Philips’ Journey Toward Becoming A Connected Business

Macro trends in technology and shifting customer behavior are giving rise to the connected business — which is not defined by technology but is rather a new style of doing business. CIOs will be responsible for introducing technology solutions that help break down silos, boost cross-team collaboration, drive the end-to-end customer experience, and engage more deeply with customers. In order to succeed, CIOs must go beyond technology enablement and support organizational and cultural transformation.

With Jeroen Tas, one of the most renowned technology visionaries in Europe, as its CIO, Philips made a number of strategic decisions to transform itself into a connected business. Forrester believes that CIOs should familiarize themselves with Philips’ strategic, operational, and cultural transformation and learn from it, as Philips offers CIOs valuable lessons in planning the transition to a connected business:

  • Philips embraces digital propositions at the expense of standalone products. Philips maps out customer journeys and ensures that its products turn into plug-ins for broader digital propositions. The firm connects all of its propositions through data, communities, and collaboration, allowing it to understand who the customers are and how they use products. Philips decides how it needs to develop its portfolio based on these customer journey maps, opening up new business models.
  • Interdisciplinary teams help open up new revenue streams. The old model — all marketing people sitting together, all IT people sitting together, all supply-chain people sitting  together — is outdated. Interdisciplinary teams force people to speak each other’s language. At Philips, interdisciplinary teams have also resulted in much higher job satisfaction.
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Mobile World Congress 2014: The Mobile Mind Shift Is Becoming Reality — But MWC Still Falls Short Of Its True Potential

Some 80,000 visitors ventured to Barcelona to attend the annual congregation for the mobile-minded, the Mobile World Congress (MWC). Long gone are the days when one single theme dominated the show. My main impression of MWC was that compared with last year, there was surprisingly little true news. I see evolution not revolution, which is somewhat odd as the overall business environment is clearly changing faster than ever.

Of course, everybody again claimed that they are active in the obligatory fields of cloud, analytics, and customer experience. However, if anything, I feel this convergence of marketing messages creates too many platitudes and undermines the practical use case scenarios that define the mobile mind shift. I went to MWC with several questions in mind, and my main takeaways of MWC are that:

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The Facebook/WhatsApp Deal Is Bad News For Telcos

Facebook’s purchase of WhatsApp shows that the market for messaging is far from dead. But it’s just gotten worse for the telcos. We’ve already discussed the underlying reasons in a report — but the fact that Facebook put $19 billion on the table, of which $4 billion is in cash, for a global messaging service with 55 staff should scare telcos, with their millions of employees and high-cost structures. Over-the-top communications tools like WhatsApp, Line, KakaoTalk, WeChat, and Viber (which itself was bought a few days ago by Rakuten) have pushed telcos further and further away from any meaningful customer engagement.

To be sure, WhatsApp is about much more than instant messaging; it’s about content sharing — which is an emotional activity. Such emotional activities are critical to closer customer engagement. As the online giants use ever more granular user analytics to cement their position as marketing powerhouses, telcos’ hopes of developing new revenue streams from analyzing user behavior are slipping away faster and faster. This is what makes the deal so dangerous.

Of course, it’s tough to justify the deal simply on the basis of WhatsApp’s revenue model of $1 annual subscriptions. In my view, the deal is really about:

  • Bringing a major competitor into your family. Otherwise, someone else could have lured WhatsApp into theirs. The deal, which accounts for about 10% of Facebook’s market capitalization, could be seen therefore as an insurance cover.
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Computers, Privacy & Data Protection Conference 2014: Embracing User Privacy As A Competitive Advantage

By Enza Iannopollo and Dan Bieler

The recent Computers, Privacy & Data Protection Conference (CPDP) showcased a series of innovative projects that are based on big data. Big data is one of the four imperatives that shape the age of the customer — one of Forrester’s main focus areas — and the changing regulatory framework of data protection in Europe has big implications for big data initiatives.

Central to data protection is the existing EU Data Protection Directive, which legislators have been trying to update for years to reflect the changing online realities. The proposed Data Protection Regulation focuses on a redefinition of the concept of “consent.” User consent now has to be freely given, specific, informed, and explicit.

This new definition forces businesses to be more transparent about how they gather, use, disclose, and manage customer data in the form of the principles of privacy notice and purpose limitation. Complying with these new privacy principles is a challenge in the age of the customer, as privacy regulation affects:

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CIOs Need To Prepare For Cultural And Organizational Transformation

Picture: Utua

Macro trends in technology and shifting customer behavior are giving rise to the connected business — which is not defined by technology but is rather a new style of doing business. The responsibility for transforming a company into a connected business ultimately rests with the CEO, but the CIO also plays a central role.  

CIOs will be responsible for introducing technology solutions that help break down silos, boost cross-team collaboration, drive the end-to-end customer experience, and engage more deeply with customers. In order to succeed, CIOs must go beyond technology enablement and support organizational and cultural transformation. It’s easier to implement technology innovations than to change habits and culture. Technology is only the catalyst for cultural and organizational transformation. As Jeroen Tas, CIO, Philips told me:

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Mobile World Congress 2014 Will Push The Mobile Mind Shift

Mobility is becoming pervasive in the enterprise. Smart devices, including wearables, are appearing in all sectors, both in developed and emerging markets. Businesses that fail to prepare for the mobile mind shift risk losing their competitive edge. I hope this year’s Mobile World Congress, which kicks off on February 24, will emphasize the interaction between business processes and mobility — in addition to the traditional gadgets.

I focus primarily on themes relating to the connected business and social collaboration, and I will travel to the world’s leading mobile event in Barcelona to gain new insights into several questions in these areas:

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Symantec EMEA Industry Analyst Conference: shifting the tack of dealing with security issues

With Enza Iannopollo

Symantec held its EMEA Industry Analyst Conference in the UK recently. Symantec saw targeted attacks increase by 42% during 2013. Although it’s always mentioned among the top concerns by businesses in surveys, security is still often treated in a somewhat blasé way by many of those businesses in reality. We took several messages away from Symantec’s conference:

  • Security is not just a simple IT issue but has wider business implications. Digital security has many facets, including cybercrime and online privacy. Security is an economic and societal dimension for the digital ecosystem. Just think of privacy legislation -- customers expect the businesses with which they interact to adhere to it. This also means that the future security manager will be someone who understands business requirements and employee wishes well enough to balance them against specific security threats and compliance obligations. The security officer who just “shuts the gates” and says “no” to requests like accessing video websites or installing software is damaging to what we call the connected business.
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Vodafone Demonstrates Its Determination To Boost Its Enterprise Activities At Its Global Analyst Event

With Henry Dewing, Henning Dransfeld, Katyayan Gupta, Brownlee Thomas, and Michele Pelino

Vodafone hosted its annual global analyst event in London recently, and it was a good event. Vodafone’s CEO Vittorio Colao kicked it off with a passionate endorsement of Vodafone’s enterprise ambitions. But will Vodafone’s market position as a leading mobile telco give it a tangible advantage in the broader enterprise global telecoms marketplace? We believe there is a good chance it will because:

  • Vodafone’s integrated pitch is credible. Vodafone comes up in nearly every conversation with Forrester enterprise clients that want to consolidate vendors for multicountry or “global” mobility services. Increasingly, our clients also are asking about Vodafone’s wired services. And those based in the UK and Germany are the most interested in learning about what’s available and what’s coming with respect to fixed-mobile bundling. Vodafone made a big play on fixed-mobile integration, most notably with the acquisitions of Cable & Wireless and Kabel Deutschland. Its network now covers 140 countries, 28 of which support MPLS networks for mobile backhaul. Vodafone also has big plans for refreshing and expanding its international IP backbone network to more than 60 countries.
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Telstra Analyst Event 2013: Report From The Customer Advocacy Journey Triathlon

With Dane Anderson, John Brand, Tim Sheedy, Clement Teo, and Bryan Wang

During his keynote at Telstra’s recent annual analyst event in Sydney, the CEO compared Telstra’s customer advocacy strategy to a triathlon that the firm has just begun. We believe this is a fitting analogy for progress communicated at the event. Our main observations are:

  • Telstra’s transformation remains a work in progress. Telstra is not unique from other incumbent telcos that transform away from traditional — and declining — sources of revenue. Its strong domestic position seems secure for now. But its prospects in new market categories, both inside and outside of Australia, are less certain. Telstra is not particularly innovative compared with telcos in the US or Europe. Yet Telstra benefits from a credible transformation strategy, which it is gradually implementing. For instance, Telstra has built a large IP-based digital media file exchange platform to serve global broadcasters and content providers.
  • Telstra ought to use its Net Promoter Score to drive cultural change. Its strategic goal to push for world-class customer advocacy is a key differentiator and convincing. However, we believe Telstra needs to use the NPS also as a driver of internal cultural change. For instance, Telstra should analyse transactional processes of device purchasing from branded retail stores. Moreover, Forrester research indicates that NPS has limits when it comes to explaining the “how” and “why” of customer experience.
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Ericsson is pulling away from its core competition — but this brings it closer to new competitors

Ericsson is well on its way to being a prime driver of transformation in the Networked Society, as Ericsson describes its vision. I do not question the leading position of Ericsson’s core network activities. But compared to last year’s EMEA Analyst Event, Ericsson has made noticeable progress in its ambition to become a network-focused provider of ICT services because it:

  • Has a clearer perspective of what it is trying to achieve for its enterprise customers. Ericsson is much more specific about which types of enterprise customers it is catering to with what types of services. It targets sectors that face a high degree of mobile disruption and that rely on secure networks for real-time information transmission. In addition to the public and media sectors, which Ericsson has been focusing on for some time, it serves utilities and transport and logistics companies. At the event, Ericsson showcased its strong capabilities and vertical expertise for the media sector in the form of media delivery networks and broadcasting services.
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