Mobile Consumerism – The Center of Everything

It used to be that we, consumers, would have to figure the best way to deal with organizations from whom we wanted stuff – cars, insurance, clothes, groceries (gather those coupons!), doctors, hospitals, government agencies – but that has changed. The mobile consumer is now firmly in the driver’s seat.

I am a headhunter, and spend my time helping senior executives build teams that need to address a changing world. Most of the change is being driven by technology, and my passion is to get innovative technology leaders to advocate/enable/cajole organizations to transform themselves to meet these new challenges. The other side of what I do is to help build teams that address the new world where consumers are acknowledged to be the center – interacting with organizations that want their business. Please don’t be confused – EVERY organization is becoming a consumer driven, even organizations that think of themselves as B2B.

There is, however, an increasing demarcation. On the one hand – existing organizations are trying to meet the needs of the mobile enabled consumer, i.e. anyone with a smartphone. Let’s call the organizations wanting to serve the mobile enabled consumer “Outside In”, because the consumer is outside, figuring out how to “get in”. Conversely – new organizations are set up to place the consumer at the center, where the consumer decides who s/he wants to deal with, and on what terms (let’s call them “Inside Out”).

No industry is spared this new reality, but some are adapting quicker than others. Those “Outside In” organizations that sell to consumers already are ahead of the pack (e.g., clothing retailers). They are adept at understanding their customers by amassing large amounts of data internally and externally (Big Data) and targeting the consumer individually on his or her mobile device. The retailers who still have a large store presence (the magnet that drew in consumers with coupons in hand) are getting hurt by those who sell on line, mostly via mobile channels (they call it Omnichannel – but mobile increasingly dominates). For an example – compare Sears to Macys/ The retailer that is really dominating is Amazon (an “Inside Out” business) where you can buy anything from your mobile device and have it delivered – wherever and whenever you want it. Who needs a store?

I have a particular interest in Healthcare as I believe technology will impact Healthcare more than any other industry in the next 10 years. Think of wearables, IoT (Internet of Things) data from hospitals/clinics/implants, electronic medical records (that are portable on your iPhone), telehealth (where you can consult a doctor via video conference), individualized healthcare based on your DNA, notifications (to ensure drug adherence) gamification, social media, 3D printing for med devices, and much more; it is truly mind boggling!

There are two basic ways that we, as consumers, can interface with healthcare. The traditional approach of employer provided insurance with the network of doctors and hospitals with whom we do our best to engage (Outside In). There are many variations to this theme, but there is another approach entirely; it is the “Inside Out” or the “Uberization” of healthcare. Uber lets you get a ride on your terms. There are providers/drivers, and when you want a service, Uber connects you with the driver, and also lets you select the quality of the ride (Share, UberX, Uber Limo, etc). You are at the center – and the service/product bids for your business; payment is known and automatic, quality is understood and there are quick feedback loops – open to the next consumer. Another example is AirBNB where similar parallels can be drawn. This “Inside out” trend, where the consumer sits in the middle and makes decisions is starting to happen in healthcare.

There will soon be a proliferation downloadable applications that will enable you to be at the center of your healthcare decision making – where doctors, hospitals, and anyone providing a health/wellness related service will bid for your business based on price and quality. We won’t get there overnight, as there are tremendous forces holding the status quo in place: regulation, reimbursement rules, government incentives, state regulations, sunk investments, tax incentives (why can an employer deduct the cost of healthcare and an individual cannot?), and many more.

The movement is inexorable; consumers with smartphones want to be in control of their lives. They are savvy, connected, inquisitive, and value driven. They don’t want to rely solely on a “system” they don’t understand, and are increasingly placing themselves at the center of things, and choosing with whom they wish to interact. Mobile, Big Data, Analytics, IoT, Social Networks, Secure Cloud-based Storage, an App for Everything – these are the technologies that will dominate the landscape for the next 5 – 10 years.

Mobile Consumerism is affecting every business. Are you an “Inside Out” or “Outside In” organization?

What are you doing? It’s your move!

Reboot IT

This blog is a summary of thought from a CIO group that I have the privilege of moderating. They are the top CIOs in the Bay Area – so this is relevant. Not sure I agree with everything, but it is thought provoking.

Why Reboot IT? There are many reasons – here are a few:

  • Outsourcing is broken. It doesn’t reduce cost much, but does reduce flexibility, innovation and accountability.
  • Integration and customization = huge complexity, and you can’t introduce cool new stuff to meet the business needs because you are in the land of Lilliput.
  • Waterfall methodologies are arcane.  Slow, costly, etc.
  • It’s really hard to measure value.  Conversations around IT are often directed toward cost-saving, whereas they should include deep discussions around revenue generation as well – see my IT Benchmarking blog (published 9/13/13).

So – what’s a CIO to do?

The simple answer is that the IT department must be just like a technology company with products.  The head of development is like the VP Engineering, and should be supported by Product Managers who are responsible for the various offerings (Think as if you are Workday, Salesforce, etc., building commercial products – for internal use).

Technology Choices:

Build with the Cloud in mind, Web scale resilient apps, open source, embrace mobility (the form factor of a PDA screen requires a different development approach to apps delivered on PC and Mac/iPad), build everything scalable, and embrace choice.

How should you run IT?

  • Agile, self-directed project teams of 6 – 12 including product, technical and iteration management and developers.
  • Create product and service lines.
    • E.g., a product could be a CRM platform that would be charged to the business and handled like any other product.
    • Help desk would be a service – measured by cost and value (customer satisfaction).
    • Follow agile and/or scrum-based software development methodology for both custom and off- the-shelf development.
    • Follow product lifecycle – eliminate less used products.

 IT Department – Principals

  • Flat hierarchy: 8 – 15 directs with teams being self-directed.
  • Hire engineers capable of building products for commercial use.
  • Managers should have a combination of skills: leadership, business, and Technical.

What should an IT organization look like?

  1. Shared services group comprising IT:  infrastructure, security.
  2. Office of the CIO: focus on metrics, portfolio management, communication, finance.
  3. IT Operations: Problem, Change, Incident and Release management. First and second level support, NOC, Help Desk.
  4. Product Management. Strong business relationships, understand customer demand and translate into features/initiatives.
  5. IT Development. Services-based platform development of the products tied to capabilities, continuous delivery and deployment, modern tools, develop in-house capability (muscle memory).

What should you measure?

  • In a word – everything, with the objective of tying business capability enabled, to the benefits realized.
  • Build a big data store and capture logs, telemetry, capacity data, metrics, adoption data, incident management data, financials, etc.
  • Build BI on top so decisions are increasingly based on data, e.g., – products should have telemetry and adoption logging so you can see which features are being used and how.
  • Business pays for products and services delivered by IT on a usage/consumption based model. If product is not used, reduce support and then scrap.  This forces IT to be cost and value conscious so it can compete with SaaS products.

IT Benchmarking

Is IT benchmarking total garbage?

IT is often benchmarked – on cost, performance, strategy, all kinds of stuff – but why?  Ostensibly, it is to know where IT stacks up, justify a budget, increase a budget or cut a budget. You can benchmark almost anything. But what underlies the urge to benchmark?  Here are some thoughts on the subject, gleaned largely from the ideas of members of a CIO Forum that I have moderated for the past eight years in the Bay Area.

Business leaders have external pressures – mostly exerted by market forces. They have to deliver a decent product/service at a competitive price or they simply won’t “find” or “keep” customers (see Blog Archive: Driving the Bottom Line posted 5/30/13).  Their feet are regularly toasted at the fire of stiff competition.

When benchmarking comes up at the request of business leaders it is usually their attempt to hold IT’s feet to the fire.  They want a lever that will drive IT, something like the market levers they experience. Benchmarking is an easy sell, and the IT consulting firms play to this by hyping what benchmarking can do.  Well, the truth is, benchmarking will do whatever you want it to do – or whatever the person paying for the benchmarking wants it to do.  No two companies or industries are alike, so you are never going to get apples with apples. Cynical, but reality!  IT shops that are in exactly the same industry, but have different legacy systems, can be at totally different places when it comes to business initiatives.  One can be in SOA heaven, the other in the land of Lilliput – where Gulliver was held down by a million tiny wires.

And what’s more, if you look at IT’s performance/value per dollar invested, it typically far exceeds the value from investments in other parts of the business.  Consider this, does Marketing or Manufacturing have ROIs like IT, or can they cut costs and improve performance like IT?  Not often.  If you have business customers who are demanding a benchmark – there is probably something else going on.

So, before your organization embarks on a pointless, costly, in-fight producing, overly broad or irrelevantly narrow, inaccurate, and immaterial benchmarking activity, take a step back and try to figure out what is really driving the “urge to benchmark”.

The Answer:

  • Figure out what levers you can give your business partners so they feel they have some control. (More on this in a later Blog – Consumerization or “I want” IT is already in the front room).
  • Be more strategic – lead the charge. See Blog Archive: Driving the Bottom Line posted 5/30/13.
  • Report your historic performance.
  • Keep your own benchmarks, so you can trot those out regularly.
  • Be totally transparent.