The state of Digital Technology and Enterprise
Today the Enterprise Information Systems Landscape is a combination of the new and old technologies. IT infrastructures consisting of networking, data centres and devices have come to define the modern enterprise platforms that run sales and marketing, operations, planning and productivity software applications. Yet practitioners in both IT and Business have been faced with enormous changes in how Enterprise solutions are brought into the organization and their ability to spread from inside and reach outside the company boundaries. The rise of the term “digital technologies” and “digital transformation” have lead the way in describing Social media, Big data , Mobile devices, and cloud computing in reinventing how customer experience (CX) and user experience (UX) can be developed and enhanced. As a practitioner it’s a useful distinction to differentiate between CX and UX in that Customer experience, CX is about the way the enterprise engages with their consumers, customers and buyers and wider market. UX on the other hand is a key practical enabler of CX but I refer to this as the way any user (human or machine automation) both inside the enterprise and outside engages and used technology and conducts their activities and includes the choices of how to source, provision and consume technology.
The past large scale enterprise platforms seen in examples such as ERP, CRM, PLM, SCM, SRM, Office productivity, email and web site content have undergone five major technological changes: consumerization, visualization, service systems and governance.
In exploring the impact of digitization and digital technologies in the enterprise perspective, we will consider five major trends that have historically driven the emergence of digital technologies
Product-service systems (servization)
Governance , risk, and compliance
The costs of storage, networks, and applications have fallen dropping the barriers to low cost consumer led adoption. This combined with the phenomenon of modularity of IT where by devices, software and computing resources can be defined and offered as commercial units of resource has enabled consumers to just use what they want, where they want, and when they want to use the IT.
Examples of Consumerization include mobile cell phones, on-demand cloud storage, downloadable mobile applications, video and music streaming services, eBooks, massive open online courses MOOCs, hosted storage for data and backup, business software-as-a-service applications for sales, website content, billing, design, planning and so on, the list is endless. One high profile example of Consumerization scale can be seen in Apples’ growth of mobile applications. In October 2013 Apple passed 1 million applications in the aps store and more than 60 billion downloads. (1) By June 2014 with was 1.2 Million Apps and 75 Billion downloads (2) that is an increase of 25000 apps per month and 1.8 Billion downloads per month equating to approximately 7 million per day or around 5000 a minute.
What was once complex and high costs infrastructure and applications development requiring specialized expensive skills has become commoditized and offered as-a-service in many common business and general user needs. These terms refer to the shift in technology consumerism where there is an expectation to use IT as services that follow the user how can consume the IT on-demand. These features have fundamentally altered how the user and customer experience can be created and generated using such technology characteristics. Through Consumerization, faster, cheaper and often better outcomes of experience and value are achieved in many situations where standard and repeatable services are required such as email, ordering, billing, viewing video content, video communication and many other aspects of modern life.
Networks and devices have become more connected cross business and World Wide Web networks enabling enterprise data and transactions to be spread across departments, business units and exchanges between enterprises and markets. These network effects have driven what has also been described as “second order effects” in the development of social and industrial communities that have formed based not on the physical location but on how they connect common interests through technology to share content, opinions, experiences and decisions.
Examples of Communitization include social media networks, microblogging sites, crowd sourcing websites, enterprise start-up crowdfunding, picture and art exchange sites, open source collaborative developer networks. The scale of Facebook and Twitter provide highly visible examples of community building that in the relatively short space of time of less than ten years has grown to enormous global proportions. This phenomena is both rapid and fickle as seen in the growth and diminishing scale of Myspace, the entry and choice of digital community and its preservation through digital technology and services that build online community matters in the digital enterprise. Its perhaps not surprising the WhatsApp, bought by Facebook for $19 Billion, passed 600 million active users in august 2014 (3).
Communitization is a term called clustering in social networks and used by practitioners in data analytics to identify inferences and characteristics of individuals and groups. Communitization has enabled informal and formal associations both inside and outside the enterprise changing the way the enterprise needs to think about itself and its relationships through online and off-line presence.
Information is at our finger tips, in our ear phones, in electronic traffic display boards, on-of-sale check-outs, in the mobile touch screens, multi-media choices on television, and the interactive web page advertising. Digital information is not just about the products and services but also the transactions and opinions found in innumerable comments, preferences and recommendations that pervade the many search engine results and opinions online. The era where data that represents information is static and flat on a printed page has long gone in the new digital world.
Examples of visualization today are not limited what can be seen. To some extent visualization is probably incorrect term to use when considering wearable technology and audio language in a rapidly evolving field of internet of things that enable immersive and tactile response. Visual cues today exist include the message alerts on mobile cell phones that pop up inset of the viewing experience alerting the user to new emails, directions of GPS navigation or reminders for online friends or transaction deliveries and payments. Visualization also includes analytics that display social graphs that plot and color associations and trends for crowd behaviour and trend analysis. Visualization also includes superposition of information on top of images such as head up displays in automobiles and pilot control systems. Beyond this other forms of media, sound, vibration, language are also used to create a sense of information cures. Voice recognition enables input of speech to text and text to speech translation and interpretation today. Sports exercise monitors in the form of wrist bands , shoe attachments and body sensors can follow and record movement, heart rate, blood pressure and ECG to provide cue and insight on activity and wellbeing. This can be used in examples such as health care monitoring where geo-fencing can track and protect at risk patients.
Visualization has become a key way to engage and provide information from individual to communities and markets. It is a foundation of digital systems that seek to collect and provide information in a way that is accessible and meaningful. It is part of a wider move to an immersive and experiential definition of technology and contextual services that we will explore in the immerging consequences of digitization. Today, the self-image, the product and service brands are now wrapped up in the digital messaging that impact directly on how consumers find information and interact directly or indirectly with the enterprise through its’ digital enterprise.
Product-Service Systems (servization)
Technology consumerization and community building have resulted in a rise in platforms that offer meeting places and points of connection to search, send and receive information, goods and services. These come in many forms from social media sites, online book stores, trading auction sites to application developer communities and music downloads. They represent a form of system platform that provide services to individual, communities and markets. They are a mix of products and services that provide a viable consumption and operational delivery model. They are a manifestation of the long tail economic model described by Chris Anderson (4) where potentially a wide range of product and service options from high volume, high demand to discrete niche demand can be met through network effects of platforms and delivery in effect covering all points of demand and supply in the market.
Examples of Product-service systems include online retail shopping, airline transport ticketing, financial currency trading sites, online stock markets, and online payment systems. A high profile example of product-service systems can be seen in the financial services sector. The global growth of non-cash payment systems for B2B and alternative C2B (consumer to business) models (where consumers drive the service adoption and usage) on the payments value chain such as pre-payment and cashless payment are estimated to exceed 400 billion transactions in 2014. Cash still accounts for about 85% of consumer transactions but this is expects to shift quickly in the next few years (4) The rapidly moving m-payments (mobile-payments) and e-payments (electronic online) are estimated to have grown at 58% and 18.1% annually through 2014 although this coverage of this can vary widely by regional market adoption (5). These platform trends have significant consequences for the shift to online retail payments and the wider integration of the digital supply chain and contextual services.
This phenomena of digital platforms sense in product-service systems today pervades practitioner thinking and the evolution of technology enabled capabilities that support the enterprise supply chain, its customers and partners. The practical decisions over how digital platforms are used to host and deliver products and services is a central question immerging in today’s digital enterprise and being able to participate and compete in the digital ecosystem.
Governance, risk and compliance
The consequences of digitization and connectivity of personal information and intellectual property is profound. The barriers to exchange and interaction are lowered through technology so has the ramifications for legislation and cyber security expanded and changed. The ability to place controls of personal identity and personal privacy has been tested through the ability of digital information to be transmitted, modified and analysed in ways that in the physical world do not exist. The story is both one of empowerment and convenience to drive better outcomes for individuals, enterprises and markets as well as the changing nature of threats to personal, corporate and national security and cyber-attacks. Aspects of risk management to predict, detect, respond and contain threats; to preserve privacy and intellectual property are core Information technology. Compliance must embrace not just consumer confidence through audit and optional setting for opting in or out of data sharing but mechanisms that build trust and digital trust to be synonymous with each other.
Examples of the shift caused by digitization to enterprise governance, risk and compliance include new government legislation in cyber security and rules on data privacy. Others include specialist technology to secure personal identity and transactions through encryption, authentication and virtual private networks, Data Centers, devices and services to maintain perimeter detection and control across the Enterprise and its user base inside and outside the organization. A 2014 security software vendor survey on Internet security threat report is typical of the statistics indicating the growth of cyber threat now facing enterprises large and small as more business and consumers are living their lives increasingly online. 91% increase in targeted attacked campaigns in 2013, over 552 Million identities exposed via breaches in 2013 and web-based attacked up 23% (7).
The professional practitioner views these matters as concerns beyond just identity management and backup and recovery for eDiscovery compliance. They are integral part of building the digital enterprise that is secure and trusted.
The shifting digital architecture of the future
These past changes described in the last section are what I describe as the digitization effect of the Enterprise Software Applications, networks infrastructure and data. This impact has swept across all industry sectors which have changed the technology choices available to both IT and Business practitioners. Furthermore, these choices have also fundamentally changed the immerging outcomes that these technology can influence and enable for the enterprise beyond just a technology shift. As a practitioner it important to be able to assess these new consequences for building the Digital Enterprise beyond the commercial hype and the individual technology brands and features. The aim is to see how these may be connected and combined in ways that provide desirable outcomes of enterprise performance and Customer Experience (CX) and User Experience (UX).
The practical realities that we explore case studies in this book show that different combinations of these technology will be used depending of the specific needs and outcomes driving the enterprise and market and individuals.
We will highlight and explore the IT architecture concerns common to all industries as well as demonstrate how specific technologies can enable new enterprise capabilities.
The core enterprise information systems through digital technology today include as set of technologies that together represent the digital capabilities for the future.
Forward to immerging digital enterprise
The digital enterprise today is driven by these core technologies. How these are developed and deployed will change how the enterprise will operate and function.
We will consider five major trends that are emerging to drive forward the use of digital technologies.
The rise of embedded systems is a new phenomenon of specialised industrial engineering that has rapidly moved on from the earlier days of programmable logical controllers (PLCs’) and manufacturing execution systems (MES) that managed power stations, production plants and complex computations of High Performance Computing. With the fall in costs of consumer computing and storage and the telemetry reading sensors, it is now well within the commercial grasp. Mobile smart phones have an array of embedded technologies that provide advanced data collection and feedback. As mentioned many times previously, automobiles, rooms, buildings and consumer appliances are predicted to have more embedded technology. The rise of the “Internet of things” and the 25 to 50 billion objects will all be part of this.
As embedded sensors and become more ubiquitous in fixed and moving assets, so too will be the immergence of digital infrastructure platforms to collect, analyze and feedback this data. Part of this design of the digital workspaces will be the immergence of compelling and value added systems and services enabled by digital technologies.
The effects of sensors and feedback will become more pronounced as they start to support and enhance our daily lives. Satellite navigation and social network wed site communities in the space of less than a decade have become commonplace. New digital workspaces will continue to create new ways to augment our reality.
Augmentation is just part of this story, extending our physical capabilities to do more in the locations and time we have available. But this is not just physical, “new virtual realities can be overlaid” with digital technologies such as stereoscopic imaging and three dimensional information overlays on displays for advance information. How we think in digital will matter as much as how we use the digital technologies themselves.
Physical workplaces will be transformed by digital workspaces that augment and create new value. The definition of the enterprise and its place in the economy will be driven more by the way its digital entanglement is enabled directly or indirectly being impact whether desired or not, by its design and approach to digitization. Building the digital enterprise will require relevant digital practitioner skills and methods to architecting workspaces in physical and virtual space.
Please check out my book BUILDING THE DIGITAL ENTERPRISE – A PRACTITIONER PERSPECTIVE
- Business in the Digital Economy – International Series Palgrave macmillan 2015
Author : Professor Mark Skilton
1. Apple announces 1 million apps in the App store, more than 1 billion songs played on iTunes radio October 2013
2. iTunes App Store Now Has 1.2 Million Apps, Has Seen 75 Billion Downloads To Date, TechCrunch June 2014
3. WhatsApp reaches 600 million active users TNW August 2014
4. The cashless journey, measuring progress towards a cashless society. MasterCard,
5. World Payments Report 2013, Capgemini – RBS
6. The longer tail: How endless choice and creating unlimited demand 2009 Chris Anderson, Random House Business.
7. Noam Chomsky personal website
8. Symantec 2014 Internet security threat report Volume 19