Creating Breakthrough Applications at the Intersection of Technologies
Transcription
Creating Breakthrough Applications at the Intersection of Technologies
Creating Breakthrough Applications at the Intersection of Technologies Wipro Council for Industry Research Wipro set up the Council for Industry Research comprised of domain and technology experts from the organization, to address the needs of customers. help customers gain competitive advantage in the market.The council, in collaboration with leading academic institutions and industry bodies, studies market trends to help equip organizations with insights to facilitate their IT and business strategies FOREWORD switch on your computer, log in to the network and check for mail or ‘start’ work? Largely, that has become a meme of the last decade. Like you, I get my mail on my mobile device, without ever having to log in. Banks are sending alerts to customers in real time, utility services are keeping in touch with you 24x7, and medical devices are relaying information to your hospital many miles away even as you go about your daily work day. Work, education, entertainment and a host of services are available on tap in formats that are amazingly rich and interactive. Today, every idea, experience, interaction, and transaction can be instantly stored, shared, For more information on the Research Council, visit www.wipro.com/insights or email us at wipro.insights@wipro. The change is happening at the intersection of technologies. Tomorrow’s technologies are aware and augmented systems. At the same time Mobile, Cloud, Analytics, and Social are blending to create new capabilities, new intelligence, and new experiences. Consider Next Best Action – a prime example of this intersection. Next Best Action enables organizations to service customer needs before they surface and even before a customer becomes completely conscious of those needs. We are also moving towards a complex economy where experience takes precedence over ownership. The experience economy is being continuously re-shaped through smart, selflearning and self-correcting systems. Anyone who has used Pandora to listen to music knows that you don’t need to own the music; the system learns the listener’s preferences, moods and play lists to serve increasingly better options. intersecting technologies. We also evaluate the current state of business preparedness for smart systems, hyperconnectivity, dematerialization etc. and provide insights on the hyperspecialized workforce you would need to leverage these. issue. Do write back with your thoughts and feedback. Puneet Chandra CONTENTS 05 As Digital Technologies Intersect, A New World of Opportunity Awaits Businesses 42 Utilities can exploit emerging technologies This Knowledge@Wharton and Wipro article explores how businesses can calibrate and monetize investments at the intersection of digital technologies. innovate and extend services in the transactive utility markets. Radhakrishnan Swaminathan, Vice President & CTO, Energy, Natural Resources & Utilities, Engineering & Construction, Wipro Limited Dr. Anurag Srivastava, Senior Vice President E-Commerce $16 TRILLION WORLDWIDE IN 2013 10 The Future of Enterprise is “Ubiquitous” Ubiquitous enterprises – the shift towards a culture of pervasive computing. 48 Paul Mathai, Applied Research & Business Innovation Lead, Strategy Solution & Architecture Group, Manufacturing & Hi-Tech Business Unit, Wipro Limited What Smart Systems Can Teach Us This Wipro and UBM Tech survey examines how smart and connected systems are changing the ways products and services of tomorrow will be delivered, deployed and monetized. 58 Nitin Narkhede, General Manager – Emerging Technologies & Innovation, Wipro Limited Source: Gartner 22 This HBR article explores how hyperspecialization of workers may be inevitable given the qual- 34 The State of Hyperconnectivity This Wipro and UBM Tech survey talks of how hyperconnectivity, which describes mutli-client and multi-device access to enterprise resources, can help improve customer service and relationships. Subu Musti – Director, Mobile Strategy, Wipro Mobility Solutions, Wipro Limited Kedar Limaye, Director & Consulting Partner, Wipro Mobility Solutions, Wipro Limited The Open Execution Model: Innovation Across Boundaries In the information economy, an organization is only as good as the innovative ideas it can nurture and execute at speed. Indeed, many good organizations are capable of harnessing innovation within their boundaries The Age of Hyperspecialization Harvard Business Review Dematerialization - A Force for Change This Wipro and Outsourcing Center survey explores dematerialization and its impact – Prasanna G K, Senior Vice President & Global Business Head–Product Engineering Services and Global Infrastructure Services, Wipro Limited 15 Smarter Field Work Management Systems G.S.Nathan, General Manager – Innovation, 64 Data Scale & Intelligence Augmentation How is the digital economy changing the way information is disseminated in enterprises and the importance of intelligent data in this paradigm shift. Ram Prasad K R, Chief Technologist, As DigitAl technologies intersect, A new worlD of opportunity AwAits Businesses A new world of opportunities to extract competitive advantage awaits businesses at the intersection of new digital technologies. Businesses could gain from “intelligence augmentation” by processing high-volume data from multiple sources for real-time business insights. They could also provide “immersive experiences” by gleaning consumer preferences through gestures, touch and specialized eyewear. Further along are “smart systems,” ubiquitous, “always-on” monitoring enterprises, and next-generation nano materials and digital substitutes. Enabling these would be enhanced crowd-sourced “open-execution” models to develop the desired technologies. Apr - Jun 2013 05 Five Levels of Change Dr. Anurag Srivastava Senior Vice President and Chief An “exploding universe of ideas and experiments” and at the intersection of digital technologies, according to Limited. Individually, technologies like cloud computing or big-data analytics have demonstrated big gains, but the potential is far greater if they are used in innovative combinations, he explains. They are “sparking a daring new era in the way we interact, communicate, collaborate and conduct business.” Srivastava visualizes nothing less than a “Big Bang … when universes collide ing ways to solve problems.” Technology infused with innovation, termed “technovation,” is the emerging new order, he adds. Srivastava cites YouTube, launched in 2005, as an early example of an opportunity made possible by digital convergence. “The rich media social network was born at the intersection of the Internet, cheap video cameras, data compression technology, easily available storage, widely accessible computing power and autonomous self-publishing, annotation, content promotion and commenting systems.” Digital technologies are also making it possible for people and organizations to sell excess resources, says Shawndra Hill, Wharton professor of operations and information management. She points to Amazon Web Services, launched in 2006, that monetized spare capacity across multiple remote computing devices by pooling and faster speeds than conventional server farms. She also cites San Francisco-based Airbnb, which enables individuals to list online and rent unoccupied lodging such as spare rooms or even a couch to frugal travelers. Volume XVI the intersection of digital technologies will create new businesses opportunities: age high volumes of data with low storage costs, adopt large-scale data processing technologies, blend multiple sources of data, extract intelligence using machines and visualize the data based on domain and context. This involves consumer preferences articulated through gestures, touch and specialized eyewear, digital money transfers and crowd sourcing of designs. Augmented reality glasses (e.g. Google Glass) can strengthen communications in aviation, mining or drilling operations to overcome disturbances such as noise or fumes, while data visualization, with tools like 3-D graphics, enhances that further. Many such applications are currently in proof-of-concept development stages. applications with medical experts at the other end. Six urban hospitals are using this process to monitor risky pregnancies and are delivering “really good results,” says Srivastava. People in urban settings are willing to pay for “peace of mind,” so monetization is not an issue, he adds. He says the model could work in rural India, where nurses could use ultrasound equipment to track patient conditions and use handheld devices to communicate with health practitioners. Gogo, is helping developing countries combat counterfeit drugs with a combination of bar coding, mobility, the Internet and databases. This is how it works: Buyers of medicines scratch a bar code to reveal a code and then send that code over their mobile phones to Sproxil’s database, which immediately responds saying whether the drug is authentic or spurious. Gogo launched Sproxil in Nigeria three years ago and plans to expand to India and Kenya. settlement process reduced the head count at its outsourcing partner from 200 to seven using a combination of new technologies. It overhauled the entire process through to employee claims settlement. It used a mobile application that scans each bill at creation and a backend process to record travel plan changes, requiring employees to make all payments through one or two cards. These include tools to monitor equipment data; health monitoring and emergency responses; self-organizing supply chains and environmental tracking. Businesses will use devices and sensors in massive, hyper-connected networks, and maintain 24/7 “always on” computing systems without downtimes. For example, IT resources could help provide real-time responses to business model changes and M&As. This (streaming music is an early example), 3-D printing, ecomedical research. tality rates are witnessing a dramatic fall. Here, fetal monitors with sensors connect through Bluetooth or RF (radio frequency) technology to phones or cloud-based 07 a global product launch from between 24 and 36 months to 12 months. It used a combination of collaborative tools including 3-D prototyping in product design and pre-release feedback from social channels. To extract full value from investments in digital technologies, businesses must be willing to change their business processes, says Srivastava. They can often expect returns over a 12- to 18-month window, especially with fer, compared to product margins, he adds. Firms that exploit the “combinational value” of those technologies with process changes could see revenue/cost gains of up to two times in best-case scenarios, he claims. Hill says businesses must confront some questions up front before making investments: First, how exactly will they derive value from combining multiple data sources such as social networks and transaction/location information to make better predictions or better visualizations? Second, are they agile enough to take advantage of the technologies that change rapidly? Third, should they invest in the technologies themselves or pay somebody else to do it? In the near term, Srivastava expects organizations to focus on improving customer experiences and “reducing the friction between the virtual and the real world.” Banks, for example, could digitize solutions to numerous customer requests (such as opening and closing of accounts, requests for statements and checkbooks, etc.), he says. In the medium term, he sees businesses investing in “process dissipation” by improving or re-engineering existing processes and eliminating those that are timeconsuming and costly. For example, a bank investing in digital strategies might revamp the services it provides at branches to both make the “branch experience” superior for customers and better monetize its investments there. for new or enhanced products, and focus on the convergence of consumer-facing technologies like smartphones or other devices with networks and networking technologies, while incorporating social and behavioral changes. A bank, for example, might give branch cusexecutives to simultaneously track their needs or preferences and present suitable products or services. “You already in the branch,” says Srivastava. Srivastava advocates an “open execution model” to create applications around digital technologies. That model is a way of opening up application development to a large external group, including employees, he explains. ing that provides only broad and generic ideas, he adds. Hill says it is encouraging to see companies allowing their technology developers to provide open source sostill keeping the core algorithms close to the chest, they are allowing their employees to be part of a community that shares software,” she says. “This sharing has tremendous value when pushing data-intensive solutions forward.” Volume XVI Management $2.9 BILLION IN 2015 Source: SBI Energy Prasanna G K Senior Vice President & Global Business Head–Product Engineering Services and Global Infrastructure Services, Wipro Limited in locations previously inaccessible, thereby all but eliminating every logistical concern associated with the idea of ubiquitous computing. But what does this mean for organizations across the world? the future of enterprise is “Ubiquitous” Imagine a world in which organizations can communicate with their consumers, as and when they choose to. Imagine a world where organizations can use these interactions to personalize every user experience, across contexts, locations and demographics. Imagine a world where an organization’s value proposition is an intrinsic feature of their customers’ lives. Omnipresence has long been the holy grail of global enterprise. And recent technological developments mean that the scenarios detailed above are no longer well constructed hypotheses, but realities achievable through planning and diligence. This year, the number of internet-connected mobile devices will exceed the number of humans on the planet. Factor in the devel- and augmented reality (AR) applications along with the impending proliferation of wearable computing devices and the future of computing becomes apparent. From bridges that self-check their strength and embedded devices that detect and report illness, to refrigerators that order groceries and cars that read out social networking messages, a user no longer has to reach out to technology but, instead, technology reaches out to the user. The enterprise of tomorrow will have more access to the customer, more interaction with a customer and, as a Volume XVI By harnessing these technological developments, organizations now have the opportunity to deploy enterprise computing on a scale previously unimaginable, blurring the lines between personal and professional computing. Businesses can now communicate with consumers in a seamless and non-intrusive manner that makes users internalize the enterprise process, creating and facilitating new avenues of engagement. This technology-driven ability is what we at Wipro call ubiquitous enterprise. tion While ubiquitous enterprise is set to change the way organizations conduct business and deploy IT systems, it also necessitates a fundamental change in the approach to framework creation and deployment. The challenge will now be to maintain computing landscapes that scale time. These new-generation IT architectures will need to reshape themselves based on the edge device being used for access. These systems will need to intelligently in order to service volumes and optimize resource utilization. consequence, a better understanding of the customer’s need. And it is in being ubiquitous that enterprises will A recent United Nations study showed that six billion, of the planet’s seven billion people, own a mobile phone, while a mere four and a half billion have access to proper sanitation. While the concerns raised by this research are rather self-explanatory, it also reveals that computing, once a privilege, has now become a basic, omnipresent feature of human life. When we consider the progressively increasing power and constantly decreasing size of computing devices, it is easy to see how the world is moving towards a culture of pervasive computing. Technologies like ambient backscatter can create situations where devices can power themselves and communicate seamlessly, even 11 This would mean a three-step change for business: i. Enterprise IT systems will now have to shift their current this also means a move from being a system of record (data) to a system of engagement (customer focus) and a reduction in the number of platforms and applications. ii. IT departments will need to use new age development methods, polyglot programming, automated, agile development, and enterprise app stores for rapid response to market needs. iii. The creation of multi-channel, variable functionality with always-on computing architectures that employ returns per transaction. IT industry forecasters predict that by the year 2020, over 50 billion devices will be connected. Soon we will live in a world where computing is all around us – seamless, accessible, powerful and unobtrusive – signifying a seismic shift in technology consumption patterns. This mesh of connected factory user experiences across devices and locations. In order to facilitate this unfettered, high-performance access to enterprise experiences, organizations will use web scale application programming interfaces (APIs) ible performance. Responsive design will be the guiding force of all IT architecture with constant innovation and integration taking place at the intersection of technologies. Volume XVI The success of ubiquitous enterprise, similar to that of the Internet of Things, will rely upon one hundred percent adoption by target users. A hyper-connected web of computing devices – sensors, RFID tags, microprocessors and the likes – will generate and draw intelligent inferences from “ubiquitous” data to deliver a hyper-personalized service. Applications must be context aware and inherently functional. This ambient intelligence run on always-on systems that allow for multi-client, multi-device access will give rise to an unprecedented quality of user experience, driving organizations to focus on adding value. The world of ubiquitous enterprise will also cause the decentralization of enterprise IT systems. With the IT eco-system now outside the organization, the success of a business will be driven by the robustness of its security and the optimization and use of its open and linked data. This extended enterprise, with IT systems external to an organization and its employees, will reach out to users on day-to-day basis, forming, cementing and enhancing enterprise-customer relationships. accessible by a wide array of user devices? enterprise systems? nologies to create hyper connected applications? management, application management and operations? tions ready for use in an open, hyper-connected world? If your answer to all of these questions was yes, then your organization is on the right path to ubiquitous enterprise and you need to consolidate and move forward. The questions to which your answer was negabecome ubiquitous. ture Before you make the decision to shift to a ubiquitous IT infrastructure, it may be useful to ask yourself the following questions. ly personalized location/ context driven services? impact on your organization’s IT eco-system. In order to consideration: The use of sensor/RFID and externally accessible? - the number of end user devices and place a heightened strain on your IT infrastructure. End user devices will no longer be owned by you or by your employees but by in- dividuals. Add to this autonomous devices that perform functions and gather data independently and it becomes essential to have a robust IT framework in place to support all end user devices consistently. Another factor to consider is the increase in your organization’s computing capability requirement. The large number of devices, which I mentioned earlier, alongside external IT eco systems, virtualization and the need for boost in enterprise computing capability. Data collection, mining and analytics must now be ‘agile’ in real time with comprehensive algorithms that account for, both, structured and unstructured data. Being zation’s storage requirement. While organizations con- 13 system would allow for “ubiquitous” data. Consequentially, data capture, storage capacity and retrieval requirement would all need to increase in proportion with the amount of information gathered and processed. The cloud would be a ubiquitous revolution-enabler in this situation. Perhaps the most portance in a ubiquitous IT infrastructure. Various types of data – sensitive data, real-time data, personal data – are now located outside the organization in a system almost entirely dependent on IT. This vulnerability means your IT system is more susceptible to malicious attacks. Robust, secure and adaptable systems that can detect, the success of your organization’s move to ubiquitous enterprise. Also crucial, to the success of seamless, ubiquitous enterprise is increased networking capability. In an always-on world with several internal, external and independent devices utilizing, transmitting and receiving data constantly, your mentarily. Maintaining service levels and user experience in this situation then takes precedence over sheer of transmitting, receiving and processing vast quantities of data, is the foundation for the deployment, progress and maintenance of ubiquitous enterprise services. Think about the conveyor belt that calculates and optimizes production cycles at your manufacturing unit, sends real-time data to your supply chain managers and about the retina scan payment system that decides what conditions your customers are most likely to make a purchase in. Think about wearable computing that sends you rich, varied data about your consumer’s interaction uct, but a comprehensive, customized user experience. We too have put some of these systems in place already. For instance, in the oil and gas sector, we have Volume XVI deployed a solution where seismologists sitting across the globe can make on-site decisions based on sensorgenerated data. Our connected health solution, monitors expectant mothers, this monitoring can ensure invaluable and timely intervention. The possibilities really are limitless. The Internet, smartphones, and more recently, wearassisting, and enhancing, a user’s interactions in everyday life. By becoming intrinsic to a user’s discovery of the world, organizations can engage with consumers on an elemental level, adding value, building relationships and creating great consumer experiences along the way. Furthermore, ubiquitous enterprise frameworks incorporate smart systems that will perform tasks such as data mining, analytics, repair and maintenance autonomously, thereby mobilizing the workforce into value intensive tasks. Early adoption will be the key as the organizations that start the soonest will adapt the best, in addition to gainmentation of an adaptable IT framework in this process, tiator between organizations that thrive in a ubiquitous world and those that don’t. http://www.vs.inf.ethz.ch/publ/papers/socialambient.pdf http://seeit.mit.edu/Publications/CrackBerrys.pdf http://www.vs.inf.ethz.ch/publ/papers/ubicomp2003-chatty-env.pdf http://www.vs.inf.ethz.ch/publ/papers/sktelecom2005.pdf http://abc.cs.washington.edu/ http://www.ericsson.com/res/docs/whitepapers/wp-50-billions.pdf whAt smArt systems cAn teAch us This Wipro and UBM Tech survey examines how smart and connected systems are changing the ways products and services of tomorrow will be delivered, deployed and monetized. UBM Tech conducted an online survey on behalf of Wipro in May 2013. Respondents include 163 business technology professionals with management titles who are learning about, deploying or working on smart systems from various industries across all company sizes. Nitin Narkhede General Manager – Emerging Technologies & Innovation, Wipro Limited Smart systems are devices that incorporate sensing, actuation and control. They can describe and analyze situations, making predictive, adaptive decisions based on the available data and subsequently performing smart actions. However, we’re entering into a new frontier in human-machine interactions as embedded computers get smaller and more powerful. Also advances in nanoelectronics, sensing and communication technologies enable machine-to-machine interactions giving rise to telligence (AI) and machine learning. Smart devices, such as home healthcare monitors and those embedded within automobiles, have been part of our lives for more than a decade. They help us perform and performance patterns, and improve productivity. For example, ultra-low power, wearable medical devices which are small, intelligent devices that integrate sensors and embedded computing with advanced analytics. The result is a system that can remotely measure multiple vital parameters such as heart rate, respiratory rate, skin impedance, blood-oxygen levels and blood pressure, with automated alerts that indicate when a patient should seek medical assistance, facilitating anytime, Volume XVI The new smart system frontier includes machines and devices, people, cyber and physical sub systems and information all connected and interacting in a seamless, adaptive manner. Smart systems have shifted the focus from individual technologies to overall system intelligence, resulting in fundamental changes in how the products and services of tomorrow will be created, delivered and monetized. A recent UBM Tech survey commissioned by Wipro on smart systems asked more than 160 business-technology professionals about their plans regarding the Internet of Things. Almost all of the respondents are high-level management decision makers: Most are IT managers, line of business managers and corporate C-level management. In fact, nearly one-third (31%) hold executive Quite a few of the respondents (41%) come from Twenty-seven percent of the respondents work at companies with 10,000 or more employees, 28% at companies with 1,000 to 9,999 employees, and 45% at companies with fewer than 1,000 employees. 42% of respondents work at companies with at least $500 milcompanies earning $1 billion or more. The greatest possible margin of error for systems, we asked respondents to rate their maturity level with them. Forty-four percent say that they’re in the learning phase, and another 17% indicate that they’re in the research and development phase. In terms of actual smart system deployments, 14% say they’ve deployed at least one system, and 25% are working on systems that will be deployed within 3 months to more than 2 years (see Figure 1). The largest number of respondents (35%) indicated that connected machines will have the most impact on their business, followed by integrated sensors (24%), location tracking (20%), and sensor networks (15%). However, if you combine all responses related to sensors and the respondent base (N=163) is +/- 7.6 percentage points. UBM Tech was responsible for all programming and data analysis. These procedures were carried out in strict accordance with standard market Data: UBM Tech survey of 163 business technology managers engaged in smar systems deployment, May 2013 research practices. Survey respondents consider smart systems to be mainly newer devices. High on their list of initial uses for smart systems is remote monitoring and follow-up services connected to remote monitoring. The survey raises questions regarding smart systems, such as acceptance of consumers to pay monthly fees for services that they rarely use or ones they would only use in emergencies. The results back empirical data showing that smart systems must deliver clear value to Learning about it 44% systems and the people using them need to be able to act on the data the systems provide. For example, a system that tracks monthly electricity usage also should something about them. The deployment is more than 2 years out 09% Will deploy smart system in 6 to 12 months 05% Will deploy smart system in 2 years 05% Will deploy smart system in 3 to 6 months 06% Already deployed a smart system in production 14% To get a view of what enterprises are doing with smart In the R&D phase 17% 17 one spot with nearly 40% saying sensor-related smart systems will have the biggest impact. When asked to pick the top three industry sectors that will see the greatest impact from future smart system development, nearly half of the respondents chose healthcare, followed by security (34%), energy & utilities (30%) and manufacturing (28%). Biotechnology, transportation, safety and retail each ranked in the middle at about 20%, with education, entertainment, and construction ranked lowest (see Figure 2). However, the engineering, procurement and construction (EPC) industry is a heavy smart system user, both as part of the equipment used (i.e. drills and excavators) and as part of smart infra- ing would rank higher, compared with B2C where retail may have a larger impact. When asked to prioritize various areas of their smart systems development, respondents rated remote monitoring highest at 68%, followed closely by analytics at 63% and device management at 62% (see Figure 3). Monitortems, and analytics and management typically provide the most business value. Note: Maximum of three responses allowed Data: UBM Tech survey of 163 business technology managers engaged in smart systems deployment, May 2013 Note: Maximum of three responses allowed Data: UBM Tech survey of 163 business technology managers engaged in smart systems deployment, May 2013 Remote monitoring 68% Healthcare 47% Security 34% Energy & Utilities 30% Manufacturing 28% Biotechnology 21% Transportation 21% Safety 19% Retail 18% Education 13% Entertainment 05% Construction 02% Analytics 63% Device management 62% Mobile app development 54% Big data Sensor integration 52% Industrial automation (IA) is the use of machines and technology to increase producIt might come as a surprise that embedded development isn’t rated higher, since building smarter devices requires embedded code. However, it’s likely that the many respondents who rated mobile app development high (54%) were including embedded apps in that category. Given the tools available, developers are building the embedded intelligence required of smart systems into mobile applications. Typical enterprise tasks such as virtualization and data center infrastructure are lower on the priorities list. At 48% Virtualization 47% structure and smart city initiatives. Device provisioning - 47% In other cases, business liability is potentially high. Enterprise storage systems, for instance, help to ensure data is maintained, and storage must remain available. Predicting system outages and avoiding them is paramount. Smart systems can predict component failure Data center infrastructure Volume XVI Embedded development 30% Computer aided vision 28% chines; it analyzes the processes used with a feedback loop to learn from and improve them. As such, smart systems have been increasingly used in manufacturing to improve quality, reduce costs and increase safety. Mark Hessinger has created a remote as VP and general manager of services at mature in healthcare but are an emerging technology in IA, he says. Overall, he expects business-to-business adoption of smart systems to be slower than in the business-to-consumer market. the greatest challenge for smart systems adoption is customer acceptance and a willingness to begin using the technology. Once customers start to use it and see that their data isn’t at risk, they quickly become excited with the results, he says. However, getting to that starting point is a challenge. Overall, Hessinger sees improved system 46% and healthcare. These rankings also depend on whether you’re considering the use of smart systems from a business-to-business (B2B) or a business-to-consumer (B2C) perspective. For instance, with B2B, manufactur- beyond simply replacing people with ma- Based on his experience, Hessinger says, of downtime. 50% and delivering related services. IA goes services program for IA as part of his work most likely already in place for organizations focused on the future of smart systems. However, changes to existing architecture likely would be required before many organizations are ready to dive deeper into device-side smart systems development. For example, with highvalue equipment and systems, customers are looking for maximum utilization, so uptime is crucial. Therefore, monitoring becomes important, and diagnostics and 51% Database/storage tivity and quality when manufacturing goods This is especially true in manufacturing, where smart systems are deemed to have high impact in our survey. When something goes wrong in the manufacturing process, traditionally you would send engineers and techni- uptime assets and equipment ROI as the 19 connectivity, you can perform much of the same work remotely without the travel time and associated costs. With large potential savings, it’s not surprising to see that 21% of our survey respondents say their budget for smart systems development is $1 million or greater. Twenty-seven percent say they don’t have a set budget, which could indicate that their focus is on building the right systems despite up-front costs or that associated costs are being built into existing product development Note: Maximum of three responses allowed Data: UBM Tech survey of 163 business technology managers engaged in smart systems deployment, May 2013 the 58% Ability to analyze all that data 47% 42% Processing power to the respondents’ industries, as well as in-house expertise and education. Given the costs associated with deploying and managing sensor networks and associated connectivity (i.e. cellular communications), it’s not surprising that cost is the biggest barrier to smart systems success. However, those costs are coming down. Beyond this, device integration and management seem to be the top issues. 37% Decreased costs 33% Improved human-computer interfaces 30% New revenue generating opportunities 26% Increased revenue across existing products 23% 39% 23% Nothing, we’re ready now 04% In terms of challenges to enterprise systems, respondents indicate that smart systems and devices would require back-end changes to handle the explosion of data coming from smart systems. Very few say their back-end systems are ready now (see Figure 4). Since they could choose more than one answer, respondents indicate that almost all enterprise systems would require some degree of change. Although storage capacity and security once again rank high among our respondents, the bottom two choices -- management and processing power -- are still important considering the percentage of those who chose them (42% and 39% respectively). Respondents say greatest barriers to smart systems are cost (65%), integration with legacy IT systems (59%) and device management (35%). Regulatory requirements and the existing business model aren’t as much of a concern, with less than 20% of respondents identifying Volume XVI Increased customer satisfaction Security Management “ Note: Maximum of three responses allowed Data: UBM Tech survey of 163 business technology managers engaged in smart systems deployment, May 2013 41% 66% 46% These top three areas of support are followed closely by provisioning, security, remote management and power, in that order. This indicates that as far as the Internet of Things is concerned, we’ve reached an acceptable level in terms of device battery power, but improved connectivity and reliability (perhaps related to connectivity) are still required. - Storage capacity Communications bandwidth As mentioned above, smart systems development is still vices have only recently had enough processing power, connectivity and battery life. When asked where additional support is needed for successful smart systems deployment, 60% of the survey respondents say connectivity support, 50% device reliability and 48% storage capacity. - Solve domain problems 12% When it comes to topline business growth and new revenue streams generated from smart systems, respondents are clearly focused on connected machines, which they say will have the most impact on their businesses. When asked how smart systems will improve their busi- Customer lock-in 09% Conclusion Smart systems and devices have the potential to help us customer satisfaction and 37% decreased costs (see Figure 5). productivity of real-world processes, increase worker Closer analysis shows correlation between the answers. For instance, the high ranking of improved human-computer interfaces can be attributed to its relationship to increased customer satisfaction. in business processes. Although still emerging in many industries, these systems have already proven themselves in areas such as healthcare and industrial automation for many years. In terms of business value, half of the respondents expect smart systems to translate into less than $25 mil- As seen in this UBM Tech survey commissioned by Wipro, data storage and security remain high among the challenges to smart systems adoption. However, as say it would be less than $1 million, while 20% say between $1 million and $25 million. Combined with the almost 40% of respondents who say that they don’t know the dollar value of smart systems (or would rather not say), the results infer that most are in the early stages of deployment and are testing the market with limited use cases. and start to focus on the new business opportunities they’ll enable. increases, more companies in a wider range of markets will begin and expand pilot programs. And as real-world examples have shown, once companies experience and customer relations — and see their competitors doing the same — there will be explosive growth in their use across industries. 21 one might think we’ve already reached the extremes of specialization. Boeing’s initiative to build the 787 Dreamliner, for example, was hailed as the epitome of subcontracting—and then proved to have gone a bridge too far when the parts failed to come together as seamlessly as tains 379 links. But an aircraft is fundamentally a physi- from the productivity gains of dividing work into ever smaller tasks performed by ever more specialized workers. Today, thanks to the rise of knowledge work and communications technology, this subdivision of labor - be diced when it produces intangible, knowledge-based goods and the information involved can be transported anywhere in the world nearly instantaneously and at almost no cost. Just as people in the early days of industrialization yet widely understood, world of work. H A RVA R D B U S I N E S S R E V I E W the Age of like InnoCentive. Adam Smith’s Wealth of Nations, published in 1776, famously described what would be one of the central drivers of economic progress for centuries to come: the division of labor. Volume XVI - 23 salesperson, secretary, engineer— atomize into complex networks of people all over the world performing tage will soon strike us as quaint. “Software developer,” for example, already obscures the reality that often in a In the great tradition of the division of labor, this hyper- design, coding, and testing. And that is the simplest sce- of coders. As we’ll discuss, the potential quality, speed, and cost advantages virtually guarantee that this model in Connecticut, gets involved, the same software may be touched by dozens of contributors. nity of freelance developers as competitive challenges (opening the possibility of becoming a “top coder”). For erate the best new software-product idea. A second contest might provide a high-level description of the document that best translates them into detailed system requirements. (TopCoder hosts a web forum that allows developers to query the client for more details, and all those questions and answers become visible to all combecome the basis for the next contest, in which other developers compete to design the system’s architecture, specifying the required pieces of software and the connections among them. Further contests are launched to develop each of the pieces separately and then to integrate them into a working whole. Finally, still other sundry parts of the system. TopCoder’s model is intriguing, not least for what it allows its network of almost 300,000 developers from more than 200 countries to do. Because the company veloper who is particularly good at, say, designing user interfaces to spend the bulk of his or her time doing increasingly specialized. Some focus on programming ules. Some have discovered a talent for putting together software components that others have written. And clients with development work that is comparable in quality to what they would get by more traditional means but at as little as 25% of the cost. And it manages to do unalloyed? To ensure that hyperspecialization is as welcome as it is likely, we must keep our eyes open to its possible dangers. Quality improves when more of the work that goes it. The improvement is even greater when, as with TopThe term “hyperspecialization” is not synonymous with outsourcing work to other companies or distributing it to the same technologies. Rather, it means breaking work previously done by one person into more-specialized pieces done by several people. Whether or not those pieces are outsourced or distributed,their separation often leads to improvements in quality, speed, and cost. To understand the magnitude of the quality gains that hyperspecialization makes possible, consider how much time you personally spend on tasks that don’t draw on your expertise and that you may not even be particularly adept at performing. Just like craft workers of the past, knowledge workers engage in myriad peripheral activities that could be done better or more cheaply by others agers, for example, spend untold hours preparing slide decks even though few of them have the software facility and design sensibilities to do that well. Some are able to delegate the task, which at least allows it to be accomplished less expensively. But imagine a service like remote workers were brilliant chart producers,others were eagle-eyed proofreaders, and still others were confor instance, might specialize in sales presentations for Volume XVI view meetings for the pharmaceutical industry.) Add an inspired graphic designer, and there’s little doubt that the presentation would be enhanced. with one another to get it. This is the power of the online “open innovation marketplace” InnoCentive, which connects seekers of solutions— mainly businesses facing science and technology challenges—with solvers who may have fresh answers. (Full disclosure: Thomas W. Malone is a member of InnoCentive’s advisory board.) On any given day, thousands of scientists, engineers, students, and others troll through InnoCentive’s website looking for challenges that intrigue them. They know that if they formulate the solution that works best, they stand to collect the posted reward—which in some cases exceeds $100,000. For seekers, the appeal of InnoCentive lies mainly in the quality of the solutions it can yield. By casting the net so widely, it often pulls in solvers with very specialized experience who can make headway on problems that have stumped internal experts. For instance, as the business writers Julian Birkinshaw and Stuart Crainer have described, the pharmaceutical comthe volume and quality of clinical specimens passing through its automated chemistry analyzers. In 2008 it sponsored a contest on InnoCentive. After two months it had received 113 proposals from solvers around the world. Tod Bedilion, then the director of technology among them a novel solution that had eluded Roche for 15 years. specialization: speed. In Roche’s case, the isolation of the problem and the competition around it dramatically accelerated the discovery of a solution. More generally, hyperspecialization can reduce clock time by assigning them in parallel rather than serially. This can be as simple as many hands making fast work. A company called CastingWords, for example, produces transcriptions of time than the recording itself took to make. How is this possible? It’s not rocket science: CastingWords simply workers, whose services it procures through Amazon’s Mechanical Turk site, transcribe them simultaneously. Its automated processes use overlaps in the assigned bits ditions of the same phrase), and knit the separate pieces veals which workers can be trusted to do well on future assignments. “CastingWords seems like a magic trick to me,” a user named Merlin Mann comments on its site. 25 business-to-business sales process, accurate contact information about prospects must be assembled. As essential as that activity is, it’s a terrible misuse of the time “I babble for an hour, upload an MP3, and, somehow, they turn that into paragraphs. In, like, a day. It’s nuts. Like making a lady disappear.” vast army of workers doesn’t only make old tasks go faster; it enables the completion of a whole new class of time-critical tasks. Consider the search for Jim Gray, a well-known computer scientist who disappeared at sea in his small sailboat in 2007 and was never found. When the news of his disappearance reached his colleagues, they realized it would not be impossible to search the 30,000-square-mile patch of ocean in which Gray’s boat real-time satellite images were relayed to thousands of Mechanical Turk workers and volunteers for close been imagined— and suggests many other possibilities, ing’s overnight video feeds, to translating headquarters communications simultaneously into many languages, to responding quickly to a potential client’s complicated request for proposal. Increased speed is one of the reasons that hyperspecialization can reduce costs. Bedilion had this to say about his InnoCentive experience: “I couldn’t put 10 people in a room and have a brainstorming session or a two-day seminar for the same cost with all the travel involved. And I would have gotten a few hundred sticky notes rather than an entire notebook with 113 separate detailed proposals.” The biggest cost saving for most companies may come in the form of better utilization of their own employees’ time. Beimmediately have time freed up to spend on the highervalue tasks that only they can do. For example, in any Volume XVI employ microspecialists—such as the workers recruited masource sends this kind of data entry work to individuals in the developing world, who verify business web addresses, phone numbers, e-mail addresses, and DUNS (Data Universal Numbering System) numbers through a combination of web research and direct phone calls. Hyperspecialization reduces costs most dramatically when a company can turn to an expert instead of having to reinvent the wheel. For example, consider how much across the United States. Contrast that with the value a who each specialize in some tiny aspect of the law. A lines for U.S. antitrust cases, or the rules of evidence for out well ahead on costs. In any given company, hyperspecialization might reshape the organization in many ways, from the macro to the micro level of task assignment. Some of the tasks ries and processes might be upended. Managers might focus on lower-value-added tasks, as the clients of Samasource do when they hand over data entry. Or they might see greater value in tapping world-class expertise for high-end tasks. For instance, Business Talent Group and YourEncore have networks of freelance experts who provide clients with short-term, high-priced, but ideally higher-value consultation. Regardless of task level, capitalizing on hyperspecialization will call for new managerial skills and focus. First, managers will need to learn how best to divide knowledge work into discrete, assignable tasks. Second, specialized workers will have , founded in 1997, claims more than 1 million registered members and enables talent searches in 220 skill-based services categories. founded in 2003, reported in 2009 that payment for services through its site had exceeded $100 million. Most of its workers are located outside the U.S. 1998 eLance, founded in 1998, appeals to small businesses looking for graphic design, computer programming, web development, and writing help. By September 2000 it had more than $50 million in funding from top industry investors. 2005 Mechanical Turk, launched in 2005, was initially developed to distribute Amazon’s own tasks; it’s now available to others in need 1999 LiveOps, founded in 2000, relies on 20,000 home-based agents to provide ondemand, payper- minute call center services. 2001 Innocentive, munity for open innovation, was created in 2001. It stages competitions in which “solvers” of science and technology problems respond to the challenges of “seekers.” founded in 2005, provides transcription services to its clients, started providing labor on demand to verify information and categorize images and text in 2007. 2008 Samasource, founded in 2008, distributes computer-based work to people living in poverty around the world. began hosting algorithm comchops. Over time it has become more oriente toward staging design and development competitions contracted for by clients. 27 to be recruited and the terms of their contribution settled. Third, the quality of the work must be ensured. And Understanding how a specialization begins with mapping the tasks currently mediately suggest tasks and subtasks that could be performed with higher quality, at greater speed, or at lower cost by a specialized resource. In 2008, the phar- spending 20% to 40% of their time on things like data entry, web research, basic spreadsheet analysis, and PowerPoint slides. The company established a process company. Critical to subdividing knowledge work is understanding the dependencies among tasks and determining whether they can be managed satisfactorily if the tasks tinational company recently reorganized its administraexecutives’ travel arrangements to a select group of administrative assistants who could then become its travel specialists. In the end the company decided that because travel itineraries impinge directly on the scheduling of other meetings (and on family birthdays and anthe administrative assistants who worked directly with the executives. To complete hyperspecialized tasks, companies can use internal employees, develop dedicated relationships with workers to design and critique its products. one of the key disciplines of 21st-century business. Hyperspecialization will require most managers to learn to work with the kinds of dedicated intermediaries that have sprung up in recent years to provide access to pools of skilled labor. (See the exhibit “The New Brokers of Work.”) Much as “cloud computing” services - One way to ensure the quality of hyperspecialized work is to do what most companies do before they hire employees: check credentials. Some demand access to large groups of appropriately specialized workers. The intermediaries enable clients to accomplish tasks that range in size from tiny to quite large. On Mechanical Turk and Samasource, workers undertake small tasks that last a few seconds or minutes in exchange for payment ranging from several cents to several dol- including web development, graphic design, writing, and business analysis—for payments of several hundred to several thousand dollars. InnoCentive and TopCoder undertake complex activities such as software devel- Enterprises that already use hyperspecialization have developed a variety of innovative incentives for their communities of workers. Most of them pay, but many rely on other incentives as well. TopCoder, for instance, posts detailed individual performance statistics that are visible to the entire community, and members often go to great lengths to get their names on the list of top contributors. Another key motivator for many workers is the ability to select their own tasks. TopCoder’s founder, Jack Hughes, believes that this is a leading reason for his community’s high productivity. com, still rely on this approach. But over the past decade several new approaches have emerged. Paying on the basis of an outcome is one. For instance, when a contest is held on InnoCentive, the client does not pay until a solution to the problem has been developed. Users of Mechanical Turk don’t pay unless the work meets an acceptable level of quality. Another approach is to have multiple workers complete the same task and use only results that are replicated. A related method is to mix real tasks with test tasks for which the correct answer is already known. The intermediary its test tasks wrong. Still another approach is to have one group of workers do the tasks and another group rate the outputs. Integration: The last managerial challenge presented by hyperspecialization is the need to integrate separately produced pieces into a coherent solution. This means managing the three kinds of dependency described by Malone et al. in the March 1999 issue of Management The most obvious way to do that is to have someone in authority direct the process. Some experienced members of the TopCoder A ccurs when separate outputs must be integrated into a whole. Modular architecture and develops an overall architecture in the early stages of its modules. Once the architecture is in place, the modules can be developed simultaneously, speeding the overall process. well. when it experimented with hyperspecializing its internal For example, in a , tasks occur in a sequence, with later tasks reliant on the output of earlier ones. Software tools can often manage this by tracking task status and automatically passing work from one stage to the next. CastingWords uses specialized soft- small number of dedicated outsourcing companies. The T-shirt maker Threadless created its own community of them, and learning how to keep them engaged. In fact, cultivating communities of workers is likely to become workers who will transcribe them, then to detect and - Volume XVI In a , more than one worker uses the same resource. A common way to manage this dependency is with various forms of markets and bidding. TopCoder’s programmers, for instance, often contribute to—and reuse modules from—a library of software components. Those who contribute are paid a royalty when others use their work. The time of people potentially available to do tasks is another critical shared resource; ding markets to manage this dependency, too. the contests and developers to get the information they perspecialize in coordinating the work of other special- As hyperspecialization becomes more common, attracting contributions from the most talented workers will become a critical success factor for man businesses. And it will increasingly resemble the way sales and marketing organizations now attract customers: by under- link clients with communities of specialized workers. scribed pieces into a single document. 29 sponsibilities. And the autonomy workers feel when they can choose their own assignments has a strong appeal. For companies, hyperspecialization allows capacity to be ramped up and down very rapidly. In the wake of Hurricane Katrina, the Red Cross hotline was overwhelmed - The agency quickly engaged 300 LiveOps agents, who handled more than 17,000 calls over the next few days. Hyperspecialization can also ameliorate the skills mismatch that plagues many national labor markets. Even with today’s high rates of unemployment, companies tain key employees, such as sales representatives, engineers, and accountants. These shortages might be alaccountants coordinated the work of hyperspecialists ers in developing countries. But as economic development worldwide advances in the coming decades, labor market arbitrage will become less common, and at least some of this wage gap is likely to close. And, of web. A recent survey by a researcher at Harvard’s Berkman Center for Internet & Society showed that workers Another concern is that dividing work into minuscule fragments allows the unscrupulous to conceal the goals prototype system called CrowdForge, developed by researchers at Carnegie Mellon University. It addresses piece of high-quality prose be assembled from the output of people working on small bits of it in isolation? CrowdForge came up with an answer by using Mechanical Turk workers to write encyclopedia articles. First it asked some workers to write outlines for the articles. ent sections of the outlines. Still others used those facts to write paragraphs for each section. Finally, the system automatically concatenated the paragraphs according to the original outlines. Independent evaluators found that the articles were of higher quality than articles produced by single authors at the same cost. Of course, we don’t know how far a hyperspecialized approach to writing might go. But perhaps business Volume XVI reports, proposals, and other documents written by a single person will someday be as rare as handcrafted clothing and furniture are today. companies, workers, and society as a whole. But it has a potential dark side, which must be addressed. Although many of these advantages and disadvantages also occur with the outsourcing and distribution of work, they The promise: ployment arrangements do. Individuals can often work where and when they choose. Agents for LiveOps, which attractive, because it allows them to operate from home and makes it easier to balance work with personal re- what they produce—not by résumés, prior experience, or references. This can be liberating for young people ed to the work world, or those who risk discrimination in face-to-face workplaces. Pearl Interactive Network, an Ohio-based company that performs outsourced tasks ties. Hyperspecialization also provides virtual labor mobility for people who live in developing countries. Wages in advanced economies can exceed those in some emerging nations by as much as a factor of eight. Being able to undertake small tasks on sites like Samasource and standing of workers in, say, Africa and South Asia. The perils: A cloud looming over the future of hyperspecialization is the possibility that it will facilitate what the Harvard law professor Jonathan Zittrain calls “digital sweatshops,” where workers are exploited for very low wages. These wages result in part from labor market arbitrage. What are viewed as sweatshop wages in advanced economies can be quite attractive to work- may unknowingly be contributing to something counter to their personal beliefs. A recent study of Mechanical Turk suggested that more than 40% of the tasks on the signing political or corporate advocacy to give the appearance of a grassroots movement). This highlights a related problem: Small-task intermediaries like Mechanical Turk have made it easier to game the internet. And when work is divided into tiny tasks, it may become dull and meaningless, perhaps even producing of labor, noting the deleterious results when a person’s work was reduced to “a few very simple operations.” Two other potential problems are the growing amount of work done on spec (that is, with no guarantee of payment) and the increased surveillance of electronically connected workers. Neither is unique to hyperspeciallike graphic design and writing, and close surveillance of workers is still common in factories. But the contestbased business models of some intermediaries rely 31 much more heavily on spec than typical freelancers’ work arrangements do. And other intermediaries have ominous. Finally, over the long term hyperspecialization may elimilution eliminated some traditional crafts. During the industrial era, social mechanisms eventually emerged to manage employment arrangements, but the transition was wrenching. A move into the age of hyperspecialization could prove equally so. : How might we address some of the less attractive aspects of hyperspecialization? Currently, a patchwork of regulations, mostly designed for the industrial era, govern work—including hyperspecialized work. Each country or region has its own rules. If roughly comparable rules were adopted across national boundaries, through either agreed-on company standards or new government regulations, egregious exploitation or deception could be reduced, along with uncertainty for both companies and workers. The goal would be to create the equivalent of a free-trade zone in which workers were protected, companies got the work they needed, and governments collected the appropriate taxes. Establishing global rules and practices to govern hyperspecialization would be a big challenge. On one hand, the very concept of hyperspecialization cuts against the grain of many countries’ labor regulations, especially in the European Union. On the other hand, some developing economies may well resist any rules or standards, fearing they would curb growth. It might be possible to reframe knowledge work undertaken on the web as a form of international trade. Thus global rules for the exchange of knowledge work might create win-win outcomes—much as the loosening of trade restrictions, massive expansion of trade in goods since World War II. Mechanisms are needed for hyperspecialized workers to develop skills over time and to transfer their work records from one intermediary to another. Those who operate online from home may also want to connect with peers to share war stories or simply to vent. In prior writ- Volume XVI ings we have called for the rise of a new form of guilds to provide the dispersed digital 21st-century workforce with professional development and a sense of community. The New York– based Freelancers Union and other independent worker organizations have emerged to help so as well. Work divided into ever tinier parts doesn’t necessarily lose meaning. Medical specialists, for instance, often focus on very narrow aspects of keeping people healthy specialized workers in a factory, who do the same tasks all day, digital hyperspecialists can easily construct personal portfolios of tasks. An engineer, for instance, might companies use it will determine which ones achieve competitive advantage. ization have relied on intermediaries like Mechanical Turk and TopCoder. But as it becomes more prevalent, enterprises will most likely try using it to organize their internal activities as well. And new kinds of intermediaries may step in—governments that want to create employment for their citizens, for example, or organizations that represent workers’ interests. We envision the emergence of by global rules and standards—to support hyperspecialization. It would be much like today’s web, except that instead of enabling the exchange of information and InnoCentive and then relax by doing some less demanding work on Mechanical Turk. of knowledge work. No discussion of the future of knowledge work should puters take over tasks formerly performed by people. One recent example is a new generation of software tools that analyze massive amounts of text. Used during the discovery phase of lawsuits, this software can is the Patrick J. McGovern Professor of Management at the MIT Sloan School of Management and the founding director of the MIT Center for Collective Intelligence. He is the author of The Future of Work: How the New Order of Business Will Shape Your Organization, Your Management Style, and Your Life (Harvard Business Review Press, 2004). by laboriously reading box after box of documents. In tiatives will become viable candidates for pure automa- is a research scientist and the associate director of the MIT Center for Collective Intelligence. or augment hyperspecialization, by automating some tasks or managing portions of the process. Given the ns is the senior vice president of innovation and workforce solutions for ManpowerGroup. of hyperspecialization should continually monitor the potential for fully automating certain knowledge work. Hyperspecialization is the human cousin of the information technology tools that have become available to businesses over the past few decades. In the case of computer technologies, the simple act of buying and deploying them was not enough: Companies that used these new tools wisely, in concert with organizational innovations and people practices, gained an edge. Hyperspecialization presents a similar opportunity. How 33 - S U RV E Y R E P O RT the stAte of Subu Musti This Wipro and UBM Tech survey talks of how hyperconnectivity, which describes mutli-client and multi-device access to enterprise resources, can help improve customer service and relationships. Director - Mobile Strategy, Wipro Mobility Solutions, Wipro Limited cost savings and revenue opportunities moving forward. Overall, the indication is that hyperconnectivity leads to new opportunities, improved customer relationships and Kedar Limaye Director & Consulting Partner, Wipro Mobility Solutions, Wipro Limited Enterprises expect hyperconnectivity to improve customer service and customer relationships, according to a new research from UBM Tech and Wipro, based on 238 high-level marketing and IT managers respondents (see the sidebar, for a more detailed breakdown of the respondents). Nearly half also expect a bump in mobile productivity. on deeper engagement with existing customers before attracting new customers and that most place higher makes sense as it’s cheaper to keep existing customers—and sell new or add-on services to them—then it is to prospect for and attract new customers. The research set out to provide insight into how enterprises plan to use hyperconnectivity as it relates to mobile connectivity, user productivity, social network integration, work- Volume XVI Hyperconnectivity, which describes multi-client and multi-device access to enterprise resources, involves mobility, personalization, localization, and the management of the customer experience. The data, applied analytics, and trends that are discovered as a result are harnessed by corporations to manage and improve the corporate strategy and even their entire organization structure to better serve customers. Hyperconnectivity has the potential to transform companies into next-generation enterprises. Nearly three-quarters (72%) of all respondents to the UBM Tech research survey indicated that they agree or increase the customer engagement index. Only 3% of all respondents disagreed (rating of 1 or 2) while the remaining 25% were neutral or unsure (rating of 3). full 85% of marketing professionals agree or completely agree (rating of 4 or 5) and 68% of IT agree that hyengagement index at their company. 35 In fact, respondents expect that hyperconnectivity will help them meet their business goals primarily by strengthening customer bonds (see Figure 1). According to the survey responses, the top three ways that hyperconnectivity will help achieve business goals are: 1.Improving customer service (55% of marketers; 70% of IT) 2.Building stronger customer relationships (55% for marketers; 44% for IT) ships, learn to support them better, and provide them better value with the goal to increase sales. As examples, the integration of social media represents an additional channel for marketing, and the additional customer touch points lead to a better understanding of users’ needs outside of the product(s) they’re currently using. This leads to increased satisfaction and new sales to existing customers, achieved through new product features or even new product families, as customers’ needs are better discovered. 3.Increasing mobile workforce productivity (51% for marketers; 45% for IT). These results show that companies believe hyperconnectivity can improve business: companies are marketing to their existing customers to improve their relation- Note: Maximum of three responses allowed Data: UBM Tech survey of 238 insurance business technology and marketing professionals, May 2013 Build stronger customer relationships Increase mobile workforce productivity Open up newer communication channels Increase revenue Attract new customers Drive new sales Reduce customer acquisition costs Increase margins Revenue through partnerships 50% Date / Time format 48% 39% Social network integration One philosophy for software design is to focus mainly on users’ needs and the data required, rather than on building an application for the desktop or a mobile device. This approach can enable a user to collaborate on a document with another teammate regardless of whether they’re at their desk, working from home, commuting, or on business travel. The device type and user location become less important, and the experience needs to be consistent across all locations. 34% Currency format 27% Location based services 25% 46% 42% location. Survey questions that ask about customer service, creative marketing, and in the integration of social media into more traditional applications support this, as we’ll see in the next section. 24% 21% No personalization supported 21% User interface customization Analysis of user searches 17% Learning of user searches 15% Targeted ads ( from ad engine ) 14% 22% 22% 9% 6% 6% Many companies are betting their future success on tight social network integration and data mining. For example, software vendors are increasingly integrating social media authentication (such as Facebook user ID and passa level of convenience for users and opens the door for deeper analytics, leading to a better understanding of their customers’ needs and interests. The sharing of social media information works in three important ways: standing of their customers as well as their experiences with the related application. Second, it provides an additional channel of communication between vendors and Social media allows users to collaborate and communicate more easily (with each other as well as with application vendors), and it opens opportunities for deeper understanding about these customers. Although social media data may be outside the business context, understanding customers on a personal level helps companies better meet their needs on a business level. Suggestion of content 31% 27% cations and improved internationalization features, such as multi-language support. Purchase history tracking 20% 66% - Note: Multiple responses allowed Data: UBM Tech survey of 238 insurance business technology and marketing professionals, May 2013 Multi - language support Companies are using hyperconnectivity to better enImprove customer service - 7% users. Finally, it leads to new personalization and interaction based on social media patterns. integration as a personalization feature for to their enterprise application users (see Figure 2). This integration is at the heart of hyperconnectivity, as it plays a huge role in connecting the various forms of technology people use throughout the day. Other methods of personaliza- Volume XVI that increased customer engagement is the top way that This engagement is done through both traditional channels as well as new channels created by the move to hyperconnectivity. For IT, customer engagement was For both groups, the second area of impact is increased brand awareness (51% and 30% for marketing and IT respectively). When asked to rank all of the ways in which mobile one answer (57%), with mobile device email integration at a close second at 56% (see Figure 3). When broken out separately, both the marketing and throughput second (64% for marketers; 53% for IT) and emergence of a self-service model third (36% and 44%). Almost 50% of both groups indicated that between 10% and 29% of their customers would adopt self-ser(see Figure 4). Just over 37 one-third of those surveyed expect that less than 10% of their customer base might adopt self-services apps in ables users to help one another, gain assistance through new automated procedures (either online or via mobile integration), or connect to vendors over social media, in addition to traditional methods such as phone-base customer support. exists. With hyperconnectivity, for example, do the mobility-driven changes in user expectation represent a sea a few key areas? The ability to use social media to expand the viewing experience in real-time while watching a television show is a good example of a revolutionary hyperconnectivity experience. Simply creating a featurefor-feature equivalent of a desktop application for a mobile device may only be considered evolutionary. 44% for IT). Interestingly, the third most common answer Note: Multiple responses allowed Data: UBM Tech survey of 238 insurance business technology and marketing professionals, May 2013 Mobile device email integration 68% Despite the potential for hyperconnectivity to improve business, respondents point out many areas for improvement, including bandwidth, security, device capability, and so on. For instance, only recently have devices contained enough processing power, memory, storage, and screen resolution to accomplish tasks otherwise done on a desktop or laptop. Although device capabilities continue to improve, in many cases users cite additional needs to support a truly hyperconnected experience. The technologies that IT and marketing managers felt would best enable growth and adoption of hyperconnectivity in the next three years are: 64% Emergence of self service model 36% 34% Integrated help system 32% In May 2013 UBM Tech conducted an Application initiated phone call online survey on behalf of Wipro. A total of 238 business technology and marketing turing, healthcare/medical, and banking/ percentage points. UBM Tech was respon- 3. Improved security (53% for both groups) sis. These procedures were carried out look this crucial feature. the total respondent base (N=238) is +/- 6 Mobile device email integration Emergence of self service model Interactive chat services Application initiated phone call in strict accordance with standard market research practices. - 54% 53% sible for all programming and data analy- This relatively low rating for mobile payment support is somewhat surprising, especially as the market for mobile users and applications continues to grow. Confusion over what a mobile payment is (for example, Pay- Integrated help system 44% 31% 18% the numbers in the responses. Alternatively, it’s possible enough to require mobile payments. Possible mobile payment methods include PayPal, direct mobile billing through the carrier, Google Wallet, Amazon Payments, QR codes, contactless NFC, or credit card vendors (i.e. Visa payWave, MasterCard PayPass, or American Express Mobile). 15% Base: 118 IT respondents son of respondents with marketing titles and IT titles. The 47 marketing professionals base yields a possible margin of error of +/- 14 percentage points, and for the IT segment of 119 respondents, it is +/- 9 percentage points. Savvy companies try to look beyond the hype to determine whether new technology represents a new para- indicate that they don’t currently plan to support mobile payments. industries such as technology manufac- 2. Increased use of cloud-based services (60% for marketing and 47% for IT) - 30% Base: 47 marketing respondents The greatest possible margin of error for fact that security appears in the top three enabling technologies shows that this is a key concern in the area of hyperconnectivity as well. A focus on security can be a One area where many have predicted a sea change related to hyperconnectivity is in the area of mobile payments. In the UBM Tech and Wipro survey 15% of marketing and 20% of IT respondents say their applications already support mobile payments/billing, whereas 38% of marketing and 45% of IT plan to roll out mobile payments/billing in the near future. Nearly half (47%) of mar- Interactive chat services 1. Improved mobile bandwidth (72% for both marketing and IT) IT security is too often poorly planned, and planned too selected “common user interface components” and “a more personalized experience” (tied at 44%), and the IT group chose device convergence (40%) for their third choice (see Figure 5). When asked how they envision their applications’ user experience changing in the future, 70% of marketing and 60% of IT managers cited multi-device compatibility, followed by seamless connectivity (59% for marketing and Volume XVI - 39 Note: Multiple responses allowed Base: 47 marketing respondents Data: UBM Tech survey of 238 insurance business technology and marketing professionals, May 2013 Base: 47 marketing respondents Data: UBM Tech survey of 238 insurance business technology and marketing professionals, May 2013 Multi-device compatibility Multi-device compatibility 70% Seamless connectivity 60% Seamless connectivity 59% Common user interface components In the face of rising costs, increased liability 44% More personalized experience and expensive downtime, the construction industry increasingly uses technology to 39% such as Rasmussen Equipment rely on the 30 to 49% 13% 10 to 29% 48% None 0 Base: 47 marketing respondents Quicker transactions 39% Increased device-to-device communication - 50% or more 4% Under 10% 35% 44% Device convergence able bandwidth from wireless carriers is their number one technology enabler for hyper- 37% Common app management platform 35% Predictive based on user patterns connectivity, according to Rasmussen’s Shane Johnson. Location-based functionality is important in construction, especially in terms of helping 26% Enhanced security More convenient billing and payments 44% Device convergence 40% Common user interface components 39% Enhanced security 39% More personalized experience 39% Quicker transactions 23% Increased device-to-device communication 23% More convenient billing and payment Common app management platform 24% 20% 14% 20% Base: 47 marketing respondents Base: 118 IT respondents crews travel and communicate in remote locations, and to track the whereabouts of expensive equipment. Additionally, as with especially as security concerns are ironed out. most, security remains high on the list of needs in the area of hyperconnectivity. Areas of hyperconnectivity that aren’t as important to Rasmussen Equipment and other companies in the construction indus30 to 49% 10% 50% or more 5% Under 10% 27% 10 to 29% 49% None Base: 118 IT respondents 9% try include social network integration and ity is in the early stages as mobility continues to mature. As mobile device and application usage increase, the need to personalize users’ experiences and integrate work seamlessly across desktop environments, tables, and smartphones as users change locations — is sure to increase and accelerate. Device compatibility and improved mobile bandwidth (as well as costs) are important factors for the future of hyperconnectivity. Although mobile payments are slow in gaining traction, adoption is certain to increase over time as vendors continue to integrate with social media, where forms of mobile currency are gaining popularity, Volume XVI Overall, marketing and IT managers surveyed believe that hyperconnectivity leads to new opportunities, imEnd-user experience and value is top of mind for both sets of respondents. When the goal is to increase customer satisfaction and improve relationships with existing customers through hyperconnectivity, both the companies and their users will win in the end. http://www.inc.com/karl-and-bill/its-cheaper-to-keep-em. html, also “Industry Outlook 2013: CMOs Lead the Big Data Revolution”, http://www.wipro.com/the-data-directive/docs/Wipro-analytics-CMOslead-the-data-revolution.pdf 41 Vice President & CTO, Energy, Natural Resources & Utilities, Engineering & Construction, Wipro Limited smArter fielD work mAnAgement systems Generation Transmission Grid Operations Web Customer Access Mobile Customer Access Mobile for Field Work Customer Care Partner Access Distribution Enterprise Shared Services Customer Service Commercial Power Trading Service Management Field Work Management Vendor, Partners NON UTILITY TRANSACTIVE MARKET INFORMATION MODEL COMMON UTILITY INFORMATION MODEL UTILITY CONTROL APPLICATIONS Utilities can exploit emerging technologies and the unique opportunities Customer Management Local Energy Market Operations UTILITY Enterprise Access EMERGING NON UTILITY CONTROL APPLICATIONS Generation Control Distribution Management Demand Response Management Micro Grid Management & Control Transmission / SCADA Control Automated Metering Control Data Center & Network Operation Centers Commercial Control EV Management Non Utility Device Management Industrial Control Residential Control micro-grids is an area that can expedite the growth agenda. Utility Connected Assets Recent innovation in smart grid technologies is set to transform the global electricity business by introducing transactional local markets, often referred to “transactive tiated by a wide scale deployment of net-zero residential generation, demand driven community micro-grids and Connectivity Model Non Utility Connected Assets Standalone Assets Every utility today focuses on many aspects of planned maintenance, inspection, customer facing energy services and vegetation. The existing systems and processes Generation Home Automation Devices Distribution Enterprise IT Transmission Metering Commercial Automation Devices Solar / PV Storage PHEV Stations Community Micro Grid with regulatory or other service level criteria. This model areas of deployment, maintenance and management of local resources such as residential solar and community micro-grids. This work opens up a plethora of opportunities for local utilities to extend services by exploiting existing customer base, vendor relationships, processes, scale to meet the commercial needs of the emerging utility market. The service model in a local energy market will be competitive, driven by cost and service levels as op- work must be proactively managed to minimize cus- Volume XVI Generation Distribution Residential Transmission AMI WAN LAN MESH WIMAX WiFi WIMAX Wireless LAN PLC DNP3 Voice Radio Mesh Cellular Enterprise IT Commercial Industrial Electric Vehicle Micro Grid In all market scenarios, planned work must take into account customer preferences such as time, day of week, preferred touch points, schedule details and comPublic Internet 43 tor and report a variety of useful measurements such as location, speed, vehicle condition, fuel status, boom angle etc. The live feed cameras in the vehicle can provide a 360 degree view and when integrated with telematics data, can deliver a new range of safety applications. In connected communication scenarios, the VAN can deliver reliable voice at a competitive cost. In emergency scenarios, the VAN can switch to a pre-allocated and negotiated communication band, increasing availability and reliability under all environmental conditions. In computing requirements. Private / Public Cellular Public WiFi cessful completion and periodic customer communications are the key factors in driving customer satisfaction and growth. A comprehensive systems architecture to meet such requirements is presented in Fig 1. This architecture holistically integrates emerging technologies and centralizes process management structures to effectively scale and exceed customer satisfaction. and vehicles. Integrated technologies provide a unique outage management truck used in day to day restoration, should be equipped with a low cost computing nected and disconnected modes. This vehicle, will also implement a communication platform architected with advanced radios, which can seamlessly manage a wide spectrum of available networks ensuring high availability and low operating costs. In addition, these mechanisms will provide digital mobility for several feet around the vehicle delivering a Vehicle Area Network (VAN) and ensuring untethered access to key diagnostic and other work management applications. The communication layer can also implement reliable mechanisms for the computing platform to con- integrate advanced telematics that can measure, moni- Volume XVI 45 The crew productivity can be tremendously improved by strategically employing wearable technologies to expedite work completion. The next generation work helmet will include a camera, GPS, poisonous gas sensor, accelerometer, temperature sensor and induction sensor. Most engineering design diagrams and safety manuals can be housed in the vehicle-computing platform and streamed directly to the technician’s wearable or proable can stream real-time video from the work site to a remote diagnostic center where an expert can help aid with a guided robotic arm and other special devices that can help resolve technical issues such as attending to rooftop solar panels. Most digital grid devices incorporate powerful processors and several components like data validations etc., of an end-to-end business process can be executed right within the device. Many such business processes can be functionally de-componetized and distributed across grid devices, the vehicle computing platform and chitecture that is functionally distributed as opposed to stove-piped service architectures. A primary feature of this app architecture is its ability to dynamically recontion capabilities. Utilities must extend the existing apcomponents so that they seamlessly align and deliver clude scheduling and dispatch apps. The former should prioritize work based on customer preferences, historical work crew performance and contractual obligations. The latter should initiate work based on real time crew availability, environmental and service level agreements. All app components will embed several adaptive learning and predictive algorithms and evolve to optimize work dispatch given customer expectations and resource availability. These new age apps will work with Volume XVI advanced asset management and operational systems to deliver optimal work schedules. Crews will be empowered with specialized apps that can provide individualcustomer satisfaction. These apps will work in tandem with communication systems that can deliver real time work status anywhere, anytime to customers. A practical realization of a residential solar panel outage/restoration process is depicted in Figure 3. a robust communication layer enables a unique opporcesses. Utilities can set up a network operations center work including existing lines of business regulated work. In addition, these centers can also prioritize, sequence, dispatch and manage work across the entire service tasks and respond quickly to an emergency scenario like a tornado disaster. Customer preferences and compliance criteria can be implemented using standardized processes, established and directed by these operations centers. These centers can also implement predictive process models that can help optimize operational costs processes can be centrally captured and analyzed for As smart grid and other digital evolutions mature in the electric industry, accelerating local market structures, utilities can expand their service resulting in higher customer satisfaction and retention rates. Smart utilities can leverage their existing customer base and advance the gies. $10 BILLION INDUSTRY BY 2016 Source: Gartner Applied Research & Business Innovation Lead, Strategy Solution & Architecture Group, Manufacturing & Hi-Tech Business Unit, Wipro Limited A force for chAnge in the mAnufActuring inDustry Do manufacturers truly understand the impacts of dematerialization on business as we now conduct it on the global stage, and are brave, new, dematerialized world? Today, with digital technology, manufacturers can make make it. This is commonly known as dematerialization. Jonathan Koomey, of the Lawrence Berkeley National Laboratory and Stanford University, is considered an expert on the trend toward dematerialization, which he moves the need to create a physical product,” Koomey says, “and it also saves the energy associated with transporting a product.” In recent years, the phenomenon known as demateas disruption, for multiple industries. Dematerialization Volume XVI enables conservation of natural resources and moves businesses away from waste toward sustainability. So it’s not surprising that the government, insurance, music ernment—and mortgage-backed securities, commercial This conserves natural resources saves money and can be stored quite handily in cyberspace—dematerializa- adopters, given their historically paper-intensive methwere quick to migrate to electronic recordkeeping, which is far less expensive, far more accurate and requires considerably less physical storage space. Quickly seeing At present, in the United States alone, according to the U.S.-based Depository and Trust Clearing Corporation (DTCC), most U.S. securities, including U.S. gov- Today, it is the manufacturing industry’s turn to gear up for this transformation, and as the waves of dematerialization—or, more accurately, tsunamis—crash over the heads of manufacturers large and small, what can we expect? Driven by Digital technologies (social + mobile + analytics + cloud (SMAC)) and consumerization of IT, facturers broadly in the products being produced, and 49 in the manufacturing processes they follow. The demaways these products are digitally marketed, consumed or experienced. On the process side, the dematerializa- new ways of manufacturing like additive manufacturing. There was a time when the Internet was the “next big thing.” Before that, it was In the transformation from physical to digital substitutes, the prominent dematerialization trend is that of the bundling of digital services around the core product. As noted before, the digital (SMAC) technologies and consumerization of IT are driving this adoption. More ways are available now, for digitally performing the pre-purchase, purchase and post-purchase activities. With increased digital consumption of the product in real time, as well as the move away from a full-time ownership mode toward a subscription mode, consumer-led innovations are also accelerating digitization of services. To illustrate this, consider the sea change happening in the automotive manufacturing segment. personal computers. So is dematerialization the next big thing? It certainly has the Surrounding the physical product (the car), we see a proliferation of digital services for pre-purchase, purchase and post-purchase stages — such as crowd-sourced car designs, virtual reality based car-buying experience; online multi-channel order placement and tracking; personalization of navigation services, infotainment services, vehicle-health diagnostics, safety-wellness services and eco-footprint service during usage of the car. Advanced smart digital algorithms on the car, is also transforming the driving-experience from ‘driving’ to ‘being driven’. power to wipe out many legacy industries, but it also has the potential to exponential- - ly increase wealth for manufacturers and cesses well-being for consumers all across the On the factory-side impact of dematerialization, the adoption is broadly driven by three trends, namely, globe over the next two or three decades. Watch for emerging technologies, such as We see this adoption poised to increase across all manufacturing segments, such as aerospace, heavy engineering, and automotive. So, do manufacturers really understand the potential of dematerialization to disrupt their industries? Are they taking appropriate precautions to ensure that they can survive? Wipro and The Outsourcing Center conducted a survey of 44 manufacturing industry professionals that encompassed C-suite executives, managers, team leaders and individual contributors; the purpose of our probe was to get a handle on how prepared these companies are to migrate to this brave, new manufacturing world. their organizational footprints span the Americas or Europe, with 75.6 percent covering the Americas and 53.7 3D printing, to profoundly disrupt traditional manufacturing. It’s not a question of “if.” It’s a question of “when.” To take a few process-side digitization examples, virtual reality immersion technologies, 0.98% prior to actual production runs, - 22.0% ing using virtual digital collaboration media 34.1% 34.1% On the fabrication side, 3D printing is revolutionizing the way products are created and serviced. Products are ‘engineered to order’ and spare-parts are ‘printed-toAdvancements in material science (like nano-electronics, printed electronics and bioelectronics) have embedded intelligence into the products, making it smarter, smaller, fewer, lighter, greener and autonomous. Thus, the dematerialization of processes, fabrication and smart materials, is helping optimize production costs, minimize waste, reduce prototype cost, and ease collaboration across geographies. Volume XVI Extremely aware; an action plan is in place to address the issue Very aware; an action plan is being prepared Somewhat aware: currently discussing the need to gather information Dimly aware; want to respond but don’t know where to start Completely unaware or slightly aware but have no plans to learn more or take action 51 percent covering Europe. Just behind Europe, we found that 46.3 percent of our respondents’ organizational 24.4 percent encompass the Middle East and Africa. ufacturing organizations in all geographies really are. We got a few surprises. Read on: gaged an IT services provider to stay ahead of the curve. More than twice that number (35.7 percent) responded that their company is very aware of this trend and has a task force that is creating a road map that will enable an to be worried, too. One can only wonder about the fate of the stragglers. only somewhat aware and at the brainstorming stage. Moving into the factory-side impact of dematerialization, the emerging trend toward digital and additive manufacturing is being driven by such new technologies as 3D printing, new material science products, nanoelectronics, printed electronics and bioelectronics, as well as virtual, immersive experiences and simulations, all of which have implication across the manufacturing processes. We mentioned that dematerialization would include the shift from material resources to cloud-based and SaaS services for sales force support, videoconferencing, digital imaging, business collaboration, system backup and a host of other business activities. Interestingly, we encountered a tie with this question. A little more than one-third of our respondents (34.1 percent) indicated that their organization is extremely aware of the need to adapt and already has an action plan in place to address the issue. A little more than one-third (again, 34.1 percent) responded that their organization is very aware of the issue and is in the process of preparing an action plan. Fewer (22 percent) responded that their organization is somewhat aware of the issue and is currently discussing the need to gather information. organization is dimly aware, with some understanding that there is a need to respond but little idea of where to start. None of the individuals we surveyed indicated that their organizations were completely unaware and had no plans to address the issue. So about 68 percent of those we surveyed believe that they are in a position to adapt to this shift. - 02.4% 16.7% 19.0% 35.7% 26.2% Extremely aware; our CIO has engaged an IT services provider to keep us ahead of the curve Very aware; we now have a task force in place is creating a road map so that we can remain agile in responding Somewhat aware: currently discussing the need to gather information Dimly aware; it’s on their list, but they curCompletely unaware and borderline scornful; they don’t think consumers have the capability to drive innovation Consumerization generally refers to an environment in which consumers have become the primary drivers of technology innovation. We wondered whether their leaders are taking action to ensure that the business remains competitive and maintains speed to market with products. Finally, 19 percent are only dimly aware—this is on their company’s list, but is not a high priority—and 2.4 percent indicated that their organizations are completely unaware of the trend or even refuse to believe that consumers have the capability to drive innovation. At least Only 16.7 percent indicated that their organization is extremely aware of this trend and that their CIO has en- marshal some resources to get prepared; another 26 percent, which approaches one-third, are aware enough Volume XVI To take a few process-side impact examples, virtual product design using virtual reality technology is showtype cost and ease of collaboration across geographies. constantly on your guard,” to “it impacts strategy decisions,” “heavily,” “we are planning for the inevitable” and “we are very aware.” It should be noted that additive manufacturing processes, such as 3-D printing, are still in the nascent stage; it is therefore not that surprising that manufacturers of a traditional mindset might not perceive it as an imminent threat. However, the fact remains that any manufacturer along a given supply chain—especially one deeply entrenched in traditional processes—would be well advised to assess the potential impact of additive manufacturing on operations. It’s true that, at present, additive manufacor production of small quantities of highly customized items or those that are technically complex. But this new 3D printing is also revolutionizing the way products are fabricated and serviced, and digital simulation of production plans prior to actual production is helping to optimize production costs and minimize waste. Additionally, nanoelectronics and printed electronics have embedded intelligence into products, making it much smarter, smaller and autonomous. To investigate this, we quizzed our respondents about additive and digital manufacturing. - Research conducted by The Outsourcing - Apparently, this one hit a nerve. Since additive manufacturing issues include global supply chain security, increased reliance on modeling and simulation, faster innovation that responds to consumers’ needs— all of which are important to the health of a manufacturing business—their silence was a bit deafening. cant number of manufacturing organiza- But let’s focus on the responses we did receive: They were very polarized; there really was no middle ground. Responses on one end of the spectrum indicated a sig- 1975 and whose name was then synony- ents,” to “hasn’t impacted us yet,” to “has no impact at all; my company is very archaic.”) Responses on the opposite end demonstrated a comprehension of crystal clarity; they ranged from “aware,” and “you have to be tions may not fully grasp the impact of dematerialization until it’s too late. Of course, they have plenty of predecessors. For example, in a particularly ironic twist, Kodak, mous with the digital revolution, nonetheless failed to embrace the next generation of digital technology. The price for ignoring the big picture was steep: Chapter 11—A . 53 nents? How can they leverage the advantages of digital design in the manufacturing process? We then wondered if our respondents might be slightly intimidated by the shift to 3D printing. As with any trend at the stage of relative infancy, it’s important to be alert 23.7% Economist has stated that the Third Industrial Revolution is underway, and digitization of manufacturing, as well as the 3D printing technology that is driving this change, 05.3% 10.5% 26.3% 34.2% manufacturing wave has the potential to become a sigbringing increased printing speeds, plummeting material printing and traditional manufacturing. The 3D process - enables manufacturing to happen outside of a factory and very close to the point where the product will be consumed. Additionally, the same 3D printer in a single facility can be used to make a wide variety of products that range from consumer goods to medical or automotive components. And it almost goes without saying that it can produce products that a lighter, stronger, better and cheaper. Thus, it is already being used in the healthcare, defense, aerospace and automotive industries. We inquired about how our respondents feel about the operational, material and shipment costs, but there’s a sumerization trend. When asked if they see 3-D print- Volume XVI ing as a promising solution to dematerialization, an astounding 43.9 percent of our respondents had no idea. The remaining respondents were polarized: 34.1 percent see 3-D printing in a positive light, while 22 percent disagreed. Consider this: The open design community is teeming with digital designers who conceive innovative ideas and perceive no boundaries. 3D printing has enabled them to build designs that are commercially viable and empowered them to create prototypes—even when they have no access to factories or funds. Over time, it is entirely conceivable that these new entrants to an old manufacturing market could become a formidable competitive force. 3D printing could inaugurate a new era of innovation, ingenious products and services, and opportunities for collaborative partnerships between IT services providers and manufacturers. These new possibilities raise important questions for traditional manufacturers. How much longer will their current business model remain viable? Could 3D printing techniques improve their own products or enable them to manufacture their products with 3D-printed compo- value chain. Only a very small number of our respondents—5.3 percent—believe their organization is ahead of the curve in overcoming them. A larger number—15.8 percent—believe their company is already relatively adept. A still larger percentage—21.1 percent—has already begun to address the challenges and acknowledges that they need help from an IT services provider. Nearly onethird, or 31.6 percent, of respondents have pushed these challenges to the future, and 26.3 percent of respondents, or almost one-third, stated that their organization is uninformed and not taking action. disruption issue, most of our respondents fell into the not-too-concerned camp. A scant 5.3 percent acknowlthreatening because they’ve engaged a services provider. A larger number—10.5 percent—indicated a slight considering engaging a service provider. Moving on, 26.3 percent are beginning to think and talk about it internally but have taken no further action yet, while 34.2 percent aren’t too worried and are only beginning to gather information. Finally, 23.7 percent don’t have any fear that their value chains will be disrupted and aren’t pursuing any course of action. Perhaps our more complacent respondents would feel more motivated if they understood how 3D printing could possibly help them manufacture a better product. It is also entirely possible that 3D printing could end the I’m very concerned, and I know we must engaged prepared a services provider I’m slightly concerned, and it’s growing more apparent that we must address this issue. It’s a little threatening, so we’re considering engaging a services provider I’ve been thinking about this recently and have begun discussions internally, but we have not engaged a services provider I’m not worried about this at the moment, but we have begun gathering information I don’t think this will disrupt my value chain to any great extent, so I don’t have plans to take action need for long-distance production in lower-wage countries. With less labor-intensive, automated production techniques, near-shore production would become more attractive, as would mass production at home. Because 3D printing reduces the need for assembly of multiple components that include moving parts, associated storage and distribution costs will probably come down, as well. Still more changes—such as mass customization and made-to-order capabilities that reduce warehousing appear on the horizon before long. 55 “We must do more with less” used to be the battle cry of CEOs intent on reducing costs. But in the face of rapidly increasing natural resource depletion, saving money is only one reason to shift to a more sustainable business model. As unconstrained consumption has risen rapidly in a world always hungry for more, resources have grown scarce—and more expensive. Now, more than ever, businesses are challenged to do more with less. As leaders push to adopt a consciousness of frugality, they’re often met with resistance on many fronts. (In some organizations, it may be the leaders who are actuabout that below.) As we learned from Koomey, when we can make “things” less material, they will consume fewer physical resources. It’s useful to examine where we’re already seeing dematerialization in ways that are widely accepted. We need venture no further than our smart phones to see that the information and capabilities needed to comto read maps, encyclopedias and other books or cards; listen to music; or play games—can be accessed elecYet, these activities require nothing material beyond the device we’re using. As technology continues its relentless march of change, everything in the world (as we know it), from consumer choices to availability of products to business models, is changing, too—at breakneck speed, in fact. As in the Industrial Revolution, business models are becoming obsolete and companies are going bust at a dizzying pace. Reinvention is the order of the day: Amazon, born of technology and driven by it since day one, has been forced to evolve from an online bookstore to a distribution engine for digital books, to a purveyor of an astonishing array of products. And let’s not forget able e-readers, a provider of Web services and a cheerful exponent of same-day delivery—clearly, it’s a company that embraces change. But how can you embrace a change if you don’t un- Volume XVI derstand the change that’s already underway? Every organization has some level of vulnerability; even Nokia, which was once the world’s leading manufacturer of phones, was forced to take a back seat to Samsung and Apple—primarily because it failed to adapt to smart phone technology. The phenomenon of new technologies replacing old ones is nothing new. Many industries have been transformed—as well as decimated—in the process. For those manufacturers with their heads in the sand, the swift sword of industrial Darwinism can deal a painful blow. But the truth is, the manufacturing processes and business models that have served us well for the past century seem a bit dusty with the advent, rapid evolution and adoption of digital technologies. Technological change is a fast-moving train, and as the dematerialization trend continues to gather steam, it seems wise to nals may do so at their peril. Research conducted by The Outsourcing Center and Wipro suggests that many manufacturers are still clinging to “status quo” thinking. However, it’s not too late to get back on track. Engaging an astute IT services partcreate an informed action plan for a smooth transition to the new business model would be the most prudent course. Clearly, manufacturers need a coordinated action plan for preparedness that enables them to scale up for this level of disruption. To be prepared for the very need streamlined processes, new standards and digital data-exchange security, along with an increasingly collaborative approach among all players in their respective manufacturing, IT and technology ecosystems. Automotive Sensor Market $18.1 BILLION IN 2015 Source: Strategy Analytics enormous challenges when it came to institutionalizing G.S.Nathan and scaling this approach in the context of a business General Manager – Innovation, enterprise. To be sure there were successful startups software testing, data validation, software development, - and so on. But its adoption by mainstream IT services - delivery organizations has so far been small, far be- sourced and customized the design of a Porsche. Can you envision the impact that this approach of depending It is in this context that new technologies become on people who don’t work for you, could have on how organizations get work done? For instance, imagine if an organization working to deliver complex technology examine how an Open Execution Model can be an en- solutions could source niche skills from anywhere in the abler of innovation, the process challenges, and best globe, outside the boundaries of the organization. How practices in the backdrop of Wipro’s experience in evolv- would this enable organizations to innovate more rapidly ing open execution delivery systems. Clearly, in the information economy, an organization is only as good as the innovative ideas it can nurture and the open execution Innovation Across ies execute at speed. Indeed, many good organizations are Technological advances allow new business processes capable of harnessing innovation within their boundar- to be created that can drive competitive advantage. To ies. However, if organizations were able to tap into the leverage this, organizations need to be able to quickly knowledge, skills, experience, and ‘innovativeness’ in- access the skills and competencies needed to cater to side and outside the organization—dissolve all boundar- them. Moreover, as the number of new technologies and ies and become a borderless incubator of innovation— - they would become supremely capable of continuously ect increases, an organization, however large it may be, delivering better solutions to their customers. This is will not have all the required skill sets to complete a par- Henry Chesbrough in his book Open Innovation: The organization to scale up and tap into the best resourc- - es to solve complex business and technical problems, ogy. Since then, open innovation principles have come to be rapidly adopted to source ideas both internally and externally, and to rapidly experiment, prototype, test, and create innovative products and solutions. The concept of “crowdsourcing” soon followed, referring to the - way services—coding, testing, engineering design, and so on—that required specialized skills and knowledge Clearly, in the information economy, an organization is only as good as the innovative ideas it can nurture and execute at speed. Indeed, many good organizations are capable of harnessing innovation within their boundaries. Volume XVI could be sourced from anywhere in the world, whether the providers of such services were part of an organiza- - tion or not. However, “open execution”—delivery of services using a crowdsourced model was always fraught with 59 whether they are within or outside the organization. In drawing on external expertise, when required. These this way, standing on the twin pillars of competence and organizations’ new focus on competency building also collaboration, this approach facilitates innovation. helps create a highly motivated, skilled, and focused Wipro’s Open Execution Model is designed to address world, and not bound by organizational ties, will require will have to groom a new generation of leaders who can workforce. this and to function as an IT service delivery platform that : The new semi-porous structure of enables innovation by tapping into a broad resource pool, these organizations makes them a high-collaboration within and outside the organization, while quickly deliv- zone that harvests the strongest ideas from the best ering the innovation to our customers. In other words, people. Take for instance, the generation of new ideas While it may be possible to dis- by working with appropriate stakeholders, the model al- during technology hackathons. At Wipro, we have seen aggregate the service so that it is delivered by a group of lows great ideas to surface, get converted into business power of this approach early, through our ‘ideas’ cam- and program management knowledge needs an extension to accommodate the demand for these skills. services valued by customers, and deploys them rapidly. Risk management and also an essential skill that is crucial to the Open Execu- compliance to the various contract obligations that gov- tion Model. Here again, the latest technologies in appli- Predictably, this new approach to ern the delivery of IT Services is a whole new area. To cation development are seen to be quite helpful. The key resource mobilization creates a leaner and more cost- start with, contracts that may include crowdsourcing is a change in the mindset of the development teams need to be rewritten to include the new provisioning where work processes do not follow the traditional life- structure. In an ODC model, there would be severe limi- cycle model, but switch to more agile, iterative, and in- them with an incentive to opt for the delivery of their tations. Access to, control of and compliance to infor- cremental models. products or services through the Open Execution Model. mation dissemination, all need to be reworked based on technical problems internally. Organizations could adopt the Open Execution Model management strategy that facilitates teamwork, cost optimization, and organizational transformation. While this the agreement between the customer, IT service delivery approach would be especially successful to drive technology solutions for large enterprises, it is open to all or- vendor, and the Open Execution Model participants. All sustain an open execution program? of these would test new ground. ganizations and individuals for their participation. - may be ready to adopt the Open Execution Model as yet. Organizations may also need to consider and meet clude: Ultimately innovation is about Controlling quality while working under an Open Execution Model can be a challenge as individual technologists, participating in delivering so- : Co-ordination be- common set of standards and code of conduct. In this tween a group of technologists scattered across the scenario, establishing, monitoring, and assuring quality the challenges of adopting this approach to innovation. invention of new ways (processes) to meet customer The biggest issue is the needs, improving on existing approaches, and executing complexity of the execution model. Facilitation of free them rapidly. The Open Execution Model helps in get- movement between internal and external resources, ting great ideas (invention), and acting on them swiftly el several fold. For example, complexity is introduced (execution). Organizations could dis- in work organization (how work is broken down, what is crowdsourced, what is done internally, assignation, and payment), how ideas and IP are handled and the protec- employee could now be productively utilized, with the organization drawing on the expertise of external technologists for niche skills that are not easily available internally. tions they should have, communication, costing, governance, and risk management. In fact there is complexity in all aspects of delivery. Organizations would have to predict and manage this complexity, and even invent a model akin to the Global Delivery Model that enabled IT : With this new approach to resource mobilization, organizations in the Global Delivery Model, the Open Execution Model could focus on building their core competencies, while is also a work in progress at this stage of its evolution. Volume XVI 01 6 4 This approach also has been leveraged by academia, - None of these are insurmountable problems. Interest- particularly Stanford’s eCorner and INSEAD, in their the diversity of the workforce, while meeting the gener- ingly, we are able to make progress in a number of these study of entrepreneurship and innovation thought lead- ally strict industry norms. Existing quality processes and areas today, and push the envelope. ership. metrics will need extensive revisiting. : In view of the internal-external collaboration that drives the Open Execution Model, it becomes cru- Clearly, open execution has the potential to transform the Open Execution Model are driven by a set of mixed the delivery of technology solutions for products and motivations that combine elements of the open execu- services. But the successful deployment of this model tion incentives’ 3Ps: “price, prize, and pride”. Many participants would work for a price, realized in Quality processes need to be rethought and enforced through innovative methods. For instance, one option is extending the new advances in developing technologies that help in automatically ensuring development quality through using tools and processes for both communitybased and formal quality control into the Open Execution Model. This unique a series of sustained investments, in the face of uncer- some cases on an auction model. For instance, take the examples of the crowdsourced labor space oDesk and the crowdsourcing Internet marketplace Amazon Mechanical Turk (MTurk), which have successfully provided platforms for businesses and freelancers to work together via the Internet. As the largest online market- them to drive many of the changed processes that open execution will necessitate. This is not necessarily a new skill to be learnt, but the context of its application introduces fresh challenges that need new approaches. Determining and managing the IP created in a fair manner, also poses challenges. Some of these are not entirely in the control of the organization and may depend on local laws and regulations. While progress has been made to create enabling laws, organizations could adopt for the delivery of IT services and products through the Open Execution Model: Conclusion Open innovation has already begun to transform the tries. Just as the Global Delivery Model opened up new plexity that goes with this approach, not all services avenues of service delivery, the Open Execution Model are appropriate for delivery via open execution. For in- has the potential to foster a dynamic and result oriented stance, data governance, image tagging, and translation culture of innovation in our 21st century organizations. However, the approach is not without its challenges, and so it is necessary for organizations to actively innovate 2. Choose the right platform: With this approach still evolving, organizations must be careful to select a plat- clock 75,000 hours each day at this online marketplace. where suitably big prizes are announced for the best at the start of the partnership. approach to product and service creation across indus- billion has been spent on its platform since its inception in 2005. It is a further demonstration of the success of ment on intellectual property and other copyright details 1. Select the right service. Given the high level of com- place in the world today, oDesk reports that over US $1 Another fairly widespread model is the prize model, is necessary to build the right leadership and empower management. Here are some of the best practices that cial to clearly elucidate pricing and have a legal agree- product or service being managed under the Open Ex- in managing open execution processes for success. The fruits of mastering the science and the art of open innovation and execution are a great innovation culture within, and market success without. ecution Model. solutions. The X PRIZE Foundation, which runs public Given the com- competitions to encourage technological development plexity of this model, it becomes imperative for organi- is the trailblazer for this model, and was memorably lev- zations to forecast and manage potential problems that eraged by Richard Branson to select the technology for could arise from this style of management. As with all the spaceship that launched Virgin Galactic, which was licensed from the winner of the Ansari X PRIZE. software development cycle, they become less expen- Yet, other powerful incentives remain passion, community, collaboration, and recognition. Increasing inputs from diverse disciplines, such as economics, statistics, - cance in the case of the Open Execution Model, where the process is, by its very nature, less amenable to control. tion of the contract and reward mechanisms used here. Organizations can tap into any of these motivators to would the IP have to be shared by both internal and ex- drive innovation and raise the quality of the technology ternal entities? Is it possible to commercially capture its solution delivered through the Open Execution Model. Volume XVI Quality 63 - Ram Prasad K R ciples of Success Chief Technologist, Chief Technology The needs of an enterprise for the digital economy is to provide the right information on demand to people play- DAtA scAle & intelligence When such a fundamental shift is happening with data, ing varied roles in an enterprise and answer questions there seems to be a contrast in the way information so- with speed and agility. The technologies and architec- lutions are built within the enterprise and on the internet tures would need to break the data silos, understand the which is the nervous system of the digital economy. The context of the business domain and the business pro- consumer search engines have thin line interfaces wait- cesses that generate the data and deliver this through formation about anything one wants by simply typing into a one line interface. They use smart devices to browse, music and use many more services at great speeds. Life is simpler and easier with the digital world today. On the Internet, large volumes of data are democratized, with many sources like websites giving search engines thin line interfaces like the internet search engines. One can map this need to four key principles: disintersection of these would give the enterprise areas to innovate for the digital economy. Let’s look at these 4 principles in detail and see how they aid to creating a scalable and an intuitive information management system. access to information, and assistance to understand, organize, and identify. - The technologies and architectures would need to break the data silos, understand the context of the business domain and the business processes that generate the data and deliver this through thin line interfaces like the internet search engines. formation is in silos with diverse technologies, formats Within an enterprise, silos of data assets could be in the following forms: and structures across lines of business and access is not democratized. They need orchestration of data from diverse sources, both within and outside the enterprise warehouses as this provides innumerable opportunities for business documents and email, and innovation. Knowledge workers are spending more that 20 percent - content and social media. tion. Knowledge workers need to give meaning to data Data virtualization technologies, such as Apache TE- Enterprises are innovating for the digital economy and data has become the fulcrum and understand it unambiguously. Unlike the consumer - of innovation. In the digital world, the ecosystem is generating data every second world where the search engines provide a few thousand ing applications and users access to organizational data, - businesses, governments, citizens, machines and networks. The data has to be results when a user enters a keyword, knowledge work- while providing for data security. In this virtual environ- ers need precise information pertinent to their roles. ment, data repositories and warehouses can be added collected, understood and analyzed to create innovative products and services. Data - The technologies of internet search engines and en- dynamically and information accessed on demand from faction, productivity, cost control, dynamic and personalized products and services terprise knowledge systems are creating breakthrough multiple data sources, enabling information discovery. and discovery of business insights. applications and thus driving innovations for dynamic search within the enterprise. Can we create a thin line Volume XVI interface akin to the internet world for enterprise users Find-ability covers the extent to which an information to get them the right information at the right time without management system supports data navigation and re- having to use several applications? trieval, while enabling intelligence augmentation through 65 approach. In response to a question, it searches for top- system can even understand parts of speech and recog- ics, concepts, and associations that span a vast num- nize words like ‘what,’ ‘when,’ and ‘where’ to determine ber of sources. It provides for auto-recognition of topics, the type of question that has been asked. It could even with information extraction based on the ontology of a pick up words like ‘for,’ ‘in,’ or ‘between’ to connect various parts of a search phrase into something meaningful. multiple sources. The integrated capabilities of semantic search and NLP Semantic search improves accuracy and relevance by considering the intent behind a query and the contextual enable users to have a dialogue with information systems and get exact answers for their questions. With the introduction of a question answering system, knowledge models associated with the data. Enterprises will need to leverage intelligence augmentation methodologies to view information in terms of data ontology. This involves deploying a formal method of describing entities and relationships in a domain along with their properties. Augmented intelligence will mirror complex internal relationships and captures the aggregated knowledge within a domain. These descriptions of Intelligence augmentation can be further used to create visualizations enabling rapid decision making. Big data analytics has moved from categorizing data to visuhas a context and is displayed in terms of its connection to other information. It functions as an information blueprint that enables more strategic decision making. Let’s take the case of Proctor & Gamble that has instituToday, “Decision Cockpits” on their desktops represent key business information visually for all 50,000 P&G employees, while meeting spaces have embedded visual analytics from P&G’s Information and Decision Soluglobe and enable decision making. provides users with a reply after it considers a search query in terms of its context, location, intent, word variation, synonyms, and foreign language interpretation. In this way, it narrows down the number of replies for a single query. Users will no longer have to face thousands of results for a single query - they would be delivered precise reOn the Internet, this methodology has been utilized to create semantic search portals, such as Google’s Knowledge Graph and Facebook’s graph search. But now this capability can be leveraged within the boundaries of an organization as well, with tools, such as Thomson Reuter’s Eikon 3.0. This market analysis and trading soft- Consider a digital enterprise of the future which needs the ability to create products and services dynamically a more intelligent, relevant, and responsive interaction than the deployment of standalone information technologies in isolation. This new-age digital information architecture will fundamentally disrupt how enterprises deal with information, democratizing data, augmenting intelligence and providing understanding and insights. As the system introduces business professionals to a world of exact answers, we will witness an increased exploration of ideas. With one click and thin line interface they can make their way through all the noise to gain deep insights from data. They can throw away time-consuming applications, reports manuals and search functionalities, and use the tools that empower them to make the right business decisions. and respond to market needs with agility. Further, it will have to: a. Combine and harmonize information from many dispareleases, social media updates, subscription databases, internal products and services databases, internal business databases (licensing and sourcing) spreadsheets, emails, and other ad-hoc sources of information. and rapid responses to complex queries, thereby facilitating market analysis in a user-friendly environment, similar to the Google experience. b. Tie together information from internal databases with up-to-the-minute information from public sources to ofproducts, and services launched. Most users have questions that need precise answers. The need perhaps is for an answer engine rather than a search engine. Here, Natural Language Processing the user’s question. While much of the research around Understanding is about the contextual meaning, reasonalso has tremendous implications for the capability to manage and search organizational information. An NLP Volume XVI Conclusion markets at one place, with a semantic search facility that allows users to rapidly focus on relevant information. (NLP) can improve the quality of an information system’s ing and making inferences to provide unambiguous re- daunted by a task that required multiple steps, may now feel emboldened to ask any question. ral language processing. These systems will provide an abstraction layer, above existing data management technologies, enabling enterprises to bridge the gap c. Extract information relevant to the business, analyze this in the context of the relevant domain, and derive insights about aggregate competitive intelligence. It will have to provide business users with data about comdisseminate information on a continuous basis. The enterprise knowledge systems designed around standing and dialogue will be driven by tools for data virtualization, semantic search, ontologies, and natu- 67 If you would like to read more, please visit our website www.wipro.com/insights — where we regularly publish our viewpoints and perspectives that can help companies sustain competitive advantage. We would love to hear your thoughts and suggestions knowledge-sharing tool for senior executives like yourself. Please write to us at [email protected] Best Wishes, Wipro Council for Industry Research Give us your feedback online About Wipro Ltd. Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of “Business through Technology” - helping clients create successful and adaptive businesses. 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