CTO Blog
The following is a guest post from a good colleague and friend Hans van Grieken who has often been a thought leader. It’s a novel idea and a good one building on the wisdom of the crowds. I am sure it will promote some good posts ! Andy
A personal call to enrich some of our sector specific market Metrics
For decades the Consulting Industry has made huge sums of money by measuring their client’s performance to industry best practices and standards. Over the past 70 years, millions of Executives have looked their consultants in the eye with that weary look in their face: “am I still on par?” As a result, companies such as McKinsey, Boston Consulting Group, Baines and Capgemini produced massive and expensive sector market-overviews with which they engaged with their clients to either benchmark them or to develop transformation-business engagements for the unfortunate and perpetual “underperformers”. According to Wikipedia, Benchmarking is a powerful management tool because it overcomes “paradigm blindness.” But is sensitivity to paradigm shifts “inside ones company or market sector” enough these days? I think not.
‘The term ‘benchmark’ presumably originates from the practice of making dimensional height measurements of an object to a workbench’ using a gradual scale or similar tool, and using the surface of the workbench as the origin for the measurement. It was put into a formal process for the first time by Rank Xerox. Yet, one might argue that a lot has changed the last 10 years, specifically since the internet. Competition has become a much fiercer and global play, customers demand an ever growing number of individualized/personalized products and services which calls for “mass customization”, time to market has become key in conjunction with extremely shortening Product/Service Life Cycles, disruptive Web 2.0 technologies enable new entrants to rapidly move into a new business/market on a massive scale. The question as to the extent of your market performance in comparison to your peers therefore, has become less important over time. One might even argue that “if you’re not on par, you’re dead anyway(or at least for sale)”. That obviously doesn’t mean to say that these companies aren’t interesting to look into as potential clients for our Consulting offerings: they are. But having said that I think it is time for us to develop an additional set of benchmark-offerings totally geared at those companies that are on par or beyond anyway. An offering that I would like to refer to as the mashmark.
A mashmark I would define as is the ability of a company to structurally scan the environment for anomalies that might trigger new business opportunities, new coalitions, both inside its own vertical markets but – far more important – outside its sector in mashup with players from other sectors. As put in a recent article by Ron Tolido, Koen Klokgieters and myself , “a mashmark indicates the level at which an organization is able to integrate with the outside world and quickly arrive at new insights based on continually changing information sources and events. A mashmark also indicates the extent to which an organization is to enter into new, flexible collaborative ventures with partners and customers, even if these are in totally different sectors or the parties are on remote continents.”*.
What metrics make-up such a mashmark? This is obviously work under construction, but to get your idea’s “pumping” here’s some of my own indicators:
1. does your company have an organized outside-in radarscreen that detects anomalies both outside and inside your marketsegment?
2. does your company have an ecosystem of business partners with whom to team outside your vertical market?
3. does your company have a specific set of “rules of engagement” to deal with issues of intellectual property in interacting with potential mashup partners (“open source, wicki,)
4. does your company have an IT architecture that allows you to easily and securely interact with potential mashup partners (SOA, deperimeterisation/Jericho principles/risk appetite, Web 2.0)
5. does you company have the company border crossing collaborative tooling in place to support these business processes?
6. and finally: does your company have the “open innovative culture” that is vital to make this work in a sustainable fashion?
These thoughts of mine are meant to stir thought and feedback, it is a call to collectively define a number of metrics and indicators that might well make up a future ‘benchmark’: for want of a better name for now and to build around the idea I refer to this as the Capgemini MASHMARK. Let me know what you think.
Hans van Grieken
VP Business Innovation
Capgemini Netherlands
Further reading:
* From benchmarking to mashmarking – Koen Klokgieters, Ron Tolido, Hans van Grieken – Capgemini Face to Face – NL Corporate Clients magazine
Clayton Christiansen – the innovators dilemma
Chan Kim, W. and Mauborgne, M., Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant (Harvard Business School Press, 2005)
Chesbrough, H., Open Business Models: How to Thrive in the New Innovation Landscape (Harvard Business School Press, 2006)
Christensen, C.M. The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials, 2003)
Friedman, T. L. The World Is Flat [Updated and Expanded]: A Brief History of the Twenty-first Century (Farrar, Straus and Giroux, 2006)
Moss Kanter, R., Innovation: The Classic Traps. In: Harvard Business Review (November 2006)
Don Tapscot, Anthony Williams, Wikinomics
On the history of benchmarking: 12manage
On mass-customisation: Mass Customisation is the customisation and personalisation of products and services for individual customers at a mass production price. The concept was first conceived by Stan Davis in Future Perfect. It was then further developed by Joseph Pine in his book Mass Customization
About the author
Capgemini Global Chief Technology Officer, Andy is a member of the Capgemini Group management board and advises on all aspects of technology-driven market changes, together with being a member of the Policy Board for the British Computer Society. Andy is the author of many white papers, and the co-author three books that have charted the current changes in technology and its use by business starting in 2006 with ‘Mashup Corporations’ detailing how enterprises could make use of Web 2.0 to develop new go to market propositions. This was followed in May 2008 by Mesh Collaboration focussing on the impact of Web 2.0 on the enterprise front office and its working techniques, then in 2010 “Enterprise Cloud Computing: A Strategy Guide for Business and Technology leaders” co-authored with well-known academic Peter Fingar and one of the leading authorities on business process, John Pyke. The book describes the wider business implications of Cloud Computing with the promise of on-demand business innovation. It looks at how businesses trade differently on the web using mash-ups but also the challenges in managing more frequent change through social tools, and what happens when cloud comes into play in fully fledged operations. Andy was voted one of the top 25 most influential CTOs in the world in 2009 by InfoWorld and is grateful to readers of Computing Weekly who voted the Capgemini CTOblog the best Blog for Business Managers and CIOs each year for the last three years.
Excellent Post…
Got me thinking the following:
Generally you cross cut a consulting organization two ways. Vertical – Industry Focus and Horizontal – Technology Focus.
What the above discussion tells me is that you need to add a third dimension in the way you approach to your Customer.
ie. The Customer Segmentation. Adding a practice that focusses on understanding the demographics , groups(individual , houshold , small business , Enterprise) , Age , culture etc is CROSS CUTTING across industries and technologies. For example if as a Consulting organization I can talk about how the current demographic for my insurance client is shifting to using web and self service as compared to what Progressive insurance is doing as its next step , It changes the game from being a catchup to a benchmark to being a someone who understands the mashark. I noticed this notion while reading the Capgemini “World insurance report” and the “world banking report”. Both the reports had a lot in common in terms of what they were advising. I am sure if If there was a “world Auto report” it would say the same that the Customer lives in networked economy , has more information and has a short attention span. Breaking this information down to customer segmenation and the buying patterns of the segments is true across all industries
Missed a point..
So something like a “World Customer report” would be a nice to have. This could talk about different geographies , demographics , age , culture etc.
Niraj makes a valid point. To put in place a set of “market-sensors” that trigger “alerts” based on changes in demographics , groups(individual , houshold , small business , Enterprise) , Age , culture and technology use could well be a good approach to spot the “next relevant mash-up”. Question is if you would want a “World Customer Report” for that. I would rather get closer to the market by using crowdsourcing mechanisms to monitor these developments in a more granular way. Invite the customer to help define the next mashup:-)
Hans van Grieken : the only way to do what you are suggesting is via social software that know the pulse of a demographic.(Example MySpace knows the gen X in and out , Socialpics probaly knows the Individual investor and linked in knows the Professional and google knows the most about a person as a result of its BI on searches)
Expecting a consulting company to know all these segments is impossible. Consulting companies probably need to work with Social Software companies. Learn the segment and apply it to other companies.
HANS IS ON HOLIDAY AND WILL BE RETURNING TO ANSWER YOUR POSTS ON 24TH SEPTEMBER.
As someone working on enterprise architecture, a move towards mashup organisations as well as defining a mashmark, puts a challenge towards the means of enterprise architecture.
When enterprise architecture is to be a means providing insight to management concerning decisions about the enterprise’s future as well as a means to guide transformation processes, then it’d better aid in answering questions regarding an enterprise’s mashmark.
In working towards a definition of a mashmark, I would think there are five levels of “mashability” an organisation might have:
1) Unable to participate. Organisations that have a monolithic nature, lack clear service interfaces (be it in IT terms of business terms).
2) Able to participate based on invitation. This would be an enterprise which has well defined services and is able to offer these in different constellations in mash-up contexts
3) Able to participate and adjust. An enterprise who is able to flexibly participate in a mash-up due to its well defined services and its ability to easily provide variations of these services due to a flexible service delivery/creation mechanism, focussing on flexible core human/computing competencies rather than rigid production processes
4)Able to spot chances to join up with mashups being created. This type of enterprise would also need Hans’ “radar screen”.
5)Able to take the lead in creating new mashups. These enterprise do not just need the radar screen, but also the maturity to setup and manage mashups of differing enterprises.
Ideally, I think we would need to be able to determine (an indication of!) the mashmark of an enterprise based on its architecture. If we are able to do so, enterprises would be able to weigh different design alternatives in terms of the increase in the mashmark potential (potential, since an architecture is just “paper”…).
Another issue I think is that a mashmark should take into consideration any restrictions put on freedom of enterprise-configuration by government regulations. For example, in a banking context, regulations by central banks might disallow certain constellations of mashups due to regulations concerning financial risks. Would be interesting to see which regulations actually have a limiting effect on mashups.
Cheers,
Erik
Hans, theoretically this sounds like a good idea. However, in practice many benchmarking projects are initiated because the unit or department head wants to prove his or her manager how good he is doing c.q. to avoid cost cutbacks. There are few companies which actually use benchmarking for the purpose it was meant to serve. So while the notion of the mashmark looks real good, I think it is worthwhile to focus on what customer or CxO role would actually buy such a project and what his or her personal objectives are with starting up such a project.
Erik,
thanks indeed for your build. I find this build from the architecture perspective quite useful. The five levels of “mashability” help to define the type of architecture services might be delivered to clients. It also relates to a disctinction that I always make myself between an ecosystem and a chain. An ecosystem has far more of an ad hoc character, whereas chains have a high degree of interdependancy which by nature calls for a more robust architecture.
Your observations regarding “restrictions put on freedom of enterprise-configuration by government regulations” are spot on. On the one hand because they limit the scope of possible intercompany mash-ups, on the other hand because they might well trigger discussions with regulators and government to remove regulatory boundaries for future growth.
Roy,
thanks indeed for your build as well. I agree that most of the benchmarking we know is basically geared at “ligitimizing” the function of a department or its manager. Having said that I am sure that you are aware of the type of research papers that companies such as Capgemini produce on retail, automotive, logistics and transport. They give an interesting view of what happening in a seperate vertical market. Yet my claim is that if the “mash-mark” component would be added, a basis would be created for a sound discussion on future innovations within a chain or ecosystem of organisations.