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Sunday, January 08, 2012

The Next Wave Of Technology Led Business Gains

I was in a long conversation with the CIO of Fortune 500 company recently and invariably the conversation turned towards how much it is becomimg difficult for IT organization to continue to delight the business – the world of business itself is undergoing massive changes while the world of technology is also changing very fast. The IT organization is supposed to be on top of these whirlwind of change and continue to support the current and also be the enabler of change for the future. All this when dollars and cents spent on IT matters more than ever. This week, as I finished by keynote address at PSGTECH and sat for questions, more and more of this began to look clear to me.

Let’s look from the outside – what are the contours of deep change that need to be understood to remain relevant for today and stay competitive. Starting from the dawn of this new century, there has been a deep rooted shift in the sphere of IT innovation. Earlier, the new technology/product/systems that hit the market set their foot mostly at the Fortune 500 companies ( typifying high spend, highly mature, high growth areas of applied IT innovation). Then the medium sized enterprises would try and adapt those systems and the SOHO, Consumer segments would get to use them in time. This flow seems to have reversed noticeably in the last decade. It may not be an overstatement to say that today we see that more cool and modern technology tends to get adopted and popularised at the consumer, SOHO end of the spectrum before moving onto the late adopter class : medium and large enterprises.

It may be too tempting to dismiss such claims as outlandish or not based on limited set of data – but unargualbly the trend is set and widely recogniseable. This can also be seen by some as not a matter of great concern ot the large enterprises. For some inside the large enterprises for decades such things have never nothered them – after all they are the biggest spenders of IT and have traditionally leveraged IT substantially with proven methods of success. For some inside the enterprise, the consumer centric services like social sites games are all mindless distraction and these should find no place inside the large enterprises.

Whats my view on this? Are the large enterprises correct in taking such a “Prim & Propah” view? No – An emphatic and clear “NO”. What’s happening in the Consumer, Social, Mobile space is nothing short of creating a new paradigm of doing business – it’s like as if a new set of DNA strands are coming together to create a new organism per se, Nothing sort of this. Those enterprises that fail to recognize this or choose to not participate in this journey would be missing out a huge chance of business success potential.

Let’s look deeper here: The Twitter, Facebook. Google Plus and Mobile are actually creating a new sort of connected world, wherein new rules of presence, social relationships and collaborations are getting shaped. Needless to say that these new rules would be the drivers/enablers of innovation and competitive success for tomorrow. And that big enterprises would approach that tomorrow faster than they have seen at any point in time in the past would approach The digital natives who are at the forefront of this revolution, would never allow this journey to be slowed/halted. For big and medium enterprises that is following a “Wait & Watch” attitude, they will be failing demonstrably in their abilities to reach out to a new generation of customers/stakeholders, who are beating their drums to a different future. And inside these enterprises, a phenomenal opportunity to redefine ways of working and foster effective collaboration would get lost if large and medium enterprises don’t adopt this quick enough.

Enter the world of connectedness: by Social - from car buying to university selection to travelling to holiday shopping to medical concerns, the world is getting engulfed with social tools and mechanisms. Look deeper, at the heart of the social phenomenon: In one sense, the people who matter, the consumers – they are connecting with one another in an unprecedented manner, creating a vast and efficient network of information that shapes and steers experiences and markets. What do they get out of this: The participants are beneficiaries of a new genre of collective intelligence that informs and guides people in real time in a myriad number of ways. By making available a platform that is universally accessible – which facilitates discussions of the experiences consumers have had with brands, businesses, a new we have created a new world of consumer influence.

The consumer world has adopted this world much faster than expected right from Googling to get an instant answer to points of interest, doing comparative shopping, assessing medical facilities to electronics shopping to university education comparison. One can see a pool of like oriented people sharing their views, out of which any information seeker can draw appropriate inferences. All at a click away, in a realtime basis.

Now lets turn our attention to look at the enterprise in the same perspective.

From the industry supply side, it can be seen that the enterprise software industry can't avoid the glaringly noticeable trend therein. This is an industry - seen as ever-maturing by some and "never maturing" by others - and an ecosystem that is demonstrating growth indicators which are now becoming visible to all observers. A range of data clearly supports the notion of growth: starting from value added by the industry over the last few years - take the number of people that the industry employs, the projected growth rates, the capital outlay for the industry, and so on.

The consumerization of the enterprise is moving ahead at full speed and may become irreversible. While some enterprises are experimenting with this –wherever adoption has happened the surge in interest appears high promising to make the adoption of such technologies faster and deeper within enterprises. The interesting part of the equation is that a number of newcomers are coming with a variety of solutions but enterprises see before them humongous opportunities for differentiation and for fostering competitive advantage in adopting such technologies.

Most of the enterprises are still in a slow adoption mode. Are enterprises looking at moving beyond email as the standard way of communication? Most of the CIO’s/ IT department take a big breath before trying to introduce any new technology inside their enterprise. It’s a classic problem – 75% or more of the enterprise IT spend goes towards supporting investments/assets built in the past aka legacy systems. How does enterprise get to attack this cost structure. What’s the magic wand to make the enterprises adopt technology at the same speed as the consumer world is embracing.

Clearly the answer lay in a combination of vendor lock-in mechanisms and data lock-in mechanisms. Vendor lock-ins are getting manageable with the body of knowledge in how to manage them having improved substantially over time, question that begs an answer is what is data /information lock-in? It’s clearly the system of record. In a number of conversations with CIO’s who want to move ahead and try new technologies the defining question that gets raised is my backbone systems should not be tinkered with while you build a jazzy front office apps using collaborative tools and mechanisms and then the question is how much more can the whole thing put together be more effective.

If you examine closely, the system of records that anchors the enterprise system internally ( which used to help in creating leading edge enterprise solutions) though may look to be working fine may not be necessarily perfect in their composition. So much of maintenance spend has to be committed to make this perform continually, a challenge that lock-ins always bring to the fore. All cost optimizations inside enterprise IT have been traditionally focused on infrastructure, outsourcing etc.

In this flat economy and a maturing IT discipline, the common denominator across the board is that enterprise suffer from a serious commoditization curve effect and to create and sustain a competitive advantage through IT would call for looking at getting their core business processes get architected very differently and in a manner that competition may not find it easy to imitate or catch-up. Such core processes would in areas like customer support, supply chain, channel management etc. Here the IT system needs to be more flexible and adaptive for varied forms of collaboration as against a rigid form of communication. Such a type of arrangement where new forms of collaborations can be enabled to provide high quality enablement for business would be a strong leading edge differentiator for any enterprise.

The underlying factor here is being able to tap new order of productivities not just the glamour of a new tool being brought in and this is precisely the next orbit of progress for IT inside enterprises. Here the role IT plays goes beyond setting up the information backbone to helping in creating intelligent business by business empowerment – starting all the way from the bottom to the top of the organizations, particularly by empowering more and more operational executive better, transcending all the barriers of language, geography just as the consumer world has shown how effective it could be .

Obviously, these mechanisms won’t replace the existing investments but co-reside with focus on collaboration and engagement rather just on plain transactions. This evolution can be seen as part of the progress from paper based communications to email to real time connectivity of minds as against just a process led workflows and system. Mobile devices, video communications, ever increasing bandwidth, multi-lingual support, new forms of enabling technologies like social and in-memory databases all would help the right IT setup for organizations that would put a premium on engagement to deliver better business results.IT Today, in the competitive global business ecosystem cutting across almost all industries, there is an extended value chain that needs to perform efficiently to make business successful and that’s where more and more enablement needs to go – it’s like pouring gas at the tip of the hockey stick curve. We see huge opportunities for the next wave of gains for business with such a focus.

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