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
The Value Ecosystem: A Telco Example
In our transformational march towards the Digital Enterprise – the Value Ecosystem grows in importance. Fueled by the increasing importance of relationships to value propositions, the Digital Enterprise adds relationship management to its list of critical core competencies. This point was underscored at a Telecommunication Innovation Forum held by TCS in London last week. Perhaps no industry finds itself in the same place as this industry – both an enabler and victim of the digital world. As expressed by Keith Willetts, Chairman of TM Forum, this is truly a digital paradox. TM Forum is a global, non-profit industry association focused on enabling service provider agility and innovation. At the TCS event, Mr. Willetts described the various challenges faced by companies in this Industry:
- Extreme pressure on cost management and exploiting economies of scale
- IP networks dramatically reduce the barriers to entry for services, so core voice and messaging services are under attack
- The phone number does not equal the customer, and therefore brand loyalty is shifting
The CIO and CMO Partnership
Much has been said about the critical need for the CMO and CIO community to work towards a more effective partnership. Yesterday at the CIO Executive Summit in Dallas, Suzanne Kosub – CIO at Concentra – closed the event by underscoring this point. She described the traditional CIO relationship alignment, which in most cases was with the CFO and in some cases the CEO. But the many disruptive forces affecting us today are driving the imperative for the CIO to partner more effectively with the CMO. At an upcoming CIO Summit in New Jersey, I will moderate a panel discussion with three CIO/CMO teams to explore this subject further. How do these executives overcome the relationship challenges of the past? There are many perspectives on this topic, including this recent Forrester piece that proposes the creation of a Marketing Technology Office (MTO). The MTO is a center of excellence that leads technology strategy, develops marketing technologies and evangelizes innovations throughout the marketing department.
In this scenario, the CIO would relinquish control of certain customer-facing technologies and hand responsibility for the function over to the Chief Marketing Officer (CMO). Rubbermaid is an example of a company that has created such a function. Their MTO function reports to the CMO, not the CIO, and the only CIO relationship with the department is to ensure that it is complying with the company’s defined IT standards and processes. Other models are emerging, many of which disrupt the current CIO structure. At this same CIO Summit, I heard several approaches described:
- IT application resources aligned with the business versus the CIO
- Creation of new innovation groups that combine business and technology resources
- The emergence of the Chief Digital Officer
- A model that categorizes IT into three buckets: Enterprise, Local and Federated – and then organizes accordingly
Regardless of the model, it is growing clearer that change is coming. The interesting question for me is: are we witnessing another swing of the pendulum, or are we seeing lasting change to long standing operating models? My bet is that the impact and rate of change is a forcing function and there is no turning back. I’d be interested in your examples of emerging models.
IBM Big Data Study
The IBM Institute for Business Value recently completed Big Data research and released a report titled Analytics: The real-world use of Big Data. As the report states, companies have been dealing with large volumes of data for years (think billions of call center records collected by Telecommunication companies). But the report also identifies the two trends that make this era of big data different:
- The digitization of virtually “everything” now creates new types of large and real-time data across a broad range of industries. Much of this is non-standard data: for example, streaming, geospatial or sensor-generated data that does not fit neatly into traditional, structured, relational warehouses.
- Today’s advanced analytics technologies and techniques enable organizations to extract insights from data with previously unachievable levels of sophistication, speed and accuracy.
The Social Ecosystem
I recently viewed a video titled The Future of Social Inside the Enterprise, a thought leadership presentation from the recent Dreamforce 2012 conference. The presentation is delivered by Dion Hinchcliffe of the Dachis Group, and Alan Lepofsky at Constellation Research. This is a fifty minute journey through the past, present and future of social business. You’ll find some content on the business value associated with social, and some good examples of how social is evolving to support the way we work.
You can start to see how systems of record may integrate with systems of engagement. Two examples are given by Mr. Lepofsky. The first describes a stream level integration, which allows system of record events to be broadcast into the activity stream. This stream level interface is envisioned to be the place where people spend time doing their jobs. It is pointed out however that stream level integration has its issues, the biggest in my mind being the loss of context. Comments made in the activity stream do not work their way back to the system of record, so context is lost. The other critical issue is the noise level associated with these streams. Without robust intelligent filtering, these streams become worse than email. This filtering – finding the actionable insight among the noise – is critical to the effectiveness envisioned by future systems of engagement. I had a discussion this week with senior executives from a large Financial Services firm, and the general belief is that this critical filtering will take years to develop and optimize. It took IBM four years to tune IBM Watson to compete in the Jeopardy challenge. This is not simply a sentiment analysis exercise.
TCS Digital Mobile Consumer Study
Tata Consultancy Services recently conducted a major study to understand how large organizations in North America, Europe, Asia-Pacific and Latin America have been revamping their strategies, products and processes to win the loyalty of consumers who use mobile devices to do business with them– the so-called “Digital Mobile Consumer”. The Study focused on how companies are coping with this mobile consumer. Some key findings are summarized here.
Blurring the Boundaries
Webster’s dictionary defines the term “blurring” as something vaguely or indistinctly perceived. This term – a term I have heard often in the last couple of months, seems like a good way to describe the dynamics of our world today. The lines are blurring, the boundaries are blurring – pick your phrase – I find it really fits. For example, one of the key drivers of change is the blurring boundaries between industries:
- Insurance: Gartner predicted that at least one social network will become an insurance sales channel by the end of 2014. The rationale is linked to Facebook’s timeline feature, which documents all the crucial events in a person’s life from getting married to having a child to retiring. The personal information controlled by players like Facebook and Google could fuel their desire to take on today’s insurance giants
- CPG: manufacturers will increasingly encroach upon the Retail Industry as they pursue Direct-to-Consumer models. The number of companies selling products directly to consumers is expected to increase from 24 percent to 41 percent over the next 12 months.
- Publishing: By facilitating publishing, Amazon, Barnes & Noble and others are eroding the position of the publisher in the ecosystem in much the same way Apple eroded the gate-keeping role of the carriers when it introduced the app store.
- Entertainment: The borders between Entertainment, Communication, and Information are blurring, and service innovators like hulu and Sling are establishing their role in the ecosystem
- Telecommunications: Competition from content and “over-the-top” companies (Facebook, Google, Apple, Skype, Amazon, etc.) are taking market share and dismantling long-standing Industry value chains
- Financial Services: Companies like PayPal, Amazon, Zynga, Google, and Facebook are encroaching on their territory, and payment is the battlefield. Banks will need to experiment with new business models and digital disruptions of their own to fight back. The balance of power could shift from banks and credit card companies to innovative companies that provide the best digital wallets
Big Data and the Emerging Era of Engagement
I often tell the IBM Watson story as a way of describing the future of analytics. Watson – with a large quantity of Big Data behind it – beat the two biggest Jeopardy winners of all time. Although that became the story, the bigger story for me was the business application of what I had just witnessed. Watson showed us how analytics will mature from descriptive to prescriptive. Most companies I talk to are still in the descriptive stage – reporting on that which has happened.
Reimagining the Future 