In an earlier post, I had discussed the emerging trends in corporate learning. The rapid growth of technology and advances in learning methods along with the growing numbers of Millennials in the corporate workplace has been responsible for this.
In this post I will talk about the characteristics of the Millennials which calls for a new age training platform which utilizes digital technology and transformative principles in the training space.
Today, 40% of the workforce and most average companies are millennials, and this can go upto as high as 80% depending on the type of company they work for.
A millennial is one who is born between 1980 and 2000.
They come after the Gen-X and the Baby Boomers. Most Baby Boomers are in the retirement phase and the Gen-X will step in to take their place. The Millennials will be followed by the Gen-Z and so on. The younger workforce is only going to keep growing in number. And the training methods being used yesterday in the corporate workplace need to be thrown out the window – they are just not relevant anymore! And soon the people who trained using those methods will not be relevant anymore.
Millennials spend on an average 6.5 hours a day engaging with electronic media, listening to music, viewing, creating and publishing internet content, playing mobile games, and using community and messaging apps.We need to understand what characterizes Millennials, as this is what forms the basis for designing learning platforms for them.
They like to be in control. They do not want to be bound by traditional schedules, and they do not necessarily want to sit in an office to work or in a classroom for a training session. Instead, they prefer to use technology to work and study at any time of the day or night, and communicate from anywhere in the world and define "balance" in their own individual ways.
They like choice. When they are in a project-based environment, they will use technology to complete tasks in new and creative ways. Their need for alternative methods to complete tasks presents challenges in measurements of productivity using traditional methods.
They are group-oriented and social. Millennials constantly network socially. In person, they travel in packs, shop and play together. Online, they seek opportunities to identify with other individuals on a smaller scale, join communities and associate with peers around the world. They are highly collaborative; sharing what they learn with others and constantly creating and building their own personal identities.
They are the first to be surrounded by digital media which has always been part of their lives, and because of this access, they naturally gravitate to it. They expect it to support their learning and do what they need it to do. They can perform more functions with mobile phones, handheld devices and other wireless equipment than they can with traditional computers.
They think differently. Technology itself is not amazing to Millennials, they do not marvel at it. They simply accept technology, adapt to it and use it. If they need to find some information, they simply "google" it. What Google is and how it works does not concern them, they simply use the tool to find the information they need.
All of the above is very different from the generations that came before them. And that is why the learning methods used earlier are not relevant anymore. The new trainer methods are learner centered, involve collaborative work, provide for active participation vs passive consumption, have different kinds of content which can be easily consumed, encourage critical thinking, and can be delivered anytime, anywhere and on any device.
Mobile learning which is characterized by anytime, anywhere access, has short lesson sizes, provides online collaboration and instant feedback, works very well for the Millennials as they are so engaged in social media. That is also why such platforms can be used to give learning the collaborative aspect that is so important to this generation. The social engagement of receiving feedback, participating in polls, starting discussions is as important as the training itself. This provides a one-stop-shop for social and collaborative learning where individuals can access information, expert advice, and mentorship online, as well as network virtually and share experiences and insights in real-time.
Micro learning is any brief and targeted learning module that spans between 3 to 6 minutes. These modules can be accessed at any time and by anyone who is interested. They have very specific learning outcomes and can on mobile devices. Micro learning works very well for learners who either immediately need some information in order to get a task done or just a refresher on already learned information. Also, the need for instant gratification which millennials have is satisfied by this approach to learning.
Motivating millennials to learn is quite hard if the training is going to test their patience. Although they have a desire to learn and grow at a rapid pace, they need to be motivated to consume the relevant training. Gamification is an excellent motivational tool for participants, as it challenges them to achieve the learning objectives. This is not to say that the learning modules are turned into a game, only that the mechanics of games are employed in order to encourage participation and involvement in the training programs. Competition is an important component and the use of contests, quizzes and leaderboards greatly increase learner engagement and motivates them to achieve the goals set for them.
The millennial professionals want to consume information at their own pace with content delivered in manageable chunks. A learning platform can support this integrated, adaptive learning approach allowing learners to personalize their learning, fill in knowledge gaps as they see fit, access various learning paths and content, and move through course content at their own pace.
In summary, considering the characteristics of the Millennial in the workplace, a relevant training approach is the use of a next-generation learning platform to facilitate mobile learning, social learning, micro learning and just-in-time learning with strategic content creation and curation, with gamification built in. This will ensure that today's Millennial professionals will accumulate knowledge, stay abreast of industry change, and remain in synch with fast-moving industry best practices.
Digital Transformation in the field of education and learning has changed how new and existing employees are trained. The methods have changed from the classroom training model to various other forms using emerging tools and technologies which are aligned with the needs of an employee of today. The need for employees to be trained and have access to new knowledge on an ongoing basis, when they want, how they want, and on what device they want, has become the challenge. As markets and technologies evolve continuously, companies need to work harder than ever to stay agile and competitive in a rapidly changing landscape. To be able to come out on top and stay successful, organizations need to offer compelling new experiences, establish new focus, build new expertise and devise new ways of working. They have to digitally reinvent their business or lose out to the competition. Deploying new ways to help every employee learn quicker and smarter will help the company stay agile and ahead of the knowledge curve.
There are many new trends that define the corporate learning and development programs of digitally transformed corporates which can be adopted by those companies that are undertaking digital transformation initiatives.
The corporate Learning & Development market has seen tremendous change over the last decade, changing from long, page-turning courses to a wide variety of videos, small micro-learning experiences, mobile apps, and intelligent, adaptive learning platforms.
The changes in systems, users, philosophy and the formats of learning in the last couple of decades has seen a move from e-learning and blended, to talent management to continuous learning and digital learning.
There has been a constant evolution of the tools and methods that allow employees to take small bite sized blocks of training at a time, then curate and spend a little more time subsequently as per their convenience.
There is a new marketplace of tools vendors that has emerged in the last few years that offer tools for external content curation, tools to build online courses internally, tools to deliver adaptive, micro-learning content, and intelligent tools to help recommend content, assess learning, practice and identify skills gaps.
These are the kind of changes that are disrupting and changing $4 billion-plus market for corporate learning management systems (LMS). Large traditional companies are starting to turn off their old systems and build a new generation of learning infrastructure. What used to be a single integrated platform is now turning more into a learning network. So although corporate compliance and mandatory training will never disappear, these are now being pushed into becoming more like back-office functions, thus making the traditional LMS far less strategic than it once was.
The single integrated platform has now given rise to multiple types of platforms that include Learning Experience Platforms, Program Experience (Delivery Platforms), Microlearning Platforms, Assessment, Development and Delivery Tools, Content Libraries, Learning Record Stores and LMS Platforms.
Some of the emerging trends that are defining these various kinds of platforms are being dictated by the emerging technologies, digital transformation initiatives and user expectations and demands of the new age industry. These trends include Personalized Learning, Machine Learning and AI, Mobile Learning, Micro-learning, Mobile Apps, Gamification, Collaborative and Social Learning, Interactive Videos, Virtual and Augmented Reality, and Learner Analytics.
There is a trend towards self driven learning where learners are able to take learning that is personalized based on their learning preferences.
The Experience API (xAPI), is an e-learning software specification that allows learning content and learning systems to speak to each other in a manner that records and tracks all types of learning experiences. Learning experiences are recorded in a Learning Record Store (LRS).
It is difficult to develop training to meet every learner's style and learning need. However with xAPI and LRS (Learning Record Stores) organizations can gather more learning data and create personalized learning paths. With the need and increasing trend for Personalized Learning, more LMS vendors will offer xAPI integration so organizations will be able to offer more personalized training.
This trend is beginning to emerge and the industry will begin to see more developments in Artificial Intelligence (AI). Machine Learning is a type of AI that provides computers with the ability to learn without being explicitly programmed. Machine learning focuses on the development of computer programs that can change when exposed to new data. Machine learning and algorithms can be leveraged to help improve learning from data without human intervention. Machine learning can be used to steer individual learning paths without a human in place.
Machine Learning helps organizations to use analytics to identify a user profile and provide them with the required resources as per their needs. Machine Learning studies performance patterns to understand the level of risk which helps build predictive models of attrition drivers, to help organizations to reduce employee dropout rates. Machine Learning can offer the organizations with an intuitive dashboard to track trend analysis, key performance indicators and improve employee retention.
Machine learning can predict an employee's future performance based on the calculations on their ongoing training performances allowing them to address any issues and challenges that an employee may face and make sure that they receive all the help they need.
Mobile learning continues to grow as a leading trend as technology advances and the frequency with which learners are accessing their mobile phones is increasing. Learning content is accessed through mobile devices by a large number of learners and will continue to grow. Providing access to courses that are multi-device compatible is a high priority for organizations. The advantages of using mobile devices for learning are easier access to information, increased flexibility and robustness and the choice of accessing courses whenever, wherever and on whatever device they want. Organizations with remote workforces will be specifically benefited by this.
Mobile Apps usage will increase as a result of the modern learners' needs to access information on the go. Mobile Apps offer additional flexibility to take online courses when learners do not have internet access and can be utilized for formal and informal learning. The benefits include offline and online viewing, popularity with Millennials, good fit to provide pre and post assessments for formal training (online or blended) and useas reinforcements of formal training through videos/examples/scenarios. The most significant advantage is that Mobile Apps provide access to just-in-time information which makes it an effective tool for performance enhancement.
MicroLearning continues to grow in popularity as people are looking for quicker and just-in-time (JIT) training. Organizations are challenged as Millennials now make up a large proportion of the workers today and are the largest segment of the workforce. Millennials have interest in technology-based solutions that can be accessed on demand to meet their needs. MicroLearning answers the need for quick impactful training and will become increasingly integrated into the work day which will make JIT more relevant. MicroLearning will also continue to be part of blended learning leveraging mobile and video-based delivery.
The Micro-Learning is a "I need help now" vs the older "I want to learn something new". Compared to the macro-learning offered earlier, the characteristics of Micro-Learning courses typically are bite-sized chunks of information that are 5 minutes or less, topic or problem based, can be searched by asking a question, has a video format, is indexed and searchable, and the content is rated for quality and utility. This is in contrast to the earlier formats that would stretch over several hours or days, contain exercises graded by others, have physical people that would train and coach and the trainer would be rated for performance and not so much the content.
Gamification in eLearning motivates learners to perform better. It is a strong strategy to create high – impact immersive learning. Gamification is also used as a blended solution with Mobile Learning, MicroLearning and Social Learning and will continue to see organizations leveraging its benefits. The concept of bringing in rewards for achievements in the form of badges or trophies, having a leaderboard so that others can see where they stand compared to others in their batch and other such elements of gaming bring about a sense of competition that enhances engagement and learning.
Social Learning is reemerging as a leading trend that fosters collaborative learning in organizations. The industry has seen an aggressive increase in Social Learning where learners network, collaborate, and exchange ideas.
Social learning is learning with and from others which can happen over popular social media platforms or during face to face group discussions and interactions. Standard collaboration features like comments, posts, instant messaging, group discussions, chats etc. encourage collaborative and social learning and this is being used increasingly in today's learning platforms to allow the participants to share ideas, share knowledge and curate new inputs into a knowledge centre.
With movement towards self-driven learning, users benefit from informal learning and social feedback. No longer are learners limited to basic learning methods but, now have, access to limitless knowledge shareable by Collaborative and Social Learning technology.
Interactive Videos is the fastest growing area within learning. Interactive videos are being used increasingly for performance support and MicroLearning to deliver interactive learning experiences.
Interactive video platforms provide students and teachers a place to have face-to-face interactions without being in the same geographical location. Trainers can utilize interactive video platforms to enhance their students' experiences and increase engagement and retention.
Organizations continue to struggle with learning effectiveness and how to measure the direct impact on performance improvement. This focus shift from measuring at an organizational level to individual learner analytics is being attempted with the help of next-generation learning analytics using machine learning backends that go beyond simple descriptive analytics to provide predictions of learner success, and ultimately diagnosis and prescriptions both to learners and trainers.
Summing up, organizations around the world are investing heavily to keep up with the pace of rapidly evolving technologies. A crucial component is the talent available in the company, and so the big question of how to acquire, build and retain this talent becomes critical for the success of digital transformation in any organization. There are many new trends in learning methods using emerging tools and technologies that organizations are using to address skill gaps in their workforce. The focus is on how to create and deliver efficient, flexible and personalized experiences for every individual in an organization.
Digital Transformation requires, among other things, the re-designing of IT architectures to speed delivery of innovative products and services, improve market position, and create operational efficiencies.
To be able to achieve speed and agility in the digital era it is necessary to change the slow, cumbersome ways of doing things which is deeply rooted in many organizations. Many companies are still using the waterfall model of software development, in which a project moves from development to testing to quality assurance to integration to production in slow sequential stages. That is why it is so important to break down the walls between development and operations (DevOps). DevOps enables software to be developed in shorter cycles and deployed into production faster.
There are three key areas that businesses need to focus on if they wish to disrupt themselves and undergo a digital transformation. These three key areas are Customer Experience, Operational processes and New business models. The common thread that runs through these key areas is innovation, and continuous innovation deployment is critical for today's businesses. Innovative ideas need to be built, tested and deployed in rapid iterations for a business to remain competitive.
The main business driver for an agile IT is the need of the line of business leaders to experiment and quickly determine best alternatives for new business capabilities.
DevOps is an approach where business owners and the development, operations, and quality assurance teams collaborate to continuously deliver software. Business leaders require constant feedback to learn if market experiments are succeeding and to make quick adjustments. Technical teams need to learn early if there are performance issues with deployed applications. DevOps enables the business to experiment with entering new markets, introducing new products, and differentiate existing products with enhancements. DevOps encourages rapid delivery and rapid feedback for quick adjustments.
The requirements for an agile IT are speed to value, enhanced feedback, secure and managed APIs, and a flexible architecture. Enterprises require speed and predictable lead times for application delivery initiatives. The lead time for delivery of business capabilities relates directly to market opportunity. Business leaders require constant feedback to learn if market experiments are succeeding and to make quick adjustments. Technical teams need to learn early if there are performance issues with deployed applications. Digital platforms and the innovation edge of an enterprise require secure connections from cloud to backend systems and managed APIs to enable effective and controlled access from external applications. Application and services architecture must be flexible, de-coupled, and enable independent deployments of business capabilities.
The IBM Cloud Garage Method is IBM's method to deliver applications by using DevOps. DevOps encompasses the full application lifecycle; the Garage Method describes it in seven phases. Each phase has a set of practices and related tools. The method describes how to pull together the right tools for your team to implement DevOps in your organization.
DevOps encompasses the full application lifecycle; the Garage Method describes it in seven phases. Each phase has a set of practices and related tools. The method describes how to pull together the right tools for your team to implement DevOps in your organization.
Culture: Build trust and align your team with better communication and transparency.
Think: Know your audience and meet its needs faster than the competition.
Code: Collaborate to create and continuously integrate high-quality code.
Deliver: Continuously build, test, and deploy code through an automated delivery pipeline.
Run: Harness the power of the cloud to quickly get your minimum viable product (MVP)into production.
Manage: Monitor and manage your applications to a high degree of quality and meet your service level agreements. Grow or shrink your resources based on demand.
Learn: Gain insights from your users as they interact with your application.
The DevOps architecture of the IBM Cloud Garage method includes the best of Design Thinking, Lean Startup, Agile Development, DevOps, and Cloud to help enterprise organizations accelerate all phases of the application design, development and delivery lifecycle.
Team members and stakeholders continually communicate plans, tasks, issues, and feedback. Collaboration tools enable a culture of innovation. Developers, designers, operations teams, and managers must communicate constantly. Development and operations tools must be integrated to post updates and alerts as new builds are completed and deployed and as performance is monitored. The team can discuss the alerts as a group in the context of the tool.
Track work and team progress, create defects, see what's incoming, maintain project backlog, and plan work for future sprints. As the team brainstorms ideas, responds to feedback and metrics, and fixes defects, team members create work items and rank them in the backlog. The team works on items from the top of the backlog, delivering to production as they complete work.
Tools used to write source code to implement the architecture. Developers write source code in a code editor to implement the architecture. They construct, change, and correct applications by using various coding models and tools.
Repository for sharing, storing source code, and versioning code drops. Developers manage the versions and configuration of assets, merge changes, and manage the integration of changes. The source control tool that a team uses should support social coding.
Build, scan, test, integrate, and package applications before deploying. Automates builds and deployments to the cloud. Developers compile, package, and prepare software assets. They need tools that can assess the quality of the code that is being delivered to source control. Those assessments are done before delivery, are associated with automated build systems, and include practices such as code reviews, unit tests, code quality scans, and security scans.
Artifact repositories manage binary files and other output from the build. Binary files and other output from the build are sent to and managed in a build artifact repository.
Help plan, execute, and track a complex release through every stage of the delivery lifecycle. The release is scheduled. The team needs tools that support release communication and managing, preparing, and deploying releases.
Coordinates the manual and automated processes that are required for the solution to operate effectively. The team coordinates the manual and automated processes that are required for the solution to operate effectively. The team must strive towards continuous delivery with zero downtime. A/B deployments can help to gauge the effectiveness of new changes.
Includes the application and the options for the application's runtime environment, security, management, and release requirements. The team must understand the application and the options for the application's runtime environment, security, management, and release requirements.
Environment where the code will be developed, tested, staged, and run.
Enables data and application protection. Provides actionable security intelligence across cloud and enterprise environments. The team must ensure that all aspects of the application and its supporting infrastructure are secured.
Capture real time and historic application resource and performance metrics to optimize operation and diagnose problems. The team plans, configures, monitors, defines criteria, and reports on application availability and performance. Predictive analytics can indicate problems before they occur.
The right people on the team or systems are notified when issues occur.
The team manages the process for responding to operations incidents, and delivers the changes to fix any incidents.
The team uses analytics to learn how users interact with the application and measure success through metrics.
When users interact with the application, they can provide feedback on their requirements and how the application is meeting them, which is captured by analytics as well.
DevOps engineers manage the entire application lifecycle while they respond to feedback and analytics from the running application.
Provides secure connectivity between services running in the cloud and data or applications running on premises or in other clouds. The enterprise network is protected by a firewall and must be accessed through transformation and connectivity services and secure messaging services.
Provides storage and access to user information for authentication, authorization, or profile data. The security team uses the user directory throughout the flow. The directory contains information about the user accounts for the enterprise.
A Platform approach to DevOps is to use the DevOps services available in IBM Bluemix. This allows you to access everything you need to build all kinds of apps. You can work on your own or use the collaboration tools to work with a team. Using this platform can really speed up all development efforts and you can go go from source code to a running app in a very short time.
For more details on the IBM Bluemix platform, click here.
The IBM DevOps maturity model, which can help you assess your current practices, define your roadmap, and measure your improvement along a continuum as you adopt the IBM DevOps approach.
The IBM DevOps maturity model defines four levels of maturity that describe how well an organization can perform practices aligned to each adoption path. The levels consider: consistency, standardization, usage models, defined practices, mentor team or Center of Excellence (COE), automation, continuous improvement, and organizational or technical change management.
More details on the maturity model can be found here.
A business can benefit in several ways by following a DevOps approach. They can build a startup culture that brings business, development, and operations together. Businesses can respond to the market faster and build engaging user experiences. They can reduce development and operational costs by automating processes. They can deliver new features continuously without waiting for a convenient time to deliver major releases. Quality is ensured by enabling automated testing on a production-like environment before changes are pushed to the production site.
Rapid innovation, which is at the heart of of digital transformation, can only be achieved if it is supported by an Agile IT which includes the DevOps platform, the tools, the processes, the people and the transformation culture of the organization. DevOps are essential for any digital transformation initiative.
The days of organizations operating as lone entities are quickly becoming a thing of the past. Given today's interconnected world, it is becoming increasingly beneficial for companies to collaborate with others to create new business opportunities. This is helping them gain competitive advantage and pull ahead of competition.
The platforms are what are driving businesses, and the APIs or Application Programming Interfaces are holding the platform economy together and enabling business everywhere to embed the software capabilities of other platforms within their own apps or websites.
It is the API that has made possible entirely new business models across nearly every industry, allowing companies to create new services by customizing existing platforms, algorithms and utilize external resources for external innovation.
It is the API that has helped redefine the nature of partnerships, allowing companies to participate in ecosystems and to tap into services such as cognitive computing and the Internet of Things (IoT) that would be too difficult, expensive or time-consuming to reproduce in-house. The API economy, which is the commercial exchange of business functions and capabilities using APIs, has allowed software developers, strategists, marketing leaders to innovate and differentiate themselves in their businesses.
Today, there are upwards of 18000 APIs available worldwide. The graph below shows the growth in the numbers in the last 10 years.
Looking at a brief history of APIs, In 2000 Salesforce was launched and APIs were part of its solution from day one, as customers needed to share data across their different business applications.
2000 also saw eBay rolling out its API to selected eBay partners and developers in an attempt to revolutionise the way people did business on eBay.
In 2002 Amazon launched its Amazon.com Web Services, which allowed third parties to incorporate Amazon.com products and features into their own websites.
Flickr in 2004 created its API, which enabled it to become the image platform of choice for early blogging and social media users.
2006 was an important year as it saw Amazon Web Services (AWS) being formed as the cloud computing platform launched an API to give developers access to inexpensive computing infrastructure.
In 2006, Facebook also launched its API, allowing developers access to Facebook friends, photos, events and profile information.
2006 also saw Twitter launching its API in response.
In 2007 Google Maps created its API ahead of the launch of the Google Maps app, enabling businesses to embed maps of their locations on their own websites.
Apple launched the App Store in 2009 opening up a new world of mobile apps.
In 2011 Instagram released the official API for its photo-sharing app.
Companies are beginning to understand the power of leveraging the API economy.
It is important that the companies who wish to participate in the API economy understand the forces driving API usage.
They have to understand the potential business models and monetization strategies that APIs can help create.
Customer experience is the key to digital transformation and is one of the top key drivers for API adoption.
Companies are becoming increasingly focused on creating differentiating customer experiences. They are doing this by building more responsive websites, custom mobile apps and other user-friendly digital interfaces to enhance their interactions with customers. It is here that the capabilities of the API allows highly creative ideas that come up from design thinking workshops to be translated into user experiences. Another key customer segment for the APIs is the developer community. Easy-to-use API development and deployment platforms with API-enabled features help companies engage developers.
Having a frictionless access to ecosystems is another driver. The ecosystem is made up of a number of other companies and vendors and partners whose services and data are accessible through APIs and the APIs enable companies to leverage the data and services of other organizations thus allowing organizations to increase revenue generation via participation in external markets.
Everyone has a need for faster speed to market. Organizations just cannot afford to react slowly to changing market trends. Using APIs, companies can take advantage of sophisticated technologies without having to commit internal efforts and resources to develop them thereby being able to go to market sooner.
Organizations have facilitated API adoption by providing API management platforms. The purpose of an API management platform is to allow developer communities and developers in organization to expose their business services securely as APIs. The platform provides for a self-service portal that will allow the developers to develop, publish, and manage their APIs. The organizations can also manage & monitor the entire API platform using the API management platform.
This makes it very simple for an organization to create and manage the APIs that they wish to expose, as now their developers can compose new APIs, import APIs, or discover APIs. Developers can focus their time and energy on creating innovative applications.
Another big enabling factor has been a mindset shift among developers and business strategists. New businesses are now creatively combining APIs rather than rebuilding from scratch. Rapid innovation is becoming increasingly the order of the day. These changes are coming about due to the ease of access to a wider variety of services via APIs, configurable API marketplaces and agile platform-as-a-service options that are being creatively used by the developer community in their innovation efforts.
There are three API business models. The first is where the API Is the product. This is the model when an API is your product and not an extension of your product, and is the primary source of revenue. In this direct consumption model, an organization develops and offers APIs directly to consumers. Through the APIs, consumers gain access to services that would be prohibitively expensive or time-consuming to develop in-house. These services range from commodities – such as data storage – to application development platforms, to highly advanced cognitive- computing capabilities. APIs also provide access to specific data sources, such as those related to social media, weather and geolocation services. This is the primary model organizations use when they are applying APIs internally.
The second is the Market making model where Organizations that use this model add value to API producers' services and bring together a critical mass of consumers to create a marketplace, like a brokerage firm that generates revenue through commissions or fees for business services. These APIs help locate API consumers and producers and match them allowing business transactions between them.
Ecosystem enablement: This is a reseller model where a company uses APIs to generate sales through partners or third parties. The company consumes APIs from multiple organizations to create a service that can then be resold by others. Ecosystem partners can then repackage the service, or provide value-added services for sales to a different set of users.
There are three primary ways to monetize APIs.
Indirect: A company like Google, Facebook or Twitter provide APIs free of charge to gain analytical insights or enhance market presence. The analytical insights they gain is then in turn used in different ways to increase their revenues and user base.
Direct Transactional monetization: In this model, the API producers charge API consumers for the number of times an API is accessed. There are many variations of this model that include Tiers, "premium-quality-of-service" pricing, "Freemium", in which consumers can use APIs as per their needs and pay accordingly as per their usage.
Product-based monetization: In this model, APIs are monetized through delivery of products or bundles of services and is based on fixed fees, revenue share or value added to a business transaction. In this model the user pays for the usage of the service itself rather than for the number of APIs invoked.
Smart carts can be deployed by combining the shopping cart with in-store location services and shoppers' purchase history based on the analytics using the data gathered on the shoppers behaviour through various sources, which can help promote relevant products of interest to the shopper. The shopping cart can display on a screen product demonstrations or advertise products in other departments which may be close to where the shopper is at present. When shoppers select an item on the screen and place it in their cart, sensors and the screen can total up the prices, giving the shopper the advantages of self-checkout without having to stand in lines. The organization makes the data and analytics more easily available to other internal audiences through APIs, thus providing added value based on the data that has already been collected. Here a combination of sensor devices, location services, beacons, analytics, user profiles all come together using the APIs in the ecosystem to create this experience for the shopper.
The API economy is here to stay. Platforms are here to stay. Ecosystems are here to stay. The days of lone entities doing business are quickly disappearing. Collaborating with others is the only way to create new business opportunities and gain competitive advantage and stay in business. In this context, the quote from Game of Thrones can find a parallel in the world of Digital Disruption - When the digital snows fall and the winds of disruption blow, the lone wolf will die, but the ecosystem will survive.
Each one of us is a storyteller.
The stories we tell are the ones that are born out of our experiences and our interpretation of the world that we see around us. The stories we tell become bigger stories when we engage in conversation with those around us. Conversations are useful as they form the journeys that we undertake towards specific goals. A very large part of these journeys however, remain as memories as we dont always record every moment, every conversation, every part of our journey. Then there are those that do tell their stories like poets, authors, journalists, filmmakers, photographers, artists, musicians and many more, using the tools and the expertise that they have built up. Most of us, however, have to be content with the conversations that we have. And hope that we can remember at a later date the things we said today.
But consider this. There is available today, thanks to the advances made by technology in the last few years, the ubiquitous smartphone. That wonderful device which apart from allowing us to make and receive calls, also allows us to record our world around us. And given that most of us make extensive use of our phones to take pictures, we do have enough material by way of images on our phones that can be used to tell wonderful stories about the world around us. The only thing stopping us is that little bit of effort that we need to put in. The effort to put some images together along with supporting words and tell coherent visual stories. And since it is an effort, what most of us end up doing, is simply uploading our photographs on to social media platforms of our choice.
Going a bit further, now consider this. What if our device could create a meaningful visual story for us automatically with the photographs we have on our phones, and allow us to put in the finishing touches before sharing it with our friends? This is not wishful thinking. We have the technologies today to be able to do this!
What follows below is an idea that I have on how this could be done. This is purely conceptual and is a possible direction for developing an application, and is not the solution itself.
My idea considers two specific technologies in addition to the mobile platform and the related services that are required to build mobile apps.
The first one is Visual Recognition.
Visual Recognition is the ability to find meaning in visual content. It allows us to analyze images for scenes, objects, faces, and other content. We can then create custom classifiers and tag images accordingly. This would allow locating similar images within a collection. Using this service we can develop smart applications that analyze the visual content of images or video frames to understand what is happening in a scene. Visual Recognition uses deep learning algorithms to analyze images that can give insights into visual content. Using this, we can organize image libraries, understand an individual image, recognize food, detect faces, and create custom classifiers for specific results that we would need.
Cognitive services of the IBM Watson Services on IBM's Bluemix Platform can be considered. One such service is a Visual Recognition service which is available on the Bluemix Platform. This service has a General Classification feature using which we can generate class keywords that describe the image. We can use our own images, or extract relevant image URLs from publicly accessible image sources for analysis. There is a Face Detection feature which detects human faces in the image. This service also provides a general indication of age range and gender of faces. The Visual Training feature allows for the creation of custom, unique visual classifiers. We can use the service to recognize custom visual concepts that are not available with general classification. Using this models can be trained and then incorporated into the apps.
This will allow us to train the models that can be imported into the app.
Here is video on the IBM Watson Cognitive Visual Recogntion Service.
The second service which I would use is the Watson Conversation service. This will allow us to add a natural language interface to the application to automate interactions with the end users. We can train the Watson Conversation service through an easy-to-use web application, designed so that we can quickly build natural conversation flows between the app and the users.
This would allow users to specify using simple language the parameters around which they would like to build their visual stories. The parameters could be location, events, dates and others which could fit into building a story around a theme.
Shown below is a video which is an overview of the IBM Watson Conversation Service.
To see how this app would be used in the real world, let us consider this scenario. Lets say that I am on a holiday in the mountains somewhere. I have my iPhone with me and i use it to take many pictures of the various places that I visit. I spend the day just visiting the various sights and taking photographs.
My phone has the ability to tag these photographs by location. So the images are already tagged by location and by date.
At the end of the holiday, or maybe at the end of each day, I would like to build a visual story using some of these images and share it with my friends.
What most people do, including me most times, is to upload some of these photographs to social media sites like Facebook, Instagram, Twitter with or without captions and share them with our friends. The other option is to upload the entire lot to photo sharing sites like Flickr or Google Photos and then create an album and share the link with our friends. This is an album and the best you can do is create separate albums by theme and hope others can see the underlying storyline (if at all you intend for one to be there).
But now what i can do, given the option of using the concept app that I am talking about, is that I can actually build a visual story automatically with a specific theme. I open up my visual storytelling app and it gives me some suggestions for themes around the current location that I am in. This could be based on the photographs that I have in my phone (and maybe public photographs for that location that are available on the net as well).
What if I decide I want to build my own theme? So I start up a conversation with my app specifying that I would like to build a story around life in the mountains. During the conversation the app finds out more that would help it to identify the right images that can be used to build the story. Once I am satisfied that what I have in mind has been understood by the app I ask it to go ahead and locate all the images that can be used.
The app can then identify the relevant images based on the understanding it has from the conversation and from the visual recognition algorithms and the classifiers that have been built into the app. I would be presented with a selection of images around the theme with some basic captions.
I could then make changes to the captions, or the order of the images, give the story a title, maybe add or delete images to enhance the basic story, and once I am satisfied I could then publish the story. Once it is published I could share it with others on social media and my followers.
For those who would want to manually create their own stories the app would allow them to select images manually and caption them and lay them out visually as desired. This is for those who like to use their own creativity instead of relying on machine intellience!
The uniqueness of this app would be the fact that using cognitive capabilities the app would understand the conversation and arrive at the theme that the user is looking for and then the visual recognition cognitive abilities built into the app would identify the right images and help build the visual stories.
This would help everyone create meaningful visual stories using resources that are readily available to them.
One would be the phone they already have and the capability of taking photographs using it. The other part would be the cognitive app that will identify the theme and the relevant images that can be used to build a meaningful visual story.
Together, this cognitive visual storyteller app could easily turn everyone into successful visual storytellers!
Part 1 had talked about Customer Experience. This part takes a look at improving operational efficiencies using automation, data and analytics.
Part 2 talked about the Operational processes and how they can be transformed.
In Part 3, I look at the third key area which is new business models.
A digital business model is a model in which digital technology plays a significant role in the value proposition, value creation, value delivery and value capture. Companies and enterprises that are born digital, such as Amazon and Google have used the power of digital technologies. They have used technologies for innovating platforms on which their products and services are built, and have used these platforms to enable the business models that have fundamentally changed how companies can do business. The digital business models allow companies to create entire ecosystems that does much of the work helping the company to grow. The platform is the business model which enables growth for companies.
A new focus on building new business models across the organization is a key digital driver in the digital transformation exercise for any business. The organization has to develop new ways of realizing and monetizing value. It has to create the strategy and execution plan of delivering this value to the market.
Some important differences between a traditional and digital business model are that a traditional value chain business model has value creation in a linear fashion and is a one-way street. It goes from production to distribution to marketing and to the consumer, while in a Digital Value chain the business model has value creation in a loop and is continuous with the the loop being between the Platform and the Ecosystem which consists of the developers, publishers, content owners, various service providers etc.
A traditional approach to business is to have single point solutions with independent return on investment targets, wheras a digital approach would be to adopt a model that would result in a total transformation. Traditional businesses are system-centric, internally focused whereas digital businesses would be experience led and externally focused. In traditional companies, the risk management would be around cost with a focus on incremental improvement versus a digital business where the risk optimization would focus on opportunities and threats and would be open to experimentation and innovation in pursuit of improving the business. Most important, the operating model in a traditional business is primarily internally owned whereas in a digital business the operating model includes the entire eco-system.
The value proposition of these companies arises out of the the ability of digital technologies to support the informational part of products and the related information transforms a product into a service, a model in which the ownership of the physical part of the product is not at all required, and the consumers usage of the product is made possible by digital technologies. For example, the ability for consumers to book, locate, and access a car (a product) via a smartphone app enables cars to be made available as resources for consumers. This is a service and the company does not own a single physical car (for eg. Uber).
Companies can create value by tapping into resources and capacity that they don't have to own. Take Apple for example, and the iOS App Store. The App Store was launched shortly after the iPhone and today the iOS App Store includes an ecosystem of hundreds of thousands of developers that have created millions of applications that have been downloaded billions of times and have generated billions in sales for Apple. The model splits the revenue with the developers and has generated billions of dollars for the company. And all this by using resources that it does not need to own!
Shown below is a diagram showing the Apple ecosystem.
The apple ecosystem consists of the apple design, marketing and manufacturing facilities, the distribution, apple stores and partner stores, the developers who develop the apps, the content providers who provide the music and movies content, the apple platform made up of all the components that facilitate the development of the apps, the submission, review process and the app stores and finally the customers who buy the devices, download the apps and consume the content.
1. The developers sign up on the apple developer portal and using the accounts and the sdks available for app development develop the apps.
2. The apps are submitted on the developer portal. The description and price along with other necessary information needs to be provided while the app is being submitted.
3. There is an extensive review process that reviews the app for compliance with all the apple guidelines for apps.
4. Once the review is successful and the app is accepted it is then featured on the iOS app store.
5. There is a similar process for the apps built for the desktops and laptops are featured on the Mac App Store.
6. Content providers of music and movie content as well as books can also submit content.
7. The content is submitted on the platform for being sold on iTunes, which is the online content store of apple.
8. There is a review process for the content.
9. The iTunes store features all the content that is available for streaming and download by the users on their devices.
10. The iBooks store features the books that are sold online.
11. The apple devices are designed in California in the US, and manufactured at various facilities around the world.
12. The devices are then sold at Apple stores as well as partner stores around the world.
13. The apple devices like the macbooks, iMac, iPads, iPhones, iPod touch, apple watch and apple TV are then purchased by customers.
14. The customers then use these devices to buy, download and stream apps and content from the iOS app store, the Mac app store, iTunes and iBook store.
15. The Apple company generates revenue from the sale of the hardware devices and the apps in the app store (free apps are also available on the app store), the subscriptions of the developers and the rental and sale of the content on iTunes and iBook stores. The company shares the revenue generated from the sale of the apps and content with the developers and the content providers as per the revenue sharing agreement it has with the partners. The ecosystem which is built around the platform that has been built by Apple allows apple to generate revenues using resources and infrastructure which is not necessarily owned by it.
Some other examples of digital business models of companies also are given below.
Uber does not own a single vehicle, unlike traditional taxi companies that need to own and maintain a fleet of vehicles. Uber has at its core, a platform that connects people and drivers on a massive scale creating an experience that allows them to book cars at their convenience of time and location. Uber completely disrupted the traditional industry leader Hertz.
Netflix gives customers the option to stream video on demand. In the process it has disrupted not only itself (it had an online rental model where you rented online but the physical videotapes were delivered to you for viewing), but all other channels of entertainment and transformed the way that people view film and television media. The ability to consume movies and TV shows at any time or place has been made possible by the platform that enabled this business model.
Disney has embraced digital technology in order to enhance experiences in its theme parks, with the use of MagicBand, a wristband that uses RFID and radio to connect with sensors in the park, and transformed the entire park experience for visitors – the experience going to an attraction, staying in a hotel, dining at a restaurant, taking a photo and sending it to friends or family, and buying merchandise as a souvenir. Visitors receive the MagicBand a few weeks before the visit and can use it to enter the park, buy food or merchandise, reserve attractions, and watch real time data on wait times.
Similarly Airbnb has disrupted Hilton, the traditional leader in the hospitality business and Amazon disrupted Walmart in retail.
The digital business models have at their heart the platform which allows the company to become part of an ecosystem and in the process is able to create value, deliver value and capture value using the value network that has been created.
With this I conclude the 3 part series on the key areas that need focus in a digital transformation exercise which are Customer Experience, Operational processes and New business models.
One of the major challenges that businesses face today is one of end-to-end visibility in their operations. Finding that one central point where you can stand and see what is happening throughout the operations is very difficult. Because it is highly unlikely that it is there in the first place. Having that kind of visibility translates to having data moving through your system in an efficient, reliable and timely manner. And for that to happen the necessary infrastructure has to be in place. Infrastructure both in terms of processes and technology. A lot of times data falls within the cracks and visibility is lost because these are not integrated or missing, and when things function in silos data will fall through the cracks.
For example consider a fictional company that is providing logistics services. A challenge could be that there is little to no visibility of the consignments and packages beyond a certain point. There could be little or no visibility on the status of the consignments and little or no updates on the schedules of various partner organizations. Data flows would be intermittent. Track and trace would be a major issue. This could be due to various reasons, not necessarily just because of the absence of systems and processes. A lot of the processes could be manual and status updates could be available locally but not centrally. The systems themselves could be distributed and localized with synchronization methods that are scheduled as batch jobs. It could be a problem with the architecture of the systems themselves with central servers being available but the updates happening over unreliable networking infrastructure. Or the manual processes themselves failing. It could be any number of reasons. Providing the necessary architecture and platforms that will integrate all the systems together so that there is an end-to-end visibility of the data is absolutely essential.
This is part 2 in the series on the key areas that need focus in any Digital Transformation exercise.
The challenge that most organizations face while trying to improve operational performance and efficiencies is one of trade-offs. Do they focus on the needs of the global company or the needs of local departments? Is it important to focus on short term efficiencies and improvements or work on the long term growth? Avoid risk or innovate? This pushes organizations into making tradeoffs, or more often choosing one over the other. Standardization gets chosen over empowerment as more efficiency is seen in standardized processes as compared to empowered workers choosing their own methods of working. Controlling processes improves efficiency and reduces risk. But it also suppresses innovation which could lead to better processes being introduced that could improve efficiencies manifold. At the same time, allowing innovation could lead to inefficiencies or put the company at risk. So a balancing game is played out and established practices and processes that have proved to be efficient and leading to less risk are continued with little innovation being attempted.
There are companies that are going the digital way that have brought in transformation by way of adopting digital technologies and applying them to their operational processes. Automating, collecting data and analysis of the data leading to insights and improvements and optimizations are being adopted by companies taking up digital transformation exercises. On the operations front, implementing platforms and tools and building out an ecosystem of business partners and supply chain partners is an essential part of the transformational exercise.
Let us look at an example of a fictional company that is in the logistics service providing business. The ecosystem consists of the business partners, customers and the operations staff along with the warehouses, transportation hubs and fleets, and the control systems at the warehouses and hubs, and the platforms and applications in the enterprise. Shown below is diagram which represents the various components and data flows of the fictional company that provides warehousing and logistics services to retail and ecommerce businesses.
1. The Partner portal is used for onboarding of partners and customers. The customers and partners who register on the platform have visibility into their part of the business. They have access to business reports and transaction reports that are relevant to their part of the business in the operations. This portal is also integrated with the enterprise systems for financial payments and other partner management related functions.
2. The warehouses owned/leased by the company have local systems that integrate with the local control and automation systems. They are also integrated with the central warehouse management system. The devices and sensors that are used to register and track the movement of the products within the warehouse are connected through the gateways at the warehouses to the API gateway in the enterprise cloud and in turn to the IoT platform that collects the data from these devices.
3. After the pick and pack operations at the warehouse, the consignments are moved to the transport hubs. The transport hubs also have devices and gateways that collect data on the inward and outward movement of all the consignments and vehicles. This data is collected by the IoT platform in the enterprise cloud.
4. The transport fleet vehicles themselves have onboard devices (OBDs) that are connected to the IoT platform through the gateways. These devices can track various vehicle parameters and also through gps the movement of the trucks itself. The data is continuously collected in IoT platform.
5. The API gateway in the enterprise cloud is a secure gateway that provides the necessary security for all the data that is being collected from the various devices in the ecosystem. The API management platform allows for the secure management of the APIs that are being exposed by the organization for the external partners as well as the APIs that are being used for internal integrations with the enterprise and operational systems.
6. In our particular example, the Internet of Things (IoT) platform plays a crucial role in the overall solution. It need not necessarily be present in all implementations. It is required only when you have devices that need to be monitored and data collected for control and analytics in the overall solution. There are three main parts to an IoT system. There are the devices which generate the data from the sensors that measure specific parameters. The devices can be installed wherever any parameter needs to be measured and monitored. There are devices that are installed in the warehouses, transport hubs and in the transport fleet vehicles. Each device is a sensor that has a particular function and which is connected to a local gateway device. For example in a vehicle onboard devices can measure various engine parameters, tyre performance parameters, fuel consumption related parameters, temperature of refrigerated trucks, etc. The sensor sends data through the gateway to the IoT platform which then collects this data in realtime and can further process and act on it. The second part of the system is the collection of the data. The APIs and gateway, along with the applications on the platform collect the data in realtime and store it. The third part is the analytics which is carried out on the data that is being collected. This part is a part of the overall IoT platform and can also be supplemented by integrating with other advanced analytics platforms for advanced actionable insights.
7. The central command center is where all the monitoring is done. The tracking and tracing of the various consignments, the movements of the fleet vehicles, the conditions of the vehicles, the performance of the drivers, the status of the goods moving through the system along with all the other parameters that need to be monitored in the ecosystem can be done from the central command center. This platform will have inputs from the IoT platform, from the advanced analytics platform, and the supporting applications and this will be the main console which will be manned and monitored by the operations staff of the organization. This is the main center where all the alerts, alarms and actionable items will be displayed.
8. The analytics platform provides the advanced analytics required by the system. This will provide actionable insights that can be used to directly impact the overall performance and efficiencies of the operations. The analytics platforms supplement the IoT platform which will have its own analytics. The advanced analytics platform provides the analytics which requires inputs from not only the devices but also all the other systems and applications in the ecosystem.
9. The integration layer integrates the various systems of engagement, systems of insight and differentiation, systems of record in the enterprise, partner systems, cloud integration where separate clouds are involved and other components that will allow the secure interactions between various applications in the ecosystem. This layer will provide the data translation, transformation and orchestration as required by the applications and the overall solution.
10. The enterprise applications which serve as the systems of record and the other enterprise applications that are used by the organization are also integrated with the other parts of the ecosystem through the integration layer. The resource planning, scheduling, accounting, vendor and partner management as well as the organization's employee management is carried out by the applications in this layer.
The solution described would ensure that all operations are monitored at all times and that there is enough data being collected in realtime to ensure that alarms and alerts are triggered at the right times for the necessary actions to be taken. There is visibility at all times of all the parts of the operation along with status updates that are accurate. The overall performance and efficiency of this operation will definitely be much higher than that of one which does not have the necessary platforms and integrations in place.
You can go from being left in the dark about various parts of your operation to being completely in control with full visibility into all aspects of the operation. You need no longer be in a situation where you have to say 'Now I see you, now I don't'.
Now I will see you. Always!
On the 15th of August, 1998, a new ecommerce service was launched by a pioneering dotcom company based out of Mumbai, India. I was a part of the founding team of that company and we had built the whole service on what was essentially a storefront and cataloging system. The business part of it had a few vendors who had partnered to sell their products on the marketplace. Essentially, it was the storefront and cataloging system with the capability of accepting orders that made up the ecommerce system. What we later added on bit by bit was what we know today as an order management system, vendor management system, logistics integration etc etc. This took some time and it was a learning process as the business was growing bit by bit and we had to keep adding on components, re-writing others and building in integrations as and when the need arose.
Today, the technologies have evolved along with the business processes followed by the industry and new businesses wanting to get into the game have available to them a variety of processes, platforms and tools and the eco-system which has matured fairly to support online businesses. Customer satisfaction is everything in today's businesses and all systems need to be designed and built keeping the customer as the focus at all times. Retail organizations today need to provide a state-of-the-art customer experience. Having a retail digital platform is an absolute must. This article will provide you with insights into the business need for a retail digital platform and will give you an overview of the various components for creating your own platform.
• marketing and campaign management services which work based on the actionable insights provided by the various analytics systems.
• Partner services such as logistics, warehousing, payments, sms notifications, product and service ratings and reviews, address validation, store location, loyalty and reward services, chat services and social media integration services.
• The ability to integrate systems with partner systems in the overall ecosystem.
The retail organization needs all these in addition to the core commerce order capture and management system that also includes content authoring and publishing systems.
The retail organization is a part of an entire e-commerce ecosystem. This is just like any other digital business as ecosystems are an integral part of any digital business today.
At the core of the ecosystem is the retail organization along with the core ecommerce systems that manage the store, order management, supply chain, customers along with the analytics and digital marketing systems. The enterprise systems of record like the ERP, finance, and HR systems also make up the core of the ecosystem. This can be hosted in a mix of public/private/hybrid cloud infrastructure depending on the requirements and environment that exists in the organization.
The other players in the ecosystem are the business partners like the vendor partners, payment system partners, marketing partners, financial partners, 3rd Party Service Provider partners. These partners systems integrate with the core organizational systems through partner APIs that allow for the interaction between the partner and the retail platform. The systems in the enterprise integrate using the integration bus and system APIs which also form part of the ecosystem.
There are technology partners, cloud hosting and infrastructure partners, development partners that also integrate into the processes and systems of the retail organization.
The communities like the customer communities, social media communities and the developer communities also are a part of the ecosystem.
In terms of the infrastructure and integration it represents a complex mix of public and/or private clouds, system APIs and trading partner APIs. There will also be applications applications that provide a variety of analytics, customer insights, promotion or campaign insights, performance reporting etc. This mix of private cloud, public cloud, and APIs form a hybrid cloud ecosystem.
A retail digital channel requires a customer-centric view of the ecosystem including its architecture, components, and integrations. The ecommerce ecosystem can be considered as a service or microservices ecosystem and this gives the whole organization the needed configurability and agility through quicker orchestration, changes, and new product or offering introductions.
The diagram below shows a retail digital platform and its components.
The components shown above are described below.
1. The core commerce applications e-commerce, order management, supply chain management are the ones which handle the core ecommerce functionality like managing the store front, search, shopping cart, checkout, order management and fulfillment.
2. The store content and catalog is managed by the content management systems. These systems manage images and the product descriptions. In a hybrid cloud scenario, most integrations happen from cloud to cloud.
3. The Commerce data (Product catalog, inventory, pricing etc) is managed by the commerce data management modules and these are also integrated to the enterprise backend systems through a scalable and configurable data exchange hub.
4. Th retail analytics module of the platform provides the necessary analytics and actionable customer insights based on the customer information, channel interactions, transaction history, social media interactions, and provides inputs for the digital marketing and campaign management modules for creating and engaging the customers with realtime relevant campaigns.
5. The digital marketing and campaign management systems integrate with the retail analytics platform for deriving insights on customers and create and manage campaigns, promotions, and other marketing activities accordingly.
6. The customer data management modules are the ones which manage the customer master data and provide the necessary inputs to the analytics for creating 360 degree views of each customer. This can then be used for providing relevant marketing campaigns and customer service to the customers.
7. The integration layer provides for API-based integrations with the partner ecosystem which includes all the business and community partners.
8. The systems of record and enterprise systems and the enterprise data are usually maintained on premise data centers. These are then in turn integrated with the other transactional and insights systems of the platform.
A retail digital platform is made up of complex sets of components that work together to deliver an enhanced and contextual customer experience. To achieve this purpose, a hybrid, multicloud approach is perhaps the only viable way to support this combination of complex components. Using a retail digital platform is the way to achieve customer centricity and to bring an end-to-end engagement with the customers. Retail organizations need to build and deploy a retail digital platform to be able to become part of the ecosystem if they need to remain competitive in today's digital business scenario.
Serverless architectures refer to applications that significantly depend on third-party services (knows as Backend as a Service or "BaaS") or on custom code that's run in ephemeral containers (Function as a Service or "FaaS"). The term is misleading as it does not actually involve running code without servers. The name "serverless computing" is used because the business or person that owns the system does not have to purchase, rent or provision servers or virtual machines for the back-end code to run on.
Serverless is a new way to approach cloud computing. It is an approach that has been pioneered by Amazon with the AWS Lambda serverless compute platform. Serverless computing is based on an event-driven architecture and has functions as the unit of development.
This has been an evolution from the early days of computing when the concept of delivering computing capabilities over a global network was the goal. With the internet the web technologies started maturing and it created a need for hosting these websites. The Internet Service Providers (ISP)s came up and filled this need by providing the infrastructure and renting shared resources to meet the need. Global data-centers came up and traditional data-centers abstracted the hosting environment with limited elasticity and resource pooling. Scaling was achieved by adding more hardware. During this stage the consumers managed the application stack, OS, data, storage, networking and the hardware.
The next step in evolution with cloud technologies starting to mature was the emergence of Infrastructure-as-a-Service (IaaS) platforms like Amazon Web Services (AWS) and Google Compute Engine (GCE). These abstracted away infrastructure components into self-service models for accessing and managing compute (VMs or bare-metal), object storage, block storage, and networking services via APIs, and billed based on consumption. These virtualized data-centers abstracted the underlying infrastructure. Scaling was achieved by allocating more compute (VMs) and other infrastructure resources. Now consumers managed the application stack, data, and OS, while the IaaS provider managed the virtualization, servers, hard drives, storage, and networking.
The next big step was the emergence of Platform-as-a-Service (PaaS), which now added another layer of abstraction on top of the IaaS components, by providing a unified computing platform with a self-service portal to deploy applications. PaaS platforms like IBM Bluemix, Microsoft Azure, Heroku, Force.com and Google App Engine have become popular examples. PaaS abstracted the management of infrastructure services, with scalability, high-availability, and multi-tenancy as it's core tenets. Now the consumers manage the application stack and data, while the PaaS provider managed the OS, virtualization, servers, storage, and networking.
In the last few years, AWS Lambda made another round of abstraction and brought the concept of serverless computing to the consumers. The Functions-as-a-service (FaaS) paradigm promotes self-contained, stateless chunks of code packaged into 'functions', that can be run or triggered, in ephemeral containers. All this is done without managing the underlying infrastructure or the language runtime needed by the code. The unit of deployment is functions. Serverless computing abstracted the language runtime. Consumers manage the application code in units of functions, while the serverless cloud provider manages the execution environment and everything else under it.
Sometime in late 2014, Amazon launched AWS Lambda which was a serverless computing platform that allowed you to have a microservices architecture in which it wasn't necessary to manage the underlying infrastructure. The provider would auto-scale your application in response to load. Serverless architecture is a FaaS (Functions-as-a-Service). Serverless architectures have changed how applications are built and deployed at scale allowing teams to interact with increased autonomy and higher productivity. As microservices can now be decomposed into functions, decoupling can be done at a finely-grained level which provides the flexibility to map functions to events that can originate from different sources.
Serverless architectures does not mean that there are no servers. They will still have servers somewhere. What makes something serverless is, that as a developer you don't have to worry or think about those servers. You can just focus on code. You also don't have to worry about the administration. When you're ready to deploy code, you don't have to provision anything beforehand, or manage anything afterward. There is no concept of an operating system. Everything runs in the cloud and the provider manages scaling for you. Even when the code is deployed you only pay for resources that you use.
Some of the providers today that provide their own serverless computing platforms are IBM OpenWhisk, AWS Lambda, Microsoft Azure Functions and Google Cloud Functions.
Let us consider a couple of use cases to understand how this concept works.
The first one involves the IBM OpenWhisk platform, which is is IBM's serverless compute offering. OpenWhisk is an event-driven compute platform that executes application logic in response to events or through direct invocations–from web/mobile apps or other endpoints. OpenWhisk works through rules that bind events and triggers to actions. Web and mobile applications often invoke OpenWhisk actions directly through API calls via the mobile SDK. More commonly, Watson or other Bluemix services invoke OpenWhisk actions by generating events to which OpenWhisk actions respond. When an event or an API call invokes an action, OpenWhisk creates a container to run the action in a runtime appropriate to the programming language used. It supports the languages Node.js, Python and Swift. OpenWhisk also can run custom-coded actions packaged in a Docker container. IBM's API Gateway provides security. To stop unwanted usage of the data you supply, you can ensure that only users with the correct authentication can access your APIs. Methods being supported include API key, API secret, and OAuth validation.
The first use case considered is Skylink, which is an application that uses IBM Bluemix OpenWhisk with the Cloudant, Alchemy, and Watson services to analyze and tag in realtime images captured by a drone.
A diagrammatic representation is shown below.
Shown is the IBM Bluemix platform that provides the Cloudant, OpenWhisk and the Watson services. The following steps are shown in the diagram.
1. User sends video for processing.
2. An action is triggered by the db write in cloudant to break the video into separate images. The actions are running in containers of the OpenWhisk platform.
3. The Watson Visual Recognition service then analyses each image and writes the results to the db.
4. The db write then triggers actions to send the Watson data to the user device.
5. The user clicks the tag in a thumbnail to see the object at the time-stamp in the video.
The following video shows the use-case.
Another use case is using Amazon AWS Lambda and Amazon Kinesis. Amazon Kinesis is a service which allows you to ingest realtime data such as application logs, website clickstreams, IoT telemetry data, and more into your databases, data lakes and data warehouses, or build your own real-time applications using this data.
The components involved in this use case are Amazon Kinesis, AWS Lambda, Amazon DynamoDB, Amazon S3 and Amazon CloudWatch.
1. Real-time event data is sent to Amazon Kinesis, which provides large-scale durable storage of the events for 24 hours and allows multiple AWS Lambda functions to process the same events.
2. In AWS Lambda, Lambda Function 1 processes the incoming events and stores the event data in a table in the db.
3. The Lambda function also sends the values to the monitoring of aggregated metrics.
4. Another AWS Lambda function, Lambda Function 2, stores the incoming events in the Amazon S3 storage for downstream processing and analytics.
In conclusion we can say that that Serverless is a new way to approach cloud computing which is based on an event-driven architecture and has functions as the unit of development. It is not meant to replace other computing platforms, rather it will augment them. It removes the need for the traditional 'always on' server system sitting behind an application thereby significantly reducing operational cost. It allows for more options on how applications can be built. It can be considered as a disruptive technology that will change how developers will code in the future.
Many years ago, when I was an entrepreneur, we had developed a mobile app. It was a visual storytelling and networking platform that allowed users to tell visual stories using the photographs that they had taken using their mobile phones. They could share these stories with their friends on social media and also follow others, get others to follow them and form groups. The technologies involved in building this app was mobile, social and cloud. We had used the SDKs available for developing the app along with cloud hosting infrastructure to set up the databases and the mobile backend.
What we did not have at that time was a platform-as-a-service that would have helped us do all this and more in a much shorter time. At that time it had taken us more than eight months to fully develop the app to our liking and test it satisfactorily before we could launch it on the app stores. Today, with a platform such as IBM's Bluemix we could have done the same thing in less than two months! It may sound incredible, but it is true.
Bluemix is an open cloud platform that gives mobile and web developers access to IBM software for integration, security, transactions, and other key functions, as well as making available modules developed by the community of business partners. It is built on the Cloud Foundry open source technology. Bluemix also provides Mobile Backend as a Service (MBaaS) capabilities. The whole idea of the platform is to provide a smooth and simple way of building and delivering an application by providing services that are ready for immediate use.
Bluemix offers cloud deployments for both large enterprises as well as small businesses and startups. All service instances provided are managed by IBM. You need to register on the platform and you will get one bill for only what you choose to use. This is a platform that is ideally suited for startups and small entrepreneurs who have budget constraints and who are looking for an environment that not only provides various services on demand but also the underlying infrastructure and development and testing environment. Developers with a minimal amount of programming knowledge can quickly build and deploy applications in this environment.
It is free for anyone to register and you will be charged only when you start utilizing the computing and data environment and will be charged only for what you use.
Shown below are some screenshots of the catalog section in Bluemix.
Each of these categories have many modules available under them. The detailed list and descriptions of each can be found in the documentation that is available on the Bluemix platform.
To get a developer started and off the ground easily, the boilerplates are a useful place to start. A boilerplate is a container for an application and its associated runtime environment along with predefined services for a particular domain. The main advantage of using a boilerplate is that you can quickly put together an application and be up and running in a short time. The list of boiler plates offered by bluemix is shown in the figure below.
There is a flexibility of developing and running your app in an environment of your choosing. The runtime services can provide the environment in which your app will run, for example you can run an app in in Liberty for Java, Node.js, .NET, PHP, Python, Ruby.
There are multiple options when it comes to development on the bluemix platform. Bluemix supports a few different approaches for developing applications and running them in Bluemix. The approaches are functionally equivalent and work equally well, so developers can choose the method with which they are comfortable. They can use a starter, a runtime starter, such as the WebSphere Liberty profile or the Software Development Kit (SDK) for Node.js. A boilerplate starter the developer can run an application by specifying only minimal information. The Eclipse integrated development environment (IDE) can be used to work with Bluemix applications. The Cloud Foundry cf command-line interface (CLI) tool can be used to work with Bluemix services and applications on your local system.
The DevOps services offers tooling for rapid development, testing and continuous deployment and is well suited for the times when you need to quickly deploy and keep up a continuous improvement cycle.
The Bluemix platform is equally useful for large enterprises as well as small businesses and the startup community. It is advantageous for a startup to adopt such a platform given the nature of the way a startup functions. There is a lot of ideation and innovation that goes on while moving a product from the conceptual to the final finished product. There are multiple iterations and experimentation that takes place and an environment that allows you to rapidly experiment and try out innovative ideas is a great advantage, as it allows you to save time in prototyping using traditional methods. In a startup speed is a critical factor and you need to be able to go from idea to your first MVP (minimum viable product) at the earliest.
Here is a short video on building a mobile app using the Bluemix platform. There are more videos on Bluemix and its use on the Bluemix Channel on YouTube.
For those who are interested in more information on the Bluemix platform, you can find it here.
Like I had said in the beginning of this post, if I had had a platform such as Bluemix to build on, our app would have been built much faster, would have had many more features, simply because we could have tried out all the ideas we had and prototyped a lot quicker, and just the number of services available in the bluemix catalog would have given us many more ideas that we could have built on. Today, a large number of startups are already using the platform, and so if you are a startup, or have plans on one, you could consider a platform as a service like Bluemix to build your product on.
Over the past few years there has been a lot of discussion over cloud architectures, cloud deployments and the definitions that go with them. We have come to understand the terms public cloud and private cloud. But the term Hybrid cloud has been a bit hazy and there have been many definitions and descriptions of what a hybrid cloud really is.
If you consider this definition then you can look at the hybrid cloud as the combination of one or more public cloud providers (such as Amazon Web Services or Google Cloud Platform) with a private cloud platform which an organization has set up and is using for its own in-house computing and for hosting systems of record. Now the public cloud providers could also set up a private cloud for you. And this could be either in their infrastructure or in the company's own data center which could be on-premise or located elsewhere. Essentially, when we say hybrid, it means being able to securely integrate and communicate securely between all the computing environments that a organization may setup one way or another.
Hybrid clouds are useful when organizations need to keep sensitive data in-house or are unable to move data onto the public cloud due to governmental regulations. It also useful when legacy systems cannot be moved to the cloud due to the nature of the workloads. It should be noted here that you cannot just move everything to the cloud. Only those workloads that are feasible and applications that lend themselves to being able to work in the cloud can be moved. Given this it becomes necessary to set up a hybrid cloud environment where a part of the computing infrastructure continues to remain in the organization's data centre which can be on-premise or outside.
Applications which can be migrated to the cloud need to be first evaluated to see if its feasible to move them to the cloud. This is an exercise by itself where the application's computing and data architecture is studied and evaluated to find out its feasibility of moving to the cloud. Those that can be moved are then put through a cloud migration plan. Those that cannot be moved are retained on premise or in the company's data-centre. The overall hybrid architecture will then need to consider secure connectivity between the on-premise applications and the on-cloud applications.
An enterprise architecture provides for integration across all the applications and computing and storage resources. This will also consider all the security aspects that need to be built into the architecture for a hybrid cloud implementation.
The following diagram is a simple representation of a hybrid cloud deployment.
The diagram shows at a high level what the different components making up a hybrid cloud configuration are.
The public and private clouds together constitute the cloud environment that is used by the organization for its computing and storage needs. This block is where a majority of the systems and storage can be located. Typically the customer engagement systems are based in the cloud. As this involves web, mobile, social and analytics technologies, the cloud platform is most suited for deployment of applications based on these technologies. The applications typically hosted in the cloud are the customer engagement applications like the mobile apps, the customer and vendor portals, the Customer Relationship management systems (CRM), the analytics systems and the digital marketing systems. There are times when some of these applications may be offered as a service by other vendors in other clouds, for eg. CRM may come from a vendor like salesforce.com who has their own cloud environment, office applications may come from a vendor like Microsoft who have their own Azure cloud hosting environment, a vendor like SAP has their own cloud environment and IBM has their own. If an organization has applications supplied by these different vendors and also has built its own web and mobile apps for customer engagement and portals for their partners, then all these applications will have to work in conjunction with each other and also with the enterprise applications (like ERP, HRMS, Finance etc) of the organization itself. This is made possible by integrating all the various applications across the different cloud platforms and the in-house enterprise applications using enterprise integration.
The organization's cloud platform should be able to provide secure connectivity between its own enterprise applications and the other cloud based applications provided by other cloud providers. Secure connectors, VPNs, firewalls etc. all need to configured together to be able to provide secure access to enterprise applications and data and for the secure transfer of data between these various environments. It is advisable to have the data and the applications using the data in the same cloud environment for performance reasons but its not always possible due to various factors and hence it is important to be able to maintain secure connectivity between the applications and the data.
There has always been a resistance to moving to the cloud from the CIOs in organizations due to various reasons, but that is a trend that is now declining and the benefits of the cloud far outweigh the unfounded fears that have kept organizations from moving to the cloud. Today it is not an issue. The hybrid cloud was not understand in the earlier days and hence the reluctance to move any application to the cloud. But today given the stability of cloud implementations and the security provided along with the secure connectivity between public cloud, private cloud and data-center applications, it is no longer an issue.
A typical use case for a hybrid cloud implementation is described below.
Assume that there is a logistics provider who provides services to various e-commerce organizations in terms of warehousing, shipping and delivery of items to its end-customers. To be able to provide service of the highest quality it is imperative that the provider be able to monitor and track all shipments from the time they are picked up or packed to the time they are delivered. This means keeping track at all stages of the shipment. Apart from the shipment it is also necessary to be able to track all the partners that are involved in the operation and be able to manage them efficiently. This means that all the systems involved need to be able integrated together.
When an ecommerce site makes a sale, the order details will be flagged off to the respective vendor of the product and the logistics provider who will service the order. This requires that the logistics providers systems be integrated with the ecommerce site. Once the order is registered in the system, the warehouse, which could be at a totally different location, is informed so that the item can be picked and made ready to be shipped. The transport management system and fleet management systems are also integrated and these may or may not belong to the logistics provider as they could be 3rd party providers. The trucks transporting the goods themselves will be fitted with onboard devices that will enable the logistics providers to track the movement of the tracks. The warehouses and the transport hubs will be fitted with devices at the loading and unloading stations and will have readers to read tags on the shipments. All this data from the devices and readers and other sensors are collected and relayed through gateways at these locations to a platform in the cloud which receives the data in realtime. Updates on the delivery are relayed to the systems in realtime from the handheld devices of the delivery boys. The delivery boys themselves could have handheld mobile apps that help them manage their routes and delivery as well as allow their supervisors to manage their activity. All these apps and data is handled in the cloud. All these applications then need to be integrated with the back-office systems that handle the finance and reporting for all this activity. These systems could be located on-premise at the company's location or in a datacentre. The status updates on the delivery are made available both to the ecommerce provider as well as the customers on both the web and the mobile applications.
The point here is that with so many different actors, systems, applications, devices, and environments, it is only by means of an integrated cloud environment that it is possible to operate in a cost-effective and efficient way without performance and customer satisfaction suffering. The story would be a lot different if each of these applications and systems were located in silos and there was no integration or communication between them. Only a hybrid cloud environment makes this possible.
Once upon a time, actually not so long ago, software programmers made use of a programming interface called an API, which is an Application Programming Interface, which is also an interface that the programmers made use of to get their part of the program to speak to another program. The programmers of the other program, would have come up with a set of rules that needed to be followed by anyone wanting to talk to their program. These rules would then be used to build a piece of code that another piece of code could call making use of the set of rules specified by the first piece of code.
If all that has confused you a bit, don't worry. An API is simply a programming interface that another program can use to communicate with it. It is an interface between different software programs and facilitates their interaction, just like a user interface allows for the interaction between humans and computers.
Today, the awareness has spread beyond just the programmers, and it has become a means of generating revenue for an organization. This has been largely due to the social, mobile and cloud technologies that have made great advances in the last few years. The business leaders are generating revenue by exposing APIs as business building blocks for third party applications.
Some examples of companies that have used this very effectively are Amazon, Facebook, Twitter, Google, SalesForce.com. Industry examples include Banks, Insurance companies, Content Providers, Healthcare providers, online marketplaces, logistics providers etc. etc.
The term used to describe this is the API economy (application programming interface economy).
A growing trend in the industry is that more and more CIOs are going to be tasked with developing new business models that can be built using existing and/or new IT platforms. This has brought pressure on them to think more like business strategists than IT strategists, and they need to launch newer business models to keep their companies competitive. The main weapon they have in their arsenal to help achieve this is the API. This is what will make the digital businesses competitive in today's world.
The API economy is based on the management of the whole API lifecycle which includes managing an API from start to finish, from strategy, design, deployment, advanced support and security to versioning and eventual retirement of the API.
The purpose of an API management platform is to allow developer communities and developers in organization to expose their business services securely as APIs. The platform provides for a self-service portal that will allow the developers to develop, publish, and manage their APIs. The organizations can also manage & monitor the entire API platform using the API management platform.
This makes it very simple for an organization to create and manage the APIs that they wish to expose, as now their developers can compose new APIs, import APIs, or discover APIs. As security is a major concern for everyone, it becomes easy to specify security & API behaviour and manage it. It also provides for versioning of APIs. The platform will also allow the business to create a plan, add API resources, choose rate limits which means specify the number of calls that can be made to each of the APIs in a given time period. They can test the APIs and stage it in runtime environment to be able to test and monitor performance. The usage of the APIs can be analysed by using the tools provided by the platform. The Admins can use a management console to monitor the health of the system resources.
There are many providers out there who provide API management platforms, an analysis and comparison of which is outside the scope of this post. Be aware that they are available and your business can monetize the services that you build by exposing your APIs and expanding your eco-system. Eco-systems are a critical component in today's digital business landscape.
So go ahead, make that API. And expose it.
There are powerful digital dragons out there! They include companies that have wholeheartedly embraced digital disruption and are using it fearlessly to invade and dominate markets they didn't even play in before. If you need to avoid getting burnt to a crisp by one of those fire-breathing digital dragons, you need to get out of the way, and fast! But thats not really going to help, and it's not really possible. Like we have said before, there's no place to hide. You need to face it and fight it. Disrupt fire with fire! Become a fire-breathing dragon yourself. Come on baby, put out that fire! as Jim Morrison of The Doors would say in today's scenario.
You will need a digital business model. And you will need a digital business technology platform too. The model will make you a dragon, and the platform will give you your fire!
What is a digital business platform? What are the components that make up one? Well actually there is no one platform that you can buy and plug in. At a high level we can break it up into three layers - a product and services layer, a core platform services layer and a infrastructure services layer.
The product and services layer is the layer that you would expose to your customers and partners. This would be the layer that would be responsible for the customer experience - it would expose the APIs and enable access to the applications that would be directly responsible for customer engagement and meeting their business requirements.
The core platform services layer would be the enabling layer for the applications and provide the integration, identity and authorisation and other core micro services that can be used to build up the applications that will serve to meet the business requirements of the customers.
The infrastructure services layer would provide the hardware and platform services that would be required to develop, test, deploy and host the digital platform applications.
This is the platform that contains all the main customer-facing elements, such as customer portals, omnichannel commerce and customer mobile apps. The Customer portal and apps are used by customers to gain information, get customer service, apply for services, place orders and transact, and/or view various status. Enterprises need to be able to participate in social networks for community interaction and transactional functions. The customer experience platform needs to be able to support this by enabling the posting of data (feeds) and by receiving data posted by customers. Customer analytics will be used by enterprises to analyse customer behaviour and social sentiment. Customer analytics can be diagnostic, predictive and prescriptive. The output/results of customer analysis can be fed to any other parts of the technology platform. The customer experience platform becomes the gateway through which other platforms can provide communication and value to the customer. All inbound data, insight, customer requests and e-commerce, as well as all outbound information and fulfillment of services should go through the customer experience platform.
It is very important for the enterprise to have a "single view of the customer". For example, customers should be able to walk into a branch, store or service center and ask about transactions and services that were done on a mobile app. The organization should have an up to date view of each customer that includes purchase history, browsing behaviour patterns, preferences, social sentiment etc. to be able to create relevant offers and services for the customer.
Analytics is core to any organization as this is what will drive all the actionable insights that will be required by any digital business. This would contain all the information management and analytical capabilities which would allow data-driven decision making. The purpose of the analytics platform is to provide real-time analysis and actionable insights that will allow real-time and contextual actions to be taken in reference to a customer's current behaviour. The platform will allow these decisions to be made; and prescribe courses of action that can be executed. The analytics platform can deliver insight that is descriptive, diagnostic, predictive and/or prescriptive.
Today there are many devices everywhere that are connected (in homes, hospitals, cars, buildings, manufacturing, warehouses etc.) that collect and relay data in realtime. The relevant data for an organization's business can prove very useful as it can be used for monitoring, optimization, control and monetization. The capabilities of this platform include connectivity, analytics and integration to core and operational systems. For eg. data from connected devices in cars can provide use cases for optimization of assets (e.g., use less fuel, obtain better yield) and insight on usage (e.g., driving patterns). The IoT platform can either act as a gateway to analytics and storage capabilities that exist in the data and analytics platform or do all of the data monitoring, storage, analytics and algorithms in the IoT platform itself.
This is probably the most strategic platform as this is what will enable the ecosystem - which is a defining part of a digital business. This platform will support the creation of, and connection to, external ecosystems, marketplaces and communities. The main elements of such a platform are API management, control and security. This is the platform that exposes the APIs of all the internal applications to the ecosystem partners and customers to enable them to participate in the organization's business.
The purpose of this platform is to enable an enterprise to create value from the outside with business ecosystems in the digital world. This requires the ability to make assets like data, algorithms, transactions and business processes available through APIs to external business ecosystems; to construct ecosystems that an enterprise can host to connect new partners and developers, and to pursue new business models; and an ability to connect to industry ecosystems such as marketplaces, supply chain hubs and financial networks. The essential components that make up this platform are API management for the management, security and governance of the enterprise's APIs that will be public-facing and APIs from partners that will be employed by the enterprise. This can be used for managing Customer-facing public APIs as well as Partner-facing public APIs.
This is a common platform and this is what would support all the back office operations, such as ERP, finance, HR, purchasing, billing and other vital back-office systems, employee collaboration and workplace — Email, telephony and video, file storage and sharing, collaboration tools, productivity tools. Each industry has a set of core systems (e.g., core banking and core merchandising, provisioning systems in telecom, actuarial systems in insurance, and supply chain and warehouse systems in industrial sectors, etc.).The Business intelligence applications would include reporting, dashboards and analysis of back-office and core system data. All these systems would then be integrated using various integrated methods to allow for the translation, transformation and orchestration of data and services as required by the other systems in the overall digital platform.
These platforms are built on services-based principles and architecture, and on the cloud primarily. The primary goal of building such a platform will be to enable the creation of an interoperable set of services that can be brought together to create applications, apps and workflows. A micros-services based architecture is the key to developing and deploying such a platform, as this is what will give you the flexibility to easily put together scalable applications for any business requirement. It is like using lego blocks that can be put together to build an end service. And as we have said earlier, this is not a single platform that can be provided by a single vendor which you can go out and buy and deploy. It will need to be put together depending upon your business needs and the organisation's strategy.
A digital business technology platform is a must in today's business landscape. If you are going to digital war, you are going to need a digital platform. Build a digital platform.
Go get yourself a dragon!
................From "Break On Through (To The Other Side)" - The Doors.
Digital will destroy traditional. Traditional will try to run, try to hide.
Today, across Organizations, there is one buzz word which is making itself heard above all the others. And that word is transformation. Digital Transformation.
To the CxOs in the organizations it is something that could be used as a quick fix to their existing business problems.
To Consultants, it is a theoretical articulation based on their observations of the innovative business models and processes of the brash young upstarts who dared break all convention and disrupt traditional businesses in ways that had never been imagined before.
To Enterprise Architects, it is the re-imagining of an enterprise in terms of customer experience, responsive operations and innovative business models, and developing a scalable enterprise architecture that will result in a digitally transformed enterprise.
And to solution vendors, it is a blueprint created by the joint efforts of the CxOs, the consultants, and the enterprise architects, based on which they will provide the solution components and implementation that will help the enterprise in their digital transformation initiatives.
Digital Transformation is re-imagining the enterprise in terms of customer experience, responsive operations and innovative business models which will allow the enterprise and their customers to interact with each other whenever, wherever, and in a manner that is most relevant and appropriate to any given moment in time.
Digital technologies today are creating a wave of industry and economic disruptions, totally changing how people and businesses interact. They have enabled unprecedented levels of disruption and have fundamentally changed the business economics. This is dangerous for those organizations that refuse to acknowledge the reality around them. Like ostriches, they have buried their heads in the sand. It works for ostriches, but not so much for today's enterprises. For an organization to stay afloat in this disruptive environment, they will first have to pull their head out of the sand, and acknowledge the reality around them.
To succeed in this disruptive environment, organizations will have to offer new experiences, develop a new focus, build up new expertise and come up with brand new ways to work. And this is something that will have to be driven from the top as it involves a fundamental reimagining of how an organization operates and how it engages with its environment. They will have to take cognizance of the relentless technology innovations that are happening around them that are disrupting the business landscape, the new digital technologies that include contextual mobility, the internet of things and cloud technologies.
The changing business landscape has been driven by factors that have been enabled by the changing technology landscape. Traditional value chains are fragmenting as the new technologies are creating more transparent value chains that are easier to decompose functionally. Traditional industries are now converging as new competitors are emerging that compete in specific value chain functions across industries and this has been driving industry convergence, resulting in the blurring of boundaries between industries. There is an emergence of new ecosystems. These new types of ecosystems which are emerging are displacing traditional industries and they are the ones that upderpin the evolution of seamless and sophisticated customer experiences.
All this has resulted in non-traditional players disrupting traditional industry leaders. There are many examples littering the countryside.
- Uber, with a market valuation of over 70Bn USD and more than 150000 drivers registered with them, own no cars. They have disrupted the traditional industry leader Hertz whose market capitalization is less than 10Bn USD.
- Airbnb with a more than 25Bn USD market valuation has over 1.5 million homes for rent, yet own not a single property. Totally disrupted traditional industry leader Hilton with a more than 21 Bn USD market capitalization and 550 + hotels and resorts.
- Similarly, other examples are facebook, amazon, skype - all have disrupted traditional leaders in their industry without owning any physical infrastructure or property.
So how should an organization respond to keep ahead of these young upstart start-ups who are the brash bad boys on the block?
They need to be embrace digital transformation. This will involve a ground up reinvention of strategy, operations and technology. They will need to aim for a day in the future when their organization will not look like what it does today. They will need to move towards a day when their strategy will begin with a focus on customer experience, they will need to embrace disruption, and they will need to have a unique business model and become part of an ecosystem. They will have to continuously reinvent their operations using iterative innovation, and integrate the physical processes with the digital. In terms of technology, they will have to decapitalize investments by sharing and renting, become fluent in agile, analytics, mobility and operate utilizing the full potential of enabling technologies.
Organizations will need a new focus, new ways of working and new expertise. These are the digital drivers that will take them on their digital transformation journey.
New focus can be brought about by employing advanced analytics across the organization and building new business models. They will need to develop new ways of realizing and monetizing value and come up with new business models.
New expertise will need to be brought in by identifying, retaining and building the right talent for an agile and innovative organization and actively participating in eco-systems. They will need to create a culture of design thinking, agile working and experimentation. They will have to utilise the ecosystem, decapitalize infrastructure and leverage partners. They will have to develop new relationships that will unlock new sources of value.
New customer experiences will create differentiated experiences that customers will desire and want. They will have to create differentiated experiences will drive the way the organization works.
New ways of working will ensure responsive operations which will involve digitizing the product, services and processes across the organization to redefine experiences with customers. They will need to leverage predictive analytics, cognitive computing, Internet of things and automation. Employing predictive analytics and advanced analytics will give actionable insights that can be used to optimize both experience and operations and will help to create deep and advanced competitive differentiation.
And this is the least they will need to do if they want to survive.
It is a given. Digital will destroy the traditional. But the traditional need not run and hide. It will simply have to break on through to the other side. The digital side.
Millennials have the attention span of a goldfish. Studies have shown that Millennial attention spans require ads that are just 5 to 6 seconds in length. They will pay no attention to yesterday's marketers and their outdated methods. (Then why do those dinosaurs still exist? Because other dinosaurs like you and me still like to be advertised to and sold to in the old fashioned way, but that is not relevant to our discussion here!). Today's millennials are loyal to brands and that's the only reason that they may pay a little attention to all the fancy-pants brand ads blaring out on TV. In terms of marketing messages and engagement it will have as much impact on them as water on a duck's back.
So what is a typical customer journey for your typical millennial, say Saumya, today? Saumya wakes up, pays obeisance to her mobile device, checks out what's happening in the world around her, which is basically her circle of trust friends. She will also, if she has decided on buying something, discuss it with her friends, get their opinions, research it online on reviews and ratings sites, compare prices and do whatever it takes till she is satisfied she has enough data to make an informed decision. So a large part of the purchase decision has already been made even before she has stepped out her door.
Ok so she's smart. You can be too. You need to know how to engage her - that's the only way you will get her attention. You need to know what she likes and dislikes, what matters to her, what events shape her life, whose opinions matter to her. You also need to have an insight into her purchasing behaviour and online activities. Today all this is possible with the right tools and access to the right data. And there is enough data out there being generated that can be harnessed. Underlying all this of course, are the privacy policies that govern all behaviour regarding collection and use of user data on the internet. So you will get access only to data that has been implicitly agreed to by consumers and not more. But there is enough of it and more for you to make decisions on how to engage her and lead her along in her purchase journey. There are platforms and tools and expertise out there that will help you profile each individual consumer who is your customer and who you can engage with. A technical discussion on all these technologies is beyond the scope of this post.
Saumya arrives at your store. Now here is what you do. Your in-store presence detection devices detect her presence as she walks in through your store doors. A store assistant gets an alert on his device with background information and purchase history and current status about her transactions. You send out a welcome message to her device with directions to the location of the item that she may have placed in her online shopping cart. Your store assistant meets her and assists her in completing the purchase decision process. While she is browsing in another section of your store you can send out a relevant offer to her for an item that she is examining. Relevant, because from her behaviour profile, you already know it is something that will interest her.
Now here is how all this is made possible for you. There are devices that are known as beacons that function as in-store presence detecting devices that can be placed at strategic locations in your store. These can detect the mobile devices and your brand apps in their vicinity and this information can then be processed by the applications that they are connected to. Your apps will already have sufficient data available about the customer, who has been identified by her mobile device and app. The analytics engines will provide real-time decisions on the relevant offers that can be made to her at that time, which can then be sent to her mobile device by other supporting programs. The available data we are talking about would include data about her past purchasing history, about her browsing behaviour, her social interactions, all of which can be analysed by the analytics engines helping to arrive at real-time decisions and the next best action to be taken in engaging the customer at that moment in time. This is relevant contextual mobility which has been made possible by a combination of social, mobile, analytic and cloud technologies.
Needless to say, if her experience has been good, she is going to talk about it with all her online friends which is going to benefit your brand immensely.
And this here is what has helped bring all this together. Your store app on her mobile device, location aware services, beacons and presence detect apps in your store. In addition, you have her online profile that your analytics has built for you. The analytics has used data gathered by social listening tools as well as data on her browsing and purchasing behaviour gathered from transactional data. The marketing and campaign applications have used this information to arrive at the next best action that will be relevant at that point in time. Using all this, you can engage her contextually in real-time using mobile and cloud technologies.
And so – if they be smart, you be smarter. Happy selling!
Manav was born with an iPhone in his hand. He announced his arrival with a "Have arrived dude, lets party" with a hashtag #worldamazingplace, paid off all hospital bills using a wallet on his phone, and Ubered his way home. On the way he checked out some offers that flashed up on his phone as the cab went past the Toys'R'Us store and placed an order for the fancy looking whatevertoyitwas and opted for it to be picked up by his dad at the store near his home at a later date. He was carried into his home which had been well stocked and was in a new baby arrival readiness state. His parents had been busy on their iphones responding and selecting offers over the last few months for baby stuff that they knew they would need once the baby came. And things were all set up so that baby consumables and necessities would be delivered to their home on schedule in the coming months.
If I had written this sometime during the last few years of the last century and you had read it back then, you probably would have had your tongue hanging out in disbelief and said hey that's science fiction and futuristic. But today, since it is neither so much fiction nor futuristic, you may not have your tongue hanging out in as much disbelief as you would have had sometime in the last few years of the 1900s. OK, so babies are still not born with iPhones in their hands, and they still do not Uber their way out of hospitals on their own, but it is definitely a future that is believable, and can be possible. And Manav soon is going to be old enough to have a bicycle that will allow him to ride into that possible!
Manav is part of a generation that is known as the Digital Natives, Millenials, or as I would like to call them the smartass-know-it-all-born-with-silver-iSpoons-in-their-mouth generation. They are smart, they know a hell of a lot more than we did at that age (and possibly now too), and they will not rest. They will ride into that possible, and if they do not have a bicycle to do so, they sure as hell will invent one!
They are the ones that should be your focus and your world. The early internet pioneers went to great lengths to define target groups using socio-economic-age-gender-location-etc-etc grouping and designed elaborate campaigns for them. Today, forget all that. Your target group is just one. And they are informed, mobile, connected and want everything when they want it, where they want it, and how they want it. Welcome to the age of Contextual Mobility. And make that precocious millennial out their your friend and base all your strategies and design all your experiences around him. For today, he is king and he will determine your tomorrow.
And that is the single most important reason that every organization on this planet is scrambling to go digital. Transforming digitally is no longer an option. And if you do not recognize this fact and do not start planning out your digital strategies embracing Social, Mobile, Analytics and the Cloud soon, then you can start outfitting your grave, like they did the bunkers in the war days, for long extended stays till the war got over and it was safe to come out. Well this time there will be no coming out. This is a war that is not going to end and so, if you do not transform and go digital, be prepared for a long, long, very long stay in there. And the the only entertainment you are going to have to keep you company will be the sound of the digital natives dancing on your grave.
Transform. Go Digital, Old Man!