakeholder’s part of the innovation process. We will hear more about crowd sourcing and collective intelligence in 2011, with social technology and advanced analytics playing an expanding role.

Social Technology and the Enterprise
I’ve always felt that social technology and analytics were a natural pairing when you consider the data explosion driven by user generated content. I thought that companies everywhere would deploy social technologies internally to foster collaboration and capture and retain knowledge. The adoption rate has been slower than I expected. That will change in 2011, as one of the big drivers of adoption is the growing realization that social networks capture the collective intelligence of employees, organizations, communities, citizens and others. In 2011, expect to see the growing corporate use of social media externally and the adoption of social technologies internally. The impact of social technology has had a profound effect on society, and now business is getting the message: social networking is not only good for business – it is a necessity in our competitive global economy. Businesses that embrace collaboration via social technology will have a competitive advantage over those that don’t. Just take a look at how several traditional businesses are reaping business rewards from social networking portals.   

  • The Lego Group uses online communities to identify and rally its most enthusiastic customers to help it design new products and market more effectively. 
  • Eli Lilly and Hewlett-Packard host online “prediction markets” that extract collective knowledge from online communities, which help them gauge whether the government will approve a drug or how well a product will sell. 

Voice of the Customer initiatives will gain new life
Voice of the Customer (VOC) is a time-tested business concept that has gained new life through the application of text analytics. VOC complements and extends traditional CRM by capturing customer requirements and feedback in order to provide best in class products and services. This process is proactive and constantly innovative in an attempt to capture the changing requirements of the customers over time. The voice of the customer is expressed in different forms through different channels. An effective VOC initiative is data driven with clear goals and expectations.

VOC initiatives are getting more challenging as a growing amount of valuable insight is shifting to social channels. Tapping this insight is complicated by sheer volume and the unstructured nature of social data. Further, the market is inundated with software that attempts to tag, sort, search, organize and manage much of this unstructured data. But discovering the actual facts in this data is a challenge that frustrates most companies. As a result, the unstructured data collected from customers is often not used at all. Valuable insight is lost, as the reason for an event or opinion is often revealed in text, as are potential marketing opportunities or early warning on issues.

The only available means most companies have to understand unstructured data is to have humans read it – but humans are poorly suited to read volumes of text records. Online discussions and volumes of customer emails simply cannot be processed into useful, actionable insight without the capabilities offered by text analytics solutions. In 2011, voice of the customer initiatives will increasingly involve the automated analysis of text and the inclusion of data from all customer channels.

There will be a shift in focus from analytic tools to analytic applications
Business Analytics is multi-faceted. It combines multiple forms of analytics and seeks to align the right analytical methods with the desired business outcomes. Analytics range from traditional business intelligence which describes past outcomes, to advanced analytics which have the potential to predict future outcomes. Knowing which form of analytics to apply to drive a desired outcome is an ongoing challenge. In many cases, a combination of analytical methods is needed to achieve the required outcomes. In 2011, the focus will increasingly shift from selecting analytic tools to holistically developing analytic applications that enable specific business outcomes. These applications will strive to be prescriptive by identifying what it takes to achieve the best possible business outcomes.

Social listening and intelligent workflow will gain momentum
Companies today have the ability to drive workflow based on business rules; but those rules focus on structured data. What if workflow could be driven by the insight from both structured data and text? The intelligence in our workflows would be greatly enhanced. Insight alone is meaningless without action and driving workflow based on insight initiates action. In a scenario that is getting more common, someone makes a comment on a company’s FaceBook page and expects a response. The company is not proactively monitoring the page and the commenter is left to wonder why no one reached out. Negative sentiment is expressed for the world to see.

What if an automated analytics process was actively monitoring various social channels? What if based on available insight, support requests were routed to the appropriate support team? Action would follow. Expect to see considerable focus on enabling this scenario through social listening and intelligent workflow in 2011. Solutions will emerge that enable a customer care agent to receive relevant social media discussions across major social media channels that meet their areas of expertise for response

Reporting, planning and analysis is embraced by the Masses
I spent many years at AT&T watching organizations, divisions and departments build their own Excel-based reporting and planning systems. These systems took on a life of their own; with production MIS systems reduced to the role of data source for these business-maintained applications. Business users did this for a number of reasons:

  • They were familiar with Excel
  • They could easily train others in Excel
  • They couldn’t get what they needed from IT on a timely basis
  • IT solutions did not meet their requirements

Although this approach provides value, there are several issues with Excel as a solution for reporting, planning and analysis:

  • Lack of audit-ability
  • Difficult to maintain
  • Loss of a key resource could cripple the planning and reporting process
  • Lack of security
  • High error rates
  • Resource intensive

All these same reasons for using Excel and the issues it creates exist for small and mid-sized businesses as well. Although reporting, planning and analysis tools are somewhat broadly adopted at the upper mid-market and Fortune 500 companies, managers at smaller companies are yet to adopt them. Companies with fewer than 1,000 employees sometimes lack the user base required to generate sufficient returns; and software solutions are cost-prohibitive.

As a former technology liaison to business executives, I am excited about the future for small and mid-sized companies, as well as Divisions and Departments within larger companies. In 2011, I expect to see broader adoption of Business Intelligence solutions that are priced and designed for this segment of the market. Business Intelligence software like IBMs Cognos Express uses an Excel paradigm to make it easy for users to adopt and embrace the software. In so doing, the issues with Excel-based reporting are addressed.

Broader adoption of Predictive Analytics
The notion of mining all forms of data and better enabling decision making is gaining momentum. Predictive analytics helps us turn data into actionable insight. One of the challenges of predictive analytics is the skill set required to effectively use this advanced analytic technology. I’ve heard many practitioners say that it is difficult to find and retain resources that can develop models and more importantly, make them produce results.

Advances are coming that may help alleviate some of these issues. In 2011, expect to see the continued focus on enabling the business user to more effectively participate in predictive analytic initiatives. These advancements will help drive broader adoption of advanced analytic technology. This same trend leads to an increase in the number of companies outsourcing their analytic functions.

The Outsourcing of analytics will become an attractive alternative
The reasons companies outsource are varied. Cost is a main driver, but sometimes it’s about focus. Shedding a non-core function allows a company to focus on what they do well. Other times, it’s simply a matter of resources. Through the years, the need for specialized skills has led organizations to look for outside help.  

In talking to prospects over the last several months, I’m convinced that advanced forms of analytics will follow this path. The skills required to leverage data mining, text analysis, predictive models and statistical analysis are very specialized and in high demand. This is the perfect scenario for analytic outsourcing. Outsourcing analytics allows a company to focus on taking action based on insights delivered by the outsourcer. The outsourcer can leverage these specialized resources – in many cases PHD’s – across multiple clients. As the importance of analytics grows – and it will – organizations will have an option to outsource. Expect to see more of this in 2011.

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