Seven steps on the path to a frictionless future

SUMMARY:

In this post based on his talk this week at Cloud Week Paris, Phil sets out seven rules for success in a frictionless future enabled by the cloud

Phil Wainewright speaking at Cloud Week Paris July 2015 snapped by @runmyprocess
Phil Wainewright at Cloud Week Paris

When we ask what cloud computing will look like in ten years’ time, we cannot think only about the technology. We must also think about the business outcomes. What will the world look like in ten years’ time? How will the technology have changed the way we work and do business? And how will those new behaviors change what we ask of the technology?

We can’t predict specific details but we can assert general principles. The principle I want to focus in on today is the concept of frictionless enterprise.

Let me explain what I mean by that. Today’s connected cloud computing, plugged into these remarkable smart devices we all carry around with us, is changing the world. In business, the combined effect has collapsed distance and supercharged teamwork in ways that were unimaginable just a decade or two ago.

In the cloud, on the Web, there’s no distance to slow us down — we can connect, and get things done wherever we are. We don’t have to wait to build custom infrastructure to harness resources, we can just call them up on demand. There’s no paperwork that has to arrive before things can happen — we can see information and act on it in real-time. The services we connect to are constantly evolving so that we can adapt to change as it happens. And there are no longer any barriers to collaboration with colleagues both within the enterprise and beyond its boundaries. Without ever having to wait for physical stuff to happen first, we can make connections, harness resources and start interacting.

These changes have removed much of the friction that used to add cost and inconvenience to many business interactions. The classic theory of the firm stated that an enterprise could only be efficient by bringing as many operations as possible in-house. It caused too much friction to go outside for them. Today’s digital connectivity has turned this on its head. It takes too much time to acquire or build stuff in-house if it’s already available on-demand from the cloud. The most successful, efficient organisations therefore are those that can easily connect to and harness those cloud resources.

This is frictionless enterprise. It is the future of business and it’s at the heart of what cloud computing will be in ten years’ time. But most enterprises today are full of friction. How can they get from where they are today to where they need to be within the next ten years? Today, I’m going to give you seven rules to strip out friction and unleash the real power of cloud computing and digital connectivity in your enterprise.

1. Eliminate paper

The traditional firm is networked by paper. And traditional enterprise software automates passing the paper around. It hasn’t changed much from the days of green screens, when we thought it was an achievement to just put the contents of a paper form on a computer screen (in many organizations people still scan in images of paper forms that have been filled out in longhand — others have recreated the forms in PDF so you can fill them in on screen and print them out!).

So what happens to an order form or an invoice or a holiday request in most organizations today? I complete the document and submit it to the relevant department to be processed. Sent via email or a web form, it arrives instantly. Then I call up the next day to find out its status:

Hello, I sent in my information yesterday, can you give me an update? No? It’s not in the system? But I sent it over yesterday. When will it be on the system? OK, someone has to re-enter it into your system. Then we have to wait for IT to transfer it to another system before it can be actioned. I should call back next week, you say?

And we call this progress? We have not only digitized all the forms and paper documents, we have digitized all the in-trays and pending stacks where the paperwork used to sit on people’s desks. We took all the imperfections and shortcomings of the past and replicated them in our client-server computer systems.

All these processes are still tied to the paper processes of yesterday, when the mail arrived every morning and it was OK to do work in batches, because no one was any the wiser until tomorrow.

But today we have incredibly smart, connected devices that we all carry around with us in our pockets. I can fill in the details here on my mobile phone and it will instantly be on your system over there. We don’t have to send a document or wait for it to be processed. We can let the machines do all the drudgery and help us get things done instantly.

In ten years’ time, cloud computing will have eliminated paper and paper-based processes from the enterprise.

2. Chip away at the center

The problem is that all these enterprise applications we run our businesses on were designed for that old, batch way of doing things that revolves around paper documents. It doesn’t help to forklift them into the cloud, to make them connected, to give them mobile and digital front ends. Because on the inside, they’re still the same.

So instead we have to chip away at them, peeling off functions one at a time into new systems. The quickest way to achieve this is to deploy a ready-made SaaS application — and that’s what most organizations are doing today. If you look at all the analyst research, most enterprise spend on cloud computing goes on SaaS, not infrastructure players like Amazon and Azure.

Where the application isn’t available off the shelf, people can turn to PaaS. Or they use continuous delivery methods to bring in new custom applications using DevOps methodology.

In this way, organizations are able to gradually shrink back the core operations that run on older computing platforms. In ten years’ time, most ERP systems will have been totally replaced by responsive, real-time cloud computing systems.

3. Eliminate boundaries

The pre-digital, paper based enterprise was divided up into functional departments. This was the only way to get things done at the time. The paper trail had to follow a bureaucratic equivalent of the assembly line, otherwise it would get lost or stuck. But today we’re all connected and we’re finding new efficiencies from working across departmental boundaries.

Fluid new collaboration technologies and ways of working are some of the most important and exciting contributions that cloud computing is making to the modern, frictionless enterprise. People work collaboratively from offices around the world or from several different organizations to develop a project, using services like Google Hangouts to converse instantly face-to-face, or resolving exceptions by instant messaging that’s embedded in the transaction they’re discussing.

In ten years time, collaboration technology will be the most important enterprise application stack.

4. Set the business free

The most important functional boundary to eliminate is the boundary between IT and the rest of the enterprise. When business people start getting exposed to the easy configurability of SaaS and cloud applications, they rapidly learn to harness digital resources for themselves. They no longer have to send off change requests to IT and wait weeks or months for it to be actioned. Once they can change things for themselves, they can also iterate those changes without having to involve IT unless there’s some integration hitch or governance issue.

In ten years’ time, instead of being a discrete departmental function, IT will be a service that’s embedded throughout the organization, helping business people harness automation directly.

5. Eliminate applications

We see cloud application pioneers like Amazon and Netflix changing the way that applications are built, breaking them down into microservices so that there’s no single point of failure. The devops approach to continuous delivery is now bringing this same microservice architecture into the enterprise, while mobile applications are also encouraging the creation of microservice APIs. Soon the same approach will enter the user interface. Why do I need to open up an HR application if I want to book some vacation time? The phone already knows who I am and the HR system knows the policies on paid time off and who needs to approve my vacation request. Why can’t I simply send a message and get an approval back without even having to touch the application?

In ten years’ time, instead of having to load up an app to get things done we’ll simply send messages and let the machines take care of the rest.

6. Move the work (and the payment) where it needs to be

Pervasive connectivity and digital innovation means we have to fundamentally rethink many of the things we take for granted today. 3D printing will strip away manufacturing and delivery costs and revolutionise the way we repair and customize items. Robots and drones will make many driving jobs redundant. Crowdsourcing and the sharing economy are introducing new ways of sourcing services.

Pervasive computing is even changing the way we pay for things, powering much of the subscription economy. In mobile, the Internet of Things means networked apps will be aware of our environment and they’ll use the cloud to connect into machine intelligence to work out what we need before we realize it ourselves.

In ten years’ time, cloud computing will support a pervasive infrastructure that will challenge traditional ways of working.

7. Become a network platform

Success in an era of frictionless enterprise not only means removing friction from within your internal operations. The most successful enterprises in this new era will be those that remove friction for others. The future belongs to those enterprises that take the lead in becoming a network platform that brings buyers and sellers (or providers and subscribers) together.

In ten years’ time, cloud computing will have removed much of the friction that holds back enterprises today — but there will still be much more to be achieved. Let’s meet again in 2025 for a new set of predictions!

Disclosure: This post is based on the text of a talk presented as part of the Visionaries Conference which opened Cloud Week Paris on Monday 6th July. Cloud Week Paris is organized by EuroCloud France. The author was a co-founder of EuroCloud and serves as chair of EuroCloud UK.

Image credit: by @runmyprocess.