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:

  1. Developing a holistic strategy
  2. Creating experienced-based differentiation
  3. Creating an integrated social ecosystem
  4. Developing systems of engagement and integrating to systems of record
  5. Enabling right-time in-the-moment effectiveness
  6. Moving insight delivery from descriptive to prescriptive 

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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

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The Early Stages of the Digital Enterprise Journey


I have had the pleasure of attending and presenting at several CIO forums in the past couple months –and with all the talk of their future demise and the changes ahead for Enterprise IT, it’s good to get a view from the CIO themselves. They all seem very interested in the dialog around their role changing in the next 3 to 5 years, and the panel sessions on the topic are mobbed. But I don’t see this group buying into the notion that their role will change – aside from the more progressive CIOs. Actually, at a recent event, it felt like very little was changing – as I sat through presentations that could have easily been given in 1998. Some of the same challenges that traditionally drain the resources of an IT organization are still front and center. 

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2012 IBM CEO Study


The 2012 IBM CEO Study is now available: IBM CEO Study -2012.  This study provides further evidence that the world is shifting to what Geoffrey Moore has termed “Systems of Engagement”. This quote from the report would indicate that CEOs see the writing on the wall: 

“The view that technology is primarily a driver of efficiency is outdated; CEOs now see technology as an enabler of collaboration and relationships — those essential connections that fuel creativity and innovation. Simply put, technology is reinventing connections with — and among — employees, customers and partners.” 

This study underscores my long time premise that collaboration and analytic excellence is required to be successful in this new systems of engagement era. Those that think this is just another cycle or a passing fad are greatly mistaken. We are at a unique point in history – driven by a perfect storm of innovation as highlighted by this quote: 

“Today’s CEOs are in a position few of their predecessors have faced. Although there have been many eras of technology disruption in the past, several factors make this period different. First, a number of new technologies are rippling through society at the same time, and they’re being adopted much faster. In addition, disruptive technologies of previous eras almost always originated in business or government, and then spread to consumers. But recent advances are flowing in the reverse direction and are being absorbed more rapidly by the younger generation.” 

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Will we Spend $1 Trillion on Systems of Engagement?


Geoffrey Moore coined the term “Systems of Engagement” to describe the in-the-moment empowerment required by the middle tier of our organizations. He talks about informed interaction – a great way to describe the type of relationship and analytic excellence required for future success. Systems of engagement address the complexities of an ecosystem that increasingly includes third parties, as more companies move towards specialization. 

In this 30 minute keynote presentation, Mr. Moore describes the historic focus on systems of record, and the $1 Trillion spent over the past decades to develop them. His perspective – one shared by the VC and software community – is that the amount of value we can extract from further investment in these systems of record is a relatively small percentage compared to the value already extracted. In his view – a view I share – the future is about systems of engagement. These systems sit on top of our systems of record – and here’s the fascinating part – Mr. Moore can see a comparable $1 Trillion investment in creating these systems of engagement. I really have no way of quantifying this investment – I’ll leave that to those more qualified than me. I do however feel very strongly that this move towards systems of engagement will dwarf the investment and effort of the recent past. 

His thirty minute presentation is a great look into this movement from systems of record to systems of engagement. You can view the video in three parts: Part 1Part 2Part 3. It’s a well spent thirty minutes.

Is Data and Insight a New Source of Revenue?


In this world of Big Data and advanced analytics, many companies are starting to wonder about the revenue potential of their data. An opportunity to create new revenue streams is an attractive scenario – if data assets can become information products. Although not new, the number of companies that pursue information related products could grow considerably. Most companies upon inward reflection will find that the analytic core competence required to deliver insight – the higher end of the monetization scale – does not exist internally.

This introduces some interesting scenarios that underscore the market need for analytic outsourcing and the establishment of analytic centers of excellence. The evaluation process for this opportunity involves a market analysis that identifies the value-added information products for the target market. Understanding the business outcomes enabled by insight is a critical step in determining which products make sense. In addition, the data required to enable these products must be clearly understood, available, and clean enough to deliver the required insight. The process is then enabled by the appropriate analytic methods, taking advantage of advances in computing power and in-memory capabilities. The ability to include insight from unstructured data through the use of text mining expands the opportunity for value creation.

I envision a number of relationships emerging between technology companies and value chain players. These relationships enable new, more insightful information products by combining traditional data related skills with deep analytic and domain expertise. Companies will look to supplement existing offerings with analytic oriented products and services, or pursue new innovative offerings altogether. Insight as a driver of business and decision processes will be enabled in the future by internal movement towards analytic excellence, the use of external information products and services, or some combination of both. This is a natural response to the “Big Data” phenomena and the need to improve the speed and quality of decision making. It introduces a new era of information brokers that deliver new innovative products and services enabled by business analytics.

Systems of Engagement


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. 

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Digital Strategy 2.0


I have visited with companies over the last couple of months and the term “Digital Strategy” has come up many times. It started me thinking about the last time the term was very popular – the late 1990s and early 2000 time period. I saw a reference to Digital Strategy 2.0 last week and thought it was a perfect way to describe this latest phenomenon. Several factors are driving this renewed focus on digital strategy: 

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