This piece, written by MWD Advisors’ lead analysts Angela Ashenden, Neil Ward-Dutton and Craig Wentworth, provides an overview of the key trends we see organisations facing in 2017 (and beyond). If you’re in a technology leadership role, you should be exploring how these trends will impact the ways you plan, design, deliver and support services and capabilities.
At MWD Advisors, our research program is focused, at a high level, on how digital technology changes work. The core of our scope of research is the systems and platforms organisations use to share knowledge, make decisions and co-ordinate work; we look at how new technologies are changing the picture, and what distinguishes successful organisations that reap the benefits of new technologies from those that struggle to drive meaningful change.
The three trends we outline below are fundamentally changing the relationship between technology and business. Organisations in sectors like telecoms and media have long seen the interweaving of IT with business capabilities, products, services and processes; however through a continuing wave of digital transformation, we’re now seeing organisations in sectors as diverse as logistics, retail, hospitality and utilities making huge leaps – melding business and technology in new ways.
A big engine of change: innovation programs
Over the past year within our research community (around 7,500 practitioners and leaders from multiple industries and continents) we’ve seen a steady rise in the pursuit of formal innovation programs. These programs take many forms, but they’re very often the cradles of digital transformation work – following uncommon approaches to research and development in order to find new opportunities for growth. Innovation programs we encounter commonly use variations on the same toolkit to create catalysts for change in products, services and processes: a combination of lean startup methodologies and design thinking. It’s these programs which are creating or influencing much of the demand we talk about below.
Changing delivery models: part of the furniture
In putting our 2017 trend analysis together we considered including as-a-service capability delivery (through cloud platforms and subscription models), and also the increasing importance of mobile workstyles on application and platform architectures. However our view is that these changes to application and platform delivery models are ‘part of the furniture’ – they’re not new things that we need to understand or explore; they’re things that every technology leader should have strategies in place for already (even if implementation is still a little way off).
Trends on the edge
Although technology trends concerning the ‘edges’ of technology in business have an impact on our research domain, they’re not a core consideration for us in our practice for 2017. Augmented Reality (AR) and Virtual Reality (VR) technologies, as well as technologies powering the emerging Internet of Things (IoT), are edge technologies that will create new sources of data and content that need to be managed to help organisations make better decisions; they’re also providing customers, suppliers and employees with new experiences and ways to interact with digital environments. They will create new ways for products and services to be delivered and for operations to be optimised – but in and of themselves we don’t see them as central to how organisations share knowledge, make decisions and co-ordinate work in the coming year.
Our three key trends for 2017
Expect to see our research agenda for 2017 reflecting and exploring the three trends below.
2017 Trend #1 – The rise of learning systems
In the past two years there’s been a major uptick in announcements of new ‘intelligent’ services and systems available to both businesses and individual consumers. If you’ve not been exposed to discussion of the capabilities of Apple’s Siri or IBM’s Watson in the media, for example, you’re in a very small minority. These are just two examples at the forefront of a wave of technology and product advances. In 2017, we expect to see ‘learning systems’ – systems that employ learning techniques to configure and optimise their algorithms – being used in more and more mainstream, operational use cases.
As you can read in our recent reports The new wave of automation: Machine Learning and more and The new wave of automation: Unpicking the business impact, learning systems are now being applied in two distinct, but related areas: in driving interactions – mostly, enabling new more human modes of interaction between software applications and people (via chatbots and intelligent assistants, for example); and in driving insights – enabling more interactive, predictive, advisory analytics to be used to drive more effective, real-time recommendations and optimisations within digital workflows and workplaces.
In 2017 we expect to see many more examples of how learning systems are impacting software capabilities driving interactions and insights, and at the same time as seeing opportunities for improvements in process efficiency and quality and customer experience improvement, seeing challenges relating to the new relationship balances we create between people and software applications.
We expect most learning systems implementations in 2017 in scenarios where organisations would have otherwise been poised to invest in people to do high-volume knowledge work, but where systems now exist (at an attractive enough price point) which can at least do a ‘good enough’ job – and where these systems, once trained, offer the potential to support business scaling ambitions which wouldn’t have been economically viable using people alone. More and more packaged cognitive applications for specific scenarios are becoming available, and we expect to see these being eagerly adopted.
2017 Trend #2 – From as-a-service to self-service
The meteoric rise in adoption of the SaaS model for enterprise and personal productivity application suites alike has in large part been fueled by the ability for business teams to self-serve – both in procuring the technology in the first place, and then in configuring and using the technology. Now, though, we’re seeing this self-service model having an influence far beyond the adoption of enterprise and personal productivity application suites. Now, platforms that power digital workplaces and workflows are also being offered as-a-service, and in many cases, they are designed and delivered in a way that enables self-service.
Whereas ten years ago the organisations making all the running in software platform investments were large, relatively high-margin businesses in financial services and telecoms, investing in centrally-managed platforms deployed ‘top-down’, now the organisations driving adoption of new, more lightweight, self-service digital business platforms have their homes in comparatively low-margin sectors that typically have dispersed, mobile workforces and lack the luxury of large, generously-funded IT departments: retail, travel and transport, distribution and logistics, hospitality, utilities and so on.
At the same time the new wave of easy-to-use, self-service digital business platforms naturally promote more of a bottom-up adoption approach, and support the tackling of ‘long tail’ issues that centrally-managed IT teams often find hard to dedicate resources to. It’s not only those organisations in comparatively low-margin sectors that are now adopting these platforms.
In 2017, we expect to see established enterprise software platform vendors redouble their efforts to match the ease-of-use, pricing and licensing approaches of the constellation of relatively early-stage vendors (from Asana to Zapier) currently making most of the running.
2017 Trend #3 – From products to platforms
Finally in 2017 we expect to see more market impact from the continuation of a slower shift in the way that software capabilities are offered to businesses – a shift from packaged offerings with very well-defined functionality and limited, high-cost extension and customisation opportunities; to offerings that are still packaged, but that offer extensive, easy-to-use and open APIs for customisation and extension. Another way of looking at this is a shift from well-defined products specialised to suit very particular use cases, to more general-purpose platforms that ship with some packaged functionality (that may sometimes seem like showcases for how the broader platform can be used, as much as anything). Just as with our other two trends outlined above, we see this playing out across every part of our research program.
One obvious way that this is playing out is in much more flexibility offered by vendors in how user experiences for their products are created. Now more than ever vendors can’t control the user experience when clients deploy their products; clients may want to deliver functionality to their customers or employees via web experiences, but also via mobile apps (of various kinds), online forums, chat technologies, or social networking properties. In 2017 the hype will no longer be about ‘mobile first’ deployment of applications or platforms – as organisations realise that openness and flexibility in user experience choices is the key.
Five key takeaways for technology leaders
In 2017, technology leaders need to take account of these trends as they plan and deliver investments, and find new ways to engage business peers to deliver value. Here are our five key takeaways:
- Create an automation strategy, and soon. The new wave of automation is bringing many new low-cost, self-service tools into the picture for your business, as well as more complex tools and platforms that may have the potential to radically affect your business processes and operating models; without a clear strategy for how you’re going to engage with new automation tools and approaches, you’ll come unstuck very quickly.
- Think again about how you set technology standards. With the rise in self-service platforms driving the digital workplace and digital workflows, it’s increasingly unfeasible to mandate single corporate standards in these areas. You need to find ways to enable business teams to ‘bring their own platforms’.
- Learn to let go while retaining visibility. In the past the argument for central control over platforms was about visibility and quality, cost control and so on. Now, though, platforms’ increased openness means central technology groups can still gain visibility over platform usage (and so control, or at least influence) even when multiple platforms are used in multiple ways by multiple groups.
- Think beyond feature checklists in procurement. If you’re still driving procurement based on feature checklists, think again. You need to take an evaluation approach that takes into account more qualitative factors relating to ease of design, development and customisation; and support for prototyping and quick time-to-deliver.
- Agitate to take a central role in innovation. With more and more organisations creating formal innovation capabilities, your organisation can’t afford to be left out of these conversations. Innovation teams can benefit from ‘sandboxes’ that enable them to experiment and iterate new product or service ideas quickly, free of the shackles of corporate IT governance procedures; however corporate technology groups have key skills and corporate knowledge that will be crucial in the ‘hardening’ of any such innovations.