Continuing with this closer look at transformation, part three focuses on differentiation; the fourth forcing function. Differentiation is a process that showcases the differences between products and services. It looks to make an offering more attractive by contrasting its unique qualities with other competing offerings. Successful differentiation should create competitive advantage, as customers view these offerings as unique or superior. In his piece on The Future of Enterprise IT, Geoffrey Moore, famous author of “Crossing the Chasm” describes the global business dynamics (Slide 10) that places differentiation at the center of a virtuous (perhaps vicious) cycle. His key message is that globalization and rapid commoditization are placing greater emphasis on differentiation, especially in developed economies.
Author: Frank Diana
A Closer Look at Transformation: Effectiveness & Efficiency
In part two of this closer look at transformation, we will focus on two forcing functions: effectiveness and next generation efficiency. As a reminder, forcing functions are those things that force the enterprise to invest in a future state. In the case of efficiency, the next phase in the search for gains is upon us, as companies have hit the efficiency wall. But something bigger is happening, as the pace of business will increasingly demand that we are not just efficient – but effective. Whereas the past was about re-engineering, the future is about re-imagining.
A Closer Look at Transformation: Growth
2014 will see an acceleration and expansion of transformation programs. All the dynamics are in place to create a compelling reason for companies to transform. This 14 part series takes a closer look at transformation and the likely path it takes in the next decade. This is the first piece in the series. Links to the other parts of the series are included at the end of this post.
In my last Post , I focused on three recent thought leadership pieces:
- Middle class job Creation – Geoffrey Moore
- Disruptive Technologies – Mckinsey
- New Machine Age – Andrew McAfee
These pieces continue to describe the transformative period that lies ahead. As we look at this and other thought provoking pieces, our job as leaders is to assess the potential impact to our organizations. Readers of my Blog know that I have focused my own assessment on the enterprise of 2020, or what I have been calling the Digital Enterprise. So I have worked to develop a high level road map based on my own perspective and experiences, ongoing executive dialog, and key pieces of market thought leadership. I will use the next several Blog posts to summarize my thinking. The road map is focused in two key areas: The forcing functions that drive the need to transform and the enablers that require investment to get us there. Forcing functions are those things that force the enterprise to invest in a future state. The forcing functions and a vision to address them are critical, as far too many leaders continue to sit on the sidelines with no impetus to invest in this future enterprise.
The New Machine Age
I recently participated in a panel discussion at an MIT CIO Symposium and had the pleasure of hearing Andrew McAfee talk about the book he co-authored with Erik Brynjolfsson titled Race against the Machine. Mr. McAfee has talked at length about the digital revolution and its impact on the workforce. He talked about the dawn of a new machine age, where the focus is on idea production versus physical production, and knowledge work versus manual labor. He focused on the most impactful period in human history – the advent of the steam engine that ushered in the first industrial revolution. A lengthy period that followed the first machine age was transformative and disruptive. We are on the verge of something that history may someday view as more transformative and disruptive. A quote from Mr. McAfee summed up his thoughts:
“Digital will make a mockery of everything that came before it”.
Geoffrey Moore: Middle Class Job Creation in the Digital Era
Geoffrey Moore recently authored a Report focusing on middle class job creation in the Digital Era. These same forces that Mr. Moore describes in the context of job creation are disrupting the very fabric of the traditional company. This is a fascinating look at the state of middle class jobs in developed countries. This diagram from the report effectively summarizes his views on the topic. The grid focuses on the nine basic areas of employment inside an enterprise, across a product and a service business model. The columns are further divided into complex (B2B) and volume (B2C) businesses.
Where are we on the Bring your own Device Journey?
As I prepared recently to moderate a CIO panel discussion regarding the “bring your own device” (BYOD) journey of three companies, I took a hard look at the current state of BYOD. Before I get to that, let’s set a common definition for BYOD. Wikipedia defines it as the policy of permitting employees to bring personally owned mobile devices (laptops, tablets, and smart phones) to their workplace, and use those devices to access privileged company information and applications. Gartner defines it in a recent Report this way: the ability for users and business partners to leverage personally selected and purchased devices to access business data with the option of including PCs in a BYOD strategy; and the possibility of a company subsidy for the purchase of devices.
Digital Enterprise Road Map Series: Part 6 – Insight
Part six wraps up our Digital Enterprise road map series with a focus on moving insight delivery from descriptive to prescriptive. Throughout this series, I have stressed the importance of analytic excellence to long term success. But current methods such as traditional business intelligence (BI) focus on reporting and analysis that seeks to answer questions related to past events – what happened. Advanced analytics seeks to answer questions such as: why is this happening, what if these trends continue, what will happen next (predict), and what is the best that can happen (prescribe). There is a growing view that prescribing outcomes is the ultimate role of analytics. To accomplish this, analytic initiatives need to leverage an insight-action-outcome framework that starts by defining outcome-enabling insight and ends with a focus on data provisioning.
Digital Transformation
A new short Video featuring Tonya McKinney and I is now available on the TCS website. The focus of the video is the broadening role that Digital will play in the future enterprise. It’s no secret that I still see too many companies limiting their digital perspective to Marketing. Digital will eventually be viewed as the biggest disruptive force business has ever seen. Yet so many companies still have a business as usual view of the world. You can read about our perspective on the critical path forward via this Blog or through the TCS Perspective Series.
Digital Enterprise Road Map Series: Part 5 -Effectiveness
In part five of our Digital Enterprise road map series, we focus on business effectiveness. Efficiency dominated the last two decades with a focus on doing things in the right manner. But the next decade brings an increased focus on doing the right things – also known as effectiveness. The overarching goal of effectiveness is to drive desired outcomes and encourage innovation to meet enterprise goals. This simple statement has far reaching implications and represents one of the strongest drivers of enterprise change in this next decade. If I were to place one long term bet, it would be on the enablers of enterprise effectiveness.
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.
Digital Enterprise Road Map Series: Part 3 – Social
My belief that digital is still very misunderstood is growing stronger. Instead of understanding digital to be the transformative engine that drives sustainability – it is still viewed as an offering or channel. Those are indeed critical pieces of the digital story, but it’s not the whole story. Those very innovations that drive our current disruptive environment – transform us to deal with the aftermath. Our customers have shifted – and we can’t shift with them if we are inhibited by traditional views of digital. I participated in a recent think tank discussion, where people talked of digital’s small contribution to revenue, concluding that it was not worth the focus.
Heavy sigh!
Digital Enterprise Characteristics
In the past two months, interest in the characteristics of a digital enterprise is accelerating. I believe increasingly, traditional companies understand that viability in the next decade drives the need to evolve. The list of characteristics has been refined through ongoing dialog and now looks like this:
Digital Enterprise Road Map Series: Part 2 – Experience
In part one of this six part series; I focused on Holistic Strategy – the first step on the digital enterprise journey. In part two, the focus shifts to experience-based differentiation. With the rapid commoditization of products and services, the speed at which new market entrants emerge, and the rise of Consumerization, experience is the new battle ground. When I talk of experience, I mean stakeholder experience. Ultimately, it’s about creating differentiated customer experiences – but to get there, the experience we create for our employees and partners is critical to that end goal.
Digital Enterprise Road Map Series: Part 1 – Strategy
I’ve spent time in the past year writing about the emerging digital enterprise. I want to shift my focus to the road map required to become one. This is the first in a six part series that examines the digital enterprise journey and provides a perspective on the steps along the way. These steps can be grouped into six key categories:
- Developing a holistic strategy
- Creating experienced-based differentiation
- Creating an integrated social ecosystem
- Developing systems of engagement and integrating to systems of record
- Enabling right-time in-the-moment effectiveness
- Moving insight delivery from descriptive to prescriptive
The Internet of Things – The Tipping Point
The Internet of Things (IoT) is predicted to reach a tipping point in 2013. Mobile, Cloud, Big Data and Social are converging to enable countless applications of IoT in the future – and of all the disruptors in play today, IoT could very well be the biggest. With IoT, objects use tiny devices to make them identifiable by their own unique IP address. These devices can then autonomously communicate with one another. In evaluating the many IoT applications, I have categorized the path forward into four buckets: Smart Products, Smart Optimization, Smart Automation, and Smart Decisions. Here are examples across each category.
Geoffrey Moore: The Tide has Turned
In a recent Blog post as part of the LinkedIn thought leadership series, Geoffrey Moore states that The Tide has Turned. He sees signals that the consumer IT boom has peaked and the focus will shift to the enterprise. Here is a quote from his post – including a very powerful line – which I underlined:
“2013, in my view, will be the first of five to seven very productive years for IT vendors serving the enterprise, as sector after sector in our economy and around the world capitulates to digital transformation.”
I think he’s right about 2013, and I outlined my Thoughts at the end of 2012. Mr. Moore uses the word capitulate – and I believe he chose the perfect word. To capitulate means to give up resistance, and that implies that digital transformation is a foregone conclusion. To resist is futile – yet through 2012, so many companies continued to do just that. Now that we are almost through January, I’m seeing signs of the tide turning. There is a fundamental shift in the way companies are looking at digital. For although digital is the underlying cause of disruption across sectors; it is also the enabler of next generation enterprises. When viewed through that lens, the need to transform becomes much more apparent. Many more discussions must start with digital disruption as the business driver, and then shift to digital as the enabler. We could be moving in this direction – as isolated conversations about Social, Mobile, Big Data, and Cloud, shift to a business conversation where the convergence of these innovations plays a vital role.
LinkedIn: The Biggest Ideas of 2013
In the latter months of 2012, LinkedIn launched a Blogging platform for some of the world’s best known thought leaders. As part of that series, 50 posts were gathered to provide a perspective on the biggest ideas for 2013. I have categorized each of the posts and have provided a link below. There are great perspectives provided in some far reaching categories – including my favorite topic: Digital Enterprise.
Thoughts on 2013
Another year is coming to a close, and that means it’s time for 2013 predictions. Blog posts and articles will focus on the possibilities that lie ahead in the coming year. With so much uncertainty in the global community, people predict at their own peril. So this year, I am focusing my thoughts on the journey that I believe will dominate the rest of the decade. That journey will span three very broad categories: the accelerated movement towards systems of engagement, operating model change, and Digital innovation.
So here it goes – my thoughts for 2013:
The Ultimate Power Duo – The CMO and CIO
The New Jersey CIO Executive Summit produced by Evanta was held on December 5th in Whippany New Jersey. I had the pleasure of moderating the lunchtime keynote – a panel discussion titled “The Ultimate Power Duo – The CMO/CIO Partnership”. Joining me on stage were two CMO-CIO teams:
Hovnanian Enterprises, Inc:
CIO – Nicholas Colisto,
VP Corporate Marketing and Sales – Laura VanVelthoven
Panasonic:
CIO – Gabrielle Wolfson,
VP Marketing – Betty Noonan
Bloggers, Industry analysts, and Surveys are fueling the CMO-CIO partnership discussion and delivering some very bold predictions:
- Fully 60 percent of marketers point to their lack of alignment with the company’s IT department as the biggest obstacle to reaching the consumer
- Gartner says ninety percent of technology spending will be outside of the IT budget by the end of the decade. In contrast, only 20 percent of technology spend was outside of IT as recently as 2000
- In 2013, global technology spending is expected to reach $3.7 trillion, according to Gartner – and IT spending is being spread more widely than ever across the business
- Gartner Research predicts the CMO will spend more on IT than the CIO by 2017
- A recent IBM Survey shows that leading Marketers are extending their role beyond Marketing
Operating Models will Change
The stars are aligning in a way that promises to drive change to long standing operating models. Why? The Venture community speaks of forcing functions that drive adoption of new innovation. Let’s analyze the forcing functions that likely drive change to industrial age processes and organizational structures:
- Consumerization
- The far reaching implications of Mobile, Social, Cloud, and Big Data convergence
- The blurring boundaries between personal and business computing, industries, and enterprise functions
- The emergence of the engagement era and the associated adoption of systems of engagement
- Hitting the efficiency wall
Reimagining the Future 