It’s Time to Transform ERP into a System of Engagement

The IT industry has steadily been moving beyond its roots in data management and record keeping for a few decades now, approximately since the advent of corporate e-mail. As I’ve tracked over the years, this trend is more broadly known as the shift from systems of record to systems of engagement. Over the years, we’ve witnessed how the value of IT systems grows dramatically when they focus as much on connecting people and systems together with as little friction as possible, as they do on storing and retrieving information.

We’ve also collectively learned as an industry that one-size-fits-all technology, especially in the enterprise, often ends up fitting the needs much fewer people than we expect. Put simply, despite all countless industry lessons learned, enterprise systems are still far too unwieldy, adapted poorly to individual users needs, difficult to use, and an impediment towards value creation, especially at the edges of our organization, where key business activities such as sales, marketing, service delivery, and customer care take place.

Today’s Successful Enterprise Systems Engage Effectively

In recent years, new highly personal forms of digital engagement have demonstrated a new path to us through the large scale global success of social media, use-anywhere smart mobile devices, and consumer apps that are essentially effortless to acquire and use.

When I look at most enterprise IT today however, it’s clear that the buyer is not the end-user but IT departments and other stakeholders who won’t have to use the systems themselves. The traditional ERP system, which runs much of the mission critical infrastructure, is possibly the worst offender and most in need of remediation in today’s era of highly consumable personal IT, which runs rings around most enterprise technology when it comes to usability, personalization, fitness to purpose, and responsive design.

The Contemporary Enterprise: Systems of Records and Systems of Engagement

Certainly, enterprise systems often have a very different set of goals than consumer IT, including much higher levels of security, more rigor in data structure and quality, complex operating requirements, and other factors that consumer IT simply doesn’t have to contend with. I’d argue these are, however, just not valid excuses for meeting the standards of modern IT systems when it comes to improving productivity, usefulness, and effective results in our organization. As I’ve long argued, we need to unclog the arteries of enterprise IT for competitive reasons as well as basic employee retention, given trends I’m seeing in end-user expectations of how IT systems should work.

At this point in IT industry evolution, I’d argue that the nature of the enterprise procurement process, along the roles of those typically charged with IT acquisition each conspire against the kinds of systems that users — and the business itself — would find more useful and productive in getting their work done. Plenty of evidence now shows that usability and accessibility have large benefits when it comes to getting results from enterprise IT.

An actual data point from the respected Nielsen Norman Group serves to make the point here: Allocating a mere 10% of the budget of your IT system to usability will approximately double the quality metrics for the system. Yet few projects allocate anything like this amount, especially to off-the-shelf systems.

Modernizing the ERP for Engagement by Augmenting It

So how can we overhaul the poor effectiveness of today’s ERP systems and bring the latest advances in today’s systems of engagement to bear to increase the poor usability of ERP systems that Jon Innes famously lamented back in 2010.

Given the slow rate of change in the usability and reach of ERP systems over the years, I’d now argue that we’re not going to see a major improvement in the design of ERP systems themselves. Instead, I now see that enterprises, which have invested enormous amounts in their existing enterprise systems, have little choice from most of the leading vendors. Instead, the typical ERP system should instead be augmented with the capabilities that will provide the full measure of value creation that was originally hoped for.

To this end, I’ve authored a new white paper that lays out my analysis that we’re about to enter a new era of enterprise IT. One that is not just more consumerized and highly usable, but focused on both the needs of the business and end-user both. By augmented ERP with effective systems of record, most organization can now take the power of today’s sophisticated ERP systems and extend them to wherever they are needed in a far more personalized, dynamic, and focused way.

As a new generation of IT thinking emerges, I now see that this will be the pattern of ERP and most enterprise IT systems, in that they will become a fusion of capable foundational systems of record and systems of engagement. The latter will either be purpose-built or developed by a new generation of enterprise IT companies that understand the new generation of IT, consumerization, design thinking, and usability on top of traditional IT requirements.

How ERP Will Become the New Systems of Engagement White Paper by Dion Hinchcliffe

Credit: I’d like to thank Capriza for making my time available for the research and analysis that went into this white paper, which is freely available for download.


Using Online Community for Digital Transformation

Driving successful change in a large organization has always been one of the most difficult activities in business. But for those who are principally tasked with carrying their organizations forward into the digital future, they are currently facing perhaps the single most challenging large-scale enterprise activity of our time. One has only to look at the short-list of needed technology adaptations to recognize the true extent of the challenge.

Part of this is because digital itself is so intangible. It’s hard to understand all the moving parts of the vast technology stacks, ecosystems, and platforms that now surround us because it’s hard to discern them. It’s often even harder to understand the diverse needs, perspectives, and skill gaps of the people that have to change along with the technology.

Thus the popular topic of digital transformation has come full circle back to the change process itself, largely because we’ve found our existing toolkit to be entirely unsatisfactory. For example, we already know that the vast majority of strategic change initiatives employing traditional methods don’t succeed. We also have an increasingly good sense of why this is, and a big part of the reason is that centralized processes break in exponential times (see Martec’s Law.) They quickly become overwhelmed by the scale and dynamics of the necessary change processes, which have to keep adapting and updating themselves in near real-time to stay relevant, often in windows that are hardly more than weeks today.

Enabling Digital Transformation at Scale with Online Community

Consequently, we’ve seen steadily emerging models for change that go well beyond the strategic initiative, the center of excellence, or incubator to push out change into a much broader set of minds and hands, far beyond what we’ve normally employed to drive change previously. I now believe that unless organizations greatly expand the notion of who is involved in change, who can drive it, and how they are enabled, empowered, and supported, they will largely underperform with digital transformation.

To determine how scalable digital change can best be realized and figure out what kind of forward-thinking constructs will be required, I’ve been experimenting for the last several years with employing the very same models that we use to engage in the digital world, to cultivate and foster more dynamic change processes. The ideas of social business and online community, which show how the most scalable, cost-effective, and rich model for working is to enable the network to do the work. I’ve now come to understand that in digital transformation, we have to let the network do the work. Put simply, there is no practical way to achieve the pace and breadth of transformation required in exponential times without using exponential tools.

In the last few years, I’ve been using online community as the platform for change, instead of creating traditional centrally-staffed change programs, and found it far more effective in general. I am not the only one that believes this is a key path forward towards new types of highly potent change models. This is an industry-wide discovery and conversation we are beginning to see emerge in general. We have moved beyond the center of excellence model, which we’ve learned soon bogs down and largely fails to address the scope of enterprise-wide change activities, to a new model I’ve called the network of excellence, for lack of a better term.

Realizing that we need to scale change on a platform

I’m not alone in thinking along these lines. For example, well-known management thinker Gary Hamel has been promulgating this very same idea, entirely independently. My industry colleague John Hagel has also been writing about many related concepts, most recently about how we can scale learning in an exponential world. The highly regarded CIO of the Federal Communications Commission, David Bray, spends a tremendous amount of his energy using social media and other channels to talk about how to broadly enable digital change agents and “intrapreneurs.” There are still others exploring this topic as well.

The subject of learning in particular is a vital one to this conversation. That’s because unless we’re prepared to radically restaff our organizations, mass education for the digital era is required to help our organizations as a whole shift our thinking, behavior, and culture. Great communication is essential also, as we’re learning it is the leading success factor in driving effective change. Both of these activities are best realized using today’s modern digital communications and collaboration tools designed for very high scale, leverage, and asynchronicity: Online communities and enterprise social networks.

While I’ve been “experimenting” with new open methods with real transformation efforts in enterprises to the extent I can the last few years, an emerging model for how to structure and wield online communities to drive these kinds of change has begun to present itself. Far from being a proprietary new way of driving large scale change, I now see that this model, and similar ones like it, are the inevitable direction that change will take.

In the very same way that open source software communities eventually transformed how most software was developed and social media revolutionized how most media content was created, and we see the same advances in crowdfunding and other crowdsourcing methods, the very same shift is now happening to our organizations’ change processes. They are becoming more decentralized, more empowering, diverse, and resource rich by using digital connections to enable wide-scale learning, alignment, communications, and execution around a change process. They are even allowing local actors — and often now even external agents (see open APIs, developer networks, hackathons, startup partnerships, etc.) — to pick up the tools, processes, and lessons learned to change their part of the organization.

Early lessons in using online community for digital change

While the methods and approach we are using to connect together change agents in a community to organize around and realize strategic change are very much still emerging, I can say from experience now that the following is generally required:

  • A community platform. This is a digital forum within which digital change agents will collaborate on and effect change, formulating plans, making joint decisions, and carrying out their efforts, often in very self-organized ways.
  • Facilitation. This is by applying what industry colleagues like Rich Millington refer to as strategic community management, actively facilitating the change process, ensuring those who get stuck get the help they need, and empowering, educating, and orchestrating many points of top-down and bottom-up change across the community, and therefore across the organization.
  • Learning. The community as a whole becomes a massive learning repository, a sort of self-documenting and emergent MOOC for digital transformation adapted to the organization, with lessons learned and best practices culled by facilitators and spread to change agents.
  • Empowerment. A community of transformation spreads knowledge, resources, know-how, and collective energy, enabled by sponsorship, capabilities, staff, and a mandate from the highest levels of the organization.
  • Communications. With rapid change comes an absolute requirement for transparency and clear, open communication. These traits are the natural attributes of an online community, as everyone can see what’s happening and why. As I cited above, this is the top factor for successful transformation.
  • Co-creation. The strongest, swiftest change happens is when there is alignment locally and globally on what needs to be done. Then everyone comes together to put together their ideas and resources to drive digital change.

I invite you to collaborate with me as the digital transformation world begins to adopt the same digital forces of open participation that have remade many industries now, and apply them deeply to our practices and frameworks. For just as the old, plodding, limited, and bandwidth-starved methods of central production are no match whatsoever for today’s methods of digital peer production, failure to adapt has very significant competitive and existential consequences. In short, online community is one of the most powerful methods for achieving almost any large-scale human endeavor, and so I’m pleased to see it arrive to help with digital change.

Can most organizations achieve this? Well, we do know that organizations can’t change unless their leaders change with them, so I do hope so.

Postscript: I’d be remiss in not citing Don Tapscott’s excellent work in identifying and promulgating Global Solution Networks as perhaps the most strategic form of using community to drive large scale learning and change at an intra-institutional, consortia, industry, government, and NGO level.

Additional Reading

A change platform is a priority of the CIO in 2016

Going Beyond ‘Bolt-On’ Digital Transformation

Is it IT’s last chance to lead digital transformation?

Vital Trends in Digital Experience and Transformation in 2016

This year I was invited again to come to Dreamforce in San Francisco and present on the latest developments in digital experience and digital transformation for the conference’s Emerging Tech Trends track. Surprisingly well-attended given the satellite location of the track at the Hilton Union Square, having to prepare this session is always a good opportunity for me to go over my research in the last year and map out what’s likely going to happen next.

For myself at least, it’s clear that human change has become closely linked to and as important as digital change, so I have divided up the trends list in the last two years into a tech dimension and a human dimension.

The bottom line: How we think, work, and react as people has tremendous impact on the usefulness and effectiveness of emerging technology. It’s what separates the digital native from those who are just beginning the journey. For example, those not inclined to share information won’t get much use from the technologies and techniques of social business, nor will those who are uncomfortable and unused to spending time in virtual worlds be able to take advantage of the rich opportunities of virtual reality. And if we’re not changing our leadership skills to be more network-centric as opposed to hierarchy-centric, then much of the business value of digital experience and engagement is wasted on us. The list goes on.

What’s more, not only are we co-evolving with our tech, but we need to understand how we need to change just as much as the technology is changing. This is required in order to a) understand the art of the possible and b) to be able to access technology’s unique and historic new value propositions.

What's Next in Digital and Social Experience and Digital Transformation in 2016

Another point I make early in the presentation is the technology is changing exponentially right now and has climbed into a rather steep part of the curve, yet our organizations just don’t change on the same curve. Instead, we change far more linearly, at best logarithmically (see slide 8.) That’s not to say that that enterprises can’t organize themselves to change much faster, but in order to do so we must employ fundamentally new ways to transform organizations. Certainly, some organizations are adapting faster and digital transforming more sustainably (see data on slide 4.)

Sidebar: I’ve recently been exploring what these new models for sustainable yet highly scalable models for digital transformation, even proving them out on client projects I’ve been working on over the last few years. The key seems to be a more network-based, decentralized, and emergent approach I’ve called a Network of Excellence.

Emergent Tech Trends Inputs

For this year’s round-up of emerging tech trends, in addition to original research, I used as inputs several items:

Major new additions to the list include digital assistants/bots/chatbots, blockchain, omnichannel, workplace app integration, and collaborative EMRs, along with significant tweaks in a variety of the existing trends.

You can see the whole deck with an overview of each trend on Slideshare. I’ll post any video that is produced as well.

Also, in other Dreamforce news, you can review my live blog of the main Dreamforce keynote as well as my current assessment this week of the Salesforce platform and ecosystem.

Additional Reading

Digital priorities for the CIO in 2016 | ZDNet

The Building Blocks of Digital Transformation: Community, Tech, Business Models, and a Change Platform

Dreamforce 16: Live Blogging the Benioff Keynote #df16

The annual main keynote session here at Dreamforce in San Francisco starts today at 1pm ET in Moscone Center. I’m onsite in the industry analyst section just 50 feet or so from the main stage, so I should get good photos as for the live blog. The usual flair is on display with a well produced and colorfully lit stage as the crowd streams in early to try and get a good seat. This year security is much tighter than usual and everyone has to go through bag searches and metal detectors, leading some to speculate that a special guest requiring such security measures may appear.

The Largest Technology Event in North America

As one of the few can’t-miss events in the tech industry, the 170,000+ registered attendees have taken over downtown San Francisco and set a new attendance record along the way. The news here at Dreamforce so far has been unusually pre-announced, with Salesforce’s first significant artificial intelligence play, known as Einstein, as the most important announcement so far. There’s also been plenty of other news including broader integration with Quip, their recent workforce productivity acquisition, the advent of Lightning Bolt, an improvement on their Lightning UX technology announced a few years ago, along with a new version of Salesforce1 which can be customized to corporate branding and is more easily tailored and personalized, along with data processing improvements to the company’s new IoT Cloud, first announced last year.

The recently released Salesforce Economy infographic (below) shows how far the company has come, from a scrappy SaaS startup in the mid-2000s that was making a name for itself in CRM to an industry juggernaut that has made public cloud and SaaS a reality like few others while moving into the cutting edge of enterprise technology including marketing, customer care, digital experience, online community, big data analytics, cloud service provider, and Internet of Things to name a few. The company is projected for $8B+ in revenue, offers over 3,000 apps with 3.8 million installs, 751 partners, and over 24,000 workers.

The Salesforce Economy in 2016

DSC0640912:53pm: Salesforce SVP of Research Peter Coffee is up on stage ahead of the keynote noting that you can watch the Dreamforce Benioff keynote live online and introducing various partners, including Bluewolf and Accenture.

1:02pm: Peter Coffee and is up with Julie still on stage talking about partners. Now talking about their relationship with military veterans, which they call Vetforce. Now introducing the first veteran to become Salesforce certified. “Dreamforce is all about trailblazing.” Trails and the company’s very successful Trailhead program for learning about about all things Salesforce is infused in everything here, right now do campground themes through the show.

1:04pm: Just introduced well-known musician and entrepreneur onstage, talking about Dreamforce “as the most inspirational community there is today.” Talking about inner city kids and mentoring, not just in America but abroad. How to get them involved in computer science, artificial intelligence, and robotics. “I’m a geek and Geekdom can change inner city kids forever.” (Big applause.) Now showing a video. at Dreamforce 2016 (Photo by Alan Lepofsky)

1:09pm: Video from continues.

1:13pm: Video concludes and Peter Coffee is back up on stage. (Standing ovation.) Now making a forward looking statement. “Now I get to talk, not about the culture of Wall Street, but the culture of Hawaii. A beautiful culture and one that is in the DNA of Salesforce. We are privileged to welcome Ambassadors of Aloha.” Beginning the traditional Hawaiian ceremony that is a hallmark of Dreamforce.

Peter Coffee kicking off Dreamforce 2016

Peter Coffee kicking off Dreamforce 2016

The Ambassadors of Aloha Opening Dreamforce 2016

The Ambassadors of Aloha Opening Dreamforce 2016

1:20pm: The Ambassador’s of Aloha singing a song to set the stage for the keynote.

1:23pm: The lights dim and a video starts to kick off the keynote in earnest, talking about the Trailblazer. Montage of Amazon partnership, Demandware, Commerce Cloud, the Forbes cover article that Benioff recently was profiled in. Acquisitions, AI for marketing, mentioning Einstein and customer success.

1:28pm: Benioff himself comes out. “We’re going to entertain you. We’re going to thrill you. But the #1 thing I’m going to do is thank you. All of customers, all of our partners, all of our employees.” Thanking Trailblazer, MVPs, their Customer Success Community, and many others. Going over the size of the company, the trust he has in his ecosystem, growth, and innovation, organic and inorganic.

Marc Benioff Begins His Annual Keynote at Dreamforce 2016

Marc Benioff Begins His Annual Keynote at Dreamforce 2016

1:32pm: Introduced Tony Prophet, their new Chief Equality Officer, who has come over from Microsoft. Talking about will.i.m telling him that education is the single greatest factor in helping the inner city. Talking about their 1:1:1 corporate social responsibility model, where 1% of their time, products, and equity to philanthropy. Says “it’s an incredible new, smarter world that we’re all creating together.” Talking about how his smartwatch is making him more intelligent and more connected. Mentions conversational UXs twice now. How GE is making smart cars, and Amazon Alexa. “How do we get closer to customers. That’s the power of customers. We can create a single view of the customer that’s so powerful!”

1:40pm: “Adidas is selling billions of dollars of sneakers on Salesforce. And of course Fitbit, we’re going to talk about them. And Uber and the customers they hold close. Closer to the customer. Uber’s customer is not just me, but the driver. You’re going to hear an amazing story about them today. Schneider Electric runs half the buildings in the world and their visionary CEO is here to tell you how they are changing the world. It’s the age of the customer. From Lightning, to Wave, and to Thunder. Without code. We want to bring this technology to everybody. An incredible new world of artificial intelligence has arrived, deep learning, machine learning. AI build into the deepest level of every app and in the core of our platform.”

1:44pm: “We’re here to bring artificial intelligence to the world, we’re going to give AI to everyone, just like we gave the cloud to everyone and mobile to everyone. Knowledge is limited, but imagination circles the world.” Now talking about the Lightning App Builder, their low code platform. “We’re all going to have to go a lot faster. It’s incredible how Lightning is going to help us go faster.” Talking about Salesforce Quip will make people collaborate better on spreadsheets, word documents, and put conversational. Download Quip on your phone, it’s designed or the phone service. Commending Bret Taylor for creating Quip. “It’s all about productivity.” Now talking about how the model for using our computers is changing: Voice interfaces, messenger apps, conversations. introducing Salesforce By Message.

1:51pm: Salesforce co-founder Parker Harris is on stage talking about artificial intelligence and conversational interfaces on Siri, and Facebook. Facial recognition is being driven by artificial intelligence. “We’re just going to bring AI to all of you. That’s now what you asked for. You asked for intelligence. We got to work. We found a bunch of data scientist. They were hard to find, there’s a world shortage of them. Then we realized that we had to get all the data together, integrate it, and model it. Many companies have tried to do this but it is hard. We want to make it easy. We want to take all the complex things in the world and make them easy.”

An Einstein avatar appears between Parker Harris and Marc Benioff at Dreamforce 2016

An Einstein avatar appears between Parker Harris and Marc Benioff at Dreamforce 2016

1:55pm: Parker now invites Einstein on stage, who appears virtually on the screen between him and Benioff. “AI makes you smarter. Customer data + AI + Salesforce platform makes it the smartest CRM in the world. We did not build a separate AI platform. It’s right in the Salesforce platform with your data. All of your apps are there too. This means Einstein is everyone’s data scientist. It’s going to make you a smarter salesperson, with things like predictive lead scoring. It’s usable in the app or if you’re a developer. Even our brand new cloud, the Marketing Cloud, has it built right in.”

An Updated View of the Salesforce Platform at Dreamforce 2016

An Updated View of the Salesforce Platform at Dreamforce 2016

2:00pm: Shubha Habar is being introduced as one of the key people behind Einstein. “Two years ago we were five people in a basement, and to see how it’s involved and be on stage at the largest tech stage in the world.” “Here’s the new Winter 2017 release.” Explaining how Einstein works, including with all Salesforce objects, as well as customer objects, plus calendar, e-mail, and other data sources. Einstein examines data and looks for patterns. Einstein can figure out who your competitors our, and will then surface relevant data and will even urge you to take action. It can even write the e-mails for you to take action. It can even go through the hundreds and hundreds of leads you have and assign a lead score, a single number that tells you how valuable a lead is. What will be interesting is that since every Salesforce customer gets this, there will be gains to be across the board, but it will be the companies that can actually educate their staff on how to use these very powerful capabilities to get ahead. In short, AI is another technology force multiplier that will separate the leaders and laggards apart.

Shubha Habar, one of the key people behind Einstein, at Dreamforce 2016

Shubha Habar, one of the key people behind Einstein, at Dreamforce 2016

2:06pm: Shubha wraps by saying, “Now everyone will have a data scientist, even you Parker.” Parker: “We’ve built 500 new features [into the Salesforce platform] since the last time we met in this room a year ago.” Now talking Lightning and to get a 1:1 assessment about Lightning on the 3rd floor of Moscone during Dreamforce from their top engineers and architects.

2:12pm: Video playing about disadvantaged children and HIV, and the efforts of the Salesforce involvement with RED (you can get involved here.)

RED's Ebony Frelix talking about using Salesforce to fight AIDS

RED’s Ebony Frelix talking about using Salesforce to fight AIDS

2:16pm: Ebony Frelix comes up, saying “Dreamforce is more than a tech conference, it’s a family reunion, a rock concert, and a great place to network. We have an opportunity to change the world.” Talking about the non-profit RED organization, with a mission to create an AIDS-free generation.” Uses the Wave analytics platform to drive actions with insights. RED uses Salesforce’s Community Cloud to give a global giving community, which they do almost instantly in a demo onstage.

Additional Reading: My analysis of Community Cloud, Salesforce’s flagship full-spectrum online community platform.

2:23pm: Ebony explains about RED trying to raise $1M for AIDS today, with Bill and Melinda Gates double matching and the Benioff family providing another $1M. Now the CEO of RED, Deborah Dugan, is up on stage with Marc, talking about what the organization does. Talking about Bono, her “hard charging” boss. is up again talking about the vital importance of public education and notees that Moscone Hall has the same color tone (of the audience) as it would have had in 1916. Suggests that making sure everyone has an education would change the competitive and entrepreneurial landscape in the tech industry.

2:35pm: Marc: “We’ve heard a great story about RED, and now we’re going to take a look another company, Schneider Electric, that is changing the world.” Rolls video about the company. Constellation’s Alan Lepofsky, who is sitting next to me at Dreamforce, notes that Schneider Electric has been shilling for a long list of technology companies lately.

Salesforce Chief Product Officer, Alex Dayon, Unveils New Products at Dreamforce 2016

Salesforce Chief Product Officer, Alex Dayon, Unveils New Products at Dreamforce 2016

2:38pm: Marc now welcomes Alex Dayon, Chief Product Officer, of Salesforce. Alex says they believe that electricity is a basic human right. Introducing a new Salesforce product, Salesforce CPQ, or Configure, Price, Quote is a type of applications that helps companies accurately resolve the price of goods across a large and constantly changing spectrum of variables. Before I can write this, he introduces another product called Field Service Einstein. Alex continues a whirlwind overview, noting how the Salesforce platforms features such as Wave all combine to deliver a highly productive and data-driven business experience. Now showing how Einstein is powering a predictions dashboard in these new apps. Demonstrating how it calculates the percentage of all the leads flowing into a company turns into business. Now need to involve a data scientist to help you, it’s built into the platform with Einstein. Demonstrates how Einstein can read your e-mails and score leads for you based on background information. It’s interesting that we’ve gotten to a point where people are probably comfortable with this type of intrusive technology, because it will save them so much time and effort.

An augmented reality demo at Dreamforce 2016

An augmented reality demo at Dreamforce 2016

2:50pm: Demonstrating an augmented reality helmet, presumably powered by Salesforce, to guide the repair of a Schneider Electric transformer. Now Marc is talking with the CEO of Schneider Electric. David Blaine was just referenced by Marc as being in the front row here. Marc: “How many people have a Fitbit here?” A lot of people raise their hands. Now he rolls a video about the company and their partnership with Fitbit.

2:59pm: Fitbit is on stage talking about Health Cloud and creating a 1:1 customer journey, touching them every step of the way, using Journey Builder and Service Cloud. Mentions something called Analytics Cloud Einstein. Has predictive capabilities. Mentions that customers have urged the company to open Fitbit data up, and they are now going to do that. Kudos to them, as it was one of the big reasons I gave them up. Now they’re talking about Marketing Cloud and the Krux acquisition. “Think about as marketers, the proliferation of channels you have to with. Krux does all the segmentation and analysis. Now switching back over to Service Cloud: “Take service from being transactional to conversational.” Demoing the Journey Build canvas, a pretty cool looking view that provides overall control of the digital customer experience and journey.

Additional Reading: The bar for digital experience is rising in exponential times

An overview of Fitbit and Health Cloud at Dreamforce 2016

An overview of Fitbit and Health Cloud at Dreamforce 2016

3:05pm: Fitbit will empower you to use your data in new ways. Can have a data-driven conversational with my healthcare position. I can jump into myHealth app, built on the Salesforce Lightning platform. Bring patients and providers closer together. Can access a nutritionist, personal trainer, doctor, and an intelligent bot that is a virtual care coordinator. It can suggest softer trails to run on, integrate with the calendar, and schedule meetings, and live video embedded into apps, can access physical therapist right in the app. In my opinion, this kind of integrated digital health experience is going to revolutionize preventative care and clinical treatment with telehealth. Talking about “Einstein Inside”

3:11pm: Marc introduces James Park, the CEO of Fitbit. James says they’ve shipped 50 million Fitbit devices so far. Mission has always been to how to take data from sensors to help people become healthful. Sleep better, eat better. Latest products are designed to help people deal with stress. We want to impact more chronic conditions like hypertension, diabetes. Fitbit is now involved in over 200 clinical trials.

Marc thanks everyone and says it’s the biggest Dreamforce ever. And that’s a wrap. A good keynote but lacking a bit of the pizzazz and major announcements of previous years, especially given the pre-announcements have taken a lot of the thunder. My full analysis on ZDNet soon.

Seeking a Modern Foundation for the Digital Workplace

Take a few minutes and try to imagine the workplace of the near future. What does it look like? Some of the likely items to consider are these:

  • Are mobile, cloud-based productivity and collaboration apps the center of the next-generation digital workplace?
  • Will we all switch over from e-mail to Slack-like lightweight messaging services supported by contextual apps and intelligent chatbots?
  • Will the workplace of the future be contained almost entirely inside virtual reality experiences that provide ultra-realistic online workplaces, complete with engaging avatars of our co-workers and AI-based assistants?
  • Will social networks and online communities become the leading way that we manage our organizations and conduct our work?
  • Will we soon control everything with our voices, gestures, and even our thoughts?

Almost certainly the answer is yes to all of these questions, and many similar ones. It’s just a matter of when. The reason it’s important to ask them, however, is that we learn very much about what we should do today by looking at where we will be tomorrow with digital work.

What’s the Organizing Principle of Digital Work?

As part of asking these questions, recently I’ve been trying to seek the answer to what the organizing principle of the digital workplace should be. The top models have shifted many times over the years, and we even had a sort of crisis in the early 2010s when we had so many competing choices, rapidly shifting technologies, and important discoveries of new digital workplace skills like mass collaboration, crowdsourcing, and Working Out Loud, to name a few. Uncertainly reined and the path forward was unclear for many. It didn’t help that far too many of us still thought about the digital workplace in primarily tech terms, instead of emphasizing that it is only by enabling people with new workplace concepts, skills, tools and techniques that we can become successful in working in new ways.

In fact, as a primary symptom of this issue, I still find that most IT departments use pure technology adoption as the primary measure of success, rather than the business metrics or KPI improvements that actually matter. With a tech-first mindset, it’s as if merely using a digital tool is somehow equivalent to effectiveness or creating measurable value. An important subject for another time, however.

The Evolution of Foundational Technology of the Digital Workplace: file servers, chat, team messaging, unified communications, enterprise social networks, portals, intranets, file sync and sharing

It’s clear to me, after being in the space for two decades, is that we generally have poor ability to balance the tech and the people in our digital workplace strategies. Admittedly, it’s a tough balancing act: If we focus too much outside the technology, we lose the insight required to see how emerging new types of digital tools directly guide us towards powerful new models of working (such as “Let the Network Do the Work“.) If we focus too much on the technology, we lose the insight required to see best how to bring the people in the workforce along with us.

However, if we can identify the right organizing principle — which gives us an effective way to think and reason about the digital workplace that provides the right mental guardrails to ensure we keep a good balance — then we are more likely to succeed. However, it’s evident that we’ve not yet hit upon the right mental framework that allows the average organization to reach the next level of the digital workplace, and its attendant benefits.

Social Business Was A Breakthrough, But Not Complete

To be sure, we’re getting closer. The idea of social business as an umbrella set of ideas for the future of work is probably got as far as any concept has managed to get in the broader marketplace. As my co-author of Social Business By Design, Peter Kim, defined it, social business is about enabling people through the nearly unlimited possibilities given to us through relentless global innovation of the network technologies that have essentially remade the entire world in the last twenty-five years:

“A social business harnesses fundamental tendencies in human behavior via emerging technology to improve strategic and tactical outcomes.”

Thus any digital workplace that doesn’t tap into the innate tendencies of both people and digital networks will be at a disadvantage over time, often profoundly. We can already see this if we look at the performance data for workplace technologies like enterprise social networks — a key foundational technology of social business — that has been captured over the years by McKinsey and numerous others.

But as I’ve observed recently by contrasting it with the emerging model of digital experience management, social business is not a complete (nor was it intended to be) view of the digital world of work. It’s just a very important way of looking at better ways to conduct our work through collaboration and engagement. But it still doesn’t encompass all the ways that digital is transforming both the workplace and the people in it.

Yet for the foreseeable future, it is in fact technology that is largely leading the discussion when it comes to new ways of working, given that is has been more successful than anything else in raising productivity and producing growth in the last few decades. But as those that have spent their life studying it, as famed economist Robert Gordon noted recently, it often takes us a long time to figure out how to achieve the benefits. Certainly there are important non-tech big concept trends today (corporate social, sustainable business, and lean enterprise come mind) but even most of the key business trends today have tech involved in them in some way.

The digital age is one reason why The Economist last year noted the profound decline in recent years of notable management gurus, who had great expertise in business and could spot important work trends, but did not as a group have the requisite digital knowledge, context, and mindset to see past the inflection point when technology began to change virtually everything we do in our organizations.

Yet Tech Now Sets the Future Of Work Agenda

Thus the evolution of key digital workplace technologies, which I’ve depicted above, is almost depressingly devoid of the people equation, largely because the industry has mostly focused on specific point tools themselves. File, documents, records, and transactions are still at the core of most on-the-ground thinking about the digital workplace, though at least conversation, collaboration, and engagement are now about as important. Now team messaging along virtual and augmented reality are on the upswing but still in early days.

Things are changing again in general in the digital workplace for a variety of reasons. This include old legacy digital workplaces aging out and younger workers having higher expectations. But the digital workplace is shifting mostly because of fast-paced innovation, tech change, and acute proliferation. As a result, we’re now seeing a more nuanced and complex conception for the digital workplace emerging; a way of thinking about connecting the pieces into a multilayered and contextual digital habitat, as opposed to a mass jumble of largely disconnected apps.

We can also see that the digital workplace wilderness that we encountered during the collaboration and app proliferation of the early 2010s was just a gentle breeze of disruption. A large raft of disruptive technology is coming to the enterprise at this very moment, and it will change the workplace more in the next 10 years than in the last 50. While we see new digital management theories such as Holacracy emerging to try to create a better defined and detailed digital organizing model for us, the reality is that any approach is subject to the same forces that dethroned the traditional gurus of management: We just can’t see how work will shift until new tech is actually upon us, forcing us to revise and rethink much of what we know in a reactive mode, rather than with forethought and strategic planning.

For this reason and others, I now believe any effective organizing principle for the digital workplace must be profoundly designed for loss of control and take into account highly emergent behavior and outcomes. I believe we’re seeing the model for information technology (IT) finally shifting in realization of this, though it will take time.

You’re Invited to Two Open Events on the New Digital Workplace

So what then should be the foundational model for work today? To help discuss this question I will be participating in two industry online events this week in which we’ll explore these topics to the fullest possible. I would like to invite you to join me in the discussion.

The first is a Town Hall Debate this Wednesday, September 14th, 2016 at 9am PT/noon ET — which I’ve humorously likened more to a cage match — with my friend, industry colleague, and content management uber guru Tony Byrne, of the Real Story Group. We’ll be grappling with all of the above and more in a live video broadcast and I hope you’ll join us and ask hard questions.

You can register for the Town Hall Debate on Enterprise Social Collaboration here.

Town Hall Debate on Enterprise Social Collaboration and Networks with Dion Hinchcliffe and Tony Byrne

The second event is a Webcast of my latest research with Jive Software’s Gili Guri-Mill where I’ll explore why the enterprise social network is emerging at the leading candidate for the foundation of the digital workplace. This will be broadcast on September 15th, 2016 at 10am PT/1pm ET, and I’ll be taking questions towards the end.

Please register for my the Webcast, titled Enterprise Social Networks: The Foundation of the Digital Workplace here.

Webcast: Enterprise Social Networks as the Foundation of the Digital Workplace by Dion Hinchcliffe

Additional Reading

What is the Future of Work?

Digital Business Ecologies: How Social Networks and Communities Are Upending Our Organizations

The Building Blocks of Digital Transformation: Community, Tech, Business Models, and a Change Platform

I’ve been making the argument lately that the single largest obstacle in successful digital transformation is change itself. Surprisingly, the arrival of new technology is generally not the large hurdle to becoming more digital in a meaningful way, though it certainly represents a large and growing learning curve. Yet learning the new technology is manageable by most organizations in my experience, if they have the will to do so.

Finding the right business models can be a bit more of a challenge, but the process of discovering the best ones is increasingly well understood these days. One somewhat ironic lesson is that we’ve also learned that we usually have to build an audience first, often well before we decide on new digital business models, that are centered around some activity or capability of significant shared interest with the market, before we can experiment and find the right path forward in terms of generating value, such as revenue from sales, subscriptions, advertising, etc.

Online Communities Are the Business Construct That Create the Most Value

From my Enterprise Digital Summit 2016 Paris Keynote Deck

Why Digital Needs a New Mindset

It actually turns out the most important and challenging building blocks for digital transformation is people and the processes that can change them. Thinking in digital terms requires a significant shift in mindset, such as designing for loss of control, understanding the power laws of mass connectedness, the startling revelation that the network will do most of the work, and understanding how open participation is the key to unleashing digital value in scale to our businesses.

However, shifting the mindset en masse of the large number people that exist in the average enterprise (i.e. tens or even hundreds of thousands of workers) is not something that can be done to them, but can only be done with them as Euan Semple frequently likes to point out. So, what’s the single best venue in which to engage significantly in a time efficient and sustainable fashion? I now suggest that the most likely and cost-effective vehicle for this that we know today is online community.

The building blocks of digital transformation is a topic that I recently had time to study in depth as I prepared my closing keynote for the always terrific Enterprise Digital Summit 2016 (formerly the Enterprise 2.0 SUMMIT) in Paris this month.

Step 1: Gather Stakeholders into Communities of Digital Change

The fundamental building block of digital transformation is therefore not technology, but people, a much more challenging proposition. However, if we can somehow connect the collective workforce in the organization together in an effective fashsion to begin a shared and dialogue-based process of learning, understanding, experimenting with, and then carrying out the tasks of digital transformation across the enterprise as a much more aligned and self-supporting way, then we are much more likely to succeed. As I’ve discussed, we’ve even started to witness evidence that IT is shifting in this direction steadily, with the rise of empowered change agents and even unexpected source of pre-existing tech change using forces like shadow IT as a key resource for creating decentralized technology adaptation across the organization.

But it all starts with community, for which I believe the evidence is now clear is the most powerful way of organizing human activity and creating shared value yet developed.

Step 2: Assemble a Modern, Market-Facing Technology Stack

From there, we do need to look at the technology lens at what our business does and how it does it. We can no longer realize all tech change ourselves, as our competitors have already learned that the single greatest force for value creation is capturing and wielding community contributions of customers by the millions via mass co-creation, and business partners by the thousands (see APIs + hackathons). I recently summarized the many other emerging enterprise technologies we must consider all the time as well, but the most important ones are customer facing and involved in co-creation.

We therefore must instead now becoming highly competent in building strong and effective architectures of participation, as most digital leaders harness the vast capacity of the Internet to do most of the value creation:

The Digital Business Stack: Marketplace Driven Engagement & Value Creation

Step 3: Create and Nurture Digital Experiments

From there we can combine people-led digital change at scale with a portfolio of digital engagement and experience technologies and processes — that must prominently include market-facing community — to begin creating, launching, and growing healthy and vibrant new products and services. Growing hacking in fact, has become an important new technique used by top Internet companies to ensure early lift and adoption, and has been a key subject of interest by top technology leaders like Microsoft CEO Satya Nadella. So grow the results of digital transformation this way, then generate revenue:

Digitally Transforming a Business with Growth Hacking, Business Models, and Community

Step 4: Get Serious About Revenue Models

Finally, the last building block is digital business models, which one the service has a successful audience or community, can be experimented with and validated, though certainly some services, such as sharing economy ones, can monetize from the outset, though often at break even levels. Below is a representative list of some of the most common Internet business models, though by no means all the possibilities. For example, there are at least 18 separate known business models for open APIs alone. The high level Internet business models break down like so:

Common Internet Business Models

For a more complete exploration, please view the video of my closing keynote on this subject in Paris on June 2nd, 2016:

Or download a copy of the Slideshare deck that I presented with.

Additional Reading

How IT Can Change For the Digital Era and What Leaders Can Do About It

The digital transformation conversation shifts to how

More Evidence Online Community is Central to the Future of Work

Within the last month, two new industry reports have been released that shed important new light on how we’re going to be organizing and operating our organizations in the coming years. Many of you know my point of view in this regard: Social technology has at this point largely transformed the consumer world, yet the increasingly outdated digital landscape of business frequently continues to rely on creaky and rather limited technologies such as e-mail, document repositories, intranets, file sharing, and so on. So it’s always instructive to see how far we’ve actually come in places, and how much we have left to go.

The first report is The Community Roundtable’s excellent annual State of Community Management for 2016. While I’ll provide a fuller write-up on ZDNet soon, it’s clear from this report that the model of online community continues to rise in prominence and attention as a superior operating model for activities that involve a large number of people that have common interests and need to work together on shared objectives.

As my industry colleague Alan Lepofsky likes to say, without aiming our new digital technologies and cultures purposefully, there is little point.

Key Aspect of the Future of Work: Online Communities Aimed at Shared Purpose

Particularly significant in the report was this year’s exploration on the oft-discussed and little resolved issues of calculating hard return-on-investment (ROI) for community. While in my experience online community is a far superior — albeit still emerging — new way of working for a wide variety of use cases than traditional methods, both internal and externally facing, The Community Roundtable tackled the issue head on in this year’s report to determine ROI from this year’s participants in the survey:

While there is a wide range and many communities do have negative ROI rates that are likely due to their young age, small size or immaturity, many more demonstrate compelling returns that should satisfy stakeholders.

Successful internal communities are more valuable, on average, than their external facing peers and those community programs that addressed both audiences had an ROI in the middle. Overall, communities average an annual ROI of 942% – suggesting that most community managers have nothing to fear from calculating their community’s ROI – remembering that it is the start of an ongoing dialog about value and how to grow it.

The numbers overall are impressive, and shows what I’ve seen consistently: The return on community is not only enough to justify the initial investment and is superior to most competing methods, but is also more than enough to properly fund the ongoing effort with a properly sized team. This especially means dedicated, professional community managers, which are perhaps the top success factor for communities, yet too often neglected in my experience. In short, we can now quantify how online communities and enterprise social networks offer significant value to the typical business. In any case, the numbers make the case on their own:

The ROI of Online Community by Use Case

From here we can see from the data, which Rachael Happe indicated to me recently in a discussion was from their largest sample size yet, is there is serious, immediate, and significant value in both internal and external communities. This continues to validate why online community should be a central plank of your digital strategy, and a core component of your digital transformation efforts.

Also, it’s worth noting that online community is also a key platform for enabling digital transformation, a key topic that came up last week in Paris by many practitioners at the Enterprise Digital SUMMIT, where I was speaking. I’ll explore that issue in more depth as well soon.

The value of social in the back office

The second report is “How social tools can reshape the organization” from the McKinsey Global Institute. Authored by well-known McKinsey partner Michael Chui — whom I finally got to meet recently in New Orleans at the Enterprise150 event — and several co-authors, the report delves into some recent findings on business impact with community and social tools that is worth exploring.

Social Tools and Community Enable Digitization and Performance

Particularly notable was the report’s finding that for any business activity which has been digitized, on average half report that incorporating social improves the digitized process even more, whatever the process. What’s more, specific business activities show a much higher level of improvement if they are digitized and made social, both (see chart above.) These activities include order-to-cash, demand planning, research & development (R&D), supply chain management, and procurement. These aren’t necessary glamorous aspects of our business, like marketing or sales, which are more often associated with social business performance but they are vital and important:

To digitize all processes, both internal and external, the results suggest that social tools can help. For every process where their companies are digitizing and using social tools, respondents agree that social technologies have enabled their use of digital overall. This is true even for the back-office processes where few respondents now say their companies are using social tools. In fact, social’s effect on digitization is greatest for the internal processes where social tools and digital activities are least common.

This data clearly shows that many efforts could be seeking higher levels of easily accessed value in places other than where we’ve traditionally focused. This also means that if you’re already digitizing something, it makes sense to make it social too.

Additional Reading: Enterprises need a (social) platform to drive change

In short, the case of online community is now stronger than ever: More data is available than ever before which shows substantial, sustained, and transformative value can be created by working in more open and highly participative models, as long as we’re sure to connect our activities to purpose. One of the things that struck me most in Paris last week is how many use cases that the latest case studies cite, far beyond simple knowledge sharing and management that used to be the central business case. It’s very encouraging to see our industry reach a new level of maturity and data-based value, though to be sure, there is still much more to do in most organizations.