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Salesforce Takes Apps-First Approach with Einstein AI

Salesforce Takes Apps-First Approach with Einstein AI

Salesforce promises artificial intelligence applications that ‘just work’ out of the box. It’s a contrast to public cloud AI offerings and a lesson learned from Salesforce Wave.

There aren’t enough data scientists in the world to go around, so Salesforce is counting on automation and an apps-centric approach to bring its Einstein artificial intelligence capabilities to the masses.

At last week’s Salesforce Analyst Summit in San Francisco, company executives shared details of the company’s two-plus-year effort to build a highly automated data management and machine learning pipeline to deliver predictions and recommendations at scale. The work started with Exact Target predictive customer journeys, and many (though not all) Salesforce AI acquisitions are being plugged into the same automated pipeline. The system can scale, said company executives, because all data collection, data prep, feature selection, model building, hyper-parameter tuning and scoring is handled automatically.

Salesforce says it spent more than two years developing an automated data management and
machine learning pipeline to drive customer-specific predictions at scale.

This data management and machine learning pipeline is already delivering as many as 300 million predictions/recommendations/scored leads per day, according to Salesforce. It’s the engine behind Sales Cloud Einstein, Service Cloud Einstein and Marketing Cloud Einstein apps that are either already available or due out this year (see chart below). Next out will be Sales Cloud Einstein apps due out with the Salesforce Spring 2017 release in February.

“One of our pilot customers flipped the switch [on Einstein Predictive Lead Scoring] and got a 25 percent lift in sales,” said John Ball, senior VP and general manager of Einstein and a KXEN veteran that Salesforce hired for his experience with automated analytics.

The goal with Einstein apps is to help people focus on what matters. Predictive Lead Scoring, for example, helps salespeople focus on the most promising leads. Opportunity Insights, another Sales Cloud Einstein App due out in February, helps salespeople set next priorities. For those still short of their quotas, that will mean spotting the next deals most likely to close; those who have made their quotas can turn to nurturing their pipelines.

Einstein apps won’t be a fit for every company. For starters, it takes lots of data to drive automated, machine-learning-based predictions. If you are dealing with fewer than 100 leads per month, humans can handle the load and they probably have a good sense of which leads to prioritize. It’s when data volumes are overwhelming that Einstein apps will make sense, said Ball.

That’s not to say that Einstein is geared only to big companies. Data volumes depend on the application. Many small marketing teams, for example, send out millions of emails per month. So Predictive Scoring & Audiences and Automated Send-Time Optimization, two apps coming to the Marketing Cloud this year, might make sense even for small companies, so long as they are marketing at scale.

For now, Salesforce is picking and choosing straightforward Einstein apps that will “just work out of the box,” said Ball. But over time the company plans to get to more sophisticated apps that might require a bit of consulting and business process change to deploy. There are also plans to support custom Einstein apps, but here, too, Salesforce said the capability will be a point-and-click affair for developer types without need of data science talent.

Until more sophisticated apps or custom app capabilities show up, Salesforce offers the ad hoc analysis and recommendation capabilities of Analytics Cloud Einstein Smart Data Discovery, which is powered by BeyondCore, acquired in September.  This separate machine-learning-based engine lets you load and explore data sets from Salesforce, relational databases or Hadoop and answer four questions: What happened? Why did it happen? What will happen? And how can I improve?

The answers to these four questions, which are descriptive, diagnostic, predictive and prescriptive analytics, respectively, are delivered in the form of text-based “stories” that can be exported as Word documents or PowerPoint presentations. You can also generate supporting data visualizations through the Salesforce Analytics Cloud Wave engine.

Smart Data Discovery was designed to let business analyst explore data and investigate measures such as cost, profitability and customer lifetime value. As with other Einstein apps you’ll need sufficient data. Beyondcore veterans say the engine needs at least 10,000 rows of data to spot correlations and patterns and generate reliable predictive and prescriptive recommendations.

My Take on Einstein’s Progress and Competition

Salesforce is taking an apps-first approach in part due to lessons learned from the failed initial launch of the Analytics Cloud in late 2014. As I wrote last year, the first iteration of Wave was too expensive, too enterprise focused and packaged too much like a traditional BI platform. Last year’s reboot emphasized ready-to-run Sales Wave and Service Wave apps designed to work out of the box.

Rather than introducing an “AI Cloud,” as in the original Wave approach, Einstein is a capability that’s built into the Salesforce platform. Wave analytics capabilities are also built into the platform, but the original Analytics Cloud packaging and pricing approach, with platform fees and expensive builder licenses aimed at developers, just didn’t work. With Einstein, Salesforce is starting with the apps and adding custom capabilities for developers later.

The big and crucial question outstanding about Einstein is just how much are these apps going to cost? Salesforce execs are still vague about that, saying that some capabilities will be free while most apps will involve per-user/per-month or per-prediction fees. In the case of Einstein apps that were acquired, notably those from BeyondCore and Demandware (now the Commerce Cloud), pricing is said to be in line with what existing customers were paying.

Looking at competitors, Oracle is also taking a prebuilt apps approach with its Oracle Adaptive Intelligent Applications. Oracle announced six planned Adaptive Intelligent Applications in September and said they would debut within 12 to 18 months. Constellation expects to see at least a few of these apps in the first half of 2017.

Public cloud vendors Amazon and Microsoft have taken services library approaches to AI, leaving it to developers to bring together machine learning, natural language processing, machine vision, sentiment analysis and other services together in finished applications. Templates, sample scripts and other content is available to guide the way, but they’re not ready-to-run applications. We expect Microsoft will do more to bring customer-experience specific services and, perhaps, something closer to finished AI apps into its Dynamics application portfolio.

IBM deserves credit for putting AI back on the map with its Watson Cognitive Computing push over the last five years. It now has a bifurcated strategy with IBM itself going after more sophisticated opportunities while also building out Watson platform cognitive services for a growing developer community.

IBM itself offers cognitive marketing solutions around campaign automation, marketing insights, real-time personalization, customer experience analytics, and customer journey analysis. Meanwhile, Watson developer partners, such as Influential, SocialFlow and Equals 3, offer Watson-powered cognitive marketing solutions. Whether from IBM or independent developers, these solutions are likely to require integration with systems of record. Salesforce, by contrast (and Oracle, when it releases its apps), is delivering ready-to-run AI applications that are extensions of its software-as-a-service applications. If Salesforce is your CRM system of record, Einstein will be the easiest and obvious first choice for adding AI.

Related Reading:
Oracle Vs. Salesforce on AI: What to Expect When
Inside Oracle Adaptive Intelligent Apps
Salesforce Reboots Wave Analytics, Preps IoT Cloud


Media Name: Salesforce Einstein Table II.jpg
Media Name: Salesforce Einstein.jpg
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Blockchain Visionaries and Blockchain Awareness - Critiquing The Critics

Blockchain Visionaries and Blockchain Awareness - Critiquing The Critics

In a Huffington Post blog "Why the Blockchain Still Lacks Mass Understanding" William Mougayar describes the blockchain as "philosophically inclined technology". It's one of his rare instances of understatement. Like most blockchain visionaries, Mougayar massively exaggerates what this thing does, overlooking what it was designed for, and stretching it to irrelevance. If "99% of people still don't understand the blockchain" it's because Mougayar and his kind are part of the problem, not part of the solution.

Let's review. This technology is more than philosophically "inclined". Blockchain was invented by someone who flatly rejected fiat currency, government regulation and financial institutions. Satoshi Nakamoto wanted an electronic cash devoid of central oversight or 'digital reserve banks'. And he/she/they solved what was thought to be an unsolvable problem, with an elaborate and brilliant algorithm that has a network of thousands of computers vote on the order in which transactions appear in a pool. The problem is Double Spend; the solution is have a crowd watch every spend to see that no Bitcoin is spent twice.

But that's all blockchain does. It creates consensus about the order of entries in the ledger. It does not and cannot reach consensus about anything else, not without additional off-chain processes like user registration, permissions management, access control and encryption. Yet these all extras require the sort of central administration that Nakamoto railed against. Nakamoto designed an amazing solution to the Double Spend problem, but nothing else. Nakamoto him/herself said that if you still need third parties in your ledger, then the blockchain loses its benefits.

THAT is what most people misunderstand about blockchain. Appreciate what blockchain was actually for, and you will see that most applications beyond the original anarchic scope for this philosophically single-minded technology simply don't add up.

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Salesforce Has A Platform Vision - Progress Report from Analyst Day

Salesforce Has A Platform Vision - Progress Report from Analyst Day

We had the opportunity to attend the analyst meeting of Salesforce, held January 3rd till 5th nicely located at the Four Seasons in San Francisco. Despite the early time, Salesforce got an impressive range of influencers to the event, even travelling as far as Europe. And it was well worth it, as it was the most comprehensive insight into Salesforce I have experienced in my 3.5+ years covering the vendor.

 

So, take a look at my musings on the event here (pardon for the bad lighting, but I really liked the skyline and you know my face ...):
(if the video doesn’t show up, check here)

 
 
No time to watch – here is the one slide condensation (if the slide doesn’t show up, check here):
 
 
Want to read on? Here you go: Always tough to pick the takeaways – but here are my Top 3:

Platform Focus is CRM – Salesforce has a substantial PaaS business under the Salesforce App Cloud brand name. Like every traditional application vendor, it has the challenge to position itself as apps vs platform overall (this is more platform at the moment per Parker Harris) and add-on / extend PaaS vs all-purpose PaaS. The interesting insight courtesy of Adam Seligman was that now Salesforce sees itself as PaaS around customer, basically for CRM. 

On the IaaS side of the platform (where Salesforce announced its partnership with AWS – read here), Salesforce is on track to run all its products on AWS in Montreal as announced. As Harris shared, the Oracle portion of the stack will also run on AWS (but on Oracle), though not in RAC mode. A very important step for Salesforce to reduce its CAPEX into infrastructure, a key move for data privacy and residency and last but least for performance of the applications. 
 
Salesforce Constellation Research Holger Mueller Enterprise Software Musings
Salesforce co-founder Parker Harris with Bruce Richardson
Meta -Tenancy – A lot of confusion (still) exists around multi-tenancy – but Salesforce was not shy to introduce another tenancy term – Meta-Tenancy. With that Salesforce means the process of de-coupling products, exposing more services and allow an overall more composite (remember mesh?) application architecture. It allows Salesforce to e.g. centralize what the vendor runs under ‘trust’ (Security, Single Sign-On etc.) – all very important given the fact that Salesforce runs on a heterogenous system landscape. And that trend will not slow down, given e.g. that Salesforce acquired vendors at the rate of $4B last year. Moving to a more composite, layered, shared service architecture makes a of sense here. 
 
Salesforce Constellation Research Holger Mueller Enterprise Software Musings
5 Transformers of Enterprise Software per Salesforce
Platform perspective is key for Einstein – The most prominent service of recent time for Salesforce has been and remains Einstein, its AI ambition. So far Salesforce has largely brought together existing offerings, but also shared a roadmap of capabilities coming in the next 12 months related to Einstein. But the vendor understands that there is only a limited number of data scientists, so enabling business users on a platform level will be key. Good to see that understanding, 2017 will be interesting to follow how Salesforce will deliver these capabilities. 
 
Salesforce Constellation Research Holger Mueller Enterprise Software Musings
5 Gentlemen, 6 Clouds
(ltr Blitzer - Sales & Service, Tippets - Marketing, Karkhanis - Analytics, Micucci - Social, Seligman - App)

MyPOV

A good event for Salesforce, good to see the roadmaps for all the different Salesforce products, which were all reasonable, we think attainable and realistic and most importantly deliver value for Salesforce customers. On the differentiation side, we are not so sure if Salesforce has hit the mark, but that would require more detailed product roadmap / plan analysis than a 2 day analyst meeting can deliver. What is clear is that for the first-time Salesforce is offering a strategic path to rid itself of its in-house infrastructure. As founder Parker Harris correctly observed, IaaS was not around when Salesforce was started… but by now it is best practice for a SaaS (and PaaS) provider to be based on an IaaS and leave the heavy lifting (and investing) to the IaaS players. My back of a napkin calculation is that if Salesforce could stop all in-house infrastructure spending immediately, it would be a profitable company… but of course that process will take a few years (if Salesforce really pulls the switch), and I expect Salesforce to invest the infrastructure savings into product capability (as the rest of the industry does). It was also good to see the talent of the Salesforce product bench – we spoke generally with development leaders removed by one or two organization levels from the CEO, many coming from acquired entities and presenting their products in a positive, competent and appealing way. Product talent matter and it is good to see that Salesforce has it.

On the concern side, Salesforce needs to rev up its development speed. As an example, we are seeing Lightning slides and products moving to Lightning now since more than three (?) years. And though Salesforce sits on a massive system, it is probably challenging the record for the lengthiest UX conversion overall, certainly in the CRM industry. But to be fair – these things always take time, and with the competition not delivering superior product either, it is good for Salesforce to focus on platform capabilities, synergies and its internal TCO to operate all of Salesforce applications.

Overall time well spent, the best insight into Salesforce in my analyst career, lots of exciting and value creating capabilities in the bag for 2017. Stay tuned. 
 
Want to learn more? Checkout the Storify collection below (if it doesn’t show up – check here).
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.
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Facebook Video Ads: What’s the ROI?

Facebook Video Ads: What’s the ROI?

With the variety of common products available, often customers want to learn how a product or service works before purchasing. With more and more buyers using mobile devices to shop, 4 out of 5 shoppers say a video showing how a product or service works is important in their decision to purchase or not purchase a product or service. In fact, shoppers report research on mobile devices with visual content helps inform their product selection. As a result, Marketers who use video grow revenue ~49% faster than non-video users. But if a brand is going to use video, understand that shoppers of shoppers expect a consistent set of visual content across desktop and mobile devices.

Where does Facebook come into this equation? Over 100 million hours of video per day are watched on Facebook. (Techcrunch) It is reported that shoppers who view video are 1.81 times more likely to purchase than non-viewers and more than half of the marketing professionals worldwide name video as the type of content with the best ROI.

With over 1.5 billion users, ~1 billion users visit Facebook on their mobile device, so brands considering must think mobile first. What sets Facebook apart from its competitors is its unique ability to harvest vast amounts of customer information to create custom audiences, generate leads and build brands. The advantage is that it’s all within a platform that is already known for its engagement opportunity.

Facebook also  rewards advertisers for shares with cheaper views, cheaper clicks, and more impressions. This combination leads to an overall better ROI. The net-net is that retailers & brands should be seriously considering video advertising because advertisers cite a 40 percent increase in purchases as a result of video – specifically in the categories of apparel, home goods, and electronics.

While there seem to be many advantages, some businesses are holding back on video advertising because they feel video is too hard to make, or doesn’t produce conversions the way other ads do. But video content does not need to be difficult to create. There are vendors that make it easy, like Animoto. And attribution to video ads is easier often than TV ads because of the digital footprint.

Brands should also use the analytics Facebook provides and make sure to not waste budget by not segmenting your audience. Segmenting audiences can be done by looking at jobs, life events, relationship status, purchasing behaviors and additional segmenting can be done beyond this, for example geo-location targeting. Without segmenting an audience, marketing risk wasting their ad budget on the wrong audience and not generate the conversions expected.

In addition, as in any advertising, it’s important to include a call-to-action. A call-to-action can be as simple as Book Now for travel, Learn More for addition features on a product, Contact us for more information or Shop Now to be taken to the actual online store or landing page or a click-to-call button. But be careful – a call-to-action without engagement can result in consumers feeling “pushed” vs “pulled” into taking action. Include special offers and time sensitive, last minute deal to motivate consumer to come to a store, call or click.

If Marketers use a click to call button, make sure the contact center is ready to take the calls and knows what the special offers are. Consumers seem to prefer to call than fill out a web form and call convert to revenue 10X more than web leads. That is only true if there is someone at the other end of the phone to take the call intelligently. This means Marketers must ensure the ad copy and landing pages are optimized to drive calls and that they can attribute calls and the outcome to the right ad campaign so you can do more of the right thing and optimize the video marketing.

Dr. Natalie Petouhoff, VP and Principal Analyst, Constellation Research

Covering Customer Facing Applications

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The IoT Market in 2017 – Identifying changes in the role of the Buyer and the Implementer resulting in changes in Propositions, Sales and Marketing

The IoT Market in 2017 – Identifying changes in the role of the Buyer and the Implementer resulting in changes in Propositions, Sales and Marketing

When briefing Analysts Microsoft illustrate their potential IoT market with a slide showing four major Industry sectors with up to fifteen different Line of Business Management roles in each. Every role is regarded as an actual, or potential, buyer of IoT solutions. Whilst this is undoubtedly true, for reasons covered later, it does imply having to be able to position and sell fifteen different IoT business solutions in any single Enterprise.

This may sound impossible yet almost identical slides have been shown in the past to illustrate how all roles across the Enterprise could benefit from Enterprise eMail adoption. Then some years later it become Internet /Web connectivity and functionality. In both cases, as with IoT, the initial argument for adoption was difficult due to a lack of individual benefit cases.

Think of it in terms of the difficult to sell early phones when numbers of connections were limited. In time Enterprises could not participate in business markets with out their employees having access to a phone. A similar path was followed with Internet connectivity and web adoption.

Traditional Enterprise business cases require a specific activity to be improved and see no specific Enterprise wide technology based capability adoption, such as email or Web connectivity as an increase in overheads. Recent history shows that adoption time frames are shortening for each technology wave. Though initially slow, the trigger point to Enterprise Business capability transformation is occurring sooner, and then the period to widespread adoption is very short.

The relentless spread in the number of Internet connected Devices capable of providing Business Intelligence renders it inevitably that every Enterprise will ultimately be driven to adopting IoT as a necessity to remain in business.

The current phase of selecting individual business deployments focused on a specific issue are merely commercially justifiable starting point for gaining experience. However at Enterprise Management level there should be involvement to ensure that these early individual Line of Business Managers deployment decisions will not become medium term issues due to a lack of strategic foresight.  

There is strong evidence from numerous sources, ranging from Social Sources to larger scale surveys that the cohesive management of IoT projects across the Enterprise has already become an issue.  A good example of a detailed report comes from the magazine Computing survey in May 2016 whose sample of responses of those who had carried out IoT projects was across multiple Industry sectors, and Enterprise sizes.

The following are two key points abstracted from the published report, but there are many significant direct quotes providing valuable insights that make reading the full report desirable.

To the question of the background of an IoT Project leader being better to be from IT Strategy (linked to Business strategy), or Data Analytics and Development, the split was respectively 53% for IT/Business Strategy versus 39% for the more Technology based skills. The remaining 8% rejected both options, or were undecided.

A similar question relating to a desirable background for the Project Leader being either Business, or Technology management produced a total lack of consensus! The respective split being 36% to Business versus 33% to Technology, but with an astonishing 31% feeling unable to answer the question!

Whilst those delivering an IoT project may not be totally reflective of those who are the initiators, or buyers, a reasonable conclusion is that there is a remarkable diversity in where, and for what, IoT is being deployed. For IoT vendors this is a huge challenge to the traditional sales process built on marketable ‘propositions’ directly aligned to readily identifiable Business Buyers and their requirements.

If the evidence is correct then it would seem that a shift from IT driven issues to IoT Line of Business buyers could turn the accepted IT sales process around case studies and outcomes on its head!

In the traditional Enterprise Application sales process the expectation is that the IT vendor better understands the balance between best business practice and most effective technology implication. This is particularly true in ERP where, over two decades implementation, the purchase moved from heavy customization of the ERP Applications in order to fit an Enterprises current practices; To the Enterprise adopting industry sector best practice as defined in the ERP Application and modifying their own procedures to make the alignment.

A core element in the role of IT has been to assist the Enterprise to centralization and standardize to reduce cost, yet Digital Business models all stress a reversal of this move towards various degrees of de-centralization to access more opportunities in the market. The philosophy to capture more of the Long Tail is to improve revenue creation by the use Digital Technology. Continuous innovation is stressed as a necessity, and emphasis is laid on the ‘Intrapreneurship’ of Line of Business managers.

For those new to the term the shortest definition of an Intrepreneur from Dictionary.com states; ‘an employee of a large corporation who is given freedom and financial support to create new products, services, systems, etc., and does not have to follow the corporation's usual routines or protocols’. There is an increasing amount of discussion on the topic including a useful article in Forbes defining the four essential qualities of an Intrapreneur.

The facts seem to point towards a link between the diversity of IoT buyers and deployments and innovative Digital Business initiatives. Line of Business managers are individually innovating around their deep personal experience to introduce competitively differentiated outcomes. If this is truly the case then the well developed IT sales methodology of packaging and selling complete solutions supported by case studies looks unworkable, as it would require the development of too many small solution offers.

 It will require either the market to mature around a contained number of Business requirements, or a different approach.

So what could be an alternative? Inbuilt into the traditional sales offerings is a reduction in the risk of adoption, both for the buyer and seller, through implementing a known solution. In an IoT deployment the risk factor becomes higher as the new technology is still in the early adopter phase, offerings that reduce risk will always be popular.  The ever-growing move towards using ‘Services’ certainly reduces the buyer’s risk. Conversely it increases the pressure on the vendor to determine flexible enough Service packages to ensure enough sales revenues to cover their commercial investment in building and operating Services.

Both vendor and buyer need common IoT solution frameworks that support standard architecture elements onto which individual unique and innovative requirements can be readily mapped. This is not ‘news’ to the IT vendors who are already introducing ‘templates’; unsurprisingly these are largely based on the IT business solution principle.

Is there a case for a bolder move that will accept that the Digital Economy built on IoT, Clouds, and soon including AI, calls for a different approach? If so what could the basic architecture propositions be based upon?

At the most basic level there are four readily identifiable business activities where IoT can add value by increasing the data available. In no particular order;

                                  People in relationship to their Activities; Service Engineers, Merchandisers, Sales and similar Activities.

Machines monitoring their operations for reliability, operating efficiencies, etc.

Process to gain near real time data to optimize and improve further process steps

Ecosystems for the interconnection of any and all of the above in Smart Services.

Using these four definitions it is noticeable that a high number of IoT market success reports f are grouped around these headings; Salesforce concentrates on People; GE on Machines; SAP on Process but who is the leader in the final category of Ecosystems? Microsoft, AWS and Google could all claim their presence in this sector. But is it really that simple?

Careful analytics of the reported wins suggests that either focus, or volume succeeds; The People, Machines and Process category case studies all show the in depth focus and inherent knowledge of the vendor in the Business activity.

Summary;

There are two distinct different markets with different Buyers, whose projects are different, and whose selection of a supplier and solution is therefore equally distinctly different. Vendors will need to make a substantial effort to identify and verify exact where their products and in house skills will serve them best.

Line of Business Managers require a Vendor with strong sector specialism/experience to act as a partner in developing an innovative idea.  Engagements may be driven by revenue creation activities in respect of the Digital Economy and Smart Services, or internal Operational Improvement, though in Utilities as an example, this is likely to mean external deployments. A strong factor will be the ability to provide ‘the final mile’ sensors/sensing and connectivity element, once again favoring the specialized vendor.

Individual Projects may be small, but the decision making, budgetary approval cycles will be fast, with an expected high business value outcome.

Initial engagements should form the basis for an ongoing team partnership with the development of methods and architecture that could form the basis for becoming an Enterprise level partnership embracing other Line of Business Managers.

IT Managers expect their existing IT Vendors, particular their Cloud Services providers, to be able to demonstrate how IoT will be an extension of the existing Enterprise IT strategy. The IT driven project is likely to be driven from the perspective of ‘Big Data’ and ‘Analytics’ with in-house IT expertise in these areas playing an important role. An existing Cloud Partner offering ‘template’ solutions, and able to introduce preferred partners for ‘the Final Mile’, or for integration, is the ideal.

Projects will have full Enterprise support and will go through the traditional sales/buying cycle required for this level of significant investment using cost justification as the major factor.

Cloud based partnerships are driven by cost and Service levels, but IoT brings a new set of dynamics to the existing IT use, and charging models, of Clouds. Both sellers and buyers will need to carefully their on going commercial relationship.

Enterprise Hybrid Adoption Models combining both types are the most likely outcome as the boundaries between both fluctuate in different sectors and Enterprise cultures. However both sellers and buyers will need to make clear decisions on exactly where, and how, they intend to develop in the 2017 IoT market, or they are likely to end the year with conflicting outcomes and a poor enterprise level success.

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The More Digital We Become, The More Human Partnerships We Need

The More Digital We Become, The More Human Partnerships We Need

1

I’m preparing for the 50th Hawai’i International Conference on Systems Sciences and have taken the title of my contribution in a workshop there as the title for this post. As individuals, we need to “race with the machines.” However, at the organizational level, we need to create human partnerships as scaffolds for our broader digital relationships.

Greater Ties Across Organizations

For example, from my university perspective, I’m looking for tighter ties across universities, organizations, professional accreditation bodies, and job platforms. Hospitals may be looking for tighter ties across data repositories, governmental agencies, and search engine providers (great article about the rise and fall of Google Flu Trends). Digital connections will enable much of the trust and communication of these partnerships, but I’m left with these questions to pose to my colleagues at the conference:

  • Do the founding human partnerships evolve into digital platforms?
  • If so, how do we maintain needed agility in those platforms?
  • These relationships seem to be more than liaison or advisory roles -- but what are they?

New Roles and Relationships?

More broadly, and clearly from my particular perspective, our companies and universities need to create stronger partnerships to support the increased pace of change afforded by a more digital world. Quarterly meetings of advisory boards, using an example of academic programs, may not be enough. For universities to effectively, agilely, serve students and the organizations that employ university graduates, we may need new roles and relationships as I note above.

The participants of this HICSS workshop perhaps understand the digital/human connection better than most. Membership in ISSIP is a common connection for many of us in the workshop. ISSIP, The International Society of Service Innovation Professionals (pronounced iZip) is a professional association co-founded by IBM, Cisco, HP, and several Universities with a mission “to promote Service Innovation for our interconnected world.” We come together in ISSIP, and in this workshop, to take on complicated questions and then offer our home organizations suggestions supported by our combined research and experience.

Data on Digital Transformation

I’m expecting to see unique data on how our environments are becoming more digitally enabled and look forward to sharing it after the workshop. For example, Paul Mugge, Executive Director of the Center for Innovation Management Studies at North Carolina State University, will present results from their on-going research on how to accelerate the process of repositioning and reshaping organizations. (You are invited to participate in their research here.)

We may also hear how digital transformation is affecting jobs. We’ve seen that the only US job growth is in non-routine work (see image below). This points to the need for individual and organizational agility as we work to fine tune opportunities across education and work experience.

New Partnerships

But what I hope for most from this experienced, well-connected set of colleagues, is the creation of new human partnerships that will help our universities, businesses, and communities. These human partnerships, I expect, provide the agility we need for our organizations to execute on their goals in a more digital, nonroutine, world.

Please share examples of the partnerships you're seeing and/or participating in -- there is a Comment button below the figure. How are these partnerships deeper given specific digital shifts your organizations are making? 

 

 

Future of Work Chief Executive Officer

Davos17: Dynamic Leadership; A Responsive And Responsible Approach

Davos17: Dynamic Leadership; A Responsive And Responsible Approach

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Today's Leadership Models Fail To Address Responsive And Responsible Leadership

The World Economic Forum kicks off January 17th to 20th in Davos-Klosters, Switzerland. As the global theme for the annual meeting, responsive and responsible leadership begins a lofty conversation about the qualities required to bring generations together, create inclusiveness in growth opportunities, and to bridge cultural and economic divides. With the global system challenged by a confluence of political, economic, societal, technological, environmental, and legislative forces, executives seek leadership models that reflect this responsive and responsible paradigm. Moreover, the impact of technologies such as artificial intelligence and robotics on the future of work plays a key driving factor in the development of policies that address humanity in a digital age.

This macro pressure at the global scale impacts the business world from many fronts. In fact, the digital disruption organizations face from non-traditional competitors, emerging technologies, and new disruptive business models requires a different type of leadership to manage the pace of change required not only for survival, but also for cultural agility. Past models of leadership play a key role, yet the continual over and under emphasis of one type of leadership design and style no longer is relevant for the challenges ahead.

Dynamic Leadership Provides A Responsive And Responsible Framework For A World Of Digital Transformation

One solution is a dynamic leadership approach. By identifying the immutable core traits and modulating the balance in foundational attributes of leadership, executives can achieve a contextually right time approach. Immutable core traits must be mastered and cannot be neglected. Foundational attributes require more finesse and self-awareness of contextual relevance in balancing out responsive and responsible traits. This dynamic style of leadership allows a framework to balance out traits as needed to achieve the mission, goals, and objectives over a defined period of time.

Five Immutable Core Traits Never Change For Great Leaders

Integrity, inspiration, inclusiveness, authenticity, and transparency form the five immutable core traits of leadership. These immutable traits do not change with time or the business trends at hand. Great leaders hone and refine these traits as part of their development and incorporate these traits into their DNA (see Figure 1.)

Figure 1. Five Immutable Core Traits Never Change For Great Leaders

  1. Integrity. Leaders must have strong moral principles, demonstrate honesty, and uphold honor.
  2. Inspiration. Leaders must stimulate and draw folks towards ideas, concepts, and actions.
  3. Inclusiveness. Leaders must bring people together from different backgrounds and points of view to create equal opportunities.
  4. Authenticity. Leaders must reflect a genuineness in who they are and what they stand for.
  5. Transparency. Leaders must be accountable and provide clarity on decisions and actions

Seven Dimensions In The Art Of Leadership Require A Balance Of Fourteen Attributes

The art of leadership requires the balance and mastery of fourteen foundational attributes. Each of these 14 attributes on their own have often been used to simplify and describe traits of a great leader. For example, great generals have been known to be demanding. Leaders of freedom movements have been shown to be principled. However, other great leaders have won over folks by their compassion or have been known to be quite adaptive. As evident, this one dimensional approach to leadership often leads to imbalanced description of what it takes to succeed at that point of time and does not reflect the reality of the current or future environment. A more balanced or Yin-Yang approach segments attributes into responsible and responsive dimensions that consider decision making, demeanor, goals and objectives, policy and actions, motivational approach, performance expectations, and execution style. Responsible attributes include principled, focused, accountable, decisive, composed, demanding, and collectivism. Meanwhile, the responsive attributes include adaptive, aware, empathetic, pensive passionate, compassionate, and individualism. By taking a dynamic leadership approach, leaders can account for a more complex reality and attenuate an attribute as needed. These 7 dimensions of leadership include (see Figure 2.):

Figure 2. The Art of Leadership Requires Balancing Fourteen Attributes In Seven Dimensions

  1. Decision making. In the Decisive versus Pensive decision making process, are rapid and clear decisions more valued than a thoughtful methodology to decision making?
  2. Demeanor. For Composed versus Passionate demeanor, would a composed presence outweigh a passionate emotional manner?
  3. Goals and objectives. When thinking about Collective versus Individual goals and objectives, should a leader think about the larger group instead of the individual self-interest
  4. Policy and actions. In Principled versus Adaptive policy and actions, should leaders be lauded for staying the course or knowing when to make a shift?
  5. Motivational approach. Does a Demanding versus Compassionate motivational approach require leaders to push hard for more or will reaching out with more compassion result in better esprit de corps?
  6. Performance expectations. In Accountable versus Empathetic performance expectations, is a broad based policy and results driven style more important than a personalized approach to achievement?
  7. Execution style. In Focused versus Opportunistic Execution strategy, should we emphasize laser focus on a task or sentient situational awareness?

The Bottom Line: Digital Transformation Requires Dynamic Leadership For Success

As leaders converge at Davos, the call for responsive and responsible leadership will require a new way to approach the timeless topic of leadership. Instead of taking a classical binary or rigid approach, consider the 5 core traits and develop a balance of 14 foundational attributes as a guide to successful and sustainable dynamic leadership (see Figure 3). Success at the leadership level will translate into much broader organizational values and capabilities.

Figure 3. Why Digital Transformation Requires A Dynamic Leadership Model

Your POV.

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A critique of Privacy by Design

A critique of Privacy by Design

Or Reorientating how engineers think about privacy.

This blog is extracted from my chapter Blending the practices of Privacy and Information Security to navigate Contemporary Data Protection Challenges in the forthcoming book "Trans-Atlantic Data Privacy Relations as a Challenge for Democracy", Kloza & Svantesson (editors).

One of the leading efforts to inculcate privacy into engineering practice has been the "Privacy by Design" movement, or "PbD". It's a set of guidelines developed in the 1990s by the then privacy commissioner of Ontario, Ann Cavoukian. The movement seeks to embed privacy "into the design specifications of technologies, business practices, and physical infrastructures". PbD is basically the same good idea as build in security, or build in quality, because retrofitting these things too late in the design lifecycle leads to higher costs* and compromised, sub-optimal outcomes.

Privacy by Design attempts to orientate technologists to privacy with a set of simple callings:

  1. Proactive not Reactive; Preventative not Remedial
  2. Privacy as the Default Setting
  3. Privacy Embedded into Design
  4. Full Functionality - Positive-Sum, not Zero-Sum
  5. End-to-End Security - Full Lifecycle Protection
  6. Visibility and Transparency - Keep it Open
  7. Respect for User Privacy - Keep it User-Centric.

PbD is a well-meaning effort, and yet its language comes from a culture quite different from engineering. PbD's maxims rework classic privacy principles without providing much that's tangible to working systems designers. The first three principles are common generalisations. No. 5 and no. 6 simply reword standard privacy principles of security and openness.  User centricity (No. 7) is problematic in the era of Big Data and the Internet of Things, where the vast majority of Personal Information is collected or synthesised behind our backs, beyond our control. "User centric" is hollow as a call to action.

PbD principle no. 4 exemplifies the most problematic aspect of Privacy by Design -- its idealism. Politically, PbD is partly a response to the cynicism of national security zealots and the like who tend to see privacy as quaint or threatening. Infamously, NSA security consultant Ed Giorgio was quoted in "The New Yorker" of 21 January 2008 as saying "privacy and security are a zero-sum game". Of course most privacy advocates (including me) find that proposition truly chilling. Privacy should not be traded mindlessly for security.  And yet PbD's response is frankly just too cute with its slogan that privacy is a "positive sum game".

The truth is privacy is full of contradictions and competing interests, and we ought not sugar coat it. For starters, the Collection Limitation principle - which I take to be the cornerstone of privacy - can contradict the security or legal instinct to always retain as much data as possible, in case it proves useful one day. Disclosure Limitation can conflict with usability, because Personal Information may become siloed for privacy's sake and less freely available to other applications. And above all, Use Limitation can restrict the revenue opportunities that digital entrepreneurs might otherwise see in all the raw material they are privileged to have gathered.

Now, by highlighting these tensions, I do not for a moment suggest that arbitrary interests should override privacy. But I do say it is naive to flatly assert that privacy can be maximised along with any other system objective. It is better that IT designers be made aware of the many trade-offs that privacy can entail, and that they be equipped to deal with real world compromises implied by privacy just as they do with other design requirements. For this is what engineering is all about: resolving conflicting requirements in real world systems.

So a more sophisticated approach than "Privacy by Design" is privacy engineering in which privacy can take its place within information systems design alongside all the other practical considerations that IT professionals weigh up everyday, including usability, security, efficiency, profitability, and cost.

See also my "Getting Started Guide: Privacy Engineering" from Constellation Research.

*Footnote

Not unrelatedly, I wonder if we should re-examine the claim that retrofitting privacy, security and/or quality after a system has been designed and realised leads to greater cost! Cold hard experience might suggest otherwise. Clearly, a great many organisations persist with bolting on these sorts of features late in the day -- or else advocates wouldn't have to keep telling them not to. And the Minimum Viable Product movement is almost a license to defer quality and other non-essential considerations. All businesses are cost conscious, right? So averaged across a great many projects over the long term, could it be that businesses have in fact settled on the most cost effective timing of security engineering, and it's not as politically correct as we'd like?!

Q3 2016 NextGen Apps Developments & Trends Shootout

Q3 2016 NextGen Apps Developments & Trends Shootout

By now you know the idea... Check out the Q1 (here) and Q2 (here) shootouts on Next Generation Applications. These quarters were won by Microsoft with Conversation as a Platform and Pivotal / Cloud Foundry.  


 
 

 
In case you wonder about the methodology - check out the above links, too - no need to repeat here.
 
And here is Q3 2016 - all related to NextGen Apps - the research area that covers when enterprises build new software - what are the use cases, the tools, the platforms, the players, the best practises etc. 
 
 
 
 
 
 
[Apologies - time to market forced me to play the bracket right to left.]
 

Round #1 Dropouts

 
  • Unit4 Business Prevero - 2016 was the year of predictive analytics morphing into Machine Learning, and for the aggressive messaging makers of the industry, into artificial intelligence. Unit4 did not miss out with the acquisition of prevero, strengthening the vendors BI and CPM capabilities (read here). But not a match to Dell's acquisition of EMC (read here).
       
  • AWS Enterprise Summit Frankfurt - AWS continues its progress around the world, and while interest and projects are high, in more conservative locations, like Frankfurt in Germany, enterprises were not comfortable to share their plans, status, projects on a keynote stage (more here). Box's move to AWS / the public cloud garnered more CxO attention and goes on (read here).
     
  • GE & Microsoft - It was also the year in which pretty all SaaS properties choose their IaaS partners. GE chose Azure in July, a good move by all vendors (read here). But compared to the massive announcement and progress of Oracle OpenWorld - not a fair match (read here).
     
  • Pivotal SpringOne - The Spring network gains more popularity again, never count anyone out in application development, certainly fostered also by the popularity of CloudFoundry (our Q2 winner - read here). Interesting to see what enterprises are building on SpringOne (read here). But compared to the many announcements and developments of the Microsoft Ignite conference not a match (read here).
     

Round #2 Dropouts

 
  • Box BoxWorks - BoxWorks was an impressive event - both from a Nextgen Apps perspective and Future of Work (see Q3 on Future of Work coming soon) - announcing new capabilities across the board (read here). But compared to the news of Dell Technology, the closure of the Dell / EMC deal not a close match (read here).
     
  • Microsoft Ignite - Ignite was a good event for Microsoft, where the vendor showed progress and made announcements across the board, in my view the FPGA Azure architecture stood out (read here). But compared to Oracle OpenWorld, where e.g. CTO Ellison announced nothing less than 18 substantial announcements, read here.
  

 

Q3 Finals - Oracle OpenWorld beats Dell Technology

Two key events for enterprise software, next generation applications in Q3 of 2016, with massive consequences for enterprises... more than 2/3 of enterprises have some sort of Dell / Oracle product / services in place. But while Dell merits kudos for the courage or the largest IT transaction ever (read here), the road forward is much less clear than for similar categorized vendor Oracle. Oracle is more advanced in its formulation of its future than Dell at the moment, and the massive R&D push coming our of the Redwood Shores headquartered company is impressive (read here). 
 
So congrats to Oracle to win the Q3 2016 next generation applications shootout. 
 
How would you have scored the Q3 2016 news? Please comment!
  
 
Here are all blog posts:
 
  • News Analysis - Unit4 acquires prevero; gets more strategic and intelligent - read here.
  • Event report - AWS Enterprise Summit 2016 Frankfurt - The German Road to Cloud adoption is ... long - read here.
  • News Analysis - GE and Microsoft partner to bring Predix to Azure - Multi-Cloud becomes tangible for IoT - read here.
  • Event Report - Cloud Foundry Summit Europe - Europe & Cloud - A long path - read here.
  • Event Report - Box BoxWorks - Box is on the run - now with a platform - read here.
  • First Take - Microsoft Ignite - AI, Adobe and FPGA [From the Fences] read here.
  • Market Move - Dell Technologies is here - 3 scenarios and a bonus perspective - read here.
  • First Take - Early Oracle OpenWorld 2016 Keynotes - read here.
 

 

 

Other Shootouts for 2016:
  • Q1 2016 Future of Work Developments & Trends Shootout - read here.
  • Q1 2016 NextGen Apps Development & Trends Shootout - read here.
  • Q2 2016 Future of Work Development & Trends Shootout - read here.
  • Q2 2016 NextGen Apps Developments & Trends Shootout - read here.
 
Find more coverage on the Constellation Research website here and checkout my magazine on Flipboard and my YouTube channel here.
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Final 2016 Editor's Picks: Hit 2017 at a Sprint

Final 2016 Editor's Picks: Hit 2017 at a Sprint

 

2016 is the year of M&A not to mention disruptive technology developments and forays into this brave new world of AI, robotics, machine learning, virtual reality, blockchain technology, IoT, and significant digital transformation. You can explore our Constellation Insights to see the big stories that we covered in 2016 or to get set for 2017.

This is our final installment on 2016 editor's reading picks for leaders who want quick answers on what to expect next or even a couple gold nuggets from the year. Also, here's an interesting roundup of the 10 Best Books of 2016, especially #6 with The Industries of the Future, which likely touches on Constellation Research's predictions. 

Byte-Sized Analyses

What's New?

Constellation ShortList Pick: Constellation ShortList™ Digital Experience (DX) Integrated Platforms - R "Ray" Wang
New Research Pick: Recommendations for Successful Digital Transformation in 2017 - R "Ray" Wang

Finally, check out our 2017 CEN Member Chat Schedule led by our founder, Ray, who'll set the stage on big trends and the great expectations of 2017 on January 10th from 10-10:30am PT. If you're not yet a CEN Member but would like to join us, email [email protected].

Constellation Executive Network

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