At Momentum 2015 and EMC World, Jeremy Burton discussed the ‘Information Generation’, Rohit Ghai talked about the ‘Digital Enterprise’, and Joe Tucci explained the characteristics of the ‘Digital Era’—the same concepts from different perspectives. Clearly there is a pattern forming on the horizon.
In the halls of the Venetian, I had the pleasure of discussing these concepts with many customers and EMC’ers alike. Many thought these concepts applied only to the likes of Amazon and Google. Many were intrigued but had more pressing immediate concerns with which to deal. Some were interested in understanding the critical criteria for IT and business transformation.
For some organizations, like Google, and Amazon it is extraordinarily easy to see their place in the digital economy. For others, (until the likes of Uber) nobody would have ever considered the Taxi industry to be a digital candidate. In all cases, these entrants completely disrupted a very analog world: advertising, retailing, and taxis. The question then must be asked, “What else is lurking out there?” and how does that impact me.
I would assert that the transformation to the digital economy is not a defensive move. It’s about grabbing hold of one of the most compelling shifts in global economics and staking a claim. The shift to the digital economy is less about mobile UIs, and advanced analytics (although these are critical and will be discussed below). It is all about shifting from a world of ‘realized value’ to a culture of ‘perceived value’. We live in a world where the cost of most goods can be reasonably estimated by multiplying their weight (in pounds) by $80-$100. That 4,000 pound car ($35,000) you drove to work today has the same approximate price per pound as the 5 pound laptop ($500) on which you are reading this blog entry.
With such a commoditized world, differentiation therefore comes from one’s perception of the item desired. Yes, the physical elements of business are critically important, but customers can get ‘good enough’ everywhere they turn. They are paying for that which they want as opposed to that which they need. This is the essence of the digital economy and it is critical for every business in the world.
- Google disrupted advertising by delivering perceived value around ‘eliminating information overload’.
- Amazon disrupted retail by delivering perceived value around ‘comparison shopping’.
- Uber disrupted the taxi industry by delivering perceived value around getting a ride quickly.
What element of your business carries the highest degree of perceived value and how can your business enhance that to its fullest?
Now that you have started to focus on the perceived side of the equation, the natural question arises: how do I take full advantage of this new wisdom? What are the key elements of a successful digital business?
Digital businesses reduce all obstacles between the users (notice I did not say customers) and their organization. This is why Mobile, and On-line user interfaces have such importance in this new world. The analog world by virtue of the environment placed people and things between the organization and the people that used their goods and services—bank tellers, insurance agents, call center operators. This was necessary to translate analog inputs into structured information that could be shared. A digital world does not require these interpreters.
Digital businesses optimize their operations to fully support these direct interactions. The systems from the analog world that were designed to support work groups (sales, accounting, marketing, human resources) are no longer sufficient in a world that thrives on personal interaction with their end users. Operational excellence is a critical foundation for success—but in the digital world, the business processes are much, much shorter. Yes, the same technologies that support operations today (such as Documentum, Captiva, and Document Sciences) are a critical component of the digital economy—just applied a bit differently.
Let me use a banking example, as most people are familiar with the changes going on there—in the analog world, banking transactions were split between Withdrawals, Checking transactions, and Savings transactions. One would dutifully fill out one of the 3 forms in the bank and the teller would interpret the requirements from that form and execute the proper activities. In the digital age, there are MANY more options of a much finer granularity—deposit cash to checking, deposit cash to savings, deposit a 3rd party check, transfer money from one account to another, transfer money to someone else. And without anyone to interpret your desires the process has to anticipate the exceptions and handle them. This is operational excellence, and for the most part it means rethinking your company’s processes to make them much more fine-tuned.
Digital businesses understand their end-users intimately. Not just today, but tomorrow and the next. This is where advanced and predictive analytics come to play. Hadoop is providing an unheard of ability to crunch massive amounts of data. To what purpose though—clearly, to exploit the equation of perceived value discussed previously. Advanced analytics drawing demographic and transactional information together (compliantly provided by InfoArchive), provides the raw material that data scientists need to ascertain the key patterns of behavior today and predict behaviors tomorrow.
It’s an exciting world and we should expect massive changes on the horizon. We haven’t even finished round 1. As the bell weathers of analog economy start to shift focus from real value to perceived value and rethink their operations—they have a huge natural advantage over upstarts. Namely they have massive amounts of the most valuable information around—years of transactional data to rely on.
To conclude, there are no right answers, just different perspectives. This is a conversation. Join us! Join the Documentum family in progressing the conversation. Tell me I am wrong, tell me I am partially right, let’s discuss.
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