We Need A Revolution of Enterprise IT

The following article outlines why the incumbent technology providers will find it difficult to provide the solutions needed in the next decade. Aivars Lode Avantce

Geoffrey Moore: We Need A Revolution Of Enterprise IT

By Jacqueline Prause, Published on June 18, 2012

Maybe you’re familiar with this millenial’s lament: “How can I be so powerful as a consumer, and so lame as an employee?” Of course, you don’t have to be a millenial to have noticed the gulf between your IT experiences as a consumer and as an employee.

As consumers, we are prompted and enticed to participate in a vibrant online community. Yelp wants us to share our opinions; Amazon tailors product recommendations to us personally; Foursquare wants us to announce we are in the world; and Twitter just wants to know what we are thinking, right now. We, as individual members of this community, are lauded and rewarded for our valuable knowledge about the world and our ability to make grand decisions, like purchasing a new car or house through our research online and with social media.

Come Monday morning when we are back at the office, however, most of us feel that our power has somehow waned. But why is this?

Best-selling author Geoffrey Moore has given the question considerable thought. Moore says that enterprise IT has to undergo a critical transformation to catch up with consumer IT. Evolution alone won’t do it, according to Moore, who says that we need a revolution of enterprise IT that capitalizes on three megatrends – access, broadband, and mobile – to empower business users to work effectively across collaborative business networks. Enterprise IT needs to provide faster analytics and deeper collaborative functions to deliver the right information to business users in real time during their critical moments of engagement with a customers, suppliers, or prospects. (You can watch Moore’s presentation  online).

Systems of Record

The next revolution in enterprise IT, according to Moore, will be the move from the systems of record, which process transactions and store data, to systems of engagement, where business users access, analyze, and share information in real time.

Systems of record have dominated the enterprise IT landscape over the years. They have been extremely successful in providing enterprises with stable and reliable data to drive corporate operations and deliver analytic insight to the executive suite. Think of such corporate functions as finance, HR, order processing, inventory management, supply chain management, customer relationship management, and so on.

Companies have invested deeply in this technology because the security and reliability of these systems is vital to the enterprise. Systems of record are here to stay, as Moore astutely points out.  However, with their massive offline stores of data, these systems are neither quick enough nor flexible enough to keep up with today’s business requirements for analytics and collaborative decision making.

The time has come for something new: systems of engagement. The real question, according to Moore, is how big of a journey is this for the enterprise and how disruptive will it be?

Systems of Engagement

The next wave of investment in enterprise IT will be in systems of engagement, claims Moore, who made his first forecasts on this trend in 2010. In his assessment, the new systems of engagement will encompass four design principles – global, mobile, social, and virtual – and meet the dual goals of enabling people to more easily engage within their work environment and enabling businesses to more easily engage with their customers.

There are two trends driving this transformation. One is the proliferation of the Internet and social media. This trend has profoundly affected how businesses engage with their customers before, during, and after a transaction. In the few short seconds that companies interact with their customers online, they have the possibility of increasing the return on that transaction through the intelligent use of algorithms that seek to promote additional purchases, solicit customer reviews, or provide the right level of customer service to make the transaction satisfying to all parties. While this trend is not new in the direct-to-consumer space, there is still tremendous opportunity for enterprises to maximize value by linking transactional systems with algorithmic analytics to drive better results.

The second trend is collaboration, in which businesses seek to provide the right information to their tactical and operational business users – typically the middle tier of the corporate hierarchy – during critical moments of engagement with other enterprises. One way in which engagement is different from past decision-making systems is that the business user is able to use social media to quickly and systematically pull information from his or her people network. In the best case, the information is available in real time and is situation specific.

However, information that is available in real time during that critical moment of engagement may not be as solid as data that has been sifted and analyzed by a system of record, a process that takes much more time. In such cases, the business user has to make a decision to go with information that is available right now, which is perhaps 80% accurate, or pass up that moment of engagement until better data is available.

Preparing the CIO toolkit

How can a CIO prepare an enterprise to implement systems of engagement?

Systems of engagement combine analytics and collaborative business tools in a dynamic manner. While analytics have long been on the agendas of CIOs, they gain critical new importance in a system of engagement for their ability to deliver insight in real time.

“I think the best place to start is with analytics, because that builds upon competencies that we already have in most organizations,” says Paul Clark, senior director of solution marketing for analytics at SAP, who recommends taking an evolutionary path toward implementing increasingly powerful analytics on top of already existing systems of record. “That’s an area where they can deliver value very quickly to the business by getting the right information into the right hands at the right time. And that will help set them up for this future state of extremely dynamic systems of engagement.”

Another area where CIOs can start is to identify the critical moments of engagement for their companies. For each case they need to ask, who represents us in that moment? What system of engagement would make that person more powerful?

“Think about every moment where one of your customers or even a prospect is engaging with you. That engagement could be directly with employees of your company, or it could be via social media where they’re talking about your company or they’re talking about your product with their friends, or they’re coming to your website,” says Clark. “The thing to look for is where can I provide the best information at those moments of engagement?”

This might mean providing critical information to employees when they are talking to customers, or providing the right information to tailor a personalized experience for a customer on the company’s website.

“Traditionally, being a best-run company was focused very much on efficiency. And that remains unbroken today,” says Clark. “But for being best-run from now on, through the next decade, it is going to be just as important to focus on effectiveness as efficiency. It’s no longer enough just to be efficient.”