2012: the year of unstructured technologies and market change

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I was deliberately pretty conventional in my comments about technology for 2012, but after reading Gartner’s views that up to 35% of expenditure will move from IT by 2015, that 2012 will be the year of big data, and also that enterprises will struggle with these topics in 2012, I think I can afford to […]

I was deliberately pretty conventional in my comments about technology for 2012, but after reading Gartner’s views that up to 35% of expenditure will move from IT by 2015, that 2012 will be the year of big data, and also that enterprises will struggle with these topics in 2012, I think I can afford to provide some of my own personal views.  There is a big point in the Gartner predictions relating to the topic of big data, which is that the term ‘unstructured’ should be applied, and for me that is at the very core of the whole change we are all facing. IDC, in its 2012 predictions, refers to a current industry-wide shift to what they term the ‘third platform’ in 2012. This is built around the combination of clouds, social networks and mobility. At Capgemini we will soon release a new Point of View paper defining the shift in much the same way but replacing social networks with big data, which seems to align more with Gartner’s view.

So we all seem to be pretty well in agreement with the technology elements, but exactly what is it that they deliver and why is it the business revolution that I drew attention to in a previous post? Possibly even more important is why are many IT folks struggling to understand what is happening? This post is about the ‘unstructured’ nature of this new ‘environment’ and its applicability to the front office to do business with the external world. By definition this means being flexible, and agile, to match what you want to see to what others want to buy or, in a more popular turn of phrase, being able to optimize ‘events’. This is set out much better in the latest book from John Hagel III and John Seely Brown under the title ‘The Power of Pull’, which features dust cover endorsements from Bill Clinton and, perhaps more constructively, Marc Benioff, the founder of Salesforce.com, Hasso Plattner, the founder of SAP, and Eric Schmidt, the Executive Chairman of Google. That should align to the strategy and thinking of some pretty powerful players in the technology market whose products are installed in many enterprises!

However you look at it, the front office is basically an unstructured operational area built around talented people who are mostly not sitting at a fixed desk trying to make insightful decisions around whatever facts are available. So there is the basis for ‘mobility’ as the smartphone and tablet (iPad) fully enable this, with the ‘big data’ part of the new environment – meaning how to search for relevant data from the huge amounts available. And that’s not the same as using the internal data produced from the back office applications with conventional Business Intelligence. The back office is where the environment is ‘structured’, and indeed it has been the journey of the last twenty years with Enterprise Resource Planning (ERP) to fully automate the processes to ensure that the structure is optimized! There has been little success in front office automation simply because the core values creating activities are not structured!

So there is the challenge for the IT folk; the last twenty years of good practice in IT has been to introduce structure into processes and ensure that all data is categorized and structured ending up with Master Data Management as the Holy Grail. The chaotic event-driven world of the front office based on these new technologies and a strong externalized (meaning risky and dangerous to any good IT person) set of activities is not something that it seems right to embrace. In a previous posting, I explained that, in fact, these are two separate, and indeed separated, environments that the new Capgemini Point of View covers in some detail. We call these environments ‘inside-out’ for the traditional IT environment based primarily on internal applications using client server, close-coupled, state-full architecture, and ‘outside-in’ for the new environment focused primarily on external ‘services’ using a browser-Web architecture, which is loose-coupled and stateless.

Not much similarity between the two is there? Business requirements are different, the area of use is different and above all the technology is different too! So how do we make what this means clear? The answer partly lies in Conway’s Law, which states that if you change your business model then you will need to change your communication and decision making methodology. In the new ‘outside-in’, ‘unstructured’ world of the front office that means shifting from email to social networks. Examining this in more detail is a great way to explain the difference, and to understand why senior managers are mystified by the topic.

In many ways social networks are the glue of this new ‘unstructured’, ‘outside-in’ environment of the front office with the role of finding alignments between events, people, and big data to ‘organize’ collaborative responses to market opportunities. The market opportunities are unlikely to align exactly with the way that the enterprise would like to do business and the role of marketing has always been to figure out what the market wants. At the same time the role of sales has been to convince the customer that they want what the enterprise wants to ‘push’ to sell. In the new online world the customers have choices at their fingertips and power reverses to the customer ‘pulling’ their exact choice from the potential suppliers (remember the book ‘the power of pull’ mentioned above). The enterprise has to quickly find answers to all the questions and be ‘agile’ in its ability to match the requirements of the market and its customers in the online globally competitive environment.

Social networks inside the enterprise allow skilled people to identify themselves by their skills, and receive and answer questions on that basis – there is no need for the sender to know the names of the people individually, or to do mass mailings, both of which are required by email. Furthermore, used skillfully, social networks allow the receiver to filter the messages and so reduce them to only the relevant messages, rather than with email where the sender has control and can rapidly fill email boxes with unwanted messages. The generally expected figure is that if an enterprise can make a social network function properly then users will see a 40% reduction in their email, which in turn gives them the time to respond to their social network requests.

This front office unstructured activity is primarily focused on the ‘outside’ and is rich in market, product or other aspects that make up the ‘value’ of what the enterprise sells. It contrasts totally with the structured back office on the ‘inside’ that is about how the enterprise operates its procedures in order to manage its ability to run the order-to-cash processes. In the back office the names of the people responsible for the various elements and processes are clearly defined, and, as such, email works perfectly as indeed it was introduced to do in the last Business Process Re-Engineering in response to the business model changing following the introduction of PC technology in the early 1990s. Accordingly, senior managers in the back office see quite correctly that they have no need for social networking in their activities!

This is a small part of the overall picture, but one that does make a good point about the difference in the front and back office roles and the use of technologies. Next week I plan to post a ‘use case’ to try to extend the understanding of the way the front office is being changed by adopting the combination of cloud, mobility and big data with social networks to create a wholly new set of capabilities that are based on the ‘outside’, unstructured nature of the front office’s activities in the market and with its customers.

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