Apr 14, 2016

Enhance your Competitiveness with the Digital and IoT Enterprise.

Big-Data, IoT and IoE initiatives are mostly about analytics and real-time decision enablement  

According to Gartner 72% of companies have one form or another of a Big-data Initiative underway. According to the same source fewer than 30% of these initiatives would deliver any true business benefits or meet business expectations. So while investments are high the BVA (Business Value Attainment) factor score continues to remain low. Unless you think a ROI of under 30% is acceptable. This is concern 1 for most companies commencing their digital journey.

We started with an IoT events way back at Palo Alto, CA back in  Nov 2014 and realized that we were facing an audience that queried us on whether what we presented was just ‘smoke and mirrors’. We followed these clarifications with another event in April 2015 with a series of IoT demo’s and suddenly the competitive positioning opportunities started to click into place when most attendees realized that IoT and IoE were a real paradigm shift happening all around. On April 6th,2016 we help our ‘Road-2-HANA- The digital Enterprise’ event in New York which this was a resounding success. By the way you can still register and get access to the post event presentation slides and videos.  

In most ways, Internet of Things (IoT) is mainly about collecting enterprise digital dust from currently connected, semi-connected and dumb data generators. Only when we start to collect this digital dust is when we realize that analytics are like any other analytics. In this digital enterprise journey the first step is digitization, the second is analyzing the history of these data generators and the third is extracting decision capable analytics via patterns and algorithms from this digital dust. The Big-Data, IoT, IoE analytics mostly conform to the same rules and design decisions as we have been using in traditional  business intelligence (BI) and advanced analytics. Even so, the IoT is creating unparalleled information management and analytics challenges. This is concern 2 on route to establishing our digital enterprise- the fact that Gartner reported in 2012 that current BI initiatives are delivering less than 40% business benefits from thei BI projects. My validation, and interpretation, of this statement is by validating whether this statement is true of false. ‘Move than 60% of the reports in your BI production system are not being used, or will never be used, by your business users’. I have been asking this question to BI managers since 2011 and in every honest reply I slowly get a ‘..probably more than that.’

During our event in New York we briefly touched on the evolutionary steps for a current enterprise to the launch itself into a digital enterprise. We also discussed the difference between IoT, which is like a digital hub and step 1, and IoE which is the end goal of digital connectivity and digital dust generation.

Why is IoE and IoE important?

According to Garner by 2020 50% of major competitive enterprises will have some element of IoT installed and will be capturing essential predictive data?  The message is CLEAR – ‘DISRUPT or be DIRUPTED’ the choice now is yours.

According to our research by 2020 30% of companies will change their business models, i.e. from being sellers of air compressors to simply selling Air-as-a-Service by leveraging predictive maintenance and guaranteeing constant air supply to users without any incumbency of breakdown or old equipment.

In order to meet these requirements business stakeholders will need to firstly define the business needs and the business cases. Start with the business needs so you don’t get lost in the data deluge.  Once you have identified that, we do it with a business focused ‘Design Thinking’ workshop that extracts unique business needs that are otherwise impossible to spot, identify or extract. This becomes the baseline for the digital transformation. This is where we sieve the coal from the diamonds. This is but the beginning.

We simultaneously re-tool our users from Reports to Analytics and then from Analytics to Informatics. We need to retool them from reading reports to real-time decision enhancement. We also need to make them aware of Analytics, Predictive Analytics and Prescriptive analytics which is already taking out all the human errors and replacing them with pattern based algorithms.

Concern 3: We can no longer afford to create technocratic reports and analytics with a 30% ROI. With such large data volumes, we need to keep our data engines surgically clean and effective for real-time decisions. We can no longer apply the same rules, the same architecture and decisions that have go us here. We need to change our partners, architecture, Infrastructure, methodology to optimize our digital experience.

 So what makes the digital and IoT data different?

As our data volumes, velocity, variety and veracity increases algebraically we need to fine-tune our analytics engines like a formula-1 racing car. I published this in a book in 2010 ‘BI Valuenomics’ see end of this post for details, which is more relevant today than when it was published 4 years ago.

The changing lens of 360° Decision Enablement

Current - Digital
Data Sources
Inside the Enterprise Firewall
Upstream, Downstream and Midstream
Data Volume
Very High
Data Extraction
Data Sources
Few System with static Data
Data in Motion, streaming from sensors
Periodic ETL
ELT, store, blend and manage massive data
Value Chain
Downstream and Upstream
Data Type
90% Structured enterprise
Growing unstructured streaming data
Reports & Dashboards
Real-time Decision metrics and alerts
Medium to very high
Distributed to the edge
Manual and static
Pattern based automatic algorithm’s
Point of transform
ETL to ELT (transform at DW)
TEL (Transform at Source) then extract
One way to DW
Bi-Directional in Real-Time

What got us here will not get you there

Remember your current architecture and design capabilities are running at 30% efficiency, i.e. 70% of your data is either redundant or worse dead data. So continue with your current paradigms and  your decision system will enter a dark place we don’t want to even discuss here. So Plan your work and only then work your plan.

What will your Digital Enterprise require.

Better Infrastructure Partners: Your legacy partners have been experts in the midstream enterprise requirements, i.e. HW, servers and storage. Your future needs are going to be driven by Big-Data, which resides at the edge, by IoT which requires networking and communications, by IoE which will require connected products and then interconnected devices, and most important of all a dynamic and scalable architecture that does not lock you into long term boxed contracts- like an appliance for SAP HANA.

Better Connectivity: According to Michael Porter the connected enterprise is changing the very definition of an industry and thus your enterprise. So connections, sensors and networking are going to be the keys to success over the next decade.

Better Real-Time Decisions: It will not matter how many millions of dollars you spend. It will not matter how much technology one buys. It does not matter how big-4 your partners are. It will not matter if your project delivers 6,000 or 8,000 reports or 3,000 ODS’s and Cubes. The only thing that matters is how much the end results impacts your day-to-day operations and the enterprise decision capabilities.

What your need to plan for

More Business Participation: I stated this in 2010 and I state it today. Any Si partner that requires your business stakeholders to be kept outside the doors of your Big-Data, Cloud, IoT, BI or SAP HANA projects must be shown the door very rapidly. The only path to success is to get business involved in a ‘design Thinking’ workshop before you start your project.

More Data: Your data is not only going to be high volume, velocity, variety and voracity but it will get more and more unstructured. Your designers will need to play with non-repetitive data streams tht will come streaming and the challenge is going to be where to keep your data in motion.

 More Complexity: Digital Enterprises will no longer collect their data from enterprise, structured applications but from across the planet in very strange and complex formats that will be generated in devices, pass through controlled clouds and systems, zip through servers, filtered via smart routers at the closest point fo data generators and then placed in low cost data lakes. This data will then need to be enterprise harmonized and then merged with structured data that users are familiar with. We need to take a leap from analytics to informatics very rapidly with a high focus on true business benefits.

More Automation: With data generators that produce very large streaming bits of data the only way to do all the above is to identify patterns and the deploy algorithms to automate the data flow and transformation processes as close to the source as possible. The IoT informatics system will be as strong as its weakest link, where a stitch in time will always save nine.

More Secure: This one should actually sit at the top of these topics but it is hard to start with security if one does not comprehend the width and depth of the digital data flows from the edge. As the enterprise doors open to let in data from the edge it will also leave the same doors open for hackers and undesirables to come in via the edge streams right into the heart of enterprise systems. So before you start your Big-Data, IoT, Cloud or SAP HANA initiative start with security. Start with a universal security fabric that runs from one edge to the other. Remember the cardinal rule the undesirables know the edge devices are the least secure so they tend to reside there to gain entry into your enterprise jewels.

…oo ššÅÆ oo…

Jan 19, 2016

How ready are you for the new Digital Generation?

‘Companies today have one of two choices, Disrupt or be Disrupted’

If you were born between 1980 to 1990 then this new digital world is not entirely new to you. If you were born before 1980 you had to grow into this digital world and if you were born before 1970 then unless you are deeply connected to IT and technology the picture above might even be a little difficult to comprehend.  You had to possibly fight your natural instincts before approving things that you could not grasp easily. You had grown on the hard-copy days. The other people who adapted are ones with kids and grand-kids for these generations rapidly exposed their older generations to the transformations taking place all around which we refer to as the new Digital Transformation. However, if you were born after 1990 then you are rapidly defining this new digital world inside which you grew up. This group is now coming into the workforce as workers, trend shifters, leaders and decision makers. This generation grew inside their digital devices. They network, communicate, share and operate digitally. They live inside their digital devices – it’s just another evolutionary step. The photograph on top is routine today rather than an exception. People before 1970 never knew of this world and had to adapt to fit into it.

The digital world is rapidly changing around us – the only question is are we reading the writings on the wall.

66% of companies report that they were under pressure to reappraise their operating model. 76% said they needed to make considerable changes to their processes to maintain margins. 82% said that they were threatened by digital disruption that they could not yet perceive. 18% said they were victims of digital disruptions.

55% of the top 20 most valuable companies in 2005 are no longer on that list today. 30% of market share leaders will not exist in 5 years. 30% of market share leaders of 2005 do not exist today.

Gartner Predictions: By 2018 75% of IT organizations will be Bi-Modal and 50% of them will make a mess. By 2020 75% of application purchases will done digitally so your mode today has to be 'Build' and not 'Buy'.

The most disruptive component in the market today is not the technology but the customer – the new millennial customer, where customer experience and digital connectivity is the new competitive differentiator.

This disruption was coming and will now become full blown as the millennials start to join and lead the workforce. The last wave of Gen-X are currently migrating within the workforce. The Gen-X world was dominated by a need to follow hard copy, structured and peer-defined standards and processes - sequential and repetitive. However, the millennials have grown up under the digitized pressure to be faster, better and smarter than their peers. While Gen-X have been told that the digital economy will disrupt the real economies, the millennials cant even perceive the difference between the two. While the Gen-X looks at computers and digitization as accelerators the millennials live in that world. The average millennials shops, reads the news, communicates, shares pictures and connects digitally. Looking deeper already the things they don’t do digitally are few and far in-between.

How to capture attention in this new Digital Economy?

In this new digital economy of new technologies, rapid disruptions have been demonstrated by companies like AOL, Amazon (most of us forget Amazon started as a book reseller), Uber, Spotify, Airbnb, etc. These companies continue to dominate and expand in the digital economy. Our path is clear - we need to adapt to fit into this new digital world.

One of the key ingredients to success is to provide instant value to potential services- customers simply will follow by sharing their good experiences. It is not uncommon to find a brand leader promising incredible change, and then a few months later they are just gone. Millennials see the world dominated by digitally visible, instant value, reactive, agile and benefit-leaders and not by traditional, brick and mortar companies that react like sloths and continue to exist as legacy ‘king of the hill’ enterprises. Uber’s disruption to global taxi services in a few short years exemplifies the power of digital disruption. Uber started in 2009 with a $200,000 seed money and today stands as a $27 billion global disrupter. Uber carries the tree hallmarks of the new digital economies, i.e. simplicity, better services and lower costs- how can one beat that. The most important part of their business model is that they do not own a single taxi or a driver, yet give each driver total freedom on when to work and when to take off. Traditional taxi drivers are reacting with  with strikes, politics, violence and legacy Gen-X reasoning but the millennials will henceforth only demand these new level of services that have now become their new benchmark for travel.

Disrupt or be Disrupted?  Is the only path forward..

So one way or another the key is not to simply survive but to become the disrupter. Here are a few ways we have helped companies start on the path to disruption:

  1. Design for the future millennials and not the historical Gen-X: The world around is rapidly being dominated by the new millennials who operate in this world very different. Companies that continue to think legacy will slowly sing into the quagmire of history. Companies that adapt and change to meet the new digital world of millennials will continue to disrupt and thrive. Hire and think for a millennial.
  2. Innovate to Deliver products and services faster and at lower costs: Look around at the success signatures of the big disrupters- Uber, Airbnb, Apple, ASOS, Spotify, etc. What do they have in common. It can be clubbed into the [1] Internet of things in the form of Uber applications that allows Uber to track every live taxi on the planet against demand in real time; [2] understanding untapped customer needs in the form of providing faster service at lower costs; [3] finding untapped suppliers in the form of private cars not being used optimally for the duration of its life; [4] making it all stick together for a ‘Higher Quality at a lower cost’ paradigm
  3. Reinvent your full value chain: Companies that have lived, planned and operated inside their firewalls are doomed to predictable outcomes. Digital disruption starts by reinventing the full value chain with one seamless and real-time access. Millennials appreciate innovations that reinvent product delivery and service to make life better and simpler. The new digital disrupters did not invent one new product they reinvented the full value chain in the new digital economy. They predicted what the consumers wanted even before they realized it. The new world not only thrives but seeks these new companies out by constant real time digital scoring and social networking.
  4. It’s never the technology, but all about benefits and simplicity: So far most technology projects have remained focused on technology as the ultimate provider of solutions. The disrupters realigned their focus on simplification that is enabled by technology. CEO’s worldwide expect 15% to 50% of their future earnings to come from disruptive technology. Companies that are not planning to be on this path will predictively lose 15% to 50% of their market share to disruptive players. On the technology side the platform for the Big-Bets are IoT, Big Data and Digital Transformation. A lot of companies have initiated these projects but unless they are on a digital business benefit track accompanied by true ‘Design Thinking’ with business users Gartner predicts 70% of them will continue to fail or not meet business expectations.

Many ‘experts’ claim that this new digital revolution is for the millennials only, but it truly isn’t. My mother at 82 has found the Apple iPad as easy to use and communicate with as do our nieces and nephews. However, while my mother uses only a few functionalities the younger generation absorbs new simplicities like a desert sponge with infinite capabilities for social absorption. How many of us have not tried and got hooked to these new digital service providers?

  1. Millennials are on a hyper-growth curve: Not only will they be the largest generation workforce they will also become the largest consumer base that operates and decide digitally. While, technology was important to their predecessors’ millennials see the digital revolution as part of their lives. They seek simplicity, higher quality at a lower cost. Companies like Amazon, Apple, SAP are not simply reinventing the wheel they are out there creating the new digital future and re-designing the future from the ground up on simplicity and real-time. To thrive in the future executives need to become partners with business benefits, simplicity and digital reinvention as never before. We MUST get outside our familiar fire-walls as most of these answers lie outside, i.e. in the upstream and downstream domains of our value chain.

Disruption is the now the only constant?

If disruption is the inevitable constant, then we all have a ‘Zero Option’ in this new game that is right now changing the very definition of industries, products and services.

Every industry, product and service is today prone to digital disruption. All the big players are threatened as never before. Unfortunately, these digital disruptions do not take decades to bring about change- they are becoming more and more rapid as the number of millennials increase in the consumer market. These new disrupters consisting of small team sitting right now in some garage could bring another disruptive idea to life.

So plan, plan very hard indeed-  to be the Disrupter or be disrupted!