I just finished another book and added it to my Library. Pandemic, Inc. explores eight trends that are amplified by the current pandemic. Author Patrick Schwerdtfeger believes we will see more change in the next 12 months then we saw in the last 12 years. He views the current crisis through an optimistic lens, seeing a time of incredible change, but also opportunity.Continue reading
IDC today announced its worldwide information technology (IT) industry predictions for 2016 and beyond. The predictions were published in a new IDC FutureScape report. As we embrace the notion of Future Thinking
This forward looking guidance is critical. Here is a snippet from the report:
“The disruptive impact of digital transformation is about to be felt in every industry as enterprises ‘flip the switch’ and massively scale up their DX initiatives to secure a leadership role in the DX economy,” said Frank Gens, Senior Vice President and Chief Analyst at IDC. “In the next two years, two-thirds of Global 2000 CEOs will put DX at the center of their growth and profitability strategies. By the end of this decade, IDC predicts that the percentage of enterprises with advanced DX strategies and implementations will more than double.”
IDC predicts that the scale-up of digital business strategies will drive more than half of enterprise IT spending within the next 24 months, rising to 60% by 2020. Mastery of 3rd Platform technologies will be table stakes for successfully executing DX business initiatives and “Cloud First” will become the new mantra for enterprise IT. Virtually none of the other 3rd Platform technologies or major DX initiatives is possible in scaled-up implementations without the Cloud as the foundation. By 2020, IDC predicts that enterprise spending on cloud services, the hardware and software to support cloud services, and the services for implementing and managing cloud services will exceed $500 billion, more than three times what it is today.
Additional predictions were provided:
- By the End of 2017, Two-Thirds of the CEOs of the G2000 Will Have Digital Transformation at the Center of Their Corporate Strategy
- By 2017, 60% Companies with a DX Strategy Will Deem It Too Critical for Any One Functional Area and Create an Independent Corporate Executive Position to Oversee the Implementation
- By 2018, 80% of B2C Companies Will Have Created Immersive, Authentic Omni-Experiences for Customers, Partners, and Employees; 60% of B2B-Centric Companies Will Have Done the Same
- The Top New Investment Areas Through 2017 Will Be Contextual Understanding and Automated Next Best Action Capabilities
- In 2016, 65% of Large Enterprises Will Have Committed to Become Information-Based Companies, Shifting the Organizational Focus to Relationships, People, and Intangible Capital
- By 2018, 75% of the G2000 Will Have Deployed Full, Information-Based, and Economic Models or “Digital Twins” of Their Products/Services, Supply Network, Sales Channels, and Operations
- By 2020, 60% of the G2000 Will Have Doubled Their Productivity by Digitally Transforming Many Processes from Human-Based to Software-Based Delivery
- In 2016, the Level of Connectivity Related to Products, Assets, and Processes Will Increase 50% for All Industry Value Chains
- The Sharing Economy Will Give Rise to the Networked Free Agent and Skill-Based Marketplaces, Resulting in More than 10% of Work Being Sourced in this Fashion in Mature Economies by 2019
- By 2018, at Least 20% of All Workers Will Use Automated Assistance Technologies to Make Decisions and Get Work Done
I expect the conversation regarding the Future of Business to intensify over the coming months. Evidence is mounting that business as usual is a thing of the past. In a recent post by SAP, they present ninety nine ways that digital will change business. As you look at the information presented, and see the number of shifts occurring at the same time, it’s hard to imagine a business landscape that weathers this storm unscathed. Here are examples of these shifts from the SAP post:
- At the current turnover rate, 75% of the companies in the S&P 500 in 2027, will be new (companies not currently in index today)
- By 2019, approximately one quarter of the entire U.S. workforce will be independent workers (self-employed, independent contractor, freelancer, temp contractor, etc.)
- By 2030, 10% of the largest companies in the U.S. will be virtual corporations (less than 10% of their workers will be in an office at any point in time)
- 50% of the U.S. Jobs lost in the 2008 recession were middle-skilled jobs, but only 2% of the jobs gained since then have been middle-skilled
- By 2025, there will be 10 global virtual currencies that will be considered mainstream. Their combined market value will exceed $5 Trillion, and Bitcoin will still be the largest.
- Private and commercial robot use will grow 2,000% from 2015 to 2030, creating a $190 billion market
- By 2030, 2 billion jobs will disappear – roughly 50% of all the jobs on the planet – as a result of technology advances
- 3D Printing usage will grow 2000% between 2015 and 2030
- Purpose-driven and value-oriented organizations outperform their competition 15 to 1
- By 2030, sensor use will grow 700,000%, solving nearly every human need such as cancer-killing chips
- By 2020, information will reinvent, digitize, or eliminate 80% of business processes and products
- Although 90% of companies view advanced and predictive analytics as important, less than 30% have currently deployed them, and only 30% have plans to do so
- There will be more words written on Twitter in the next two years than contained in all books ever printed
- By 2025, the total worth of IoT-enabled technology is expected to reach $6.2 trillion – most of that in healthcare (2.5 Trillion) and Manufacturing (2.3 Trillion)
- Within the next five years, more than 90% of all data from IoT will be hosted in the Cloud, reducing the complexity of supporting IoT “Data Blending
Just a small sample (more via the link above) supporting the notion that the future of business could look considerably different than its past. I’ll pursue the future business landscape in up-coming posts.
Part three of Anticipating 2025 will summarize the third section of the book. This section focused on redesigning artificial intelligence, with a look at six important questions and the exploration of human-machine mergers. The six questions explored in this section are:
- Can we create a human-level artificial intelligence?
- If so, when?
- Will human-level artificial intelligence lead to super-intelligence?
- If super-intelligence arrives, will we like it?
- Can we upload our minds to computers?
- Can we de-risk the arrival of super-intelligence?
Like the first two sections, this section forces us to look at disruption through a different lens. Granted, the path forward is highly speculative, and even the most optimistic scenarios are likely years away from having transformative implications. Nonetheless, it does force us to broaden our lens beyond traditional views. For example, I’ve focused on the automation of knowledge work and all its ramifications, while the authors (Calum Chace, Martin Dinov, and Elias Rut) focus on creating super-intelligence by uploading our minds to computers. They explore a human-machine merger that they see as the enabler of super-intelligence benefits realization. This merger in the author’s view is the only way to avoid creating our successor. So yeah, that’s a little more impactful than automating knowledge work.
In October, IBM released a report from their Institute for Business Value titled Analytics – A Blueprint for Value. IBM releases these reports on a periodic basis, and this one is focused on the growing importance of analytics to business success. Through their analysis, they came up with nine levers that represent the sets of capabilities that most differentiated leaders exhibit:
- Culture: Availability and use of data and analytics within an organization
- Data: Structure and formality of the organization’s data governance process and the security of its data
- Expertise: Development of and access to data management and analytic skills and capabilities
- Funding: Financial rigor in the analytics funding process
- Measurement: Evaluating the impact on business outcomes
- Platform: Integrated capabilities delivered by hardware and software
- Source of value: Actions and decisions that generate results
- Sponsorship: Executive support and involvement
- Trust: Organizational confidence
This list of 99 Facts pulled together by SAP continues to build the case for inevitable change. The title of this SAP presentation is “The Future of Business”. Here are some of the key facts from various sources. There are embedded links in the content that take you to the source documents. Enjoy.
This current executive presentation captures the breadth of the digital enterprise transformation series. It can be found on SlideShare – appropriately titled Blurring the Boundaries.
The presentation is a call to action for leaders everywhere. A slide in the deck asks the question: as status quo thinking prevails, what drives action? The first half of the presentation builds the case for action. The second half describes a framework to enable that action.
Over the last three months, I have presented a framework for thinking about transforming the enterprise to the type of enterprise that can succeed in the year 2020 – What I call a digital enterprise.
Throughout this multi-part transformation series, I have focused on those forcing functions that push us to transform – the drivers that stir us to action. Old models that were created for another time cannot lead us into this future – we must think differently. We must invent the models that define business in the decades ahead.
So, I wrap up this closer look at transformation with the hope that I’ve convinced you in some small way that we are indeed heading towards what is likely to be the most transformative period in history. My hope is that leaders everywhere think differently to usher in a period of prosperity and societal advancement. Instead of talk of disruption, let us talk of enablement and advancement. May we each have the wisdom, vision and courage to lead in this emerging transformative period.
For a review of this entire transformation series, here is an intro and link to each of the prior posts. As a reminder, forcing functions are those things that force the enterprise to invest in a future state. The enablers are those facilitators of change that allow us to address the forcing functions and build a path towards the future. Click on the underlined title to access each post.
Next up in this transformation series is the eighth enabler: the evolution from descriptive to predictive analytics. At the heart of future success lies the ability to leverage insight for competitive advantage. Yet, analytic capability and data driven cultures are lacking in most organizations, and most executives when assessing their positioning on a descriptive-to-prescriptive scale answer level one. The table below defines each level:
Next up in this transformation series is the seventh enabler: Collective Intelligence. One of the key themes throughout this transformation series is the clear movement from an enterprise entity to an extended enterprise of stakeholders. This extended enterprise – or what I alternatively call value ecosystem – increases complexity and requires a new management approach to be effective. I use the term collective intelligence as an umbrella phrase that combines the critical need for both collaboration and analytic excellence. This includes other forces like crowd computing, crowdsourcing, co-creation, and wisdom of the crowd – all of which stem from the connectedness of our world, and the growing realization that value creation requires a broader community.
Next up in this transformations series is the sixth enabler: sense and respond systems. These systems are critical to the transformation agenda, as most of the disruptive technologies likely to impact the enterprise in the next decade have data at its core. The resulting data explosion promises to complicate information management for most companies. As the speed of business accelerates and the amount of data flowing through company ecosystems expands, the need to sense stimuli and enable a real time response intensifies. Fortunately, rapid advancements in the price and performance of technology make realizing this sense and respond paradigm achievable and economical for a wide range of use cases – but this is arguably one of the most difficult components of transformation road maps.
Next up in this transformation series is the fifth enabler: 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. 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.
In May, I participated in a Big Data panel discussion at the 2013 MIT Sloan CIO Symposium. The panel was moderated by Tom Davenport, Harvard Professor and co-founder of the International Institute for Analytics. The panel participants aside from myself were:
- Annabelle Bexiga, CIO, TIAA-CREF
- Jack Norris, CMO, MapR
- Keith Collins, SVP, CIO & CTO, SAS Institute
- Michael Chui – Senior Fellow, Mckinsey Global Institute
This was a very good discussion on the potential of Big Data and the possible direction it takes in the future. Michael Chui did a great job with his opening remarks, referencing this Mckinsey Report and using examples from it. This report, which I have mentioned previously, focuses on major disruptive technology. It is interesting to hear the perspectives (and sometimes biases) of these industry players. It’s an hour and ten minutes long, with some very good audience questions.
The next focus area in this closer look at transformation is the fifth and perhaps most critical forcing function: societal change. Wikipedia refers to societal change as an alteration in the social order of a society, including changes in nature, social institutions, social behaviors, or social relations. The base of such change is change in the thought process of humans. Digital is the primary driver of a societal change not seen since the first industrial revolution, impacting every aspect of society from business to war. It was digital (Internet) that accelerated globalization, and now the broader digital platform allows even a start-up to be global upon inception.
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.
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.
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.
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.
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.
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.