Geoffrey Moore, Managing Director, TCG Advisors recently authored a white paper titled: A Sea Change in Enterprise IT. Mr. Moore – and more recently Forrester – has used the phrase “systems of engagement” to capture the shift from a transactional focus to an experiential one. I believe this phrase captures the required response to this phenomenon and addresses what Mr. Moore describes as a shift in the axis of IT innovation from large enterprise to consumers, students, and children. As stated in the paper, systems of record are no longer a source of competitive differentiation for organizations, but a necessary condition of doing business – enterprises are forced to sharpen their competitive advantage or risk being commoditized.
To create future competitive advantage, I believe companies must excel in two key areas: collaboration and analytics. As described in the paper, conducting business today involves many relationships. This relationship-based enterprise must excel at orchestrating existing relationships, creating new ones, and turning down those that are no longer relevant. Agility in today’s business environment is critical, and successful value chains will evolve to enable it through relationships and cloud computing.
Alongside agility in the mission critical department stands rapid and effective decision making. Everything moves at warp speed today and it’s driving every business to make faster and better decisions. This will require a level of analytic excellence that does not exist in most organizations today. Companies will increasingly turn to advanced analytics – but the rate of adoption is a slow process. I still hear executives describing business intelligence in the form of performance metrics and dashboards. Very few are talking about infusing their processes with insight to enable better decisions at the point of engagement. We have never had more data available to drive these decisions. Those companies that can effectively turn data into insight and insight into action will have an advantage.
Lastly, this paper focuses a great deal on content – but more importantly, the context-awareness required by systems of engagement. So much of what we discuss in terms of experience or engagement is linked to context. This creates an inextricable link between the two critical elements of competitive advantage described above.
I think we will be hearing a lot more about the notion of systems of engagement. I’ve said this in several of my last executive discussions and I’ll repeat it here: the move towards systems of engagement and the impact of the four innovation pillars (Cloud, Social, Mobile, Big Data) could dwarf the reengineering waves of the past.