Key digital takeaways from 2016 so far

Profile picture for user ddpreez By Derek du Preez August 9, 2016
Summary:
After a string of global conferences, dozens of interviews and sitting in on a number of sessions, I mull over the latest trends in the digital market.

ekg-tech
As we draw close on the start of the year’s crazy conference season and take a few weeks downtime before it all kicks off again in September, I thought it might be a good idea to pull together some of the key trends that have emerged over the past few months.

Given that in the first seven months of the year I have attended dozens of conferences, spoken to countless customers and sat in on endless sessions, it’s easy to lose sight of the top level details that are emerging.

Obviously by pulling out just a few key trends you are inevitably going to miss out on the subtleties and nuance that can be found in the hundreds of stories that have been written in the previous months on diginomica - but nonetheless, I think it’s worthwhile having a go at highlighting some of the things that I’m seeing.

I’d be perfectly happy to add to this list, so if you’ve got any input, do get in touch.

Data really is a top priority

For years now we have heard about how X% of data has been generated in the last 12 months and how this presents huge opportunities for companies. However, last year I didn’t see a great deal of evidence of this extending beyond some traditional dash-boarding and analytics. Sure, there are always going to be some companies that lead the pack, but generally I found that enterprises were more concerned with getting their houses in order, than they were about the data opportunity.

And this makes sense. Without your house in order, which would mean messy data, how can you find or execute on any opportunities? But with the increased collection of data, plus the use of cloud for storage, and more complex data infrastructure, companies are now beginning to think about making data operational.

For example, personalization has featured heavily in conversations with digital buyers in recent months. Companies are beginning to think about differentiating from the pack and creating that stickiness with their customers, by providing personalised online services. From what I’ve seen thus far, some of the efforts are pretty rudimentary - but this doesn’t take away from the fact that it’s a top level agenda. For examples, see these story’s on Comcast, Whole Foods, M&S, Tesco, NOW TV and Coral.

Equally worth noting, is that traditional software vendors are beginning to think about how data can be used to provide value add services to their customers. For example, NetSuite is considering how it can use data to closer bridge the gap between ERP and the customer. Whilst Sage is looking at the use of machine learning and bots to make accounting easier for customers. It’s also worth taking a look at how the government is rethinking its approach to data so that it can better serve citizens.

There are probably plenty more examples floating around on diginomica from this year, but it’s becoming increasingly evident that data strategies are being formed in forward thinking enterprises.

Legacy being taken seriously

Business team hands joining jigsaw pieces in cloudy blue sky © hin255 - Fotolia.com
It will come as a surprise to no one that enterprises are struggling with their legacy architectures and systems. That’s not new. However, I am starting to notice more and more that companies are now beginning to seriously consider how they overcome it.

It’s not enough to create a two-tier architecture for the foreseeable future. At some point, the legacy is going to hold back the top tier. No necessarily in terms of performance, but in terms of silos. Even if your cloud, digital-first systems are able to fly on their own, there is still going to be a whole customer base and a whole organisation internally that is making use of, or working with, that legacy. Single view of the customer and frictionless enterprise are a lot more difficult if everything is in distinct operations. Yes you can implement extraction layers, use open APIs, try to join everything up - but if we are honest, it’s not the same as running one, digital, frictionless organisation.

And we are seeing evidence that companies are now realising this and taking this seriously - Whole Foods, for example, is replacing 90% of its systems. Argos is doing what it can to shift entirely to the cloud, using micro-services. TAL Apparel, a huge Hong Kong based clothing manufacturer, is upgrading the entire backbone of its business to the cloud.

These aren’t lighthearted decisions. And they carry risk. But it seems that given the competition being brought by those born in the cloud, the risk of not doing it is getting greater.

The skills problem

I know this is something that has been a running theme for a number of years now, but it isn’t going away. Every single customer and vendor I speak with has some sort of skills shortage and is doing what it can to compete in a market where those skills are constantly evolving and in short supply.

What we have seen this year, however, is a number of end user organisations trying their best to insource digital skills - as opposed to trying to sole rely on vendors for the capability. For example, Sainsbury’s is hiring hundreds of digital staff to support its multi-channel efforts, Whitbread is doing the same, as is Argos and the UK government.

Interestingly, we also found some examples of how companies are trying different approaches in their acquisition of skills. The most exciting being Year Up, a company that purposefully targets disadvantaged areas and recruits ambitious young adults into an intense training programme, which then feeds them into a position with an employer that is desperate for those skills. It’s probably my favourite story of the year, well worth a read.

Rethinking your existing assets

This is a point I’ve highlighted before as something that’s going to become more prevalent as we move forward with the ‘digitisation’ of the enterprise. I have argued that instead of companies feeling burdened by their existing infrastructure and assets, they should see it as an opportunity. The one thing that a start-up doesn’t have and can’t quickly compete with is scale - be that people, physical buildings, or cash.

There weren’t too many examples in the first half of the year, but my interview with Argos CDO Bertrand Bodson is worth pointing to. Bodson recognises that instead of Argos feeling weighed down by its stores and physical presence, it should use it to its advantage. He explains how the company is now using them to enable much quicker deliveries and availability for customers, allowing it to compete with the likes of Amazon. It is using its legacy investments to its advantage.

Automation

Obviously automation is something that companies have been focused on for years now, given the

Robot and human connecting through electricity bolts © Pixelbliss - Fotolia.com
efficiency and cost reductions it can bring. That being said, I’ve personally always felt that the threat/opportunity of automation in the past has been somewhat overstated.

This is becoming more and more difficult to believe, given the number of stories I’ve written this year about companies either automating thousands of low-level jobs, or automation being more generally relied on to tell companies what they should be doing.

For example, we saw plenty of this in the financial sector. RBS is cutting jobs in favour of automated digital advice for investors, HSBC automated nearly 3,000 jobs in 2015, whilst Barclays is set to cut up to 30,000 jobs as it looks to increase automation and reduce costs.

Not only this but we have seen vendors, such as Splunk, looking to automation to help companies with their increasingly complex security operations. We saw how Pfizer is automating clinical trials through the use of Pega. In fact, we also heard the US Federal CIO call for ‘aware’ systems that can help reduce the risks of increased connectivity and the influx of data - automating the operations of the Internet-of-Things.

Digital government

As ever, digital government has continued to surprise and entertain in the first six months of the year. Whilst things in the US continue to progress at an impressive rate, see the White House’s recent announcement about code sharing, things have been a bit more unsettled here in the UK.

The year started positively with GDS director Stephen Foreshew-Cain adopting a more collaborative approach to digital operations in government and committing to the development of the organisation’s Government-as-a-Platform strategy.

However, very recently it was announced that Foreshew-Cain would be stepping down from his post and that business transformation chief Kevin Cunnington over at the Department of Work and Pensions would be taking over. We aren’t convinced that this isn’t an attempt by the Permanent Secretaries to destabilise the efforts of GDS, but we are hopeful given that Cunnington has come out and said that GDS is “here to stay”.

Unfortunately, it’s very hard to separate the politics from the digital government agenda. Both come hand and hand, and as a result, delay progress for citizens. That being said, there are some very determined people both sides of the Atlantic Ocean that are going to try their hardest to change the status quo. We can expect a lot more from this topic in the second half of the year.

Image credit - digital pixel EKG electrocardiogram blue background © ninog - Fotolia.com, Business team hands joining jigsaw pieces in cloudy blue sky © hin255 - Fotolia.com, Robot and human connecting through electricity bolts © Pixelbliss - Fotolia.com

Disclosure - At time of writing NetSuite is a diginomica premier partner.