The ability to sense and execute on change are essential qualities of a digital business in today’s marketplace.
Don’t believe me? Consider this: 70% of the companies that were on the Global 500 list a mere 10 years ago have now vanished – unable to adapt. In those 10 years we’ve seen digital disruption change the business landscape. We’ve watched the Internet become pervasive, embraced cloud-based applications that update multiple times a year, acquired mobile devices that connect everywhere in the neighborhood and around the globe, and embraced information workers who use their own tools to do corporate work on their own time.
We recently surveyed 300 global businesses to dig deeply into how prepared – in the sense of being agile – they are for types of events and business changes that the new digital age will bring. And, our findings were not surprising. High performing organizations are flattening to deal with rapid change. They are using knowledge creation and dissemination to drive decisions lower in the organization, and redefining the role of the CEO. Organizational agility, characterized by high awareness and execution in knowledge dissemination, change management and digital psychology agility dimensions, drives significant performance for enterprises.
My keynote session at our Forum for Technology Management Leaders in London (June 12-13) on the topic will highlight organizations that have made market, organizational, and process changes based on digital strategies to become more agile, more productive, and grow revenues. I hope to see you there.
Lexmark’s acquisition of Readsoft is part of a continued effort at Lexmark to balance mature and stable printer HW revenues with faster growing software and services businesses. This acquisition is one of many in the last two years, and is consistent with consolidation in the mature capture and content market. And it works for me.
Readsoft provides more software depth in Europe then Lexmark has, and is stronger than Lexmark in financial process automation (purchase –to-pay and order-to cash although mostly the former) with strong integration with SAP and other ERP vendors. Perceptive Software, the core technology within Lexmark’s software division, is more content then transaction oriented, a strength that Readsoft adds.
There is also synergy across analytics. For example, Brainware, acquired by Lexmark, is very strong in analytics for forms processing – one of these being invoices. This should add smarts to ReadSofts front end.
As always, success is determined by how integration talks place over time and whether an integrated platform can emerge with minimal customer disruption. It would be good to see acquisiions in the services area to more quickly balance revenue with the tradition business.
It hit me the other day when I was speaking with a call center operator about my reservation. She was funny, smart, well informed and flew around her app. with the quickness of the chipmunk. She is the new breed of worker. Not the production worker that performs repetitive tasks, like data entry and responding to the same dumb information requests, anxious to get you off the phone to meet a call duration metric. No, our relentless offshoring, automation, and customer self-service is slowly eliminating this type of worker.
We hear numbers like this consistently, and this from a Workforce Planning VP at a major Major Telecommunications company,
“Today 70% of our inquiries are handled by self service (IVR, Web, or mobile) with only 30% that ever get to our call center. But these calls that get through are really hard. The customer has researched the problem on line and is ready to have a deep conversation. So unfortunately, even though the call volumes are way down, the number of agents we need has not decreased due to how complex these calls are. "
What does this mean for enterprises? High performance will be achieved supporting these workers with advanced information management and solutions like Dynamic Case Management that give them freedom to make decisions and advance the customer experience.
We will shortly publish a wave on DCM. Look for some new European solutions like BeInformed (Netherlands), Whitestein (Germany), and ISIS (Austria) to gain ground on PegaSystems, IBM, EMC, Appian and others from the traditional BPM market.
My wife would say that the cold weather has me watching too many "waste of time" sporting events. She is correct of course, but sports and life have many paralells and here's my current favorite. I am believing more and more in the importance of Karma where good intent and deeds contribute to future happiness, and bad intent deeds contribute to future suffering. Hence, there is only one explanation for the dismal Denver performance yesterday. Denver had simply way too much bad Karma. And here's why. They denied Patriot fans the opportunity for any tickets (not one) to the AFC championship game in Denver. This was a selfish, low class, and just down right mean. It created a tremendous reserve of negative Karma that could not be overcome Sunday. As a Pats fan, I was thrilled to see not just a loss but a record setting devastation.
Investment in clean energy in South Africa increased more in 2012 than in any other country, rising 206-fold to $5.5 billion, according to Bloomberg New Energy Finance. South Africa generates 85% of its electricity from coal, but chronic power shortages may have been the catalyst to look to solar (a low point in 2008 closed mines for five days). It’s making up for that gap with solar energy — and now it’s the only African nation among the top 20 solar markets, with installations comparable to South Korea, Thailand, and Israel.
The 360 days a year of sunshine certainly help, and it’s great to see the clean energy push work so well. But what is interesting to me is the amount of change in the overall economy the solar boom has caused. Wages are up, new jobs are available; hotels are adding more rooms, restaurants are changing menus to be more suitable for Europeans, and sales volumes are increasing. So I’m adding “changes to the energy infrastructure” to my list of events that require business agility. Changes in customer expectation, digital disruption, and shortening product life cycles get the most attention as change events that drive the need for companies to be agile, but as shown here change can rapidly come from infrastructure shifts. And South Africa is just starting its transformation. There are plans to invest in other forms of renewable energy: wind, concentrated and photovoltaic solar, landfill gas, and biomass power. And it looks like South African businesses are up to the challenge and are responding to the market. For more info, click here.
CPG companies are a great example of what Business Agility really means in “The Age of the Customer”. They produce tissues, disinfecting wipes and cold remedies are finding new ways to predict and chase outbreaks around the country.
Forrester is putting significant effort into Business Agility – what it is, how it relates to the success of companies within industries, and what foundations business agility is built on. Our recent study of agility and performance found that high-performing companies were building agility into their core business. (see recent Agility PerformanceReport)
No where does this seem more true than CPG industry. CPG has been innovating in - Market Responsiveness - one of forrester's 10 dimensions of business agility. This means simply understanding what’s going on in your market and shifting strategies and resources to respond. In the CPG context, it means to figure out when people are getting sick and ramp up marketing, and then reduce expenditure when people are well.
The way we deploy software is changing. Our research and others shows that enterprises are moving away from on-premise apps. and moving to private and public cloud offerings. But here is the basic question that is seldom asked. When a company deploys to the cloud does that boost revenue and returns to stockholders? Are high performing companies separating from low performers by their knowledge of and use of cloud technologies? Our recent Business Agility study says clearly that they are not.
Let me give some context for this statement. Forrester is putting significant effort into Business Agility – what it is, how it relates to the success of companies within industries, and what foundations business agility is built on. We’ve identified the three types of agility that companies must develop -- Market, Organizational, and Process agility – and evaluate ten separate dimensions that make them up. We found out which of the ten dimensions were the most important, defined as driving growth in revenue and profit (see the Agility Performancereport).
And here’s the point. Infrastructure Elasticity – which is our agility dimension for all things cloud, accounted for almost no difference in enterprise performance. Enterprises aggressively embracing cloud solutions did not perform better than their peers. In fact in some industries, they performed worse.
$3 billion may not be enough for Snapchat, the latest social-media craze. Those of you as socially challenged as I am may not know that Snapchat allows teens (mostly) to send photos that get erased after a few seconds. Certain politicians would have paid dearly for this feature. And now there are so many bad photos zipping around the Internet (my wife alone is responsible for thousands) that the Snapchat message service may have great social value.
No question, it is a popular site for young users and is grabbing Facebook’s teenagers. But valuations like this strike me as well – ridiculous. Sure Facebook will try to keep this from Google and the latter will be reluctant to see Facebook grab the possible next big social media thing. I get that.
But value continues to be a funny thing in technology. 7,671 miles from Silicon Valley is India. Looking over its shoulder at China, they finalized the deal to pick up a $2.3 billion aircraft carrier from Russia. A bit of a "fixer-upper" but it will now have two aircraft carriers. The Russian flag on the vessel was lowered, and the flag of the Indian Navy was raised. A coconut was then smashed against the ship’s side.
I have a hard time reconciling these two values. You can have a photo-sharing site with a clever algorithm and a fair number of eyeballs, for maybe 3 billion. Or you get a 45,000-ton vessel that can carry up to 30 aircraft and will have a crew of around 2,000 for a mere $2.3 billion, certainly an eye-popping conversation piece when tied up off the back dock.
It’s hard for me to imagine that the vast R&D teams at Facebook or Google couldn’t whip something like Snapchat up in a few months. But even if taking a bit longer, if rumors are true, how do you turn down a $3 billion offer? And the bigger question: Is it really worth anywhere near that?
Everyone is focused on getting the health exchanges working well (or criticizing those who failed to get them working). But the greater risk and opportunity long term is the ability to manage change. With software you often get one chance to get it right – that initial design and architecture needs to be well conceived. Adding features, patches, and fixes, particularly under pressure, often creates hard problems down the road.
So think of the vast number of changes that await. Modifications to various rating systems within hundreds of benefit and risk levels; revised procedures and laws that allow brokers to enroll – not to mention the small business health options (SHOP) programs; and improvements to back-end functions to support online and offline processing. And these are changes to the Act itself. Changing demographics, ramping customer experience demands, and advancing mobile opportunities also will drive change. My biggest fear, as we pull the bus out of the ditch, is whether hastily applied extensions to deal with the initial crisis will make it difficult to adapt going forward. Hence, the real challenge is whether healthcare.gov has been built to handle the incredible number of inevitable changes with this transformational law.
We just completed our second report on Business Agility Performance and looked at what factors can make the government more agile. Of our 10 dimensions, the most important dimensions for the exchange going forward are Process Architecture and Software Innovation.
Here’s a different take on the recent revelations of the NSA.
How does Edward Snowden, a low-level contractor to the government, recently fired from Booz Allen with a fabricated salary history, get access to a trove of documents about top-secret telephone and Internet surveillance programs? This to me is troubling. Too many years ago, I had top-secret clearances in places like BBN and MITRE Corporation that do lots of contract work for DoD and the three-letter agencies. But I never had anywhere near the broad or deep access to information that this contractor had.
Yet, we need to keep this lapse in governance in perspective. The only way we can beat terrorists is with superior information management. Big data with predictive analytics can make connections that no human can. These tools will form the ultimate weapon of this century and should remain a key investment area where we maintain leadership. How important is analytics? Forrester just completed its second report on business agility, and we looked at what factors can make the government more agile – better able to deal with unexpected outside events. We also studied which of our 10 dimensions drives the most economic performance. Of our 10 dimensions, the two that apply most in this case are analytics and knowledge dissemination.
Competence in analytics was shown conclusively to drive effectiveness in government and profit in the private sector based on our survey. See Agility Performance. A sophisticated government organization, particular where intelligence is the goal, needs great tools to control, manage quality, and govern the use of data throughout the organization.