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Augmented reality: An enterprise business imperative

We hear terms like virtual reality and augmented reality without always understanding what they mean and the implications for business. Beyond cute stickers in Snapchat or Pokemon Go, augmented reality is going to have a profound impact on many parts of our lives including social relationships, professional activities, and culture.

In the coming years, domains as diverse as medicine, training and education, customer and field service, and transportation – to name but a few – will change as the technology companies, telecom suppliers, and governments build the infrastructure needed to support wide-scale adoption of augmented reality.

I believe there is no question that innovator technology organizations in the enterprise must start learning about augmented reality. Whether you sell to consumers or B2B, now is the time to plan your augmented reality strategy.

Focus first on the business strategy. Although augmented reality requires a significant technology infrastructure, the business case must drive how you deploy the technology. For example, if your company provides field service, the first step is figuring out how augmented reality can help your organization better serve its customers. If you run a hotel or resort, begin with the question, “How can augmented reality improve the guest experience?”.

As with any form of digital transformation, success with augmented reality demands collaboration across the entire organization. The CIO will probably build out the infrastructure; marketing and product development will formulate product offerings; customer service will determine how to incorporate augmented reality in post-sales support. And the CEO will ultimately be responsible for examining the business model implications.

In summary, augmented reality represents a frontier of innovation that will happen; it’s only a matter of time.

To explore this topic, I invited two of the world’s most prominent experts to participate on Episode 228 of the CXOTALK series of conversations with innovators. Robert Scoble and Shel Israel are well-known technology authors, researchers, and consultants.

Their latest book, The Fourth Transformation, explores the implications of these technologies for both consumers and the enterprise.

Watch the video embedded above and read a complete transcript at the CXOTALK site. As always, you can download the podcast on iTunes. Here is an excerpt from the video with an edited transcript:

What’s the difference between AR, VR, and mixed reality?

Robert Scoble:

So VR, first of all, you’re in a black box and you’re only seeing virtual things. You’re not seeing the real world at all. With AR, or augmented reality, you can today use your phone like on Snapchat or on Facebook and aim it at things, and see virtual things on top of the world.

Soon, you’re going to be wearing glasses, and soon, being in the next three to four years, you’re going to see a range of glasses from companies like Apple, Facebook, Snap… There are ten under development that Shel and I know about, and we probably don’t know about all of them. That will lock the virtual image to the real world, and let you walk around it. And, that can interact, and that’s really mind-blowing.

I mean, with the HoloLens, you can have aliens coming out of your walls, and they’re putting holes in your real wall. You’re seeing the real wall, but it looks like there’s an alien coming through it. And it’s like, mind-blowing what this technology does for education, for retail, for all sorts of things.

Your book is called “The Fourth Transformation.” Give us an overview.

Shel Israel:

In the First Transformation, we started with putting words into PCs, on knowledge worker desktops, in the form of personal computers. Then, we went to point-and-click with the McIntosh, and that meant everyone could use these desktop things. Then, we went to touch and mobility, and that brought us into what is now this third transformation where anyone is using digital technology everywhere. Now, we’re going to go to a system which is much more intimate than what we have with phones. We’re going to have things in a few years that look like glasses I’m wearing. And, they are going to allow us to do all the things that I had just named: MR, AR, VR; and we’re not going to look freakish, and we’re not going to be tethered to anything.

This means that the customer experience in stores is going to change because they can do things in 3D. They will walk into stores, be at home, and have an immersive experience with the product. This means that surgeons can get assistance while wearing headsets. It means that anatomy students will be doing virtual surgeries in headsets, rather than with frozen cadavers. Every single place we look will be virtual teachers in China, at least; students will learn what looks like what the Civil War was like not be memorizing the name of a battle and by dates, but by actually getting to Gettysburg and getting the full impact of what a bloody war is like.

Wherever you look, whatever you do, it’s going to be enhanced with mixed reality technologies.

What kind of investment is needed to make this vision to fruition?

Robert Scoble:

Sensors that are seen around the world that is billions of dollars for R&D. IM-Sense was bought by Apple. Google Tango is doing the same kinds of research; Meta is doing the same kind of … Everybody who wants to build a mixed reality glass has to build sensors to see the world in 3D and bring it into the glass. Then, you talk about the connectivity that you’re going to need, right? Because with mixed reality glasses, you get as many TV screens around you as you want. So, imagine being able to watch CNN here; here, ESPN is playing; and over here, you can watch your security cameras from your business; and over here, you can watch Amazon servers; and over here, you can watch Facebook. You just look around, you have dozens of screens all around you, and you don’t have to buy more if you want more screens.

But, to serve all those screens with hi-res 4K or 8K video, or eventually even more in the future, you’re going to need a lot of bandwidth, and that’s 5G. 5G brings 35 gigabits per seconds down to the glasses, but we don’t yet have 5G yet. Verizon has to re-do the architecture on a city because the cell tower needs to be a kilometer and a half from you or closer, and that’s not true with today’s cell technology. You can be 15 kilometers away. So, they need to put a lot more cell towers into a city, and they put fiber into each one of those antennas, so it’s going to bring us 5G. That’s coming this year. Verizon is turning on the first 11 cities this year.

You go through the GPU; the GPU is needed to display the polygons. So, when you see virtual things in VR or AR, you’re seeing millions of little polygons or little triangles that are underneath what you’re seeing; and you’ll need a better GPU to process more of those. So, if you want to increase the resolution or increase the frame rates, or increase the experience of being immersed in the media, you need more GPU; or, you need to do a lot of trickery with […] rendering. And you look at the R&D budgets of NVidia, and AMD, Qualcomm, and other companies that are building these chips; they are spending billions of dollars per quarter in R&D.

Then you keep looking around; companies are building eye sensors. GoogleBot, Eyefluence that’s in our book, Facebook product company called Eye Tribe; there is lots of money spent on that, and particularly in the new user interfaces that you’re experiencing when you get a glass like this. They’re investing that.

You just keep moving down the stack. The whole thing is expensive, and there are ten companies building these glasses, and they’re all building their own infrastructure.

And the infrastructure; Apple’s building a CDN, so think about putting a server near you, so you have low-latency VR; you can play football with your friends over the internet. That requires a CDN that’s a massive new expenditure for Apple and other companies.

Let’s talk about one that you’re going to hear a lot more about: Facebook was the first one to use this term on stage in a big way; in a big, company way. And that’s “SLAM.”

Simultaneous Location And Mapping; which means we’re building a 3D map of the world, and it’s not a map like Google Maps, where there is just a line in the middle of the street, but it’s capturing the entire street in 3D. And, we’re not just going to capture the street, we’re going to capture every surface in the world with these glasses, and build a massive database. How big is that database going to be? Petabytes or Exabytes? How massive [an] amount of server space just to keep a 3D copy of the world at some resolution? You know, let’s say a millimeter per pixel or voxel resolution around you? That’s a huge amount of data, and that’s a billion dollars right there just in a data center to start with. It might be three or four billion, once you are done, and certainly, you are going to have to change those machines out like you do with cloud computing machines at Amazon, for instance. And so, that’s, right there, that’s a billion dollars, minimum.

And, Uber‘s building one of those copies, Mercedes is building one of those copies, Google already built one of those copies, Apple’s building one of those copies, Facebook is working on this, right? That’s what they were showing off when they said, “Oh, you can lock virtual things onto your tabletop. That’s using SLAM; the phone instantly builds a point-cloud and then a 3D model of the world, and then starts doing AI to figure out how to lock things properly to the surfaces in your room. And that’s going to be something that over the next 18 months, you’re going to see a lot more of; because right now, we haven’t seen any of the really good AI that recognizes the objects in your room, but that’s coming, and that’s coming big time according to Google because they’re going to use the data that they built off the self-driving cars to bring to our glasses. And how many objects in the street does the Google self-driving car or now Waymo, recognize the hundreds of thousands of things, right? Because it needs to see a stop sign or a stop light and know what to do! And, the glasses are going to do the same thing. When you walk around, it’s going to tell you stuff about the world that you’re looking at.

What’s the time frame for all this to happen?

Robert Scoble:

It’s now! This week, Facebook and Snap laid out expansive strategies for this. And if you’re not paying attention to that, you’re going to get slammed every month because, over the next 24 months, you’re going to see ten glasses come out; and big companies come out with major new strategies around this. Apple is the one that I’m looking at the most, and Tim Cook has been out there talking about AR for a year now. Now, we have a question. Does he ship this year, does he ship next year, does he ship in 2019, but certainly by 2019, everybody is in the game! If you’re running a business, you have to start thinking about how your customers in three years are going to experience your business as they walk in, or as they call you from this mixed reality world and what their experience expectation is going to be.

How can brands today prepare for this inevitable future?

Robert Scoble:

You need to start getting into VR or getting a HoloLens and start thinking through strategically how your business is going to be changed by these technologies.

Sephora, for instance, already is doing augmented reality signs in the stores, and they’re already building augmented reality into their Apple app to augment makeup onto your face so that you could try out pink lipstick, for instance, on the Sephora app on the iPhone or Android. And they’re already playing with this. So when the glasses come along, they’re already going to have their engineering teams geared up, and they’re already going to have a good idea of how they’re going to build things, and they’re going to be able to build it iteratively and nicely.

And now, a Unity developer is fairly cheap, and in a year, a Unity developer is going to cost three times more than it does today. So, if you convince a Unity developer to come and join your team today, you’re going to get them cheaper than you will in a year because Apple and Facebook and Google and Snap are going to wake everybody up. If that’s the lesson this week, companies need to wake up to the fact that this stuff is becoming real, and fast. And you need to get into it.

One deep change, your brand is going to be sprayed onto the world. You’re going to walk into a hotel in five years, and the hotel is going to be augmented. Disneyland is going to be augmented. They’re already working on it. So, their customers are going to walk in with Apple, or Facebook, or Google Glasses, or Snap Glasses, and things are going to be augmented in the park when you walk around.

So, you are going to have to build a new kind of team that hasn’t existed, and is a cultural review team, because you’re going to make mistakes in this new world that are cultural. You might piss off Trump supporters, for instance; well, that’s a lot of people to piss off. So, you’ve got to run a diverse team of people through your software the same way you run a diverse group of people through, to make sure you don’t have bugs and crashes; to make sure you don’t make cultural mistakes; make sure there are no Nazi symbols on the walls anywhere … That’s not through the design process. This stuff happens, but you need to have a team to work on this.

Shel Israel:

This is where the humans meet the sensors. This is all this Internet of Things; it has no value unless we interact with it and that’s how we’re going to be doing it.

In every aspect of learning. [For example] virtual teachers in China. They can’t produce teachers fast enough to keep up with students. So now, they’re experimenting with a game company in a classroom where kids wear glasses, and they customize their teachers. It can be an old teacher, a young teacher; a teacher watches the student and teachers as the pace where a student learns. The teacher gets bored, the teacher, the virtual teacher, creates a pop quiz right there.

This allows every pupil, for better or worse, to have a customized education at that pupil’s ability to learn; no faster, no slower. And you can’t do that in a classroom.

So, if you bet against what we’re betting on, then you’re betting against the best and brightest technology companies in the world, and the best and brightest new developers in the world.

CXOTALK brings you the world’s most innovative business leaders, authors, and analysts for in-depth discussion unavailable anywhere else. Enjoy all our episodes and download the podcast from iTunes.

(Cross-posted @ ZDNet | Beyond IT Failure)

Build 2017: The Microsoft Story Remix

For as long as humans have huddled around campfires storytelling has defined us. Gazing absentmindedly into the flames, burning wood crackling, we tell stories about our ancestors, our kids growing up, and our fears and hopes. Yearning and memory hold families and friends together, experiences shared. In the modern era we created new tools to capture the past, new ways to tell stories. The daguerreotype, the camera, the movie camera.The Kodak moment defined an era. Sepia tones, the washed out colours of the 1960s and early 70s. That epiphany when Don Draper named the “Carousel”.

Cameras took images ever sharper, crisper, clearer, and then of course came digital. Everything changed, with the Web the flickering images changed even faster. Today Facebook is where we share the photographs and stories, it is the fire we look into as families have become dispersed.

Snap wants to be the camera, to be the place where stories are told, and shared, but Facebook with Instagram is not giving up lightly, and a $2bn loss is never a good look, first results or no.

Google Photos is an amazing app for Android people – it’s creating a timeline of my kids learning to ride bikes, laughing together on Greek islands, my wife and I in a rare moment of peace. Collages, animated GIFs, digital stories I share with my folks. Photos is a great piece of work, it’s making Google sticky. Which services would you give up?

Apple has iMovie and recently introduced “Clips” to make video editing easier, with Snap-like augmented reality options. We take the photos we share with our phones now, which left Microsoft with a potential problem. Now Microsoft gave a response – it demoed its new Story Remix app, a replacement for Movie Maker, which will ship with the Fall Creator’s Update of Windows 10 later this year.

Story Remix is a video editing app with some really nice features – you can choose which protagonist to focus on as it makes a movie on your behalf, you can set it to edit the movie on the beats of the soundtrack you choose, you can easily add augmented reality overlays. Story Remix uses machine learning to augment creativity and if the demo is anything to go by, the videos it creates will be very slick indeed.

Microsoft introduced a ton of new features today during its keynote for developers, and I will be covering much of that later, but for now I am just left thinking that Story Remix is a surprisingly significant aspect of the Windows Story Remix. It’s slick enough to nullify some of Apple’s advantages, and some of Google’s plays. The PC can still have a place, Windows still has a place. Whether it’s a companion or a center piece the PC can be about modern AI augmented storytelling, and sharing and making memories. Story Remix is a fine piece of work.

(Read this and other great posts  @ RedMonk)

A company like me: Beyond customer-centric to customer-engaged

ryanair.jpg

I’m going to start out by telling you a story about Ryanair.

I didn’t realize until I read about it somewhere, but they are now the largest airline in Europe – even bigger than Lufthansa. I don’t have any evidence to support that other than I read it somewhere, but its just interesting, not that germane to my story so I’m not going to find out whether that’s more than someone else’s supposition or not. I’ll just pass it on. Take it or leave it.

In any case, in 2013 Ryanair, which had been known for its disdain for its own customers, underperformed, issuing two profit warnings. Needless to say, this scared their shareholders and they called for some action.

As a result, Ryanair instituted the “Always Getting Better Programme” in late 2013.

The whole idea was to be more “customer-centric” and do something that would benefit customers and thus, get them to start flying Ryanair again as they had in the past. So they included what are for the most part, table stakes for airlines, but for them, with customers that had low service expectations to begin with, was almost shocking. Things like:

  • More easily navigable website – for example, to book a flight went from 17 to 5 clicks
  • 24-hour grace period to make booking changes – rather than charging for the changes as soon as the flight is booked.
  • Cut in baggage fees
  • Free second cabin bag
  • Allocated seating
  • Allowing the use of portable electronic devices

But, there’s a kicker. The reason for it. This is Michael O’ Leary, Ryanair CEO’s comment when they got back on the right revenue track for 2014:

“If I’d only known being nice to customers was going to work so well, I’d have started many years ago.”

Ugh. That is simply cold – and indicative of something very important that I’ll point out in a minute or two.

One more thing, before we really get going.

I’m going to show you something I read about a month ago. It was a blog post based on a press release I had gotten from CHAMPS Oncology, a cancer care organization business affiliate of The Center for Health Affairs, which handles operations for Northeast Ohio hospitals. The post was on what were the elements of great customer service. While it was a pretty straightforward post for the most part, one thing got my attention. It was this:

“Personal Connection

My colleagues and I feel the importance of our clients’ work every day. We genuinely respect and appreciate the service our facilities are providing for cancer patients and their families. It’s personal for us as we all have a relationship with someone who has been touched by cancer. That’s part of what drives our team to provide excellent customer service – we know our work is all part of the greater effort to fight this horrible disease.”

This was the most emotionally strong part of the entire post. The rest was good enough but pretty much a blog post on customer service. But because the entire staff had relationships with people who had been touched by cancer, there was a crystal clear singular voice in that paragraph, that transformed the blog post. Because of that one paragraph, I trusted the whole post. The power of empathy to engender trust is powerful, indeed.

What am I getting at?

In the midst of writing The Commonwealth of Self-Interest, I had a bit of a breakthrough, if such things are called that post-65 years of age. For the longest time, I (and everyone else) have been hearing that we need to be a customer-centric culture. But, I realized when I heard the Ryanair story, that being customer centric was possible tactically without any real concern for the customer. You could do things that would benefit the customer but you only did them to make sure that your company was doing what it had to do to benefit its shareholders – meaning focusing on engaging your customers – and true value exchange with them wasn’t part of your DNA – but a tactical, pragmatic and reactive move to ensure business value. You give up something to get something, rather than think through the idea of value exchange and embed it into the culture of the company.

To build the kind of company that can demonstrate successful customer engagement requires a culture that would foster a relationship between the company and its customers characterized by this value exchange. That’s what customers are looking for anyway. You’re a customer. You know that you require a relationship that makes you comfortable with the company – at its optimum, if you care enough, you’d feel that the company was trustworthy and “understood” something about you. They don’t exaggerate, they don’t lie, they don’t hide things. They are believably honest. They know enough about you to want to provide you with what you need as a customer to derive value from the company and are willing to provide it. At every level of the company – from its human representatives to the way it does business to the automated processes – this value exchange is reflected. No person, no process is not impacted by or impacts the customer in a “company like me.”

Establishing Who and How…

How do you go about reaching this nirvana, this exalted state of a “company like me?” First understand who the customer and your employees trust. Also, how they trust.

Back in 2000, Edelman, one of the world’s leading agencies, released the first Edelman Trust Barometer. The report was created to become the go to for becoming the annual report of record for who and how people trusted. The broad framework was simple – ask people who were their most trusted sources. In the seventeen years, it has existed it has become the most trusted source for who is your most trusted source.

In one of the earlier incarnations, 2004, a new category of trusted humans emerged – twenty-three percent said a “person like me” was one of their foremost trusted sources.

Who exactly is a person like me?Let me reassure you, there is no one exactly like you (or me) on this planet. But that said, a person like me is someone who you feel has similar interests to you – perhaps similar or identical hobbies, or sports teams, or business interests or language or food and beverages. You’re Apple fan…people, perhaps? I would imagine if I asked you about a brand that you love, you could give me one – and go on and on and on…and on and on…and…. about it. I would bet that you’ve even at times participated in a brand love fest with strangers. But those strangers? That’s a “person like me.” In 2004, twenty-three percent saw them as a most trusted source. By 2006 that categorical person like me was considered a credible public spokesperson, which means for the first time, we were seeing the rise of influencers – especially brand influencers. By 2016, the number of people who felt that a person like me was a trusted source was 82 percent and by 2017, that same peer was identified as a very or extremely credible spokesperson by 60 percent, tied for first place with academic or technical experts. That means that peer trust has become perhaps a powerful source of faith, a place to put that trust.

More on a company like me, then? Sure.

What does that mean for a company? It means that the customer, to be engaged in a way that is meaningful with the company, must trust the company to the point that they feel the company consists of peers of that customer and those peers are found in all areas of the company that touch that customer – sales, marketing and customer service, in particular. Most importantly, and I’m calling this out. the company must show itself to be trustworthy, empathetic, believable and respectful

“The company must show itself to be trustworthy, empathetic, believable and respectful”

. These four characteristics drive, not a customer centric company, but a customer-engaged company. None of these attitudes and behaviors is easy to measure because they are often intangible in any way beyond a feeling, but your business can make concrete efforts and establish concrete programs and deliver a supportive culture to make this work the way it should.

Let’s briefly look at the four characteristics – trustworthiness, empathy, believability, and respect – and then look at how to build the culture that makes gives the employees and the customers the kind of support that leads to not just a customer-centric organization, but a customer-engaged one.

A Company Like Me: Trustworthy

The communications revolution, which because I’ve talked about it a million times, I’m not describing again, led to a change in who and how we trust. If you believe, as I hope you see I obviously do, that the most important thing that your company can do for its customer is to establish a trusted relationship, then this is a momentous change. Being capable of building that trust with the customer should be an integral part of your business culture.

What exactly do we mean by trust in a business or a brand?

Does it mean that trust is based on successful and frictionless transactions? -meaning the customer trusts that when they buy from you they will get the products or services they paid for, the quality of products or services they expect, the transaction itself is protected from theft and frictionless in the interchange? Think the Amazon return process.

Does it mean trust in the interactions between company and customer? – meaning promises made are kept? This isn’t necessarily someone telling a customer “I promise that I will…” It’s FedEx and UPS delivering packages averaging a 99 percent on time success rate. It is NOT GE Appliances saying that you will have the parts you need in three to five days – and failing to deliver any parts at all ever – twice. Sigh.

Does it mean trust in the truth of what is said? – meaning the company is being honest with the customer about whatever the subject matter, good or bad? The United CEO’s mea culpa 24 hours after his first response to the removal of their passenger from the plane was 24 hours too late. Honesty is the best policy goes the old saying. It’s an old saying because it remains true. Truth in business means trust in business. Let’s make that an old saying.

Does it mean the company is acting as a trusted adviser to the customer? – either individual or institution – meaning the customer is showing that they have a product-agnostic way of thinking about their customer and are willing to help them think through their strategies, practices, approaches, without the primary focus being the products or services the company sells. For example, Salesforce has a program called Ignite that consists of staff members whose only job is to work with Salesforce customers to innovate with and for the customer’s company. Oracle has a program that operates at the same level but with a more operational approach. Both are designed so that the company plays the role of trusted adviser to the customer.

There is another facet to this. Your business needs to be able to trust its employees in how they deal with customers. That means that there needs to be formal organizational support for the empowerment of those employees. The Philadelphia Flyers who empowered each employee to work with customers to resolve issues and answer questions no matter what it took to do so. But also, if you remember, the employees were rewarded for outstanding performance when it came to the results of their efforts with the fans at the arena and elsewhere.

This is a hint of what it takes to start putting the building blocks of an exceptional culture in place. Build trust with the customers, trust the employees by empowering them to deal with the customers in the name of the company and then make sure that the employees are rewarded for successfully adding to the building blocks of that trust with the customers by compensating the employees and thus supporting their efforts with concrete reward. Institutionalization of trust is a core principle of a customer-engaged culture.

But, of course, this isn’t enough.

A Company Like Me: Empathetic

Empathy is not just a personal matter. It is a business and most importantly, cultural matter.

Before we get into what an empathetic corporate culture means, let’s look at some numbers from The Empathy Business (yes, that’s real), a UK-based organization who are focused on measuring “actionable empathy” at businesses. Their definition of empathy in business is more than suitable:

“We define corporate empathy, not compassion or sympathy, as the emotional impact a company has on its people -staff and customers- and society-the next generation.”

What makes The Empathy Business interesting but not necessary on the right track is that it measures empathy – takes something that has often been mistaken as “feel the customer’s pain” and left at that and fleshes out what makes a company empathetic. The things that they investigate and score are, by category

  1. Ethics
  2. Leadership
  3. Existing culture
  4. Brand perception
  5. Public messaging on social media
  6. Employee perceptions of the company
  7. Diversity and inclusion initiatives
  8. Environmental concerns and sustainability efforts

The Empathy Index has its detractors, those who feel that you can’t quantitatively measure empathy and others who question the methodology. I think the criteria seem incomplete. Where is corporate philanthropy for example, which would be a primary measure of empathy I would think?

Regardless What they have found is that the top ten scorers on their Empathy Index, which measures how empathetic they find companies to be, increased their market capitalizations more than twice as much as the bottom ten and generated 50 percent more earnings per employee from 2015 to 2016. That unto itself isn’t all that interesting because that could be that you are talking about overall, better run companies doing far better than poorly run companies. But well run companies include empathy as part of their game plan.

But, you say, isn’t it appalling that you are looking for business value from empathy? That’s so personal….

Yes it is personal, but it also can be embedded into the genetic code of a company – and I’m arguing here, has to be.

Sandra de Zoysa, Chief Customer Officer of the wildly successful Sri Lankan telco, Dialog Axiata said this to me a few years ago,

“This has more to do with bonding and relationships for the long term. It’s not just a phone. It’s not just revenue to us. Wherever you go, there is Dialog in your life making it easy for you. It’s all about how well Dialog fits into Sri Lankans’ lifestyles. This is service from the heart.”

This is business empathy at its best – deep knowledge of what customers wants, desires, pain, and needs are and then building the organizational culture to support that – with the overarching reminder that this is a business and the purpose of it is to sell things – but in the case of Dialog Axiata, they are selling services that are meaningful to their customers and spending the time to get to know them in ways that other’s don’t – and their attitude is one that says, “we may be a business, but we are Sri Lankans who make up this business and we want to be a part of your life – if you will let us.

Contrast this to Ryanair – and you see the difference between a cold hearted company doing what it has to to ensure shareholder value and a company that truly believes in the value exchange that engagement with customers bring.

An empathetic company needs to be made up of empathetic people from the top down.

So, what do you do to make your business truly empathetic on its way to a customer engaged company?

Listen to the customers – and the detractors – Customers who are buying from you often have something to say about you. Those who really don’t like you, have a reason that they really don’t like you. Find out what the customers are thinking and hear it. Even if it is painful. Many years ago, one of my retail clients was forming a customer advisory board and the first person they reached out to recruit was one of their most active detractors. She became the first advisory board member and within a short while, a firm advocate for the company. Because they paid attention.

Ethics, diversity, sustainability, corporate philanthropy are all active C-level and board responsibilities – Salesforce has a Corporate Equality Officer, Tony Prophet, who’s entire job is to see that ethics, diversity and sustainability are all part of the corporate portfolio and the corporate culture, regardless of their direct relationship to sales. Salesforce handles corporate philanthropy via their Salesforce Foundation, which had given out somewhere around $600,000,000 in grants by the end of 2016.

It starts from the top…. – The CEO on down must be able to reflect and transmit that empathy as do his officers and the staff. This should not only be publicly obvious but reflected in the actions of the company’s leading individuals. In 2015, my wife and I had to cancel a cruise on Oceania Cruises that we were about to embark on from Rio de Janeiro due to a death in the family. We had insurance so we were covered on getting the money returned on this rather expensive vacation. In all our interactions with the company, not only did we barely hear, “sorry for your loss” which would have been tolerable but there was an enormous and disturbing emphasis on “we don’t owe you any money because your cancellation was last minute” – despite the fact we weren’t even asking for anything. This was compounded by a direct mail letter in response to my wife writing to the President of the company from their customer experience director (I’m not kidding) who said pretty much in sum, “Sorry for your loss, but we want to make it clear we are not liable.” That is close to a literal statement. We have never taken that cruise line again, and after several emails and letters asking them to stop sending their sales literature – which they have completely ignored – now just rip them up and recycle them. All because of the lack of empathy. Or, in this case, even sympathy.

Transparency and accountability as policy not buzzwords – Customers want to know who you are as a company and how you conduct your business. If you are an empathetic company, you want to let them know, good or bad. Sandvik AB, the European mining and construction tools and machinery manufacturer has a publicly available Code of Conduct that is the foundation of its operations and governance. It is a combination of pledges and procedures – one that makes them publicly accountable. In combination with that, they include themselves in the Financial Times Stock Exchange FTSE4Good index which is listed as a sustainability index but really is a vehicle to commit oneself to being accountable for environment, governance and corporate social good. The results are a profitable, $10.5 billion company that is trusted worldwide.

But it keeps going.

A Company Like Me: Believable, Personable

I prefer believable to authentic though this is as close to the idea of authenticity as you are going to et. The idea is not that you believe what the company says, but that you believe that the company has real people with warmth and personality who the company fosters and supports. and Thus, this is a good company. It is believable to you as a customer because you can see elements of yourself as a “regular person” in the leadership or staff of the company in question. This means the willingness to expose the not just the human side of the company in whatever medium it is in at any given time, but the real people who make up the company get to speak in their own voice. For example, using Twitter or Facebook judiciously to allow empowered and/or assigned employees to communicate in their real voices is far more powerful than pushing a sales or marketing message via those same social media. But it means exposure via more than social media. The Golden State Warriors, the marquee team of the National Basketball Association, are also the world’s most popular and recognized basketball team. One of the reasons for that is not just their winning ways but their willingness to allow their stars such as Steph Curry to show their human side. Just check out his little daughter Riley Curry‘s videos. You’ll see what I mean.

Finally, a Company Like Me: Respectful

Finally, to become a customer-engaged company, you should show that you are respectful of the customers you have, the companies you compete with in the markets you are in, the employees you hired and the world in general.

One of the most important signs of respect for your customer is the respect for a customers’ information privacy.

With all that, a policy that respects the customer’s choices of privacy is the best way to start.

Ultimately, if you are talking about building a culture that fosters engagement with a customer, the company should respect the notion of customer choice. The customer has provided you with information. If freely acquired, that information is there for some potential use. It could be used for learning more about the preferences of the customer, a relatively benign purpose. It could be use, as Facebook and Google do to provide personalized ads – a little less benign. It could be for running the kind of analytics that suggest what the best next action is to take with the individual customer – even less benign. But whatever it is, the customer needs to willingly provide it and let you use it for agreed upon purposes.

A significant number of companies either bury the use in terms and conditions that most customers sign when they use a website for something or get something in return for providing the information. The more diabolical approach is to support opting out – meaning a policy that says, we are going to use it unless you tell us not to – which is disingenuous at best. Even though opt-in – the customer gives the company permission to use the information – is less advantageous to the company, it reflects respect for the customer. Think of it this way. How many of you have had auto-renewal of something that you ordered for a year, didn’t really pay attention enough to the terms of service to know that it was turned on unless you turned it off, and found out too late when you were irrevocably charged for something you no longer had an interest in. Raise your hand (Paul raises his a few times). That’s opt-out. Opt-in means the customer has control over how they want to continue to interact and as we see, sometimes transact, with you. When the company policy supports opt-in, it is a sign of respect for the customer and their needs – even though disadvantageous in an immediate sense for the company in question.

To elaborate on this, I’m simply going to show you two things – Facebook’s terms of service in 2009 and now. Keep in mind that the way you “pay” Facebook is letting it use your data for things in exchange for your free use of the site. Make no mistake about it, its a business, not a friendly neighborhood there for your use with no terms and conditions.

This was 2009 terms of service:

“[we take an] …irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute….”

This was a total shock, because Facebook decided that it could use your data for its own purposes whether you retained your membership with them or not. There was no mutual value exchange, no basis for trust. This wasn’t a violation of privacy, but it was a lack of respect for the member’s value to Facebook. Needless to say the outcry was enormous – and justified.

To the credit of Facebook, they have spent the last 8 years, fixing most of their problems. They have shown the ultimate respect for their members/customers by correcting the problems in unequivocal terms. Here are the 2017 terms of service:

“You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings. In addition:

For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.”

In 2016, Facebook was #1 in the world on the Empathy Index I spoke of above. Lessons learned.

For the next several years, I’m going on a crusade to fight for the idea of a customer engaged culture, rather than a customer-centric company. I think that customer-centrism, which certainly has its benefits, still doesn’t go deep enough into the core of a company’s being and thus for me, the stamp of approval is a customer-engaged company that shows signs of at least those four characteristics – empathy, trust, believability and respect. Once I finish the Commonwealth of Self-Interest, which needless to say is actually an entire book on this subject, I’m going to fight to see that the business world recognizes customer engagement for what it is – a means to build a truly two way relationship, valued by all involved.

Who’s with me?

(Cross-posted @ ZDNet | Social CRM: The Conversation)

Frank D’Souza: We’re now experiencing the biggest shift since the Internet

 

It’s always more fun to be the disruptor than the disrupted in markets where innovation is the key differentiator and commoditization the curse. The world of technology is a constant challenge as programming languages become commonplace, processes increasingly standardized and automated, and global service delivery efficiency a bread-and-butter offering. How can you continue to grow at a double-digit clip, while maintaining profit margins of 20%+ amidst cut-throat competition and clients forever eager to batter down their costs?

Fortunately, the entire role technology plays is changing at a pace that is faster than most industries that can barely tolerate, which keeps driving new opportunities for smart firms with a disruptive appetite at their core and a willingness to live outside of their comfort zones. Today, enterprises are asking for business problems to be addressed and simply expect their service partners to get the job done. It’s no longer “Provide me with 50 developers for this amount of time to perform these tasks”, it’s more, “We need to redefine our healthcare insurance business to be more competitive in the market to survive – come help us do that”, or “These new banking regulations are crippling our ability to remain viable – what can we do to get ahead of these and operate effectively in this environment, faster than our competitors?”

Hence, it’s up to the ambitious service providers to pivot how they address their clients’ needs by redesigning business operations through smarter automation, process design and a much more proficient understanding and orchestration of their critical data sets. This is what digital is really all about – and this is where Cognizant CEO, Francisco “Frank” D’Souza is determinedly taking his organization. Cognizant has been Wall Street’s golden child of IT services growth over the past decade, the firm ballooning from $2bn in 2007 to $13.5bn exactly a decade later, and last week announced 11% year-on-year revenue growth and a 26% increase in year-on-year net profits to $557m. Cognizant continues to outperform the market with relentless growth and appears to be on a new upward growth trajectory after a challenging 2016, which saw the whole IT services industry tackle this new secular shift, which Frank believes if the most pivotal transition since the onset of the Internet itself.

I caught up with Frank this week in London to get a little deeper into this pivotal industry shift and learn more about how he intends to keep disrupting his market.

Phil Fersht, CEO and Chief Analyst, HfS Research: Frank – great to see you again. Was good for the whole industry to see you guys announce strong results last week – is the gloomy cloud that’s been hovering over our industry lifting, from Cognizant’s vantage point?

Francisco D’Souza, CEO Cognizant: Phil, last year was an important foundational year in our pivot to digital. I think we were ahead on some of the digital thinking, code halos and SMAC (social, media, analytics and cloud), we have been talking about those for many years. I think last year was the year that picture, at least in our minds, and our clients’ minds, crystallized around what are the specific opportunities around digital. Prior to last year, digital was the typical catch-all term used for lots of different things.

I think it’s become very clear, Phil, with every day that goes by, is the notion that if you think about a company’s enterprise model (what is the business model, what’s the operating model and what’s the technology model) it’s now become clear what is the implication of digital technology at each layer in that stack and by industry. What does that mean for financial services, what does that mean for healthcare, what does it mean for insurance?

Last year was about crystallizing around that – we reorganised the business we took all our capabilities, we grouped them into three big practice areas: digital business, digital operations, digital systems and technology. Within that we really focused and emphasized the key digital themes and trends in each of those areas. If you think about the technology space we built and emphasized the cyber security aspects, we built and emphasized performance and scalability, we built and emphasized complex engineering, agile, DevOps, so really focused on what is the technology enterprise of the future and what it will look like. Enterprises are going to be increasingly asked, and need, to deliver technology with ‘Amazon-like’ scale and agility, speed and so forth. So that’s Cognizant digital systems and technology.

Turning to digital operations, there are two big thrusts and areas of focus, which are related. Number one is continuing to scale-out platforms. We’ve had great success with the acquisition of the TriZetto platform. It was two years ago that we did that acquisition and it has scaled really well for us. Every day that goes by, the pipeline of opportunities for TriZetto enabled operations, increases. It has convinced us that the model works, we can pull our capabilities together to build and operate these industry platforms. We have continued to look at software assets that we want to own or that we want to operate to create these utilities, that’s number one. And number two is that RPA and IPA is a major disruptor. We are focused on disrupting ourselves, disrupting industries, using RPA and IPA – that’s the focus of Cognizant digital operations.

In Cognizant digital business it’s about the front end, about how we work with clients redesigning business models around the new opportunities that digital is creating and enabling. There our focus has been largely acquisitions and investments that we have done. We invested in ReD Associates a year ago. ReD Associate’s core skill is that they are anthropologists and sociologists and they think about products and services from a human factors standpoint. They are based in Denmark. If you think about the traditional Cognizant model, ReD Associates are far upstream from our traditional engagement with a client. This is why we chose to invest in them as opposed to acquire them. We own a percentage of the company and have a very tight partnership with them. We then bought Mirabeau, Brilliant Service, Idea Couture, etc., firms that bridge the design, tech, business, and re-imagination gap. We are scaling up that capability through spaces that we call ‘Collabatories’, which are client co-innovation spaces. The last piece is data, data sits across all of that – we have always had a very strong foundational capability, going back to the Dun & Bradstreet days, and that’s serving us well. Underpinning everything is this notion of big data and what analytics can enable at all layers of the stack. That architecture for our business has proven to be quite powerful because it lines up with where our clients are taking their businesses. That was the big pivot for 2016.

Phil: That’s interesting, because most of the computer science grads, today, aren’t thinking the way we were thinking 5-10 years ago. They aren’t thinking about programming languages, they are thinking about data sets and business logic, which is why it’s so interesting to hear about the partnerships that you are getting into, and the acquisitions you are making. We believe you can’t truly be a digital provider unless you are true digital organization yourself. I notice you are making investments in globalizing the company more, but also trying to become smaller, but with higher growth and higher profitability at the same time. That sounds like a tremendous challenge, can you share a bit about the big plan and how you think the company is going to evolve?

Francisco: Firstly, Phil, the implications for Cognizant and for our clients, as we go through the shift on breadth of skills and capabilities that you need to enable digital transformation, is very interesting. For example, we are now, and always have been big employers of data scientists — so that has been a core capability for some time. Design talent is increasingly becoming a bigger part of the company. Industry domain expertise has always been an important capability, but now we are looking to deepen this knowledge. Consulting is incredibly important and technology is always the core.

Our view is that to create digital solutions you must bring together multi-disciplinary teams around data science, design, industry, domain expertise, consulting and technology – all coming together. That talent is dispersed around the world. Just as a decade ago India was and continues to be a concentration of technology talent. You are starting to see concentrations of data science talent in Eastern Europe, design in certain hubs in Europe and the US, and so on. That requires us to be more dispersed than we have been in the past.

Secondly, the type of work we are doing now is co-creation/co-innovation that requires us to be more proximate to clients in those practice areas. That is also creating the phenomenon that you described which is that we are closer to the customers and therefore getting a little bit more distributed as an organization.

In terms of how we think about the company, one of the pivots that we recently announced in Q4 as part of our roadmap for accelerating our shift to digital, we talked about moving away from our historical approach of industry leading growth at a constant margin. We had this 19-20% non-GAAP operating margin target for a long time. What we have said now is we will continue to drive high quality, durable growth, and will gradually increasing margins. As we look at our opportunity set, we think that we can pivot the business to higher value digital work and we are going to drive that. We think that’s the long-term direction of our clients and therefore that’s where we want to be and we are pivoting more towards that kind of work and taking the company in that direction. We are also taking the opportunity to simplify and streamline the business in places where that’s appropriate. That’s all part of this broad approach that we call, accelerating our shift to digital, as we make digital a more foundational and important part of the overall mix of the company.

Phil: The concept of globalization of talent is a good one, bringing together different skills across different parts of the world is such a fascinating dynamic. One of the things we are seeing more of is – 5 years ago – clients would call you up and tell you what they wanted, now clients don’t quite know what they want and want partners to work with them to get more out of the business model to figure it out. It’s less about solving problems and more about finding them. One of the things that has always differentiated Cognizant, Frank, is that you take a portfolio view of clients and I have seen you win deals more because you look at the whole solution, you didn’t just look at apps, storage, BPO etc, within the stack. I believe it’s the sum of the parts rather than the parts themselves, and this is where it’s all shifting, really bringing it all together as a more integrated model.

Francisco: This notion that we want to serve a small number of clients and we want to serve them deeply has been a core tenet for us from day one and that continues. The way we implement that is that our industry verticals and geographies are the primary channel to market. If you think about the capabilities in our three big practice areas, it’s really the verticals that aggregate those capabilities, that integrate them and create the solutions for the client. What we are talking to clients about is the solution to some industry problem that aggregates our capabilities in some way, to delivers a compelling industry solution. If I am with a healthcare client I am not talking about digital business or digital operations or digital systems and technology. I talk to them about patient experience or getting better at how they manage claims or how they keep patients well. Behind the scenes we aggregate our capabilities together to deliver that business result.

Industry by industry we have got strong digital solutions at all layers of the stack and that helps us get out there and have a business relevant conversation with our client.

Phil: So is this as much fun as it used to be 10 years ago when you were the new kid on the block?

Francisco: It’s more fun. We are going to look back at this period of time, 10 years from now, and we are going to say technology literally changed everything. We are right in the middle of that. Compared to 10 years ago, we have the big shift in technology which is one part of what makes it exciting. The other part that makes it exciting is where we are as a company. We have an incredible position in the marketplace. We have got great clients in the industries that we serve. We serve the biggest most significant, most substantial clients in those industries and we serve them in big meaningful ways so it gives us the platform to have a substantial dialogue with them. That wasn’t the case 10 years ago. We have great market position today and we are in the middle of an incredible shift in technology. I wake up every morning and think I have the best job in the world. It’s breath-taking how fast technology has moved and I don’t think we are even in the first inning. It’s really early days.

Phil: I think we are leaving our comfort zone, I think it is getting more challenging for people, their careers, we are talking more to clients about how to manage their careers and their growth paths, more now than ever. They are worried, thinking “where do I go, how do I think differently, how do I behave differently?”.

Francisco: 3 or 4 years ago my narrative was that once in a decade you have these big shifts in technology and we were living through one of periods. I don’t think that was untrue, but what is interesting about this shift, is that it’s not a once in a decade thing. The innovation seems to be happening continuously and faster than it ever has before. If you go back to the last time we had a big shift it was probably the Internet. There was a period of very rapid innovation over a short period of time and then there was a decade or so when all of that was implemented and became pervasive throughout the economy.

I thought that would be the case with digital. 5 years ago when we started talking about SMAC, which are very profound technologies, I thought it would have the same adoption cycle as the Internet – very rapid innovation over a short period of time and then we would see that stabilise throughout the economy. What actually happened is we are in a second wave of disruptive technology. SMAC is still there and I would argue in many cases it is still in the early phases of adoption, especially when you look at cloud and analytics. But then you when look at whole new generation or second wave of disruptive technologies, whether it’s Blockchain or Additive Manufacturing or AI, the list goes on, and you can look at any of those and each one is fundamentally disruptive in its own right, potentially as disruptive as SMAC was and this is a phenomenon that has been going on for several years now. That’s what is foundationally different along with the pace of innovation. Maybe it’s coincidence or structural, I don’t know. History will judge that, but we are living through a time when the ground is shifting faster than I have ever seen it and that’s challenging, but it also creates opportunity for those who learn and react fast.

Phil:  Terrific catching up again, Frank. The ship still sails, even though waters continue to get choppier!

Francisco: A pleasure Phil, and all the best with HfS.

(Cross-posted @ Horses for Sources)

Azure Cosmos DB: it’s web scale!

At Build 2017  in Seattle Microsoft took the wraps off Azure Cosmos DB, a “globally distributed multi-model database service”. Cosmos DB is designed to be as accessible as it is available, and is a significant upgrade of its predecessor Document DB, a managed NoSQL database service optimised for JSON storage.

What is particularly striking about Cosmos DB is that it’s unashamedly designed to take full advantage of Microsoft’s hyperscale data center infrastructure – running across 27 regions.

Like Google Cloud Platform’s recent Spanner announcement, which I covered here, it takes Brewer’s CAP Theorem – that a distributed data store can only offer guarantees in two dimensions across consistency, availability or partition tolerance – as a theoretical rather than practical limit on database design.

Cosmos DB instead offers offering these tradeoffs around as declarative options for a developer.

Replication policies are declarations rather than design decisions for the developer, with Microsoft offering service level guarantees around uptime, performance, latency and consistency accordingly.

While aimed at different application types – Spanner offers ACID-style consistency for relational style transactions apps – there are similarities in being web scale architectures with cross region policy control. Cosmos DB makes region policy really easy to set up.

In terms of developer accessibility Microsoft announced support for graph traversal, supporting Apache Gremlin.That part of the Build demo was striking, but almost presented as an afterthought – Microsoft took a natural language query and created the Graph database query on the fly. Mongo API support is another big plus in accessibility terms – CosmosDB, like DocumentDB acts as a managed Mongo database. But Mongo takes some of the old jokes about Mongo being “web scale” and turns them on their head.

Once the data is in Cosmos DB, Microsoft offers options such as Spark and Hadoop (HDInsights) for streaming and analytics. Hadoop ecosystem components belong in the cloud.

Microsoft already has customers running DocumentDB at massive scale – including JET.com, and refactored the design based on these experiences. Honeywell, Schneider Electric and Johnson Controls are all adopters, which is a solid industrial automation base right out of the gate.

Microsoft also announced managed database support for Postgres and MySQL today but there is no doubt the most interesting data store news was Cosmos DB, a differentiated offering designed explicitly for the Azure cloud.

 

 

Microsoft is a client, paid T&E to Build. Google is also a client.

(Read this and other great posts  @ RedMonk)

Knowledge Summary: The Next Decade in Digital Transformation

A knowledge summary is a semi-long to a long post that synthesizes positions, concepts, and lessons learned around a topic.  They consist of a mix of primary research with ideas and frameworks I built based on conversations and working sessions.

This knowledge summary will focus on concepts you have to know to succumb to embrace digital transformation in the next decade.

Understanding Digital

I wrote about digital transformation first in 2013.  Then an update later in the year, and finally a call to end the talk in 2015.  And I wish, you don’t know how much, we could do that.

But we can’t.

The problem is that digital has become the new crutch word much like e-anything or i-anything became the crutch letter in the late 1990s.  And we have seen decent value arise from that use: iPhone and eCommerce are the two most recognized iconic words (and concepts).

The purpose of Digital is to replace all that has to do with computer-driven or computer-assisted.  We have had computers since the 1980s in the organization, we cannot say “computer-driven transformation” as that ship has already sailed;  we talk about digital as if it was a magical, mythical approach to changing things.

But it’s not.

At the core, this machine-driven revolution is different from the one 30+ years ago in what is focused on – data.  That’s it, as simple as it can get.  This transformation is about data.

It would be more appropriate to say it was about information (a combination of data, content, and knowledge that enables companies to solve problems better in context), but — as I said before… i-anything was already taken.

Seriously, it’s not about data only, it could never be.

Data is the representation of an event.  What happened to whom or which, when, how, and where – it’s the pieces of information you need to recreate something: a customer signed up for a newsletter (what), they received the newsletter (what, when), they opened three of the five links (what, when, which), they did a search for further information (what, how, when), they bought a product (what, how, when, where), we shipped it (what, when, where, how), they received it (what, when).

That’s all data – every piece of that.

Data does not mean much without the other two parts of information: content and knowledge.

Content is the static information we (or someone else, if we believe in communities) created that describes an entity (product, solution, use cases, manuals, etc.).  For example, the customer got a newsletter with content – information about products, services, discounts, coupons, etc. and acted on that.  The data about the newsletter being distributed and the action remains, but without the content, we would not know why the client acted and we couldn’t track specific actions they took.

And that brings the final piece: knowledge.  Knowledge, if you follow my writings, is wisdom – the applied, contextual, intent-driven use of content.

And that is where the reality of what data can do comes together — if you combine data about events with content related to that event and intent and context in the form of knowledge – what do you have? the right information, at the right time, in the right place personalized for each person, optimized for each situation, and outcome-focused.

In other ways, you have the reason your organization is trying to adopt a business transformation strategy.

Becoming Digital

Now you know what digital is and why it’s the source for business transformation this time around: even though data has been around from the beginning, it’s the leveraging of data mixed with the right content and knowledge, yielding information, that makes it the basis for this new evolution.

How do you use it?

There are two slides that I use to show my clients and people I talk to where / how / why information is to use it.  First, where does information come from?  Big Data — rather Big Noise.

Check it out…

The concept of Big Data is a misnomer: how can something be “data” or be anything if we don’t even know what it is.  If one trillion IoT devices generate measurements, which ones are truly data and which ones are noise? If there are 20 millions tweets in one week mentioning your company name, product name, or someone in the company directly by name, how do you know which ones to reply to directly and which ones to safely ignore? What about corrupt or misspelled or damaged “data”? it’s not data until you structure it, until then is noise – simple.

Although the first reaction is always to store everything and “later we will figure it out” the volumes are becoming too large for that, and the need to use the data (and the speed at which data usability and usefulness decay) increases dramatically every day.  Storing for future use is no longer possible these days.  The next step is to filter the noise and create a signal.  If a plane that uses Rolls Royce engines generates over a terabyte of data per flight, and there are thousands of flights daily worldwide – which piece of “data” should be stored? used? discarded?  Filters make that decision.

Once the filters take their turn and the noise is selected as valuable, then we structure the information.  This is the decision as to what it is: data, content, or knowledge?  This is the moment the noise becomes structured and ready to be acted on.  The concept of digital transformation being about acting on unstructured data is another misnomer – how can something be acted on if we don’t know what it is? where it came from? what is used for?  once we filter the noise (create a signal) then we figure out what it is that we have, structure it, and store it in the proper place (or not, but that’s another post) and act on it.

These actions, the analytics or workflows applied to them, generate an insight – a something we did not know.  These insights are what we use to make decisions, to act, or simply to inform – via dashboards and reports.  These signals are also the components of information that will be used to power algorithms and AI components – and that will become the new filters for Big Noise.  The cycle of optimization based on what we know and what we learned is then complete and we have both insights we didn’t before, and data (and content and knowledge) stored.

Very different from simply capturing everything to figure out later what to do, no?

Being Digital

This section is the second framework I use with clients and in conversations when talking about what it takes to become a digital enterprise.  I must confess, this is not a new model – I first introduced it in 2013 – but have been working and optimizing it since.  Thanks to all of you that helped me along the way.

Once you get past the awesomely-designed majestic use of colors and boxes, you end up with six components you can focus on: four yellow boxes, and two blue boxes.  I know, mind-blowing.

The yellow boxes represent infrastructure, the purview of IT and Architects in your organization.  As your organization becomes more entrenched in the cloud (which by now is commoditized, so I am assuming you are either already there or on your way there) they will notice more and more a need to structure their approach.  The yellow boxes separate the different pieces they need to focus on:

  1. cloud infrastructure, the core components used to run and interconnect everything
  2. legacy access, because I am still proud of the code I wrote in the 1980s in COBOL and to be fair – a large number of you still use it and need it to run your organizations
  3. interface connectivity, because in the age or mobile and IoT there is no longer a requirement but actually a necessity to be device-independent — this is not mobile-first, this is mobile-also
  4. and to accommodate the hype of the day – AI (or advanced analytics, if you read my writings on the topic) with three specific outcomes: optimization, personalization, and automation.

I wrote about this framework before, the link is above and there is an update to it here as well, which is why I am just summarizing it here.  If you need more details read those posts, or contact me.

Once you configure your distributed computing architecture (AKA cloud) to operate in a model similar or comparable to the above, you will end up with two blue boxes – which is where the magic behind digital business transformation happens.

The information blue box is what we were discussing above in the previous section: how to find the right data, content, and knowledge to create the necessary information for every transaction.  The information will come from anywhere: devices, legacy data or applications, or AI and analytics engines.  The role of the information layer is to make sure that all information is considered, and the best selected, when crafting the response to an interaction.

The experience layer is the one where most organizations would love to have control – but they can’t.  The concept of building experiences for customers is archaic and, frankly, dumb.  This is not about understanding customers journeys or planning for them – or anything like that.  This is about understanding that stakeholders (notice it says customers as well employees, partners, and public) will interact with the system on their own terms, according to their expectations, via any channel, at any time, in any way they see fit.  Today they may have more time, tomorrow less – and they would appreciate a quick summary today, and more information tomorrow.  To accommodate these shifting expectations, each experience will be built ad-hoc by the stakeholder – provided they have access to all systems, information, and rules that apply.

This is the essence of being digital: building an infrastructure that allows any stakeholder to interact with any part of your organization, at any time, anyway they want, for anything they need.  if you can do that, you are “living la vida digital”

To get there, that’s what you need to do over the next decade; this is not a simple system purchase and deployment.  It requires extensive changes in all layers of the organization: people, process, and technology.  It also requires new thinking in governance and metrics.  and that — that takes a decade or so to complete.

Your move.

disclaimer: first things first, thanks to Jon Reed for the idea of using crossed-out text.  Since Sameer Patel does not like my parenthetical digressions, I am testing some minor ones using crossed-out text to see if it works.  if it does, all credit belongs to Jon who uses them to great effect (far greater than I could ever do) at Diginomica. I would reluctantly, but understandably, relinquish the use if he asks.  second, I also have to give credit to the kind folks at OpenText who helped me with the first chart a bit during a consulting session in December.  the other people, many, who contributed over time are also very kind and i am profoundly thankful – but they were more motivation and inspiration, OpenText tweaked the slide for me and let me use it.  third, no vendors are mentioned – but y’all know that i work mostly with them, so there’s a chance that some of this stuff shows up in something they do / use and i will gladly take all the credit for that.  ideas are mine, originally and follow-through, so feel free to yell at me for anything i got wrong.  if it works, not me – if it didn’t, me.  comment box is below.  thanks for reading.

(Cross-posted @ thinkJar)