Meet The Digital Architects Of Your Technology Strategy

When Jeffrey Hammond, Mark Grannan, Adrian Chapman, and I dove into our most recent developer survey, we unearthed a fascinating group of developers we call "digital architects." This group aspires to set architectural direction, deploys open source software across four or more technology areas, and uses three or more types of cloud services (see the figure). 
 
  • One in 11 enterprise developers. Only 9% of the developers in North America and Europe are digital architects. This small segment is an elite and attractive group, with particular enthusiasm for technology and, as we'll see, for digital innovation and customer engagement.
  • More likely to work at fast-growing companies. More than half of digital architects — 53% — work at companies growing at double-digit rates. You'll find them in all three sectors of the software business: enterprises, software vendors, and service providers.
  • Younger than the rest. Almost three-quarters of digital architects are younger than 45, and 30% are younger than 35. That means these technologists came of age during the internet and smartphone era. They think digital because they know nothing else.
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In 2017, Digital Transformation Budgets Will Top The Billion-Dollar Bar

Check out our Predictions 2017: In Digital Transformation, The Hard Work Of Operational Excellence Begins piece that went live this morning. It has more predictions and more detail from from my coauthors Nigel Fenwick and Martin Gill.
 
You've been creating digital customer experiences for years now. You've built a successful app. You’ve assembled a martech/adtech stack. You may even have started swinging at omnichannel delivery or harnessed AI or piloted a connected product. So it’s time to declare victory on digital transformation, right? [In our 2016 services survey, a shockingly high 19% have . . .]
 
Not so fast. Digital customer experiences are only the shining faces of a digital business. Those pretty faces quickly lose their luster unless you’ve also transformed your business operations to make them better every single day -- and introduce new digital faces all the time. We call this capability "digital operational excellence." It’s the 80 in the 80/20 rule of digital transformation. Here are three predictions for 2017 to prod the digital business conversation:
 
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Drunk History of Your Mobile Strategy

Everybody can name their favorite apps. But can you name even two mobile websites you love? We can't. So we stared into the awful maw of the mobile web to learn how to fix it. 65 companies signed up to help. Along the way, we found problems stemming from the journey you've taken to be in your customer's pocket.

My colleague Danielle Geoffroy brilliantly realized that it was a drunk history, so we wanted to share it with you.

  • 2008: "There's an app for that." Savvy developers jailbroke the first iPhone so they could build apps. Apple then launched the Apple App Store and chaos ensued as every developer and company piled on the apps as the mobile strategy. (And y'all invented the pub game, "there's an app for that.") You ignored the mobile web.
  • 2010: Responsive retrofits tiny-ize websites but miss the mobile moment. Agencies and creative developers swooped in to magically morph brands' giant desktop websites into "mobile-friendly" websites. But that strategy led to the quiet crisis that responsive web design is not mobile-first.
  • 2016: Apps are winning . . . just not yours. Forrester's data shows that US consumers used 26 apps last year and 26 apps this year. (Millennials use . . . wait for it . . . 28 apps.) Consumers have enough apps — they don't want more. What's worse, they spend 60% of their total mobile time (web and app) in just three apps — usually owned by Facebook and Google. 
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R.I.P. BlackBerry Phones

An era has passed. BlackBerry will no longer make phones. RIM opened our eyes when it put the power of digital communications into our pockets. Email on the go was the beginning of the mobile mind shift.

I loved the passion of Mike Lazaridis and his team for building great devices that we'd drive home and get if we left on the counter. His devices were the first to inspire such passion, such intimacy, such a feeling of empowerment that we now all take for granted. He started it.

As a software guy, I was always saddened by the clunky interface for apps other than email and messaging, but I loved the power flowing into my palms from the BlackBerry devices I carried.

Then along came iPhone. As a software guy, it only took a few months of jailbroke phones and developer-built apps before I realized that the real mobile revolution had arrived -- a computer in your pocket. That's when the mobile mind shift really kicked in, as Julie Ask, Charlie Golvin, and Thomas Husson recognized very early.

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Facebook Violates Rule #2 Of An Insights-Driven Business: Marry Algorithms And Expertise

Facebook can't buy a break with its newsfeeds. Every time it changes the model, somebody complains. But its latest snafu -- turning over the job to an algorithm without expert oversight is not the answer. Posting a fake story just isn't smart. It's not insights-driven; it's head-in-the-sand.

(The provenance of this image is opaque. If you own it, please let me know so I can attribute it properly.)

An insights-driven business is built differently and operates differently. As we say in our report

  • Rule #2: Marry algorithms and expertise to continuously improve outcomes. Algorithms are not a secret sauce; they are a model of the real world. If the algorithm says X and the expert says Y, then there's room to improve either the algorithm or human understanding. Innovators like Allstate Insurance (and Memorial Sloan Kettering Cancer Center) accomplish this by putting product experts (or oncologists) and data scientists in a room to continually refine their cognitive assistants. (see endnote 9)
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Google Will Attack Popup Ads On Smartphones -- Hallelujah!

We've all experienced this garbage:
 
  1. You are on your smartphone.
  2. You find a link that you hope will help you in a mobile moment.
  3. You click with the great hope that it will be exactly what you need.
  4. Some irrelevant popup ad grabs you by the arm and blocks your path.
  5. You suffer through the ad or the countdown before getting to the site. (And feel angry or bad doing it.)
  6. Now you finally find out: Does the website help or have you clicked in vain?
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Insights-Driven Businesses Will Make $1.2 Trillion In 2020. Wanna Join Them?

You can't win, serve, and retain powerful customers without being insights-driven. It's one of the principles of customer obsession: customer-led, insights-driven, fast, and connected. So what does it mean to be insights-driven? We think we know based on conversations with over 50 companies over three years. 
 
We have identified 40 public companies and a horde of venture-backed startups that work in a fundamentally different way: They harness and apply data at every opportunity to differentiate their products and customer experiences. That makes them faster and fleeter than you. In fact, using data from PitchBook and Morningstar, we forecast that, collectively, these insights-driven businesses will make $1.2 trillion dollars in 2020 (see the first figure).
 
What does it mean to be insights-driven? It's easiest to see by example. What if you could:
  • Optimize the driving experience by mining car performance data for insights to continuously improve car software? Tesla does.
  • Improve student loan re-financing prices and risk by finding insights in a borrower's credit card transaction history, college, and grades? Earnest does.
  • Win a football championship by gathering data and using insights to improve recruiting, training, and half-time pep talks. FC Midtjylland does.
  • Earn the best on-time arrival of any major airline by measuring when the airplane door closes -- and everything leading up to it. Alaska Airlines does.
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Unilever Buys Dollar Shave Club To Become Digital Direct

Unilever is the latest in a long string of enterprise giants to acquire digital. It acquired the digital-native startup, Dollar Shave Club, for $1 billion. I've been telling the Dollar Shave story lately as a way to describe the disruption possible when a company uses digital technology to establish a direct relationship with a customer. Dollar Shave Club is in its customers' daily shower and conscienciousness. It's a digital disruptor, not because it has a revolutionary product. It's because it has a revolutionary relationship.

What should you take away from this Dollar Shave Club deal?

  • Digital disruption starts with a direct customer relationship. Sure, sometimes digital is about new products and services. But it's always about a direct relationship with customers. That's what's so scary to traditional industries with their indirect distribution models. Unilever has sold through distribution for time and memorial. It doesn't know its customers except through the lens of research and somes times purchased sales data. No longer. Now it can know its customers as Under Armour is starting to.
  • Digital strategy is about bridging the gap between your core capabilities and what customers want. For large firms, you don't need to reinvent your core capabilities to become digital. You instead need to recognize that digital is the way customers want to buy, engage, and get service, so you must give them the tools they expect. Dollar Shave Club sells razors. It just sells them conveniently at a great price. That puts digital within reach of every company.

There will be a lot more digital direct deals like this. Direct customer relationships are one vector of our digital future.

Responsive Web Design Is Not Mobile First

My colleague and coauthor Julie Ask and I are watching with dismay as company after company shrinks its desktop website down to a small screen using responsive web design (RWD) techniques so it fits on – but isn’t optimized for – smartphones.

Companies have delightedly embraced responsive web design as the one-size-fits-all solution to mobile, tablet, and desktop sites. In a recent survey of digital business professionals, we found that 93% are using, piloting, or planning to pilot responsive web design.

That sounds great on paper. After all, RWD is a very practical approach to developing websites that render on any device. But when mobile tasks diverge from desktop tasks as they often do in commerce, the one-size-fits-all approach taken by most responsive retrofits will fail to delight or even satisfy customers on smartphones or desktops.

People do different things on their smartphones than on their desktops or tablets (see figure). To delight and serve your customers in their mobile moments of need, you need to give them exactly what they need to move forward in their immediate context. So if you can't reach all customers with an app – AND YOU WON’T! – you will need to deliver an app-like mobile web experience.

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What Comes After The Unicorn Carnage?

According to CB Insights (thanks, guys!), by the end of 2015, investors had given 152 tech startups “unicorn” valuations of more than $1 billion.  But now, valuations are deflating for many private and public tech companies. Is this 2000 all over again? No. The bubble popping over the next two years will mean job loss in Silicon Valley and a pullback in disruptor investment but not a collapse of tech spending or of the wider economy. CIOs and CMOs should seize this small window of opportunity to hire or acquire talent for digital transformation to serve customers in the digital channels of their choice.
 
That’s our conclusion (24 analysts contributed to this analysis, with special thanks to Chris Mines and James McQuivey) in new Forrester reports for CIOs and for CMOs. We present the full analysis there, but here's a (long) summary.
 
 
1. The Unfolding Carnage Of Unicorns -- There’s Blood In The Water
 
Private investors dramatically drove up the number of unicorns -- private tech companies they valued at more than $1 billion -- from 31 in 2012 to 152 in 2016. But down rounds and post-IPO stock collapses have begun. Accel Partners’ Jim Breyer, believes 90% of unicorns will be repriced by investors or die. He called it “blood in the water.”
 
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