Wednesday, January 29, 2014

Better Late than Never!

image“US CEOs are coming to realize that no matter their industry, they must now think like technology companies,” says PwC, reporting on their annual CEO survey for 2014. I am just happy to see that the executive offices are finally realizing the competitive advantages of technology. The report is chockfull of sentences like, “Technology is everyone’s business” and “The consensus is that IT has firmly moved from the back office to the corner office”. This is unlike any other report in recent times that I have seen. The report quotes that 86% of US CEOs say technological advances will transform their business over the next five years. That is a very high number!
So what technologies are they betting on? Business analytics and socially enabled business processes take the top two spots. Not surprising, business analytics has been a growth market for a long time, in fact, now generally estimated to be $18 billion market. Its appeal is universal, it is easy to understand the value it brings and over time, BU technology has evolved to be actually useful! But I bet the next decade belongs to what is referred to as the “socially enabled business processes” in this report.

Not that this is new bandwagon either! Oracle’s Larry Ellison started talking about this in 2011, unveiling their intent through Oracle Social Network. However, most companies are still stuck in the “collaboration” aspects of the social networks and seem unable to move beyond that. But collaboration aspects have existed in enterprise applications for decades: Collaboration portals for business partners have enabled functions such as CPFR, bidding and reverse bidding, communications (think EDI), compliance, vendor score-carding, claims and so on.

Unfortunately, none of these are truly the functions of socially enabled business processes. Why? Because none of these leverage the power of feedback that social networks are creating for the enterprises. They simply are enabling peer-to-peer connections in a new way that may enhance visibility and allow multi-connectivity, but none of these qualify to be socially enabled business processes since there is nothing that is being “socially enabled”.

So what will be a a good example of socially enabled business process? Imagine if you were forecasting demand and your forecasting solution allowed you to model “social sentiment” as a causal factor that affects demand, just like today’s software allow you to model promotional events and measure their impact on demand. That would be truly innovative and a great example of socially enabled business process. Obviously, it is a harder problem, but not impossible. With the data-mining and big-data technologies, it is quite conducive to be turned into an algorithm, that can be measured, applied, and used objectively as a true input to a conventional business problem, giving better business results.

With most of the solution vendors unable to think beyond collaboration when thinking “social”, the real question is, who will pioneer such advances to truly leverage what social networks bring to the table!  

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Want to know more about supply chain processes and supply chain strategy? Check out my books on Supply Chain Management at Amazon.
© Vivek Sehgal, 2014, All Rights Reserved.

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