Tag: technology

What You Need to Do to Get a Business Performance Breakthrough | Sherpas in Blue Shirts

At Everest Group, we’ve been studying the reason behind the disappointing phenomenon of powerful new disruptive technologies achieving only modest, incremental benefits instead of their promised performance breakthroughs. In my recent blogs, we’ve looked at whether the fault could be due to hype or immaturity of the technologies, whether it might be a lack of talent or whether there is an inherent conflict of interest in companies’ incumbent ecosystem. Not one of those things is sufficient to explain why we’re not getting the breakthrough in performance that is ripe for the taking if we can get there. We think all of these factors may contribute to the phenomenon; but these factors don’t seem to be powerful enough to prevent the breakthroughs.

We think a missing ingredient is the organization. When companies implement these new technologies, they must also change the fundamental organization.

At the moment, these technologies tend to be implemented to save costs, whereas the change in performance is far more than cost savings. It has to do with customer experience and cycle time. Although cost is often reduced, that is a byproduct of the greater performance that is generated.

As the buyer of the new technologies, the remedy is to be willing to step back and understand that you have to create a new strategic intent. That intent must focus on performance. It also requires a willingness to address the organizational dynamics. Whenever you digitize a workforce or you embed analytics into it, this affects how you organize work. So often we see people attempting to bring in tools but just adding them to the existing organization. That doesn’t work.

Fundamentally, to get a performance breakthrough, you have to rework your organization. Doing that means significant change across all the pieces. Along with creating a new strategic intent, you have to change your organization, your ecosystem, your technologies and your talent. All of those components have to come together and focus on the promised improvement you’re seeking. Only then will you get the step change performance. If you do them individually or only partially, you’ll only get is more of the same. You’ll get a better status quo, not a changed status quo.

Is Technology the Reason You’re Not Achieving Performance Breakthroughs? | Sherpas in Blue Shirts

In my prior blog, I discussed the phenomenon that vetted, powerful new technologies such as cloud, analytics, cognitive computing and robotic process automation (RPA) should be making big differences in businesses; but for the most part, they’re achieving only modest, incremental benefits. Why aren’t they delivering performance breakthroughs?

In answering this question, we need to consider the technologies themselves. Are they overhyped? Or is it that they are too immature?

Let’s think about cognitive computing, for example. IBM has absolutely demonstrated the power of Watson. They used an interesting way to do that by having this cognitive computing technology compete and win at Jeopardy. Google just had its cognitive agent compete and win at Go. If you dig deeper, you find that IBM can run off an impressive set of use cases for cognitive technologies from assisting doctors in diagnosing illnesses and a wide variety of things to helping equity analysts make decisions around stocks.

So cognitive technologies such as Watson or IPsoft’s call center cognitive agent Amelia are robust. Yes, these technologies will mature further. Yes, they will become more powerful. But cognitive computing’s current capabilities clearly could be a game-changer in many different industries and problem sets. Yet it’s not happening.

Let’s turn our attention to cloud. We’ve been looking at and kicking cloud for a decade now. Clearly the proof cases are there that this is a mature technology. There are whole businesses running in a cloud environment (Netflix for example). Massive workloads, both production and new workloads such as Hadoop or analytics workloads, are accomplished daily in the cloud. So why hasn’t it changed the average enterprise environment? The technology of cloud is now, under any reasonable assessment, mature and capable of supporting production and enterprise-quality work.

Or take analytics. Clearly we now have an enormous body of work and tremendous ramp-up of data scientists. So why are most organizations largely underutilizing it in changing their business? The technology is capable.

In the area of robotic automation, look at what IPsoft is doing with its autonomics, and look at what Blue Prism is doing in the BPO field. Again, the technology is robust and production quality. It’s working in numerous situations. So why aren’t most companies using it? And where they are using it, why isn’t it creating a fundamental performance breakthrough in those businesses?

Part of the answer could be adoption. It takes time for new technologies to be understood and for companies and organizations be willing and able to apply them.

But it’s not the maturity. There’s no doubt the technology is robust and mature and certainly ready to create performance breakthroughs.

Slack and the Future of Enterprise IT | Sherpas in Blue Shirts

Unless you’ve been living under a rock, you would have heard of Slack. It is not another enterprise collaboration application. It merely aims to redefine how organizational communication takes place and upstage this little thing called email. As far as start-ups go, the company has witnessed a meteoric rise. In its most recent round of funding in April 2016, it raised US$200 million at a post-money valuation of US$3.8 billion (with an annual recurring revenue of US$64 million last year), which is all the more impressive when you consider that it launched just three years ago and has raised almost US$540 million. An incredible amount of money at a time when VCs are supposedly tightening the screws and we are witnessing a ‘correction’ in the investment climate. To Slack’s credit, it has built an incredibly popular platform. In May, it reached a significant milestone when it announced three million Daily Active Users (DAUs; a much revered metric of app usage vs just installs) and two million connected users. It has grown at breakneck speed – less than a year ago, it had one million DAUs, and in October 2015, one million connected users.

The changing face of enterprise IT

Slack is built on the premise of seamless communication in an increasingly complex enterprise world across platforms, teams, and applications. It has 430 employees and counts NASA, CNN, LinkedIn, Harvard, McKesson, Ogilvy, and Spotify as enterprise customers. Slack represents the true vision of what is often referred to as “consumerization of IT”. It refers to the confluence of consumer imperatives such as seamless user experience (UX), BYOD/CYOD convenience, and boundaryless communication within an enterprise IT framework. Digital technologies are reshaping the workplace of the future while enterprise applications tend to be stuck in a bygone era. Slack, and its ilk, aim to redefine this paradigm. Slack, in particular, aims to make messaging the primary form of communication among co-workers. As an illustration, they can place documents saved in Dropbox into their chat streams, collaborate on revisions and assign tasks without leaving Slack, and search previous conversations and files. It also has fully native apps on iOS and Android with syncing across devices.

This is a far cry from current legacy enterprise collaboration applications, which have seen their fair share of experiments. The most high-profile one was probably Yammer, which was sold to Microsoft in 2012 for US$1.2 billion. One primary reason why Yammer has not scaled as hoped is that it still operates as a separate tool from the rest of the enterprise workflow, much like the IM tools that came before it, which also fall short of meeting the requirements of digital enterprises. Microsoft has tried to salvage its Skype bet with the integration of Lync (now Skype for Business), but the jury is still out on it.

Peers of Slack (Campfire, HipChat, Skype) can copy its core features, but the implications of its network effect and ecosystem of integrated apps/chatbots are quite profound. It meaningfully differentiates on the basis of its pricing models as well. While other SaaS providers typically charge on a per-user basis (regardless of how many users actively use the software), Slack tweaks this to activity-linked pricing. For example, with other applications, if you buy 1,000 seats but only use 100, you still get charged for 1,000. Slack, on the other hand, will charge on the basis of how much it is actually used (say number of messages exchanged).

Challenges and the road ahead

That’s not to say Slack is not facing intrinsic issues. The enterprise version of the software was initially delayed and there are reports that ride-hailing company Uber dropped Slack because it couldn’t handle the number of communications it required. Scaling from micro-teams to coordinate multiple Slacks in a large organization has been a problem. As Slack aims to replace email as the standard of organizational communication, there is a very likely danger that it might end up having the same problems that have made modern-day communications so tedious and sub-optimal. Execution will be a key area of scrutiny. There are very few industries where companies experience this type of hyper growth, especially on the enterprise IT space, so managing the pitfalls become all the more tough.

To Slack’s credit it has not displayed a lack of ambition when it comes to pivoting its future, which clearly needs to be a platform-based play for any meaningful and scalable business model to emerge. The goal now will be to turn its software into a platform that integrates with other software so that a user can accomplish all enterprise objectives inside the ecosystem and thereby create stickiness. To further this ambition, Slack announced an US$80 million investment fund in December for developers to build apps that integrate with the platform. Right now, the Slack Platform consists of a new Slack App Directory (with ~160 apps), a Slack Fund (to invest in new apps), and Botkit (a new framework to easily build new apps). As Slack scales up its aim to be a ubiquitous SaaS ecosystem, it can unlock a significant opportunity by becoming the identity layer of the enterprise. This is similar to the intent Microsoft is driving toward with the US$26.2 billion acquisition of LinkedIn. Ultimately, if Slack’s platform picks up, it can drive other services such as single login and identity access, effectively serving as the singular identity provider for an employee across the enterprise ecosystem. Slack has the momentum and intent on its side to redefine the enterprise application paradigm, and it’s hard to see anyone else (apart from Microsoft) having a bigger opportunity to succeed.

The Perils of CIO Jobs, Remedies, and Case Studies — May 12, 2016 | Events

Peter Bendor-Samuel will be the featured speaker at the May 12 Tampa Bay Technology Leadership Association (TBTLA) meeting.

Peter will discuss with the perils of CIO jobs in today’s rapidly changing environment, and the gaps between business expectations and how CIOs are performing.  He will also share remedies and case studies.

Featured Speaker:

Peter Bendor-Samuel, Founder and CEO, Research, Everest Group

When:

Thursday, May 12, 2016

Where:

The University of Tampa
401 W. Kennedy Blvd
Vaughn Center, 9th Floor
Tampa, FL 33602

Learn more and RSVP

Technology Disruption: Is This the History of the Future and a Bankruptcy of Innovation? | Sherpas in Blue Shirts

The “technology disruption” euphoria is everywhere. Though cynics say the technology industry comes up with something every five years and something big every ten, this time it could be different. Not everyone, however, buys the concept of dramatic disruptive change and supports “incremental innovation.”

The incremental innovation supporters say that many things “appear” similar to what they were ages back. But, when you peel back the onion, you see lots of changes…think today’s cars, compared to those in Henry Ford’s time. Their take is that because incremental innovation doesn’t grab headlines, it’s considered boring. On the flip side, supporters of disruptive changes point out that Edison could never have made the light bulb by incrementally innovating the lamp.

Irrespective of which camp you are in, it’s clear that things in the broader technology world are increasingly resembling what they wanted to compete against. For example, check out Amazon now planning to open brick and mortar stores.

Here’s a look at three major technology evolutions from the recent past and how they are taking us back in history.

  • Mobile apps: Web applications were considered the panacea for everything wrong associated with desktop applications. Unlike desktop applications that required installation on different devices, web applications were easy to access, and could be accessed from anywhere on any device via any OS, as long as the user had a network connection and a browser. However, mobile apps are taking us back to the desktop world where applications (or apps) need to be individually installed (albeit a lot more easily), individually managed, secured, and should work across multiple form factors and OSes
  • Edge computing: As the cost of network bandwidth skyrockets, organizations are realizing that the idea of central computing is very costly. Therefore, the data in various analytics platforms is processed at the nodes themselves, rather than at a central junction. Additionally, in the broader Internet of Things (IoT) ecosystem, organizations just cannot afford, either economically or technically, to send data to a central crunching unit. For that, the IoT edge devices need to compute themselves, instead of having an always on data channel with central servers. This means going back, at least partially, to the days of intelligent end clients
  • Dedicated SaaS: Large technology vendors, unable to fight the nimbler cloud SaaS providers and desperately wanting to ensure client renewals, are taking the dedicated SaaS route. While purists question how SaaS can be dedicated, others argue that if an IaaS platform can be “private,” SaaS can be as well. Many large technology vendors have made SaaS an evolved form of application hosting, which has been around for decades. They add their financial reengineering and deep discounting to lure buyers, without realizing the challenges they will face during renewals. However, the bottom line is they are going back in history.

Of course, we can argue that irrespective of how these technologies are delivered or consumed, they assist in doing new and better things in a different way. However, does this mean that true innovation, whether incremental or disruptive, is not possible in the technology industry? Consider that there have been multiple articles on how corporations are buying back their shares to improve earnings per share (and the linked executive compensation), rather than focusing on R&D. The thesis here is that many organizations are realizing they get greater benefit from returning cash to their shareholders than they do from the risks of innovation. Innovation skeptics also point out that many companies that were the first to innovate never got their returns.

So, is the technology industry destined to just repackage what existed earlier, or will we see something that is fundamentally different? Are we destined to oscillate between different technology models every few years? The bigger question is, should the pursuit to be innovative be for its own sake, or to create some meaningful value? I firmly believe that regardless of whether the value comes from incremental or disruptive innovation, the value needs to be the key driver.

How can technology companies (which these days implies every organization) innovate yet manage the risk in these times of rapid change? How can they jettison their age old planning cycles and be more agile and nimble?

The industry needs to answer these questions to ensure the pipeline of innovation does not dry up. The future of technology is right here, right now, and all stakeholders need to shape it to ensure it neither goes back in history nor becomes a prisoner of old habits that die hard.

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