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“What’s next?” is the perennially insistent question in information technology. One common observation about the industry holds that cycles of innovation alternate between hardware and software. New types and forms of hardware enable innovations in software that utilize the power of that hardware. These innovations create new markets, alter consumer behavior and change how work is performed. This, in turn, sets the stage for new types and forms of hardware that complement these emerging product and service markets as well as the new ways of performing work, creating products and fashioning services that they engender. For example, the emerging collection of wearable computing devices seems likely to generate a new wave of software/hardware innovation, as my colleague Mark Smith has noted. This said, I think that the idea of alternating cycles no longer applies. It would be convenient if we could assign discrete time periods to hardware dominance and software dominance, but like echoes as they fade, the reverberations are no longer as neatly synchronized as they once were. Moreover, adoption and adaptation of technology by consumers reflected in the design of work, products and services always lags – and lags in different ways, further blurring the timing of cycles.

Adding to the messiness, technologies enter the market and evolve in ways that seem designed to embarrass pundits. In the 1990s, Bluetooth was supposed to be the next big thing for wireless connections; Wi-Fi wasn’t on most radar screens. Today, Bluetooth has an important role, but Wi-Fi is bigger. Some heralded technology breakthroughs sink without a trace. Sadly, that has been the case for multidimensional spreadsheets like Javelin and Lotus Improv. Other technologies appear, are used in trendy ways and then become mainstream. Instant messaging and chat immediately replaced passing paper notes in class for teenage girls. While somewhat passé in this role today, they have become an essential tool in the workplace. Of course the rate at which technology is incorporated into mainstream business use varies greatly. The Internet became central to business and commerce at an astonishingly fast pace while earlier inventions such as voice mail took about a decade to become universal.

vr_sparse_use_of_advanced_analyticsSoftware has dominated as a driver over the past two decades, but devices and business process changes have become increasingly important in amplifying the impact and producing knock-on effects that spur innovations of all sorts. Smartphones and other mobile devices might have become another Minitel except that there were programming tools and business models in place (including the absence of top-down control and regulation) that spurred ingenuity, substantially enhancing the value of these devices and making them highly adaptable to personal preferences and individual business needs. Rapid and broad adoption of mobile devices has been driving change in business software to enable companies to utilize the value of these devices. Yet there are plenty of examples of how organizations have failed to change how they conduct business. Our benchmark research finds that companies have been slow to adopt better methods facilitated by information technology for planning and budgeting, closing the books, managing the workforces or handling customer interactions. Software-driven change will come in these areas over the next decade, driven in part by a generational shift as baby boomers retire, and more attention will be paid to cognitive ergonomics and the resulting increased attention to the design of the user experience in business computing, such as gamification.

Innovation in business often takes longer to appear than futurists hope. One part of today’s answer to the “What’s next?” question includes all the things that software marketing departments have been promising over the past decade or so that haven’t come to pass yet. Usually, this is because there is some confusion on the part of vendors between “easier” and “easy.” Many innovations and enhancements in business software have made them easier to use but not easy enough for mainstream adoption or easy enough to spur process innovation or a change in management practices. One example is advanced analytics. There have been steady improvements making it possible for many kinds of users to employ them in business, but most users today require advanced degrees or specialized training (although I have some hope for new mass market tools on the horizon). Consequently, our research finds that two-thirds of companies make little or no use of advanced analytics.

vr_ibp_few_companies_have_interactive_reviewsAnother example is in business planning. For all the discussion about changing budgeting and planning, practices have remained pretty much the same over the past two decades. One way to make planning and budgeting more useful is to make reviewing results more actionable. This could be accomplished more easily if organizations could immediately drill down into the details of the results rather than having to wait for follow-up information or debate what the likely causes might have been. Yet only about one-fourth of participants in our business planning research are able to get to the numbers behind the numbers while the meeting is under way. Improved software technology is making this easier to do. For example, many ERP vendors have changed the basic architecture of their systems to make them capable of handling transaction processing and analytical tasks at the same time. But technology alone will not make a difference. It will take a change in management and demand that periodic reviews be highly interactive to make a difference.

Even with hidebound management techniques, it’s likely that new devices coming to the market will be major sources of innovation, either those that complement existing business practices and consumer demands (which are obvious candidates for rapid adoption) or as a speculative venture. The loudest buzz is around the Internet of Things. This is an amorphous concept at the moment, and there are considerable technology hurdles that must surmounted for it to become practical (notably the limited address capacity in the IPv4 standard). Still, the concept has a good deal of theoretical appeal when one extrapolates the value already realized by increasing the scope of people-to-machine connections (such as for monitoring processes or the health of devices) and the variety and number of machine-to-machine control and instrumentation (for example, automatically tracking physical assets and optimizing machine performance by monitoring conditions).

As I mentioned earlier, wearable computing is another emerging area of innovation. Thus far, it has had more allure than demand, but that was true also for the personal digital assistant, which had a few notable flops before catching on and becoming a mass-market device, eventually to be subsumed into the smartphone. Devices are already being worn for health, entertainment and augmented reality purposes. Bracelets, fobs and glasses have considerable scope for use in business settings, for consumer applications and for wellness. Glasses and wrist devices in particular have the ability to augment the utility of any computing device as sensors or for input/output. A computer screen is rather like a keyhole through which one “looks” into the computing device. Dual screens are now commonplace because this expands the breadth of view of the user. Glasses can broaden the scope of view considerably more, improving the ergonomics and expanding the utility of any computing device. Any of these devices could augment the capabilities of software applications. They will give software designers added scope to enhance the capabilities and usability of applications.

So the answer to “What’s next?” in business computing probably is “ A lot – and sooner rather than later.” There’s a tendency to view current technology in terms of the major advances of the past. If that is any guide, today’s information technology will soon appear pitifully primitive. Consumer use of technology has outstripped that of business, in part because multiple individual needs are generally less difficult to serve than that of an organization and the tasks the technology performs usually are far less complex: They’re apps, not applications. Yet business computing is on the cusp of a fundamental shift in which devices and software are powerful enough to adapt to the needs of users. In the past, business computing was defined by the limits of information technology and required that businesses adapt to those limitations. Everything from a richer and more enjoyable (or at least less painful) user experience to the transformation of accounting systems from paper-based analogs to a truly digital ledger has the power to change for the better how businesses operate.

Regards,

Robert Kugel – SVP Research

The developed world has an embarrassment of riches when it comes to information technology. Individuals walk around with far more computing power and data storage in their pockets than was required to send men to the moon. People routinely hold on their laps what would have been considered a supercomputer a generation ago. There is a wealth of information available on the Web. And the costs of these information assets are a tiny fraction of what they were decades ago. Consumer products have been at the forefront in utilizing information technology capabilities. The list of innovations is staggering. The “smart” phone is positively brilliant. Games are now a far bigger business than motion pictures.

VR Logo Bug Square BufferYet few business users are tapping the full potential of today’s systems. Most organizations have been slow to integrate IT innovation into their core processes. Companies have made considerable investments in information technology, but their business methods have been slow to adapt to the resources available. For instance, software for incentive compensation software and for planning and budgeting has made it possible to improve these processes, but most companies manage compensation, budget and plan in much the same way they did decades ago. To be sure, it’s much easier for individuals to adopt new tools for themselves than it is to align groups and executives in corporations to change proven approaches – even mediocre ones. But it’s also the case that business software must make it easier for individuals to realize more of the potential of information technology. And this part of the evolution of business software is only beginning. This is the context in which I took note of two emerging capabilities of IBM’s business software. One is its Concert user experience software and the other its emerging application (not yet officially named) designed to make advanced analytics more consumable. These are two important capabilities IBM highlighted at its recent Insight user group meeting and Big Data and Analytics analyst summit.

Integrating processes and data across a business has long been a challenge for IT departments. Some decades ago the issue of “islands of automation” emerged as companies implemented stand-alone business applications one by one to perform some function but then realized that it would be handy if these could share data and manage processes from start to finish. Initial progress toward this goal was made in the form of applications such as ERP that offer integrated functionality and enterprise data stores, although these often were difficult to implement and complex to maintain. Lately, software vendors have been refocusing to provide users with ways of facilitating end-to-end process management and making data more accessible.

IBM Concert is such an attempt. Announced in November 2013, it is a user interface IBM designed to be the central touch point across multiple applications and data stores. (It’s possible to link Concert to other vendors’ software, but it’s unlikely that a company would buy it on its own to link other applications.) It’s meant to replace menu-driven interactions between the user and the system with “I want to do this process” and a “day in the life” approach to organizing how individuals access applications and data. IBM Concert is an example of how we are only now beginning to achieve the longstanding objective of having IT systems conform to the user’s needs rather than the opposite. On a single screen Concert organizes personal task lists and presents metrics, conditions and dashboard elements configured to an individual’s preferences so the user can easily monitor conditions and enable more management by exception. Users can organize the data they need to support a given process right in front of them rather than having to go to some other application to fetch that data.

IBM Concert also has a social component that provides the ability for users to collaborate in context. Social applications generally have improved organizations’ connectedness. They offer greater immediacy than “copy all” email, greater inclusiveness than chat software and better communication in a mobile and geographically dispersed workforce. Initially, social applications took a broadcast approach similar to an unfiltered Twitter feed but as I pointed out at the time, that wasn’t a useful approach. As anyone who has used Twitter during an event can attest, the volume of messages quickly exceeds one’s ability to pick out the important ones. Moreover, not everyone wants to share information broadly, especially, for example, finance departments. Concert by contrast “understands” the area in which the individual is working and connects him or her to the conversations of others who are part of the group that needs to collaborate on that specific task. Users also apply hashtags to add a specific context to the message.

I think that Concert has the potential to become the nexus of business people’s computing environments and a sidekick that helps them stay organized and informed, get alerts, collaborate, find answers and explore their workday world.

Both at Vision and again at the Big Data and Analytics analyst summit, IBM previewed Project Catalyst Insight which is a not-yet-named application that is a significant advancement from its SPSS Analytic Catalyst software. Making big data and analytics more useful and consumable by the white-collar workforce (and even some of the blue collars) would be provide a major boost to organizational performance. By itself, a mass of data is not especially useful, and there are significant challenges to teasing out insights from large data sets, especially when that requires sophisticated analytical techniques. Another as-yet-unnamed application from IBM is designed to make big data and analytics more consumable and more useful. Typically large volumes of data are now accessible mainly to those with Ph.D.s in statistics or otherwise highly trained. The main objective of this project is to package advanced analytics routines for use, after limited training, by ordinary business analysts working in any department in any industry.

Big data has always been with us; it is just a question how much “big” is. Today the term refers to data sets so large and complex that organizations have difficulty processing them using standard database management systems and applications. Technology for handling big data has crossed a threshold, becoming more capable and cost-effective. Companies can now to tap into much larger amounts of structured and unstructured data. Big data has potential – and potential pitfalls – for improving a company’s performance, as I have noted. Big data is of little use unless organizations have the ability to use analytics to achieve insights not available through more conventional techniques. The ability to sift through large quantities of business-related data rapidly could set in motion fundamental changes in how executives and managers run their business. Properly deployed, big data can support a more forward-looking and agile management style even in very large enterprises. It will allow more flexible forms of business organization. It can give finance organizations greater scope to play a more strategic role in corporate management by changing the focus of business reviews from backward-looking assessments of what just happened to emphasis on what to do next.

vr_NG_Finance_Analytics_14_innovative_companies_adapt_betterThe challenge for many companies is that big data and advanced analytics are not readily consumable. Our research on finance analytics finds that fewer than one-third (29%) of companies use big data to support their finance analytics, even though this technology can handle the flood of data into today’s businesses and can help produce more useful analytics and advanced techniques. Although analytics is essential to finance departments, their focus remains on the basics. Fewer than half (44% each) use the proven newer techniques of predictive analytics and leading indicators. Nearly three out of four (73%) do not assess relevant economic or market data and trends, and fewer than half assess customer and product profitability; any of these could make analyses more relevant to the overall success of the company. The ability of finance organizations to master analytical techniques – especially advanced ones – ought to be a priority for senior executives because our research shows a correlation between competence in utilizing big data and analytics and the ability to adapt quickly to changing business and economic conditions.

IBM SPSS Analytic Catalyst Insight is designed to make it easier for business users who are not trained statisticians to create predictive analytical models just by answering a few preliminary questions about what they want to accomplish using the data. The new incarnation with IBM Project Catalyst Insight aims to simplify the process even further to bring it into the reach of a wider set of business users. It does so by packaging a range of standard routines that would be applied to data sets and providing even more guidance to analysts and even some business managers that know what they want to know but have a limited grasp of the analytical techniques necessary to find meaning in a mass of data. If IBM can create an application that enables more business users to utilize predictive analytics and other advanced analytical techniques, it would represent a big step forward in making big data a useful tool for many more functional areas than it is today.

Both IBM Concert and the new business analytics tool called Project Catalyst Insight “to be officially named later” reflect IBM’s strategy of achieving product differentiation in a rapidly evolving software market. The first decades of packaged business applications were characterized by a race to create new categories and load them with distinguishing features and functions. In the next decade competitive advantage will fall to software vendors that – in addition to features and functions – can provide business people with a user experience that is easily molded to how they naturally work. IBM Concert is a useful first step that is likely to be further refined. The new analytical environment derived from IBM SPSS Modeler and SPSS Analytic Catalyst Insight looks and sounds like a good idea, and it will be interesting to see how it develops when it is generally available.

Regards,

Robert Kugel – SVP Research

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