Meet The New Consumer

New consumer

The word revolution is overused, but in the past five odd years, there has been a significant change in how customers engage with products and service providers. Thanks to a combination of technologies, the consumer of 2015 is vastly different from 2010.

Let’s look at 6 specific points of change, which will reshape how you need to engage with consumers today.


The Encyclopaedia Effect: The Consumer Knows More
When a customer walks into a TV showroom today, the smart money is on the probability that he or she knows more about the product than the person behind the counter. In part this is exacerbated by the high turnaround and relative inexperience of shop floor staff, but also because consumers today have all the means and have learnt to thoroughly research their purchase – including features, price comparisons, technologies, accessories and performance. Contributing to this is the ease of garnering information via social media.

How ready are you to deal with this consumer? If you’re a retailer, is this a nightmare scenario or are you able to use this to your advantage? Do you arm your shop floor staff with information? Do you enable consumers to do their own research in the store? Do you provide enough authentic information out there for consumers – so they can trust your information?

In many ways, this puts the onus back squarely on the product or service delivery. You can no longer paper over the inferiority of your products through better marketing or better sales. This is a wake up call for product development and service design people. Get it right or you will be found out.

BYOW: Bring Your Own Web

When I last bought an airline ticket from Pune to Chennai in India, I asked the question on facebook about whether I should fly Airline X who had recently had some bad press and I wanted to check if it was a good idea to fly with them. About twenty people responded. Eighteen said it was a really bad idea (one person was being ironic and one was professionally involved with the airline). I was able to make a decision based on a cumulative 5 minutes of research.

It’s the internet to go. It’s carrying wikipedia, amazon, google and the the world’s product databases in your pocket. Earlier, the physical world and the digital world were distinct. You did your comparison shopping on the web and then took a print out to the store. Now you take the web with you to the store. You scan items with your phone and price compare then and there. Or pull up reviews

and product comparisons. Or check calorific values and nutritional advice. This is not a small evolutionary change. It is game changing.

We know that the mobile phone has already in larger or smaller measures replaced wrist watches, calculators, sat-navs & maps, time-tables and a host of other products. Even a spirit level, if you’re into DIY. But it’s ability to tap into the www wherever and whenever you like is arguably its killer app.

And what about your consumer? What is she checking for while selecting your product? Are you making it easier to find that information? Are you enabling or constricting this behaviour? Does your sales process factor in the always addressable consumer?

Generation M: Beyond Millenials

You’ve probably become accustomed to classifying yourself as a digital immigrant or a digital native. Maybe your kidds are the natives in your household. The “digital generation” aren’t even a homogenous group any more. The internet generation is a different breed from the mobile generation.

The mobile generation, or as Tammy Erickson calls it in this HBR article, the Re-Generation, was born around 1995 or later, is the generation that wants to swipe every screen they come across, and expects to be on multiple screens at the same time. This generation is all about expectations of connectivity, and being willing participants in solving issues – digital activists or at least aware of their role and influence by the virtue of a simple “like”.

If we are to go with this classification, this generation is about to enter the work force, armed with the ability to touch-text like their parents could touch-type. This generation can start a flash mob or, unfortunately, a riot from their hand held devices.

If you’ve been thinking about the “mobile-first” mantra – this is probably the generation of users it is critical for. Expect your first point of contact with consumers from this generation to be on the mobile device. Maybe even a significant part of all your interactions will be on the device. 

Perhaps it’s time to start thinking beyond mobile-first, to mobile-only. How geared up for you for this mobile-only relationship?

The Shazam Effect: Telescoping AIDA

Back then (10 years ago), you heard a song, you tried to find out what it was, maybe you heard it again, then on the radio. Somebody told you what the song was if you were able to hum it. Or you searched the lyrics on the internet. You went to the music store / Amazon and bought the cd, if it was worth the £7.99, or whatever the arbitrary price point for the cd was.

Now you hear and like a song that you’ve never heard before, you “Shazam” it, and it tells you the song, artist, and offers you the chance to buy it with a single click off itunes. In 30 seconds, from never having heard the song, you now own it.

This telescoping of the traditional “AIDA” marketing and sales cycle is what the mobile world is accelerating. Real time is in. Waiting is out. Consumers are starting to expect this in more and more areas. Whether its your bank account or your energy bill, or an itemized break up of your estimate for fitting out a new nursery, there is an increased expectation to make it available now.

How real time is your business? How long do customers have to wait for information about your products and services? How much self service do you enable in the information buffet?


The Interface is Dead: Long Live The Interface

We’ve argued about multi-screens, second-screens and even third screens, but what is happening now, is much more amorphous. The screen is vanishing, yet it’s everywhere. On your watch, in your line of sight from a wearable frame, on your shoes and in your car. In fact, sometimes it’s not a screen at all, just a natural interface. Think of Nest, or Amazon Echo, and it’s not a screen that comes to mind, is it? And once we get into the internet of things, the environment will be one giant interface.

With both computing and interfaces becoming much more amorphous, you and your consumer will always be connected in multiple ways. Are you ready for this kind of commitment?

Federated Identities

The two biggest challenges historically, used to be creating a single view of consumer data and marketing to a segment of one. Today, both are addressable with current technology. This project from Metlife, US is a great example of the former, and Amazon, Apple and Google all do a good job of the latter. The conceptual battle ground has moved. What’s even more granular than the individual? Federated identities.

Your customer in her office and your customer at the park with her kids are not really the same persona. Her needs are different, different receptors are at work, her emotional states are different. How can you tailor the messaging to this kind of contextual personas which are segments of an individual? This is very relevant if we’re going to talk about real time and always connected consumers. You have to model the different personas within a single person, based on context. This is your next assignment, should you accept it.

In Conclusion

These categories are just useful labels to stick onto a wide set of complex and ongoing changes. The journey isn’t over yet, but already, not recognising and adapting to these changes could mean that you are out of step with the consumer of today.

5 Challenges for Marketing In the 21st Century

Attention Deficiency
 
 
First there were letters, then came emails, then text messages and twitter. Our patience for longer communication has dwindled both as senders and receivers. Newspapers and long opeds have given way to snappy blogs and bullet point memos. Videos have replaced text, and short videos have replaced the longer formats. You get the gist – we are increasingly in an attention starved economy. 
 
Attention is fragmented, fleeting, and in generally small supply. Hyperactivity has been known medical problem for ages, but it was in the 1980’s that the condition was prefixed with “attention”.  The double whammy here is that even as attention grows more precious, the volume of noise keeps going up, so finding the signal becomes even harder. So what little attention we have, we must guard zealously. 
 
This is marketings first big problem. Marketing and advertising, as we know it today, is a hundred years old. It is no longer fit for purpose. Creativity in capturing attention still gets headlines, and this won’t change, but the goalposts are shifting constantly and the new rules are yet to be written. 
 
Google adwords seemed to provide some answers, but I think that our general mistrust of marketing messages cripples the value of adwords. We have all become experts in tuning out ads. Banners on pages, full page spreads in magazines, spots on television (usually coinciding with tea-making or a trip to the toilet), or ebook ads in Kindle magazines which you flip through with barely a thought. 
 
As a marketer therefore, your first challenge is getting through the noise, the fragmentation and ephimerality of messages, and actually register on the audiences attention span, without spending a kings ransom in the process. Especially if you’re not an already established and known brand. 
 
Every once in a while I notice a piece of marketing communication for a product that I’ve never heard of. But it’s almost always in a category I’m already interested in, and often filtered via friends feeds (FB/ Twitter etc.). I signed up for Carbonite, the online data back up service after I heard their ‘ad’ on a podcast – it wasn’t a traditional ad but the host of the talk show talking through the benefits of the product in a related category to the ongoing discussion. This morning I watched an interesting and interactive Honda ad because somebody posted it on Facebook. The last time I was actually influenced by a TV ad was …  er… I don’t remember really. 
 
Wanted: Action
 
Let’s assume you’ve actually solved the first problem. So you have my attention – perhaps for 15 seconds. Perhaps even 30. The next challenge is getting to action. What are you going to motivate me to do?
 
Historically, advertising and marketing spends have fallen into clear categories – strategic or branding type communication, intended to create a longer term desire; and short term tactical spends, intended to create an immediate sales boost. The latter typically comprising offers, coupons, and other enticement to act now. 
 
The first problem here, is that in the attention deficiency model, everything is about NOW. It’s either now, or it’s gone. (I’m stretching the point here, but this is generally the trend). If I’m not in the market for a car, you’re wonderful car advert is not likely to register beyond a point. Because I know that when I do want to buy a car, all the information in the world will be available. 
 
I’ve written before about the telescoping of the AIDA cycle. Awareness, Interest, Desire, Action – the 4 stages of classic marketing & sales. I call it the “Shazaam” effect, after the app. From never having hear a song, we can now hear it, like it, identify it, want it and actually own and download it in about two minutes. This process in the past, woud require you to hearing the song on the radio, finding out the name, going to the store, deciding if you really wanted to spend money on the whole album, listening to the other tracks, and finally taking the plunge. On average that could be weeks if not months, with a high probability of dropping out of the process altogether. It’s not just digital goods, you could pass a shop window, like an item, check it out online with your phone and order it – again, the process would take a few minutes, if the retailer made it easy to do this. 
 
Most ads today do not have a compelling call to action. This doesn’t necessarily have to be an action to buy, it could be an action to save, highlight, wishlist or read later. Most digital publications allow you to do this with your content. Why not with your ads? Why can’t I click on a car ad and save it for later, because I do want to buy it next year, but this model looks interesting. Or tag the ad? All of this is for enabling future searchability. 
 
The other implication of this is that the secret sauce for advertising and marketing messages may well be getting your attention when you’re looking to buy the product. Not dissimilar to point of sale advertising, but more like point of time advertising. This is all about context. It involves being able to pick up on cues based on opt-in analytics that allow me to tell you about a cycle when you’re looking for a cycle. Sadly, what we have today is that when you search for a cycle, you are guaranteed to see cycle ads for the next 4-6 weeks, even though you bought the cycle in week 2. It’s a blunt weapon that needs a lot more finesse, though it’s probably heading in the right direction. The problem  is that I tell Google that I’m looking for a cycle, but I tend to tell Facebook about my adventures on the bike. May be sharing my ride pictures on Google plus is a good way of telling google to stop selling me cycles. 
 
Media vs The Message 
 
The media industry is probably the hardest hit by these technologies. Audience fragmentation, disintermediation and ever lower barriers to entry have caused havoc in the business. The television industry would have us believe that people still watch as much TV but I would suggest that the quality of viewing is dramatically lower, i.e. it shares your attention with your smartphone and your other chores, and in many instances has become a truly passive experience. Which is bad news for brands and advertisers looking to grab your attention. Newspapers have also down and out and the few who have successful digital editions are enjoying a new life, but advertising models continue to be experimental and much less lucrative. Google adwords have been a moderate success in terms of click throughs and paying for results, but it’s not the answer to all marketing problems. 
 
From a marketers’ perspective, the gravy train has vanished. There was a simple equation – you spent your money, you got onto the most popular TV shows or major newspapers’ front pages and you could launch a product nationally and get decent outcomes. Today’s marketing manager has to consider direct (website/ app) vs indirect channels; digital vs traditional media; multiple options within digital media including banners, innovative banners (with video, for example), ad-words, SEO, and a host of new options such as ambient screens, and digital point of sale. You also have to worry about attribution modelling and manage your spends in near real time. Agencies are starting to make money of trading desks, using algorithms not dissimilar to share trading. 
 
Increasingly the smarter brands have tried to make their message the story, rather than an interruption. Coke, Dove,  and Red Bull are brands that have tried to do this. 
 
 
Morphing Aspirations 
 
It’s also worth asking the question – how have our aspirations changed? In the increasingly global and multi-cultural world, there is a certain level of fragmentation of aspirations too. Only 44.9% of London’s population is white British. Even in 2007 there were apparently over 50 non-indegenous communities with over 10,000 population each. 
 
The implication of this is obvious – as populations go less homogenous, so their aspirations, needs, habits and buying cues. Everybody knows the story of the 2 elderly white men both rich, born in 1948 married twice, holiday in the alps and fond of dogs. One is Prince Charles, the other is Ozzy Osbourne. How then do you attract the housewife of Indian origin who loves popular psychology, with the rock climbing single hungarian girl who wants to work for the police? Both of them may be  24, female, living on in the same post code and searching for psychology in Google. 
 
The challenge is not just analysing and deciphering these ambitions, it’s the need to deal with such a vastly diverse array of ambitions. And ambitions that will themselves morph and blend in cultural melting pots. How do you sell an aspirational product when there is no consistency of aspirations, without boiling it down to economic ambition as a lowest common denominator?
 
 
Trust Erosion
 
Who do we trust? Not the government, not large enterprises, not banks or telcos, and not Google or Facebook. Yet. we trust the feedback of strangers on recommendation websites. However, you still wouldn’t trust a random stranger to provide you with broadband services, find stuff on the internet quickly, or hold your savings for you. Trust therefore has many facets. One of them is competence, another is ethical. In earlier (and perhaps more naive) times, we tended to combine them. Now, with the free flow of information we know better. 
 
Opinion may vary about the competence of banks, but you would still trust the bank with your money because they have demonstrable competence. Also because they are regulated. So while we don’t trust governments or banks, we may find that the combination provides us a trustworthy outcome. 
 
Why is this important to marketing? Well primarily because trust is the basic currency of all communication, and consequently, for brand creation. Without it, you may as well flush your money down the toilet. So the question then is do your customers trust you? And how do you establish and build this trust? And given that we live in a low-trust environment, this may be the first and most important bridge to build. 
 
 
A Quick Checklist 
  • Make the message the story. 
  • Be contextual in the positioning of your message 
  • Create actions in your messages – not just ‘buy’ actions 
  • Understand aspirations from a cross cultural perspective
  • Own your communication and include direct to customer channels 
  • Build a strong trust bridge before sending the marketing cavalry across it

Enterprise Social: Your Future Neural Network

If you’re reading this in the last months of 2014, it is likely that you belong to a company which has pondered enterprise-social platforms. And it’s likely that many head scratching moments have occurred and that the answers so far fall into broadly two camps.
 
External use and mining of social media is now well understood as a means to build customer engagement and feedback. Plenty of people still get this wrong but tools like Clarabridge are strong players in this area.
 
The more perplexing piece is the use of social platforms inside the business and here, most businesses have explored rolling out Yammer or Chatter and are often wondering ‘what next’? Many are actually struggling to justify what it is that they are getting out of this?
 
In the rest of this piece, I’d like to suggest that the Enterprise Social Platform is an idea whose time has come and that in 2015 we will all be flipping to the new model of enterprise social.
 
First though, let me highlight some of the problems of communications inside large organisations:
 
 
Information flows in big companies typically represent hierarchies. So information typically flows much more smoothly up and down hierarchies and quite poorly across these lines. This is just a truism of corporate cultures and represents a significant inefficiency.
 
Second, reward systems in most companies are typically not aligned to avowed corporate values. Many companies try to enshrine values such as collaboration into their work culture but have no means in place to recognise or reward such behaviour. Consquently, collaboration, or other such values, are often a road-kill in the stampede of those behaviours which are actually rewarded – often to do with sales targets and hard numbers. This is arguably detrimental to the business in the longer run, and this is specifically the problem that WorkAngel, one of the start-ups in this space is seeking to solve.
 
And how exactly do we measure the internal transaction costs of doing business? For example to create a proposal or to deliver a project, you might need to work with up to a dozen people from different teams and departments. Often the two kinds of transaction costs you encounter are (a) time to locate the right person and (b) the time and effort-cost of the transaction, given that the said person may have no idea about who you are and may have no motivation to support you. Again, start-ups such as ProFinda and WorkAngel look to solve these everyday problems.
 
 
Another challenge you face as you grow larger and more global, is the tendency of localised problem solving. Would you even know if the problem you’re trying to solve (say, a branch specific problem in a Bank or a retail outlet), has been solved somewhere else in the organisation? Or that the expertise exists elsewhere? Also known as the re-inventing the wheel syndrome.
 
Many people have written in recent times about the role of culture – often more important than strategy as a critical contributor to success of an organisation. Where does your culture reside? Where is it rooted? How do you create a crucible for capturing this?
 
Even more so when you go through mergers or acquisitions and you are trying to quickly forge a new culture, and all the earlier challenges reappear in starker ways.
 
And what about all the soft information that you increasingly need to hold and manage but have no repository of? Somebody in the team worked as a volunteer at a hospital and has the insight which could make a big difference to your healthcare project. But it’s not in her CV, or in your corporate systems. And all the conversations between people that hold ideas and sparks for new products. And that brainstorming session that could have been a product, but everybody got busy with a bunch of other projects? Where is all of that intellectual capital?
 
And a last but important challenge: we are today in the world of bring your own self. This is a term I first heard used by Ade McCormack while we were discussing BYOD. But the idea is ubiquitous – increasingly we are blurring, in positive ways, the line between personal and professional. We no longer have to leave our personalities and hobbies at home because increasingly those can represent pools of capabilities or knowledge that can add value to our work and to our businesses. We are being encouraged to bring our whole selves to work. And our information systems are inadequate to reflect and represent our whole selves.
 
So Where Do We Go From Here?
 
We know that we’re moving from systems of record to systems of engagement in most businesses. Implicit in this is a move from structured to unstructured information. And from data and transaction centric to relationship and conversation centric information. It also implies the move from desktop to mobile and from process based to context based information. John McCarthy and his colleagues at Forrester have a report on this.
 
Seen in this context the enterprise social platform is that new and complementary layer which holds this new conversation centric, context based, relation and human oriented information which seeks to address the problems we outlined earlier. There are two key words here. (a) Complementary – nobody is suggesting we junk our transactional and structured data in favour of the warm and fuzzy. and (b) seeks – there is no guarantee. A lot will still depend on that pesky notion of implementation.
 
Social platforms are inherently non-hierarchical. Although there are some like Loyakk, which are designed around certain types of hierarchies, most are designed to engineer those serendipitous or interest based discussions, or perhaps around specific problem domains which are independent of hierarchy. On a social platform it’s not just the HIPPO who get’s his/her way. (Highest Paid Person in the Organisation). So cross hierarchical and also cross departmental conversations become quite common on social platforms. I have found Yammer perfectly good for this kind of discussion. For example when I wanted to know how to create an internal enterprise blog, I had 3 good answers in about 30 mins of posting a 1 line question.
 
I’m excited talking to next generations social platforms, such as ProFinda and WorkAngel because they go to the core of the social challenge outlined above. WorkAngel, for example has a mechanism for explicitly identifying and rewarding those behaviours which align with the avowed organisational values, through a social feedback mechanism. What’s more the rewards can be quick and even financial. ProFinda’s secret sauce is the algorithm that goes to work on all your data both structured and unstructured, internal and external, to create relationship patterns which tradition tools don’t or can’t get. Both of these are softwares you license and install, so we mustn’t confuse Social Technologies with Social Media. Both of these have strong mobile platforms and analytics, so critical to today’s needs. As does Broadvision, with it’s Vmoso mobile solution which sits on top of the Clearvale social platform.
 
Beyond Platforms To Results
 
Needless to say, the best platforms will not be good enough to deliver success if you just treat them as the answer, by themselves. Some of the key, and often obvious guidelines:
 
It’s always useful to have clear and measurable business objectives. Following a discussion with one of our clients who wanted to implement a well known social tool, but didn’t have a clear business case, we drew up this mind map. The idea was simply to identify the different types of problems that could be solved by the tool in question, from providing support on HR issues or driving cross functional teams.
 
 
 
I would urge taking this further till you can see a clear path to money – either money earned or saved. You may not get clear answers but it will still provide clarity of thinking and enable you to get the right data going forward.
 
What we should avoid, is what the authors Macdonald and Bradley, in their book “The Social Organisation”, call ‘provide and pray’. Don’t just invest in the platform and hope some good will come of it.
 
But Can’t We Experiment With New Models?
 
Does this sound contradictory with the notion that with new technologies, you don’t always have a clear business case, and you need to try stuff? The key here, I believe, is that if you’re trying it out, it should be (a) a controlled experiment and (b) with specific learning objectives. So the learning becomes the business objective and backed by an understanding of the metrics of that learning.
 
Things To Avoid
 
(1) This is not an IT solution
(2) The product/ platform is not the answer by itself
(3) Avoid buzzwords like ‘gamification’ if they are not delivering your business objective.
 
Some Other Issues To Think About:
 
Can social experiences truly be engineered? Probably not a hundred percent. But they can be curated. And the right platform, with the right implementation underpinned by clarity of goals, will go a long way in getting you there.
 
Can true collaborations across hierarchies actually take place in large companies? Probably less so in high power-distance cultures. How you enable the voice of the junior most people in the business is definitely a part of the answer.
 
What about the work/ non-work balance?
This goes back to the point earlier about bring your own self. This is going to be one of the key debates as we move away from traditional office environments with clear time and place separation of work and personal. New mores and guidelines will evolve. It is entirely possible that people in err in both directions. This space needs watching and again, it won’t harm to gather data which can help to create those guiding principles.
 
In Conclusion:
 
Unless there is a specific need for point to point communications between people who need it, the publish subscribe model is a far more efficient way of communicating. Facebook has made us comfortable with the notion of a feed and thanks to social media platforms, we are all able to post, follow, engage and respond as we feel best. No education is required here.
 
If done right, the social layer will be the neural network of your enterprise. Not getting it right, though, will lock your business into the past and history is very unkind to anybody who doesn’t evolve.

Digital Transformation: From TOM to EOM

TOM / EOM – sounds like a soup you might order. But for the purpose of this discussion, put your appetite to one side, and think about Digital Transformation. 

 

TOM or the Target Operating Model is the staple of the consulting framework in transformation environments. The logic being, you have an initial operating model and you enter a transitional phase, driven by internal and external change, and you emerge with a new “target” operating model. It’s an excellent construct and very useful for delivering change. 

 

In the digital arena, though the idea of the Target Operating Model is challenged because of a number of reasons. 

 

Critically, it assumes that the change is a finite and one time activity. This is no longer true. Consider the landscape today. You enter a phase of virtualisation of your servers and networks, and before you finish that you’re in the middle of the mobility revolution. You combine cloud and mobility to create another transformation and everybody is talking about big data and social analytics. And then there’s the Internet of things, machine two machine and smart environments waiting to happen. So which points do you pick as the start and end of the change? And if you took this whole set as one change, would you even survive it?

 

And then, if the change is not a finite or a single event, what do you assume as your end state or ‘target’ environment? And if there is no target environment you can define, how can you create a target operating model? Would it not be outdated even as you were implementing it? 

 

There could be an argument that these individual technology waves do not affect the business model and are just technology changes. I would disagree with that. Yes, moving from one vendor to another, or upgrading from version n to n+1 is a technology change, though even those projects need to be seen as business change projects. But the waves of technology I called out earlier – from Cloud, to Mobile, to IOT are all pretty fundamental shifts – often creating deep changes in business models. 

 

To add to these problems, as this article in the Forbes highlights, many organisations undertake digital transformation without actually knowing what it is. Many don’t really understand the transformation, many others just see it as platform upgrades. 

 

So here’s the bad news, your digital transformation project is not a one time exercise, there is no target environment and so your target operating model may be in need of an update by the time it’s bedded in. 

 

The likely scenario is that there will be multiple waves of transformation. And here onwards they will all be digital (or at least until we come up with a new word). 

 

Which leads me to my proposition – that perhaps the right way to think about this is as an Evolving Operating Model, rather than a Target Operating Model. 

 

What would be the key features of an evolving operating model? Here are three key ones, though there may well be more. 

 

Building a change capability – at the core of this is the creation of a Culture of change adaptability. I’ve consulted for many organisations where the smallest change has to be handled with kid-gloves and is a source of anxiety and organisational stress. These are all big changes we’re talking about, so there’s a lot of work to be done to make people change friendly. This should ideally be reflected in contracts with employees. HR needs to take a leading role here and ep build a culture of change through awareness, education, self-empowerment and counselling. At the same time, leadership needs to invest by ensuring the right people are chosen and then given the time to grow into this change culture. Based on my experience, there are parts of the world, such as Europe, where this would be a harder process than, say, in Asia. European business cultures are much more rigid about roles and function, and these are often defended by regulation. Also, in Europe, there is often a much higher premium on matching exact experience to a role, rather than bet on adaptability. One of the ways to address this is to balance the majority of such fixed role people with a handful of adaptors – people who can foster a pro-change environment within the business. 

 

For example, I met a European company in the travel segment who could not even change business rules in their enterprise apps, or implement a mobile app store without validating the decisions with worker councils. 

 

Funding Change: Not a capital expense but the cost of doing business: Build in the cost of change into your cost of running the business. Rather than the one hit capital expense of a digital transformation project, budget for change annually, that LOBs and divisions can draw from, with the right checks and balances to ensure governance is provided. There is every likelihood that each of the next five years will require significant changes to some part of your business or the other. Rather than running it as a giant centralised project, or leaving this to individual departments and LOB’s who may not value this investment, organisations should explore creating an investment bucket which is made available to teams based on their justification, against a stated vision. But this investment is locked down for change efforts and cannot be used for other purposes. 

 

Earlier this year, the BBC announced a program of saving £48m and reinvesting at least £29m of that into Digital Transformation services across channels, mobile and digital journalism. Cooperative Bank had set aside £500m on IT alone, to enable it’s digital transformation. Your budgets may be comparable to BBC, or Cooperative Bank, but in all probability they represent significant amounts of money. 

 

The big bang approach assumes that one large and hugely diverse project is the best way of optimising the way this budget is spent. Reality may be very different. 

 

Instrument your company: Build an instrumented organisation where process change can be systemised easily, using BPM, middleware, SOA, and other architectural approaches. This is fundamental in order to plan, implement and measure change. For example, if you want to change your mobile customer service layer, with new processes without necessarily having to make big changes in your CRM or ERP systems, you need a decoupled approach that will allow you to modify or even replace your mobile front end without always having to change a legacy application. But also, it will be faster and quicker to implement a new process if the systems can change quickly, rather than become a symbol of the organisational inertia. 

 

A good analogy and one you hear often in business discussions is about turning the tanker. We talk about large businesses being like large tankers – hard to turn. But your digital transformation should not be seen as that one awkward turn. It’s more like suddenly being in an environment where you will need to turn and often. The real challenge here is actually, how do you stop behaving like a hard to turn tanker? 

Why Digital Architectures Matter – A Business Perspective

I was recently in a discussion about digital architecture. There were half a dozen people in the discussion and everybody had a point of view, but there were two things prventing the discussion moving forward. The first was that we didn’t have an agreed view of digital architecture – a ‘what’. And the second was we didn’t have a ‘why’. 

 

My knowledge of technology architecture is limited at best. You would not want me anywhere near an actual architectural design discussion. But it was the ‘why’ question that fascinated me. Why is this relevant? Why should we bother discussing this? What’s at stake here? 

 

Let’s take a look at the competitive environments we live and work in. Increasingly, we are finding ourselves in a world of hyper-competition. What do I mean by that? 

 

First, we are competing on new parameters. Most industry leading businesses have done the basics, so the battleground for competition has shifted. Often the differentiation itself comes from an information driven or ‘digital’ part of the service. Last month, in New Jersey, US, I agreed with a colleague that a primary basis for choosing a rental car would be the quality of the SATNAV system. But it is also likely that you have done enormous amounts of optimisation on your operational models. I just read about UPS’s optimising routing by minimising the number of left turns (in the US) and their innovation on how to land cargo planes. 

 

Second, we are competing with entirely new types of players. Broadly there are 2 new types which require us to think harder. The first is the entry of established providers from other industries. For example, traditional banks have to worry about retailers many of whom are launching banking services. The second is the emergence of disruptive start ups. Once again, for Banks, you have new providers like http://www.simple.com or Square – each of whom may individually survive or perish, but collectively, they will pose some serious threats to your business model. 

 

Consider two more key trends: 

 

One, technology is now a part of the product. Almost every product. You can call it ‘smart’ or you can hide the technology but the chances that the tech component of your product is increasing annually as a percentage of your product’s value are extremely high. From Nike to Nest, everybody is doing this. 

 

Two, there is an ongoing service-isation. As most companies seek that sweet spot between pure products and pure services, technology, and specifically software, is often the delivery mechanism for the service component. After all, when you buy the Nest thermostat, what you’re really buying is the service of ambient temperature at home. Or when you buy a washing machine from Samsung, for example, you’re really buying the service of cleaning clothes. So could Samsung theoretically also send you analyses based on weather to let you know when clothes will dry faster without a dryer? Or perhaps it might analyse the performance of your washing and let you know that you’re overloading the washing machine on weekends. You can easily think of ways in which almost every product can enhanced by a service layer, which is driven by data and software. 

 

What does all this mean to our discussion on digital architectures? Here are some questions to ponder: 

 

1. If your competitor provides any core service at a lower cost than yours, could you survive in the long run? If a broadcaster can run a channel at 10% lower operating costs, or lower ad-sales costs by 10%, can their competition survive? Does your architecture allow you to run core services at a competitive cost model? 

 

2. If your competition can get new services to market faster than you can, would you retain customers? 

 

3. How do you compete against companies that have no legacy? You can get away in an internal discussion by talking about how much of a challenge your legacy is, when it comes to making changes or adding a new service. But do your customers care, when they can get the same thing elsewhere? 

 

4. Is your digital architecture designed to handle the new requirements of competition, new services, and the technology component of your products? 

 

So coming back to the challenges of digital architecture, I believe there is an absolute requirement set and a competitive requirement set. The absolute set may contain things such as scalability and response time. We learnt from the early days of the web that traditional architectures and spikes on websites were not a match in heaven. Even now, major sites crash when the world flocks to see something unfold or buy something everybody covets. Architecture that can handle spikes is a critical requirement in an absolute sense. You can estimate the boundaries and plan for them. Speed/ response time is another – we did a project once where it would take a few seconds to respond, and that was unacceptable, of course. After due analysis we discovered that each request was being routed via enterprise servers across the atlantic and back, so obviously even the physical set up needs to be understood. Other absolute requirements may include security and handling specific functionality such as streaming or transactions. 

 

But to my points above, all of this will point to navel gazing unless you also consider your competitive requirements for your architecture. This leads to benchmarking the costs of key processes, the time taken for changes, new products, upgrades and of course, your customer interface.

 

So whether you’re like UPS – extracting the last bit of efficiency so you can be that half a second faster than the competition – or whether you are the competition to UPS, the focus of your digital architecture needs to be (a) ensuring it can do all the things you need to do for your customers and (b) ensuring it allows you to be compete – by making you faster, cheaper, quicker or better. 

 

That should be the starting point of the discussion for digital architecture. 

Adventures in Uberland

 

The Habit 

Nothing is as addictive as a service that is easy, offers instant gratification and solves an everyday problem. I just had to try it once, and I was hooked. Now, you have to realise that it’s not the same in London, where the density and availability of cabs, both private and public is very high. But out here, in New Jersey standing on the highway, and facing the prospect of great head-scratching and then significant time and effort to get practically anywhere, it’s the most obvious thing to do! And once was all it took. 

My name is Ved and I am addicted to Uber. 

Nobody walks in New Jersey. This is almost as much of a truism as “No Snakes in Ireland”. But its true. I found a Starbucks 10 mins away (on foot) from my hotel. To get to it, though, I have to walk through 3 parking lots, a driveway and a stretch of path by the road which I think has just been created for some construction work. Nobody walks in NJ and it’s not designed for walking. Nonetheless, each morning I venture my way to the Starbucks and then head out from there. 

When my coffee is three-quarters finished, book the cab on Uber. It usually takes 7-8 minutes for the car to arrive. It comes right to the Starbucks without my having to give the driver any instructions. I get a warning when the car is 2 mins away. Is it not obvious yet, why I can’t tear myself away? Of course there are moments when it falls over a little bit. But more about that later. 

What’s in It for Me? 

It’s a cashless transaction. I can track the car. You know all of this. 

But I also know the name of the driver and vice versa so I can greet him with a ‘Hello Dan’ – this is a very small thing, but I find it extremely worthwhile. It opens up the space for a conversation. 

What’s in It for Him?

So far all the Uber drivers I’ve met are men. I’m sure there are women Uber drivers as well. So forgive the generalisation. 

Uber hoovers up spare capacity and brings more granularity into the supply side. In other words, you could be an Uber driver for 2 hours a day or whatever works for you. 

I met a driver who was a tech entrepreneur, one who was also driving for a cab company and one who was a student. I learnt that Uber gives each driver a phone with the Uber app installed and everything else disabled. I learnt that thanks to the geofence implemented, if you don’t have the right license / car to drive in New York, the app shuts off as soon as you get on the bridge. 

Finding Nemo

Yesterday, I called the Uber car after my coffee but he struggled to find me. 

 

2014 09 21 12 37 51

2014 09 21 12 38 01

2014 09 21 12 38 08

2014 09 21 12 40 572014 09 21 12 42 19

2014 09 21 12 41 47

 

2014 09 21 12 42 13

2014 09 21 12 44 11

 

 

 

 

 

 

But he did, finally. Took him 15 extra minutes. It was a Sunday and I was enjoying my coffee. I didn’t mind. 

 

Mobile Entrepreneur 

Today, my Uber driver was Rob. He told me he’d just started with Uber a month ago, when he quit his job with a software company. Why did he quit? He started his own company. What kind of software? Mobile apps. He said he drives for a couple of hours every day. We had a great discussion about the Uber app itself, the advantages and drawbacks. The geo-fencing, the battery life. 

On Friday my Uber drive was Taj and we spoke about daughters and growing up in different cultures. 

 

Uberisation

Professionally speaking, Uber could well happen to your industry. What if service providers had a platform to offer to users what you do with great investment and commitment? What AirBnB is to hotels, or Ebay is to retailers. These platforms aren’t service providers themselves, but often are really focused on marketplace efficiencies. 

Should you look for these opportunities within your own industry, before somebody else does? That might well be the right question to ask. 

Because, as I’ve already argued before, resisting technology is like resisting ageing

Teach Your Children Well – The Real Value of Social Media

A common refrain we all hear nowadays is how technology is creating a generation incapable of human interaction. Your kids spend all their time with their noses stuck in a phone or laptop and you’re worried (or should be) that they aren’t building the skills to interact with real people in the real world. Books such as Sherry Turkle’s “Alone Together” – (which I’ve tried to read), paint this view all too grimly.

This is a misplaced fear at best, and downright wrong at worst. This post will try and explain why. 

But first, let me state that I do find it odd when I meet with young people and neither they nor their parents find it necessary to make any attempt at conversation. They slink into a corner with their phones and the inter-generational equilibrium (read: uneasy truce) is reached. I’m not defending the lack of real life social engagement skills. But is technology really to blame for this? In my book, this is a debate about parenting, which is best kept for another forum. 

But social media has a bad rep in many circles. I occasionally hear people say with a lot of vehemence (or pride?) “I don’t have time for cr*p like Facebook”. Others will say “I don’t get the point of Twitter”. Without disrespecting opinions, let’s get a few simple assertions out of the way.

Social media is first, a marketplace. It’s a market for opinions, emotions and connections. As with any market, there are buyers and sellers. Thus it is that on any platform, including the ones above, there are people who have the need to express, and those who have the desire to listen. 

Second, many of us live in a post-national world today. Our families, friends, colleagues and professional relationships all comfortably span countries and continents. On a given day we interact with people all over the world. Isn’t it amazing that we can do this? Have we forgotten already how magical this is? And how far we’ve come from the days of having to pre-book International Trunk-Calls and start conversations with “What time is it there?”. 

Most importantly, in the world today’s children will grow up in, it will be natural to have as many conversations with people across the world as with the persons next to us. No, this is not sad, or a decline in human communication. It’s the death of distance. I want to have a coffee with my colleague at work, and dinner with my friends who live in my city, but I also want to share the private joke with my college friend who happens to be working in Africa currently, and debate the pros and cons of the changes in the Indian political climate with my friends in India. I want to hear from my friends caught in the Polar Vortex in America, that they are safe and warm and to continue the debate I started with my mother about whether or not the US Dollar is a artificially held up by oil-negotiations. I want to do all of this in a single day. And I can. Isn’t that great? And if it isn’t already for you, this will be the new normal. Inability to manage in this world will be a huge challenge. 

Remember, the are entirely new skills being learnt here. Your average teenager is adept at holding multiple parallel conversations; is part of an ongoing language evolution, and is learning about an entirely new way of running trust relationships without physical interaction. All of these are life-skills for tomorrow. 

So while not decrying the value of human interaction as we know it, lets not forget that these technology enabled means of human communication are as important. Knowing one should not mean losing the other. Just as gaining a friend shouldn’t mean losing another.