The battle for to own “digital spaces”
PA Consulting recently gave the Keynote in San Francisco at The Open Group conference on International Enterprise Architecture standards and open connected systems. Professor Mark Skilton spoke about the evolution of digitization as an explosive force of disruptive change across industry with predictions of 50 billion connected objects, while 24/7 multi-media networks are already upon us and the rise of connected supply chains and the Industrial internet. The session provided practical case studies in the emergence of consumer behaviors, instrumented smart assets and company strategies to own the connected products, places and spaces enabled by pervasive digital technologies.
The event was part of a series of new international thought leadership initiatives to develop architecture thinking and the boundaries of new systems practices. PA Consulting are a key founder of a new Work Group in Digital Business and Custom Experience that is leading development of international guidelines on the impact of digital on business models and best practice customer experience and customer journey design. A first white paper is due for publication and subsequent work in 2016 is plan ned to include TOGAF guidelines for digital customer experience design and architecture practices.
We live in an era of unprecedented growth of digital information.
In one digital second in the present time in 2016 we have 32,500 gigabytes of IT traffic per second, 2 million emails per second, 52,000 google searches per second, 7,500 tweets per second and the list is growing 1. This volume of data has grown double digits within the last year and shows no slowing down.
This extraordinary speed is driving new realities in consumerization, socialization and industrialization of business technology that is creating new ecosystem phenomena of clusters of devices, places and experiences we have only really started to understand the value and impact of it’s potential.
Watch the keynote here https://www.youtube.com/watch?v=8mWFjHHYUDQ&t=815s
While economists report the percentage of ecommerce to global GDP is only 8-13%, the impact of digitization has been measured in other ways that point towards a 40-90% annual growth in the
shift towards use of mobile devices, social media in many industries 2. We see predicted growth over the next five years connected industries from $36 billion connected cars, $50 billion smart home market, $200 Billion smart health , $600 billion smart retail and over $1.5 trillion in smart cities and digital payments within the decade 3.
Technology continues to fundamentally change the way we live, work, and exchange information, products and services. It increasingly reflects our culture and value systems of connected systems, rooms, buildings, to social networks, devices and “things”. The effect of “digitization” is changing how value works in the very real personal, social, business and economic sense.
Digitization is driving change through more fine-grained pervasive devices connected by telecoms and local networks and protocols that support more real-time agile data interactions.
The meaning of what is an “enterprise”, “products” and “services” are being recoded by digitization into platforms and channels themselves.
This disintermediates and re-intermediates new ways of thinking about a business and its evolution into a digital business.
Products and objects are becoming “platforms” themselves. They are becoming the “proxy” for experience facilitators and aggregators of content and usage agency.
What does this mean for the design of customer experience and for business operating models is profoundly impactful.
The battle for attention in the “always connected” world
Very little of a typical 24 hour data is transactional, several studies now show that over 50% of a waking day may be using media devices from tablets, mobiles to wearables, not to mention the sensors, webcams, digital payments and travel ticketing that are pervading experiences 4.
The consequence is several “white spaces” of missed opportunities exist that micro-location studies show that more contextual personalized experience will drive higher opt-in click through and conversion rates. This battle for attention time is growing. Increasingly people and objects are always connected to internet or detected by telecom network devices sensors that can “follow” user journeys from home, work, travel and lifestyles. This is moving pervasive computing into a new growth for digital space augmentation and attention seeking.
The “white spaces “ of pervasive and active experience is the data and usage information that digital devices and sensors may collect but is wasted.
New instrumentation and devices are emerging into this “white space” to claim areas of living and lifestyles. From connected rooms, connected transport to connected social and business networks, the very nature of connected experience is changing.
The first movers in the digital land grab
We are seeing early movers working on connected products, connected services and connected experiences. This is disrupting traditional companies and creating new entrants as seen in Google, Apple, Amazon, Facebook, Alibaba, and many others and start-up. Here is some examples but in reality its moving from vertically connected industries and consumerization of digital services to joining up what can be described as connected horizontal products and services as people, businesses and markets become more interconnected.
Connected cars - Companies like Tesla and google are seeking to create new mobile platforms that “own” the connect travel experience
Connected homes – Apple, Amazon, GE, Siemens and many others are seeking to “own” the home platform from entertainment to connected kitchen, bathroom and other living and working spaces
Connected health – Philips, Siemens and others are developing medical wearables and connected medical and health Care systems that enable better care in the community, translating research into practice and the goals of cost effective health.
Connected retail – Amazon, John Lewis, Walmart and many companies are realizing the power of digital connected supply chains and connected consumers driving new efficiencies and online services.
Connected finance – banking, insurance, to trading markets are all being transformed by digital applications, automation, machine intelligence, cryptocurrencies to connected financial payments that radically alter the potential role and value between transactions and execution.
Connected work – utilities, cities, transport, engineering to buildings and public places are potential areas for high connected value and impact by advances in automation, robotics and embedding systems. These create new information and insight into how traditional work can be reimaging and remade in the 21st Century.
It is a battle that has moved from the physical world to the digital work and combining the two as companies seek to “own” these connected spaces to better serve customers, create new innovative experiences and drive new value and growth.
Transforming Leadership in the connected economy
Individuals and companies will need to have the leadership, culture and capabilities to take this forward and be a winner in this new reality. Companies need to understand the shifting risks , cyber security and regulation impact as well as the sheer dynamic effect on operating costs, revenue, workforce and profitability metrics caused by digitization.
Successful transformation is not just technology but a shift in consumer behaviors, privacy and security risk awareness, and contextual thinking to join-up transitional and transformational strategy and results.
“Owning” the physical and digitally connected spaces that create customer experience and journeys involve understanding the diff*erences between utility, agency and adjacency of your product, service or assets in relation other products and service supply chains. This involves vertical and horizontal connectivity to enable and own your value network ecosystem.
The impact on productivity, performance and economics is seeing a shift in physical-virtual systems that drive agile reconfiguration of operating models in the ecosystem. Supply chains, advances in materials & engineering design are changing the boundaries between human-machine and machine-machine interactions.
Whether you are seeking to protect your value or seeking new value from digital capabilities, “going digital” is difficult because it spans all areas of a business and connected experience.
Will you be ready to push and build the transition and capabilities in the connected economy?
Professor Mark Skilton
Feb 2016
San Francisco
References – publicly available.
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OECD Digital Economy
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Allied Market research, Grand view research, Forbes.com, Statista
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Ofcom said UK adults spend an average of eight hours and 41 minutes a day on media devices – estimate 60% daily activity), compared with the average night's sleep of eight hours and 21 minutes- reported in http://www.bbc.co.uk/news/technology-28677674
Ofcom annual communications study 2015
http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr15/