Demand – it is a fickle beast

pending

Guy Courtin was formerly Vice President and Principal Analyst at Constellation Research covering Matrix Commerce and how the Internet of Things drives the evolution of commerce.  Guy has over 15 years experience in the technology space and specifically in the supply chain space. Most recently he was the Vice President of Research at SCM World. Where he focused on the service providers that empowered supply chains. Prior to SCM World, Guy held numerous senior positions. He was responsible for product marketing at RSi, a retail supply chain solution provider. There managed RSi’s go to market strategy around their leading cloud based supply chain solutions. He also spear headed Progress Software’s supply chain group. Where he was responsible for driving revenue and market share as well…...

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Understanding customer taste and their buying patterns remains a tricky exercise. The story of L.L. Bean and their snow boots is a great example of how challenging it is to accurately predict demand. The Maine clothing and outdoor company is already sold out of their iconic boot. According to the Yahoo report, click here, there is already a 100,000 name long waiting list for the boot. Wow. Talk about a good problem to have, well maybe.

L.L. Bean cannot just ramp up their manufacturing, well in the long run they might be able to, but not fast enough to meet this pent up demand. Based on their meticulous manufacturing process, it takes half a year to train someone to manufacture the product, you cannot just bring on seasonal labor or outsource to a contract manufacturer to bolster your assembly line. So what should L.L. Bean do? It isn’t as if these shoes are a new product that vastly exceeded the expected demand. These shoes have been around, for what seems…forever.

No…you can’t wear this LL Bean boot

Their popularity is clearly back. I remember my classmates wearing these when I was in high school…and that was a long time ago. I never looked at them as a trendy item, not like what UGGs did or other brands. But clearly the product has regained popularity with the “younger people.” Meaning it is appealing to the 15 – 23 year old segment where trends can truly go viral. When you do a Google search for “L.L. Bean boots” you get sub searches “women,” “men,” “frat,” and “preppy.” Clearly it has mass appeal for the kids!

Should L.L. Bean have had better demand sensing? Could they have anticipated this upswing in orders months ago? Granted, based on the lead time they need with regards to adding manufacturing capacity, it might not have mattered. And how should they monitor this demand moving forward? Will there be this level of demand next winter? Or will some other brand become the cool footwear on campus next winter? This is one area of Matrix Commerce that calls for a high degree of digital sophistication as well as some good old fashion intuition.

Clearly this season is over capacity and there is very little L.L. Bean can do to accelerate the production. Moving forward, L.L. Bean needs to apply some savvy digital monitoring to better gauge the demand for 2015 and beyond. For example – what is the reaction of the shoes? Are they trending on social channels? How are they being discussed on social channels? Are the returns on pace with historic returns? Or are there more or less? L.L. Bean should monitor the fake and knock off products – imitation is the sincerest form of flattery. Companies that can produce a similar product will rush into the market if they believe the pent up demand cannot be met or if there is another layer of demand at a lower price point. These are all digital data points that L.L. Bean will have to pull back into their planning and forecasting engines to better manage their supply chain. Of course there is the other strategy of potentially keeping the supply low, to create exclusivity of the product. Hmmm makes one wonder.

But this latest Christmas season and fashion trend story reminds all of us, that accurately predicting future tastes and demands remain a fickle beast. The digital world allows us to cast a wider and more detailed net of what is going on, but we are far from being able to create an precise map for demand.

Now where are my boots…we are having a Nor’Easter here in Boston!

Weekly Recap - Weeks of November 28th and December 5th 2014

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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Here are my takeaways of the two weeks:

And here is the content:

• IBM Datapower - now embedded in the BlueMix PaaS
• Continuent (now VMware) - good integration process, now looking at adding BigData capabilities
• BetterWorks - New approach to Performance Management
• Paycor - SMB focused HCM, Talent Management and Payroll provider
• HR Acuity - Looks at when things go back in an enterprise - what does HR need to do track, record  monitor and ultimately avoid.
• Ralllyteam - Addressing the challenge to find the right talent, a mix of Learning, Performance Management and Career Planning / Succession Planning.
• HashiCorp - Then under NDA - just releases now - Project Atlas - DevOps using 4 open source projects, the founders have launched in the last 3 years 
• KeyNexus - Key Management Service when working with Amazon AWS
• Sphere3D - MicroVisory VDI vendor, closed the storage vendor acquisition with Overland
• BigPanda - Applying BigData and Analytics to IT Ticket Management in the age of IoT - interesting approach.
• Progress Software - A UI briefing, good progress and bridging the both the Admin UI and the ultimately created product.
• Message Systems - Moving their systems to the cloud, new email automation product with SparkPost, using cloud, BigData and analytics.
• Informatica - Caught up on the Cloud Analytics product, interesting value add on top of the transformation capabilities
• IBM STG - Quarterly update with Tom Rosamilia, 2015 will be key with a mainframe refresh cycle and the dynamics around Power8
• Raet - Originally Dutch HR vendor, going more global starting with Europe and Latin America. 
• IDG Roadmap in Washington D.C. - I spoke about cloud and next generation applications.
• Jibe - Delivered what they had on the roadmap for 2014 - nice visualization of recruiting performance. 
• Infor - Attended the CIO Summit, was on a panel on IT trends and presented about People Science (or HCM) trends.

Google Hangouts: Too smart for privacy?

Steve Wilson

Former Vice President and Principal Analyst
Constellation Research

Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA). Coverage Areas: -  Identity management, frameworks & governance-  Digital identity technologies-  Privacy by Design -  Big Data; “Big Privacy”-  Identity & privacy innovation Previous experience: Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...

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An Engadget report today, "Hangouts eavesdrops on your chats to offer 'smart suggestions'" describes a new "spy/valet" feature being added to Google's popular video chat tool.

"Google's Hangouts is gaining a handy, but slightly creepy new feature today. The popular chat app will now act as a digital spy-slash-valet by eavesdropping on your conversations to offer 'smart suggestions.' For instance, if a pal asks 'where are you?' it'll immediately prompt you to share your location, then open a map so you can pin it precisely."

It's sad that this sort of thing still gets meekly labeled as "creepy". The privacy implications are serious and pretty easy to see in objective terms.

Google is evidently processing the text of Hangouts as they fly through their system, extracting linguistic cues, interpreting what's being said using Artificial Intelligence, extracting new meaning and insights, and offering suggestions in response. 

We need some clarification about whether any covert tests of this technology have been undertaken during the R&D phase. A company obviously doesn't launch a new product like this without a lot of research, feasibility testing, prototyping and testing. Serious work on Smart Suggestions would not start without first testing how it works in real life. So I wonder if any of this evaluation was done covertly on live data? Are Google researchers routinely eavesdropping on hangouts to develop the 'smart suggestions' technology?

If so, is such data usage covered by their Privacy Policy (you know, under the usual "in order to improve our service" justification)? And is usage sanctioned internationally in the stricter privacy regimes?

Many people have said to me I'm jumping the gun, and that Google would probably test the new Hangouts feature on its own employees. Perhaps, but given that scanning gmails is situation normal for Google, and they have a "privacy" culture that joins up all their business units so that data may be re-purposed almost without limit, I feel sure that running AI algorithms on text without telling people would be par for the course.  Let's not forget the company culture's carefree attitude to data as raw resource revealed by the way that Google engineer wrote a routine and loaded it into StreetView cars to collect unencrypyted home Wi-Fi traffic. 

In development and in operation, we need to know what steps are taken to protect the privacy of Hangouts data. What personally identifiable data and metadata is retained for other purposes? Who inside Google is granted access to the data and especially the synthtised insights? How long does any secondary usage persist for? Are particularly sensitive matters (like health data, financial details, corporate intellectual property etc.) filtered out?

This is well beyond "creepy". Hangouts and similar video chat are certainly wonderdful technologies. We're using them routinely for teaching, education, video conferencing, collaboration and consultation. The tools may become entrenched in corporate meetings, telecommuting, healthcare and the professions. But if I am talking with my doctor, or discussing patents with my legal team, or having a clandestine chat with a lover, I clearly do not want any unsolicited contributions from the service provider. More fundamentally, I want assurance that no machine is ever tapping into these sorts of communications, running AI algorithms, and creating new insights. If I'm wrong then Google could do what Apple did and publish an Open Letter clarifying their data usage practices and strategies. 

Come to think of it, if Google is running natural language processing algorithms over the Hangouts stream, might they be augmenting their gmail scanning the same way? Their business model is to extract insights about users from any data they get their hands on.  Until now it's been a crude business of picking out keywords and using them to profile users' interests and feed targeted advertising. But what if they could get deeper information about us through AI? Is there any sign from their historical business practices that Google would not do this? And what if they can extract sensitive information like mental health indications?  Even with good intent and transarency, predicting healthcare from social media is highly problematic as shown by the "Samaritans Radar" experience. 

Artificial Intelligence is one of the new frontiers. Hot on the heels of the successes of IBM Watson, we're seeing Natural Language Processing and analytics rapidly penetrate business and now consumer applications. Commentators are alternately telling us that AI will end humanity, and not to worry about it. For now, I call on people to simply think clearly through the implications, such as for privacy. If AI programs are clever enough to draw deep insights about us from what we say, then the "datapreneurs" in charge of those algorithms need to remember they are just as accountable for privacy as if they have asked us reveal all by filling out a questionnaire.

Not your father’s POS system

pending

Guy Courtin was formerly Vice President and Principal Analyst at Constellation Research covering Matrix Commerce and how the Internet of Things drives the evolution of commerce.  Guy has over 15 years experience in the technology space and specifically in the supply chain space. Most recently he was the Vice President of Research at SCM World. Where he focused on the service providers that empowered supply chains. Prior to SCM World, Guy held numerous senior positions. He was responsible for product marketing at RSi, a retail supply chain solution provider. There managed RSi’s go to market strategy around their leading cloud based supply chain solutions. He also spear headed Progress Software’s supply chain group. Where he was responsible for driving revenue and market share as well…...

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Here is something to tickle your retail supply chain – we are under 15 days until Christmas. Avoiding the debate over the mass commercialization of the holidays, the reality is that consumers will, or already have, started their shopping engines. With so many retailers dependent on good holiday sales, for example Lego moves 50% of their sales between Thanksgiving and Christmas, the ability to properly capture orders is vital.

The POS (point of sale) systems, whether in brick and mortar or on line, are the vital touch point between the consumer and the commerce supply chain. Like with the majority of technologies, this has been impacted by the digital wave. POS systems are not longer limited to the larger systems synonymous with the corner store – remember the ones where numbers would pop up once the large typewriter like buttons were pressed. These systems have evolved into a new range of sleek mobile devices, and those large legacy systems are now smarter. POS systems are also getting into greater areas and increasing their reach – supply chains need to craft strategies about how to take advantage of the new data as well as the new places POS systems will pop up.

For example:

• The POS systems in the air. Those us that have been flying long enough remember the days when we were served a meal and drinks as part of our overall plane ticket. Today if you want a scotch on the rocks and a can of Pringles, you need to pay for these items. Airlines have put mobile POS devices in the hands of their staff to take your payment. Rather than just using these as order taking machines, airlines like Delta Airlines have made these mobile devices a much more valuable part of their supply chain. Beyond just taking payments, the mobile devices are enabled to communicate about customer and maintenance issues. So if the passenger in seat 7a voices a legitimate complaint, Delta employees can use the POS system to give that passenger 10,000 miles. If a seat is found to be broken or an overhead can’t open, the flight attendants can use the system to communicate the problem and location to the destination airport and schedule the appropriate maintenance.
• Infusing retail into other entertainment channels. We have all used to having to walk through the store when we leave a museum, zoo, aquarium or other attraction. But what about the movies? Get ready for your phone to become part of a POS system for the movie theater. I am not speaking of the POS when you are ordering your over-sized tub of popcorn, but post movie viewing. For example – you go see the Transformer movie, once the movie is over as you are leaving the theater there are QR codes on promotional posters at the exit and even pop up kiosks where you can scan your phone to find where to get the latest Transformer toy. There could potentially be a 3D printer right there allowing you to get your item made in place. If you scan the product at the movie theater you may be given a discount – incentive consumer to make transaction at that point. Your portable POS systems – aka your smart phone – will have an app that allows for this to happen and could also communicate with the closest Target, WalMart or other retail channel that carries the item. Or even tie back to Amazon and have the eCommerce giant dispatch your item immediately.

Of course there remains a continued evolution in mobile POS, companies like Square and Apple are allowing anyone with a tablet and connectivity to run mobile POS systems. Retailers can start looking at these mobile POS systems as great data sources – where do most of the transactions happen on the store floor? Are there still locations for impulse purchase displays? Can you tie these mobile terminals into the inventory systems? A prospective buyer is looking for a specific piece of cookware at William Sonoma. The item is there but the consumer wants it in sky blue. Using the mobile terminal the associate helping that consumer can instantly scan the inventory at different stores, identify where an item can be secured and ship directly to the store or to the consumer. The mobile device should also be able to pull up the consumer’s profile: are they a loyal shopper? If so the associate should have the ability to waive shipping costs or expedite the product.

Supply chains need to think of their POS systems as Point of Service, not sales. In a world of Matrix Commerce, these are the intersection points between the consumer and the commerce supply chain where the digital reality has great impact. How companies take advantage of this will determine who leads and who is a laggard.

News Analysis: Inside the First Industry-Specific Mobile Apps by the IBM MobileFirst for Apple iOS Partnership

R "Ray" Wang

Principal Analyst and Founder
Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation Research Inc. He…...

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The IBM-Apple Partnership Achieves First Milestones

On December 10th, IBM and Apple announced the first wave of industry-specific enterprise solutions as part of the IBM MobileFirst for iOS applications.   In a meeting with Fred Balboni, IBM’s general manager of the Apple partnership; and Jeremy Butcher, Apple Marketing and Strategy, Constellation received an update on the progress of the industry-specific Apple iOS apps

Key developments include:

1. Announcement of 10 new industry-specific applications. IBM launched 10 industry-specific apps that are generally available to the public. These apps include Advise & Grow (Banking and Financial Markets), Case Advice (Government), Expert Tech (Telecom), Incident Aware (Government), Passenger+ (Travel and Transportation), Pick & Pack (Retail), Plan Flight (Travel and Transportation), Retention (Insurance), Sales Assist (Retail), Trusted Advice (Banking and Financial Markets)
   
   Point of view (POV): Constellation estimates that the apps are designed to deliver 80 percent of most organizations’ required needs. The remaining 20 percent will require a combination of configuration and customization for last-mile capabilities. These apps are the first set of third-generation mobile enterprise apps to hit the market from IBM and Apple.
    
2. Delivery of IBM MobileFirst for iOS and MDM and API management. Taking advantage of Cloudant, the release includes an SDK that delivers intelligent workflow and context. This includes full master-to-master replication of JSON objects, shadow databases, and data bursting. The solution also takes advantage of the IBM SoftLayer bare metal for dedicated instances and provides both cloud and on-premises development for iOS. In enterprise mobile management, the solution provides security, application and device management, and enterprise distribution.
   
   (POV): Constellation sees this development as key to both IBM and Apple expanding the future ecosystem for not only the industry-specific apps but the instrumentation required to deliver on Big Data business models. Future Big Data business models build on information differentiation, information brokerages, and information networks. These capabilities open up the future possibilities and enrich the opportunities for the developer ecosystem.
    
3. Offering of enterprise AppleCare services.   IBM and Apple made a commitment to deliver AppleCare service and support offerings with 24×7 phone and email (in English) for end users; toll-free calls routed to Tier 2 phone advisors; one-hour IT level support for P1 tickets; fee-based, technical and onsite support. The service is now available in 10 countries.
   
   (POV): Constellation has a number of clients who have asked about or are inquiries exploring or in the middle of completing an agreement for enterprise AppleCare. The service addresses Apple’s Achilles heel in supporting enterprise customers. Most IT departments and end users expect comprehensive support of Apple hardware and operating systems. Customers have been pleasantly surprised with the onsite repair or replacement of Apple enrolled iOS devices.
4. Progress in delivering IBM logistics expertise to Apple. The IBM MobileFirst supply, activate, and manage capabilities now deliver end-to-end procurement, device enrollment, and lifecycle management services in more than 20 countries. As part of the Apple Device Enrollment Program (DEP), IBM can deliver mobile device management; distribute, secure, and manage enterprise apps for easy employee access; and enforce real-time and policy compliance for stronger data protection.
   
   (POV): Constellation believes that enterprise-class organizations will favor this model as the approach gives the IT team centralized control without creating additional friction for the line-of-business users. Another advantage is the ability to take advantage of IBM Global Financing for fair market value (FMV) leases, volume licenses, Apple Advantage discounts, and AppleCare for the enterprise.

Preorder Disrupting Digital Business, published by Harvard Business Review Press In Q2 2015.  Learn more.

Ten IBM MobileFirst for Apple iOS Apps Meet the Third-Generation Mobile Apps Challenge

The IBM – Apple offering is one of the first to meet the requirements of third-generation enterprise mobile applications.  In fact, the design point for IBM’s MobileFirst for Apple iOS apps begins with the application of analytical insight to the Apple iPad and iPhone devices that interact with enterprise systems.  IBM has made a significant commitment to date with five development labs in Toronto, Chicago, Atlanta, Bangalore, and Cupertino.  Further, IBM expects to have 30,000 mobile practitioners trained and fully enabled by year-end and more than 100,000 trained through 2015.

Offerings Address Three Major Enterprise Use Cases

The announced offerings intend to address three major use cases:

1. Industry-specific apps for iOS. These third-generation mobile apps address business requirements and span traditional business processes and functions such as banking, telecommunications, insurance, government, retail, transportation, and telecommunications (see Figure 4). Sample use cases include telecom field service, fuel optimization for piltos, and situational awareness for first responders.
2. ERP for iOS optimized with advanced APIs. These apps extract legacy ERP systems of record from sources such as mainframe, Oracle, and SAP to create new interfaces in iOS native apps through an API management layer.
3. App integration and management for end-to-end lifecycle management for iOS. These solutions provide an end-to-end MDM integration and full management services for mission-critical apps, including maintenance and enhancement across the DevOps lifecycle.

First Wave of Industry-Specific Apps for Apple iOS

The key industry-specific apps include 6 industries that address 10 design patterns (see Figure 4).

The Bottom Line: IBM-Apple Partnership Represents Both A New Class of Applications And A New Type Of Partnership In A World Of Digital Transformation

Constellation believes that mobile is more than just the device.  While smart phones and other devices provide a key enabler, design in digital transformation should take into account how these technologies address the business value and business model transformation required to deliver on break through innovation.  These devices provide the sense and respond, the interactivity, and the connectivity required for digital transformation.

Today’s announcement shows how the IBM and Apple global partnership is helping the two companies co-innovate and co-create new solutions that play to each others strength.   IBM’s big data and analytics expertise, mobile management capabilities, logistics prowess, integration knowledge paired with Apple’s design prowess, device expertise, and enterprise market share penetration have created new digital business models.  The offerings from IBM and Apple are just the first wave of solutions that bring together new out of the box enterprise mobility solutions.  Customers seeking out of the box digital transformation solutions can expect more on the way and can expect to see real out of the box software.

The full analysis and research report can be found here when published on the Constellation Research website.

Your POV.

Ready for digital disruption by starting with mobile?  Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

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Future hardware that impacts your supply chain – think V2V.

pending

Guy Courtin was formerly Vice President and Principal Analyst at Constellation Research covering Matrix Commerce and how the Internet of Things drives the evolution of commerce.  Guy has over 15 years experience in the technology space and specifically in the supply chain space. Most recently he was the Vice President of Research at SCM World. Where he focused on the service providers that empowered supply chains. Prior to SCM World, Guy held numerous senior positions. He was responsible for product marketing at RSi, a retail supply chain solution provider. There managed RSi’s go to market strategy around their leading cloud based supply chain solutions. He also spear headed Progress Software’s supply chain group. Where he was responsible for driving revenue and market share as well…...

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I wrote a post earlier this week about a number of hardware trends that will impact your supply chain, those are all in place today, already impacting supply chain and will only grow in significance. But here is one that is futuristic – V2V (vehicle to vehicle).  Why would  a driverless vehicle impact my supply chain you may ask?

Of course the biggest impact will be on making road safer, make cars more energy efficient, reduce congestion to name few. But this enhanced hardware also has the potential to impacting your supply chains. For example – last mile package delivery. Driverless vehicles will bring to delivery the same advantages as companies like Kiva have to warehouse management. Companies like Fedex, DHL and UPS could leverage a fleet of driverless vehicles to make

Coming to you…without a driver.

small parcel, last mile deliveries. With greater overall visibility of traffic patterns, other vehicles and tied into overall grid would allow greater optimization of package delivery. There are already applications such as Route4Me that look to provide optimal routes based on the errands or destinations the consumer has to run. There are a number of these apps that are being baked into the smart cars. Add to this routing software the ability for vehicles to drive themselves and you open up great possibilities when it comes to logistics. Private operators could “rent” out their vehicles for delivery purposes….just like Uber drivers do with their cars when it comes to the chauffeur business.

Supply chains need to think about how this could impact parts of their business models. We are already seeing some retailers like Footlocker offering same day delivery from their stores. They are doing so using services from Deliv (think Uber for small parcel delivery). What if instead of having to use Deliv, they could dispatch driverless vehicles? What if the consumer could use the driverless vehicles for returns? What if the retailer use the driverless vehicles to bring back returns to other locations? This potential delivery channel could truly transform the consumers’ home into an extension of the brick and mortar store.

I realize that V2V technology remains in the future with regards to becoming a reality in our day to day lives. Unlike the other hardware changes, V2V is not going to impact your supply chain today. But think about the potential it may have once it becomes a reality – which is closer than you may realize.

Tagged: Driverless Vehicle, IOT, Last mile delivery, V2V