In his third post in the series, Marshall Kirkpatrick focuses on the intersection between artificial intelligence and Fintech. By way of reminder, Marshall launched a 30 day series that explores the intersection between AI and various future scenarios anchored by my emerging futures visual.
In his second post in the series, Marshall Kirkpatrick focuses on the intersection between artificial intelligence and 3D Printing. By way of reminder, Marshall launched a 30 day series that explores the intersection between AI and various future scenarios anchored by my emerging futures visual.
This Presentation tells the full business evolution story articulated below.
Several key drivers have positioned the next two decades to deliver a staggering – perhaps unprecedented – amount of change. The accelerating pace of business, the growing impact of digital, and several other major indicators suggest that a next generation enterprise is on the horizon. The first of these indicators is the level of societal change impacting everything from business to war. In the business world, the implications of this change can be seen in our employees, where for the first time in history, four generations of workers are in our work force. The associated challenges are coming into focus, as some of these workers are digital natives, but the vast majorities are digital immigrants. With customers, the shift of power to the individual has changed their role forever and placed them at the center of the company ecosystem. Other indicators include an intense focus on growth, which increasingly requires collaboration within and outside the four walls of the Enterprise. This growth agenda drives a new type of value ecosystem, enabling growth that in many cases is outside a company’s traditional business.
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:
The next focus of this transformation series shifts to the emergence of value ecosystems and their role in driving the Enterprise of 2020. As we look at the Apple ecosystem and offerings like the connected car, mobile commerce, energy efficiency, electric cars, eHealthcare, and energy performance contracts, we can see the lines between industries blurring. Some even question the relevance of Industry constructs in the future. As this phenomenon accelerates, more and more companies must identify the relevant ecosystem(s) that enable their growth strategies. These value ecosystems are complex and relationship-oriented, representing future growth opportunities that are increasingly outside a company’s traditional business.
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.
Ted Schadler and John McCarthy of Forrester just completed a report titled “Mobile Is the New Face of Engagement”. I had the pleasure of moderating a panel discussion at a TCS Innovation Forum last week, where Ted served as part of the panel. Prior to the panel discussion, Ted used a 45 minute presentation to effectively summarize the content of the new report. He provided a written summary via his Blog yesterday.
The future of sustained competitive advantage hinges on the ability to effectively manage the collision of disruptive innovations. The digital disruption driven by Mobile, Social, Big Data, Cloud and the Consumerization of IT is impacting every industry. To date, much has been said about these individual areas of innovation. But the areas of intersection – critical to creating value from these innovations – have mostly been ignored. As innovations collide, the intersection must be effectively managed – or the result is distributed chaos. As the digital disruption takes hold across every company, in every industry, the need to transform becomes a business imperative – and future digital strategies will define success or failure.
2011 in my mind will be viewed as the launching point of a digital revolution. The momentum started in 2010 and kicked into overdrive in 2011. The rapid adoption of tablets and Smartphones fueled an aggressive development of mobile applications, while E-Book sales increased at a remarkable pace. Meanwhile, the world continued to go social in ways that few would have imagined. World leaders felt the power of Social Media, as revolutions expanded through the organizing power of Facebook and Twitter. Business leaders came to grips with the power of social media, as skepticism waned and social business turned the corner. Data continued to grow exponentially, expanding the gulf between available data and meaningful insight. Lastly, 2011 marked the year that cloud computing burst onto the enterprise landscape – In fact, 2011 may eventually be viewed as the year of the Cloud.
These factors combined to drive an aggressive digital expansion that in most cases happened through isolated initiatives driven by marketing. Businesses with indirect channels to market looked towards direct to consumer models. Regulated industries embraced the opportunity of social media, while addressing its risk. Customer experience became the mantra for many businesses, as re-inventing customer relationships topped most priority lists. New digital executive positions were created in response to growing questions about effective governance models. The notion of holistic digital strategies was in fashion again, and innovation and operating dexterity rounded out the top priorities for most executives in 2011.
This recent Big Data Article from the Mckinsey Global Institute focuses on three key themes – some or all of which will impact every company in the future.
- Big Data will increasingly form the foundation of competitive advantage for years to come.
- Big Data will drive new business models across every industry.
- Decision processes will forever be changed.
A company’s use of Big Data will increasingly be driven by competitive pressures from those that effectively leverage its insight. As these companies mature in their use of data, they will shift from competitive response to competitive advantage. Decisions will improve, driven by an ability to simulate and model various scenarios that enable optimal outcomes.
The really interesting aspect of Big Data – and the analytics that help us derive insight – is the potential impact on complete value chains. This article provides some good examples of this phenomenon at work. In essence, data will drive new business models. Members of a value chain that own data may have an ability to monetize it. Those that have a proven ability to deliver insight from this data can monetize a core competence. Some companies may find themselves driving revenue from a business model that was never envisioned.
Whether it is new business models, better decisions, or enabled actions, the effective use of Big Data requires a level of analytic excellence that few companies have with any level of scale. This Mckinsey article echoes an earlier report that identifies a scarcity of analytic resources as a key obstacle to Big Data success. As I talk to companies about their digital strategies, I continue to focus on Big Data as the centerpiece of the strategy.
The explosion of data and content is not limited to social media and represents a top of mind issue for many companies. The opportunity exists to create unprecedented business value – but there are significant hurdles like greater risk exposure, more complicated risk management, and difficulty extracting relevant insight from large volumes of data.
As volume grows, automation is critical. For example, social media monitoring is a common practice today, one that becomes increasingly ineffective and costly as the social web expands. Monitoring tools that enable the analysis of dialog on social networks like LinkedIn, FaceBook and Twitter provide a basic level of insight. But a deeper level of insight still requires a manual process, where irrelevant content is filtered before finding meaningful insight. Information management is therefore a growing challenge.
I find myself talking a lot lately about the slow evolution from basic social listening to a more robust use of analytics to truly gain actionable business insight. I have long felt the evolution was inevitable – of course I often think these things and they take years to materialize – a story for a different day. This Recent Forrester Blog Post touches on the notion of moving from social listening, to integrating social and customer data. It also presents a roadmap for how to move through the crawl-walk-run-fly stages.
I am sure the authors realize that although this is a piece of the evolution, there are other steps along the path to actionable business insight. I’m already seeing the movement from basic social media monitoring to the broader use of text analytic platforms. Companies that started their journey focused on brand mentions are evolving to new use cases that deliver considerable business value. One of the signs that we are reaching an inflection point can be found in a growing move towards evaluating text analytics software for a broader set of use cases.
As I reflect upon a month full of customer discussion, it becomes clearer that future and sustained competitive advantage hinge on excellence in two critical areas: collaboration and analytics. The need for a relationship-based enterprise becomes more apparent as we look at the critical need to:
- Re-invent customer relationships
- Leverage the collective knowledge and talent of our organization
- Partner to facilitate operating dexterity
This relationship imperative makes collaboration excellence a critical success factor; and a key enabler is social computing. I don’t mean Facebook, Twitter, LinkedIn, or YouTube (although they play a role) but rather the use of social technologies to drive effective collaboration and communication. This evolution to social business moves the enterprise up the collaboration axis as described in the diagram below.
In a recent presentation, Forrester describes the uniqueness of our current business environment as a perfect storm of technology innovation. In the past, technology cycles were driven by one major innovation (mainframe computing, personal computing, networked computing). The current environment sees a perfect storm of cloud computing, social business, mobile computing, advanced analytics and smart computing. This latest cycle begins a period of accelerated innovation, and introduces a larger potential for disruption than in past cycles.
Disruption in many different forms is not just possible, but likely. Business models across many industries are already under attack. The Information Technology (IT) function itself will see considerable change over the next several years. As the workforce and business leaders play a bigger role in technology selection, the role of IT will evolve. What IT looks like in the future is anyone’s guess, but change is almost certain. The current outsourcing model that so many companies have embraced over the years, will change as cloud computing widens its footprint. The way companies build and deploy applications will change, as mobile apps and app stores shift from the consumer world to the enterprise. The way companies interact and communicate with all stakeholders will change, as social media evolves to social business.
I recently participated in the writing of an article on Social CRM for the Insurance industry. The piece is now available online via the Insurance Networking News. The Insurance industry is showing a great deal of interest in social business – and I hear it in most discussions with industry executives. It is clear that the industry is beginning to understand that insight from social channels can drive better decision making. Companies like Farmers Insurance are driving new growth, new product development, and customer retention by sharing information from Twitter, FaceBook and LinkedIn with their network of Agents.
A recent study indicates that 56% of companies are planning future Social CRM initiatives, while Gartner indicates that 30% of companies will extend their Social Networking efforts to Social CRM processes within the next two years. As I note in the article, social computing will enable a powerful sales, marketing and customer service platform that improves the customer experience and elevates brand identity. The full article is a worthwhile read, and provides some insight into the future use of Social CRM in the Insurance industry.
In this recent video, Eric Siegel, PhD, Conference Chair for Predictive Analytics World and Text Analytics World, discusses three innovative advanced analytics trends.
These trends build upon the growing focus on social data and text analytics. The three areas covered are:
- Using social data to improve predictive models
- Applying text analytics unstructured data to better predict customer behavior
- Using net-lift modeling to determine which customers will be receptive to retention offers.
It’s a brief five minute video that is well worth the look.
Big Data is the latest buzzword attracting all kinds of attention. A Brand New Report by Mckinsey takes a detailed look at this new phenomenon. Mckinsey defines Big Data as datasets whose size is beyond the ability of typical database software tools to capture, store, manage and analyze.
This very good Article by Anand S. Rao discusses the growing use of predictive analytics in the Insurance Industry. I believe Mr. Rao is right on the mark – although I continue to emphasize the expanding role of Text Analytics in the analytic value equation. In this article, he identifies some of the drivers of predictive analytics adoption.
So here’s an interesting example of the world growing more instrumented: A Social Vending Machine. Text messages and videos are being sent by a vending machine. Just more fuel for the data explosion fire. Innovative companies like PepsiCo are generating ideas that we could not imagine even a year ago. Still doubt the staying power of this social phenomenon? Still think it’s a passing fad? Vending machines just went social. Think of all the other social business scenarios on the horizon. All the while, the volume of insight bearing unstructured data just continues to grow. It gets more interesting by the minute.