Wednesday, March 27, 2013

Thinking outside Bar Code!

Am sure you are familiar with Taco bells’ caption – Think Outside the Bun!  This post is intended to explore the ways where we can think outside the Bar code!  In this post, Bar code is used as the metaphor for representing Standardization and Automation!

While the last post is all about certainty, this post is all about Standardization and Automation.  This is an extremely beloved topic in Enterprise application space, because standardization and automation leads to certainty and predictability.  Standardization, Automation also leads to mass production, cost efficiency and eventually commoditization.

Absolutely, nothing wrong with this concept. However, as we discussed earlier, the business that focuses only on cost eventually will get devalued. A business that focuses only on cost will not be able to improve its business performance.

The challenge becomes apparent when we stretch the concept of standardization and automation to almost all areas of enterprise applications. They are extremely good at digitizing transactions, but not relationships. They are extremely good at addressing complexity, volume/scale, and computation/analysis.

For example, I visit a rental library in Bangalore – called Just Books. It’s a professional business model that has standardized the business process, service catalogue, digitization/web presence, etc. Pretty neat model. When an existing customer does a transaction in the branch (issue of new book, or return of old book), absolutely no social contact / conversation required with branch staff. The firm follows a self-service model enabled by technology. The books are tagged with RFID. Hence, the books can be issued or returned by interacting with a digital kiosk. Job gets done!  Customers are so happy. Even kids could do it!  So simple!  No learning curve required!  This is a perfect example of automating a simple business process/transaction with a customer leveraging technology!

But remember, it’s a transactional scenario. How do you understand the customer, if you don’t talk to them, converse with them, and understand their customized needs or wants. How do you grow your business?  How do you get new ideas based on customer insights?  That’s the challenge!  The Bar code attitude will help us to reach only certain heights. Moreover, Bar code attitude is replicable and A better technology, better invested business could put the current model at risk any time.

Am not talking about digital businesses or e-Commerce here. That’s a different beast altogether!  Will discuss more on the same in a different post.  But, my concern is that even in brick-and-mortar businesses, in the name of standardization and automation, we are steering away from customers. We miss the opportunity to understand their customers, build relationships, build new business models, new growth engines.

So whatz the alternative?  I would have loved to see JustBooks creating community groups around different book genres, discussions/connect sessions with book authors, friend referrals based on book interests, etc. That would have been fantastic!  Then, JustBooks becomes a platform for sharing knowledge/interests and insights. This increases engagement with the business and would lead to new business opportunities! But, it may not be easily replicable across branches. The TCO may be high!  But, the brand as such may gain unbeatable value!

This whole new set of ideas can be enabled by deploying new set of technologies. That’s what I call systems of engagement, systems of personal fulfillment.  The system of engagement and personal fulfillment will become applicable only when it intersects with individuals/communities interests, desires, needs and wants.  The intersection is possible only when the conversation happens. When conversation is limited or eliminated as the increased cost to business, businesses will lose out all opportunities to sustain and grow!.  And these conversations could happen anywhere be it physical or digital media. It doesn't matter. The question is are they engaged. Are they engaged with your business.

The challenge of future businesses lie in creating context for customers to interact, socialize, work together towards a compelling interest/purpose.  This context needs to be created proactively by businesses.
From enterprise technology perspective, Analytics could help in identifying the context, social could provide the platform for engagement and mobile would become handy in providing personalized fulfillment services. All this could be powered by Cloud Infrastructure by serving elastic/scalable computing needs.

Monday, March 18, 2013

Design with Uncertainty!

Recently I read the quote by - Mario Andretti, one of the world’s most reputed automobile racing driver.

“If everything seems under control, then you are just not going fast enough”

I also like few other quotes on similar lines  

“If you know what you are going to do, its not research”

“If you absolutely know what the solution is, then you are not doing a strategy”.

I would like to slightly revise the first quote by saying

“If everything looks certain and absolutely measurable, then probably you are not innovating enough”

In a tough business climate, we all long for certainty. I see the micro-metering capability of our cloud computing models is exactly the reflection of our business sentiment.  We want to absolutely know measure and have a handle on the cash outflow on our computing needs. Perfectly understandable, if our focus is on cost!

However, if someone wants to build a whole new business model that makes breakthrough revenue, no amount of certainty is going to help.  Here, the focus is on performance and growth.  A business that constantly focuses only on cost will get devalued.  In order to generate growth and new revenue, it’s absolutely required to come up with new products/services.

There is a whole lot of discussion happening on the Net around the topic – Design Thinking.  Not sure how many people believe in it. I have started to believe in it as I study and practice more and more on the topic.

Am not going to explain and defend in detail about Design Thinking in this post. That’s for another time!. But, In essence, Design thinking is just an attitude. It’s a way of problem solving – applying a designer’s techniques/methods in solving real business problems!.  Some of the key distinguishing aspects of Design thinking are – Applying Abductive thinking (Asking what might be possible?),  Applying Divergent thinking before making a conclusion (Coming up with variety of options before concluding a solution).

The issue which I wanted to highlight is businesses hate uncertainty. Finance hates uncertainty (That’s why we hedge). Project Management methods hate uncertainty (as cost increases).  IT service contracts hate uncertainty.  Eventually, business suffers. Creativity suffers.  Innovation is hard to come by.

The more we apply our scientific, statistical, monte carlo methods, continue to baseline our plans (in agile), We constantly move away from ‘Artistic’ side of problem solving.  Scientific, Structured methods are absolutely necessary, critical in solving structured problems, where stakes are high and risks are unacceptable.  The artistic methods are people-centric, inherently learning (doesn’t assume a certain solution upfront) and may waste resources.

In order to solve wicked problems that are chronic, unstructured, Design thinking methods could certainly help.  Applying Design thinking in the project means you may come up with variety of ideas/solutions in the project, discard a few, combine one or two and form the final solution. Now this whole process may take its own course of time, based on the team dynamics.  How do you arrive at an estimate for such a scenario?  Certainty goes out of the window, when team dynamics comes into the picture.  That’s the reason we take people out of the equation and shift the focus on the process. Agile could be the answer? – Agile campus agree that a different approach needs to be taken for design thinking projects and Agile methods like Scrum can complement those projects.

Design thinking process necessarily involves understanding, observing, ideation, prototyping and testing.

The key question is – How do you package the design thinking projects in conventional IT services contracts?  There are various models such as Time & Materials, Fixed Cost, Outcome-based, etc.  Each one has its own flipside as they are suited to solve structured problems with certainty as the key metric.

Remember, compensation structures of sales executives are highly variable, dynamic based on revenue/growth. Unless such variability is introduced into business contracts, there wouldn’t be an incentive for the teams/partners to come up with fantastic ideas applying design thinking solving real business problems.