links for 2007-10-31
Next Generation Enterprise Transformation - Why it is necessary
Initially I had wanted my previous post to cover the What and the Why of Next Generation Enterprises, but I found that the post was getting too heavy and this topic is too rich, so I decided to break it up into two posts. Plus, I’ve found that like powerpoint slides, when reading blogs it is easier to digest and engage on shorter posts focused on a single topic than to read long, albeit detailed, posts covering multiple topics. I’m curious to get feedback on this general blogging point.
I left off on my last post, The Next Generation Enterprise - What is it?” indicating that we’re on the cusp of a major transformational shift in business which will play-out over the course of the next 20+ years and leave many enterprises stranded or out-of-business in its wake. This shift is why enterprises need to begin NGE transformation today. Let’s explore the reasons behind this shift.
The most recent significant change in business models was dubbed Re-Engineering. It encompassed shifting from a siloed functional organization structure to a process-oriented approach. Alongside that shift, was a technology transformation from centralized computing to client/server computing, putting processing power in the hands of knowledge workers on the desktop through PCs. With that shift, we underwent massive re-engineering of business processes, and automated everything “inside the office”, resulting in large operational efficiency improvements. The back-office was automated by ERP, front-office was automated by CRM, supply chain was automated by SCM, and so on. The focus was inside the four walls of the enterprise, and the underlying enabler was automation.
Our point of view is that the NGE transformation is about “getting out of the office”, with extreme collaboration as pervasive underlying enabler. Here are the parallels:
Re-engineering = Inside the Office - Powered by Automation
NGE = Outside the Office - Powered by Extreme Collaboration
What are the megatrends that are driving us in this direction? Here are a few:
- Talent Crunch: Boomers are aging and starting to head into retirement or second careers at the same time that the Millennials are emerging with new viewpoints and values on work, life, and collaboration, along with massive adoption of social media - how we work is about to change through this shift alone; key skills are also in short supply worldwide.
- Customer Power Shift: Thanks to the openness of the Web, customers and consumers are now empowered with more information than ever before, more choice, lower switching costs, and a platform to disrupt corporate brands directly from their desktop or mobile phone by connecting to the world virally through the Web. Enterprise value is now highly correlated with customer experience more than ever before.
- Globalization: Being a multi-national is no longer sufficient. An enterprise’s operations must be global in nature, taking advantage of comparative advantage of local markets and economies across the globe to bring products and services to markets worldwide. Being truly global will be the only way to compete, placing a higher premium on 24/7 cross cultural collaboration. Regional headquarters will now be replaced with capability centers located across the globe where it makes most overall sense.
- Web 2.0: The nature of applications and application development is changing dramatically with Web 2.0 and Web Services. Now, rich applications can be built in weeks, rather than months or years, and deployed to users without installing software. These new applications can talk with and include other applications or widgets which provide functionality from complimentary applications or marketplaces from across the Web. Within weeks, a new application, comprised of functionality from other applications and marketplaces and services from across the web can be mashed up and deployed, powering a global business process connected with core partners and service providers for an enterprise. Having your current legacy enterprise applications from the past 50 years on a Services Oriented Architecture will be a necessary requirement to best leverage the coming enterprise applications powered by Web 2.0. While wikis and blogs are included, this concept carries far beyond what we’ve seen to-date in Enterprise 2.0.
Any one of the above listed megatrends would constitute a significant disruption in business as we know it today and force a Newtonian response. The combination is powerful and highly disruptive … carrying the Newtonian metaphor forward, the response must be equal or greater in power - thus the need for NGE transformation.
What are your thoughts on the megatrends? Do you see NGE, as defined in the prior post, as the response to these megatrends, and why or why not? Is the response to the megatrends truly contain collaboration and On Demand at its core?
In my next post on the NGE thread, I would like to outline and build upon the fundamental capabilities that need to be part of a truly effective NGE.
^ brian
Corporate Social Networking and the Personal Tag Cloud
Here is a link to an interesting article this week from CIO Insight, about social networking in the enterprise. It highlights Wachovia’s current initiative to deploy an enterprise-wide social network, and the rationale for doing so. Here is an excerpt:
Wachovia plans to introduce its social networking service to its 110,000 workers by early 2008. Like the popular Facebook service, the network will allow users to upload photos of themselves—not just corporate ID mug-shots, either—and personal information. Community-building across the vast company is one of the goals.
This initiative gets at the heart of an internal effort at BSG Alliance as well - that of the “Personal Tag Cloud”. Think of the PTC as a representation of a person’s skills, abilities, interests and past projects for starters. The big tags are where the interest or strength or experience is the greatest. A social network and collaborative focus, in addition to the right On Demand applications, allows this to happen. Some more excerpts related to the PTC concept and the benefits of this type of social networking:
The idea is that it will boost top and bottom lines by providing a clear understanding of who knows what, and who knows whom, within a company and among its business partners. Making it easy for people to get together online and off, and harnessing the energy and information unleashed in recent years by so-called Web 2.0 tools, is supposed to advance core business tasks including sales, marketing and knowledge management.
To my BSG colleagues, it’s interesting to note the industries which have focus on using collaborative social networks for getting work done:
Early adopters range from the U.S. intelligence community, which plans to launch a cross-agency social network in December, to major players in the pharmaceutical industry, where drug discovery is being driven by knowledge-sharing across companies
^ brian
Social Media - It’s not just another marketing channel
In recent meetings with BSG Alliance customers, the topic of the next generation of workers consistently generated a high degree of interest - both from a perspective of how to recruit and retain this next generation as well as how to market to them.
In my last meeting, one of the participants asked an engaging question. To paraphrase and protect identities, the question was roughly as follows: “If I have a long standing, stable, and successful brand which has not changed much if at all in its lifetime, what if anything do I need to do going forward in the Next Generation Enterprise world?”
The question generated a good amount productive discussion, and an interesting comment from the group which I felt was not exactly correct, but did not have a good response at the time as to why it was not what I felt was the right response.
The comment was basically that reaching customers in the social media world is just going to be another channel that marketers will have to figure out, just like the shift from print to radio to TV, and so on.
I do not agree with this premise - social media is not just another channel. Flipping through the following powerpoint from Charlene Li at Forrester Research this morning helped to clarify my thoughts. It’s worth looking at Slides #16 through #30 then reading on.
Those that treat social media as just another channel, are doomed to fail in social media marketing, unless they learn and adapt along the way. Charlene goes into some of the reasons and examples in her presentation, mostly from a perspective of how social networks like Facebook and their members behave and operate.
I’d like to add an additional reason. A massive power shift is underway with customers and consumers, powered by Web 2.0 and Social Media. More information is in the hands of customers now than ever before, and customers can now collaborate in unprecedented ways as the costs of collaboration have trended to zero. As such, customers are demanding to be treated differently - not as a marketing channel, but as a person - and have response mechanisms at their disposal to ensure that marketers provide them with what they want. They want experiences. They will give feedback. If they’ve been wronged or are dissatisfied, they will rapidly form a group with shared interests and respond in force globally! If they have a great experience with your brand, they will do the same!
Social Media is not just another marketing channel. The challenge for marketers and brands is greater than figuring out how to take print and radio advertising to TV. The challenge is rethinking how advertising shifts from a one-way message to enabling positive and desired experiences, with Social Media as the enabling platform. Marketers must also understand the experience and outcome their customers desire, and be able to deliver it. Accountability for not doing so comes fast and hard. The spoils of doing so also have exponential returns.
As a reasonably active user of Facebook, the good news for marketers and the case example mentioned above is that I can tell you few companies or brands have figured this out yet, and the Social Networks themselves have not identified how to effectively enable this type of experience-creation for the marketers yet either.
I do expect an inevitable tipping point is near.
^ brian
The Next Generation Enterprise - What is it?
In my last post, Defining the Next Generation Enterprise (NGE) - All Hands on Deck!, I kicked off an effort to begin an open, collaborative dialog in the Web 2.0 world on defining an NGE and providing a roadmap for NGE transformation. This post, Next Generation Enterprise - The What and Why - is the first in this promised series of blog posts, and will focus on the topic of providing a simple definition of what an NGE is, and a set of compelling reasons why the shift to NGE is necessary.
First, here are a couple of ground rules, disclaimers, and credits for this overall series of posts on NGE:
- Remember, this is a discussion, so I’m eager for feedback - please provide it whether positive or negative. Treat this as NGE version 0.1 with a goal of getting to a version 1.0 - once there, I expect that we’ll already be discussing NGE version 2.0 (but not now).
- What will be presented in this blog post series is a collective picture of BSG Alliance’s view of NGE, written by me and hence presented through my point of view. So, many of my BSG Alliance colleagues should and will be credited with this content and the ideas behind it, but it may be presented differently by me - for better or worse.
- We’ll course-correct along the way, and in fact, you may (I hope) see my colleagues debating or restating content that is presented by me here. Some of these posts may move onto lives in other collaborative communities.
Good enough … what follows for the remainder of this post is a proposed definition of an NGE and our point of view on the reasons why NGE transformation is necessary now. I’ll try to be short to encourage comments, participation and debate.
First, here is some pre-work if you have not done it already. Bob Morrison from our BSG Concours division authored an excellent Boardroom Imperative on NGEs to kick-off our NGE transformation efforts. This Boardroom Imperative is a must-read for this series of posts, which I hope will build upon Bob’s work.
Let’s start with a definition of an NGE. We have not yet formally codified a definition of an NGE internally at BSG Alliance. Here is an initial shot below; this may be a moving target, but we’ll try to form a definition that can stand the test of time, even as fast as time moves in the NGE world.
A Next Generation Enterprise is an agile organization that operates a highly collaborative, open, network-based business model with fully engaged constituencies, and executes with high-velocity, On Demand, in delivering world-class experiences and desired outcomes for its customers and constituents.
Note the key descriptors in the definition. Our point of view is that you cannot be NGE without each being a characteristic of your enterprise:
- agile
- highly collaborative
- open
- network-based
- engaged constituencies
- high-velocity
- On Demand
- world class experiences
Many of these characteristics are nearly direct opposites of a traditionally organized business over the last half-century or so! Companies are typically thought of as:
- structured & hierarchical, not agile and highly collaborative
- closed and private, not open and transparent
- having a daisy-chained value chain (supplier-manufacturer-distributor-retailer-consumer) not networked ecosystems
- the ones which initiate the engagement, not as a participant in a two-way engagement process with constituents
- operating with discreet strategic planning and budgeting cycles, not in continuous high-velocity On Demand planning and execution mode
- delivering products and services, not experiences and outcomes
Why is such an extreme re-architecting of the traditional hierarchical organization with the buyer/supplier execution model required? Our belief is we are at the cusp of a series of fundamental shifts in the global economy which necessitate the transformation to NGE for competitive advantage and most likely enterprise survival. Some industries are seeing this change now and others will not see it for some time, but we do believe this is a 20 year transformational shift and a major disruption in global business. From a Schumpeter-based point of view, we will be undergoing massive creative destruction, which in the end will be a significant benefit to the global economy and those companies that embrace NGE transformation will not only survive, but thrive.
In my next post, I will explore these fundamental shifts in the global economy which are driving the need for NGE transformation.
^ brian
Defining the Next Generation Enterprise - All Hands on Deck!
Don Tapscott recently (indirectly) lit a fire under me. I went out for a run and listened to this HBR podcast (download here) from way back in May of 2007 on Don’s book Wikinomics. For those in business who are not aware of Don … you need to be. Don is the Chairman of think-tank New Paradigm and a preeminent thought leader in the area of fundamental business changes and trends on the horizon. He has consistently predicted many significant business shifts over the past couple of decades through his works The Digital Economy, Growing Up Digital, The Naked Corporation, and Wikinomics among other titles.
I had already read Wikinomics and have been living in the Enterprise 2.0 space for quite a while now - certainly prior to this recent run. Yet, Don’s HBR interview was a stark reminder of the fact that collaborating outside of your company is a vital capability for competitive success in the emerging business world governed by Wikinomics. At that moment it occured to me that we at BSG Alliance are embarking on an effort to define a Next Generation Enterprise and help lead the transformation to NGE for our customers … however we have not yet fully engaged in a highly collaborative effort to do so.
To be sure, we have engaged with dozens of our customers - both individually and through our BSG Concours executive conference platform - on the topic, and each interaction has both generated significant interest and advanced the NGE definition effort substantially. What would happen if we powered this effort with hundreds to thousands or more participants in an open collaborative effort in Web 2.0? The argument is that the gains in advancing the NGE definition and transformation effort would grow exponentially. So, here goes … or as my BSG colleagues would say, I’m ‘Free to be NGE’ …
I am starting a series of blog posts here on the topic of The Next Generation Enterprise. With this series, I would like to frame out our current thinking, messaging, and definition within BSG Alliance about NGEs, and invite all readers to begin to participate in the discussion about all things NGE - including what one looks like, why NGE is important, what the challenges are, what are the underlying building blocks and capabilities NGEs must possess, and how to become an NGE.
Yes, we’re doing this internally across our entire company. Keeping it to ourselves only slows the definition and transformation effort down and slows the ability for companies to capture the value of being NGE sooner rather than later. If we lead in an open and collaborative manner, everyone benefits at greater levels, including BSG Alliance.
My goal is to engage as many interested and relevant participants in the debate as possible to create some high-value collaborative thought-leadership, quality discussion and synthesis on the topic of NGE. I’m not sure where it will go yet, but will be sure to extend the debate and discussion to as many relevant social platforms beyond blogging as is relevant to continue to advance the NGE discussion (read: possible NGE Facebook group, NGE wikis on core components of NGEs, external blogs run by NGE promoters and detractors, and dare I suggest the possibility of a Wikipedia entry on NGE? - the community will guide us).
I hope my BSG Alliance colleagues find the effort fruitful and join in this NGE social effort by commenting on the threads started here and building on this NGE discussion through their own content and thought-leadership from their blogs.
I’m looking forward to the discussion and hope you all find it interesting and engaging. My next posts will outline an initial definition of an NGE and some core components that we believe NGEs must possess. Following that, I will be blogging on each of the components separately, and hope to add real world color (while protecting third-party confidentiality) following interesting customer and prospect meetings, and BSG Concours conference presentations.
And, don’t forget to listen to Don Tapscott’s HBR interview linked to above - it’s rich beyond its emphasis on the value of collaboration and peer production.
^ brian
Technorati Tags: NGE
Industrial Science acquisition - Simulation. On Demand.
Wednesday, BSG announced the acquisition of Houston-based Industrial Science. We are highly excited to have George Danner and Howard Park as part of the BSG Team - they are among the best in the business when it comes to building business simulations and have amazing depth and domain expertise in the area.
In the effort to fulfill BSG’s mission to lead the transformation to Next Generation Enterprises On Demand together with our customers, bringing business simulation capability into the BSG Platform was a necessary step. Industrial Science is a perfect fit for BSG, and will accelerate our ability to provide business simulation services to our customers - on demand.
As I move forward with my blog posts to generate discussion about defining a Next Generation Enterprise (NGE) and engage in discussion on all of the core capabilities of NGEs, Simulation On Demand will be the topic of one of these future posts. However, in discussing this acquisition I’m going to jump start some of the discussion of this simulation capability now.
Brian Mennel at the Austin Startup Blog had an appropriate quote in his announcement of this acquisition, which is highlighted below:
These days you can’t just walk in to corporate America as a consultant and offer advice, you have to posses a toolkit of readily deployable pieces that can add value quickly.
BSG is not a consulting company; we are in the business of NGE transformation, and provide a highly relevant suite of services to help drive that effort for our customers. We are rapidly assembling, both organically and through strategic acquisitions, an On Demand Platform of services for enterprises seeking to transform into NGEs. These services, whether strategic advisory services, custom web-based On Demand applications, or our own On Demand applications offered as a service, are to Brian’s point readily deployable, On Demand, to meet specific needs and drive immediate value for those embarking on the NGE transformation journey.
Providing a Simulation On Demand capability as part of the BSG Platform is critical to this NGE transformation effort. We have a strong point of view that having robust, visual, predictive simulations of core business processes will be a core capability of any NGE.
Why is Simulation On Demand a core capability for any NGE? Certainly it is for a lot of reasons, but here are a few critical ones from our viewpoint:
- The process of thinking about the details of a business process or operation that goes into developing a simulation is as or more important and insightful than the results of this simulation itself
- Basic business analytics look at what has happened, while simulations look at what might happen or what could happen depending on the changes across multiple variables, thus allowing for better predictive planning, and anticipation and understanding of potential issues and opportunties
- Visual simulation allows for the bridging of analytical information with the non-numeric business intuition of decision makers, providing the information and insight to allow for optimal decision making and communication of analytical insights throughout the organization and extended enterprise
- Simulations On Demand are tied into critical enterprise information technology infrastructure through service oriented architecture and web services, and thus are live simulations - allowing for agile responses to changing market conditions in an on demand manner
- Simulations On Demand can enable more robust and agile business partnerships, by allowing companies to simulate the economic models governing their business partnerships and alliances - this approach allows for greater transparency in business relationships and better opportunities for the business partners to propose, simulate, and implement new models which can benefit both partners in known and well understood ways
To further familiarize yourself with Industrial Science’s capabilities and prior work, look for BSG’s news release and related links on our website today. Additionally, visit Industrial Science. In particular, you can view case studies and a sample demo of a simulation developed by Industrial Science at the links below:
Now, on to that initial NGE series blog post.
^ brian
Back to blogging
Recently my BSG colleague and fellow blogger Susan Scrupski asked me when I was going to start blogging again. Feeling quite exhausted, my quick answer was that I didn’t have the time right now given how busy things are at BSG and at home. Reflecting on this answer today, it occurs to me that it is an unacceptable response in today’s highly collaborative Enterprise 2.0 business environment; it may even be irresponsible to not blog.
Blogging should not be seen as something outside of ‘work’ in the Enterprise 2.0 world. As the leading champion of the need for enterprises to transform into Next Generation Enterprises (NGE), people like me who are part of BSG need to find ways to leverage blogging and external collaboration as integral parts of our job. That is what I’d surmise those that are part of NGE’s will do.
So, with that I am back to blogging. The big question now is how can I use blogging to better do my job and make a meaningful contribution to my readers and the web in general?
One thing that we are working on at BSG is defining the Next Generation Enterprise, as well as the steps that enterprises can take to get to be NGEs. I am a participant in this process, and also have responsibility for presenting on the topic of NGE in our fall executive summits on the BSG Concours platform. While we are indeed figuring out what it means to be an NGE and how to get there, and I do believe we have a unique insight into this transformation as well as novel transformation services, I also know we do not have it figured out yet. What better way to get there than through a public collaborative effort with my colleagues as well as interested parties on the web? More to come on this in one of my next blog posts.
Another thing I am working on is BSG’s acquisitions and overall strategy. As we implement our acquisitions strategy, I feel that blogging can play a role in that effort too. I also feel that blogging on the acquisitions we complete and how they fit into helping enterprises transform into NGEs will be useful dialog in the blogosphere too. Did you know that we announced a new acquisition yesterday? More to come on that too.
Both of these areas are part of my job, and also can create useful discourse in the blogosphere from which many people, including BSG employees, fellows and customers, and other interested readers can benefit and find value. I believe this effort has the added benefit of enabling me to do my job better as well.
Now, back to blogging.
^ brian
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