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Digital Impact
 From Systems of Record
to Systems of Engagement

         DigitalNow!
        April 26, 2012
Technology Megatrends
    Decades of Disruption to Business as Usual
    • 1980s
      • Personal Computing, Office Automation
      • B2E - documents, presentations, financial analysis
    • 1990s
      • Internet, ERP, Worldwide Web
      • B2B – outsourcing, globalization, business networks
    • 2000s
      • Broadband, Mobile, Social Media
      • B2C – media & entertainment, communication, branding
    • 2010s
      • Digital commerce, Collaborative Systems
      • B2B2C – advertising, retail, customer service

2
Two Types of Business Network

              O                                     C



YOU
       Collaborative                     Coordinated
       Networks                          Networks
  • High complexity                 • High volume
  • Relationship oriented           • Transaction oriented
  • Outgrowth of project teams      • Outgrowth of value chains
  • Organize around an              • Organize around a
    orchestrator                      concentrator
  • Focus: expertise, innovation,   • Focus: efficiency, speed,
    and market development            and adaptability

          Disney Films                    Disney Theme Parks
Two Types of IT Leverage

              O                                        C



YOU
       Collaborative                           Coordinated
       Networks                                Networks
  • High complexity                   • High volume
  • Relationship oriented             • Transaction oriented
  • Outgrowth of project teams        • Outgrowth of value chains
  • Organize around an                • Organize around a
    orchestrator                        concentrator
  • Focus: expertise, innovation,     • Focus: efficiency, speed,
    and market development              and adaptability
        SYSTEMS OF                               SYSTEMS OF
       ENGAGEMENT                                  RECORD
                            New     Familiar
                            Idea      Idea
Systems of Record
The Story of Enterprise IT in the 20th Century
• Transaction systems for global commerce . . .
  • Financials, Order Processing, Inventory, HR, CRM, Supply Chain
  • Mainframes, minis, client-server, PC, Internet-enabled, SaaS


• Drove three decades of investment
  • Databases are at the center of these systems
  • OLTP and Business Intelligence have been the key drivers
  • Network is seen primarily as a transport mechanism


• Y2K put the capstone on this trend
  • Pulled forward a half decade of investment
  • Enterprise IT has had to go through a long “digestive” period
  • Focus in past decade has been on efficiency investments
IT Innovation: 2000 to 2010




     Enterprise IT        Consumer IT
      On a Diet             On Fire
Redefining IT for Consumers
The Digitization of Human Culture
  •   Access
      • Infinite content, no barriers to entry, no barriers to exit
      • Communications are globally democratized
      • Microsoft, Google, Facebook, Wikipedia, OpenTable
  •   Broadband
      • Pictures, video, shopping
      • Internet touches both the mind and the heart
      • Skype, iTunes, YouTube, Hulu, Netflix, Zappos
  •   Mobile
      • PC for the emerging markets
      • iPhone and iPad set the bar in mature markets
      • IM, email, camera, game, wallet, magazine. . . even a phone!


          How will this impact enterprise IT?
B-2-B “Enterprization” of Consumer IT:
Investing in Collaborative Systems of
Engagementburden falls on the middle of the organization
 • Collaboration
    • Not front-line workers engaged in transactional workflows
    • Not top executives engaged in strategic issues


•   Need to invest in “IT for the middle tier”
    • In-the-moment empowerment through Systems of Engagement
    • On-demand access to Systems of Record as required


•   Systems of Engagement must meet four key design goals:
    • Mobile      to be in the moment
    • Social      to share facts and insights with others
    • Ad Hoc      because that’s how issues emerge
    • Real Time           because that’s when issues get resolved
Enterprise Systems of Engagement Who knows
Communication & Collaboration                              the head of BD
                                                               at IBM?
Can you help me
 promote this in        •   Enterprise Facebook
my community?
                        •   Enterprise YouTube             How much did
                                                            we spend on
 Let’s make sure        •   Enterprise Search              this last year?
everyone registers
  for this in the       •   Enterprise App Store
    same way!                                              Let’s keep the
                        •   Enterprise Twitter
                                                            buzz going!
                        •   On demand conferencing
  We need all
 hands on deck,         •   Global presence detection
   right now!                                               I need to talk
                        •   Mobile access to everything      to Sherry—
                                                            where is she?
                        •   Social content management
   Let’s look at
   the data and         •   With more revolutionary          What is the
                                                            sentiment on
    get Larry to            applications to come . . . .     this in our
  walk us thru it
                                                            community?
                     This is the “enterprise-ation”
                               of consumer IT
Technology Disruptions
     When Will Your Organization Make the
     Transition?
                                                                           MAIN
                                                                          STREET
                          TORNADO


        EARLY
       MARKET



                                                           BOWLING
                         CHASM                              ALLEY


                                                                  ive y
                                             ist ty
                          ar rs
               rs




                                                                                   s
                                                                at it
                                                                     s)
                                          a t ori




                                                                                  d
                                                              rv or
                        on te
                              s)
             to




                                                s)




                                                                               ar
                            ie
                     isi op




                                                            se aj
                                       gm aj
           a




                                                                              gg
        ov




                                                          on M
                                     ra M
                    Ad




                                                                            La
                                                      (C t e
         n




                                   (P l y
      In


               ly




                                                        La
                                  r
                    (V



                               Ea
                r
             Ea




10
Adoption Dynamics
      How Will the Transition Unfold?
     Power                                              Performance
      Gear                                                  Gear
     Virality?                                           How many?
     Churn?       ENLISTMENT              ACQUISITION    How soon?




                                Starter
                                Motor

Performance                                               Power
    Gear                                                   Gear
 What ROI?       MONETIZATION             ENGAGEMENT
                                                        How often?
 What IRR?                                              How much?




11
Focusing to Accelerate Adoption
Where Should the Transformation Start?

•   Every customer-facing strategy is made or broken during a
    handful of moments of engagement—what are yours?


•   What person or system represents you in these moments, and
    how effective are you at meeting the new expectations?

•   Where could you introduce systems-of-engagement capabilities to
    amplify your organization’s power at these specific moments?


        Use these questions to target your first
          project on a moment that matters
Final Takeaway: A To-Do List
     How Could I Go About Putting This into
     Effect?
     1. Review your strategy and identify your top-priority moments of
        engagement.
     2. Determine what systems of engagement would have the biggest
        impact on your effectiveness in these moments
     3. Assess your organization’s Technology Adoption style and
        calibrate your ambitions accordingly
     4. Identify your early adopters and recruit them to this effort
     5. Engage with outside help to design and prototype your first
        systems of engagement effort
     6. Focus on user experience as your critical acceptance criterion
     7. Use anecdotal feedback from early adopters to create the case
        for crossing the chasm to widespread pragmatist adoption
     8. Focus the pragmatist investment case on a critical pain point, and
        do whatever it takes to put that issue to bed

13
gmoore@geoffreyamoore.com




14

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Digital Impact: From Systems of Record to Systems of Engagement

  • 1. Digital Impact From Systems of Record to Systems of Engagement DigitalNow! April 26, 2012
  • 2. Technology Megatrends Decades of Disruption to Business as Usual • 1980s • Personal Computing, Office Automation • B2E - documents, presentations, financial analysis • 1990s • Internet, ERP, Worldwide Web • B2B – outsourcing, globalization, business networks • 2000s • Broadband, Mobile, Social Media • B2C – media & entertainment, communication, branding • 2010s • Digital commerce, Collaborative Systems • B2B2C – advertising, retail, customer service 2
  • 3. Two Types of Business Network O C YOU Collaborative Coordinated Networks Networks • High complexity • High volume • Relationship oriented • Transaction oriented • Outgrowth of project teams • Outgrowth of value chains • Organize around an • Organize around a orchestrator concentrator • Focus: expertise, innovation, • Focus: efficiency, speed, and market development and adaptability Disney Films Disney Theme Parks
  • 4. Two Types of IT Leverage O C YOU Collaborative Coordinated Networks Networks • High complexity • High volume • Relationship oriented • Transaction oriented • Outgrowth of project teams • Outgrowth of value chains • Organize around an • Organize around a orchestrator concentrator • Focus: expertise, innovation, • Focus: efficiency, speed, and market development and adaptability SYSTEMS OF SYSTEMS OF ENGAGEMENT RECORD New Familiar Idea Idea
  • 5. Systems of Record The Story of Enterprise IT in the 20th Century • Transaction systems for global commerce . . . • Financials, Order Processing, Inventory, HR, CRM, Supply Chain • Mainframes, minis, client-server, PC, Internet-enabled, SaaS • Drove three decades of investment • Databases are at the center of these systems • OLTP and Business Intelligence have been the key drivers • Network is seen primarily as a transport mechanism • Y2K put the capstone on this trend • Pulled forward a half decade of investment • Enterprise IT has had to go through a long “digestive” period • Focus in past decade has been on efficiency investments
  • 6. IT Innovation: 2000 to 2010 Enterprise IT Consumer IT On a Diet On Fire
  • 7. Redefining IT for Consumers The Digitization of Human Culture • Access • Infinite content, no barriers to entry, no barriers to exit • Communications are globally democratized • Microsoft, Google, Facebook, Wikipedia, OpenTable • Broadband • Pictures, video, shopping • Internet touches both the mind and the heart • Skype, iTunes, YouTube, Hulu, Netflix, Zappos • Mobile • PC for the emerging markets • iPhone and iPad set the bar in mature markets • IM, email, camera, game, wallet, magazine. . . even a phone! How will this impact enterprise IT?
  • 8. B-2-B “Enterprization” of Consumer IT: Investing in Collaborative Systems of Engagementburden falls on the middle of the organization • Collaboration • Not front-line workers engaged in transactional workflows • Not top executives engaged in strategic issues • Need to invest in “IT for the middle tier” • In-the-moment empowerment through Systems of Engagement • On-demand access to Systems of Record as required • Systems of Engagement must meet four key design goals: • Mobile to be in the moment • Social to share facts and insights with others • Ad Hoc because that’s how issues emerge • Real Time because that’s when issues get resolved
  • 9. Enterprise Systems of Engagement Who knows Communication & Collaboration the head of BD at IBM? Can you help me promote this in • Enterprise Facebook my community? • Enterprise YouTube How much did we spend on Let’s make sure • Enterprise Search this last year? everyone registers for this in the • Enterprise App Store same way! Let’s keep the • Enterprise Twitter buzz going! • On demand conferencing We need all hands on deck, • Global presence detection right now! I need to talk • Mobile access to everything to Sherry— where is she? • Social content management Let’s look at the data and • With more revolutionary What is the sentiment on get Larry to applications to come . . . . this in our walk us thru it community? This is the “enterprise-ation” of consumer IT
  • 10. Technology Disruptions When Will Your Organization Make the Transition? MAIN STREET TORNADO EARLY MARKET BOWLING CHASM ALLEY ive y ist ty ar rs rs s at it s) a t ori d rv or on te s) to s) ar ie isi op se aj gm aj a gg ov on M ra M Ad La (C t e n (P l y In ly La r (V Ea r Ea 10
  • 11. Adoption Dynamics How Will the Transition Unfold? Power Performance Gear Gear Virality? How many? Churn? ENLISTMENT ACQUISITION How soon? Starter Motor Performance Power Gear Gear What ROI? MONETIZATION ENGAGEMENT How often? What IRR? How much? 11
  • 12. Focusing to Accelerate Adoption Where Should the Transformation Start? • Every customer-facing strategy is made or broken during a handful of moments of engagement—what are yours? • What person or system represents you in these moments, and how effective are you at meeting the new expectations? • Where could you introduce systems-of-engagement capabilities to amplify your organization’s power at these specific moments? Use these questions to target your first project on a moment that matters
  • 13. Final Takeaway: A To-Do List How Could I Go About Putting This into Effect? 1. Review your strategy and identify your top-priority moments of engagement. 2. Determine what systems of engagement would have the biggest impact on your effectiveness in these moments 3. Assess your organization’s Technology Adoption style and calibrate your ambitions accordingly 4. Identify your early adopters and recruit them to this effort 5. Engage with outside help to design and prototype your first systems of engagement effort 6. Focus on user experience as your critical acceptance criterion 7. Use anecdotal feedback from early adopters to create the case for crossing the chasm to widespread pragmatist adoption 8. Focus the pragmatist investment case on a critical pain point, and do whatever it takes to put that issue to bed 13