Finovate Europe 2012: Innovation In Digital Financial Services

Benjamin Ensor

A number of people asked me to repeat my blog post from last year with my impressions from Finovate, so I thought I would.

For those of you who aren’t familiar with Finovate, it’s a fast-paced format with seven-minute live demos and pitches from 35 financial technology vendors. It’s produced by Online Financial Innovations, the people behind the excellent NetBanker blog.

I was lucky enough to go along to the show in London today. Unlike last year, when four or five themes dominated the day, this year’s exhibitors were more diverse. Among them were:

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Deutsche Telekom Demonstrates Willingness For Cultural Change As Part Of Innovation Drive

Dan Bieler

I attended Trend Forum 2012 last week in Bonn, effectively an analyst day where Deutsche Telekom presented its innovation strategy. There was no focus on overall group strategy. Still, innovation matters greatly as part of the repositioning efforts of telcos. As the role of telcos in the value chain is weakening, largely due to increasing competition by over-the-top providers (OTTPs), telcos need to differentiate themselves increasingly via service provision and their ability to innovate quickly and prolifically. Failure to do so will cement their status as transport utilities for OTTPs.

Deutsche Telekom’s Core Beliefs focus on: a) building its platform business by partnering with software firms; b) leveraging the cloud by providing high QoS and secure connectivity; and c) leverage differentiating terminals through device management and customer experience provision. These Core Beliefs form the basis for pursuing its focus growth segments in digital media distribution, cloud storage, cross-device digital advertising, classified marketplaces, and mobile payment in addition to the core telco business. These targets match up well against our evaluation of best cloud markets for telcos.

A defining characteristic of next-generation network (NGN) infrastructure and the move towards cloud-based business models is openness. As a consequence, OTTPs increasingly deal directly with end customers across the network. Relationships between telcos and other members of value chain become more complex. Emerging cloud services by telcos need to become network agnostic to deliver cross-network solutions and ensure cloud interoperability. Deutsche Telekom has made significant progress in the recent past to adapt its strategy to these new telco realities.

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Christmas 2011: The First Mass Customized Holiday Season

JP Gownder

Ah, Black Friday: What would the post-Thanksgiving shopping bonanza be without a visit to the local mall? This year, I was keen to perform some gumshoe research on a theme I've been talking about all year long: mass customization, a product strategy that's ready for prime time across multiple industries.

A trip to the Natick Mall (yes, "Mall," no longer "Collection," New Englanders) reveals that mass customization isn't just the future; it's the present. In fact, it's hiding in plain sight. Build-a-Bear Workshop, Hallmark, Lego, and LensCrafters are all stores in the Natick Mall that offer significant customization for consumer products. Burberry is the latest Natick Mall vendor to offer mass customization; I am quoted in Time magazine this week (here, but subscription required to view the link; page 82 in the December 5 paper edition) discussing how luxury clothing and customization fit together well. As I've written before, one of the benefits of employing mass customization is that it empowers consumers to create products that express their personalities -- a particularly relevant feature for clothing and apparel products.

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Executive Q&A with Sona Chawla, President e-Commerce, Walgreens

Andrew Stockwell

I'm thrilled that Sona Chawla will be a keynote speaker at Forrester's Consumer Forum in just over three weeks! As the President of e-Commerce, Sona oversees operations and leads the team responsible for building the sales, service and customer experience of Walgreens.com and drugstore.com (acquired in June 2011). This includes driving store traffic through the Web, growing online profitability, and the development of new product and service offerings via emerging digital touchpoints such as mobile.

Earlier today, Sona provided me with a sneak peek of her upcoming presentation for our forum "110 Years Of Agility: Continuing Our Evolution To Meet Customer Demands" and all I can say is that it's not to be missed! I don't want to reveal too much and spoil it, but Sona will touch on the dynamic forces at play within healthcare and retail that are driving Walgreens' digital transformation, the framework they are utilizing to enable that transformation, and finally what Walgreens sees for the future. And of course throughout the discussion Sona will have key lessons learned and advice for firms across industries going through similar transformations.

I do however want to share with you Sona's responses to some questions we asked her in advance of the event. Her thoughts demonstrate the growing importance (and let's not forget the financial benefits) of serving customers across touchpoints with innovative, digital products and services.

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IT Services Industrialization 2.0

Fred Giron

Mobility, cloud, and smart computing will drive tremendous growth and significant changes in the IT industry over the next few years. My fellow analysts have brilliantly covered these topics in the past few months.

I would like to build on these views and focus more specifically on the productivity race that the IT services industry and its clients have been in during the past 10 years or so. While IT services vendors have managed to improve their output levels in order to protect margins in a market of severely eroding price points, I believe they will rapidly reach a plateau if they continue to use traditional methods. Instead, the most successful IT services firms of tomorrow will increasingly leverage disruptive methods in order to fulfill the client expectations to always “do more with less.”

Ever since the Internet bubble burst a decade ago, clients have pushed their providers to find ways to provide them with continued price decreases for similar or greater output levels. This was achieved thanks to two main levers to decrease the amount of resources required to run IT systems by end user firms:

  • Fewer resources: Optimizing the utilization of resources in order to reduce their consumption. For example, most projects around asset management, infrastructure standardization, consolidation, and virtualization yield the most evident returns as sources of productivity improvement. This is the case in particular in developed countries where companies need to cope with multi-layered legacy technologies that render IT systems as complex and expensive to maintain.
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Update Your Application Development Sourcing Strategy To Drive Innovation And Differentiation

Conquering The Marketing/Technology Divide

David Cooperstein

The competitive challenge that companies face today is driven by new issues that transcend classic distribution, brand, and product challenges. In the world we live in today, which Forrester defines as the Age of the Customer, firms need to look at how they deliver marketing and technology solutions that have visible impact on the customer.

Just the other day I was reminded of that when, sitting with a client, he described their competitive threat as coming from software products. That would be normal were it a tech company, but this was an airline! Yes, an airline that required technology and marketing to come together to define a customer experience that would differentiate them beyond seat configuration and route system. This highlighted to me the challenge that many companies face in this new era of disruption (for another view of how to think about this product challenge, see my colleague James McQuivey's recent report "Innovating the Adjacent Possible").

Charles Rutstein, Forrester's COO, sat down with my CIO Practice Leader peer Sharyn Leaver and me to discuss the role that CIOs and CMOs play in this customer-obsessed new world. See what we had to say here:

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What Signal Does The Google-Motorola Marriage Send To Product Strategists?

Carlton Doty

It’s a couple of days after Google announced its intentions to jump headfirst into the hardware business. By now everyone — including my colleagues Charles Golvin and John McCarthy — have expressed their thoughts about what this means for Apple, Microsoft, RIM, and all of the Android-based smartphone manufacturers. This is not another one of those blog posts.

What I really want to highlight is something more profound, and more relevant to all of you out there who might classify your day job as “product strategy.” To you, the Google/Moto deal is just one signal — however faint — coming through the static noise of today’s M&As, IPOs, and new product launches. But if you tune in and listen carefully, two things become crystal clear:

  • The lines between entire industries are blurring. Google — and some of the other firms I mentioned above — are just high profile examples of companies that are diversifying their product portfolio, and the very industries in which they play. There are several instances of this over the past "digital decade." What's different now is the increased frequency of the occurrences.
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Do Not Depend On EA To Innovate

Brian  Hopkins

Many organizations expect EAs to be the source of technology innovations. They are broadly knowledgeable, experienced, connect-the-dots kind of people you might naturally expect to come up with reasonable ideas for new approaches and technology. When you think about it a bit, this expectation is misplaced. Here’s why I think this:

The best technology innovators are users who have a problem to solve; motivation to solve a specific problem affecting their lives is the key ingredient. EAs just don’t have these kinds of problems; because they operate as a bridge between business and technology, most often they are attempting to solve things that affect other people’s lives. Please don’t get me wrong: EAs are always looking for new, innovative ways to improve things. But this doesn’t replace the “I gotta fix this now” kind of motivation inspiring most innovations.

So am I saying organizations should take EAs out of the innovator role? Yes and no.

Here at Forrester, we have been writing and talking about topics such as Innovation Networks and new roles for business technology for a while. I think that EAs are better placed at the center of an Innovation Network where they connect innovation suppliers (lead users who are dreaming up new ways to solve their problems) with innovation users (other folks who can benefit from a generalization of the solutions the suppliers come up with). In addition, EAs can bring innovation implementers — the team members who know how to actually make innovations into solutions that work for more than just one individual or group — into the conversation.

So what should you do?

  1. Send EAs on a mission to find people doing innovative things in IT and the business. This has a side effect of connecting EAs to the frontlines, where they might discover all kinds of things.
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Keep Up With The Pace Of Change By Innovating The Adjacent Possible

James McQuivey

We live in a world punctuated by big innovations. From fire and the wheel down to the light bulb and the iPad, we mark the march of history by the steady beat of transformative innovations. Except that steady beat is no longer so steady. The rate at which these life-altering innovations are coming to market is accelerating so quickly that it's no longer sufficient to invoke even Moore's Law to explain them.

Not only are new things being introduced more swiftly than before but consumers are adopting them more rapidly than before. I make my living studying early adopters, but recently I've had to throw many hard-earned lessons out the window. Because in a world where Microsoft sold 8 million Kinect cameras for the Xbox 360 in just two months, traditional definitions of "early adopter" became irrelevant after about week two. 

This is both exciting and maddening. We've spent that last several years watching the acceleration of innovation to figure out what is making this rate of innovation possible and we've discovered that innovating at this pace is tricky, but doable, with the right approach.

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