The role of technology in driving innovative business models
The fundamental question we need to ask ourselves is not “What is the role of the CIO and the IT department?” This is something that is already well defined and understood. The question we need to ask ourselves is “What role should technology be playing in the business?”
Digital Business
In previous articles I addressed the questions of Must the Business Always Bypass IT When It Wants to Innovate? and Free Your Users (or They Will Free Themselves): The vexed issue of Social Media and BYOD in the workplace. Both questions focus on the challenge of responding to new business drivers coming from outside the traditional requirements and role of the CIO (and of the IT department), as we would usually understand them, based on the role and experiences of the last 20 to 25 years.
This piece asks the question “What role should technology play in business?” This is a larger question than the one currently hanging over the role of the CIO and the IT department. This is a bigger question, a question that starts by asking what role technology is will play in the new “innovative” business models that are emerging.
In short, we need to approach how technology will fit into what some call Digital Business, with fresh thinking based around a set of new and very different business requirements. At the core of this change is the pervasive nature of technology in society, which has resulted in people using technology to redefine their lives. This is not just shopping from a website; it’s a lifestyle change in where and how we find information and how we choose to act upon it.
This shift in our attitude to technology is frequently called “Consumer IT”. The reality is that people are driving the uptake and use of technology in business to do business rather than IT professionals. This was at the core of my last article, Free Your Users (or They Will Free Themselves).
In this piece I want to move on to the theme of “innovation”, currently a popular term with as many interpretations and mismatched understandings as the technology elements that go with it.
Innovation, but not as we’ve been doing it
Most IT departments pride themselves in being innovative and can rightly point to a track record in assessing and deploying year by year continuous improvements by “innovatively” adopting new technology. However that’s not what a business school would mean by their use of the term. Instead they would add two key words that provide some increased clarification: Innovation in Business Models.
This difference can be clearly expressed if we go back to the arrival of Amazon and compare it with the then US leader Barnes & Noble response to the emergence of the internet.
Barnes & Noble added a website enabling customers to order books online. For their existing business is concerned with increasing channels to market for incremental business, with the majority of the business model still being unchanged, focused physical locations carrying stock for walk in customers and browsing.
Amazon fundamentally rethought the business model of selling books and changed it from being based on bookstores with their overheads and limitations on stock carried. Amazon took advantage of ubiquitous use of technology in the hands of consumers to allow them to browse and buy in a manner that opened up a whole range of new possibilities.
You can argue that the final point in the revolution was the advent of the Kindle and dropping physically printed books for electronic editions, that truly is an ‘innovation in the business model’.
Amazon still has an internal back office carrying out processes under the best processes of IT, but its business model to find, win, gain orders and more particularly create long term customer relationships with repeat business is based on using technology “outside” the “internal” focus of operating the business associated with IT.
New business models break old assumptions
In the first article in this series – Must the Business Always Bypass IT When It Wants to Innovate? – I provided a breakdown of nineteen recognizable core business models that are frequently used as references for the possible digital business options and their innovative business models.
Source: Mark W. Johnson (2010), Seizing the White Space, Harvard Business Press
There are a number of ways to define digital business. The major points are:
It is interactive between participants to shape what is achieved.
- It is collaborative in the manner that people interact to share experiences and comment on products or experiences.
- It depends on apps, browsers and clouds.
- It occurs outside the firewall and away from the enterprises internal systems.
You can add a lot more to this list, but these main points tell us why the hard won experiences of delivering internal enterprise transactional processes safely isolated from the external world by the firewall on client-server technology simply don’t transfer well, if at all, to the new world and the support of innovative business models.
McKinsey tell us in a recently published report Bullish on Digital that 30% of major businesses have, in recognition of this, appointed Chief Digital Officers (CDOs), though there are several other titles around that equate to the same role as well with Chief Innovation Officer being the main one. You can learn a great deal more about the role and actions of a CDO at their association website CDO Club.
Does hiring a CDO change anything?
However, you are reading this as a CIO so thus far this is not an encouraging message! Let’s recognize that the CDO is effectively just another manager in the business who needs technology to make their operational and strategic requirements to happen. Okay, so they are a technology literate manager with a strong grasp of the topic, but the question is how to define roles and responsibilities within an enterprise to make it coherent and operational successful.
A little over two years ago I wrote in my CTO blog on the Capgemini site about this topic around the title “Inside-Out” versus “Outside-In”. The ideas in the post appeared in a full Capgemini white paper at the beginning of 2012 entitled The Cloud; Time to Deliver which is available on Slideshare. Rather than rewrite the paper here, can I suggest that this white paper should help you to understand and build a realistic approach that combines both. More recently an interesting update on Inside-out and Outside-in, linked to SAP and ERP, has been posted on the Capgemini Capping IT Off blog site.
Innovation in technology vs. innovation in business model
So let’s end with a summary of what this means and the link to the opening paragraphs of this blog about “innovation” in the IT operations versus “innovation in business models”.
Firstly “Inside-out” defines the traditional role of IT in providing the systems to support the “internal” or “inside” the firewall operations, with a secondary focus on providing a limited and controlled set of accesses externally, or “outside” the firewall. The new business models depend on using technology externally or “outside” the firewall, with a secondary concern to provide limited access internally, or “inside” the firewall.
If we now apply this to cloud technology “innovatively” then its role in conventional IT in “Inside-Out” is to improve the virtualization and flexibility of computing resources by enabling greater efficiency in operating Client-Server enterprise IT.
Conversely cloud computing in “Outside-In” is the ability to obtain and use flexible computing resources that exist outside the firewall and are safely separated from the enterprises own systems. In addition the role and type of use required is unlikely to be client-server based; instead it will use the browser and app model.
The first is innovation in using technology to enhance the current operations and business model and the second is innovation in the business model based on being able to use technology in entirely new ways than was previously possible.
Source: Andy Mulholland
In the next article I plan to go into this more deeply by introducing how Enterprise IT should be planning, deploying and operating an Enterprise Platform to successfully underpin an Outside-In Digital Business with an auditable set of management tools. To wet your appetite for this I suggest you might like to take a look at the Open Group who are widely respected for their work in developing the TOGAF (The Open Group Architecture Framework) architecture methodology for Enterprise IT, and are now starting to address the need for what they call Platform 3.0. Why 3.0? To differentiate from the term Web 2.0, which was popular some years ago.
What role do you think technology will play in the new digital businesses that are emerging? What role do you think the IT department will play? And what opportunities do you think that this creates for technology professionals?
Keynote speech: Network to Win!
By Ross DawsonRecently, I gave the opening keynote at the 38th annual global conference of international accounting network Kreston International. Below are the slides for my presentation. Note that they are intended to accompany my speech, not to be meaningful in themselves.
Kreston are a very interesting organization. With revenues across the network of over $2 billion, they are the 13th largest accounting network in the world. The day of the conference they made the final step in becoming a network according to the IFAC (International Federation of Accountants) definition of a network. One of the critical issues in determining whether a group of firms is deemed a network is whether they have common quality controls. The appointment of a Global Quality and Professional Standards Director is a key step Kreston has taken.
I have long been fascinated by professional services networks. I wrote about them in my first book Developing Knowledge-Based Client Relationships, and in detail in Chapter 9 of Living Networks.
I am actively continuing to explore the nature of networks in professional services. How well they network very simply determines their success. As such I was delighted to be invited to do the opening keynote on the conference’s theme of Network to Win. It took the format of a participatory workshop run over two 45 minute sessions, getting the attendees to reflect on and discuss how they can best enhance the cross-firm networks that drive results.
The future of technology in health care
By Ross DawsonRecently I gave a keynote speech on The Future of Technology in Aged Care at the Aged Care Association Annual Congress. I took the audience on a big-picture journey into where aged care is going, which went down very well between the many high-detail presentations at the conference.
Below is a brief snapshot of the five key ideas that I presented:
1. Telemedicine
Health care is being transformed by connectivity. This ranges from simple applications such as monitoring medical data through to remote surgery, bringing the skills of the best doctors anywhere in the world. Accenture’s Online Medicine Cabinet is an example of how patients and the elderly can have their health monitored from home, and their medications managed effectively. Now robots such as the one in the video above can visit patients or do rounds in the ward, linking them directly by video to doctors or nurses.
2. Care robots
Japan is in the vanguard in using robots in aged care, being at the most pointed confluence globally of a rapidly aging population and a lack of health care workers. Increasingly the basic work and functions – both at aged care institutions and in people’s homes – will be performed by robots, or in some cases, such as in the video above, by people assisted by robots or exoskeletons.
3. Emotional robots
We will become increasingly emotionally engaged with robots. Paro the seal robot, which I first wrote about in 2004, is being used to help the elderly, people with Alzheimers and schizophrenia, and sick children. The first video above shows Paro being used in therapy, including of a Japanese Prime Minister. The second video reports on a recent study by St Louis University which showed that the robotic dog Aibo was as helpful as a real dog in helping seniors to feel good and engage with the world around them.
4. Connecting
While younger people have tended to take up social networks more than the elderly, most people underestimate how many old people are engaged in online communication with their family and peers. Over two years ago, 18% of Americans over 65 had shared content online, with photo sharing common in this demographic. The key thing that will allow elderly people to engage in technology is easier interfaces. As shown in this video, new interfaces such as that on the iPhone make access to technology far easier. We can expect social networks for the aged to grow rapidly, for example the Grandparents Network described at the Online Social Networking and Business Collaboration conference.
5. Getting better
Technology should not just ameliorate our problems, it should make us better. Technology, including games, can help us to keep our minds alert and engaged, which has been demonstrated to delay dementia. Beyond this, a whole array of new technologies will give us more possibilities as humans, especially in enabling our thoughts to get things done.
In the future we will have relationships with our homes
By Ross DawsonToday I was interviewed on The Daily Edition about the homes of the future.
Click on the image to watch a video of the segment.
The future of homes is a very rich topic that goes far beyond the usual chatter about internet-enabled refrigerators and integrated entertainment, and we weren’t able to cover much in a TV panel format.
However the main point that I made is that in the future we will have a very real relationship with our homes. Now homes are somewhere that we reside, and while we can shape them to our personalities, it is not currently a two-way relationship.
As we move forward, our relationship with our homes will comprise many elements.
Read more →
What to Do When Your Business Model Changes
By Andy MulhollandThe role of technology in driving innovative business models
The fundamental question we need to ask ourselves is not “What is the role of the CIO and the IT department?” This is something that is already well defined and understood. The question we need to ask ourselves is “What role should technology be playing in the business?”
Digital Business
In previous articles I addressed the questions of Must the Business Always Bypass IT When It Wants to Innovate? and Free Your Users (or They Will Free Themselves): The vexed issue of Social Media and BYOD in the workplace. Both questions focus on the challenge of responding to new business drivers coming from outside the traditional requirements and role of the CIO (and of the IT department), as we would usually understand them, based on the role and experiences of the last 20 to 25 years.
This piece asks the question “What role should technology play in business?” This is a larger question than the one currently hanging over the role of the CIO and the IT department. This is a bigger question, a question that starts by asking what role technology is will play in the new “innovative” business models that are emerging.
In short, we need to approach how technology will fit into what some call Digital Business, with fresh thinking based around a set of new and very different business requirements. At the core of this change is the pervasive nature of technology in society, which has resulted in people using technology to redefine their lives. This is not just shopping from a website; it’s a lifestyle change in where and how we find information and how we choose to act upon it.
This shift in our attitude to technology is frequently called “Consumer IT”. The reality is that people are driving the uptake and use of technology in business to do business rather than IT professionals. This was at the core of my last article, Free Your Users (or They Will Free Themselves).
In this piece I want to move on to the theme of “innovation”, currently a popular term with as many interpretations and mismatched understandings as the technology elements that go with it.
Innovation, but not as we’ve been doing it
Most IT departments pride themselves in being innovative and can rightly point to a track record in assessing and deploying year by year continuous improvements by “innovatively” adopting new technology. However that’s not what a business school would mean by their use of the term. Instead they would add two key words that provide some increased clarification: Innovation in Business Models.
This difference can be clearly expressed if we go back to the arrival of Amazon and compare it with the then US leader Barnes & Noble response to the emergence of the internet.
Barnes & Noble added a website enabling customers to order books online. For their existing business is concerned with increasing channels to market for incremental business, with the majority of the business model still being unchanged, focused physical locations carrying stock for walk in customers and browsing.
Amazon fundamentally rethought the business model of selling books and changed it from being based on bookstores with their overheads and limitations on stock carried. Amazon took advantage of ubiquitous use of technology in the hands of consumers to allow them to browse and buy in a manner that opened up a whole range of new possibilities.
You can argue that the final point in the revolution was the advent of the Kindle and dropping physically printed books for electronic editions, that truly is an ‘innovation in the business model’.
Amazon still has an internal back office carrying out processes under the best processes of IT, but its business model to find, win, gain orders and more particularly create long term customer relationships with repeat business is based on using technology “outside” the “internal” focus of operating the business associated with IT.
New business models break old assumptions
In the first article in this series – Must the Business Always Bypass IT When It Wants to Innovate? – I provided a breakdown of nineteen recognizable core business models that are frequently used as references for the possible digital business options and their innovative business models.
Source: Mark W. Johnson (2010), Seizing the White Space, Harvard Business Press
There are a number of ways to define digital business. The major points are:
It is interactive between participants to shape what is achieved.
You can add a lot more to this list, but these main points tell us why the hard won experiences of delivering internal enterprise transactional processes safely isolated from the external world by the firewall on client-server technology simply don’t transfer well, if at all, to the new world and the support of innovative business models.
McKinsey tell us in a recently published report Bullish on Digital that 30% of major businesses have, in recognition of this, appointed Chief Digital Officers (CDOs), though there are several other titles around that equate to the same role as well with Chief Innovation Officer being the main one. You can learn a great deal more about the role and actions of a CDO at their association website CDO Club.
Does hiring a CDO change anything?
However, you are reading this as a CIO so thus far this is not an encouraging message! Let’s recognize that the CDO is effectively just another manager in the business who needs technology to make their operational and strategic requirements to happen. Okay, so they are a technology literate manager with a strong grasp of the topic, but the question is how to define roles and responsibilities within an enterprise to make it coherent and operational successful.
A little over two years ago I wrote in my CTO blog on the Capgemini site about this topic around the title “Inside-Out” versus “Outside-In”. The ideas in the post appeared in a full Capgemini white paper at the beginning of 2012 entitled The Cloud; Time to Deliver which is available on Slideshare. Rather than rewrite the paper here, can I suggest that this white paper should help you to understand and build a realistic approach that combines both. More recently an interesting update on Inside-out and Outside-in, linked to SAP and ERP, has been posted on the Capgemini Capping IT Off blog site.
Innovation in technology vs. innovation in business model
So let’s end with a summary of what this means and the link to the opening paragraphs of this blog about “innovation” in the IT operations versus “innovation in business models”.
Firstly “Inside-out” defines the traditional role of IT in providing the systems to support the “internal” or “inside” the firewall operations, with a secondary focus on providing a limited and controlled set of accesses externally, or “outside” the firewall. The new business models depend on using technology externally or “outside” the firewall, with a secondary concern to provide limited access internally, or “inside” the firewall.
If we now apply this to cloud technology “innovatively” then its role in conventional IT in “Inside-Out” is to improve the virtualization and flexibility of computing resources by enabling greater efficiency in operating Client-Server enterprise IT.
Conversely cloud computing in “Outside-In” is the ability to obtain and use flexible computing resources that exist outside the firewall and are safely separated from the enterprises own systems. In addition the role and type of use required is unlikely to be client-server based; instead it will use the browser and app model.
The first is innovation in using technology to enhance the current operations and business model and the second is innovation in the business model based on being able to use technology in entirely new ways than was previously possible.
Source: Andy Mulholland
In the next article I plan to go into this more deeply by introducing how Enterprise IT should be planning, deploying and operating an Enterprise Platform to successfully underpin an Outside-In Digital Business with an auditable set of management tools. To wet your appetite for this I suggest you might like to take a look at the Open Group who are widely respected for their work in developing the TOGAF (The Open Group Architecture Framework) architecture methodology for Enterprise IT, and are now starting to address the need for what they call Platform 3.0. Why 3.0? To differentiate from the term Web 2.0, which was popular some years ago.
What role do you think technology will play in the new digital businesses that are emerging? What role do you think the IT department will play? And what opportunities do you think that this creates for technology professionals?
The age of self-creation: why ethics must be central to how we create the future
By Ross DawsonOne of my flurry of media appearances over New Year was on the Sunrise show, talking about what to expect in 2014.
Click on the image to see a video of my interview.
We discussed emerging consumer technology trends, shifts in retail, and the idea of “self-creation”, which was one of my 14 themes in our 2014: Crunch Time report.
As I wrote in the report about the theme:
Read more →
The top 30 Thought Leaders in crowdfunding
By Ross DawsonThere is no doubt that crowdfunding has been one of the major trends evolving over the last couple of years in particular. It has caught the imagination of the public, and already had a large impact on how artists, startup ventures, and many others consider their funding options. The trend of crowdfunding has a long, long way further to go.
Israeli-based equity crowdfunding platform OurCrowd has just launched a list of the top 30 influential thought leaders in crowdfunding, those who have shaped how the industry is seen and understood.
They commissioned Evolve Inc to do the study, which took into account “a variety of factors including social footprint, popularity among industry insiders, engagement frequency, citations by influential writers in venture finance and other factors” to create a ranked list of the top 30 influencers from a pool of 800 people studied.
The top 5 are Perry Chen of Kickstarter, Naval Ravikant of AngelList, Slava Rubin of IndieGogo, Ben Horowitz of Andreessen Horowitz and Fred Wilson of Union Square Ventures, followed by a variety of entrepreneurs, regulators, politicians, media commentators, academics, and others.
I made the list (just!) at #29, probably mainly due to the success of my book Getting Results From Crowds and the crowdsourcing workshops I’ve been running around the world over the last couple of years.
Read more →
Why children (and adults) need to be on social media or get left behind
By Ross DawsonYesterday the West Australian newspaper began a five-part series on children and social media, beginning with a feature article introducing the topic.
The article’s title, Get online or ‘be left behind’ quotes an interview with me. It is very easy for journalists to focus on the negative when covering children and social media, so I’m very glad they took a more balanced stance.
The article began with an introduction to the issue, to the point of mentioning that English secondary school Eton has banned Snapchat. It goes on:
Read more →
Today Show: What to expect in the year ahead
By Ross DawsonEarly on January 1st this year, after a great New Year’s party and no sleep, I went into the studio to talk about what we should expect in the year ahead. The video is below
A few notes from what I discussed:
Read more →
Awesome video: we are building transparent machines of business exploiting society
By Ross DawsonThis fabulous video brings together a succinct telling of the privacy story of today with some exceptional 3D graphic animations and great sound. Watch it! (preferably full screen)
Transparent Machines™ from beeple on Vimeo.
In the Privacy section of our 2014: Crunch Time report we wrote:
Read more →
On the importance of energizing holidays for entrepreneurs
By Ross DawsonI have just returned from holidays in Jervis Bay, a stunning region set in a marine national park a few hours drive south of Sydney. It is one of those places scattered around the world that feels magical in some inexpressible way.
Image credit: Hadi Zaher
It was just a one week holiday, my first proper break in the last year, which has been perhaps the most intense year in my life. Victoria and I did take a little time off between this last Christmas and New Year but I ended having to do a some urgent client work and many interviews including Sunrise, Today, and Morning Show over New Year so it wasn’t a real holiday.
Switching off
During the holiday I was almost completely switched off from digital world, with limited connectivity where we were staying helping me avoid more than very briefly glancing at email or Twitter every day or so, though I did need to respond to a couple of enquiries.
Read more →