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Thursday, October 23, 2014
On my flight back to San Francisco tonight, I managed to read the book, What Stays In Vegas, where the author of the book - Adam Tanner shows how Using loyalty programs, ubiquitous cameras, math,“math nerds,” Casinos have mastered data analytics and the collection and use of customer data to gain “an edge in a business where rivals compete fiercely with the very same games.” Caesars showcased here is shown as the casino player who knows its clients intimately by tracking the activities of the overwhelming majority of gamblers. Caesars seems to know exactly the gamblers liking of games, food, stay etc and using these data they can target them better and ensure the gamblers come again and again back to them in a predictable way.
Earlier in the day, I was busy discussing digital marketing to people in the industry, who were not so convinced about its power and reach for them to feel guilty about not participating thus far. I was telling my friends that the era of the traditional methods of marketing campaign are ending. When it comes to digital marketing, many enterprises unfortunately, do not get these right and as a result, massively lose out on the range and depth of adjustments needed to better engage consumers and get superior results.If we carefully analyze the range and magnitude of disruption heaped by the advent of digital phenomenon, it can be easily seen that one among the top business functions severely influenced by digital disruption is marketing as a business function. Seen from the prism of empowerment powered by digital forces, today consumers across every industry are enjoying unlimited amount of influence and authority over any business. The traditional enterprise, hitherto engaged in the era of expensive and wide reaching campaigns find their approach either getting minimal returns or finding them inadequate to reach their customers and prospects in a convincing manner. Its now, a common knowledge across enterprises that the era of glossy campaigns pushing products and services through mass media has been toppled by empowered customers basking under the glory of digital forces churning out information at their disposal, demanding more and more from their vendors.
Traditionally, enterprises based on the industry in which they operate and in alignment with their business objectives,take decision on types of campaigns that they would like to launch. In many enterprises due to budgetary planning, the frequency and reach of campaigns get decided annually and typically campaign calendars are drawn in terms of weekly, monthly, quarterly frequencies. In this model of outreach to customers, in reality, enterprises tend to send campaigns in this preplanned form of campaigning, one or two messages about products or services deemed relevant to the customer(s). In this age of abundance, the enterprises should be in fact catering to different set of customers with entirely different range of product/offerings making the campaign process more effective. This is precisely what digital provides for – enterprises are empowered to push out campaigns that are highly relevant to individual customers. Eg, Visa worked with Facebook to find unique segments of soccer fans on the social platform. Visa’s campaign used social and transactional data to form clusters of people who were served ads.Take the case of a leading elite online retailer (for a change this is not Amazon). They have centralized data and leverage cutting edge data for marketing to create the most personalized e-communication to their customers, so that every customer gets a different message when they receive Likewise, when customers do onsite shopping , the retailer might prioritize certain sales for them to see first, taking into account their stated and observed preferences. They make more nuanced communication – and minutes before the peak shopping hours, several thousands of different versions of messages go out to their customers. In short, this online retailer is practicing a different model of marketing compared to traditional ways of pushing campaigns to their customers.
The ubiquitous smartphone has changed the basis of relationship between the customer and the service provider. Customers can navigate better and learn not only about the price of the product but also about performance, they can see detailed reviews by the users, do comparative analysis of competing products or jump into researching into a different category of product/service altogether – all within a matter of few seconds and doing all these at their choice of place and timing.A seemingly harmless search that a customer does on their phone can reveal so much more about their preferences, if leveraged along with associated data about the customer, his/her preferences etc. Customers could be looking at online websites for information or could be polling in social media for feedback and could be talking to other customers, unknown to each other in real life but connected through digital media.This forces enterprises to push out order of magnitude number of differentiated variants as offers. Coupled with behavioral data and profile data, highly customized campaigns can be launched. This is admittedly very different from the traditional means of marketing where lot of upfront efforts go towards deciding the profile of the customers, the focal group for targeting. From a brute force push of campaigns, the model is changing to guided delivery model. This model makes things faster and can cater to complexity of high order effortlessly. And this is akin to agile software development, fast rollout, constant testing and fixing while repeating this cycle.
The next set of challenges revolves around internal issues. Typically in the past, many enterprises have had multiple divisions or centers of power responsible for different set of channel outreach and doing business. In reality, customers tend to leverage information across channels and consummate sale at a channel – typically research over the web / mobile and walk into the store or vice versa. The customers may tend to talk about post purchase experience in another channel altogether. It must be remembered that the customer journey is more important and not necessarily point of consummation or post purchase discussions. Each of the channels would have to play a relevant role in a customer’s engagement journey.Many enterprises complain about taking the first steps by taking umbrage under budgetary needs and legal compliance requirements. Too often, it can be found that this boils to attitude and leadership – these are workable and there are enough impactful working examples of enterprises who have crossed these humps and beginning to get good returns across industries that can be paraded to convince internal powers, if its indeed the case. Pilots are a killer deal inside enterprises trying to push such initiatives and are facing internal pockets of resistance. Either a product line, a limited service, a small geography can be the candidate for a pilot roll out. Such an initiative will provide the enterprise to understand the typical challenges, changes that need to be done to processes and policies, issues around data and discovery and help the enterprise prepare well for the follow on initiatives.
Digital initiative success hinges on organizational readiness, decision mechanism, data and process gearing as much as tools, algorithms and system. As in the classical way of defining success, it’s the direction that matters and not the altitude to start with. A sensible prioritization of possibilities and starting with what is internally accessible immediately is a surefire way of launching such initiatives. Like in the agile model of development, we will tend to see lot more incremental capabilities getting added over time. The philosophy of continual test, learn and redeploy often should be the specified implementation approach. A carefully enacted design leveraging available data can go a long way in setting the stage for the initiative to move forward. It’s shared objective with a firm leadership that sets the tone for the initiative.The troika – data and discovery prioritization, right leadership and teams, philosophy of continual build, test and redeploy are the key tenets that can drive an enterprise to success. The right technology infrastructure is of course needed for enterprise wide success. Likewise, the ability to map a customer journey across channels is a capability that enterprises need to develop. Associated with these are the issues around process and decision making set up inside enterprises given the massive convergence of traditional processes Many enterprises think through their to-be state technology stack encompassing support/ needed technology upgrades for capabilities in data collection & discovery, content management, business models, test and target and go-to-market approach etc. This is a critical process that should be definitely considered and long term decisions accordingly taken.
The leadership mindset inside enterprises need to change as well, for digital initiatives to have legs and gain strong support within. The key thing to note is that digital initiatives are not just one more channel, Like Burberry experienced a massive acceleration in its business, owing to digital initiatives. For almost every business, digital is massive opportunity for growth and future success. For some business, the fact is that digital may end up to be the only way to survive and grow. The leadership team needs to ensure that newer set of processes required to enable success of digital initiatives are adequately supported across the enterprise. True opportunity to transform and provide superior service to customers may get lost, if sufficient levels of executive support is not extended.Another important trait to be imbibed by the leadership team is the ability to work with data and make decisions data driven across the enterprise. Data strategy should should be treated with as much importance as customer experience strategy. This may look a little odd at first, but when the organization leverages digital, scale of operations coupled with variety will impose different kind of expectations and so would need to embrace data centricity as a key tenet of digitalization. Case at hand Kraft Foods. Kraft recently claimed that their easter campaign brought them 23% increased sales in some categories and by April got four times the return on investment. Kraft disclosed that they serve more than six billion ad impressions targeting 500+ customer segments. The average Kraft brand uses data from 10 to 15 custom segments when buying media. It must be noted that without these data, none of the campaigns would be possible at all.|
Sunday, October 19, 2014
The sweeping opportunities arising out of digital centered structural changes in enterprises are really enriching and can create deep business impact in the short and, medium and long-term. The participants in the digital world enjoy high degree of empowerment with a mouse click or with access from any digital front-end device. In the multichannel world, with different ways of participants coming together, a wide range of combination of association get formed across the offline and the online world. Many of the associations will be experimental in nature to start with and over-time the collaboration aspects will become more and more important and will help create value for the enterprise/ecosystem. Seen at a different level, it can be seen that digitalization is substantially changing the ethos of interaction in our social and business lives.
On an ongoing basis, one can see that digital disruption is shifting the sands of the profit landscape as well. Studies show that enterprises that have embraced digitalization report better returns and industries affected by digitalization, by being unprepared have had to sacrifice sales and margins. Clearly, value is migrating and enterprise leaders aren’t always sure if they’re experiencing short-term cyclical change or long-term structural change. There is consensus across the board in may enterprises that legacy assets are losing value and there is a widespread need to invest to capitalize on new, digital-related opportunities. More subtly, companies are developing new digital value in their supply chains and processes. Due to the wide reach and deep impact digital can enjoy, many enterprises are forced to rethink the very nature of their core business.
It’s now well known that traditional barriers of entry don’t hold water with players muscling in with digital at their core of business. Boundaries get distorted, categorization and niche gets torn apart, enabling a new wave of entrepreneurs and getting innovation aficionados into the mix. Digital technologies and their extensions can power a phenomenal range of technologies centered innovations - these could be far reaching in their impacts and can have a powerful cascading effect across the ecosystem. The traditional players face enormous pressure to defend and grow their turf and this collective continuum of changes and their impact - bot for winning, defending and sometimes losing can be termed as “Digital Disruption” . The intensity and the range of time to experience this disruption may change across sectors and geographies. As with any major change, in some sectors, the impact may be large and may be felt at once or over time and in some sectors,the impact may be felt only over time. Some sectors/ lines of business may actually get created because of the digital forces in action.
Enterprises - big and small impacted by the digital wave of disruption have really no choice but to find effective ways to respond to defend or take advantage to grow. With the digital onslaught being so powerful - think CAT5 storm is passing through your region - the impact will be deeply felt. The enterprise response can happen at various levels and typical response would be centered around:
- Reimagining corporate strategies and business models
- Customer centricity
- Revenue stream reassessment
- Cost structure revisions
The winners here take the long view and approach any change top down - with deep commitment and care. The wide ranging impact should factor in the changes needed internally and a clear appreciation of the way traditional business landscape is getting changed - the very nature of demand generation, consumption, competition, communication, customer expectations - all have profoundly changed. The balance of power in the commerce equation between the producer and the consumer is now firmly loaded in favor of the consumer . The wide adoption of connectivity and the resultant wave of information and the ability for the consumers of the information to take part and share their views to the potential next set of customers in real time gave made the consumers the unanointed kings and queens in the equation.
First the issues around strategy - its important to realize that one size fit all wont work for all, this wont work for players even within the same industry - as value chains undergo huge change. The opportunities and threats could significantly change for different business inside enterprises. In recognition of this, the approach to embrace the digital wave has got to be so specific that business need to define the right strategy not just at the enterprise level, but preferably at the business unit level. The core model of operation needs to be reassessed for enterprises trying to embrace digital - in this universe, the power of information and data are so formidable, that many times business integration revolves around different ways of rejigging the information flow and set stage for opportunities to create more value across the chain.
The question at a high level that needs answer for every business is how to positively embrace digital disruption. While, this is a very detailed exercise calling for a rigorous evaluation of possibilities to be engaged in a highly disciplined way - assessing possibilities, opportunities for changing the game and for further upsides in traditional business outcomes, it can be safely said that the key tenet of digital disruption is about the range and amplitude of change that business could experience soon. This also involves assessing the myriad possibilities that can be reaped when powerful digital opportunities get pursued across various business streams. Digital at its heart can allow business by helping them through innovative means to target new customer segments, power new business models and in some cases help create entirely new lines of service for the enterprise. Digital technologies can help enterprises to explore adjacent markets more easily - either on their own or as part of a larger ecosystem. Repeat this for exploring adjacencies in customer segments, geographies, product segments etc. Scaling up and scaling wide can become distinct possibilities for business, when they embrace and get digital.
Already digital promotional/ad spend is becoming a dominant category in an enterprise customer/prospect reach out efforts. These mechanisms help enterprises target newer segments leveraging the ecosystem - search engines and low cost online advertising etc. The data that gets collected will embolden business to more specifically target their customer-base, opening possibilities of cross sell, upsell and rich returns. For example, location information discerned through maps or email usage or spreading content through multiple channels, value added data procured from mobile service providers - all these help in better targeting the enterprise customers. The customer segmentation models gain more maturity by learning from enterprises more focussed on enhanced targeting mechanisms.
Some strategies that help enterprises reach new customers include adequate leverage of the 4P’s of marketing and beyond. For example, social is becoming a significant frontier in targeting - in allowing business to interact directly with customers and prospects and being able to reach out to them at very low cost to the enterprise. With adequate leverage of social enterprises gain much better targeting insights, leading to more better granular segmentation.The highest level of maturity in an enterprise digital journey is the ability of the enterprise to leverage the pervasive digital connections that exist in their ecosystem connecting systems, people, location and things. All the technologies - ranging from smartphones to remote sensors, need to be appropriately leveraged for pursuing strategy refresh, customer centricity, creating new business models. realigning the cost structure and setting up new new streams of revenue. Such measures would collectively propel the enterprise to acquire a digital edge, which it needs to continually review and hone for success.|
Sunday, October 12, 2014
It is now common knowledge that digital is changing the fortunes of many business – impacting both positively and negatively, depending on their level of preparedness to embrace digitalization. In every industry, competing business leveraging digital technologies, platforms and relationship to win over rivals, get more customers and their business and loyalty, and thereby rewriting the rules of competing in business, is perhaps the order of the day.
Reimagining the possibilities for business by becoming a digital enterprise is a key expectation for survival in the future for many businesses around the world. That calls for going beyond creating revenue by mere digital substitution. A digital strategy that focuses on specific business outcomes leveraging various forms of digital technologies can create an edge for the enterprise and in many cases, a sustainable edge comes in where the inane physical resources mutate with the vibrant digital information to create new value. Winners in doing this get there by thinking big and small together transforming processes, creating/validating/rebooting business models and enabling new waves of customer experience. The reality is that any company large or small, old or new can leverage digital technology and principles to create a winning edge for its business and perhaps, its industry. Your customers, your competitors, and your suppliers are all digital now. You can’t address this change with a bolt-on strategy that adds an app here or a site there. You need a comprehensive strategy that embraces both digital markets and digital operations.
Firms like Amazon and Netflix, were born digital — they find embracing these digital principles far easier. Most others strive to have significant digital business and imbibe /embrace digital DNA as their core mantra. For some of them, who were not tuned in, a near extinction threat could be shaking them up. The good news is that, with the body of expertise and collected wisdom available, survival and being competitive is possible like Kodak and Burberry with varying motivations and expectations were able to reorient and restructure their commercial business and have created formidable digital business. The old and well established business of last century or the ones started in the century before are totally capable of successful digital transformation.
Being self-aware is the key to reinventing oneself – this universal principle holds good for enterprises as well. At whatever level of maturity an organization is, digital journey for enterprises would call for substantial degree of change with respect to organizational DNA – this would permeate the culture, organizational structure, operations and governance. As I wrote here, “digital transformation, for a company board or a transformation council could look like a large scale revamp, but in reality, it is a series of coordinated number of changes – on multiple dimensions - across various attributes covering some planned, known unknowns, unknown unknowns - the coming together of this creates a deep impact and effects change, leading into a converged advantage. One can say that the commonality across different true transformation initiatives would rest on ability to think differently about set ways of functioning and willingness and ability to revisit all known models and think and act on them to change to deliver different results”.
There are multiple ways to measure an enterprise maturity and determine the strong and weak points (the most common way to measure is to plot a two- by-two with internal capability vs delivered excellence or capability vs maturity etc). Digital Babies” Digital Natives”, “Digital Phoenixes”, “Digital Masters” etc. are some of the terms used to denote categories, depending on whom you choose to listen to. From Slow moving to Wannabe leaders to Visionaries to Path breaking leaders, the different players can be classified through an assessment. My preferred assessment, as a next step is to chart radar diagrams covering the entire customer lifecycle journey measuring the efficiencies of various attributes along the way and using the outcome to rate against overall expectations. With such classification at hand, depending on the industry trends, a rapid path - either as a protective measure or as a winning measure need to be laid out. The important thing to notice here is no enterprise needs to be left behind in this digital journey lest they suffer extinction over time.
The successful undertakers of the digital journey need to look beyond bolt-on initiatives and look at transformation possibilities holistically, covering digital experience, digital operations and process outcomes. The nature of digital business is such that there are a lot of players/processes that need to be aligned – and some of them could be internal and some could be external involving partners, customers etc. So, the overall ecosystem would matter to get the best experience and outcome to customers. Think travel business or something like how ozon, the leading ecommerce player in Russia achieved success.
The need for holistic view cannot be under emphasized. With the proliferation of digital touch points and increased range of services that customers are beginning to expect, it is unwise to look at each of these as discrete or sequential projects – as such an approach would lead to increased cost and take a long time to deliver overall best results for the enterprise. In an age where time-to-market is a key determinant of success, such approaches are not in tune delivering for the needs of the day for enterprises.
When we digitalize enterprises, we set the seed for destruction of the old practices and policies and instead embed new age practices and leading edge policies. The customer expectations, service levels, support mechanisms etc. substantially change in the digital age and as such, those types of changes cannot be avoided. How do we conceptualize and validate such changes? The answer lays in being able to think for digital solutions wearing the shoes of the customer. Should services be delivered separately or in combinations – should we restrict the combined services to what can be natively delivered by the enterprise or combine them with external services. These types of questions need to be objectively assessed and answers though through – the answers will in turn shape the contours of digital transformation covering both strategy and operations.
One of the defining characteristics of cutting edge digital solutions is the ability to seamlessly weave associated services available with a bevy of partners made into a seemingly single stranded service for the customers – imagine airline ticketing service or financial services like Intuit(Mint) or Amazon marketplace. This is both an opportunity and a challenge – opportunity is to provide service under one virtual roof, challenge lies in integrating a variety of services real time. The customer expectations would not care for challenges though – so long as some other enterprise is able to provide similar integrated services, the baseline of expectations get already set in. The key to note here is that by offering such services leveraging relevant partners/services, an enterprise protects itself from the competitive effects of digital disruptors.
Such an ecosystem of partners sharing data and services protects the players within, overall from competitive onslaught. In every industry, digital thinking for business forces non-linear thinking and the can provide disproportionate returns to the enterprise. As the Ozon case illustrates, the partners can be sometimes competitors but such arrangements done through smart working relationship frameworks can provide great agility and scalability to business and can provide endearing value to customers.For some, such outcome may not be magical – remember, it’s a journey and the game keeps improving. It’s truly transformative for some, but in ways that will feel right and sometimes may not even look so special, given that these may become second nature. Many times, we don’t realize that the future that we envisaged in the past, when it arrives look so reachable and understandable – every enterprise embarking on a digital journey, can feel that along the way, if digitalization is pursued in a vigorous way with discipline inside their respective enterprise.
Tuesday, October 07, 2014
On my flight to Boston, I came across this article titled: We Need Better Managers, Not More Technocrats from Harvard Business Review. This set me thinking for not many articles have touched the issues of digital transformation at its core, in so far what I have seen and so mentally egged me to draw this note. The part of the article that set me thinking started with the perspective: “digital technology is not the true story. Digital transformation is “and adds, “ Leaders need to engage their people in a process of redefining how they work and what their companies do. Digital transformation is therefore the key managerial imperative for today’s business leaders”. This implies that enterprises need more proactive technical and business leaders, willing to shake the tree and get deeper to challenge the established norms of doing business in their respective business. Transformation possibilities come out of beating the status quo and propelling powerful forces forward.
The article adds that those companies that get the greatest benefit are those that:
- Make smart investments in digital technology to innovate their customer engagements, and the business processes and business models that support them
- Build strong leadership capabilities to envision and drive transformation within their companies and their cultures.To my mind, to gain advantage many things need to happen at the enterprise level to deliver sustainable results. It’s not just managers alone who matter, there are a whole host of issues that enterprises will need to focus on, besides leadership commitment.Let’s now focus on what this digital transformation is all about and the range of issues and opportunities that come into interplay. What’s Digital Transformation?
Every transformation efforts brings along with it substantial degree of risk. Digital proponents leverage the fact that the business strategies that embrace. New process models and couple powerful new technologies are transforming the way we do business and the vibrant nature of the marketplace. It’s clear that yesteryears paradigm of economic and business models are too inadequate to secure future years success. New paradigms need to be created, starting with the vision to innovate and enormous energy and skills to stay the course and realize quantifiable benefits. The core ability needed to enable digital transformation rests around customer centricity and a focus on making their businesses different through technology but not per se on the technologies. No technology should be deployed without a fully thought through vision of how it advances business goals, addresses customer needs, or both. Beyond that, technology should be so tightly inter twined with strategy that the two drive and reinforce each other.
Seen at one level, transformation is a proactive process that begins with a large and bold vision centered around making customer linked processed and operations to be made global class and the drive in support of this to effect appropriate changes in the environment. At the highest level, this is the common denominator that enterprises strive to achieve – call out the objective, introduce the variables (exogenic factor) and focus on transforming this into new order of creativity and innovation. To me, digital transformation, for a company board or a transformation council could look like a large scale revamp, but in reality, it is a series of coordinated number of changes – on multiple dimensions - across various attributes covering some planned, known unknowns, unknown unknowns - the coming together of this creates a deep impact and effects change, leading into a converged advantage. One can say that the commonality across different true transformation initiatives would rest on ability to think differently about set ways of functioning and willingness and ability to revisit all known models and think and act on them to change to deliver different results.
Digital Transformation is not a silver bullet, as seasoned business executives would confirm – there is no permanent state of advantage in an enterprise’s digital transformation journey. The true meaning of this journey is that the exogenic factors enables new avenues of powerful possibilities of change and too often this in turn opens the floodgates of passion, creativity and innovation. In a typical digital transformation journey, such release of convergent forces produce massive doses of change on the enterprises model of delivering value, the underpinning culture leading to authentic and visible transformative ways of doing business.
To repeat the often repeated cliché, “Progress can’t be achieved by doing the same things we’ve always done and expecting different results”. It’s plain talk : Unless new, progressive models are employed, true transformation can’t occur. Yet in the real world, its only to be seen that lag metrics centered thinking hold executives to protect the past. An Amazon’s way of thinking and action on growth, investments and customer advocacy efforts would substantially vary with most other business today. But that level of challenging set ways of thinking and busting assumptions are needed to effect true digital transformation efforts that can bring in sustainable success. From incubation to creating a large digital platform at enterprise level calls for ability to both think big and small, deep and wide, create capabilities at scale and target narrow skills in some cases. A clear plan, well thought through investment, and a rigorously focused implementations involving cross functional units are key to rope in success.
Creating an operational blueprint centered around digital ops would become a key requirement to carry forward the journey, an area mostly underfocussed on early on in the digital transformation journey – a big mistake.. A digital operation framework ties in executives to work together across functions to demonstrate early success that enterprise can build on. The to-be state of operation should appropriately balance opportunity upsides, core execution strengths and leverage differentiated business models. As the scale and maturity of adoption of digital transformation inside enterprises increase over time, it will be critical to replace guesstimates with more directly captured metrics leading to set the stage for repeatable, measurable and scalable outcomes.
Why are digital ops so important? Because early success and quantifiable returns feed more momentum and so is important to think through early enough in the enterprise digital journey. A well-executed strategy of putting in place a robust digital transformation framework would enable enterprises to
1) Optimize ROI at an earlier stage in the funding lifecycle of each initiative, and collectively across the enterprise; self-funding models are also being demanded by enterprises;
2) Bring in linkages and transparency between strategies, funding model, execution model including digital ops
3) Relentless prioritization for improved performance, value, and sustainable growth.True transformation entails transforming from outdated methods to new, more productive ways of conducting business to produce new ideas, profound change, dynamic innovation, and sustainable opportunities and all these are directed at enhancing customer experience provides lasting value.
Digital transformation is not a linear process where a step follows another in a predictable way. Parallel initiatives, competing attention needs will be the order of the day inside many enterprises. The advantage is going to be accrued by those enterprises, who envision, plan and execute well leveraging on the rapid advances in the marketplace and behold, we have not seen much here compared to what’s going to come with sensory and analytics technologies providing a whole lot of new perspectives about how much the digital transformation boundaries can be pushed. As I noted earlier, there is a need for enterprises to completely re-visualize the possibilities by becoming a digital enterprise. That calls for going beyond creating revenue by mere digital substitution. A digital strategy that focuses on specific business outcomes leveraging various forms of digital technologies can create an edge for the enterprise. It must be noted that a sustainable edge comes in where the inane physical resources mutate with the vibrant digital information to create new value. Winners in doing this get there by thinking big and small together transforming processes, creating/validating/rebooting business models and enabling new waves of customer experience. Any company large or small, old or new can use this digital technology to create a winning edge for its business and perhaps, its industry.
Saturday, September 20, 2014
I have used Concur system for several years and had seen it evolve over time. Earlier this quarter, when I saw this announcement about Concur, Uber and AirBnb coming together, I knew that they are aiming big, given Concur’s active partnership with the likes of United, Marriott, IHG and Avis. There is definite meat behind the claim that “Concur has developed an open platform to connect the corporate travel ecosystem, such as airlines, hotels and car rental companies in new and innovative ways”. After all big things like industry disruption happens through convergence of forces and in the software and services industry could mean that either a platform or ecosystem interplay bringing in differentiated experience or results. And that Concur was looking for a buyer was there in the air for a while.
SAP buying Concur is a decent positive decision in my opinion. As someone who travels a lot on business, I can tell you nothing endears this class of users than an enterprise class application working with the smooth and suave ways of working with consumer applications. The number of people waiting for such application could run into huge numbers. The scope and reach of this application does not stop with the current outline that we see but can expand horizontally to cover many more things, with substantial scope for innovation and the ecosystem expansion. The target industry is seeing growth in multiple dimensions - players like Uber expanding internationally and the likes of airbnb seeing manifold increase in transactions routed through Concur,indicates which direction things can move -only up.
Look at the SAP enterprise cloud footprint- Success factors from HR angle, and along with Ariba on the supply side and their huge user base leveraging core budgeting and finance apps- SAP is building a rich portfolio. Plus, there’s a HANA angle to this.
- I think HANA powers the analytics for Concur, or else this can happen soon.
- The HANA approach that’s already pushed heavily with SuccessFactors and Ariba will add the non transactional part of Concur - its safe to expect that ConcurInsights will be an early target to move to HANA completely.
- Concur messaging embracing HANA would be an interesting possibility as well.
- At present, Concur has integration interfaces with various platforms -Netsuite, Salesforce, etc including SAP systems.It can be expected that Concur connectors for HANA Cloud Integration , a predictable path simialr to the standardized connectors for SuccessFactors, already in place, gets repeated.
- Concur has some wannabe solutions that could be replaced by larger Ariba network solution in the spend management space and together could become part of the business network solution for enterprises.
-The Concur App Store is impressive and has an impressive array of partner applications. That early vision of building such a tight ecosystem with big and small payers, am sure got Concur’s founders rich returns today, Its not easy as a small niche player to go and sell to large enterprise and consumer players to be part of an ecosystem driven by them.
- With millions of users, now leveraging Concur’s platform , their data analysis on travel and entertainment provides unique insights - such as ancillary expenses are more than main expenses. The range and depth of insights could be a powerful data set that could become a service and a reference benchmark as well.
- The combined power of 50 million cloud users coupled with API strategies that they can be exploited would mean that the platform can substantially expand and begin to create a new robust ecosystem of its own - much more powerful at one level than the traditional SAP core app user base.
While it’s clear that buying Concur may not add to SAP profits immediately while pushing its topline by 700 million USD ,they key to note is that this is cloud stream based revenue and typically would grow substantially faster and is more sticky and predictable. The range of services that can be extended to make user experience more rich, relevant and engaging is enhanced substantially helping launch and release of new features and functions more effective, helping in the process to earn more returns from the customers. This also expands on the impact of SAP Ariba acquisition as the value of the transaction handles increases to 600 billion annually, a very high number by any standard. This is a major fillip for SAP’s foray into digital business, an agenda being pursued for last several years, starting with Ariba. Let’s look at this form another lens - the enterprise software industry is undergoing such a massive change - the speed of the change and the range of the change in the business models are truly mind boggling.
The tech ecosystem is itself changing fast. The rapid convergence of forces make it more potent and the traditional boundaries and model of operation - centralized system to a more open and partnership based ecosystem makes building digital business systems more attractive commercially and more scalable in its reach. While the traditional challenges of integrating Concur teams and solutions will definitely exist, SAP is now wiser having digested the likes of Ariba in the past. 8+ billion dollars for acquiring a company at 10x projected sales is not small money, by any standards. Concur is also the owner of TripIt, a travel management tool that has widespread use. TripIt has been independently run post the acquisition by Concur, and is said to have grown rapidly ever since. The current SAP users or Concur users may not see any immediate benefit of this acquisition, given the evolved services that Concur and SAP have. SAP has made some bold moves to become a player in the cloud space. The greater opportunity for SAP lay in reimagining the complete ecosystem that it has built over the last 15 + years to help in redefining their positioning as the leading enterprise cloud player. Indeed, this is an interesting journey ahead.
Wednesday, February 05, 2014
Karl Heinz Streibich is the CEO of Software AG – a very well-known name in the technology industry has now come up with a book titled- The Digital Enterprise, bringing out the moves and motives of Digital Leaders.
Fellow Enterprise Irregular and a great friend Vinnie Mirchandani has narrated this impressive book due for release shortly. Vinnie shared an author copy of the book weeks back and I was so impressed by the book - read and reread the book and I feel good sharing my thoughts on the book – topic and details therein.
Karl-Heinz Streibich in the opening chapter makes a passionate plea as to why every enterprise should become a digital enterprise. He points out that for several decades IT was used to make business operations efficient and over time felt the need to create systems of differentiation, typically achieved by integrating the enterprise and extending the integration to its ecosystem thereby reducing the barriers to conduct business.More recently, we see leading edge enterprises around the world focus on creating systems for competitive advantage by embracing digitization. Such enterprises, Karl-Heinz points out are embedding technology in their products and services, moving to technology - enabled business models and utilizing technologies to redefine business models and utilizing technology to redefine their distribution channels. And Karl-Heinz emphasizes that this happens in every industry. All IT products are today becoming digital products leveraging the technology growth from internet to data explosion to in-memory computing, big data, digital collaboration platforms and business process management. The entire chain of data generation, data analysis, data based decision making are enabled through digitization and with collaboration and machine-to-machine communications, enterprises gets enhanced power to execute business processes with unprecedented speed and insight, in real time. With the proliferation of cloud technologies, scale out and scale ups of digital programs are becoming an easy option to exercise for most to the enterprises and the journey of IT products to digital products happen rapidly, a phenomenon well exploited by leaders in unique ways across industries.
Focused on enterprise class innovation, the book is littered with powerful showcases – 22 guest perspectives and more than 300 innovation cameos representing more than 20 industries in more than 25 countries – end of reading the book, one gets the feeling of having gone around the world - for a change, across planets. Its magnitude and range is really wide and deep. The range of themes extend from creating smarter products to inventing new go-to-market models to transforming your value chain to reexamining your stakeholders and there are many more that I have not included herein .Some cases therein:
- Coca Cola Enterprises talks about mobility and crowd sourcing being brought together to create new industry frameworks to monitor inventory, shape merchandizing and improve service levels, while increasing operational efficiencies.
- Nissan talks about how by Steering –By- Wire, an aviation feature is brought onto their Infiniti range of vehicles
- A Spanish Auto Insurer shares how satellite technology leverage is transforming their Insurance industry
- Deutsche Telecom talks about how it is transforming itself from a pure communication provider into a new future centric business with innovative offerings
- Siemens AG highlights how Germany’s concept of “Industrie 4.0”leveraging continuing transformations of the internet into a network that lets objects, devices, machines and systems communicating with one another driving fundamental changes and how this could lead to the integration of digital and real worlds on a Digital Enterprise Platform.
- Dr Henning Kagermann, former CEO of SAP and currently president of Acatech, the German National Academy of Science & Engineering talks about how more stakeholders are influenced by technology than in the past and how digital enterprises would need to factor in a much wider set of stakeholders.
The exhaustive cases mostly presented by the enterprises directly make deep impact and helps visualize a variety of possibilities. The best part is that these do not necessarily come from the Silicon Valley, where I live but from industries located across the developed world. These Main Street logo’s are indeed taking “digital” to a whole new level – way, way beyond the plain interplay of social, mobile, analytic and cloud computing.
Marc Benioff in his brilliant preface to the book brings out the point that digitization helps the enterprises to get closer to the customers and are redesigning the future of business. He talks about how GE ‘s GEnx engine –currently flying on Boeing’s new 787 Dreamliner is a connected product that provides real time data about engine performance from both GE and the airline customers to communities of service technicians. Service teams on the ground can access the data while the plane is still air-borne , facilitating a new range of services .Philips , Toyota are all leveraging unique models of digitization to serve their customers better/enable new lines of business for them.
The magnitude of this becomes apparent when a top GE executive writes in the book that in a few years from now 50 billion devices could get interconnected, making giant strides in remote monitoring , self-healing etc. , thereby improving the overall quality of business. These trends will provide for massive paybacks and GE sees US$15 trillion added to global GDP in the next 15 years. That’s the approximate size of US economy today! How can enterprises start their digital journey is a natural question in the mind of everyone reading this – the book promises that any enterprise can master the challenge of reinventing itself as a digital enterprise, The concept of “Digital Babies” Digital Natives” and Digital Phoenixes” provide a context to check an enterprise’s digital journey. The Digital enterprises, the book closes by arguing have to be continuously thinking about their “Next Big Thing”. With increasing customer expectations, competition catching on capabilities faster, ever evolving industry standards and government regulations The pace of technological progress is relentless and the resultant digital enterprise landscape in future will look very different from what it’s today and claimants to the future need to start their journey today and pace up.. or will run the risk of getting grounded fast.
Though a lot of attention these days seems to go to innovation in mobile and social technologies, plenty of complex, hairy “industrial innovation” is also going on. This is encouraging because we face a daunting series of challenges at the global, enterprise, and individual level. We need winners leveraging digital forces and come out successfully to help deal with a range of challenges – big and small, of various size and structures and across geographies. Let's looks at the new business that are shaping many emerging industries - The successful enterprises spanning established corporations to upcoming start-ups—are creating incredible value by succeeding in a new way: by bringing together various streams of technology to create new form of processes, products and services to create value . These are the poster child of digital enterprise success.
The key learning’s for me out of reading the book is the need to completely re-visualize the possibilities by becoming a digital enterprise. That calls for going beyond creating revenue .by mere digital substitution. A digital strategy that focuses on specific business outcomes leveraging various forms of digital technologies can create an edge for the enterprise. It must be noted that a sustainable edge comes in where the inane physical resources mutate with the vibrant digital information to create new value. Winners in doing this get there by thinking big and small together transforming processes, creating/validating/rebooting business models and enabling new waves of customer experience. Any company large or small, old or new can use this digital technology to create a winning edge for its business and perhaps, its industry.
What I see in the book,The Digital Enterprise are a rich set of examples and metaphors that talk the story of entrepreneurs, business leaders, and multinational companies innovatively leveraging technology to tackle big problems, “grand challenges,” In their own ways, these big and small enterprises in their spheres of influence are reshaping the world
Monday, November 12, 2012
The US Election results and the process have created worldwide impact. Not only it was noticed for electing someone for arguably the most powerful office in the world, it brings along with it many innovations and advances. In 2008, when Mr. Obama won the elections for the first time, it was very clear that technology played a substantial role in his assuming office. We saw in 2008, that online world was leveraged in a big way in the campaigns for a very successful outcome,. In the just concluded 2012 election, clearly data, data insights and data centric predictions played a very big role in shaping the election outcome. Lot of deserved kudos went in the direction of Nate Silver for his super accurate predictions of the election results based on data insights. Many people looked at it from different perspectives. Media industry focused on how works like this will in an of itself influence the media coverage of elections and assessment of preference trends in election. Nate is the author of Amazon best-selling book, “The Signal and the Noise: The Art and Science of Prediction“. In the days leading up to the election, he was on every major media show, explaining how a detailed analysis of huge amounts of data, distilled from many different sources, enabled him and his team to predict with a fair degree of confidence and certainty what would happen district by district in the US elections (It’s actually a great reward to see this appearance of Nate Silver, on Stephen Colbert’s story show, reported by the LA Times). Very clearly, he was accurate to the last level of detail, in an election when the swings were noticed by both and in the days close to the election, the “momentum vote ” of the challenger was supposed to be mucking the trends.
A lovely article by John McDermott at AdAge brings out that Silver’s work will help transform the shift the “touch and feel aspects” of reporting to reporting that is anchored in data - facts & statistics. The article quotes ComScore’s Online traffic analyst Andrew Lipsman as saying , “Now that people have seen [data analysis centered political analysis] proven over a couple of cycles, people will be more grounded in the numbers.” Chatter in the online world quoting Bloomberg as the source suggested that , Barack Obama’s site was placing 87 tracking cookies on people’s computers who access the site. Mitt Romney’s site was placing 48 tracking cookies on people’s compute. Tarun Wadhwa reports at Forbes that the power of big data has finally been realized in the US political process:
“Beyond just personal vindication, Silver has proven to the public the power of Big Data in transforming our electoral process. We already rely on statistical models to do everything from flying our airplanes to predicting the weather. This serves as yet another example of computers showing their ability to be better at handling the unknown than loud-talking experts. By winning ‘the nerdiest election in the history of the American Republic,’ Barack Obama has cemented the role of Big Data in every aspect of the campaigning process. His ultimate success came from the work of historic get-out-the-vote efforts dominated by targeted messaging and digital behavioral tracking.” This election has proven that the field of “political data science” is now more than just a concept – it’s a proven, election-winning approach that will continue to revolutionize the way campaigns are run for decades to come. It is common knowledge that the campaign had been heavily leveraging the web platform in very many sophisticated ways. The campaign spectacularly succeeded in integrating political infrastructure with the web infrastructure that they managed to create. A peer-to-peer, bottoms up campaign seemed to be the strategy that finally delivered results. Volunteer participation, feedback synthesis and citizen vote drives were successfully brought out in massive scale hitherto unknown with the web platform. The campaign heavily shaped by the power of social networks and internet energized the youth power in unimaginable ways signifying the triumph of technology power. It’s a treat to watch : Mobile, Social and Big Data coming together and making an impact in this presidential election 2012.
Let’s look at the complexities involved in this exercise : There was a notable shift of demographics in America resulted in the traditional vote bases being less influential (this trend will continue dramatically in the future) – the absolute numbers may not have come down but the proportion in the votable base lowered somewhat –leaving the destiny in the hands of newly emerging swing voter base. Technology played a significant role in doing the rigorous fact checking – imagine during a presidential debate – typical citizens were looking at fact checking analysis in their other screens while watching the debate on the television. Pew research found that many were looking at dual screens while watching the debate. All well, till one looks at the paradox here – as more and more effort is made and money is spent to flood the media with political messages, the impact is significantly less, as people don’t rely on a single news source. Many American homes today are getting to embrace the “four screen” world (TV, laptop, tablet and phone, all use in tandem for everything in our lives) and so the ability to create impact on any promotion is actually becoming tougher and tougher (to create positive impact).
This is observed along with the fact that the U.S is also undergoing a deep structural and institutional change, affecting every walk of the American Life. While the online world is growing, it’s a common citing in the cities and downtowns where one can see established chains closing shops, unable to hold on to competition striking at them from the cyberworld. Trends like this clearly influence the economic role played by different industries, trends in wealth creation, job creation, city growth etc. Younger voters are more clued by default to these changing trends and their impact and so begin to think of their prospects from a different prism compared to older voters, who generally hold conventional views and so this further creates a deeper strata within the society.
Time Magazine has Michael Scherer doing an in-depth assessment on the role big data and data mining played in Obama’s campaign as well. Campaign manager Jim Messina, Scherer writes, “promised a totally different, metric-driven kind of campaign in which politics was the goal but political instincts might not be the means” and employed a massive number of data crunchers to establish an analytics edge to the campaign. The campaign team put together a massive database that pulled information from all areas of the campaign — social media, pollsters, consumer databases, fundraisers, etc. — and merged them into one central location. The current US President’s (Mr.Obama) campaign believed that biggest institutional advantage over its opponent’s campaign was its data and went out of its way to keep the data team away from the glare and made them work in windowless rooms and each of the team members were given codenames. That in and of itself signifies the importance the campaign attached to “Data – Big Data”- that’s!
Scherer adds: “The new megafile didn’t just tell the campaign how to find voters and get their attention; it also allowed the number crunchers to run tests predicting which types of people would be persuaded by certain kinds of appeals.” Scherer’s piece is an astoundingly fascinating look at how data was put to use in a successful presidential campaign. The election results are in a way a big victory for the nerds and big data. Similarly, some time back there was a sensational article on how Target figured a teenage girl was pregnant even before her father could find it. Inside enterprises, there must be big advocates to create frameworks to get to we are big advocates of the “know everything” through the world of data and align the business to succeed.
Large-scale data gathering and analytics are quickly becoming a new frontier of competitive differentiation. While the moves of online business leaders like Amazon.com, Google, and Netflix get noted, many traditional companies are quietly making progress as well. In fact, companies in industries ranging from pharmaceuticals to retailing to telecommunications to insurance have begun moving forward with big data strategies recently. Inside business enterprises, there’s a similar revolution happening – collection of very fine grained data and making them available for analyses in near real time. This helps enterprises learn about the preferences of an individual customer and personalize the offerings for that particular customer /unique customer experience that would make them come back again and again to do more business. Practically speaking, one of the largest transformations that has happened to large enterprises, has involved implementing systems, like ERP, enterprise resource planning; CRM, customer relationship management; or SCM, supply chain management—those large enterprise systems that companies have spent huge swathe of dollars on. These systems typically manage operations extremely well and then set the stage for enterprises to gain business intelligence and learn how they could be managed differently. That’s where Big Data frameworks come in handy and it’s up to business now to seize that opportunity and take advantage of this very fine-grained data that just didn’t exist in similar forms previously. Too few enterprises today fully grasp big data’s potential in their businesses, the data assets and liabilities of those businesses, or the strategic choices they must make to start leveraging big data. By focusing on these issues, enterprises can help their organizations build a data-driven competitive edge, which in this age is clearly a very powerful determinant of success.|
Friday, November 09, 2012
Look at this – like the proverbial death by thousand cuts – the cloud services can really disrupt the carefully laid out enterprise IT strategy much to the discomfort of the IT department – the disruption can range from enterprise IT strategy leading to shared services mechanisms. Everything changes from sourcing to provisioning to metering through consumption. It’s needless to emphasize that the cloud services can be made operational for enterprises rapidly and in many cases more economically. In the journey of cloud adoption inside enterprises, it must be noted that in a number of cases that the business executives can, and do, buy them independently of their IT department’s plan. This is partly accentuated by the fact that there exists an ever widening gulf between the innovation cycle-time of the IT department and of cloud services providers. One should see this in the background of constraints centered on budgeting inside enterprises.
There are well meaning advise being dished out by the experts – essentially advocating that enterprises first get their feet wet with cloud services, gain a reasonable perspective of where cloud services could fit in for their needs – fully understand their risks and benefits.. This is well meant as sometimes in their over enthusiasm they evangelists tend to created many solutions that may be fragmented with unmanageable information flows. Sometimes, an inelegantly architected solution could create fragmentation in the landscape, accentuating the challenges of information flows and vendor relationships. On the other hand, a well thought out cloud solution can provide an elegant architecture that can help organizations scale well and provide consistently reliable performance. IT department inside enterprises should regularly factor-in the strategic leverage of such solutions that should take stock of big picture thinking and long term plans for the enterprise. This in turn would enable the IT departments to feel on top of IT Management. The key strategic perspective here is that cloud services would imbibe the benefits and wisdom of looking outward at the sea of opportunities.
Like any major initiative, no doubt, cloud services will benefit a set of users and may provide disappointing results to another set of users. From a strategic standpoint, it may be even be the cases that while a majority adding cloud services as part of their IT strategy will yield good results, but for a small number of players, it may pose greater threat than providing an upside. A structured framework should be used in assessing cloud readiness inside an enterprise to align them into a coherent IT strategy. Well thought out cloud services within the enterprise would bring more clarity and method in assessing their effectiveness therein. All these clearly point to the fact that the chariots of cloud are hitting enterprises around the world and an unexpected casualty in this process happens to be the traditional IT department. With business and external service providers beginning to play such an important role inside the enterprises, should this trend continue and become a mainstay practice, the role of the IT department gets more and more tough to retain their crucial positioning inside the enterprise, and would force them to act in way more and more strategic to retain their standing.
Forward looking IT departments address these challenges as opportunities to get more strategic to the enterprise – one of the most common approach employed by these firms is to either on its own or in tandem with business initiate a detailed assessment of the enterprise cloud strategy – what part of the business and IT could leverage cloud services , what part of the IT portfolio could get affected, what should be done short term, medium term and long term, what type of risks and benefits would different scenarios provide and what type of governance would best suit the enterprise. By being in the forefront of such strategic planning initiatives, and thereby putting themselves in the center stage of things, some IT departments manage to retain their positioning inside their enterprise.
If IT can position the company for a transition, it can rightfully take the role of an anchor facilitating change to make business successful rather than a drag holding back progress . Contextually, if it can be determined early enough that leveraging cloud services can provide flexibility and be more economic overall, and with the right security models of implementation then it actually provides IT a big opportunity to make such services become a platform of growth for the enterprise and if IT can push such an agenda and deliver successfully, it becomes that much more strategic to the enterprise. End f it all, cloud is a democratizing force where access to resources gets more widespread and readily available at typically lesser cost of access. IT will have to recognize this shift and make the right moves.
Every CIO and business leader inside enterprise would want their IT organization to be more proactive and get outside of being in the reactive mode. The ability to shift gears to move from being in a reactive mode to get to a proactive mode is generally a very carefully calibrated journey. Every IT department inside enterprises that have been in existence for a while faces simmering tension with business over complex systems, inflexible, inextensible and come in the way of enterprise getting agile. While business expectations have by-and-large grown from looking at IT to support their operations – it’s moving towards enabling more rapid delivery of services and applications to powering or enabling business. The classic ratio of investments to support past decisions vs investments needed to provide innovation/new lines of service is always a hut button issue inside enterprises. Its well known that reactive organizations end up spending more than 2/3rds of their IT investments in managing legacy infrastructure and applications and the remaining budget mostly get consumed in expansions/extensions/upgrade, leaving very little resources to support building new expertise to support emerging opportunities.
Globally, business is challenged on cost, time-to-market and on being able to adjust to market realities at a rate faster than the rate of change seen in the marketplace. New business models, innovative services, self service mechanism, online order fulfillment – most of these heavily rely in IT and would not be possible without IT contribution. It’s not uncommon to see cloud making its footprint inside enterprises very opportunistically (many times under the radar that IT doesn’t get to know after these are up and running inside enterprises). In such cases, it is noticed that business functions directly have procured cloud services including consulting support from external partners. Typically, it can be seen that business teams indulge in such practices, owing to perceived inefficiency /poor service level adherence of IT inside enterprise. Many times, IT architecture team use their architecture and stack standardization as a defense weapon to block external partners providing new types of service that business find attractive to leverage. Sometimes, IT is not even ready to structurally accommodate new cloud service partners –as it may call for changes to their processes, support levels and in some case contractual adjustments tied to support functions and financial models in place.
It then begs the question what can be done make IT move away from being reactive to be proactive. Redefining the ways of working, leveraging the foundation of cloud services for making business get flexible and grow faster, nailing down the right security model and architectural fitment will provide IT with huge headstart in changing itself and in changing the impact that can be made to business. Some of the specific ways in which these can be build include but not limited to are as under: • Actively continue making investments in cloud services and work towards creating a cloud services centric foundation for growth; • Proactively co-opt external partners in the growth, innovation story of the enterprise; • Actively enable more and more self service functions, that provides business with lot more benefits that would catapult IT to be a larger strategic partner for the enterprise; • Innovate around the charge mechanisms – by changing the measurement mechanisms and move towards more and more variable pricing model – the benchmark here would be to identify cost of service that business consumes; • Heavy automation of IT functions with ability to self monitor and correct thereby increase IT reliability that business experiences. Forward looking enterprises have their IT focused on leveraging cloud to create more value for business by changing the processes, technologies, level of dependence on IT
A combination of factors like new investments, higher degree of automation, new business models etc go towards getting more value from IT. True cost of operations that can come out of redefining the measurement system helps both business & IT to optimize resource allocations and plan better for growth. The loft goals set by CIO’s in general revolve around being the change agent for growth and being able to transparently provide benefit analysis enhances the stature of IT inside enterprises and play a defining role in future –proofing their roles inside enterprise.The first part of the article appeared here |
Thursday, November 08, 2012
Just returning from an intense workshop with a customer on their future IT plans on spending and mode of operation . The meeting reinforced amongst other things that in the world of business, in some pockets men and women who are smart otherwise somehow fail to fathom the complexities in the area of business processes and therefore fail to provide for efforts needed to drive transformation inside their respective enterprises. Substantial number of executives regard technology and process evangelists as “ silver bullet holding parachute jumpers ” – people who land from sky and offer them their so-called “silver bullet” solutions. Are process transformations touting cloud evangelists in this category? Perhaps. If they influence the organization sufficiently to look at powerful enabling technologies and intertwined processes as the harbinger of innovation. Seasoned business and IT executives have a way of managing such class of consultants – they simply turn off on such views. Cloud services evangelists, however, are a much bigger problem because they proffer pervasive organizational disruptors – preassembled bundles of people, processes and technology – not plain technology point solutions. One of the fascinating aspect of cloud solutions had been the unexpected empowerment of business in embracing state of the art solutions at varying scale promising piecemeal to holistic organizational disruption to executives throughout the enterprise. In a number of occasions, IT is forced to act under compulsion aka align to the business identified/owned initiatives. The IT department inside every enterprise needs to buckle up. The changes are going to be far more sweeping than imagined and the balance of power could be seen to be decisively swinging towards business. The hold that IT had on provision of services for enterprise is certainly getting weaker atleast in respect of new initiatives/transformation centric initiatives. In such a context, IT inside every business need to map out their own vision and draw programs to maintain their leadership and in some cases their relevance inside the enterprise. Have no doubts.The IT department must change its outlook to retain legitimacy and authenticity inside the enterprise.. It is being challenged in its role as the key provider of services for the business in the enterprise and clearly a new crisis of relevance is popping up – the IT departments need to respond comprehensively with a solidified plan.
This is quite paradoxical but unfortunately very true. The IT industry has traditionally enjoyed (at least in the last 10-15 years) as the pace setter for introducing change and ushering innovation – be it in terms of enablement of core business, or powering new models of business or in terms of supporting existing mode of business more efficiently. Inside many enterprises, keeping step with the changes in the fast moving IT industry solutions were mostly challenging for business – be it in terms of technology, mode of operations or being more efficient, more agile - all direct contributors to business success. It has been a constant practice to see that executives being in the back foot desperately trying to catch up while implementing yesterday’s wave of innovation enabling technologies while noticing the next distracting wave of today while awaiting/ thinking through the next wave of innovations that are in the anvil.
In doing all these things, many businesses are tempted to call vendors and the evangelists selling/propounding new solutions as FUD agents thriving on creating confusion with the promise of an ever increasing range of new and sometime innovative solutions. In this journey, some executives inside enterprises look at cloud technologies as very appealing as it promises: A. Progressive investments as the solutions rolls on; B. A huge swathe of hitherto unimagined levels of control to business, sometime s even bypassing internal IT. All well here, but for the vendors over-hyping the benefits of narrow solutions and they typically tend to highly understate the costs, risks and complexities of implementing such solutions. Traditionally IT initiatives backlogged organizations (in terms of IT/Process adoption), are naturally attracted to such vantage propositions - so much so , overtime, enterprises begin to understand how an hasty adoption based on such promises could inter alia cause more harm outweighing the potential good. Most IT executives have, however, worked out ways to manage these good samaritans. They ruthlessly control the enterprise IT strategy and procurement activity. Some find innovative (originally unintended) defenses in the form of the mantra of “consolidate, rationalize, standardize, retrofit, retire, re-factor” as a defensive shield. With such a powerful fortress, their way of managing is to not entertain details discussions of these tastes of the day advances thereby protecting their turf.
But it’s always a tussle between future proofing an enterprise Vs failure proofing an enterprise. This new age proponents of advances Viz Cloud services have a different way of interjecting themselves inside enterprises – they are changing the rules of the game which had traditionally empowered the IT departments. They now directly deal with / create a sphere of influence much beyond the defensive fortress of IT divisions. The nature of the beast( cloud services) is such the reach can’t be stalled - like some aroma that appeals to the olfactory senses even without being visual, cloud services parade themselves of having greater transformative potential with far reaching benefits than the bare bone cloud technologies from which they are assembled. This calls for a calibrated response to leverage their true strengths. Fresh perspectives are needed to manage the onward journey of cloud powered transformative services inside the enterprise.
Let’s now characterize what makes the cloud services so powerful in their appeal and reach.The first and foremost characterization of the cloud services lay in the fact that a mature, enterprise-grade cloud service is vastly different from traditional IT / Business solutions – an evolved cloud solution brings together a nice combination of pre-assembled/ custom bundle of people, processes, and technology – rather than a new technology building block. The appeal of the cloud services is not just in its raw power – but in using the advances in technology to provide differentiated services enabling new ways of working for the adopting enterprise. In doing this, they seem to override the carefully built plans centered around strategy & architecture and extending further in some cases , the cloud replaces the traditional IT’S role as a provider of compute, storage, network (infrastructure) and application services. Why are these services so different and how different ate these form the other advance that the IT industry keep rolling out. The cloud services in full display of their might do indeed pose a significant challenge to the in-the-comfort zone- status-quo seeking IT department . Typically status quo manifests itself as internal sub-scale, under-invested, and under-skilled/ hardwired IT shared services arrangements. A deeper assessment shows that compared to a range of many prevalent enterprise shared services, in a number of cases, the leading edge cloud services are better optimized shared services that actually deliver better bang for the buck, more flexible, and bring in empowerment to enterprise and their customers. This takes the myth head on: flexibility and choice can’t co-exist with economies of scale and a wide range in functionalities. It will behoove enterprise and their IT to seriously assess suitability of cloud services for their immediate and future needs and not dismiss them off hand. They need not be resisted but should be considered for suitability.|
Wednesday, September 19, 2012
I attended Dreamforce 2012, Salesforce.com’s 10th annual user conference, in San Francisco, and came away feeling very positive about the company, product and the possible solutions that can get conceptualized. With ~90,000 registered attendees, 350+ partner companies and ~750 sessions, Dreamforce 2012 could very well be the largest user conference by any IT company ever on earth. From a day filled with so many sessions, conversations and demos, the key takeaways:
1) New product Community, based on Chatter technology, will become the bedrock of external facing customer and partner on-line communities. This will not only have the effect of replacing old portal products, but also make external facing CRM functions to be more social, and for business create avenues for generating new revenue streams.
2) Work.com, a major area of investment for Salesforce.com, aims to transform how work is organized and managed by present day businesses. A tight integration between Work.com with CRM applications could increase the productivity and effectiveness of sales/marketing/service operations.
3) Radian6’s, which SFDC acquired last year and is gaining lot more teeth with more integration with other SFDC assets -in the process the Marketing Cloud story gets more powerful, potentially tapping the multi-billion business potential therein. Through Buddy Media, Radian6, and CRM platform integration, Salesforce.com offers a product differentiated through its breadth of features.
4) The Service Cloud is getting more and more powerful with lot more focus on making it broad based and feature rich.It’s now clear that Service Cloud’s social and mobile focus will certainly position it to capitalize on a large market opportunity and develop into a $B business.
5) Salesforce Touch, and Data.com, Social Key: Salesforce Touch, powered by HTML5, expands on salesforce.com‘s native mobile strategy and will bring Salesforce to any mobile device—this is regardless of platform—and empower sales to collaborate on deals anytime, anywhere. And Salesforce Data.com Social Key will unite the best context from social networks with traditional company data, enabling enterprises to build stronger relationships with customers and close more deals, faster.
6) Salesforce Chatterbox: Salesforce Chatterbox will deliver simple and secure file sharing across any device with the proven trust of Salesforce. With Salesforce Chatterbox, people will be able to manage and share files in the context of their business.
Chatter based Communities for customers and partners It may be noted that Chatter( aimed at facilitating internal employee collaboration) has achieved significant adoption since launch two years ago with a little less than 200K company networks till date. It appears that SFDC s leveraging Chatter technology to enable more of customer and partner facing functionalities. Along came the announcement that a new product called community will be launched in summer of 2013 that will power various online communities for enterprise critical functions such as customer service, channel partner collaboration, marketing engagements and enterprise sales execution. Chatter is now broadbasing its role by essentially becoming the platform technology that infuses various external facing CRM business processes covering different stakeholders of the enterprise. The roadmap descripton shows that this new Community product will entirely replace the old customer portal or partner portal products - a big shift appears to be in the offing here. Although so far Chatter has primarily been used as a tool to increase the customer engagement with CRM apps, with this annoucement of Community, it’s also clear that Salesforce.com will take the next big step of directly monetizing the Chatter technology with separate licensing. Chatter is indeed making the entire CRM function to become more social and collaborative for all participants- covering all the stakeholders -customers, partners and employees.Work.com is focused on transforming how work is organized in modern companies Rypple is now rebranded to Work.com to reflect the broader mission of re-inventing how work will be organized and managed in companies in the future. Instead of hierarchical org chart with command and control style management, as seen in tradiitonal entperise software implementations, Work.com professes a different approach that is based on organizing people in flexible workgroups and networks that are more conducive in accomplishing goals and tasks. Today, Salesforce.com claims that it has already adopted Work.com among its multi-thousand employees to enable a more network based organization with better goal setting and collaboration, continuous feedback and performance recognition, and claims to have reaped positive returns in the form of increased sales productivity.The close integration between Work.com with CRM applications could also increase the productivity and effectiveness of sales/marketing/service operations. Work.com is one of the big annoucements in Dreamforce this year, and all signs indicate that Salesforce.com can build out the service to be yet another significant business segment over time.
The Big One: Marketing Cloud As per data shared by SFDC, currently 65% of marketers feel pressure to improve social media effectiveness, and 48% feel pressure to report quantified outcomes of social media marketing. SFDC has sensed correctly so that this will be a big area of focus for enterprises to invest and reap returns. Marketing Cloud is well positioned to address these top concerns by marketers. Marketing Cloud ties together some existing Salesforce products and delivers the key outcome that businesses need in the social age – the ability to initiate actions, measure, and react to external social influences. The story here is that when marketing cloud is enabled along with the monitoring aspects of social and when tied to actual workflow and automation, Salesforce provides a end-to-end solution that will lower the barriers to entry into the social realm for its enterprise customers. Through the Buddy Media and Radian6 integrations, the Marketing Cloud offers a more comprehensive product - enabling both creating marketing content and mining marketing intelligence data, all integrated with the core CRM platform. This is a powerful combination when it works effectively for enterprises. Radian6 enables enterprises to keep an active pulse on customer sentiment and use data to drive launch and content strategy. With Radian6 enterprises can generate reports including volume, geographic location, age/gender demographics, word cloud charting, and volume of positive and negative social comments. The integrated functionality can help enterprises respond to social media mentions across a variety of channels from a single operating platform . If cases get raised through the CRM, they can be automatically routed to relevant departments such as sales or customer service depending on key words/tags/attributes in the social post. This integration is a key differentiator for the Marketing Cloud, creating synergies across CRM’s product portfolio and broadening the product footprint.
Service Cloud adoption on the rise Service Cloud is well positioned to become another mega business over the next several years. The product itself is getting better with time and with a number of success stories around the world, this is only gaining huge momentum. One of the most notable feature is the 3rd party application integration, as it allows a company to incorporate in-house or industry specific applications in the Service Cloud interface, dramtically expanding the reach of the application. The more powerful part of Service Cloud : Integration across multiple channels (web chat, email,phone, video) permitting cases to be managed across various channels from an an integrated mannner. The social dimension kicks in here with the launch of features like live news feed - these can push urgent notifications from multiple sources directly to the agent, empowering the agent much more in the process. Integration with Radian6 also allows rapid response to social media posts on Facebook, Twitter, and other social media channels. Like in every other part of SFDC product spectrum,the emphasis on mobile and tablets were clearly seen as coming - and SFDC higlights that the interface experience through tablets would be identical to the desktop experience - an important one as mutiple tablets are enabled within the larger SFDC platform.
Salesforce Touch Experience Salesforce touch delivers on Salesforce’s long opined perspective that the future will be delivered over multiple devices and in multiple contexts. They were arguably the first company to really recognize the enterprise value of the tablet, and touch will enable their customers to deliver highly contextualized applications to their staff and stakeholders. Similarly with Chatter Communities we see Salesforce spread a fabric of social engagement outside of the organization itself and create continuity across the spectrum of customer to vendor touchpoints. And Data.com Social Key simply allows the organization to move away from the current paradigm where enterprise contact data is seen as distinct from external contact data – rather the two things will be merged into one global contact – the way most of us work in our day to day lives.
Other significant announcements
• ChatterBox enables content to be deeply embedded within an enterprise application and ChatterBox does this. As it can be seen, content is an integral part of core workflows and processes and not something in and of itself. Well evolved deep integrations of third party applications can be a very compelling model for content management, but a native product brings with it huge advantages. • The new Salesforce Identity will deliver “Facebook-like identity for the enterprise,” a single, social, trusted identity service to access and centrally manage every cloud app. With nine major enterprise cloud platform services, companies can now accelerate innovation and deliver next generation social and mobile apps with unparalleled levels of speed, mobile and trust on the Salesforce Platform. • Heroku integration with the Salesforce assets will now be enabled through the newly developed identity that works across all Salesforce assets as well as integrate across clouds – in a manner similar to Active Directories within the enterprise but the scale here can be really much large.
• Shift from transaction to engagement. CRM traditionally focused mostly on the customer management, and later evolved to cover functions like relationship, service etc. Shift forward to engagement strategies point to a move towards bi-directional conversations, unstructured information, and models of influence.
• The distinction between consumer and enterprise is slowly melting away – In other words the consumerization of the enterprise is becoming more and more real.
• The emergence of customer experiences. CRM/Front office system’s typically covers SFA, marketing, service, eBusiness. Integrated customer experience is a reflection of aligning the front office and back office functions to provide an unbeatable customer experience.Salesforce.com is attempting to address all the components here that make up the fabric here. Seen from that perspective .With so may well thought out improvements and enhancements, Salesforce now has all the ingredients to become the enterprise nerve center – after all, enterprises want to make all part of the organization to be ready and work in tandem to respond to business needs and here SFDC provides a wide coverage and should therefore become more and more critical to the business teams. |
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