Way back ten years ago in October 2011 I was posting multiple times a month on my column at ZDNet at what turned out to be the tail end of the golden era of blogging. By then the Apple iPhone, launched June 2007, had revolutionized the way we consumed and contributed information, having enabled a whole new generation of application platforms.

The Yiying Lu designed Twitter ‘Fail Whale‘ would regularly appear as more and more people attempted to interact on what was then a platform struggling to scale both technically and sociologically, and Facebook was growing fast

Now A decade later I recently was reminded of a ZDnet post I wrote about ‘information inflation‘ – the ‘signal to noise‘ crisis.

My fundamental point in those simpler times was that the distraction of ever increasing volumes of digital noise was arguably creating ‘information inflation‘, causing quality information to be harder to find, have a shorter lifecycle and become devalued more and more quickly.

‘Ever increasing volumes of digital noise‘ was a predictable understatement of course. We’ve since had a US president who successfully circumvented his opposition media to communicate directly with his audiences via social channels, with that now reactive media then quoting and critiquing his tweets, global brands have poured billions into social media positioning and handling customer interaction and reaction, 5G has merged cable TV with broadband. We now live in an always on digital soup. In 2021 Yiyling Lu is attempting to financialize her fail whale design as Non Fungible Token art.

After the glorious internet ‘Glasnost’ era of free unfettered online publishing ended, my online writing slowed down a lot, mostly because it was driving less and less enterprise collaboration consulting business because the world was changing so fast with barriers to publishing online quickly becoming virtually non existent.

As I wrote ten years ago ‘Our traditional understanding of financial inflation is a decrease in the real value of money over time; information inflation could be seen as a decrease in the value, ownership and creation of information‘, and this is what we saw happen as Linked In, Facebook and others turned you into the product – the more you shared the more they could sell about you.

This meant increasingly desperate attempts to drive ‘engagement’ by marketers and self marketers. The value of ‘followers’ dropped, meaning they had to drive larger and larger numbers (in some cases buying fake followers from click farms as the world was increasingly automated with bots), adding more and more colorful images, fridge magnet homilies and video snippets to drive the clicks.

In 2011 I could write a post like ‘signal to noise crisis’, press publish and my thoughts would be live internationally. Aside from ZDNet’s daily viewing figures pdf I could also tell how my posts were doing by cutting and pasting a paragraph into a Google search and seeing the post ripped off and posted on mostly Indian IT sites.

By 2019 there was a complex ZDNet bureaucracy for submission of articles which would be changed/edited to drive maximum clickthroughs before being pushed live with no author feedback loop, resulting in my significantly reducing my efforts after a couple of their editing disasters.

As I said in 2011 ‘The hamster wheel era of frantic Twitter trawling and spending hours reacting and interacting with your multiple channels is over – far more important is quality over quantity, foundation and focus‘.

Our issue is that it’s now increasingly hard to find that quality. I just got a new G5 pixel phone and decided to run no apps on it at all, just the Android google tools that came with it. These days less is sometimes more to keep our foundation and focus…

Lines are blurring between fintech banking and consumer digital wallets, major consumer brands have much to gain and more to lose as the race to serve future customers with their own unique currencies accelerates

‘Brand name’ corporate run cryptocurrencies received a massive awareness boost earlier this year when Facebook and partners ‘Libra consortium‘ and associated Facebook ‘Calibra’ digital wallet were announced back in June.

What followed, in a world still dominated by often justifiable perceptions of cryptocurrencies as scams and ponzi schemes, was a major backlash over Libra & Calibra with some of Facebook’s twenty seven foundation partners in Libra backing away following serious concerns expressed, July US House Financial Services Committee government hearings and the European Union asking for more details to examine.

It’s hard to think of a tech company who have fallen foul of regulators more than Facebook after years of generating paranoia and mistrust about their intentions and controversial exploitation of their user’s data on their various social networks (Facebook/Whatsapp/Instagram). They are arguably a poster child of precisely who should not be running what is effectively a global currency after their various missteps and apologies, but they have little to lose in attempting to expand into financial technology, and a huge amount to gain if they succeed.

The situation is markedly different for global companies with trust reputations and credibility to protect. Building up customer relationships and comfort levels takes a lot of time and money and can be let down in an instant by a lapse of judgement or failure. The crown jewels of large business entities are their brand image and we are rapidly entering a global era where that brand image can and will include digital wallet currencies with multiple use advantages over fiat currencies.  Association with ‘poisoned’ brands like Facebook is an efficient way to bleed away trust and understanding in this critically important new consumer experience, which has to delight and not undermine confidence. 

Walmart revealed some details of a USA patent they applied for in January 2018 on August 1st for a digital (‘stable‘) coin tied to traditional fiat currencies that will ‘enhance payments and include loyalty features on the consumer side while having business to business attributes on the supply chain side. This example of strategic planning (along with multiple other forward looking Walmart patents) are visible examples of the many projects in the works at large brands. The US Federal Reserve announced plans last month to launch its own fintech real-time payments system ‘FedNow‘ by 2023 or 2024 to modernize and speed up clearing system transaction speeds while heading off the ‘challenger banks‘ that have strong momentum in Europe despite missteps. Last summer I wrote a widely read post here on ZDNet ‘Cryptocurrency: The bubble is over, here comes the boom‘ about the rapid evolution of cryptocurrencies as the serious players entered the market and scaled up. While a great deal of activity is still behind the scenes and heavily influenced by regulator grey areas and realities, Libra, Walmart and other examples are now very visible signs of this coming wave of large scale digital currencies. 

In China, which as a nation is well ahead of western Europe and the USA in usage of digital, Changchun Mu (a former People’s Bank of China deputy director of payments and settlement division)  is China’s ‘Digital Yuan’ lead at their Digital Currency Research Institute. This is digital transformation on a global scale. WeChat, the ubiquitous Chinese social network, has Alipay at its center, enabling seamless transactions alongside a single instance of most western social apps rolled into a one stop personal digital agent (and government surveillance monitoring device).

It is hard not to imagine a future western word where existing major global retail brands run a similar service to We Chat, enabling people with limited access to current ‘traditional’ banking services to avail themselves of new currency types and where supply chain ecosystem transactions are conducted in unique brand currency all the way to consumer purchase. A business vacuum is building up to offer western mobile first consumers these types of convenience.

What is holding back western development of digital ledger technologies at scale while continuing to allow financial investment grey areas to flourish is largely a lack of clarity around securities laws from regulators at the SEC (Securities Exchange Commission)  in the USA and the FCA (Financial Conduct Authority) in the UK. The normally stern SEC clearly had a sense of humor with their educational ‘HoweyCoin’ website in spring 2018, an educational site with a scam coin offering ICO picked apart to demonstrate red flags for unaware investors. 

As we prepare for 2020 and beyond, the need for guard rails and guidance to help next generation firms and legacy retailers do the right thing while investing and scaling to provide value to build and retain trust is becoming critical. Smaller sovereign states such as Malta and Lichtenstein have created European Union compliant legal frameworks but these are not yet robust enough to build out large scale global trust networks on, and the 800 pound SEC & FCA gorillas overshadow the legality of this landscape.

There is everything to play for in this inchoate new space and much to lose as the clock ticks and strategic plans are made. Putting together the next generation jigsaw of digital elements to form the services and facilities future customers will expect is happening now, and no effort should be spared to get it right with high stakes to win and with legacy brands asleep on these realities quickly fading into insignificance. Filing patents and public relations proclamations about possible future states need to be be replaced with well thought out, practical and workable business models far sooner than most people think.

During the dot com boom twenty years ago nobody dreamt that ‘brick and mortar’ stores would be sideline to the extent they are today. Business plans to sell ePet food online were the butt of many jokes and bankruptcies, and  shopping malls were the dominant thriving social centers. What a difference a few years makes – ‘bricks and mortar’ store Petsmart bought online pet food retailer Chewy for $3.35 billion in 2017 in a deal that was fundamentally structured to leverage Chewy’s financial strength to help ailing Petsmart physical storefronts survive and regroup to serve an ever more online customer base. Shopping malls are deserted and online networks have cannibalized social interactions. 

Amazon prime online shopping and delivery is crushing retail, because with very few exceptions it is cheaper in time and money to compare, select and buy online than to burn gasoline and time going to retail stores. The internet cannibalizes the depth of real world experiences such as shopping in stores, and we now also live in an era where 4k monitors and broadcast quality audio all too often make the remote experience of an event such as a concert or a race better than actually being there. 

NASCAR stock car racing is a case in point. The fabulously successful business model that propelled this sport to be the most popular auto racing series in America at the turn of the century was fueled back then by TV advertising eyeballs and 200 mph billboard race cars. Today it is no secret that sponsors are deserting the sport, and that track attendance figures and TV and internet streaming numbers are declining for some races, despite NASCAR’s increasingly sophisticated audio visual presentation. Where the National Basketball Association has small stadiums and a ticket to a big game experience is highly sought after and prized – much like a hard to get into night club with bouncers and a line behind a velvet rope – NASCAR’s super speedways have vast grandstands that are often not full, which in turn negatively influences the multi media ‘stage set’ viewers experience on their screens. 

NASCAR flew me to their sellout flagship Daytona 500 race in February of this year and I have subsequently been watching the season with interest before writing this post. I spent a lot of time at Daytona talking to attendees, many of whom travel thousands of miles, often camping in RV’s at the racetrack every year to experience the event. Like NFL tailgating, the infield fan experience is in some ways bigger than the on track action, the ‘southern pride’ culture around NASCAR is still strong but the fan base is demographically aging. 

The reality of being at the Daytona track is that the jumbo TV screens catch the eye more than the cars on the track. That, coupled with a terrible PA system amplifies my earlier point that the race experience is arguably at this point better on your couch in front of a 4k monitor with inexpensive store bought beers rather than stadium priced beverages. 

The fundamental central issue facing retail, events and other experiences requiring a commitment of time, travel and money is quality. Video phone grazing is the enemy of live events – seeing video highlights free on your phone greatly undercuts the commitment and need to actually be there, and if you do make the effort to go that experience has to be much, much better than the hi tech experience to justify the expense in time and money. This is all too often not the case, from retail customer experience and service to crowded concrete bunker sports stadiums that are uncomfortable, expensive to enter, buy things in and often with limited visibility (except the giant monitors) and terrible acoustics. The biggest showbiz stadium events today are mostly ‘heritage musical acts’ such as the Rolling Stones and these ‘experiences’ are often more about being able to say you ‘saw’ the actual real human musicians in the flesh, bought the T shirt and other overpriced merch than buying a superior musical experience.  People will pay fantastic ticket, food and parking prices for these experiences, and it is worth finding out why. 

The Daytona 500 crowd had lots of ‘bucket list’ attendees – families that had grown up with the fabled race on the TV every February visiting the actual track once for the experience. The challenge is that the ‘live’ experience isn’t good enough for many of them according to some of the conversations i had there. Walking on the actual track and steep banking, taking the inevitable selfies and shared social media photos seemed to rank high, along with seeing the drivers out of their cars and pit lane race car tuning. The actual race many people openly said was better experienced in broadcast format with multiple camera angles and commentary. The one caveat is your ability to hire trackside pit crew radios and experience the live conversations between drivers and crew, with dedicated NASCAR attendees following specific drivers and teams typically owning their own headsets and watching the pit crew action closely. This is a good example of experiencing unique details that make the experience deeper and much more intimate, but the vast majority of the audience appeared to me to be under engaged and fiddling with their phones and mentally elsewhere a lot of the time, although to be fair some were looking at race data NASCAR was broadcasting.

Night races at Bristol – a small, intimate track in the cultural heart of NASCAR’s southern Tennessee roots- were recommended to me as the ultimate ‘real life’ experience by the hard core fans. The latest Bristol race happened there last month and many Daytona attendees were also very enthusiastic about the smaller quarter mile wing car stadium race experiences common all over America, which have less multimedia digital coverage. 

There’s hope for NASCAR – I was in a California Home Depot store earlier this month on a Sunday and was talking to the front door greeter who was wearing an old Tony Stewart NASCAR hat. The conversation turned to my attending the Daytona 500 earlier in the year. My new Home Depot greeter acquaintance was jealous and enthused about Daytona and said it was on his bucket list, and that he was about to finish work so he could go home and watch that weekend’s race. Home Depot pulled out of sponsoring Tony Stewart and team in 2014. NASCAR marketing demographics for big box stores apparently no longer make sense in our digital age and there are other areas where they are currently spending their money to reach target audiences. 

Fundamentally our connected world is now in many ways more engaging than ‘being there’ and this is a huge problem. Like ‘bricks and mortar’ retail there is a lot of work and restructuring to be done at NASCAR on improving and creating unique experiences, enticing investment in time and money by new consumers and participants to foster experience habits in new generations for sponsors at a time when cars are less central and interesting to the screen obsessed than in previous eras. 

The only thing that will motivate people to break away from their screens to spend time and money to travel to a ‘bricks and mortar’ location is the depth, uniqueness and memorableness of their experiences, and that is the polar opposite of less than 20 years ago before broadband. This challenge for retail and events is increasing rapidly as supply chains and broadcast speed and quality improve, and transportation costs, availability and parking continue to be a major factor. A great deal of thought needs to go into what constitutes a memorable experience and the cost and time justifications, whether you are running out to buy a gadget or deciding to book tickets and plan travel to attend an event.

The advertising industry magazine Adage ran a ‘best experiential 2019‘ article that demonstrates technology vendors appear to understand experience better than retail and events organizers at this point in history, a startling turn of events since big tech is arguably cannibalizing NASCAR and other events, and network TV the former principle cash cow of the ad industry. 

As efforts are made to reign in the giant technology platforms this is arguably a vital time for retail and events leadership to think deeply about their future use and relationships with technology and how to make their live on site experiences transcend the easy to graze on screens that are in everyone’s hands today. 

The word “digital” has been bouncing around like a ball for the last 15 years or so.

In the Web 1.0 era, digital transformation was originally a descriptor for aspiring to paperless offices, and a useful term to encourage senior executives to stop having their emails printing out to read. The breathtaking revelation was that they should read them off the screen, and the Blackberry device eventually made this a reality.

Fast forwarding, the most recent January Davos World Economic Forum was completely digital dominated. Founder and chairman Professor Klaus Schwab’s carefully worded Fourth Economic Revolution book is the jet set ten-thousand-foot globalist aspirational business philosophy of our rapidly changing world: “The business models of each and every industry will be transformed” proclaims one of the edicts in the associated video above. The WEF aims to “bring together the most relevant leaders from all sectors of global society, and identify the best ways to address the world’s most significant challenges,” aiming to be a collective best practices model.

Meanwhile, on-the-ground usage of the word digital — and a whole lexicon of words that collectively represent it (blockchain being a current prime example) have been mangled beyond recognition. We currently live in a world dominated by winner-take-all platform companies: FANG (Facebook, Amazon, Netflix, and Google) in the Western world and BAT (Baidu, Alibaba, and TenCent) in Asia.

Despite media hype about innovation, research and development budgets have been massively shrunk in most companies and initial public offerings (IPO’s) are at a low ebb. Financialized corporations have been buying back shares, moving money around, and acting like bankers rather than innovating, as Rana Foroohar’s excellent book Maker and Takers documents in easy-to-understand language.

The application of practical digital thinking has largely been sadly lacking beyond targeted social media network marketing — accessing you and your data trails through your smartphone and then attempting to influence you has dominated spending on and understanding of the word digital in the last eight years. Much noise and hype has surrounded broader transformation attempts to remake legacy businesses as digital entities, with the old line IT services companies investing heavily to reposition themselves as digital solutions providers while distancing themselves from their past, despite that past continuing to be their main revenue stream.

The cultural gridlock and politics in most larger companies has meant digital initiatives tend to be a sideshow for medium ranking innovation directors looking to find justifiable ways that modern technologies could be grafted into the main body of the legacy business for demonstrable results. As part of my tracking of digital business realities, I regularly talk to recruiters and executive headhunters. Discussing the level of search requests for “Chief Digital Officers” last fall I heard about very limited appetite for digital new hires, but all sorts of VP level jobs are now routinely renaming incumbent’s titles to include digital… basically putting old wine in new bottles.

WHAT IS DIGITAL ANYWAY, AND WHY SHOULD WE CARE?
The old digital ingredients of “Social, Security, Mobile, Analytics and Cloud” (SSMAC) were a past business case for heavy investment in digital marketing, but they have been superseded by a far more sophisticated world of possibilities and opportunities that also aims to leverage artificial intelligence, (AI), distributed ledger technology/blockchain, the Internet of Things (IoT), and the relentless progress of automation and robotics.

Catching the right maturity point to leverage this expanding portfolio of modern tools, platforms and possibilities is hugely challenging even for start ups aiming to start from scratch as “born digital” businesses. For mature businesses with layers of existing technologies and processes, the cacophony of marketing red herrings, lack of standards, and general confusion makes things much harder than it needs to be. Technology is moving so fast that businesses and operating models, markets, supply chains, and brand relevance are all at risk of rapid obsolescence for those who are not paying attention. “Software is eating the world,” the well-worn 2016 marketing slogan for venture capital firm Andreessen Horowitz, continues to sum up realities.

However, Klaus Schwab’s old World Economic Forum quote — “In the new world it is not the big fish which eats the small fish, it’s the fast fish which eats the slow fish” — belies the fact that forum members are arguably all large global cartel businesses, maneuvering to protect their franchises… leveraging friendly lobbyists, cliques, and politicians to create digital moats.

Meanwhile, on the ground, digital initiatives continue to fall just outside the “key imperatives” boards and senior staff draw up as their main business objectives in order to make quarterly numbers and keep the gears turning. Digital is much talked about, with anxious checking of the horizon and peripheral vision for any sign of the dreaded well-funded digital startup competitor that will obsolete and tear away profit centers. Antennae are out to fast follow any competitor’s digital moves, with firms sometimes copying each other’s cargo cult moves and replicating illogical actions (mobile apps has been a good example), resulting in some industry vertical channels being dominated by a cargo cult version of digital.

Doing anything broader about digital inside legacy firms is another matter entirely and all too often is outsourced to the large accounting and consulting firms who sell them generic frameworks to run on their generic cloud platforms, resulting in zero market differentiation or competitive advantage.

Elsewhere, actual practical business model changes tend to be brought about by the platform realities we live with, whether supply chain or sales channel. The vast majority of formal digital initiatives tend toward tentative pilot initiatives and technology foundationed departmental change management projects rather than cross company transformations. The one well-funded and budgeted exception is digital marketing, which is tasked with attracting attention in an extremely crowded and increasingly desensitized online world, aiming to have authentic influencing conversations with prospects, customers, and users.

FUNDAMENTAL SHIFTS IN THE WAY THE WORLD WORKS AND PAYS
Cumulatively, the impact of distributed ledger technologies and smart contracts, cryptocurrencies, digital funding and payment options look likely to have a greater impact on day-to-day life than the first internet wave.
Cryptocurrency speculation and boom/bust manias have obscured the more foundational sea change in funding activities enabled by new ways of crowdsourcing ideas and businesses.

Micropayments are now a part of the operating system of Brave and other browsers, augmenting the mobile device contactless RFID payments revolution that is already well underway. Cumulatively, the impact of distributed ledger technologies and smart contracts, cryptocurrencies, digital funding and payment options looks likely to have a greater impact on day to day life than the first internet wave, which was huge.

Digital currencies are now being used to reward reviews and feedback on products and services, with a new global order emerging which transcends nation state currencies. The impact of this on huge platforms such as Amazon isn’t being felt yet, but it’s rapidly maturing. We will soon be adding this important foundational element to the digital compendium of modern tools and methods.

FILTERING OUT TODAY’S DIGITAL STASIS AND FOCUSING ON DIFFERENTIATION
Despite this rapid evolution, most businesses remain anchored in their past and mostly blind to competitive digital implications outside of marketing. Pockets of experimentation are common, but the implications for this inability to keep pace with change is the challenge of the ages, and the vast majority of firms are simply not keeping up.

Thinking beyond the constraints of the big platform providers, whether traditional enterprise software suites or the dominant cloud platforms of our era is essential to avoid being on the same starting line as everyone else in highly competitive markets. Outsourcing too much of this digital model thinking makes the core of your business weak, yet changing internal cultures and challenging calcified corporate fiefdoms is equally challenging.

Add in validation of what is real, what is fluffy hype and what is someone else’s agenda and what is dangerously wrong and/or a dead end — and you’ll have a migraine for the ages, too.

The takeaway is that there is nothing remotely generic about your digital world, and that differentiating in a platform dominated global economy is essential for survival. The quality and sophistication of the people you work with will define future reach and success, and to quote Steve Jobs, an important attribute of this is to “think different” to survive.

First posted on ZDNet

http://www.zdnet.com/article/digital-confusion-disasters-and-opportunities-beyond-the-hype/

Large scale technology services vendors would be committing commercial suicide by selling themselves merely as legacy IT plumbers, outsourced administrators and historical code and process supporters, despite that being a largely accurate description of the vast majority of their skill sets.

Instead we currently live in a noisy blizzard of posturing around “digital transformation” as mature IT firms struggle for continued relevance and credibility in a rapidly evolving world.

Today Computer Sciences Corporation (CSC) is relaunching after merging with Hewlett Packard Enterprise (HPE) Enterprise Services spin off, as a new business entity with the brand name DXC Technology.

It’s entering a very competitive landscape of global service providers, all of which are struggling to remake themselves as relevant and credible to their prospects and customers in this very different new era.

Customer prospect realities

Meanwhile on the US client/prospect side, Sears is a struggling poster child for a legacy retail business that is rapidly fading from relevance.

Despite being the brand equivalent of Amazon 100 years ago, brilliantly leveraging the rail system and newly graded roads to transform retail with the Sears Roebuck mail order catalog, Sears has failed to successfully make the transition to an era of digital customers.

Sears is an extreme example of the sort of clients a new services partnerentity like DXC Technologies has to find effective business strategies and execute for.

Short of funds, desperately needing a coherent and joined up strategy to captivate and motivate their prospects and customers with, all while struggling with last century culture and IT infrastructure, Sears epitomizes, at an extreme level, the challenges countless firms are struggling with to find direction and remain relevant.

Buyer beware

Now that just about everyone on the supplier side is dressed up in futuristic digital outfits and parroting transformational marketing speak for the spring 2017 services marketing season, the key challenge on the buy side is finding out who has genuine competencies to help identify and drive effective modern business strategies, tactics and execution.

In some cases this is easy and can be a knock out blow: The buy side’s long tail of experiences and engagements with legacy vendors will have shaped perceptions of strengths and weaknesses. HPE and CSC, despite being a new business entity, carry the legacy of their past client successes and failures into their new DXC era.

DXC will need to have an extremely well defined, competitive, and compelling retail strategy to win against strong competition, whether the opportunity to excel is an emergency turn around like Sears or a white space, shiny new digital initiative for healthier prospects.

An evergreen Drucker maxim nails the fundamental problem:

“Because the purpose of business is to create a customer, the business enterprise has two -and only two- basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

I wish Drucker had put innovation before marketing in that foundational statement, but putting that aside the massive efforts by engineering services firms to pass themselves off/market themselves as business innovators via technologies is largely irrelevant to the buy side.

Marketing masking legacy realities

The challenge in many cases is that prospective services partners are essentially marketing their claimed ability to innovate around modern digital constructs rather than actually having much demonstrable experience or staffing to execute. The analogy is your plumber suddenly showing up dressed as an architect and asking whether you would like to co-design an extension for your house, a proposition you would probably be wise to decline.

Virtually any legacy services firm of any size now has innovation labs to entice customers to co-create with them, typically also featuring some superficial digital eye candy on display — robotic arms automatically opening and serving beers, green initiatives around solar power helping to save the planet, big data magic shows, etc. “Design thinking” is the lingua franca of these efforts to coach businesses and identify areas they need help with.

Anyone doing their homework on the client side knows that most of this digital innovation display is a thin veneer on a large, legacy IT services culture that knows little about this new world.

Today and moving ahead, the sharpest people at the top of the digital strategy pyramid are significantly encumbered by the sheer volume of marketing hand waving and noise making around endlessly regurgitated second and third hand “disruptive” and “transformative” ideas. I’ve personally seen many expensive failed “digital” initiatives in the last six months, several as a result of getting sucked into naive design thinking sessions followed by unrealistic execution strategies.

It’s all too easy to fall for overconfident suppliers who exhibit the Dunning Kruger effect, assuming their shallow knowledge around digital strategy will evolve and mature into positive results.

As a result of this, we are seeing a lot of the “parasite economy,” where prospective buyers pick brains during tire kicking sessions, a sort of magpie culture where information is collected and hoarded by management types who have either been given the digital hot potato to run with or see a career opportunity to lead the charge in some sort of digital initiative. These typically end in tears for all concerned.

DXC’s opportunity

DXC has a major opportunity, as a fresh new entity, to remake itself to be a credible scale modern global partner with core legacy strengths, notably anchored on scale security.

Creating modern agile digital superstructure that interoperates with legacy infrastructure to solve multiple business problems and open up fresh digital opportunities for prospects such as Sears is the reality of a lot of the prospect work in a struggling retail sector.

Other business sectors are grappling with similar problems and already have IT expense and effectiveness fatigue. The clock is already ticking — will DXC earn a reputation as a relevant technology partner or be judged as the IT services equivalent of Sears?

~

Originally posted on my ZDNet blog April 2017

The Internet of Things (IoT) has now entered a period of showstopping and heartstopping security reality checks. While most people can see the promise and value of data feeds from and to physical things, there are justified anxieties about just how weak and easy to attack many IoT device networks are.

Where business verticals such as banking, financial services, and insurance are fighting hard to escape legacy technology platforms and evolve to be modern customer focused digital businesses, IoT has the opposite problem of often being too modern and cutting edge.

The exciting new ‘white space’ business opportunities rapidly becoming possible are all fraught with risks — data is the valuable currency of digital and therefore the target of hackers. Lack of consistent standards, exploitable attack points, and a new era of high stress security efforts make IoT services work very challenging.

The so-far largest Denial of Service (DoS) attack in history was recently launched via hacked IP connected closed circuit television cameras made by Hangzhou Xiongmai Technology. A botnet propagated Mirai malware to the cameras which then flooded the US east coast with fake traffic, until Domain Name Servers crashed under the strain. And we can likely expect more such attacks.

Right now arguably the ultimate solution to stopping these attacks is internet service providers (ISPs) moving to cut off connectivity from any IP address that is relaying DoS junk data from compromised IoT devices, which this excellent article discusses.

Hard to achieve, fraught with issues, and not optimal, the more practical solution is to build out robust, secure IoT networks so your brand doesn’t get hijacked into the dark side and be a named attacker.

Longer term, ‘system on chip’ security maturation from the hardware manufacturers will add layers of addressable security in sensors. ARM’s ‘trust zone’ security extensions are a good example of where we are right now from a silicon perspective.

At a strategic level, what really sorts out the scary, easy to penetrate lightweight backends from the secure environments is the quality of the secure end-to-end design and engineering. Secure, connected devices will be digital service provider tablestakes as they become the expected norm, along with the associated modern systems and expertise that enable value to entrepreneurs.

Conversely, using sketchy, exposed connected ‘things’ will be akin to placing your personal details on the public internet — too risky.

The first dimension is the Machine to Machine (M2M) industrial internet, which evolved from heavy equipment telemetrics (the measurement and transmission of data by wire, radio, or other means from remote sources to receiving stations for recording and analysis) and has matured and grown on a linear path alongside ‘traditional’ enterprise IT systems for the last fifteen years. Examples of this are ‘time to failure’ monitoring of all types of rotating mass heavy equipment, and data flows into and from ERP, and other enterprise software.

The other, newer dimension is the explosion of product innovation enabled by new sensor developments and big data, enabling data flows from ‘born digital’ devices from and to physical ‘things’ of all sizes to modern digital backbones. It is this newer dimension of our connected world which is causing recent giant societal waves.

Earlier this year AT&T’s AVP of IoT solutions Mobeen Khan briefed me on the pace of change from a telecom perspective. There were 28 million connected devices this spring and AT&T predicts 50 billion by 2020.

While new mobile smartphone plan sales are flat (everyone has one already), connected car accounts are one of the fastest growing areas of growth. AT&T has established multiple Foundry Innovation Centers around the world to help drive market growth and development, and many large enterprise services providers have recently created similar design thinking and ideation labs.

The key to all this activity is identifying who can orchestrate viable, secure enterprise services to route explosively growing amounts of data to the right places at the right times to run modern businesses, and this is where ‘as-a-service’ vendors are going to be duking it out to be the go-to global suppliers for their clients.

In my recent HfS Research ‘blueprint’ report on the IoT Services sector I analyzed many of the major ‘as a service’ providers, some of whom have competencies in both industrial internet activities and emergent innovative IoT activities. It’s currently a buyer’s market for companies looking to find the best talent, skill sets — and of course security competencies.

Designing and building out sophisticated digital platforms for IoT interactions, along with all the other desired commercial goals of leveraging modern big data flows to improve commercial performance and customer satisfaction requires large scale services partners who are committed to drive and support rapid business evolution.

As our editor Larry Dignan wrote here recently, while the old guard systems integrators have been snapping up cloud consulting and integration specialists, prospects and clients are wary of a fresh generation of the sort of problems that plagued past IT efforts, in a far more complex interconnected world.

This really is a new digital business era. Resting on past laurels and buying up boutique design and technology firms as hood ornaments for old line services businesses won’t cut it for any prospect or client paying attention to their modern strategic business needs.

In the crowded services market there is huge opportunity to be the preferred next generation business partners — or be perceived as a legacy provider of limited relevance for today’s needs.

We all know smart phones, always-on connectivity and cloud technologies have fundamentally changed the way we behave in all areas of life. Sometimes it seems the only people who aren’t as aware of this as they could be are the people who run technology infrastructure inside companies.

The pace of change is only increasing, but with that comes some remarkable rhetoric, distortions and fear mongering from vested interests in the tech industry, and opportunistic sniping of existing business opportunities by full stack start ups.

Some of the charismatic characters who have emerged from the advertising and pr world to become self created experts in digital are being relied on to lead businesses through the technology jungle, yet are ‘cargo culters’ who have never worked in large companies or designed real world strategies.

Customer experience (‘CX’) is a massive marketing obsession this fall, particularly as the digital marketing world appears to be falling apart at the seams. The dot come era was always ‘about to come up with something more than banner ads’ on web pages before that financial bubble burst.

A useful blog post on Idlewords’ the advertising bubble’ points out similar fissures in the highly complex thickets of digital advertising firms we have today. Essentially there isn’t enough money to go around to justify the expense of capturing people’s attention to sell them things online and the digital ad industry bubble is bursting.
Paraphrasing the basic premise of the faustian bargain we strike to be told about things we might be interested in: “A customer pays money for a good or service….In essence, we pay a small consumption tax to fund advertising”.

However,

“There’s more money being made from advertising than consumers are putting in.
The balance comes out of the pockets of (advertising technologies) investors, who are all gambling that their pet company or technology will come out a winner. They provide a massive subsidy to the adtech sector.
But investors want to be on the other side of the equation. Instead of pouring money in, they want their money back, plus a handsome profit”.

The brass ring everyone is grasping for is the delighted customer, with the goals being the best experience of their lives while discovering, buying and using the goods or services on offer. Quite apart from the silent snooping every time you go to a website (trackable on Ghostery and as a browser add on here) by countless sets of business eyeballs, the sense of claustrophobia and cynicism from ‘consumers’ is palpable now we are in a rapidly maturing digital marketplace. Few enjoy hard sales interactions when browsing in a store, and the same is true online.

Just like dot com era banner ad evolution, the promise of ever greater relationship building with the digital customer is challenging…not least because attention spans are shrinking to the single second and patience is practically zero in our mobile first world.

Personally I like most people shop on price and availability almost exclusively, relying on digital reviews and perspectives on products and services before making final decisions. This price pressure is crushing when combined with the need to maintain high standards of customer satisfaction.

It’s not rocket science to understand these realities, but the mess in the digital advertising and influence world has caused mass confusion amongst buyers, including some short tenured Chief Marketing Officers. Most of the foundational logic and concepts around digital have been distorted beyond all recognition and amplified as advertising rhetoric.

There’s a good common sense piece by Clay Christensen in HBR this week ‘What is Disruptive Innovation?’ , the latest in his regular posts that clear up ambiguities and distortions of the term, which gets back to basics about what ‘disruptive innovation’ actually meant when he originated the term.

“The theory of disruptive innovation, introduced in these pages in 1995, has proved to be a powerful way of thinking about innovation-driven growth…Unfortunately, disruption theory is in danger of becoming a victim of its own success. Despite broad dissemination, the theory’s core concepts have been widely misunderstood and its basic tenets frequently misapplied“.

“….Many researchers, writers, and consultants use “disruptive innovation” to describe any situation in which an industry is shaken up and previously successful incumbents stumble. But that’s much too broad a usage“.
I recommend reading the short article to get Christensen’s definitions verbatim.

Some of this is academics keeping their core premise pure and marketable, but it is fair to say that most executives roll their eyes when they hear words like innovation, disruption and transformation these days. they have been beaten to death with conferences, after dinner speeches and crude marketing rhetoric that leverage these words to sell agendas, products and services.

Taking a machete to chop away all the marketing cruft, posturing and hype that has crusted around the application of simple, powerful ideas in the tight context of solving specific business problems has never been so difficult in a world where many are distracted by endless digital red herrings, shiny objects and charismatic figureheads.

Having said that, Claytons concepts are evergreen business quality theory, but they are pre internet and therefore sometimes of questionable relevance to some specific business cases today, even a distraction. Given the rapid pace of evolution in where business opportunities are around digital there are grave dangers in becoming seduced by boilerplate frameworks, not least of which is the almost generic fear of ‘Uberization’ of markets, which will be the subject of my next post.

I help companies of all sizes with business strategy to enable a ‘joined up’ approach across multiple business function disciplines and workflows. Digital technologies tend to be used in business silos and can cause major political and scaling issues. I can help to streamline and simplify, and to design tactics and workflows that get the best use out of your existing IT infrastructure and new digital technology selections across multiple business areas.

Summary: The challenge for giant swathes of the tech industry is that bad smell from past plumbing failures — and fear of the unknown.

The iPad is five years old this week and Apple just had the most successful business quarter of any company, ever. Asymco analyst Horace Deidu has deduced that in 2014 iOS app developers earned more than Hollywood did from box office in the US. He also makes a claim that the Apple app economy sustains more jobs than the movie biz (627,000 iOS jobs in the US vs. 374,000 in Hollywood) is easier to enter, has wider reach and is also growing more rapidly.

Meanwhile, in the face of the staggering transformation of society brought about by mobile devices and connectivity (on which you can now consume Hollywood products, instead of buying a ticket at the brick-and-mortar box office), the enterprise grade technologies and organizational models that are the underpinnings of this new world are still mostly firmly rooted in the last century.

The challenge that layers of legacy technologies and their associated human handlers impose on companies can be the boat anchor that is holding companies back from succeeding in this new world, a scenario that has played out many times in the past. The various annual lists of successful companies change out a lot more frequently than most think — look where Apple was in 2005 — and a prime reason for corporate demise is outdated processes and therefore products bound by brittle old infrastructure and associated work paradigms.

Enterprise Resource Planning had a massive run in the ’90s fueled to some extent by fear of Y2K Chicken Little syndrome: when the clock struck midnight for the new century all the old IT contraptions would stop working. Back then ERP was replacing old 80’s tech with the credible promise of enhanced business performance and more homogenized processes across the client company as the dot com boom fueled growth ideas and new tactics.

Mobility is today’s primary disconnect because it is unequivocally new, along with the way humans now interact and find information. Not a midnight clock deadline failure issue, more a nagging worry that the business is drifting increasingly out of touch.

 Many firms counter this with lots of reading of blog posts like this, employing scouts to go to events and read reports (often sponsored by tech companies) that theorize and lead about disruption and ‘the future of work’. Customer propensities and data are tracked in the belief that ‘fast following’ their competitors (i.e. mirroring their possible brief competitive advantage) will keep them in the game. A bit of public posturing about possible future plans and usage of current appropriate buzz phrases is also very popular. Internally the inertia vacuum is palpable.

ERP Donut Fragmentation

Meanwhile there is significant fragmentation of the old ERP donut, which was once a credible centralizing suite. Frank Scavo of Computer Economics nicely outlined ‘The Maturing of ERP on the Salesforce Platform‘ last November, pointing out increasingly credible alternatives to the old line behemoths: Kenandy cloud erp (‘easy to use, easy to implement, easy to change‘) is an example of the agile alternatives. Financial force, Rootstock are other examples Scavo cites. He may have written this while coming down from stimulations at the fall SF Dreamforce conference, but it’s still relevant.

The big IT players increasingly have to acquire cashflow to feed the 90 day Wall Street beast, buying complementary technology companies to expand their offerings and margins, which they refer to as ‘new technology’ and part of what SAP currently refer to as ‘the networked economy’. This colossal pressure to perform at ever greater scale can be both advantage or disadvantage to customers depending on their scale and needs.

Vinnie Mirchandani, who has been talking to a lot of SAP customers for his book SAP Nation (which I haven’t read yet), blogs that customers…

…. mostly talked to me about the “old” SAP – their investments in BusinessSuite, Business Objects, Business One etc. Several told me they felt abandoned – as they mostly heard SAP talk about “new” products.

They told me they were finding it increasingly difficult to ignore benchmarks they were hearing from peers. Peers like Inteva which decommissioned SAP and went with a SaaS alternative and reduced its IT costs as percent of revenue by 60 percent.

This is the lighter, more agile world of SaaS alternatives that the world (my comment: including SAP) is moving towards.

So with mobility/smart devices and persistent broadband as genuinely new developments in society and lots of old technology to be updated, life should be good, right? The challenge for giant swathes of the tech industry is that for clients and prospects there is a bad smell from past plumbing failures from implementation partners or a fear of untested/unproven new technologies, a lack of clarity about effective, valuable ways forward and a general mistrust of the giant consulting and implementation firms. Digital security is being tested as never before by hackers and budgets are typically fragmented, making it hard for all but board level decision makers to effect large scale change.

The biggest issue of all is fear of change and the unknown

There is clearly a huge opportunity for services companies who can get to an appropriate blending of consulting and outsourcing acumen, to quote Phil Fersht at HFS Research. The challenge for the giant consulting and outsourcing firms is: Can they get to that appropriate blend while keeping their ships afloat, since they are currently mostly staffed to answer the mail and respond to RFP’s that are becoming less and less frequent as clients seek out innovative digital strategy first? Skill comes before any scaling.

With very few exceptions, the old line services industries are geared up to adapt and extend the last century’s concept of enterprise software, with precious few people at the helm who understand the importance of innovation and modern digital business strategies for clients. In a nutshell the IT services world is basically currently all cart and no horse.

The strategic ‘horse’ is therefore all important – the challenge for clients once they have a digital plan they can believe in to drive business success is in breaking out of the huge gravitational pull of their existing culture, technology and budgeting. Culture eats strategy for breakfast — unless you make tomorrow a very different day and take away the breakfast, because once you suddenly have a competitor that is executing digital tactics and stealing your lunch it is extremely hard to get back into the game.

 

Originally posted on ZDNet
http://www.zdnet.com/article/the-growing-digital-divide-and-the-strategic-inertia-that-can-kill/
January 30th 2015