Digital Enterprise Road Map Series: Part 4 – Systems of Engagement

Geoffrey Moore introduced the Systems of Engagement concept about two years ago. This vision for the future of Information Technology is gaining broader acceptance – but a surprising number of executives are blind to the coming sea change. Is it hype or reality? For me, this question boils down to one certainty: traditional companies must infuse their organizations with digital DNA – and I believe systems of engagement accomplish this. They raise Digital DNA quotients by using consumer technology to make companies more effective. This notion of effectiveness is a key shift from a two decade long focus on efficiency. That’s not to say the importance of efficiency has diminished, in fact I’d say the next phase in the search for efficiency gains is upon us. But at the same time, effectiveness will headline a decade long journey focused on growth. The same platform that enables next generation efficiency – Mobile, Social, Big Data, Analytics and Cloud Computing – forms the foundation for effectiveness through systems of engagement.

Where current enterprise systems are designed around records (systems of record); these new systems are designed around interactions. Where technology investment in the last two decades enabled transaction workers and executives – these systems enable the middle of organizations with a focus on growth. Here is more evidence supporting the likelihood of these systems emerging: driving future growth will increasingly involve multiple stakeholders within a value ecosystem. So systems of engagement therefore must be viewed holistically across the entire ecosystem – and if you ask me, few if any have taken this holistic view. What we have are isolated sets of initiatives that in the worst case create more silos, and in the best case are sub optimal. Holistic systems of engagement should bring together the entire value ecosystem – but there are many obstacles:

  • Lack of vision – failure to see the burning platform
  • Shifting industry boundaries and ecosystem complexity
  • Ecosystem uncertainty
  • Organization and data silos
  • Innovation-crushing policies and procedures
  • Outdated back-office systems
  • Top-down command and control models
  • Digital initiative sprawl
  • Shadow IT
  • Lack of governance

Deploying systems of engagement: Effectively navigating these obstacles is the first order of business, and a Holistic Strategy is the enabler. The second is effectively using consumer technology and interaction histories (think Facebook Timeline) to drive effectiveness. These systems will increasingly use mobile as the Face of Engagement. I’ve had the pleasure of working with Ted Schadler from Forrester on occasion, and he and John McCarthy produced a Report on the role of Mobile in this emerging space. I have a lot of respect for Ted, and I believe his findings are spot on. Specifically, he states that recent research indicates that companies have:

“A new ability to empower customers, employees, and partners with context-rich apps and smart products to help them decide and act immediately in their moments of need”

Mobile therefore lies at the heart of the system of engagement vision; and “Context-rich” aptly describes a critical enabler. Not only will these systems deliver effective interactions, but they will usher in new ways of working by leveraging mobile apps, smart products, personal clouds, integrated activity streams, social task management, and personal workflow. They will increasingly leverage all data in our ecosystems to drive outcomes and enable the effective use of collective intelligence.

Beyond Mobile, systems of engagement will leverage the social ecosystem described in Part 3 of this series. The collaborating, communicating and coordinating power of social will fuel these future systems. But perhaps the most impactful and difficult engagement element is the sense-and-respond system. To deliver in-the-moment effectiveness, context must be provided at the point of interaction – and interaction windows are short. But context is just a means to an end – we need to determine appropriate action (response) – and this requires a deeper use of analytics than most companies are prepared to support. I believe the hype around Big Data masks the true issue: organizations lack the analytic maturity critical to future success. Yes Big Data technologies play a critical role, but the point of failure in many cases will occur in the process of converting data to insight, insight to action, and action to intended outcomes. Sense and respond systems therefore will only succeed if companies mature from a descriptive (backward looking) paradigm to a predictive and prescriptive paradigm (forward looking). We will explore this maturation in the sixth part of this series.

So we’ve done the hard work of deploying system of engagement components – It must be time to sit back and enjoy all this engagement. Not so fast – we need to integrate these new systems of engagement with our systems of record.

Integrating systems of engagement and systems of record: In effect, systems of engagement are built on top of systems of record. But a complex tension exists between the two: systems of record want to be stable and secure, while systems of engagement want to be agile, flexible, fast and responsive. Focus too much on stability and security – and the value of systems of engagement diminishes. Aggressively leverage systems of engagement to create Digital DNA – and the company could be exposed. This type of environment introduces risk, including possible leaks of confidential information and intellectual property. But in a recent McKinsey Global Survey, 60 percent of respondents still say the potential benefits outweigh the risks. Solutions that manage this tension will likely evolve over time, but until then, leaders need to develop road maps that enable a phased transition – not a complete overhaul.

Lastly, all of this is further complicated by architectures that are not service oriented and antiquated legacy environments. Investments made in legacy modernization and service orientation will deliver considerable returns over the next several years – and those that have done this hard work are ahead of the game. Without an enabling foundation – realizing the systems of engagement vision will be difficult. Either way, this is likely a five to ten year journey – but journey we must.

Part five of this series will focus on enabling right-time in-the-moment effectiveness. In the meantime, the first three parts of this series can be found here:

Digital Enterprise Road Map Series: Part 1

Digital Enterprise Road Map Series: Part 2

Digital Enterprise Road Map Series: Part 3

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