[With apologies to all those of you who had already read this, I'm re-publishing this as the Forrester gremlins ate my previous post.]
For the past few years, many eBusiness and channel strategy executives in financial services have had a nagging sense that today's websites would be rendered obsolete as new technologies emerged or younger consumers developed radically different behaviour patterns. We think that time if fast coming upon us.
For the past six months we've been working on our vision of the Next Generation of Digital Financial Services, led by my colleague Alexander Hesse and inspired by the work of leading eBusiness teams worldwide. Although our vision is not an exact description of how all digital financial services will evolve, given the wide variety of markets that eBusiness executives operate in and the different strategies of their firms, we think the next generation of digital financial services will be characterized by five things:
Simplicity. Making it easy for customers to achieve their goals.
Ubiquity. Interacting with customers wherever they want.
Personalization. Making the entire experience relevant to individual needs.
Empowerment. Enabling customers to take action by themselves.
Reassurance. Providing human help whenever it adds value.
For the past few years I have watched enviously as the Finovate online financial technology show has gone from strength to strength in San Francisco and New York. So I was thrilled to hear that Finovate was coming to Europe and today I was lucky enough to go along to the show in London.
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.
Forrester’s recent book, Empowered, describes the type of technology-based innovation by frontline employees that can cause nightmares for enterprise architects. New tools for business innovation are readily available to anyone, ranging from cloud computing and mobile apps to social networks, scripting languages, and mashups. Faced with long IT backlogs and high IT costs, frontline employees are building their own solutions to push business forward.
What worries architects is that (1) solutions built with these new tools — with little or no vetting — are being hooked to enterprise systems and data, opening potentially big risks to reliability and security, and (2) the siloed, quick-hit nature of these solutions will drive up ongoing costs of maintenance and support. Traditionally, architects use enterprise standards as their primary tool to ensure the quality, efficiency, and security of their organization’s technology base. However, when applied in the typical “lockdown” fashion, standards can stifle innovation — often because vetting a new technology takes longer than the perceived window of business opportunity.
To deal with these conflicting pressures, architects must forge a new equation between responsiveness and technology control. The business value of responsiveness, combined with the typically limited size of enterprise architecture teams, means that most organizations cannot wait for architects to vet every possible new technology. Thus, you must find ways to use architecture to navigate the tension between the business value of responsiveness and the business value of a high-quality technology base. The key is to build innovation zones into your architecture; Forrester defines these as:
Customers already use social technologies to wrest power away from large corporations. Now employees are adapting social technologies in pursuit of innovations to support these empowered customers; Forrester calls these employees HEROes (highly empowered and resourceful operatives). By designing social technologies as part of their Innovation Networks, CIOs and their IT teams help establish new Social Innovation Networks — innovation ecosystems employing social technologies to enhance HEROes' innovations. These Social Innovation Networks help drive faster, more effective innovation across the enterprise. And CIOs must rise to the challenge of nurturing and developing these networks while structuring their IT teams to fully support them.
Today, Forrester and Harvard Business Review Press released the print version of Empowered, a book by Forrester veterans Josh Bernoff and Ted Schadler. This book is a quick and worthwhile read for just about anyone who wants to consider the changing role of technology in the workplace. After several reads of this book, I have found that in addition to a lot of great statistics, quotes, and case studies, there is a valuable message for how companies MUST change their philosophy and approach toward new technologies in order to stay innovative.
As a quick example of how quickly the technology landscape is changing, stop for a moment to consider just how many times in the past few days you have:
Received an invitation to LinkedIn.
Seen a personal acquaintance using Facebook.
“Tweeted” or heard someone comment on “tweeting.”
Checked your mobile phone — or seen a commercial for a cool new mobile app.
On September 7, 2010, US Federal CIO Vivek Kundra (Office of Management and Budget) joined with Federal CTO Aneesh Chopra (Federal Office of Science and Technology Policy) and Bev Godwin (Director, Center for New Media and Citizen Engagement, U.S. General Services Administration) to announce the launch of Challenge.gov at the Gov2.0 Summit.
The new book Empowered highlights the benefits of empowering HEROes (highly empowered and resourceful operatives) within the workforce. As we approach our first-ever CIO Forum in October, I’m looking around for great examples of how governments are using social technologies to empower employees to serve empowered citizens.
When I think of government IT projects, I often think of multimillion-dollar projects lasting years before going live. But it doesn’t always have to be that way, as the following example illustrates.
Peter Koht is a HERO working for the City of Santa Cruz Redevelopment Office. In 2009, the city was facing its worst budget crisis (a problem familiar to many city officials). Running out of options, the city had already shut down civic services such as the community pool, museums, and a family resource center when it faced up to the reality that the people of the city needed to be involved in the decisions about what services to cut. Unfortunately, the voices too often heard at civic meetings were representatives of the extreme viewpoints at either end of the political spectrum. In an effort to collect more ideas from the silent majority, Peter suggested the city could tap into social media to connect with its citizens. Lacking any kind of budget or resources, Peter had to rely on the help of three volunteers to get a community site up and running in a week.
As many readers know, I have a strong interest in understanding the practical realities of innovation and want to help companies define what that "buzzword" means -- what it is, who manages it, and why it's important (see my just-published report on the ecosystem of innovation services providers).
I believe Sourcing and Vendor Management (SVM) can and should play a critical role in the innovation process. However, my biggest disappointment when I speak to many technology vendors, IT professionals, and business users is when they tell me that they avoid working with SVM when purchasing (or in the cases of vendors, selling) a new technology. Fairly or unfairly, they see SVM's involvement as a bureaucratic stumbling block that will stifle their ability to move quickly or pick the technology vendor they want. For these people, SVM acts as a barrier, not an enabler, of innovation.
Rollin Ford has one of the toughest CIO jobs on the planet. He leads a global IT team in one of the world’s largest companies by revenue and employees, a company that has earned a reputation for leadership in supply chain that has allowed it to dominate its markets. Yet Wal-Mart is constantly under pressure to maintain its leadership position. In the US, Target has become a fierce competitor, while in the UK, Tesco may have overtaken Wal-Mart in supply-chain leadership, with Tesco's move into the US watched closely by Wal-Mart.
Earlier this year, Ford sat on a CIO panel discussing IT’s role in innovation. His thoughts on innovation also touched on strategy and alignment. He suggested that innovation starts with the customer, then leads into a business strategy, and then it gets enabled by technology. However, he acknowledges, “there are very few secrets out there.” Ford suggests that the only competitive advantage over time is the speed at which your organization can implement and leverage innovative ideas: “Your organization has to embrace change and new technologies, and that becomes your model. It’s about getting from A to B and doing it quicker than everybody else.”
I recently finished the draft of my report on the ecosystem of innovation services providers. This report, to be published in July, explores the landscape of companies that are unified by a single purpose: they are dedicated to helping their clients unleash their own innovation potential. These are not companies who simply use "innovation" as a marketing buzzword. Rather, they are dedicated to the discipline of innovation – and bring unique innovation expertise to clients in wide variety of corporate roles. This report builds on much of Forrester’s previous work related to Innovation Networks and Innovation Management, but expands the "ecosystem" to consider all of the companies I interact with that have a distinct innnovation focus. In the report, I explore the offerings of:
Strategy consulting organizations
Technology service providers
Product management firms
Outsourced product development firms
Idea management/solution generation companies
Other niche service providers (including training program, design firms, and others)
I argue that this ecosystem of providers will be an increasingly important part of a comprehensive innovation strategy. However, it will be up to very knowledgeable and “connected” individuals within companies to help manage the diverse players, and connect suppliers to the right role, at the right point in the innovation process. I also argue that this is an opportunity for SVM professionals who want to play a more strategic role in their organizations.