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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

One of the charitable causes to which I devote time puts on an annual vintage car show. The Concours d’Élegance dates back to 17th century France, when wealthy aristocrats gathered with judges on a field to determine who had the best carriages and the most beautiful horsepower. Our event serves as the centerpiece of a broader mission to raise money for several charitable organizations. One of my roles is to keep track of the cars entered in the show, and in that capacity I designed an online registration system. I’ve been struck by how my experiences with a simple IT system have been a microcosm of the issues that people encounter in designing, administering and using far more sophisticated  ones. My most important take-away from this year’s event is the importance of self-service reporting. I suspect that most senior corporate executives – especially those in Finance – fail to appreciate the value of self-service reporting. It frees up the considerable resources organizations collectively waste on unproductive work, and it increases responsiveness and agility of the company as a whole.

vr_ss21_spreadsheets_arent_easily_replacedElectronic reporting began as a solution to paper print-outs, reducing the resources required to transmit information needed by individuals and making it easier for them to find information. Over the past couple of decades, these enterprise reports also have become much easier for IT professionals to create and maintain, but they are still time-consuming and aren’t particularly flexible. Rather than have their IT department create another version of a report, people often copy an electronic report, paste it into a spreadsheet, reconfigure the information to suit their needs and distribute the modified spreadsheet to a group of people. For this and other reasons IT departments have found it difficult to get business people to stop using spreadsheets. Our benchmark research on spreadsheets finds this is the number-one impediment to change. Spreadsheet users value control and flexibility. This is precisely what self-service reporting delivers without the time-consuming hassle of manually creating and distributing spreadsheet reports.

It’s useful to think of self-service reporting as an attitude and approach to using information technology than as a specific software product or category. It starts with the basic assumption that individuals in organizations must be able to retrieve information they need from the systems they use. This does not replace periodic enterprise reporting, dashboards, scorecards and other such “push” communication methods. This is not the once-voguish concept of “democratizing business intelligence” either; that was still too complicated for the vast majority of users. It’s more like replacing telephone operators with a direct dial system. (Note to readers under 40 years old: Once upon a time it required human intervention to connect your phone to someone else’s.) The goal of self-service reporting is to make broad sets of data readily available and give people the ability to access it (subject to permissions) as well as easily organize and display it in the form and format that works best for them.

In the early days of business computing, simply collecting and having access to company data was a breakthrough. Over the past decades, corporations automated and instrumented a broad range of functions, and the challenge lay in collecting and managing the data. Although companies still face many issues in data management, devolving reporting to the individual is now a critical issue companies must address. Well-designed self-service reporting improves the productivity of individuals in both IT and the rest of the organization. The controller of a midsize company recently told me people had been spending one-and-a-half days per month creating reports for senior executives and operating managers after the monthly and quarterly accounting close. Talk about unproductive use of resources! This is an extreme example but emblematic of time routinely wasted on something individuals ought be able to do on their own. From the IT side, far too much time is devoted to creating and maintaining reports – it’s akin to still having switchboard operators on staff to route calls.

Self-service reporting exists both as a feature of enterprise applications and in stand-alone products designed to work with applications that lack this capability. In deciding whether to replace existing software and in any vendor selection process, it’s important to assess benefits of self-service reporting capabilities. This is especially true as mobility increasingly is built into enterprise business applications. Anytime, anywhere access to information is one of the most important reasons why companies invest in mobility and demand this capability in the software they buy. Being able to drill down and around in the data contained in such reports provides a powerful incentive to replace spreadsheets. But there are also stand-alone products that can provide self-service reporting capabilities within legacy systems.

For our service organization this past year I still created a limited number of spreadsheets for individuals and groups that are not on our system. The only data issues we had were created when someone copied and pasted information from our reports into another spreadsheet. Errors are inevitable, and even in our local event there are unfortunate consequences when they occur. For example, telling someone who has just spent hundreds of hours preparing his or her car that the vehicle is not eligible for an award because it was not on the list of judged cars (even though our system showed that it was supposed to be judged) provokes the same level of irate response one might expect when a CFO is informed that there’s a material error in the published financial statements.

Self-service reporting is fast becoming a standard capability within businesses. It’s part of a generational change that is redefining corporate computing. People beyond a certain age still expect information to be given to them. Younger people want to get the information they need themselves and expect to have the ability to do so. IT departments must identify opportunities to offer self-service reporting and implement it wherever possible. Business users – especially those in finance roles – should familiarize themselves with self-service reporting – especially stand-alone tools that they can use and administer – and implement it wherever it is feasible.

Regards,

Robert Kugel – SVP Research

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