Social media and collaboration has been the heart of HfS, ever since we began as a wee blog in 2007. And while “social” has provided an obvious catalyst for helping some analysts and industry influencers share their insights and develop their networks with incredible speed and hapless abandon, we are now seeing the beginnings of social business playing a truly disruptive role in influencing the way global organizations are evolving.
Today, managers, employees, provider staff and even consultants can have access to data, insight, infinite networking and crowdsourcing opportunities that simply didn’t exist even a couple of years’ ago. Global business practices are starting to become disrupted in ways that are frightening many firms into retrenching, while others are realizing they have little choice but to embrace the change, otherwise get left behind.
People no longer have to pay thousands of dollars every-time they need help or information these days, especially when dealing with business and IT processes that no longer require some “secret sauce” to become common practice. “Best-in-class” industry process workflows, which many organizations have historically paid hundreds of thousands of dollars to acquire in the past, can now be accessed and shared, within minutes, by visiting many of these social networks – and some are even facilitated by providers themselves.
Buyers, providers, consultants, lawyers, analysts, investors… all of the industry stakeholders, need to wake up to what is happening in the world, as our skillsets, best practices, trade secrets and the like, are much more easily accessible at a global level. Remember how similarly disruptive delivery models blew up the media, entertainment and PR industries in recent years? Well, the same is happening to all industries that thrive on collaboration and information – and none more so than global sourcing.
To this end, we are compelled at HfS to focus intensely on social business and its disruptive enablers, such as mobility and cloud, in order to stay ahead of the curve, with how our global operations industry is being impacted.
So who better to onboard, than the services of a man I actually named “Doctor Disruptive” in 2007 (he’s probably forgotten I did that), who was lauding the future business impact of mediums such as Twitter, when a colleague of mine at AMR research. The only difference was – in those days – most of the analyst industry thought Jonathan Yarmis was plain nuts. Well, they were right about the nuts, but not about the fact that he was onto something three years’ ahead of his time.
Jonathan is a rare breed; someone who has an encyclopedic knowledge of technology, having been one of the original “Gartner Greats” in the 1990’s, before spending time as a lead executive in the hi-tech PR world for Hill and Knowlton, and finally returning to the analyst industry with AMR Research. Yes, Doctor Disruptive has crafted a trade where he combines an intimate knowledge of technology, media and global business dynamics to bring to you a unique research practice dedicated entirely to covering the impact that social media and disruptive technologies are having on global business dynamics and operations. Jonathan today resides in Stamford CT, a stone’s throw from his old Gartner stomping ground, where is the proud Dad of Sam, who is going into her junior year at at Oxford University, England, and Ben, who’s an aerospace and mechanical engineering major going into his senior year at George Washington.
So after the longest-ever introduction to an new analyst hire, I hand you over to the notorious Jonathan Yarmis, who waxes lyrical on…
Disruptive Technologies: The Sourcerer’s Apprentice
Today’s outsourcing leaders broadly proclaim that the broad deployment of a new generation of disruptive technologies (social, mobile and cloud) offer new vistas and new opportunities for their businesses to add customer value. Their bold assertions of opportunity ignore the fact that these new platforms actually represent a significant challenge to their businesses. The water is rising and it will take a wizard’s deft hand for them to survive the floodwaters that have been unleashed upon their castles.
Disruptive technologies have been a hallmark of the technology landscape since the advent of the minicomputer and, more profoundly, the personal computer. (I began my career in technology back in the early PC days of 1979, before IBM entered the market.) However, successive generations of these disruptive technologies have all been constrained by the fact that they lacked enterprise scale and scope. This has been irreversibly changed; users now rule the roost. Gartner calls this the “consumerization of IT.” What they’ve overlooked, however, is that this is inexorably leading to the consumerization of business and the “IT-ization” of consumers. Our users and customers now have access to infinitely scalable platforms with global reach. Facebook supports 900 million users. Can your enterprise solution deal with that? Amazon has deployed over 500,000 servers and is adding over 100,000 virtual machines to their cloud every day. You think that’s a big number? Google handles 34,000 searches every second. That equates to 3 billion per day. Three billion. Has your enterprise system handled that many transactions in totality? Ever? The “consumer” platforms like Amazon, Google and Facebook have been forced to define their own operating platforms building on top of cheap, scalable consumer hardware to deal with their own unique requirements. They haven’t outsourced their platform development and deployment. They’ve had to develop it themselves and, having done so, they make it available…perhaps most amazingly, often for free.
You’re probably thinking “yeah, but what does this have to do with me and my business?” At the risk of gross generalization, today’s generation of outsourcers have been able to flourish because business processes are:
- Formally defined
- Top down
- Replicable across companies (enabling economies of scale for the outsourcer)
- Predominantly intra-enterprise
By contrast, these disruptive technologies are creating shadow processes which mimic, supplement and eventually will supplant at least some formal processes. Some of the hallmarks of these new processes include that they are:
- User defined
- Often running on user-provided hardware (BYOD)
- Ad hoc
- Unique to a company
- And maybe even then, not replicable
- Transcend enterprise boundaries
- In fact, they’re often unaware of enterprise-boundaries
- User- and customer-centric.
It is not hyperbole to suggest that BYOD (“bring your own device”) will soon be complemented by BYOP (“bring your own platform”). Think about that one for a moment. We’ve seen the chaos wrought by BYOD. We have to develop for platforms we didn’t even know were deployed in the enterprise. We have security risks enough to scare even the non-paranoid. (I can see the hand-wringing from my new colleague Jim Slaby.) And we’re so powerless to stop it that we’ve given it a term (BYOD) and embraced it as a strategy.
BYOP won’t be so clean. How have enterprises tried to deal with this? Phase 1 has been to try and subsume the user revolution. So, CRM is slowly giving way to “social CRM.” This is a laudable objective on its surface. And ultimately it’s going to fail the same way that CRM has failed, only bigger. Why? Because it’s built on a fundamentally flawed premise. The holy grail of the 360 degree customer view is unachievable. Heck, we can’t even get a complete view of our own transactions with a customer, let alone a 360 degree view. More data – big data is the new holy grail – hasn’t gotten us closer to that goal. I might even argue that big data is a big step…backwards. That’s a discussion for another day but a hint: we’ve spent decades trying to move from data to information to knowledge to wisdom. Now we’re thinking more data is the answer? If we don’t focus on transforming big data into big insights or big actions, we’ll just drown in that rising tide of data.
Anyhow, back to the question at hand. What will the rise of social and mobile and cloud platforms mean for existing categories of enterprise software? In the case of CRM, beyond social CRM – including social interactions in our customer information – will inexorably lead to VRM. Vendor Relationship Management. A whole new category where the user is in control and we realize the only way we get a 360 degree customer view is to earn the customer’s trust and ask them for permission to see relevant parts of that view.
As is so often the case with new technologies, we go through two phases. In the first phase, we apply it to existing processes, hoping to make them more efficient or effective. In phase two, where things get interesting, we instead ask “what can we do now that we couldn’t do before?” When it comes to social, mobile and cloud, we’re still largely in phase 1. You may not have noticed but we’re actually going on five years in to this revolution, which is usually when we start moving on to phase 2. It is upon us. This revolution is going to transform our business processes in profound and still poorly and mis-understood ways.
That’s why I’m here. To help you understand and prepare for this brave new world. We’ll help you get those floodwaters to recede. My research agenda will focus on how social business will change the way we work, the way it impacts various categories of software, industries and job functions. I’ve already had some fun conversations with Tony Filippone when I’ve made the assertion that social business changes “everything.” With his eminently practical practitioner’s eye, he’s come up with some use cases where the impact will be minor at first, and slow to evolve…and we’ll acknowledge those. I’m not here to be a cheerleader for social business. But nor will I let you ignore the profound changes coming down the road. I’m looking forward to challenging your thinking, and having you challenge mine.
Cue Leopold Stokowski.
Posted in : Business Process Outsourcing (BPO), Cloud Computing, Global Business Services, IT Outsourcing / IT Services, Outsourcing Heros, SaaS, PaaS, IaaS and BPaaS, Social Networking, sourcing-change