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.
Digital
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
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
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
How Would you Fill in the Blank: ____ Enterprise?
“This is the dawn of the mobile enterprise and as a result, digital strategists must think beyond the idea of a social business”. That’s a quote from a recent post titled Investing in the Mobile Enterprise, written by Brian Solis, a Principal at Altimeter Group. Mobile, much like social, is clearly a critical element of the future enterprise; but so are Big Data, Cloud Computing, and who knows what else in the coming years. One thing is clear: the future Enterprise will not resemble the current Enterprise, as we enter a very transformative period that promises to impact the very structure of our organizations.
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.
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.”
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 1 – Part 2 – Part 3. It’s a well spent thirty minutes.
The Digital Enterprise and New Ways of Thinking
This recent Article titled “Sayonara Sony” by Adam Hartung provides a great example of the dangers of not evolving as a business. I can’t help but think that this story will play out countless times over the next three to five years. In Sony’s case, it is a stubborn reliance on industrial age thinking that has driven their downward spiral. Those companies that won’t abandon their specific reliance on legacy practices will suffer the same fate. We’ve moved on from the industrial age. We are in the midst of an information age that requires completely new ways of thinking. Sustained innovation is the new mantra, and the emerging digital enterprise will not function on long standing management theory. Leaders need to realize this and adapt – or suffer the consequences. They need to embrace the characteristics of the new digital enterprise:
- Sustained innovation
- Engagement and insight-driven
- Mobile first
- Context-aware
- Business Technology NOT Information Technology
- Relationship-based
- Flexibility in operating & business models
- Experiential versus transactional
- Prescriptive
The best leaders can adapt – but we’ve never seen a time quite like this before. There is so much unchartered territory and things are changing very fast. Therefore, leaders need to be flexible, they need to be students of the disruptive forces that are driving change, and they need to be open to new ways of doing things. In short, they need to disrupt, before being disrupted. If not – it’s “Sayonara fill-in-the-blank”.
Digital Governance
Governance is a rapidly growing area of interest. Although social media is driving most of this discussion, broader digital initiatives are just as important. Without governance across all digital initiatives, companies will fail to achieve the most critical objectives facing them: rapid and better innovation, re-inventing customer relationships, and operating dexterity. Because of these stakes, digital governance must have teeth. Companies cannot let their efforts remain fragmented and must address what some at Forrester have called “Distributed Chaos”. Personalization is just a pipe dream if data cannot be lifted from silos to create a comprehensive view of the customer. Today, the Marketing and Communication function is a common place to find some element of digital governance, and some companies may elect to leave it there. However, the current digital expansion is cross functional and much broader than Marketing and Communication.
Reimagining the Future 