DIGITALDIGITAL: DISRUPT OR DIEMark J. Barrenechea
Tom Jenkins

Barrenechea, Mark J.
Jenkins, Tom

Digital: Disrupt or Die
First Printing, November 2014
Printed in CanadaFirst Edition
ISBN
978-0-9936047-3-7$29.00 U.S.
Published byOpen Text Corporation
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info@opentext.com
www.opentext.com

Certain statements in this book may contain words considered forward-looking statements or information under applicablesecurities laws. These statements are based on OpenText’s current expectations, estimates, forecasts and projections
about the operating environment, economies and markets in which the company operates. These statements are subject
to important assumptions, risks and uncertainties that are difficult to predict, and the actual outcome may be materiallydifferent. OpenText’s assumptions, although considered reasonable by the company on the date of publishing, may prove
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IIIACKNOWLEDGEMENTS

This book is dedicated to the staff, partners,
and customers of OpenText andits subsidiaries. This book is possible due to their
combined efforts, innovation, and collective vision.

We would like to thank the staff, users, and partners of
OpenText for their contributions to this book.
Special thanks go to writers Elizabeth Hanson and Sharon Malloch, editor Rebecca Graves,and the following contributors:
Tania Almond, Eric Bencina, Travis Cain, Steven Cohen, Margaret Dobbin, Sonia Florez,
Sal Hakimi, Pat Harper, Kasey Holman, Steven Keifer, Ron Kelly, Barbara Kennedy,
Lisa Kyte, Ricky Lai, Lindsay Lane, Robin Lane, Nicole Lavell, Christine Lesden, Paul Loomis,
Dennis Lund, Deborah Miller, Mark Morley, Stefanie Nastou, Tom Niedoba, Melissa Noto,
Russ O’Neill, Donna Pearson, Lubor Ptacek, Beau Radloff, Ali Saleh, Anabel Sarrate,
Ray Schultz, Scott Schultz, Erin Schwab, Brandy Schwartz, Tim Spadzinski, Michele Stevenson,
Kathleen White, and Neil Wilson.
We would also like to thank Kevin Sy and Joe Dwyer for layout, design, and production.
Special thanks go out to all our customers as well for their contributions to this book.
Special resources are accredited in the Bibliography.
VCONTENTS
ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V
FOREWORD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  IX
1.

DIGITAL DISRUPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

2.

DIGITAL BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21

3.

INFORMATION IS THE NEW CURRENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39

4.

DIGITAL ENGAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  59

5.

DIGITAL SUPPLY CHAIN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  79

6.

DIGITAL WORKPLACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  99

7.

DIGITAL GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  117

8.

THE STRATEGIC CIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  139

9.

THE DIGITAL ENTERPRISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  161

10. STRATEGIES FOR CHANGE MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .  183BIBLIOGRAPHY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

VI

FOREWORD
There’s no denying the fact that the nature of business has changed significantly in thepast decade. The rise of global markets, regulatory shifts, economic uncertainty, varying
demographics, increasingly savvy consumers, and disruptive technologies has accelerated
the pace of change into the 21st century.
In a digital-first world, many of the traditional channels and the organizations that control
them have already become irrelevant. The Internet has almost obliterated barriers
to entry, and cottage industries and niche markets are set to flourish. Globalization is
introducing massive volumes of trade, an increasing number of regulations, and theopportunity for emerging economies like Brazil, Russia, India, and China (collectively
known as BRIC) to evolve into dominant centers of economic influence. As trade
increases, more and more physical products will be digitized into virtual goods. As aresult, there will be higher rates of goods and activities that have a virtual component—
involving Research and Development (R&D) skills and expertise and the exchange of
information.
Enabled by technologies like mobile phones, social media, and the cloud, the exchangeof digital information has grown significantly and the implications of this are profound.
Technologies that have appeared on the horizon today will become prevalent and impose
additional requirements for the enterprise to collect, govern, process, and protect its
information for true competitive advantage.
Information is the new currency that fuels business growth. In 2020 business leaders will
be required to develop and execute on strategies for information management, including
robust capabilities for governance and compliance, to help the enterprise maximize
the value of its information, while minimizing risk. For many organizations, finding thisbalance will be critical for survival. Between now and 2020, successful businesses will bethose that adopt Enterprise Information Management (EIM) technologies and processes
to ensure that their information assets are well-managed and secure.
To thrive in a rapidly evolving business environment, businesses across all industries
must take steps beyond increasing efficiencies, reducing costs, improving governance,and strengthening management. To remain profitable, organizations should be prepared
to exit their key businesses, embrace new consumer markets, introduce new products
and services, and invest in human capital to manage business models that are in flux. The
effective management of information makes this transformation possible.

VIIThis book has been written to give organizations an in-depth understanding of the ways
in which their strategies and operations are being disrupted, and to provide them with thesteps they can take to capitalize on opportunities to create value.
The journey is already underway. The road to empowering the enterprise to compete andlead in a digital-first world is a long and complex one. The outcome is clear—to digitize anddisrupt or die.
This is our vision for 2020.

John Doolittle
CHIE F FINANCIAL OFF I C E R ,OP E NTEXT CORPORAT I O N

VIIIINTRODUCTION“Use of digital technology is going to explode. The way we do business, the way
customers interact with us, the nature of consumption–everything is going to change, andthat presents huge opportunity.”1

Business in a Digital-First World

Digital Intensity

A digital-first world is fast approaching. In every sector, digital technologies are
already changing the rules of business by enabling new business models and levelingthe playing field. In the past, technology has been fundamental in helping organizations
reduce costs and increase productivity. While this is still the case, digitization
is dramatically changing our business landscape with the promise of increased
opportunity and innovation. Technology is transforming the very nature of business
today, making it more fluid, social, global, accelerated, risky, and competitive.

-11%

+26%

-24%

+9%

Transformation Management Intensity
Digital Leaders are 26% More Profitable than Competitors 2

1

A ccenture, “CEO Briefing 2014”, Global Agenda, 2014.

2

 apgemini Consulting and the MIT Center for Digital Business, “The Digital Advantage: How digital leaders outperform theirGpeers in every industry”, 2012.

IX

Most business leaders are well aware of the promise of rapid technological change. In
2020, CIOs, CMOs, CEOs, and line-of-business managers will be tasked with finding newcustomers, new markets, and new revenue streams using digital channels. The winners
will successfully reinvent their businesses to thrive in a digital economy. Companies
that demonstrate digital maturity will have higher financial performance than their lessdigitally mature competitors. On average, digital leaders are 26 percent more profitable
than their industry competitors. They generate 9 percent more revenue through theiremployees and physical assets. And they create more value, generating 12 percent
higher market valuation rates. For large, traditional companies, this can equate to billionsof dollars.3

Disrupt or Die
All of the great innovators of today have embraced digital disruption. There are examples
of it in every industry, as the winners overtake the established market leaders who fail toembrace new developments and opportunities fueled by disruptive digital technologies:
 In 2012, the United States Postal Service (USPS) was losing $25 million every single

day4, its service eclipsed by free Internet email like Google’s Gmail® and fast, reliable
delivery services from competitors like UPS ®. People want direct and targeted
services with immediate gratification, an outcome they receive when they send
emails or pay their bills online. As we move toward becoming a paperless society,
the USPS in its current incarnation (kept afloat by government funding) is bound to
become obsolete.
 While Netflix ®’s leadership anticipated the streaming trend in home video viewing,

Blockbuster® was pursuing additional revenue streams by selling candy and popcorn
in its stores. 5 As the largest American-based provider of home movie and video gamerental services, at its peak Blockbuster boasted 60,000 employees and more than
9,000 stores. It failed to transform itself from its established bricks-and-mortarroots (declining the opportunity to purchase Netflix for $50 million in 2000) and was
pushed out of its market by companies like Netflix and Redbox ®. Blockbuster lost
significant revenue and filed for bankruptcy on September 23, 2010. It closed its
final stores in November of 2013.

3

 apgemini Consulting and the MIT Center for Digital Business, “The Digital Advantage: How digital leaders outperform theirGpeers in every industry”, 2012.

4

“ U.S. Postal Service in trouble, losing $25 million daily” CNN, Dec 10, 2012, 				http://outfront.blogs.cnn.com/2012/12/10/u-s-postal-service-in-trouble-losing-25-million-daily/ (accessed Jan 2014).

5

 ernstein, Paula. “Did Netflix Really Put Blockbuster Out of Business?” Indiewire, February 4, 2014, 		
B
http://www.indiewire.com/article/did-netflix-put-blockbuster-out-of-business-this-infographic-tells-the-real-story (accessed
September 2014).

X Today, Barnes & Noble ® is the last remaining national bookstore chain in the U.S. Its

number one competitor is Amazon®. And while Amazon’s stock price has risen by 50
percent since 1998, Barnes & Nobles’ has fallen by 20 percent in the last decade. 6
Amazon sanctioned the market by digitizing its distribution: offering books for thesame price but with better service that included convenient access to products,
greater choice, peer reviews, recommendations, and sample downloads. Even
before it moved into the market for e-books with the Kindle ®, Amazon drove manystock price vs HMV stock price (log scale)booksellers out of Applebusiness.
10000

1000

100

10

1

0
02

03

04

05

06

07

08

09

10

11

12

13

Apple Stock Price Vs HMV Stock Price7

Apple

HMV

 Iconic retailer and popular brand, HMV failed to explore new revenue streams orways to offer convenient purchases and niche content, and finally delisted after its
bankruptcy in January, 2013. Its major competitor, Apple’s iTunes® is now a market
dominator, offering entertainment as digital downloads to a massive audience.
Bypassing its sales force, iTunes instantly connects millions of consumers to offer
high accessibility and instant gratification. As one of the world’s most valued brands,
Apple’s stock has risen by a staggering 6000 percent over the past 10 years.

6

A ccenture, “CEO Briefing 2014”, Global Agenda, 2014

7

Ibid.

XI

 Canon ® and Kodak ® faced off in the digital arena, with Canon taking market sharein 2005 through digital camera sales and Kodak Eastman losing $1.4 billion due toits slow transition to digital and a continued reliance on film for earnings. Kodak’s
portfolio ultimately failed in comparison to Canon’s digital point-and-shoot camera,
and after some costly restructuring, Kodak filed for bankruptcy in January 2012. It
has recently emerged from bankruptcy (2013), reinventing itself as a commercialprinting company for business, leaving the consumer market altogether. 8 On aninteresting note—as a representation of the profound shift that is taking place—while
Kodak once employed 130,000 people to deliver its services, Instagram® does thesame today with only 13 employees.
The business model that wins today is innovative, digital, and anticipates consumer
need. Like Netflix, Amazon, and Apple, organizations that succeed will have to digitize
the way they develop products and services, the way they market and sell, the way they
distribute—the entire customer journey—or they’ll be sidelined by their competition.

Key Disruptive Forces
Digital is coming. It’s a very powerful, fast-moving train, fueled by key disruptors likecloud and mobile, a changing workforce, a digitized supply chain, digital consumers, andrequirements to comply with increasing, global regulations.
In 2020, there will be larger, more interactive transactions and higher volume networking.
New technologies like social and mobile, and how they are connected—over 5G
networks—will change the way people experience the world. These networks will offer
organizations zero-distance connectivity to a high-quality, global network of five billion
users. Enterprise IT infrastructure will move to the cloud. Mobile users will replace
PC users, and more services will be mobile-enabled. The Internet of Things (IoT) willautomatically integrate machines, data, and people. Emerging technologies like threedimensional (3-D) printing will radically change manufacturing by moving the entire
supply chain online. By 2020, consumers will drive the majority of interactions with
suppliers. Buyer-driven platforms will continue to infuse the digital-first world withdynamic and real-time results, expanding on Just-In-Time (JIT) manufacturing to optimize
supply chains and meet customer demand.

8

 eth Jinks, “Kodak Moments Just a Memory as Company Exits Bankruptcy”, Bloomberg.com, September 3, 2013,
B
http://www.bloomberg.com/news/2013-09-03/kodak-exits-bankruptcy-as-printer-without-photographs.html (accessed
July 2014).

XII

50
30

%

Cautious Adaptors

5%• Lets go measure thedemand• Is this really a trend?
• Wait for the commodity• If I have too%

Market Leaders• Different• First• How do we transform
our business?
• First failures

Laggards

Fast Followers• Do we need to disrupt
our business?

• Better

15• How much longer can
we wait?
• Has the trend moved
beyond mainstream?

%• Our competitors are
doing it• What can we learn?
• How do we scale thisfaster and cheaper?

Transformative Innovation

Incremental Innovation

Proactive• We will always be here

Reactive
Market Leaders will Transform Their Businesses 9

Internally, the enterprise of the future will have to support a culture of innovation andbuild technologies to support a changing workforce. At OpenText, we envisage thatby the year 2020 our workforce will be dominated by digital natives—generations thathave grown up with the Internet. We will have to cater to their needs. The concept ofdeveloping “on premise software”, for example, will be archaic to future engineers. They
will write a line of code for software that can be accessed and downloaded over the
weekend. People won’t wait a few years for software to be developed and implemented.
Development cycles will happen in hyper-drive.
Finally, new technologies are requiring us to re-platform compliance. In 2020, growing
regulatory and competitive pressures will require the enterprise to rethink andreprioritize its security and governance strategies for enterprise information. These
requirements will be driven by emerging global regulations, increasing amounts ofInternet users and privacy-related issues, big data, and protection against Intellectual
Property (IP) loss.

9

 ang, R., “The Building Blocks of Successful Corporate IT”, Harvard Business Review, August 8, 2013, 		
W
http://blogs.hbr.org/2013/08/the-building-blocks-of-success/ (accessed September 2014).

XIII

Now Is the Time to Capture Opportunity
It’s hard to envision what technology will achieve. With its ability to transgressboundaries and overcome limitations, its possibilities are endless. Few people could
have predicted the meteoric rise in popularity that the mobile device would have. Itsapplications are not fixed to its physical makeup as a phone: its uses are becoming more
malleable. People are using their mobile phones in place of many other objects, fromclocks, flashlights, maps, books, and cameras to entertainment centers, car keys, andpersonal assistants.
A digital-first world with new technologies, a changing workforce, a global marketplace,and digital consumers offers pure opportunity for the enterprise. The impact of itschanges are just around the corner—only a handful of years away (which translates into
just two years from an IT perspective). Now is the time to capture the opportunity andmeet the challenges of a digital-first world. The pace of change in markets underlies theurgency with which the enterprise must transform itself into a digital enterprise.

Simplify, Transform, and Accelerate
But how can the enterprise effectively reinvent itself?
To succeed in 2020, the enterprise will have to simplify, transform, and accelerate
its business. It can do so by reducing costs and increasing competitiveness throughautomated and digitized information processes. Consolidated information and process
management empowers the digital enterprise to meet the requirements of a digital
workforce and digital customers in a new disruptive world. To keep pace with accelerated
innovation cycles, the enterprise must increase the speed of information delivery throughintegrated systems—on premise, in the cloud, and throughout its entire business network.
Information lies at the core of digital transformation. In a digital-first world, informationis the new currency, playing a fundamental role in empowering the digital enterprisethrough innovation, growth, and opportunity. In 2020, organizations will be required todifferentiate their products and services based on a strategy that maximizes the potential
of information as a key differentiator.
This book has been written to help chart the course for the digital enterprise on
its journey to a digital-first future. Digital: Disrupt or Die is a discourse on digitaltransformation. As told by our customers, analysts, innovators, and thought leaders, it
describes a strategic multi-year blueprint for success in 2020.
Information leads to greater insights, better business decisions, higher customer
satisfaction, greater agility, and optimized business performance. But how can theenterprise unlock the potential of information without compromising productivity
and security?
XIVEnterprise Information Management (EIM) is the key transformative technology. It
provides a robust foundation for the digital enterprise to advance engagement with
employees, customers, partners, and across the entire supply chain. This book explores
the future of digital technologies, their impact on business, and how EIM equips theenterprise as it transforms itself to brace for change and opportunity in the year 2020and beyond.
The way forward is clear. To successfully provide products and services to digitalconsumers, the enterprise must reinvent itself. With change comes tremendous
opportunity: the opportunity for the enterprise to form deeper connections with its
customers, partners, and employees; to create social, mobile and flexible workplaces thatare conducive to higher levels of productivity and innovation; to deliver products andservices according to individual need and specification; and to streamline the production
and delivery of supply chains on a global scale. With opportunity comes risk, and thegreatest risk is not embracing disruption in our increasingly digital society.
This book presents a systematic approach for the enterprise to re-conceptualize a digitalfirst future.
Are you ready?

Mark J. Barrenechea

Tom Jenkins

P RES IDENT & CEO,CHAIRMAN,

OPENTEXT CORP O R AT I O N

OP EN TEX T CO R P O R ATIO N

XVC H A P T E R

DIGITAL DISRUPTION

1CHAPTER 1

C HAPTER 1

Digital Disruption“The mindset of the digital disruptor accelerates every possible process by exploiting
digital toolsets that are free for tinkering. Economists talk about trends that reducebarriers to entry. The force of digital disruption doesn't just reduce these barriers, it
obliterates them.”1
The pace of industry has accelerated. There have been more changes in the past twenty
years than in the previous 100. In a world where everything is touched by technology,
the enterprise has never had such an incredible opportunity to reinvent itself—to moreclosely align business with technology, deliver significant customer value, and maketransformational business impact.
Changes that are taking place in business today are reminiscent of the seventies
when technology promised increased competitive advantage through automationand greater efficiencies. Business models were radically transformed again in thenineties as technology and commerce intersected on the Internet. The technologies oftoday are causing seismic shifts in many industries, from publishing to entertainment
to government. Old business models are being swept away as people find new ways
to access information, news, entertainment, products, and services to meet their
daily needs.
The year 2020 will see a convergence of technologies into a nexus that businesses cancapitalize on to create true competitive edge. These forces run the gamut from cloud andsocial computing to mobile devices to the Internet of Things (IoT) and, when combined,
they create a powerful platform for change. This chapter examines these digitaltechnologies and how they will impact consumers, business, and society as a whole.

The Impact of Digital Technologies
Predicting the future is as fallible as forecasting the weather. To make predictions welook for cognitive clues, factor in experience, and defer to data. Despite the limited visionthat characterizes human history, sometimes the forecasts are amazingly accurate. Thisis the case when we consider the theories of Clayton Christensen, Chris Anderson, andGordon Moore.

1James McQuivey, “Digital Disruption: Unleashing the Next Wave of Innovation”, Forrester Research, Inc., 2013.

2

DIGITAL DISRUPTION

Spanning almost seven decades, these three men have helped to define the trajectoryof digital innovation. Christensen coined the term “disruptive innovation”. Moore (asin Moore’s Law) described how technological innovations become affordable andmainstream. Anderson introduced the dynamic of the “long tail” to explain how nichemarkets thrive. According to all three, the future of digital innovation hinges on theInternet and disruptive technologies. When they are combined, these theories culminate
in accelerated innovation and foretell an approaching digital industrial revolution.

Disruptive Innovation

Performance

Disruptive innovation is one of the most important theories to surface over the last twenty
years. In his article for the Harvard Business Review (January - February 1995) Disruptive
Technologies: Catching the Wave, Clayton Christensen defines the term disruptive technology(commonly referred to as disruptive innovation) as “an innovation that helps create a newmarket and value network, and eventually goes on to disrupt an existing market and value
network (over a few years or decades), displacing an earlier technology.”
Incumbents nearly always win
ns

vatio
g Innoalhnicof TecPace ss
e
r
g
Pro

inin
Susta

Disruptive
Innovations

Entrants nearly always win

Time

FIGURE 1.1: The Disruptive Innovation Model 2

Disruptive innovation creates new markets or reshapes existing ones. As market leaders
continue to produce sustaining technologies that are reliable and profitable, they create
opportunities for disruptive innovations to enter the market. An innovation that is disruptive
allows a niche set of customers to access a product or service that was at one time only
accessible to consumers with a lot of money. Sound familiar? This premise lays the foundation
for Chris Andersen’s "Long Tail".
According to Christensen, disruptive technologies offer poorer performance than leading
technologies but are more affordable and deliver benefits not currently available fromexisting technologies. Market leaders miss these innovations and how they will impact themarket. In many instances, disruptive technologies quickly improve in quality and replace older
technologies. In some cases, innovations enter the market and replace leading technologies
immediately based on superior performance.
2

 eter Duke, “Sitting on Top of the World – A Strategy for Life (and Business)”, Peter Duke Media Services, March 10, 2010,P
http://dukemedia.com/sitting-on-top-of-the-world/ (accessed Sept 2014).

3

CHAPTER 1

FIGURE 1.2: Digital Cameras Vs Mobile Phone Cameras

The mobile phone camera provides a great example of disruptive innovation. These cameras
are becoming so advanced that they rival digital cameras. While smartphones have not yet
surpassed standalone cameras in image quality, the gap between the two is lessening. As aresult, digital camera companies have been forced to keep pace with mobile phone camera
technology. The Nikon Cool Pix S800c®, for example, mimics a mobile phone by connecting
to a Wi-Fi network so users can share their photos on social media sites. As this industry is
reshaped by disruptive innovation, market leaders that fail to anticipate change risk becoming
obsolete—a fate that Eastman Kodak suffered, filing for bankruptcy in 2012.

Moore’s Law
Moore’s Law is an attempt to describe the rapid pace of technological innovation. In 1965,
Gordon Moore, the co-founder of Intel®, observed that the computer processors doubled incomplexity every two years. He predicted that this trend would continue into the foreseeable
future. Coined “Moore’s Law”, the theory posits that advances in technology are exponential,
making devices more powerful every two years and half as expensive. As computers become
more powerful, they become more accessible and can fuel further innovation. The Internet isthe quintessential example of disruptive innovation. It has overhauled entire industries andcontinues to disrupt markets, both old and new.

The Long Tail
The Internet has democratized the means of production and distribution and facilitatedAnderson’s Long Tail. This theory is based on the economy moving away from producing
mainstream products to satisfying niche markets. As the costs of production and distribution
are driven down by the Internet, there is a declining demand for mass-produced goods.
Customized niche markets can be successful and lucrative, based on a digitized supply chain.
To break the theory down, the blue part of the graph below represents the mass productionof goods that has dominated our culture for the last century. The orange part represents
the long tail (or niche markets) and this is where the innovation is coming from now and into
the future.

4

DIGITAL DISRUPTION

Popularity

The New Marketplace

HeadLong Tail

Products

FIGURE 1.3: The Long Tail 3

The swift pace of innovation gives digital disruptions even greater impact. For digitaltechnology, this is based on the speed of development and the magnitude of innovation
involved in its creation. Unlike the disruptions introduced by the web in the nineties,
today’s digital disruption is cheaper, faster, stronger, and reliant on the combination of key
technologies and environmental factors. These include the ubiquity of mobile phones,
increased speed and bandwidth, globalization, more affordable data storage, and fastercomputing power and data processing ability. With more people connected and sharing ideas
in a global, digitized marketplace, the pace of innovation can only increase exponentially.

Digital Disruption is Stronger and Faster10x

the innovators

1/10th 100x
the cost

the power

FIGURE 1.4: Digital Disruption is Stronger and Faster 43

Chris Anderson, “The Long Tail”, http://www.longtail.com/about.html (Accessed May 2014).

4

James McQuivey, “Digital Disruption: Unleashing the Next Wave of Innovation”, Forrester Research, 2013.

5

CHAPTER 1

Based on this trajectory of innovation, in the year 2020 we will see the boundaries between
technology and people blur, heightened by holographic TVs, three-dimensional (3-D)
printing and manufacturing, and wearable technologies. Whole industries will be affectedby the consolidation of information from diverse systems, including mobile devices, Global
Positioning System (GPS), sensors, and video surveillance. All of these inputs will beconnected and placed onto networks to contribute to the Internet of Things (IoT). Oncethey are integrated and accessible, these technologies will significantly transform market
dynamics in all sectors.

2020: A Nexus of Forces
When combined, disruptive technologies like mobile computing, fifth-generation (5G)
wireless networks, cloud computing, and the IoT form a “Nexus of Forces”—a social, mobile,and cloud-based communications platform for the future.5 Together, they represent atremendous opportunity for the enterprise to increase consumer engagement, break down
information silos, and deliver highly targeted solutions at a lower cost.
The accessibility of mobile computing is a key influencer in digital disruption. The mobile
industry is the fastest growing industry on the planet.6 The personal computer has fallen off
the cliff as smartphones and tablets have risen in popularity.7

Continuous High Growth of Mobile Broadband

Americas

Europe460 MILLION SUBSCRIPTIONS

422 MILLION SUBSCRIPTIONS

Commonwealth of
Independent States

71 MILLION SUBSCRIPTIONS

48% PENETRATION

68% PENETRATION

129 MILLION SUBSCRIPTIONS

19% PENETRATION

28% CAGR* (2010-2013)

33% CAGR (2010-2013)

46% PENETRATION

55% CAGR (2010-2013)

27% CAGR (2010-2013)

Arab States

Africa93 MILLION SUBSCRIPTIONS
11% PENETRATION
82% CAGR (2010-2013)

Asia-Pacific895 MILLION SUBSCRIPTIONS
22% PENETRATION
45% CAGR (2010-2013)*Compound Annual Growth Rate

FIGURE 1.5: Almost as Many Mobile Subscriptions as People in the World 8

5

“ Transform Your Business With the Nexus of Force”, Gartner, Inc., February, 2014.

6

“ Major Mobile Trends Show Global Mobile Industry is now the Fastest Growing Market in the World”,
MobileMarketingWatch.com, http://www.mobilemarketingwatch.com/major-mobile-trends-show-global-mobile-industryis-now-thefastest-growing-market-in-the-world-16840/ (accessed June 2013).

7

 hetan Sharma,“2013 Mobile Industry Predictions Survey”, Chetan Sharma Consulting, January 2013, 		
C
http://www.chetansharma.com/MobilePredictions2013.htm (accessed May 2013).

8

Ibid.

6

DIGITAL DISRUPTION

Currently, there are almost as many mobile subscriptions as there are people in the world,
creating expectations around the ability to immediately access and share information.9 In
total, 91 percent of all people on the planet have a mobile phone and 50 percent of thesepeople used mobile as their primary Internet source.10 In the very near future, there will be
more people accessing the Internet on mobile devices than on personal computers.11
Global Population and Internet Users, 2000-2020
8.0
GlobalPopulation

Number of People (Billions)

7.0

Internet
Users

6.0
5.0
4.0
3.0
2.0
1.0

2000

2010

2020

FIGURE 1.6: Increasing Internet Usage

Based on the above statistics, Internet usage will rise proportionally as the adoption of mobile
devices increases. In 2000, there were 360 million Internet users; in 2010, there were 1.7
billion users; and by the year 2020 the number is expected to jump to 5 billion users.12 Withenhanced communications, the world is becoming a smaller place. Hyper-mobile connectivity
is already affordable and widespread.

9I TU, “The World in 2013: ICT Facts and Figures” International Telecommunication Union, 			
http://www.itu.int/en/ITU-D/Statistics/Pages/facts/default.aspx (accessed December 2013).

10“ Infographic: 2013 Mobile Growth Statistics”, Digital Buzz Blog, Tuesday Oct 1, 2013, 			
http://www.digitalbuzzblog.com/infographic-2013-mobile-growth-statistics/ (accessed February, 2014).

11

 rank Gens, IDC Predictions 2013: Competing on the 3rd Platform,” IDC, 2012, 				Fhttp://www.idc.com/research/Predictions13/downloadable/238044.pdf (accessed February 2014).

12“ Internet use reaches 5 billion worldwide”, Future Timeline.net, 					http://www.futuretimeline.net/21stcentury/2020.htm#internet-2020 (accessed March 2014).

7

CHAPTER 1

The growth in Internet users will result in more people gathering, transmitting, andexchanging information online. The Internet will continue to grow as a channel for
distribution, revamping value chains in many industries. In the year 2020, the delivery
of software, video, audio, games, and other media content will be almost entirely digital.
The transformation from analog to digital is well underway, as email and texting render
the postal industry obsolete; newspapers are replaced by online websites and usergenerated content; and record labels and outlets are subverted by the artists distributing
music themselves and online retailers like Apple iTunes. In 2020, further breakthroughs inwireless network innovation will drive economic and societal growth in entirely new ways.

Zero-Distance Connectivity
The future of the Internet is being fueled by advances in connectivity and capacity. In
2020, 5G wireless networks will support 1,000-fold gains in capacity, connections forat least 100 billion devices, a 10-gigabyte capacity, and an end-user experience basedon extremely low latency and fast response times. Emerging sometime between 2020
and 2030, these networks will provide zero-distance connectivity between people andconnected machines.13

1
4
7

*

1G
1981

2G
1992

3G
2001

4G
2010

2
5
8
0

3
6
9
#

5G
2020

FIGURE 1.7: 5G - Zero Distance Connectivity Between People and Machines

13

“5G: A Technology Vision”, Huawei Technologies Co., Ltd., 2013.

8

DIGITAL DISRUPTION

The boundaries between technology and people will blur; connections between users
and the network will surpass the speed of thought. Texting by thought will replace texting
by smartphone. When combined with breakthroughs in the quantum teleportation of
information (which are already taking place14), the instant transfer of information will
enhance machine-to-machine communications and other technologies. As society
becomes more connected, mobile devices will become further ingrained in the way wework and live our daily lives. Within the next decade, mobile apps will have the potential
to connect to anything at any time—people, networks, appliances, cars, and much more
to help society build increasingly “smart” cities. As the Internet becomes the dominant
platform for many aspects of our lives, we will spend more time in the cloud.

Moving to the Cloud
The cloud has become a defining technology for the 21 st century. In the future, large-scale
cloud architectures will allow Internet service to be delivered at unprecedented speeds
to meet demands for mobile traffic, connectivity, security, and mobile app development.
The term “the cloud” is a metaphor that was inspired by the cloud symbol used torepresent the Internet in flow charts and diagrams. It represents an abstraction of theunderlying structure of the Internet (as shown in the illustration below). Examples ofcloud services include everything from basic Google ® email to sophisticated businessprocess software that is run remotely to reduce costs and enhance flexibility. Cloudcomputing describes the disruptive transformation of IT toward a service-based model,
driven by economic, technological and cultural conditions.15

PC
MobileTabletInternet
Database

SensorRemote Server

Remote Desktop

FIGURE 1.8: The Cloud
14

J ames Vincent, “Scientists achieve quantum teleportation breakthrough that could prove Einstein wrong”, The Independent,
May 30, 2014, http://www.independent.co.uk/news/science/scientists-achieve-quantum-teleportation-breakthrough-thatcould-prove-einstein-wrong-9462053.html (accessed July 2014).

15

Simon Wardley, Cloud Computing - Why IT Matters, YouTube, 2009.
9

CHAPTER 1

Cloud services combine thousands of computers and storage networks, or publicmainframes, into server farms. The power of the cloud lies in this immense server
infrastructure. Facebook ® has one of the most trafficked websites and runs thousandsof databases in one of the largest server installations in the world. Google owns overone million servers spread across the globe to support its services. All major software
vendors run server farms. These data centers represent the largest collection of
information and computer resources in the world and number well over 500,000(occupying roughly 5,955 football fields placed side by side).16 Some of these data centers
are so large they require their own power generators. Cloud computing represents thecommercialization of these data center developments.
A key benefit—and the premise for how cloud computing has revolutionized IT—is theability to “rent” computing services from a third-party provider, rather than owning andmaintaining the physical infrastructure. Hardware or software resources are consumed
as a service and, unless the service is free, consumers pay only for the resources
they use or are billed on a subscription basis. Cloud computing is analogous to how
traditional utility services like hydro are consumed as a metered, pay-as-you-go service.
By outsourcing infrastructure or applications to the cloud, organization can focus onlowering their total cost of ownership by making fixed costs variable.
With the increasing adoption of mobile computing devices and improvements inconnectivity, the potential for cloud-related technologies is immense. The cloud gives
organizations the ability to respond quickly and nimbly to market opportunities andchange because they are not hindered by costly and outdated legacy systems. The
cloud concept can also make existing systems of information even more powerful. For
example, big data is based on the premise that data in high volumes can’t be assessed
without the use of powerful software and computing systems. Organizations may
use the cloud to access larger data sets and combine these data sets with their own
enterprise information for improved insights, supporting a temporary need for increased
computing power to analyze the data in the cloud. This allows for the much needed
agility and adaptability, both of which are defining characteristics of digital business,
discussed in greater detail in Chapter 2. The cloud is a fundamental enabler of digital
disruption and a key contributor to the evolution of the Internet.

16

Rich Millar, “How Many Data Centers? Emerson Says 500,000”, December, 2011, 				http://www.datacenterknowledge.com/archives/2011/12/14/how-many-data-centers-emerson-says-500000/ (Accessed
May, 2014).

10

DIGITAL DISRUPTION

The Internet of Everything
The IoT has been identified as the next phase in the evolution of the Internet. As theworld’s new digital nervous system, the IoT brings together wireless technologies,
Micro-Electromechanical Systems (MEMS) and Internet technology to connect many
disparate machines to exchange information.17
Machine-to-machine (M2M) technologies like Radio Frequency Identification (RFID)
tags, sensors, video cameras, GPS, and smart cards are the primary enablers of the IoT.
They capture data on the identity, status, condition, and location of physical assets.
By monitoring devices attached to people, animals, or objects, the IoT automaticallyexchanges information over a network without requiring human-to-human or humanto-computer interaction. Instead, data exchange is based on M2M communications
between the personal identifiers and the systems receiving the data via the Internet.

FIGURE 1.9: The Internet of Things - Connecting Devices, Sensors,
RFID tags, Meters, and Smart Appliances1817“ What Exactly Is The "Internet of Things"?” Infographic, Harbour Research and Postscapes, 			
http://postscapes.com/what-exactly-is-the-internet-of-things-infographic (accessed March 2014).

18

Ibid.

11

CHAPTER 1

The IoT will redefine the context of interactions by adding connectivity to everythingfrom mobile devices, traditional appliances, and wearable computing. The IoT is finding
its way into U.S. households, as 69 percent of consumers plan to buy a networkconnected device for their home within the next five years.19 By 2020, the number ofconnected devices will range from as little as three times the world’s population (orroughly 25 billion) to as many as 1 trillion devices (120 times the population)—each
having its own Internet Protocol (IP) address. 20
Measuring the impact of the IoT is difficult, but its potential is enormous. Examplesof the IoT are available today in the form of wearable devices like fitness sensors andsmartwatches, implanted heart monitors, microchips in pets, and cars with built-in
sensors. Beyond individuals, corporations and governments are making use of sensorbased technologies to improve inventory control or energy management through things
like smart grids. The IoT makes sensors, machines, and devices much more useful or“smart” by connecting them to a network.

A Smart Future
In accordance with Moore’s Law, smart machines are evolving at breakneck speed.
Machines have already evolved from automating simple tasks to becoming self-learning,
Artificial Intelligence (AI) systems. One of many AI projects in development, “Baby X”
is a psychobiological simulation of an infant that learns, responds, and interacts in realtime. 21 As early as 2017, it is believed that 10 percent of computers will be learning
rather than processing. 22 Based on more powerful microprocessors, the creation of avariety of sensors and improved analytics, smart systems will become “smarter” andmore applicable to our daily lives.
By 2024, 10 percent of activities that can be harmful to humans will require the useof mandatory smart systems. 23 In the transportation industry, smart systems like antilock braking systems, air bags, and crash avoidance systems are standard features thatare fully automated. Automatic pilots and landing systems have been used for decades.
While the presence of a human pilot is still preferred in planes, fully automated transit
systems are common and autonomous vehicles are finding their way onto our roads
and highways.

19

“ The Internet of Things: The Future of Consumer Adoption”, Acquity Group, Accenture Interactive, 2014.

20“ Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020”, Gartner Inc., December 12, 2013.

21

 am Baker, “BabyX reads its first words—artificial intelligence is growing up”, FierceBigData, Aug 7, 2014, 		
P
http://www.fiercebigdata.com/story/babyx-reads-its-first-words-artificial-intelligence-growing/2014-08-27 (accessed Aug2014).

22

Daryl C. Plummer et al, “Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future”, Gartner, Inc., October
7, 2013.

23

Ibid.

12

DIGITAL DISRUPTION

Google has been working on developing a driverless car. Based on a vision of the future
and powered by software called Google Chauffeur ®, robotic cars can drive more quickly,
efficiently, and safely, with more precise reflexes than humans and the potential toeliminate accidents and traffic congestion. While the car is not for sale, it can currently
be seen driving down the streets of Mountain View, California. Other recent smart
innovations include a streetlight system that improves traffic flow and a smart highwaythat eliminates the need for streetlights. The latter includes temperature sensors thatlight up the highway with symbols to describe road conditions and induction coils underlanes to charge electric cars as they drive over top. 24

FIGURE 1.10: The Driverless Car

In 2020, the efficient operation of smart cities will be reliant on the IoT, with sensors
measuring traffic flow, energy use, pollution, and the transit system to optimize
performance. A municipal water system connected to the Internet can monitor pressure,wear, and leakages, and trash containers can alert waste removal when service isrequired. In the feature below, the City of Barcelona has a digital strategy in place toevolve itself into the smart city of the future.

24

S mart Highway, http://www.studioroosegaarde.net/project/smart-highway/stories/#804 (accessed May 2014).

13

D I G I TA L I N N OVATO R S

The City of Barcelona
The solution, basedon the principles ofmobility, smart cities
and administration,
information systems andinnovation, supports 150
portals with over 4 million
user visits and more than
65 million pages generated
each month.
FIGURE 1.11: An Innovative Mobile Identification System

The City of Barcelona is the capital of Catalonia, the second largest city in Spain, andthe recognized European Capital of “Innovation 2014”—an award given by the European
Commission for the City’s use of new technologies to bring it closer to over a million
and a half citizens. Fulfilling its vision of transformation into a smart city, the municipal
government is relying on mobile- and cloud-based digital solutions to facilitate citizen
engagement with administrative processes and city services.
The goals of implementing a digital strategy are clear: to make data and services available
from any device and any location as a means to improve the quality of life for all citizens.
A first step toward achieving this was making City Council and other data available indigital format, while promoting the reuse of this information to stimulate economic
growth through opportunities for innovation. To standardize its information, the City
needed to consolidate its infrastructure based on interoperable and open standards, anddecommission its legacy systems. The City opted to migrate its solutions to the cloud.
The City of Barcelona is an example of a smart city. It is using digital solutions to transform
itself into a connected hub for all city stakeholders to deliver quality services, improve its
performance, and stimulate opportunities for economic development. The City markets
itself as the mobile world capital, with 100 percent mobile access to services that bringits citizens closer to the city. Services are “one tap away” and include an innovative, webbased mobile identification system, mobileID, supported by a secure mobile registry ofusers. This system enables citizens to log in to access government services using theirmobile device. As a result, the City of Barcelona has been able to meet citizens’ needs,
while improving efficiency and productivity through the digitization and automation ofinternal processes.

14

DIGITAL DISRUPTIONIn the future, many of our everyday appliances will have the ability to self-monitor andcommunicate with a network—from coffee machines that send notifications when coffee
is made to washers and driers that automatically upgrade based on online updates torefrigerators that place grocery orders online according to inventory.
While AI is being embedded into household appliances, nanobots are examples of AI thatcan be embedded into living organisms on a microscopic scale. Nanobots are machines
the size of a nanometer that can be used for everything from repairing space satellites
to killing cancerous cells when injected into the bloodstream.
While people are benefiting from pacemakers, artificial hearts, and hearing aids,
breakthroughs in bioelectronics can make changes at the intracellular level to alter
human biological structure. In the future, nanobots will be able to sense stimuli, perform
complex calculations, communicate, and collaborate. In theory, nanobots can be
programed to build proteins and microprocessors—and even more nanobots (throughauto-replication) enabling a small group of nanobots to grow into a swarm to tackle
complex projects and diseases.

FIGURE 1.12: A Swarm of Nanobots

As nanobots move closer to becoming a reality, electronics are becoming increasingly
more intelligent and human-like. In the year 2020, our devices will have the ability tolisten to us (through voice recognition software), act as our eyes to monitor aspects of
our lives, visually and otherwise, and respond to our touch. Touch screens have alreadyrevolutionized how we interact with our devices; wearable devices will take interaction
to a new level.

15

CHAPTER 1

You Are What You Wear
In the future, wearable technology will give marketers more opportunities to engage
with consumers to deliver targeted products and services where and when they needthem. From pedometers to wristband monitors to cameras stitched into clothing—as technologies that allow users to stay connected and hands-free, wearable devices
are moving into mainstream society. Led by health and fitness markets, wearables arecontributing to the trend of the “quantified self”—or self-knowledge gained through selftracking with technology.
One of the most talked-about forms of wearables is Google Glass ®. Positioned as “smart
eyewear”, Google Glass presents users with an optical computer embedded into a pairof glasses that can be controlled using voice commands. These devices (priced at U.S.
$1,500 a pair) provide users with a seamless experience and will effect changes acrossindustries with myriad applications. For example, field workers will be able to transmit
videos, access diagnostic data, and make updates on location. The New York Police
Department is already experimenting with the Google Glass technology and Dubai law
enforcement plans to use them to spot speeding motorists and identify stolen cars. 25

Glasses link to the Internet
through a display screen

Wireless headset
connects with mobilephone

The D-shirt records heartrate, GPS, location, route,speed and altitude

Watch connects withsmartphone

Belt clip tracks motion
and sleep

Wristband tracks
motion and sleep

FIGURE 1.13: Wearable Technology

25“ Dubai cops may try Google Glass to catch speeders”, rt.com, May 2014, 				http://rt.com/news/160552-dubai-cops-google-glass/ (Accessed May 2014).

16

DIGITAL DISRUPTION

By 2020, wearable technologies will become more sophisticated and the combined
market for wearable devices will exceed US $12 billion. 26 By this time, the IoT will be
integrating data, people, and processes in new and varying ways, resulting in the creationof new products and services. Since industries will be affected by the consolidation of
information from diverse systems, the ability to tap into the broad network created by
the IoT will be critical to the enterprise in 2020.
Connecting smart objects to the Internet gives them the ability to “sense” theenvironment, provide user context, and deliver much more personalized services. As
devices interact with each other, connect with people via wearable tech, and generate
vast amounts of data, the possibilities to engage and improve products and services
seem limitless. Along with the IoT and wearable technologies, 3-D printing will further
disrupt society and initiate a digital industrial revolution. Business leaders will have toplan strategically in the context of this revolution as it will affect consumers, businesses,
industries, and even governments.

3-D Printing
In his recent State of the Union Address, U.S. President Barack Obama ushered in thedigital industrial revolution with the following statement: “3-D printing has the potential
to revolutionize the way we make almost everything. We must ensure that the next
industrial revolution in manufacturing will happen in America. We can get that done.” 27

FIGURE 1.14: MakerBot’s Thing-O-Matic ® 3-D Printer 2826

Daryl C. Plummer et al, “Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future”, Gartner, Inc., October
7, 2013.

27“ MakerBot and Partners Are Leading the Charge to Crowd Source A MakerBot Desktop 3D Printer in Every School in America”,
BusinessWire, November 12, 2014, http://www.marketwatch.com/story/makerbot-and-partners-are-leading-the-charge-tocrowd-source-a-makerbot-desktop-3d-printer-in-every-school-in-america-2013-11-12 (accessed July 2014).

28

MakerBot: http://www.makerbot.com/blog/2010/09/25/announcing-makerbots-new-3d-printer-the-thing-o-matic/(accessed September 2014).

17

CHAPTER 1

Innovations in this field are worthy of mention by the U.S. President because 3-D
printing, 3-D manufacturing, and 3-D production will radically transform the nature ofbusiness and the structure of entire industries. Three-dimensional printing is a different
kind of disruption because it produces physical objects from digital sources or designs.
Here’s how 3-D printers work: they lay down substances in layers to create an object.
Like a dot-matrix printer, the printer head moves back and forth printing out layers until
the object is complete. Although the most common 3-D printers print in plastic, they
can also be 3-D printed in 200 different materials, including glass, steel, bronze, gold,
titanium, cake frosting, and chocolate. As an example of additive manufacturing, thisprocess contrasts with subtractive manufacturing, in which materials are removed tocreate an object.
As with early laser printers, 3-D printing is expensive and hard to use, but (according
to Moore’s Law) they will soon be more powerful and affordable. Three-dimensional
printing is already revolutionizing production in a handful of industries, most notably inhealth care: some prosthetics and even entire human organs are being 3-D printed (alsoknown as bio-printing). Toys, jewelry, makeup, machine parts, automobile accessories,and engine parts have been 3-D printed. American designers at Local Motors areworking on producing a 3-D printed car in just one day. In Holland, architects havebegun construction on the first full-sized 3-D-printed house (with assembly complete inthree years) and in China, ten full-sized houses were 3-D printed in a single day at a costof less than US $5,000 per house. Inroads are even being made in the food industry as
the first 3-D printed hamburger was created in England. 29
At the moment, 3-D printers are expensive and unreliable, but in the next few years,
the market will be poised for a mainstream 3-D printer. Currently, there are more than
23,000 3-D printers on the global market30 and the industry is forecasted to grow to morethan US $5.7 billion by 2017. 31 The number of 3-D printer manufacturers is increasing
based on the success of MakerBot, Formlabs® and 3Doodler ®. Viewed as a strategic
technology that will revolutionize manufacturing around the world, governments arefinancially backing 3-D printing research and product development.
As a society, however, we are still fairly dependent on products that are mass-producedon an assembly-line. Based on cost, it is far cheaper to buy goods produced by traditional
subtractive technology. And while 3-D manufacturing is making inroads into automotive,
transportation, aerospace and defense, consumer, education, architecture, and healthcare, barriers to entry are based on copyright, intellectual property, and ethical issues.
29Linda Federico-O'Murchu, “How 3D Printing Will Radically Change the World” CNBC, May 2014. http://www.cnbc.com/
id/101638702 (accessed May 2014).

30

Garry Evans, “Disruptive Technologies: Winners and losers from game changing innovation”, HSBC Global Research,
October 2013.

31

“Gartner Top Predictions 2014: Plan for a Disruptive but Constructive Future”, October 7, 2013.

18

DIGITAL DISRUPTION

If objects can be scanned and printed using both a 3-D scanner (that creates imagesof an object using lights or lasers and turns this into a 3-D image) and a 3-D printer,the designs of objects can be easily copied and distributed. Ironically, the sources oftechnological innovation—open source, crowdsourcing, rapid prototyping—makeintellectual property theft using 3-D printers easier to accomplish. With reduced
manufacturing costs, intellectual property thieves will be able to produce knock-offs
at a discount. Unsuspecting consumers could be at risk of poor performing and noncompliant or dangerous products.

FIGURE 1.15: 3-D Printed Prosthetic Hand

Even more controversial than intellectual property theft is the concept of bio-printing,or the ability of 3-D printers to print living tissues and organs. The 3-D printer is partof a system that includes medical imaging data and software that specifies the design ofliving tissue and organs to create an organ from an individual's own or another's cells.
Once the cells are in place, they can grow into an organ. Experiments with bladders andkidneys have already been successful. Researchers at Hangzhou Dianzi University in
China printed a kidney that lasted four months. Earlier in 2013, a two-year-old girl in the
U.S. received a windpipe “printed” using her own stem cells. 32
While bio-printing has lofty goals, there is a potentially negative side to thesedevelopments. Who will be eligible for bio-prints? And who will regulate theirproduction? The realities behind being able to produce an organ for someone who
needs one will help overcome the fears of a revolutionary new technology and the
manufacturing industry’s unwillingness to adopt it. At its most promising potential,
3-D printing expands opportunity to both consumers and manufacturers and increases
sustainability based on reduced inventory, waste, cost, and carbon footprint.

32“ Young Girl Receives Lifesaving Windpipe Transplant Made From Her Stem Cells”, Oristem, May 2013, 		
http://www.oristem.com/uk/en/index.php/component/story/?view=storyview&Itemid=133&article_id=340#.U3yqXfldVJM(accessed May 2014).

19

CHAPTER 1

Another key benefit of 3-D printing is that, as a desktop fabrication tool, it allows for
rapid prototyping—the kind that fuels mass innovation and makes micro or desktop
manufacturing a reality. The industrial playing field is leveled as the supply chain merges
production with supply, and any business or individual can upload files to have theirinvention made or even make it themselves with a 3-D printer.
This allows for innovation cycles to move into hyper-drive. Objects can be created more
quickly, less expensively, and with little complexity. Designers do not even have to beaware of the traditional manufacturing process for concept creation, which simplifies
feasibility testing. Another benefit of 3-D manufacturing is the ability to produce goods
for the Long Tail and serve a niche market. Designers can bypass the manufacturing
process. Favoring customization, 3-D printing provides a choice for consumers between
mass-produced goods and highly personalized ones. The Internet laid the foundations
for this digital industrial revolution by opening up distribution and making a global
marketplace available online.

Digital Changes Everything
Whether we like it or not, digital is now a part of everything we do—as individuals, asbusiness leaders, and as a society. Digital disruptions are converging and impacting
how we live our lives. All of these new technologies are steadily becoming extensionsof ourselves as the lines blur between our hard drives and our brains. Like somefuturistic movie, we are outsourcing our memories, communications, and more to thesetechnologies. As we continue to accessorize ourselves with digital capabilities andassets, by 2020, the network effect will be diffusive.
The convergence of digital technologies is accelerating the pace of innovation andheralding a new digital industrial age. Automation and mass production are being
replaced by disruptive technologies. Changes are being driven by a new economy that
resembles the web: it is open, distributed, and highly entrepreneurial. To succeed in thisnebulous digital environment, organizations will need to determine the value of thesenew disruptive technologies and how they can expand their abilities to compete intheir markets.
The new digital reality extends beyond the firewall (and IT departments) to mobile
devices, social media, smart machines, and the IoT. The old business models no longer
apply. Instead, organizations need to adopt a digital business strategy to satisfy theirdigital customers, and they will have to do this quickly to lead their markets andremain competitive.
Based on the progress of the past and the present rate of change, how will digitaltechnology transform business models to meet the needs of the workplace, the supply
chain, and marketing channels in the future? What will the enterprise look like in 2020?
The following chapter examines this in greater detail.
20

C H A P T E R

DIGITAL BUSINESS

2

CHAPTER 2

C HAPTER 2

Digital Business“No business can afford to ignore or underplay the impact of technology-driven
disruptions that are transforming what it means to be a business in a digital world.”1
Disruptive innovations are initiating seismic shifts in our society. They are ushering in
new ways of living, working, and conducting business. We are currently in the midstof this transformation but, by the year 2020, all of the major operating functions of
the enterprise will be digital. Organizations will need to digitize every process andre-configure their businesses to ensure competitiveness and effectiveness. But what
exactly is a digital business? What enables it? What are its primary characteristics? In
this chapter, we explore what it means to be a successful digital business in a digitalfirst world.

The Traditional Enterprise
Manufacturer

Supplier

Retailer

Customer

FIGURE 2.1: A Traditional Linear Value Chain

A digital business is more than just a business with digital products that are distributed
electronically: it’s a business in which digital technology is both pervasive and central toits overall success. A digital business is created using digital assets and/or capabilities,
involving digital products, services and customer experiences, and is conducted throughdigital channels and communities. 2 In a digital business, the majority of processes are
digitized. This means that all along the value chain—from the creation of products andservices to their consumption—employees, consumers, partners, and processes arereliant on digital technology for easy access to information, constant connectivity, andimmediacy of insight.
A digital business is characterized by an open, flexible value chain. In the transition toa digital business, organizations need to re-envision their business not as a standalone
entity with a linear value chain (as illustrated in Figure 2.1), but as part of an extended
enterprise ecosystem of suppliers from which customers assemble products andservices according to their needs (Figure 2.2). Organizations need to participate inthese ecosystems to deliver value to customers. 3
1

“Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future”, Gartner, Inc., October 7, 2013.

2

Ibid.

3

Nigel Fenwick and Martin Gill, “The Future of Business Is Digital”, Forrester Research, March 10, 2014.

22

DIGITAL BUSINESS

Service
Providers

3PL

Procurement

Customers

Engineering

Manufacturing

Services

HQ

MarketingDistributors

Sales

Financial
Institutions

Suppliers

FIGURE 2.2: The Extended Enterprise Ecosystem

By positioning products and services in the context of the customer’s value system, adigital business can grow its capabilities, leverage the capabilities of others, and open
up new revenue streams. As part of a larger ecosystem, companies are more equipped
to quickly pivot their operations to add customization or deliver new products to satisfy
consumer need. They can scale their manufacturing capacity and shift geographies asneeded to fill a specific order. In the future, these ecosystems will consist of low-costsuppliers and virtual manufacturers, be global in nature, and serve niche industries thatspan nations. Innovation will occur in hyper-drive, propelled forward by digital productdevelopment and marketing.
Digital technologies enable new business models that are dynamic, flexible, and deliver
value to both businesses and customers. Before we examine how the enterprise canreinvent itself, it would be helpful to examine the circumstances that are driving theenterprise toward digital transformation.

The Drivers of Digital Transformation
The previous chapter highlighted the rapid pace of digitalization and how this wave ofdigital disruption is stronger and faster than technology disruptions of the past. Businessleaders around the globe anticipate the rapid and transformational impact of digitaltechnologies on their businesses. A 2014 survey of 1,243 global business executives
found that 93 percent believe digital will disrupt their business within the next 12months 4. And they expect that the change to be radical and complete—reaching all partsof the organization.
4

Nigel Fenwick and Martin Gill, “The Future of Business Is Digital”, Forrester Research, March 10, 2014.

23

CHAPTER 2

Generation Z

Gen Z

DigitalTechnology

The Digital
Customer

Drivers of Digital
Transformation
Regulatory
Pressure

Operational
Agility

Globalization

FIGURE 2.3: Drivers of Digital Transformation 5

Digital technologies are a major driver of business strategy. “From big data to cloudcomputing, executives see digital technologies as transforming business—more than half
(52 percent) see them as driving either a complete transformation or significant change.”6
To empower the digital enterprise, business leaders need to embrace future trends
in technology.
In 2020, the enterprise will either evolve or it will get disrupted. Several importantfactors are at work accelerating the adoption of digital technologies and, in particular,
driving the transformation of businesses into digital businesses. These include: The nature of digital technology
 Generation Z and their new expectations for the workplace Demands of the digital customer Growing requirements for operational agility
 Continued globalization
 Regulatory pressures and the need for information security and governance5Connie Moore, “The Process-Driven Business of 2020”, Forrester Research, April 16, 2012.

6

A ccenture, “CEO Briefing 2014”, Global Agenda, 2014.

24

DIGITAL BUSINESSThe Nature of Digital Technology
Digital technologies enable new businesses models that are dynamic, flexible, and deliver
value to both businesses and customers. Central to digital transformation is the ability
to facilitate direct, peer-to-peer communication, collaboration, and sharing, without
requiring an intermediary. This ability is already reshaping business as we know it. By
providing direct, unrestricted access to information, knowledge, and resources, digitaltechnologies empower individuals in ways not previously possible or even imaginable.
Anyone with a web-enabled device can connect to a global network of expertise.
They can discover individuals with common interests and goals. They can share ideas,
collaborate, and innovate. They can band together and have their voice heard, counted,
and taken seriously by those in positions of influence. And they can access new channels
for manufacturing, marketing, and selling, and work with business partners locatedanywhere in the world.
As individuals are empowered with new ways of working, traditional channels—and those
who control them—will hold less importance. An inventor, for example, no longer needs tolicense their product idea for pennies on the dollar to a manufacturer. They can prototype
the product with three-dimensional (3-D) printing. They can “crowdfund” capital costs
using the Internet (collecting small amounts of capital from family, friends, or membersin their online community). They can market globally through inexpensive and accessible
online channels, sell through a digital storefront, manufacture small batches or distributedigitally. All this can be done in ways that are faster and cheaper and deliver new value
to the customer. In shifting power and influence away from traditional sources, digitaltechnologies are introducing opportunity to the masses. Businesses must acknowledge,
respond to, and allow digital technologies to transform their operations from the insideout if they want to stay competitive and relevant in a digital-first world.

Generation Z
Generation Z is the first “digital” generation to enter the workforce. Having grown up
with easy access to the Internet and persistent connectivity, they are technically savvy,
earning them the nickname “digital natives”.7 Technology is central to the way Generation
Z works and plays. They use digital technologies like social media to share informationand interact with peers. Constant connectedness is a fact of life for this group, theyfunction on the immediacy of real-time insight and action.
In 2020, Generation Z will expect to continue working in ways that are open, social,mobile, and flexible rather than fixed according to a hierarchical structure. They will want
to use the same tools in the workplace that they use at home to communicate, collaborate,and share information. If the enterprise does not permit access to these digital tools,
Generation Z will bring them inside the firewall, circumventing IT and establishedgovernance rules and policies. Not offering them as part of the IT infrastructure will not
be an option.
7

G eneration Z: http://en.wikipedia.org/wiki/Generation_Z (accessed July, 2014).

25

CHAPTER 2

As they enter the workforce, Generation Z will introduce the globalization of talent.
While it works to support its existing workforce, the enterprise will need to change its
business models and approach to recruiting, retaining, and motivating this workforce.
The good news is that, if they are empowered, this highly agile workforce will help theenterprise on its journey to digital transformation. Chapter 6, “The Digital Workplace”,
provides a more detailed description of this demographic, their workplace requirements,
and their transformational impact on business.

The Digital Customer
An increasingly connected consumer and the widespread adoption of digital technology
has created the digital customer. Internet-based retail is growing globally at a rate of 19
percent year over year8 and, as more consumers move online, they are using the Internet
to discover products, gather and evaluate information, and engage the buyer online
for purchasing and shipping. An increasing number of channels are offering customers
convenience, flexibility, and choice. They expect immediate gratification and engaging
experiences that satisfy. The digital enterprise will support the omni-channel delivery of
goods and services to compete and satisfy their customers.
Age of Manufacturing

Age of Distribution

Age of Information

Age of the Customer

1900 - 1960

1960 - 1990

1990 - 2010

2010+

FIGURE 2.4: The Age of the Customer 9

We have entered the “Age of the Customer”—an age in which digital technology has
empowered the customer and shifted the balance of purchasing power from suppliers
to customers.10 Consumers now have the ability to extract price, quality, and service
concessions from the world’s most powerful brands.11 What used to differentiate
the enterprise—economies of scale, distribution strength, and brand—have faded inimportance. In their place, customer obsession is what gives firms dominance and drives
their competitive advantage.
For digital business, customer experience does not outweigh the need for operational
excellence. In the feature below, Barrick Gold incorporates digital technology into theiroperations to prevent equipment failure, reduce production downtime, and maintain
operational excellence.
8

 aniel, Pallozzi, “Predictions for Retail 2020: A New Brick and Mortar Experience”, December 4, 2013, 		
D
http://www.thoughtworks.com/insights/blog/predictions-retail-2020-new-brick-and-mortar-experience (accessed July 2014).

9

L aura Ramos, “Make B2B Marketing Thrive in the Age of the Customer”, Forrester Research, May 21, 2013.

10

Nigel Fenwick and Martin Gill, “The Future of Business is Digital”, Forrester Research, March 10, 2014.

11

 eorge F. Colony and Peter Burris, “Technology Management in the Age of the Customer”, Forrester Research,
G
October 2013.

26

D I G I TA L I N N OVATO R S

Barrick Gold
Barrick Gold Corporation is the world’s leading gold mining company and a leading producerof copper. The company has its headquarters in Toronto, Canada, with mines and projects
on five continents. Reflecting a focus on responsible, modern mining, Barrick has been listedon the Dow Jones Sustainability Index for seven consecutive years, and is ranked as the top
performer in the mining industry category. Shares of the company are traded on the Toronto
and New York stock exchanges under the symbol ABX.
Operational excellence is Barrick’s goal in all areas of its business. In an interview with David
Jamieson, Vice President, Information Management and Technology at Barrick, Mr. Jamieson
discusses how digital technology plays a key role in helping Barrick achieve its industry-leading
vision. What follows are excerpts from this interview.

FIGURE 2.5: Barrick Gold Corporation - Disciplined, Profitable Production“Digital technology has greatly impacted ouroperations. With each year, our processes
and operations are being enhanced with newcapabilities, from equipment that is “smarter”,
sensors that enable tracking and monitoring,and systems that are tightly interconnected.
Access to specific and real-time data about theperformance of our mining processes gives us
insights so we can make knowledgeable andtimely operational decisions. For example, we
can monitor in detail the health of engines in
our haul trucks—these are rugged dump trucks
specifically engineered for high-production

mining. These trucks are core to our operations
and preventing downtime is important. Onboard diagnostics inform us when engine
performance degrades so we can order inparts and proactively schedule maintenance.
In addition we use high precision GPS tomanage our shovels, trucks, loaders and drill
rigs to ensure we can effectively manage thematerial that we mine and move. All of this
digital information is helping us to improve our
production efficiency and realize significant
cost savings.
27

D I G I TA L I N N OVATO R S

So, we have built a technology infrastructurethat is rich in data—data that we use to makesmart, real-time decisions to improve theperformance of our mining operations and gain
a competitive edge. This data, however, alsopresents us with significant challenges. There isa lot of data being generated around all aspectsof our business and managing this data isprobably our biggest challenge right now, given
its exponential growth.

To ensure information from across ourbusiness is properly managed throughout its
useful and defined lifecycle, we depend on
an enterprise content management system.
Information management transforms thevalue of information from “overload” to “asset”.
When information is effectively managed andcaptured, it becomes intellectual capital andknowledge. Enterprise content management
enables information to support our business
operations, rather than hinder them. As a result,
We generate significant volumes of data bothour operations run smoothly and efficiently,
on the operations side of our business, as well
we can demonstrate compliance, and we canas on the license-to-operate side. Compliancebetter meet our strategic goals and businesswith environmental and carbon footprint
objectives. Digital technology and information
standards and our own internal policies aremanagement are two sides to the same coin.
vitally important to us. Effective governance isTogether they give our business the capabilities
a foundation of our performance and successand the discipline we need to grow andas a publicly-traded mining company with sitesaround the world. Our obligations, expectations, flourish in today’s complex and competitive
business environment.
and intentions are reinforced regularly at alllevels of the company. For example, Barrick iscommitted to achieving a zero-incident work
environment with a safety culture based on
teamwork and safety leadership.
Information management is critical incommunicating and enforcing policy. The
company has implemented key safety
programs and activities, including systems
and policies, training for all employees,
performance measurement, risk assessment
processes, recognition programs for safety
achievement, and a steady flow of informationthat keeps people focused on continuous
safety improvement.

28

DIGITAL BUSINESSThe Need for Agility and Operational Excellence
Operational excellence is a key enabler of a superior customer experience. When acustomer has an online experience that exceeds expectations but their product arrives
damaged or late, this operational failure wipes out any previously positive experiences
and negatively impacts brand and sales.
Operational excellence is becoming more important as digital customers have growing
expectations for faster delivery of goods, increasing product personalization, and 24/7
engagement. In some cases, processes will need minor adjustments; in other cases,
massive change is required. The net result, however, is the growing need for processes
to be agile, adaptable, and able to rapidly respond to the needs of their markets.
A digital enterprise is process-driven and adopts technologies to make their processes
highly adaptable to changing business needs, to support around-the-clock operations,and to automate the exchange of goods, communications, and commerce. We examine
specific process management technologies in Chapter 5, “The Digital Supply Chain”.

Globalization
Continued globalization is contributing to the shift toward digitization. Globalization isdefined by Thomas Friedman, author of The World is Flat, as the interweaving of markets,
technology, information systems, and telecommunications networks in a way that isshrinking the world from a size medium to a size small.12

Rank Shift in GDP
2010 vs 2020; PPP in I$

DATAGR APHICCountries and Consumers

TOP 10 BIGGEST ECONOMIES: 2010 VS 2020

Rank

GDP 2020
PPP in I$

GDP in 2020
I$ bn
1,000 +
100–1000
10–100
0–10
Not Illustrated

2010

2020

1

United States

2

China

United States

3

Japan

India

4

India

Japan

5

Germany

Russia6

RussiaGermany

7

United Kingdom

8

FranceUnited Kingdom

9BrazilFrance

10

Italy

11

Mexico12South Korea

13

Spain

China

BrazilMexicoSouth Korea
Indonesia
Italy

14

CanadaCanada15

Indonesia

Spain

FIGURE 2.6: Top 10 Largest Economies In 2020 13
12T homas L. Friedman, “Most Overblown Fears: Globalization”, Newsweek, 2010, 				http://2010.newsweek.com/top-10/most-overblown-fears/globalization.html (accessed July 2014).

13

“ Top 10 largest economies in 2020”, Euromonitor International from IMP, July 7, 2010, 			
http://blog.euromonitor.com/2010/07/special-report-top-10-largest-economies-in-2020.html (accessed July 2014).
© 2010 Euromonitor International

29

CHAPTER 2

Globalization has accelerated dramatically over the last decade due to the falling priceof computing power, which has made technology affordable and accessible and led
to the widespread adoption of mobile and Internet-enabled devices. The result is anever-more densely interconnected world. This interconnectedness enables businesses
around the world to easily communicate, collaborate, and innovate as part of a global
ecosystem. It also provides a more level playing field on which to compete for access to
global resources, talent, and opportunity. In a digitally interconnected world, businessbarriers are lowered and location no longer determines business success.
As globalization continues to rise, we can expect to see capital, economic power,
and influence shift from older economies in North America and Europe to emerging
economies. By the year 2020, it is expected that Brazil, Russia, India, and China(collectively known as BRIC countries) will become dominant centers of economic
influence.14 They will have strong middle classes with significant purchasing power andwill be sources of business innovation.
A digital business is well positioned to gain a presence in these markets, serve theircustomers, and collaborate with businesses located there. They can hire people inthese locales and effectively integrate employees and business processes into a global
infrastructure. They can leverage international tools, knowledge, and networks to
influence local decision-making processes. The relationship between globalization anddigital disruption is interdependent: each one fuels the growth of the other and both
work together to shape digital business.

Regulatory Pressure
In 2020, growing regulatory and competitive pressures will require the digital enterprise
to rethink and reprioritize their security and governance strategies for enterprise
information. These requirements will be driven by new, global regulations, increasing
amounts of Internet users and privacy-related issues, emerging sustainability metrics,
open data, big data, and protection against Intellectual Property (IP) loss.
Global regulations are driving businesses to leverage technology both to declassify it
and open it to a broader audience. On the opposite end of the spectrum, this technology
must still provide rigorous security, classification, and controlled discovery. Regulatory
pressure forces organizations to determine which data is worth protecting, sinceprotecting all information is expensive and unnecessary. By 2017, governments andinternational organizations will adopt legislation around open data and the release of
information that was previously unpublished. Instead of ensuring that all data is secure,the digital enterprise will focus on protecting only the information that requires it.15

14

Jeanne C. Meister and Karie Willyerd, “The 2020 Workplace”, Harper Collins, May 11, 2010.

15

“Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future”, Gartner, Inc., October 7, 2013.

30

DIGITAL BUSINESSThe Components of a 2020 Digital BusinessAs digital technologies transform business operations, all major components of thebusiness will be impacted. The components of the 2020 digital business are alreadyemerging and include the Digital Workplace, Digital Engagement, the Digital Supply
Chain, and Digital Governance and Security. Let’s examine them in further detail.
DigitalEngagement

DigitalSupply Chain

DigitalWorkplace

Digital Governance and Security
FIGURE 2.7: The Components of a Digital Business

The Digital Workplace
In the year 2020, our office will be everywhere; our team members will live
halfway around the world. How, where, when, and for whom we work will
be up to us—as long as we produce results.16
The continued trend toward globalization will greatly impact the 2020 workplace, withcorporate headquarters and employment expected to continue shifting to developing
countries, particularly BRIC nations. The resulting workplace will be dispersed anddemographically diverse with employees on multiple continents, in multiple time zones.
The 2020 workforce will also be drawn from a pool that is smaller and older. In North
America, Europe, and many parts of Asia, workforces are shrinking as birth rates decline.
Germany, for example, will have a workforce in 2020 that is 20 percent smaller than it wasin 2000 and a retired population that is 50 percent larger.17 In the U.S., the population is
expected to age with many older workers continuing to work after retirement. The
growing number of aging workers means that many companies will be required, for the
first time in modern society, to manage five generations in the workplace. The digitalenterprise will have to create an environment that accommodates vastly different sets
of values, beliefs, and expectations.

16Jeremy Rifkin, “The Zero Marginal Cost Society”, Palgrave Macmillan Trade, April 1, 2014.

17

Jeanne C. Meister and Karie Willyerd, “The 2020 Workplace”, Harper Collins, May 11, 2010.

31

CHAPTER 2

The changing demographics of the global workforce are related to a larger issue.
Over the next five to ten years, smart machines and workplace automation will nudge
people out of routine, repetitive tasks. Instead, people will focus on tacit, knowledgebased work, which is non-routine and relies on information for decision-making. Tacit
jobs require a complex set of skills, such as problem-solving, judgment, listening, data
analysis, relationship building, and collaborating and communicating with co-workers.
These tacit jobs are predicted to grow two-and-a-half times faster than the transactional
segment and will change the nature of the workforce.18 While these jobs grow, there will
be a shortage of workers with requisite skills. This skills shortage and a shrinking poolfrom which to draw from will result in organizations competing to attract workers withthe right skill sets. Companies will need to create a work environment that is attractive
and appealing to the 2020 knowledge worker.

Traditionalists

Boomers

B

Generation

X

Generation

Y

Generation

TZ

69-86 years

50-68 years

38-49 years

17-37 years

Less than 17 years

FIGURE 2.8: Generation Z Constitutes Half of the Workforce

What will the 2020 workplace look like? We know it will be global and virtual withfewer on-site employees and leaner headquarter facilities. To facilitate this workforce,
workplaces will depend on digital communications and collaboration in global
conference calls, through instant-messaging and social communities, or by working
on shared documents. Digital technology will accessorize and permeate the 2020
workplace to empower employees and drive competitive advantage.

18

Jeremy Rifkin, “The Zero Marginal Cost Society”, Palgrave Macmillan Trade, April 1, 2014.

32

DIGITAL BUSINESS

Digital Engagement
In the year 2020, digital will not just be a route to market; it will be the primary routeto market. Businesses will connect directly with their customers through superior
customer experiences—reaching and engaging customers at every touchpoint.
Digital customers will bounce from task-to-task and device-to-device across relevant
channels—discovering products in online articles and community discussions,researching competitors, downloading product specifications, purchasing throughe-commerce sites, and engaging businesses through customer service portals. Each
touchpoint provides an opportunity to strengthen and tighten customer relations. To
be successful, the digital enterprise will need to provide its customers with a seamlessbuyer journey across many channels to deliver what they need, when and where theyneed it.19
Websites

OnlineCatalogs

Digital Screens

Touch
Screens& Tablets

POS &Payment
SystemsOmni-Channel
Marketing
Near Field
Communications

Mobile Apps

Physical StoreSocial MediaFIGURE 2.9: Omni-Channel Marketing 20

Omni-channel marketing will be used to digitally deliver a consistent brand experience
across a complete ecosystem of partners. Consumers regard brands as a single entityand expect the same experience of its products and services, policies and processes,
and personality, regardless of channel. They expect not only experiences appropriate
for the channels being used, but also consistency across those experiences. 21 This is
examined in more detail in Chapter 4, “Digital Engagement”.
19Ron Rogowski, “The Unified Customer Experience Imperative”, Forrester Research, May 7, 2013.

20

Christopher Hall, “Digital Signage and the ‘Store of the Future’, Retail Customer Experience”, Dec 10, 2013, 		
http://www.retailcustomerexperience.com/articles/digital-signage-and-the-store-of-the-future/ (accessed July 2014).

21

Stephen Powers and John R. Rymer, “Unify the Digital Experience Across Touchpoints”, Forrester Research, August22, 2012.

33

CHAPTER 2

In 2020, digital businesses will use digital technologies to deepen engagement withcustomers. The key to engagement will be an organization’s ability to access intelligence
about consumers and use this information to target consumer need at each stage in thebuying process.
Where does this customer intelligence come from? Customers in 2020 will leave “digital
shadows” made up of data left by transactions and interactions on the Internet andprovided by other connected devices and sensors. As people leave stronger digital
shadows, marketers will use this information in real time to adapt content at a given
touchpoint, delivering a highly personalized experience that is relevant and useful atthat stage in the buying process.
Through consumer data and intelligence, the digital enterprise can better understandits consumers, define accurate segments, and tailor products and services to meettheir needs. But insights are not only relevant for marketing. Insights from big data alsoenable the digital enterprise to measure supply chain logistics and produce outcomesthat drive competitive advantage.

The Digital Supply Chain
In the year 2020, consumers will largely drive interactions with suppliers. They will
expect greater customization of products, swift delivery of goods, and an experience thatis smooth and seamless. To fulfill this vision, digital businesses will leverage information
technology to support new levels of flexibility, operational excellence, and informationexchange between supply chain partners, otherwise known as Business-to-Business(B2B) integration. In 2020, business networks will consist of vibrant and collaborativeenvironments in which buyers, suppliers, and technology morph into a just-in-time,
market-driven world requiring the right information, in the right form, in the rightlanguage, at the right time. 22 Digital business processes supported by a digital businessnetwork will be essential to success. Technologies like Smart Process Applications(SPAs) and Dynamic Case Management (DCM), when combined with approaches like
distributed manufacturing and B2B integration, will bring flexibility, greater agility andefficiency, and customization to an extended enterprise ecosystem.
In a globalized, distributed manufacturing environment, companies will depend on B2B
integration—technology and applications for the automated exchange of transactions(for example, purchase orders and invoices) between broad networks of global trading
partners (such as suppliers, customers, and financial institutions). The 2020 B2B
network will harness the cloud and offer full mobile access.

22

Mike Lacobucci, “Looking ahead to globalization 2020”, MultiLingual Computing, 				http://www.moravia.com/files/download/Globalization2020_MultilingualComputing.pdf (accessed July 2014).

34

DIGITAL BUSINESSA final, notable force shaping the 2020 supply chain is the Internet of Things (IoT). The
ability to tag products, for example, and track them (via the Internet) through various
stages of the supply chain provides businesses with accurate, real-time informationand insight into supply chain processes. Early stages of the IoT are in operation today
in the industrial and commercial sectors. UPS, for example, embeds sensors into their
60,000 vehicles in the United States to monitor individual parts for signs of potential
malfunction so they can replace them before a breakdown occurs. 23 In other industries,
sensors record and communicate the availability of raw resources, inform the front
office on current inventories in the warehouses, and troubleshoot dysfunctions on
production lines. Sensors keep sales and marketing departments apprised of which
items are being looked at, handled, and put back on shelves. They track the locationsof products shipped to retailers and consumers and keep tabs on the amount of waste
being recycled.

HQ

3PL
Manufacturing
OEM Provider
Supplier

FIGURE 2.10: Distributed Manufacturing 24

In the 2020 supply chain, the IoT will connect devices, information, processes, andpeople across business networks. Data from sensors, for example, will be used torecalibrate supply chain inventories, improve production and distribution processes,
and initiate new business practices to increase efficiencies and productivity throughout
the value chain.

23

Jeremy Rifkin, “The Zero Marginal Cost Society”, Palgrave Macmillan Trade, April 1, 2014.

24

Ibid.

35

CHAPTER 2

Digital Governance and Security
Every business and every department is subject to laws, rules, and regulations that
require strict compliance to protect corporate assets. As digital technologies permeate
the value chain, they are producing enormous amounts of data and content. With
growing volumes of data and increasing opportunity for data theft, it will be crucial fororganizations to have sound strategies and practices for information governance andsecurity of private or sensitive information. As the enterprise reinvents itself, businessleaders will need to articulate a digital strategy that balances innovation and growthwith security and risk. Information management will increasingly leverage digitaltechnology for compliance, good governance, and e-discovery. This is an important
topic that will be discussed further in Chapter 7, “Digital Governance”.

A Digital Strategy

io

n

or

ct

m

ti n

at

Ex

i on

In broad terms, digital business is billions of people, businesses, and devices
communicating, collaborating, and transacting. Its potential is huge—from replacing
paper and manual processes with software, to moving applications to the cloud to lower
costs of ownership and increase agility, to applying analytics to deepen engagementwith customers. But it involves more than just moving to an e-commerce model: it
shakes business at its very core. It moves beyond digitizing every process to challenging
old operational approaches and inventing new processes.

an
Tr

sf

FIGURE 2.11: A Digital Strategy Is Fundamental to Transformation

36

DIGITAL BUSINESS

Digital business upsets the status quo and operates using a flatter, socially-enabledbusiness model. It promotes direct engagement between suppliers and consumers. In a
traditional business model, it’s the retailer, reseller, distributor, and shipping company
that engages directly with the end consumer and, in some cases, provides after sales
service and support. It’s also common for market research and customer feedback
to be gathered by third parties. In traditional businesses, the customer relationshipis relegated to channels and third parties. This has been the nature of top-downhierarchical business models where customers purchase what manufacturers decideto produce.
What is required is a radical break from the past and the creation of entirely new
business models with new expectations and new ways of working. Customers are
already embracing digital technology and redirecting the value chain. Digital natives areentering the workplace and bringing new expectations for how they want to work. Value
chains are being transformed, based on new business models and processes that are
flexible, scalable, and better able to serve the customer.
Organizations will only be able to capitalize on this promise of opportunity and innovation
if their focus remains fixed on the customer and finding the balance between marketingand operations. A digital business creates new revenue streams using digital resources.
In order to do so successfully, they will need to develop a digital strategy to evolve theiroperations. The strategy should support a digital workforce and culture, infrastructure,operations, and engagement across the entire extended enterprise ecosystem.
Digital disruption will help evolve the enterprise into a digital business. However, totruly transform, organizations will need to govern and secure their information. As
recent history has shown, information is the byproduct of digital disruption—a lot of it.
In the future, everyone will participate in the new information economy as technology
becomes more malleable and information is the means to production. Underlying thedevelopment of a digital strategy then must be an effective way to manage information
to promote innovation and opportunity, while minimizing risk. This is discussed in thenext chapter, “Information Is the New Currency”.

37

C H A P T E R

3

INFORMATION IS THE NEW CURRENCYCHAPTER 3

C HAPTER 3

Information is the New Currency“Information assets are an instrument of innovation that can change the very nature of thebusiness process, or even the business model. Business leaders are realizing that theincreasing supply and availability of information can (and must) be used for competitive
advantage, value generation, risk management/compliance, and transformation.”1
Disruptive innovations in technology are challenging the established rules of business.
What all these technologies have in common is that they enable a new way of using
information. For the digital enterprise, information is no longer just a cost factor but
rather the basis for growth and competitiveness.
The value of information is being increasingly regarded as an asset that must be
managed. A recent study found that 95 percent of organizations correlate strong
information management with business success. 2 Technology leaders of the past havebeen preoccupied with managing technology systems; today their focus is shifting to
the strategic value of content. When managed effectively, it enhances performance,
improves insight for better decision-making, increases customer satisfaction, andreduces risks of litigation and non-compliance.
In a digital-first economy, information is the new currency. It provides the means of
production in a digital marketplace, facilitated by digital manufacturing and a
distributed business network. In 2020, both organizations and individuals will monetize
their data to create new revenue streams. One of the biggest business challenges
related to digital transformation will be how to effectively manage growing volumesof information to optimize its value while reducing risk. But how can the enterprise
unlock the potential of information without compromising productivity and security?
This chapter examines this question in detail and introduces Enterprise Information
Management (EIM) as the key transformative technology in a digital-first world.

How Much Data?
By all predictions, the amount of data we produce will continue to grow well into the
future. In 2007, IDC produced the first in their annual series of Digital Universe reports.
In it, the report revealed that we crossed a milestone: the amount of digital informationthat we created at this point in time had surpassed our ability to store it. 3
1

 ouglas Laney and Andrew White, “Agenda Overview for Information Innovation and Governance”, 2014, Gartner, Inc.,
D
January 10, 20142

 orbes Insights, “Managing Information in the Enterprise: Perspectives for Business Leaders”, Forbes Insight (2009),
F
http://fm.sap.com/data/UPLOAD/files/Managing%20Information%20in%20the%20Enterprise%20Perspectives%20for%20
Business%20Leaders.pdf (accessed 24 Oct. 2012).

3

John Gantz, “The Expanding Digital Universe”, IDC: March, 2007.
40

INFORMATION IS THE NEW CURRENCY

The
from thetheBeginning
Beginningofof2010
2010totoEndof 2020
TheDigital
DigitalUniverse:
Universe: 50-fold
50-fold Growth
Growth fromthetheEndof 2020
40,000PROJECTED

Exabytes

30,00020,00010,000

0
2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

FIGURE 3.1: Growth of Information by Exabytes

2019

2020

4

Over the last decade, the rate of information growth has increased exponentially. The
five exabytes of information that existed globally in 2003 now represents the amount ofcontent we create every two days. Consumers are adding to data volume as the ability
to create and share information has accelerated by the number of people, devices, andsensors connected to networks. Multimedia is the most popular format of data sharedon the Internet, with over 6 billion hours of video watched each month on YouTube—
that's almost an hour for every person on Earth and 50 percent more than last year. 5
As far a social media is concerned, 1.31 billion active Facebook users per month shareover 1 million links and 3 million messages6 and upload 350 million photos a day.7 Finally,
the devices, sensors, Radio Frequency Identification (RFID) tags, meters, and smart
appliances that make up the Internet of Things (IoT) are also contributing to the growthof data. According to analysts, there will be nearly 26 billion devices on the IoT by 2020. 8
That’s a lot of potential information exchange. By 2020, the world will generate 50 times
the amount of information it does currently and 75 times the number of "information
containers", while the IT staff needed to manage it will grow fewer than 1.5 times.9 As
more people, processes and data interact, an information economy will emerge as thevalue of information increases—and outpace the skills required to manage it.
4J ohn Gantz and David Reinsel, “The Digital Universe in 2020: Big Data, Bigger Digital Shadows, and Biggest Growth in the Far
East”, IDC: December, 2012.

5

YouTube Statistics: http://www.youtube.com/yt/press/statistics.html (accessed January, 2014).

6

Statistics Brain: http://www.statisticbrain.com/facebook-statistics/ (accessed January, 2014).

7

 raig Smith, “By the Numbers: 64 Amazing Facebook User Statistics”, DMR, Digital Marketing Ramblings, December, 2013,C
http://expandedramblings.com/index.php/by-the-numbers-17-amazing-facebook-stats/#.UtMD3_v5OXM 		
(accessed January, 2014).

8

“Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020” Gartner, Inc., December 12, 2013.

9J ohn Gantz and David Reinsel, “The Digital Universe in 2020: Big Data, Bigger Digital Shadows, and Biggest Growth in the Far
East”, IDC, December, 2012.

41

CHAPTER 3

These massive volumes of data are present in both the Public Web and the Deep
Web. The Public Web refers to the portion of the web that can be indexed by searchengines. With more than eight billion pages, the Public Web constitutes only four
percent of the world’s data. It is only the tip of the digital iceberg. Consumer sites like
Google ® and Facebook represent only a diminutive fraction in the ocean of information
stored in modern systems. The rest of this information—96 percent of it—lives insideorganizations, hidden behind firewalls. This is called the Deep Web. The Deep Web iswhat companies run their business on every day.
The Deep Web
The Public Web

4%of web content (~8 billion pages)
is available via search engines
like Google

The Deep Web

96%of the digital universeis on “deep websites”
protected by passwords

7.9 Zettabytes

Source: The Deep Web: Semantic Search Takes Innovation to New Depths

FIGURE 3.2: Deep Web Data Sources

Information as a Commodity
In every industry, organizations are collecting detailed amounts of information. The
volume of content being created and stored by organizations is doubling every two
years. Every day organizations face an increasing volume, velocity, and variety of
information. For most organizations, this is not a trend but the reality of doing business.
In other words, big data is not new: the Global 5000 have been working with extremely
large data sets for decades, applying agents to scour information to better understandtheir customers, the way they transact with the company and how they influence otherbuyers in their peer group. This is the original big data.

42

INFORMATION IS THE NEW CURRENCY

What is new is the technology base that allows us to understand big data sets. These
technologies enable big data sets to fit into non-mechanical memory, leverage more
powerful processors and grid configurations, and have operations work 100 times oreven 1,000 times faster than was previously possible. Massive amounts of value can beextracted from big data—from demographic behavior and product recommendations tobuyer propensity models and geographical market uptake patterns.
The type of data generated and stored varies by sector 1
Video

Image

Audio

Text/Numbers

Banking
Securities and Investment Services
Insurance
Discrete Manufacturing
Process Manufacturing
RetailWholesale
Professional Services
Consumer and Recreational Services
Health Care
Transportation
Communications and Media2
Utilities
Construction
Resource Industries
Government
Education
PenetrationHigh

MediumLow

1We compiled this heat map using units of data (in files or minutes of video) rather than bytes. 2 Video and audio are high in some subsectors.
Source: McKinsey Global Institute analysis

FIGURE 3.3: Types of Data Generated and Stored by Sector 10

The promise of big data is the ability to make predictions based on it. Information canbe viewed and analyzed, trends can be understood, and correlations can be plotted. The
challenge, of course, is finding the value, especially when content volume is increasing.
Even more challenging than this are the technologies that are creating new content
without any human intervention, like sensors. In every organization, information ismade up of combined system-generated and user-generated content, or structured andunstructured information.

10“ Big data: The next frontier for innovation, competition, and productivity”, McKinsey Global Institute, McKinsey &Company, 2011.

43

CHAPTER 3

Structured Vs. Unstructured Information
Structured information is data in fixed fields in a spreadsheet or a relational databasethat is housed in Enterprise Resource Management (ERP) systems. ERP tools share acommon data model, covering operational end-to-end processes, such as those foundin finance, human resources, distribution, manufacturing, service, and a supply chain.
These processes depend on large volumes of data. Unstructured information is theconversation that forms around this data.
Unstructured information is pervasive. It is fueled by emerging Internet technologies anddevices that provide the immediate access and exchange of information. Unstructured
content is fragmented, mashed up, delivered across many channels, and accessible atany time in any place. It is unsystematic, difficult to dissect, and represents a staggering
80 percent of the enterprise’s data today. It's the archived supplier invoice, expenses,
contracts, receipts, presentations, faxes, memos, emails, social media, videos—theunstructured data of the business. As the complexity of this content increases, so does
the need to understand, locate, manage, and share it in real time. This requirement
is intensified by faster access to information through higher bandwidth capabilities,
mobile devices, and disruptive technologies.
Integrating all of this information across silos is a common challenge that hampers accessand productivity. The volume of enterprise content is impacted by the departments
it must flow through. In many organizations, information is maintained in siloed
repositories. Information that should flow securely and effortlessly across departments,
partners, suppliers, and customers—on premise and in the cloud—is disconnected andprocesses are fragmented. As a result, businesses do not have a consolidated view of
their information, which means they do not have a consolidated view of their resources,
projects, or customers.
......Each
has its
itsownowninformation
information
silos
flows
Eachdepartment
department has
silosandandflows
Human Resources Accounting

Marketing

OfficeLegal

Call Center

ERP

FIGURE 3.4: Integrating Information Across Silos is a Common Challenge

44

INFORMATION IS THE NEW CURRENCY

Information chaos reduces margin. Data is expensive due to storage costs and theresources required to manage it. Mismanaged information can cost the enterprise
millions of dollars in expenses associated with litigation, regulatory compliance, ande-discovery. Data fragmentation diminishes the value an enterprise can derive from its
information flows. Currently, as little as 28 percent of global organizations are gaining
strategic value from their content.11 Most organizations struggle with siloed informationand connecting processes across the enterprise. Often, the enterprise must overcome
technical, organizational, and cultural hurdles to manage information as an asset.

Big Data = Big Headaches
At present, the volume of enterprise information continues to create big headaches
for CIOs and IT leaders—from management to infrastructure, storage, resourcing, andsecurity. Current technologies and architectures are not equipped to handle massive
amounts of information. As their “digital footprint” increases, consumers are wary ofmarketers and governments using their data to serve their own agendas. Security andprivacy are important issues associated with information. To cope in 2020, the digitalenterprise will need to rethink its data management infrastructure, especially since
information will be core to implementing a digitization strategy. Organizations willneed to invest in EIM solutions and acquire the skills needed to maximize the value of
their information.

The Technology Gap
The right resources have to be in place to analyze information effectively. For manyorganizations, their data accumulates too quickly, outpacing the ability to use it to theiradvantage. To meet the demands of growing amounts of data, organization must haveprocessing and storage requirements in place, and the size and scale of these systems
makes them costly to manage. Cloud computing offers affordable solutions for storage
and analysis on large data sets that could not previously be accessed. While CIOs arefocused on minimizing the cost of storage, backups, and security, cloud computing offers
affordability, flexibility, and scalability.
In order to benefit from their information, organizations will need to ascertain how
much information they can store, how much storage costs, and for how long they need toretain the information. Deploying the technology required to capture, manage, protect,and even dispose of data is a good first step. Data must be discoverable, accessible, andusable for it to have value. It is important to manage this data according to regulations
and corporate policies and procedures—ensuring that analysis and release of informationis legal and compliant.
11“ Cisco Connected World Technology Report”, Cisco, 2012, http://www.cisco.com/c/en/us/solutions/enterprise/connectedworld-technology-report/index.html (accessed June, 2014).

45

CHAPTER 3

The Skills Gap
The right people with the right skill set must be put into place to own and manage
information initiatives across organizations. Due to its diversity, information will require
people with diverse skill sets to manage it. New information-related roles are alreadyemerging and will dictate requirements for a new IT structure to support roles related
to information leadership, innovation, and strategy.
There is already a skills gap in expertise required to collect, mine, and analyze big data.
The demand is there, and it will reach 4.4 million jobs globally by 2015. The majorityof these roles—two thirds—will not be filled.12 To capitalize on their information,organizations will need to adopt technology enablers and create strategies—as well
as applications—around information. Culture will shift to one that engenders open
knowledge sharing. Competition will be based on the ability to analyze information
for insight and customer information. The better the information, the faster and more
precisely an organization can meet consumer needs. The enterprise will need to find abalance between the opportunities provided by information and the risks it presents inprivacy and security.

No Risk, No Reward
Despite the potential benefits that access to greater amounts of data brings to society,there are growing concerns around security and privacy. Many large companies are
already the gatekeepers of private information and are susceptible to information leaks,
which raises the question—how much control do we actually have over our own personal
information? How will government and regulators be able to monitor and protect hugeamounts of personal data stored in the cloud?

Your digital shadow is the sum of alldata left by your interactions in adigital environment. As we rely moreon technology, these digital
shadows will only grow

FIGURE 3.5: Growing Information Shadows12“ Gartner Reveals Top Predictions for IT Organisations and Users for 2013 and Beyond”, Gartner, Inc., October 24, 2012.

46

INFORMATION IS THE NEW CURRENCY

People are suspicious about the ways that organizations make use of their personal
information. As consumers, we move through our days leaving data traces—fromtime spent on Facebook to purchases we make both off and online, texts sent, video
surveillance footage, and the energy consumed in our house. These data traces make up
an individual’s digital shadow. As we become increasingly reliant on technology, and thistechnology becomes more interconnected, digital shadows will only grow to becomerich, varied, and abundant.
In 2020, businesses will need to find ways to reward consumers in exchange for theirdata, based on loyalty and trust. Marketers will become more sophisticated in their useof personal data. In his book Who Owns the Future, Jaron Lanier posits that individual
consumers will sell their personal data to organizations like Google and Facebook thatare currently benefiting from collecting vast amounts of it for free. Today, one consumer
is taking charge of his personal data and auctioning it off on Kickstarter. The practice ofselling off personal data is expected to increase by triple digit percentages by the endof 2014.13
In a digital-first world, all individuals will have a commercial identity based on theirown personal information. Governments and organizations will have to protect theseidentities by investing in systems that secure personal information and protect privacy.
The number of cyber-attacks on organizations is already impacting spending on
information security. Worldwide investment is expected to reach $76.9 billion in 2015.14
Alongside security and privacy, intellectual property rights is another legal issue thatwill need to be closely managed in 2020, especially in light of emerging technologies
that facilitate digital printing and production. Questions about property rights andfair use will need to be addressed as data is increasingly duplicated and used in
combination with other data. These issues are examined in greater detail in Chapter 7,“Digital Governance”.

Where’s the Value?
So how does the enterprise find value—and find it quickly—in the mass of unstructured
and unmanaged information? The solution to this problem lies partially in its root cause.
The network effect, both inside and outside the firewall, has empowered organizations
to collect volumes of data at a high velocity across many channels. Based on this data,
organizations can determine context. This is where value is created. Organizations cantake advantage of location or presence to tailor offerings to match individual preferences
or proximity—on either side of the firewall.
13

“Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future”, Gartner, Inc., October 7, 2013.

14

 ob Violino, “Information Security Spending to reach $71 Billion in 2014”, Information Management, August 25, 2014,
B
http://www.information-management.com/news/information-security-spending-to-reach-71-billion-in-2014-10026010-1.
html (accessed August 2014).

47

CHAPTER 3

Deeper connections allow for instant action to be taken, transactions to occur, andexperiences to be created. Technologies such as mobile apps and self-service kiosks
are helping organizations tap into the digital lifestyle of both their workforce andconsumers. Digital exchanges are immediate; in the future, the digital enterprise will
have much tighter connections of each node in a complex series of both internal andexternal applications. All of this will depend on information and the technology thatconveys, stores, and manages it.
Phase 1
Information

Technology

Enterprise

Phase 2Phase 3

Crossdepartmental

SiloedData inMovement

Data at Rest

Records
Management

System ofEngagement

Ecosystem

Internet ofEverything

DigitalMarketplace

FIGURE 3.6: The Value of the Information Ecosystem

The digital enterprise of the future will be part of an information ecosystem in whichdata can be shared across the whole value chain, flowing from employeees to partners,
suppliers, and customers. Business intelligence, sentiment analysis, social media
analytics, content analytics, and predictive analysis will be applied as a complex
mix of data to enable the enteprise to act on events and information without humanintervention. Information will be consolidated across silos in an organization; the front
office will connect seamlessly with the back office. Users will engage with the ecosystem
based on their own preferences and data. Organizations like Distell, featured below,
are realizing that there is value beyond improved efficiencies and reduced costs inconnecting enterprise information and making it more transparent.

48

D I G I TA L I N N OVATO R S

DistellDistell is Africa’s leading producer and marketer of spirits, fine wines, ciders, and Ready-ToDrinks (RTDs). It employs nearly 5,000 people and has an annual turnover in excess of 1
billion USD. With 3,000 users of its IT systems spread across 80 office locations worldwide,
including specialist teams in remote locations, Distell was struggling to manage growing
amounts of decentralized data. Wouter van den Heever, Distell’s Enterprise Content Manager,
had a vision to digitize this explosion of unstructured information to help improve productivity
and empower the Company to differentiate itself and evolve on a global scale. A digitalsolution was implemented to harness the wealth of intellectual capital in the company andmanage information as a corporate asset. What follows are highlights of an interview with
Wouter van den Heever describing how he guided this transformation and the benefits thecompany realized.

FIGURE 3.7: Distell – Achieving Global Differentiation“As a business with more than 100 brands,
there was little opportunity to share bestpractices between teams. This not only impaired
the company’s efficiency, but also our ability tocollaborate and innovate.

wanted to digitize their paper-based processesor prove good governance or log ongoing
innovations. We focused on these initiatives
and brought in a collaborative, searchable,
secure repository to enable marketing, sales,
operations, production, and service functions in
one continent to access information from peers
across the globe.

When we implemented our EIM solution, we
didn’t go for a 'Big Bang' approach across thewhole business: we found departments that49

D I G I TA L I N N OVATO R S

With the system, Distell has doubled thenumber of users collaborating and sharing
information. Today, there are over 13 million
information assets in the Distell repository,
with tens of thousands of items being added
weekly. Distell has doubled the number ofusers collaborating and sharing information.
Ideas are now logged, reviewed, and tracked
electronically, where before they were siloed
and untraceable. Each business unit has teams
incentivized to come up with new ideas, large orsmall. Previously these ideas might have been
written on a whiteboard; now they’re in thesystem. It means a warehouse or production line
manager in Johannesburg, for example, can lookfor ideas used by a similar business unit in Cape
Town. Teams are learning from one another.
A big benefit of the EIM system is productivity.
Employees can now work anywhere and accesstheir information from any device—from theirlaptop, tablet, or mobile phone. Another big
benefit is employee empowerment based on theability to share and access useful information,
which enables staff to work more effectively
for the good of the business. There is a readily
available library of corporate documentation for
any topic. If someone wants a business plan forthe launch of a Two Oceans wine into Canada,
it’s there. They have it.
The system has helped create a global businesswith world-class information systems and has
fostered a culture of collaboration, ideation, andinclusion. As long as the Internet evolves, so will
our digital solution.”50

INFORMATION IS THE NEW CURRENCY

Unstructured Information: Today’s Untapped Resource
Information is today’s untapped resource. When information is managed effectively, itreveals larger patterns of activity to confirm performance levels, evaluate compliance,or deliver customer insight that can differentiate products and services. But how willorganizations find, analyze, and act on data to realize its full potential? Being able tocapture, preserve, manage, and build information-oriented applications is the next
frontier of competitive business. For the last 30 years, CIOs have been focused on
automating processes and transactions for structured data with Enterprise Resource
Planning (ERP) systems. In the decades to come, CIOs will concentrate on digitizing
processes and transactions for unstructured information.
GROWTH AGENDAOPERATIONAL
EXCELLENCEEARNINGSPERFORMANCEAGENDACOMPLIANCE

NEW
CHANNELSCUSTOMERSATISFACTION

MORE
INSIGHTSTANDARDIZATIONREDUCERISK

BUSINESSAGILITY

REDUCECOSTASSETEFFICIENCYCOMPETITIVENESSDIVERSE CIO AGENDAS. MANY EIM VALUE PROPOSITIONS.
ECM

BPM

CEM

INFORMATION EXCHANGEDISCOVERYFIGURE 3.8: Creating Business Value With Information

When unstructured enterprise information is well managed, a company’s information
becomes powerful through the use of information-oriented applications. An enterprisewith sound control over information and a robust information architecture can start to
deploy or build applications designed to solve the problems of its workforce. The more
effectively organizations can collect, find, and process information in the context of an
application, the more effectively its employees and operations function.
In 2020, the enterprise will unlock the value of its data through information-based
processes for suppliers, employees, customers, financial, cases, projects, and contracts.
The list of potential information-based applications is inexhaustible; the only limit is
the capacity to gather and manage unstructured information and the requirements ofthe business.

51

CHAPTER 3

Currently, only one third of an organization’s business processes rely on digitaltechnology.15 In 2020, all of an organization’s information and processes will be
digital, moving the value of information beyond optimizing performance to create new
products and services and open up new sales channels. The forecasted benefits aresubstantial. An automated mortgage-application process, for example, can reduce costs
by up to 70 percent16 . A digital case management solution results in almost 40 percent
improvement in the time it takes to manage cases at a leading financial institution.
Retailers can automatically manage in-store inventory for savings in time and moresatisfied customers. Governments are turning to self-service case management
programs to empower citizens to manage their own information requests and streamline
the entire process for public servants. But the most savvy business leaders are realizingthat the opportunities to create value move well beyond data warehouses and existing
business processes.
Migrating current information-centric processes to digital processes is an
overwhelming prospect. The required approach is a break from the past and existingprocesses to reinvent new processes using digital technologies. The outcome produces
myriad benefits, including the ability to increase transparency, monitor performance,
mitigate risk, foster innovation and growth, and even create opportunities to monetize
data directly.

Increase Transparency
Eighty percent of companies in a recent survey agreed that the pressure for corporatetransparency has never been greater.17 The enterprise is accountable to shareholders,customers, employees, and legislative pressures, as shown in Figure 3.9. Greatertransparency into information increases accountability and reduces instances of fraud.
Organizations can make use of information to identify anomalies in data, duplicatedefforts, errors, and opportunities for cost savings. Data from different sourcesand departments can be combined to identify productivity gaps. Greater levels oftransparency save time and money and help to optimize performance and resources for
maximum efficiency.

15

Murray, Sarah, “CEO Briefing 2014 - The Global Agenda: Competing in a Digital World”, Accenture, 2014.

16

Ibid.

17

Ibid.

52

INFORMATION IS THE NEW CURRENCY

39%

Investing in more training of staff

33%

Communicating frequently with customers
Investing in monitoring and reporting systems

30%

Transparency with investors

28%

Instigating new codes of practice26%

Communicating more openly with government

23%

Senior executives designated to manage
corporate responsibility and governanceNew roles for executives andnon-executive board members

20%
20%

Partnerships with NGOs and universities

19%

Other

0%

Not applicable to our organization

8%

0%

100%

FIGURE 3.9: The Impact of Transparency on the Enterprise

18

Monitor Performance
Many managers feel they do not have all the information they need to effectively run theirdepartments. Information can be used to support the decision-making process at eachstep in a business process. Data sets can be combined into management dashboards andcomparative engines can be used to measure the effectiveness of projects. Variability inperformance can be revealed. Organizations can add value to information by continually
measuring impact. As a result, insight can fuel continual performance improvements,
learning, and growth across the entire enterprise ecosystem.

Lock-In Security
The need for security has never been more pressing with information fragmented acrossmobile devices, multiple applications, in both private and public clouds. In all sectors, theever-present threat of security breaches is driving investments in secure information
management. Data consolidation across networks with security mechanisms built right
into the system, along with secure information exchange and governance technologies
work together to protect information and identify suspicious patterns that require
immediate action.

18

Murray, Sarah, “CEO Briefing 2014 - The Global Agenda: Competing in a Digital World”, Accenture, 2014.

53

CHAPTER 3

Augment Compliance and Governance
The requirements for governance and compliance will only increase as governments
create more laws and legislation. With information flowing across many channels,
the lack of governance policies blocks information’s path to value. Aligning processes
and information on a common infrastructure protects assets while helping to ensurecompliance. Procedural guidance can be more readily combined with documentation,
process execution tools, reporting and audits, and ERP systems. An integrated
information architecture acts as a central nervous system to capture, track, and reporton regulatory requirements. By automating processes and integrating information,organizations can transform risk into opportunity by being able to react to changes inregulations more quickly than their competitors.

Improve Productivity
Making information available and searchable frees up valuable time, so resources
can be allocated to focus on top priorities. When information is combined acrossdepartmental systems and processes, it is easier to access and duplicated efforts (anddata) are reduced—saving time and money. Automated solutions eliminate the needfor business users to sort and classify growing amounts content. With a holistic andconsolidated information system, information can be analyzed to identify costs savingsand opportunities to increase overall productivity.

Optimize Engagement
In 2020, organizations will build apps and services that apply information to create newengagement models for customers, employees, and partners. Inside the enterprise,these new engagement models will create a knowledge-sharing culture that enriches
intellectual capital.

FIGURE 3.10: A Digital Workplace54

INFORMATION IS THE NEW CURRENCY

A digitally based “open workplace” connects people with their peers, resources, andinformation. Digital workplaces are built on EIM tools that disseminate knowledge
to all employees. Tools like wikis and blogs are used in a variety of ways to provide
employees with a platform for exchanging and managing the information used toaccomplish everyday tasks. Project teams can form on the fly and organize themselves
around a defined purpose. In one study, innovation rates rose by as much as 20 percent
and employees experienced a 35 percent increase in access to expertise—all throughaccessing a digital workplace.19

Increase Customer Insight
Digital technologies like predictive and sentiment analysis help organizations to better
understand their consumers and tailor products and services to meet their needs.
Analyzing information in new ways surfaces relevant topics, summaries, sentiments,
and relationships to deliver more enriched information. Trends and patterns can berevealed by monitoring system information. Insight into customer personas, behavior,and pathways gives organizations the ability to deepen customer engagement, exceed
expectations, and create a lifetime of customer value.

Promote Open Data and Economic Opportunity

Economic
Cycle ofOpen Data

Comm
e
r
c
i
aliz
ati
on

mic Benefits
ono
Ec
io
oc

w

Publ
ic D
ata
R

s
ed
Ne

se
ea
el

Ne

In a digital-first world, data is the raw material for new products and services. Spearheaded by governments across the globe, the open sharing of information is bringing
together software developers, information architects, business leaders, urban planners,scientists, academics, and entrepreneurs to create business value from data.

S
En

dU

s e r C o n s u m p ti on

FIGURE 3.11: The Economic Cycle of Open Data19

 ndrew McAfee, “Enterprise 2.0 is Vital for Business”, FT.com, December 9, 2009, 			
A
http://www.ft.com/cms/s/0/2c473802-e4c4-11de-96a2-00144feab49a.html#axzz375JRaIwe (accessed July, 2014).

55

CHAPTER 3

As of this year, there are one million open datasets made available by governments
around the world20 , representing a global trend toward openness that necessitates thesharing of information between governments, their employees, citizens, and privatesector partners. There are many areas where the analysis of large datasets can be oftremendous value. Along with increasing transparency and accountability, the highlevel benefits of open data include creating a more participatory government throughapproaches like crowdsourcing, citizen empowerment, economic development,
improved efficiency and productivity, and new meanings based on context and combined
sets of data.
Open data is good for the economy. In 2013, geospatial data as the foundation for many
map- and weather-based applications was estimated to generate $270 billion in global
revenue. Once opened up, information based on water quality, border wait times, healthtrends, flight tracking, and crime statistics can be accessed and transformed into userfriendly applications to improve the lives of all people. The open movement extends
inside the firewall to create an open community model for the enterprise—one thatorganizes itself around talent, resources, and projects to drive greater productivity
and innovation.

Drive Innovation
As we have seen with the open movement, organizations can apply information to ignite
innovation, form new partnerships, and drive business outcomes to create competitive
advantage. In 2020, consumer input will become critical in product development. The
development of new products and services will evolve from sprints to “hyper-connected
dashes” in 2020. Product features will be crowdsourced and collective. Feedback about
consumer experience with products and services will be collected to upgrade features,
improve delivery, and serve niche markets—in real time—removing the developer “safetynet”. Data-based product ideas will be shared across yottabytes (one trillion terabytes)of data and millions of people as innovation cycles become faster, compressed, and evenapproach the spontaneous.

Create New Revenue Streams
As information becomes increasingly accepted as a corporate asset, the pressure
to measure and maximize its value will increase accordingly. The digital enterprisewill discover additional opportunities to monetize information directly, based on
packaging data for a price for partners, suppliers, customers, or the market at large.
Digital technology is an enabler of the syndication of data. In 2020, individuals as wellas organizations will be taking advantage of opportunities to monetize their data andcreate additional revenue streams.
20

D ouglas Laney and Andrew White, “Agenda Overview for Information Innovation and Governance”, 2014, Gartner, Inc.,
January 10, 2014.

56

INFORMATION IS THE NEW CURRENCY

Goods are becoming more digitally sourced. In the future, they will be based on digital
designs, plans, and data. The digitalization of products, services, processes and overallbusiness models will demand a disciplined approach to managing, governing, andinnovating with information. Effective information management gives organizations
the ability to manage information as a tangible asset. As discussed further in Chapter 9,Enterprise Information Management (EIM) is a set of technologies and practices thatmaximizes the value of information while minimizing its risks.

Linking EIM to Business ValueAs the year 2020 approaches, one thing is certain: digital information will be ubiquitousand managing it will be key to success. Currently less than 15 percent of organizations
are implementing strategic information management to drive their projects andoutcomes. This is changing as more organizations are realizing the strategic importanceof managing their information effectively in a digital-first world. 21
As data is commoditized, organizations will uncover and apply unique information
for differentiation. The closer and tighter the connections between structured andunstructured data, the more value can be extracted from it. Bringing this information
together—connecting business suites with information suites—is a unifying force that
produces a powerful foundation for innovation.
While ERP and other structured data-source platforms have been optimized over the
past 30 years, EIM presents rich business opportunity. EIM replaces the disjointed andpaper-based system of the past with a consolidated and digitized single source of thetruth. EIM technologies support information in its many formats to connect information
for deeper insight, better performance, and greater opportunity. We’ll take a closer
look at how competitive advantage is created through managing consumer-related
information in the next chapter, “Digital Engagement”.

21Michele Goetz, “Are Data Governance Tools Ready for Data Governance?”, Forrester Research, June 25, 2014,
http://blogs.forrester.com/michele_goetz (accessed July 2014).

57

C H A P T E R

DIGITAL ENGAGEMENT

4CHAPTER 4

C HAPTER 4

Digital Engagement“Digital businesses understand that if they are to win in the age of the customer, customer
experience is their only differentiator.”1
In the “Age of the Customer” focus on the customer is a strategic imperative. As
consumers become more connected, they are demanding more from the brands they
love. They want access to the information, products, and services they need, when
they need them. Location and time are no longer constraints. Communication must be
immediate, relevant, and contextual. As the brand experience moves online it must be
personalized, intuitive, always on, seamless, and global. Organizations that can deliver
engaging brand experiences will dominate their markets now and into the future.

Strategy for Customer Experience13%

For competitive differentiation

60%
47%

To set us apart from industry leaders
12%

To be equal with industry leaders

9%

To stay in the mainstream in our industry
To stay behind the mainstream in our industry

2%
12%

No goals related to customer experience
Don’t know

5%

Base: 100 global customer experience professionals

FIGURE 4.1: Digital Experience Is the Key Differentiator 2

As illustrated above, the digital customer experience is becoming a key differentiator.
Business leaders are realizing the importance of a customer-centric approach: in a
recent survey, 66 percent of CEOs regard customer relationships to be a key source ofsustained economic value and 73 percent are investing heavily in customer insights. 3
This has become even more critical as digital disruption minimizes the barriers to entry
in many industries.
1

Nigel Fenwick and Martin Gill, “The Future of Business Is Digital”, Forrester Research, March 10, 2014.

2

Rogowski, Ron, “The Unified Customer Experience Imperative”, Forrester Research, May 7, 2013.

3

Kerry Bodine and Ron Rogowski, “2013 Customer Experience Predictions”, Forrester Research, January 3, 2013.

60

DIGITAL ENGAGEMENT

In 2020, delivering digital experiences that exceed expectations will give organizations
competitive advantage. As the world becomes more connected and more informationis shared, the digital enterprise will be given opportunities to deepen engagementwith its customers. The challenge will be to extract value from information, optimize
and personalize the delivery of this information, and manage it securely. In a customercentric era, brands must deliver compelling experiences fueled by a contextual
understanding of their customers, while adhering to established information
governance policies and standards.

The Empowered, Digital Consumer
Customer experience is defined as the sum of all experiences over the duration of a
relationship between a consumer and an organization that delivers products andservices. The ideal outcome is a consistent experience that delivers relevant content,
products, and services across multiple touchpoints.
Over the years, customer experience has improved: from mass-producing products tomeet consumer need in the Age of Manufacturing (1900); to making these goods highly
available outside of the town where factories were located in the Age of Distribution(1960); to giving consumers access to the products they need, when and where theywant them in the Age of Information (1990), with the help of Internet and e-commerce.
In the Age of the Customer, only the organizations that embrace digital disruption
will succeed.4

FIGURE 4.2: The Digital Experience Ecosystem
4David M. Cooperstein, “Competitive strategy In The age Of The Customer”, Forrester Research, October 10, 2013.

61

CHAPTER 4

Customer experience has evolved into digital engagement, literally following thecustomer online. Disruptive digital technologies have introduced new channels for
distribution and consumption. A complex landscape gives customers instant access todata from websites, apps, mobile and wearable devices, sensors in cars and appliances,and social networks. Digital customers are empowered with information at theirfingertips—to check a price, read a product review, rate a product or service, or accesspeers for advice—at any time, from any place.
Today’s consumer is smarter, more technically savvy, mobile, and always connected.
They’re skeptical about traditional marketing tactics like television advertising, magazineads, billboards, and direct mail. Instead, they’re turning to peers for recommendations
about products and seeking out more genuine engagement with the brands they like.
They’re becoming more transparent with their needs, wants, and doubts—and much ofthis is happening online.

48%

of people say theircolleagues and peers are thetwo most influential sourcesof information for making
software purchase decisions
Base: 2,444 North American and European software decision makers
FIGURE 4.3: Consumers Today Rely on Peer-to-Peer Influence

Empowered consumers are using digital technology to exert their influence and demand
quality, price, and service from the world’s leading brands. The number of mobile phones
is currently over one million globally. 5 If the current pace of adoption is maintained,
most of the projected eight billion people on Earth will be online by the year 2025. Thisis a large and powerful group, and businesses must respond quickly to serve the digital
customer in the ways they now dictate.

5

“ Smartphone Users Worldwide Will Total 1.75 Billion in 2014”, eMarketer, January 16, 2014, http://www.emarketer.com/
Article/Smartphone-Users-Worldwide-Will-Total-175-Billion-2014/1010536 (accessed September 2014).

62

DIGITAL ENGAGEMENT

Social and Mobile Shoppers
Today’s consumer has access to a wide variety of technologies. The average Americanhousehold now supports an Internet-connected computer (80 percent), high-definition
TVs (83 percent), and mobile phones (65 percent) with plans to invest in digital recorders,gaming consoles, and smart TVs. U.S. consumers are already subscribing to services like
Netflix to stream video—and many are using mobile devices to watch them. 6
Total U.S. Population49%

18-24 Year Olds

32%

30%

26%

26%

14%
11%
8%

Smart
PhonesComputers

Game
ConsolesTablets

4% 5%

e-Readers

6%3%

Smart TV

FIGURE 4.4: Planned Technology Investments in U.S. Households7

Mobile devices in particular are revolutionizing the digital experience and pushing
the limits of engagement. Mobile shoppers represent a shift toward a mobile-centric
lifestyle in which information, goods, and services are increasingly accessed throughmobile devices. Today, nearly half of mobile consumers rely on mobile devices to research
product information and compare prices. In the future, this usage will be surpassed bymobile purchases. According to research, the number of mobile transactions is due torise 65 percent between now and 2016. In Australia in 2012, mobile retail constituted
30 percent of all digital sales. It is predicted that mobile e-commerce revenues in Europe
will rise from $2.17 billion in 2011 to $25 billion by 2017 to constitute 6.8 percent of
web sales. 8 Over the next few years, roughly eight out of ten digital shoppers will also
be mobile shoppers.

6

“ The Digital Consumer”, The Nielsen Company, February 2014.

7

Ibid.

8

“7 Ways the Mobile Consumer Changes Everything”, Bazaarvoice, 2014.

63

CHAPTER 4

As consumers continue to take advantage of mobile browsing and shopping, there is ahuge opportunity for marketers to support the complete customer journey—from initialinterest to purchase and follow-on support. From consumers making price comparisons
to making purchases on their handheld devices, rating their experiences, and joining an
online community to share reviews, mobile commerce is empowering consumers andproviding the enterprise with new ways to engage with their customers.
As mobile retail becomes commonplace, a digital marketplace will evolve to support a
range of technologies used to support mobile transactions. Mobile payment and Mobile
Financial Services (MFS) will become integral to the functions of financial institutions,banks, and global retailers. Digital banking cards will be embedded in mobile devices
and used by 70 percent of physical bank-card users.9 In addition to card readers, QR
codes and Near Field Communications (NFC)—a wireless communications technologythat enables mobile devices to communicate based on proximity—will increasingly
allow for payment at the point of sales using just a SIM card. In the future, NFC will
expand to support other uses, including identification, transportation, and ticketing.
Online payment options, such as PayPal® and Square ®, will continue to rival traditional
payment methods.

Store
Locator

Price
Check

Product
Research

MobileCouponProduct
Review

Tablet

39%

51%

65%

10%

55%

Mobile
Phone

76%

66%

59%

49%

47%

FIGURE 4.5: The Most Popular Activities Among Mobile Shoppers109 arry Evans, “Disruptive Technologies: Winners and losers from game changing innovation”, HSBC Global Research,
G
October 2013.

10“ The Digital Consumer”, The Nielsen Company, February 2014.

64

DIGITAL ENGAGEMENT

Like mobility, social media empowers consumers by giving them direct access to theirfavorite brands in online communities and social networks. Almost two-thirds of social
media users visit social media sites at least once a day using a computer, and half of all
smartphone users in the U.S. visit social media sites every day.11 As shown below, social
media usage happens in locations that are convenient to consumers.
Social media has found its way into the marketing mix as an effective channel. Websitesthat contain social media enjoy a 55 percent increase in web traffic.12 People are
more likely to buy (64 percent) from organizations that help them make a purchaseusing social media channels.13

48%

1/2

...of moms use social
media in the car

Half of adults (25 - 34) use
social media at work

In the car

In the office

44%
At the restaurant...of young adults(25 - 34) use social
media atrestaurants

2X

Young adults (18 - 24) aretwice as likely to use social
media in the bathroom
In the bathroom

FIGURE 4.6: Social Media Usage - Where it Happens14

As technology evolves and disrupts, the enterprise will have to adapt and change its
communications channels to suit its customers: mobile apps will continue to aid inknowledge sharing, YouTube will replace TV ads, and Twitter ® will become a customer
support lifeline. But digital consumers are doing more than just online research andretail purchasing—in many cases they are working with organizations and governments
to crowdsource new products and services and crowdfund new enterprises. They haveentered the supply chain, and by 2020, they will dictate how organizations design,develop, market, sell, and support products and services. They will expect their needs tobe met preemptively, through physical and digital touchpoints that may not be familiar
places for business interaction, such as a bathroom scale or eyeglasses15. And, they will
expect access to these touchpoints 24/7.
11“ The Digital Consumer”, The Nielsen Company, February 2014.

12

Rick Burnes, “Study Shows Business Blogging Leads to 55% More Website Visitors”, Hubspot, http://blog.hubspot.com/blog/
tabid/6307/bid/5014/Study-Shows-Business-Blogging-Leads-to-55-More-Website-Visitors.aspx (accessed 15 Apr. 2013).

13

“ComScore”, invodo, http://www.invodo.com/resources/statistics/ (accessed March 2013).

14“ The Digital Consumer”, The Nielsen Company, February 2014.

15

S har VanBoskirk, “How to Organize for the Digital Future”, Forrester Research, March 7, 2013.

65

CHAPTER 4

A 360-Degree View of the Customer
Like the digital consumer, the digital enterprise that embraces disruptive technologies
will also be empowered. As customers increasingly access information, brands,
and services online, it’s getting easier for the enterprise to follow them based on
their interactions. This knowledge, or customer big data, can be used to maximize
engagement and create rich, digital experiences.
In 2020, the digital enterprise will rely on analytical tools to paint a holistic picture of
the customer, based on information collected at all stages of the customer lifecycle—
from purchasing patterns to social networks, website metrics, predictive analytics,
and other data mining techniques. Demographic data will be combined with contextual
or locational data, channel, sentiment, and behavior to determine customer content
preferences and build buyer personas. A deeper understanding of the customer
will become a strategic objective. This is a challenge in most organizations today as
application silos, departmental silos, and a schism between IT and marketing often
prevents organizations from gaining a holistic view of the customer.

Forget the Funnel!

A CQ U A IN TA N C E S: B E MEA N I N G F U L

CO M M UN I T Y: B E VA L UA BL E

E VA LUAT O R S: BU I L D C O NF I D EN CE
E M PLOY E E S : BE EX CEL L E N T
C UST O M E R S: BE H EL P F UL

T H E M AR K E T: B E O F I N TERES TFIGURE 4.7: The Sales Funnel Is Replaced by an Orbital Model

66

DIGITAL ENGAGEMENT

Customer insight will be supported by designated teams, technologies, and budgets.
The digital enterprise will look for data-literacy talents and skill sets that can be used
to analyze and interpret data with integrated tools in place to support the entire
process. Customer big data will be hoarded and protected as an asset as it grows to
a key differentiator. Enterprise systems of record will have to merge with systems ofengagement. To gain the coveted 360-degree view of the customer, the digital enterprisewill need to manage the complete portfolio of its customer information securely in orderto maximize its potential and minimize risk.
Marketers will be forced to find unique ways to inject their programs into consumerconstructed ecosystems of value. The traditional sales funnel will be replaced by anorbital model, centered on the customer and defined by interactions and long-term
relationships. Conversations will be direct and feedback immediate. Relationships built
on trust will enable marketers to reuse data generated by consumers. In many respects,
marketing will act like curators of content, rather than creators, repackaging anddistributing user-generated content as trusted content across many channels.
In 2020, CMOs will need to drive customer intelligence into sales, services, support,
and product development to create meaningful engagement, distinct experiences, anddifferentiation. While marketers will be challenged by the number of digital channels
available for distribution and consumption, there will be more opportunities to deliver
immersive, omnipresent, and fulfilling brand experiences. Behind these experiences, lies
access to actionable information that helps deliver seamless, multi-channel engagement.

Mastering Digital Engagement
Today, reaching consumers requires a complex, multifaceted approach across manychannels. Emerging digital technologies have created new customer touchpoints withincreased interaction, information, and opportunities to engage. In 2020, the digitalenterprise will focus on creating a compelling brand experience at every touchpoint
through omni-channel delivery, responsive design, digitizing the customer journey, andconsolidating customer information across the enterprise to increase brand loyalty andprofit margins.

67CHAPTER 4

The Medium Is the Message: Omni-Channel Delivery
Despite the push to deliver a consistent, dynamic end user experience, companies
are still struggling to understand customer interactions across channels and manage
execution using multiple technologies. Recent research reveals that $83 billion inmarketing is lost each year due to poor customer experience, recognizing leading
companies as ones that are engaging customers across all channels.16
The majority of businesses today are using at least six channels to engage with theircustomers. Leading organizations use seven channels and are laser-focused on ensuring
the consistency and relevancy of messages they deliver. This approach achieves superior
results in return on marketing investments, customer satisfaction, and revenue.17
Consumer interaction with brands is already evolving from multi-channel experience
to an omni-channel experience. Multi-channel publishing pushes content to users
regardless of their device or location. Omni-channel delivery takes this one step further
by focusing on consumer need and behavior, pulling together programs to provide
consumers with a consistent brand experience across channels, platforms, and devices.
Single-Channel -> Multi-Channel -> Omni-Channel

FIGURE 4.8: Customer as Hub for Many Channels of Engagement

A consistent experience is based on a “single source of the truth” or consistent customer
data. It presents a unified style, tone, voice, and visuals. As customers become moremobile, the consistent experience becomes vital. If a customer visits a retail website
on a desktop but then changes to a tablet or phone at the time of purchasing, theinterface should maintain the same look, functionality, and content to ensure continuityof experience. Customers don’t see individual devices or channels: they look for aconsistent and familiar brand experience.
16

Ingram, Katie, “US$83 Billion Lost Yearly in Marketing Due to Poor Customer Experience”, CMSWire, May 29, 2013,
http://www.cmswire.com/cms/customer-experience/ibm-us83-billion-lost-yearly-in-marketing-due-to-poor-customerexperience-021084.php (accessed June 2014).

17

Minkara, Omer and Aly Pinder, “Next-Generation Customer Experience Management”, Aberdeen Group, 2013.
68

DIGITAL ENGAGEMENT

An adaptive and responsive approach helps marketers fuel an ongoing conversation
with a shopper, investor, patient, and more. Using responsive design, businesses canmanage a single site that caters to all device platforms, sizes, and resolutions. A single
video can be dynamically rendered to adjust to the screen size of a mobile device, awebsite, and a stadium jumbotron. An adaptive design extends the experience withclosed captions or plays the audio in a listener’s preferred language. Tethered syndication
allows each touchpoint to talk to other available touchpoints to optimize experience.
Consistently branded content creates a more satisfying end-user experience, andenables the enterprise to chart the customer journey, while aligning with corporate
governance policies.

FIGURE 4.9: Consistent Branding Across Channels and Devices

It’s All About the Journey
In 2020, the digital enterprise will have to digitize the entire customer journey. Customer
journeys document the experience customers have from initial desire through tofulfillment. This includes all points of engagement or the touchpoints that create theoverall brand experience.
Customer journeys are based on data collected across various touchpoints, transactions,interactions, social media sites, and devices. Analyzing this data leads to customer
insights—and these must be tied back to actions that drive automated, internal processes
and the delivery of content and services. This should all happen on the fly, in response tocustomer requirements to influence their decisions at the moment of need.

69

CHAPTER 4

The customer journey featured below depicts a consumer interacting with a preferred
automobile brand. A prospect might watch a video commercial posted to YouTube andfollow it to the manufacturer’s website for more information. From that site, after a few
clicks and a product download, they might complete a search for a dealer close to theirlocation. After visiting the dealership, they could close the purchase online, receivea personalized thank-you receipt, and connect to a customized customer self-service
portal for support or maintenance information. Sensors or devices in the car could
communicate issues directly with the service center to ensure immediate support andcustomer satisfaction. Along the journey, each piece of media consumed becomes morevaluable as details are attached to it. The entire experience is orchestrated to maximize
engagement, capture preferences, and facilitate a seamless purchasing experience tohelp incite repeat or follow-on purchases. The value of this information experience canbe optimized by the enterprise to increase empowerment, reach, and insight.
83% Online
Research

37% TrustAutomaker
Websites

Repurchase

57% Trust
Driverless
Car

74% Share
Driving Habits

55% VirtualInteraction
with Dealer

64% AutomatedDealer for Service
FIGURE 4.10: Car Buying Experience Goes Digital18

18

“Cisco Consumer Experience Report for Automotive Industry: survey of 1,511 consumers in 10 countries”, Cisco, May 2013.

70

DIGITAL ENGAGEMENT

Currently, only 25 percent of organizations have mapped out their customer journeys
for a clear understanding of their experience across multiple touchpoints.19 Effectively
managing customer data is critical to optimizing a customer journey that is more cyclicalthan it is linear. If an organization can predict customer behavior, it has a better chanceat delivering what a customer expects. This is called “contextualization”, and it defines
digital experiences that adapt to a consumer’s context. 20 Content is personalized,
anticipating the needs and buying behavior of each consumer to offer location-based
products or services at the most opportune moments to buy. To deliver a contextual
experience, organizations use tools that combine historical (buying behavior including
barcodes or pathways through a website), situational (geo-location), and demographic(profile-based) data. Relevant content is delivered to consumers based on preference,
past behavior, and the device they’re using, giving organizations opportunities to build
brand loyalty and long-term relationships with customers.

Seamless Information Flows
In order to optimize digital engagement, the digital enterprise must understand its
customer experience ecosystem, which is a culmination of interactions and transactions
between an organization and its employees, partners, suppliers, and customers. A
holistic view of the ecosystem helps organizations understand what their customers
experience each day and what their employees and partners require in order to support
and nurture customers at each stage of their journey.

DIG
ITA
L

DIG
IT
C

VID

ICS

YT
AL

ER

SE S
RI
RP RIETE TO ION
EN OSI RATPRE NTEG&ICRE UST
MA LATI OME
NA ON R
GE SH
ME IP
NT

B
HU

T
EN
EM

E

RIENCE MAN
PE
AG
EX
ER
EXP IENC
AL
TO
US M

AN

EO

MARKETING
AUTOMATION &EMAIL MARKETING

SOCIALFIGURE 4.11: Disjointed Digital Engagement

19

S olis, Brian et al., “The 2014 State of Digital Transformation”, Altimeter Group, 2014.

20

Ron Rogowski, “Digital Customer Experience Trends to Watch, 2013”, Forrester Research, 2013.

71

CHAPTER 4

As digital engagement progresses beyond a simple point-and-click, organizations will
streamline communications based on integrated information flows across the business.
In order to deliver a seamless end-to-end experience across many touchpoints, digitalenterprises will need to integrate front- and back-office technologies and processes
with a complete information strategy that delivers individualized customer experienceat each point of engagement.
Within many organizations, the current technology layers that support customer
engagement are multiple and disjointed, consisting of different applications from avariety of vendors. At the customer-facing level, rich digital solutions are required tosupport the evolution of a brand’s publishing points—from tablets and Kindle ® devices
to Kiosks, gaming consoles, and Google Glass. Behind the customer-facing sites are
retail point-of-sale systems (typically tied to inventory) and other applications usedby customer-facing employees. Underneath these are the systems ranging from Web
Content Management (WCM) to Customer Relationship Management (CRM) systems
and various reporting tools. These tools can include web analytics, sentiment analysis,
social media monitoring, search engine metrics, business intelligence, sales automation,
recommendations engines, and more. In an ideal system, each technology would work
to optimize digital engagement and extend to the virtual supply chain. The connections
from these systems to customer engagement should be relatively easy to track, but how
does the digital enterprise bring this all together for accuracy and consistency?
A unified information management platform empowers employees to effectively
create, curate, manage, and monetize information across the create-to-consume
process. Using digital technologies to integrate information flows ensures a consistentexperience across different contextual interactions, no matter how customers
entered the conversation. In the digital enterprise, this holistic approach requiresthat cross-functional teams work together to deliver a unified experience acrossmultiple touchpoints.
Time to Market

CreatePublishMeasureAdjust

FIGURE 4.12: A Seamless Process - From Create to Consumer

72

ConsumeDIGITAL ENGAGEMENT

Customer Centricity Starts Inside the Firewall
Creating a consistent user experience starts inside the firewall. Teams and departments
need to be aligned around customer segments. The strategic CIO has an opportunity toharmonize technology applications with digital engagement across every departmentin the enterprise. IT departments are already embracing the vast benefits of a wellarchitected Enterprise Information Management (EIM) platform to create compelling
experiences. Engaged employees are more satisfied, productive, and supportive ofcorporate objectives. Companies that engage all parts of their organization—fromback-office staff to frontline employees—are more likely to deliver compelling brandexperiences than companies that take a piecemeal approach.
16%
14%

Companies training employees on the value of customer experience

13.3%

All others

12%
10%
8%

6.5%

5.6%

6%
4%

3.0%
1.9%

2%

1.6%

0%
Revenue fromnet-new customers

Customersatisfaction

Revenue from
customer referrals

Percent of respondents, N=252

FIGURE 4.13: Linking Customer Experience to Employee Objectives 21

In the digital enterprise, every employee must understand the influence they haveon the customer lifecycle. Organizations that tie customer experience initiatives to
employee objectives have seen up to a 10 percent increase in customer satisfaction andcustomer revenue. As one Auto Company in the U.S. stated: “One of the building blocksof our Customer Experience Management (CEM) activities involves creating engaged
employees to improve our customer interaction results and even support new productdevelopment efforts.” 22In the following feature, Citibank exemplifies how the enterprise of today must shift
its business models to focus on the customer first as a key differentiator in a crowded
marketplace.

21

Barrenechea, Mark J. and Tom Jenkins, “Enterprise Information Management”, OpenText, 2013.

22

 berdeen Group, “Customer Experience Management: Using the Power of Analytics to Optimize Customer Delight”, ResearchA
Preview, Aberdeen Group, http://www.brandchannel.com/images/papers/531_aberdeen_group_wp_customer_experience_
management_0911.pdf (accessed February 2013).

73

D I G I TA L I N N OVATO R S

Citibank
Citibank is the consumer division of Citigroup, a publically-traded financial services multinational headquartered in New York City and the largest bank in the U.S. based on total
assets. Citibank operates around the world with 3,777 branch locations in 36 countries. In
addition to offering standard banking transactions, Citibank markets insurance, credit cards,
and investment products. Citibank’s online services division is among the most successful inthe industry claiming about 15 million users. This success is due in large part to the company’s
focus on digital innovation. The bank collaborates with technology vendors on leading-edge
solutions for their business. Citibank leads the way in terms of adopting new technologies andtransforming their services to surpass the expectations of their digital customers.
What follows are excerpts from an interview with Simon Chiang, Head of International
Cards, Global Consumer Technology at Citibank. In the interview, Mr. Chiang discusses thebank’s state-of-the-art card technology and how the industry has been disrupted by digitaltechnologies and the demands of the digital customer.

FIGURE 4.14: Citibank Introduces New Ways to Pay - Digitally“The financial services industry has completelytransformed itself and its services for thedigital customer. As customers become moreconnected, they want to access their financial
information and services online, using theirmobile devices, on demand, from any location.
They are looking for more convenient and fasterways to make purchases. This has required us
to re-invent our processes, moving them online
and leveraging technology for fast, accurate,and secure information exchange between
consumers, merchants, their banks, and othertrading partners.

To support the digital customer, payment
methods have evolved. From credit cards, todebit cards, to pre-paid mobile cards, technology
enables these digital transactions. In addition,
mobile payments—or making payments witha smartphone—are gaining traction withmany consumers. The Apple iPhone® 6 andApple Pay ®, for example, provide consumers
and merchants respectively with Near Field
Communications (NFC) capabilities to enable‘pay-by-touch’ transactions. NFC makes use of
short-range wireless technologies to detect thecustomer within short physical distances.
74

D I G I TA L I N N OVATO R S

customer experience is paramount. We strive
to give each customer a consistent experience
across all our channels, including their mobile
devices, the Internet, ATM, branch, andInteractive Voice Response (IVR) channels. We
want our brand to be consistent, regardless ofchannel, and the experience to be personalized
and relevant. Collecting, managing andleveraging customer information allows us tobetter understand our customers and tailor the
Citibank experience to their needs.

With many exciting technology changes
impacting financial transactions, Citibank islaunching Apple Pay in the U.S. and it will soon
be rolled out to the international market. Whilemobile payment is gaining traction, broaduser acceptance will take some time. People—
especially those over the age of 45—are used tocarrying and paying with plastic credit cards.
They need to be convinced that mobile payment
is a secure method of transacting. Despite thisbarrier to adoption, we predict that within ten
years, 50 percent of payment transactions
will be made using smartphones. We expect
to roll out new merchant terminals with NFC
capabilities over the next five to ten years. To
support this move to mobile, we are working
hard to promote the advantages of mobile
payments and drive user acceptance.

To this end, we have invested a lot of resources
into the area of predictive analytics. We areusing all the consumer data we capture tounderstand our customer’s spending patterns.
This data allows us to profile a customer,
segment them, and push product or service
offerings to him or her at the right time. To
do this, we also use geo-fencing to define
geographical boundaries around a given
retailer—whether it be a store in a mall ora specific POS terminal. When a customer
with a relevant profile crosses the boundary,
this triggers the delivery of 'location specific'
advertisements to their mobile device. Geofencing fosters engagement with customers
using the most highly contextual, personal, andrelevant channel possible: their mobile devices.
It's the most targeted advertising a brand can
do right now. It’s where hyper-local meets
hyper-relevant.

We realize security concerns are top ofmind for users, especially when they aremaking payments online or sharing financial
information. But a new technology called
tokenization introduces heightened levels of
security for payments made at point-of-sales(POS) terminals, either by card or by mobile.
With tokenization, sensitive customer data is
encrypted at the point where it is captured (thecard is swiped or detected wirelessly) and sent
to the merchant’s payment processor where it isdecrypted and the transaction is authorized. A
token representing the entire transaction is thensent back to the retailer indicating approval.
With tokenization, sensitive customer data
doesn’t reside on the user’s device. As well,customer data is not actually shared with themerchant. Instead, it is the token that stays on
file and is stored on the merchant’s network as
proof of purchase.

Along with helping to deliver an optimized
customer experience, mobile and otherdisruptive digital technologies are significantly
impacting the financial services industry. Our
business has been transformed and continues tobe transformed by new technologies which havechanged our markets, shifted our channels,
and modified the way we engage and operate.
Information and its effective management hasgiven us a competitive edge and helped us not
only to succeed but also to establish ourselves
as innovators in our industry.”

At Citibank, we are focused on meeting theneeds of the digital customer: we stay on thecusp of new advances in technology and we arealways exploring innovative ways to serve them.
But, ultimately, the technologies we adopt needto improve our customer experience. As ourprocesses move toward digital channels, the75CHAPTER 4

Marketing and IT: Better Together
Successful brands connect employee and channel engagement with the appropriate
customer experience. To make this happen, IT departments need to collaborate closelywith marketing to deliver satisfying digital experiences—all focused around optimizing
customer engagement.
Digital technology has become a key enabler in the delivery of more relevant and richer
brand experiences. The marketing toolbox has grown to incorporate new devices,channels, and media into its programs. The CMO of the future will embrace the cloudand social networks to follow customers, listen to what they’re saying, engage inconversations with them, build brand, and refine the experience with digital technology.
CIOs are responsible for providing consistent customer support using innovativetechnologies like rich Internet applications, rich media, collaboration tools, social media,
and information management.
There is a mutual dependency between IT and marketing in optimizing digital
engagement. Marketing is dependent upon IT to implement and maintain the systemsof record that marketing uses to run its programs. Emerging systems of engagement,such as NFC-enabled mobile payments at the point of sale, run on systems of record.
Marketing needs IT to make sure that these systems function quickly, seamlessly, andsecurely to build positive brand experiences.

32% believe IT

hinders their business!

39%

37%
28%

Collaborates
strategically withthe business

Delivers end
user support

Accommodateschanges tobusiness strategy
with flexible
architecture

FIGURE 4.15: Marketing and IT - A Mutual Dependency 23

23

 eorge F. Colony and Peter Burris, “Technology Management in the Age of the Customer”, Forrester Research,
G
October 2013.

76

DIGITAL ENGAGEMENTThe CMO pursues engagement to influence customer satisfaction, brand value,
and revenue opportunities. The CIO may be looking to reduce the operational costof creating, managing, and securing the latest app or supporting multiple mobile
devices across the organization. This struggle between the line-of-business and IT isexacerbated by consumer influence. Evolving this relationship into a more collaborative
one will require a cultural shift as 32 percent of marketers currently believe that their IT
department hinders their own business success.
The digital enterprise can only function as a customer-centric organization if IT andmarketing teams work together. This involves tighter mutual dependencies and aligned
strategic business objectives focused on the customer. In the future, “tiger teams” madeup of cross-functional, task-based teams will focus on applying innovative technologies
to engage with end users. Marketers will have dedicated IT resources and IT staff
will be marketing-savvy. More time and resources will be dedicated to the creation,
management, and measurement of information to help marketers develop and measure
the effectiveness of their programs—something that 70 percent of marketers havetrouble doing today.
For both IT and marketing departments, embracing an authentic customer-centric
strategy requires creating rich and interactive digital experiences that comply withinformation governance requirements. This necessitates a platform of integrated
customer experience capabilities that can be architected to work seamlessly together.

Experience Management Drives Differentiation
As part of a comprehensive EIM strategy, a Customer Experience Management(CEM) solution helps CIOs and CMOs turn unstructured data sources into leversof competitive advantage and profitability. While there are multiple definitions for
CEM, they all converge on a similar idea: exceeding customer expectations to improvebusiness results.
A CEM platform combines software applications that help organizations create richer,more interactive digital engagement across devices and channels without sacrificing
information governance and compliance. CEM empowers the digital enterprise tocapture audience expectations, process requests, search for relevant content, curate
user-generated content, assess consumer activities for analysis after the fact, andpresent actionable data to create exceptional digital experiences. Video, rich media, andpersonalized content can be created collaboratively, published seamlessly, and sharedubiquitously to surprise and delight customers at every turn.

77

CHAPTER 4

rketing
Ma erience
p
Ex

Com
Expe munrie itynce

Brand
Exper ience

Information
ExchangeSepExrer vic
ie e
nc
e

g e
yin c
B u riene
Exp

FIGURE 4.16: CEM Creates Value Across the Customer Lifecycle

In 2020, the digital enterprise will consolidate its customer experience solutions on asingle engagement platform. This will empower the enterprise to maximize the potentialof its information to reach new markets and gain competitive advantage. As digital
disruption triggers the creation of new engagement models, their reach will extend
outside the enterprise and all along the supply chain. In the following chapter, we’ll takea look at how the digital customer and disruptive technologies are affecting the supply
chain and how the digital enterprise can respond with a complete overhaul of its supply
chain processes.

78

C H A P T E R

DIGITAL SUPPLY CHAIN

5CHAPTER 5

C HAPTER 5

Digital Supply Chain“In 2020 we can expect to see a vibrant and increasingly collaborative environment inwhich buyers, suppliers, and technology will morph into a just-in-time, market-driven world
requiring the right information, in the right form, in the right language, at the right time.”1
Digital technology is giving rise to global, highly-interconnected, and complex supply
chains. In 2020, the digital enterprise will integrate its operations and collaborate
seamlessly with partners and suppliers to maintain supply chain excellence whilesatisfying the expectations of the digital customer. The previous chapter examined how
technology-based transformation is impacting the customer experience and engaging
customers in new ways. In this chapter, we’ll take a look at how digital technology istransforming the supply chain, especially in terms of digital experience, process
efficiencies, business integration, data and information, and new products and services.
The “Age of the Customer” will have far-reaching ramifications across the enterprise—from how products are manufactured to how they are marketed, packaged, distributed,
and serviced. The enterprise has already stepped up for this challenge by making doubledigit increases in digital marketing investment. 2 As organizations micro-segment theirmarkets to deliver tailored products and services, the supply chain must keep pace with
rapid-fire cycle of go-to-market activities by supporting integrated and digital processes
across the supply chain.
Technology-based transformation is providing core business processes with theflexibility and agility required to compete in a digital-first world. It is also enabling
business integration capabilities to keep pace with growing volumes of cross-borderexchanges of goods, communications, and commerce.

A Digital Ecosystem of Suppliers
In 2020, an organization as a standalone entity with a linear value chain will be replacedby the digital enterprise, operating within a dynamic network of suppliers and partners.
From within this extended enterprise ecosystem, businesses can assemble new orcomplimentary capabilities from other suppliers and more easily pivot their operations
to meet demand.

1

 ike Lacobucci, “Looking ahead to globalization 2020” MultiLingual Computing, 				Mhttp://www.moravia.com/files/download/Globalization2020_MultilingualComputing.pdf (accessed July 2014).

2

Michael Burkett, Steven Steutermann, Noha Tohamy, “Digital Marketing, Internet of Things and 3D Printing are DigitalBusiness-Driven Disruptions for Supply Chains”, Gartner, Inc., March 11, 2014.

80

D I G I TA L S U P P LY C H A I NDistributed manufacturing is a good example of a dynamic and flexible supply chain
model. In distributed manufacturing, the Original Equipment Manufacturer (OEM)contracts out manufacturing to partner factories located close to consumers to reduce
costs, environmental impact, and delivery times and to deliver customized products toa local market. 3 Manufacturing operations can be added, scaled, or eliminated based on
the orders received and the markets targeted.
As supply chains morph into dynamic systems, the digital supply chain will rely on
third parties for contract manufacturing, logistics management, warehousing, andtransportation. Digital technology is making this integrated model possible by enabling
specialized companies to communicate, collaborate, and exchange real-time information.
The end result is a tightly interconnected network of business partners collaborating
to serve the digital customer. By embracing emerging technologies, the digital supply
chain can deliver the improved efficiencies and performance required to better managechange, complexity, and globalization.

A Global, Digital-First Economy
A global economy is putting strains on today’s supply chain as it struggles to assimilate
increasing amounts of goods, commerce, and communications exchanged acrossborders. Digital technology makes it possible for a small company or even an individual
to participate in the global economy—from anywhere in the world. Lower barriers toentry result in higher levels of competition from all parts of the globe, enabling emerging
economies to play a much larger role in the global economy.
Based on stiffer competition, businesses are focusing on their area of specialty andoutsourcing other operations. They are migrating from a vertically integrated model inwhich end-to-end supply chain activities are managed in-house to a highly-specialized,
highly-outsourced supply chain model. In the computer industry, for example, OEMsare retaining operations within their area of specialty and outsourcing component
manufacturing to contractors who buy the parts, assemble the devices, and perform
quality control.
While this model is prevalent in manufacturing, organizations in every business sector
are outsourcing everything from customer service, tax, accounting, and IT to strategicplanning, public relations and marketing. In fact, it’s difficult to name an industry thathas not become highly specialized and dependent on business partners for success.4

3

 dam Robinson, “The Rise of Distributed Manufacturing and 7 Advantages over Traditional Manufacturing”, Cerasis blog, AprilA
2, 2014, http://cerasis.com/2014/04/02/distributed-manufacturing/ (accessed July 2014).

4

Steve Keifer, “Herding Geese: The Story of the Information Supply Chain”, 2011.

81

CHAPTER 5

With an increased number of businesses participating in the global economy, prosperity
around the world is rising, especially in emerging economies. As illustrated in Figure 5.1,
while it took 154 years for the U.K. to double their per capita Gross Domestic Product(GDP) during the Industrial Revolution, China and India have doubled their per capita
incomes in one-tenth of that time. 5 As a result, the new economy is expected to herald
in an additional 1.8 billion consumers in 2025, nearly all from emerging markets. 6 As
these populations pursue economic interests, global consumption and cross-order trade
will explode, further impacting the supply chain.
In emerging economies, incomes are rising faster,and at a greater scale than at any point in history

Developed markets
Emerging markets

Years to double per capita GDP1
Country

Year 1700

United Kingdom

1800

1900

2000

Germany

Global consumption$ Trillion
64

9

154

United States

Population
Million

10

53

28

65

Japan

33

South Korea

48
10

India

38

12

27
12

China

30

16

1,023
840

26

2010

34

2025

1 Time to increase per capita GDP in purchasing power parity (PPP) terms from $1,300 to $2,600.
SOURCE: Angus Maddison, The world economy: Historical statistics, OECD, 2003; Resource Revolution: Meeting theworld’s energy, materials,
food, andwater
needs,
McKinsey
Global Institute,2011; McKinsey
Global7Institute analysis
FIGURE
5.1:
Rapid
Rise
in Emerging
Economies’
Incomes

Exploding Cross-Border Trade
Over the last few decades, there has been an enormous explosion in cross-border trade,and these volumes will grow further. Between 1980 (1.8 trillion) and 2011 (17.2 trillion),
there was a tenfold increase in cross-border trade with volumes poised to increase by2025 (64 trillion). Nearly 60 percent of this increase will take place between emerging
economies 8 . The challenge for supply chains will be to support growing volumes of crossborder transactions while maintaining performance, security, and compliance with both
local and international regulations.

5

“Global Flows in a Digital Age: How Trade, Finance, People, and Data Connect the World Economy”, McKinsey & Company,
April 2014.

6

Ibid.

7

Ibid.

8

Ibid.

82

D I G I TA L S U P P LY C H A I N

As cross-border trade grows, the nature of the goods will change. Physical goods will be
digitized into virtual goods and services. These transactions will trigger greater volumesof knowledge-based exchanges—goods and activities that have a high Research andDevelopment (R&D) component, require highly skilled labor, and involve the exchange
of information, ideas, and expertise.
Underlying all this cross-border trade and commerce are exchanges of data andcommunications. There has been a sevenfold increase in data and communication flow
between regions and occurring across emerging economies from 2008 through to 2013.
The chart below illustrates that every major route has increased dramatically and that
all routes have become more interconnected.
Exhibit E8
Data and communication, people flows between regions
Regions

US
United States
and Canada

LA
Latin
AmericaME
Africa andMiddle East

WE
WesternEuropeEE
Eastern Europe
and Central Asia

CH
China
regionSize of increase
NE
Northeast
Asia

AU
OA
Australasia OtherAsia

1 million–
5 million>5 million

Data and communication flows (total cross-border bandwidth)
Bandwidth
Mbps<50,000

50,000–100,000

100,000–
500,0002008
100% = 29 million Mbps

500,000–
1 million

2013
100% = 201 million Mbps

EE
WE

US

EE
NE

OA

7x

WE

US

CH

ME

NE
OA

CH

ME

LA

LA
AU

AU

FIGURE 5.2: Sevenfold Increase in Cross-Border Data, Communication, and People 9

Global transactions have been part of our world for centuries, binding people andeconomies together across borders. Today, however, the volume of these transactions is
rapidly expanding and the pace of exchange is accelerating. In a digital-first world, supply
chains will be global, fragmented, dynamic, and complex. They will need to facilitate hugeincreases in cross-border exchange of physical goods and deal with soaring volumes ofcross-border data, communications, and commerce between networks of suppliers.
Delivering superior Supply Chain Management (SCM) and responsiveness will dependon tight synchronization of supply and demand data as well as the movement of goods,
information, and funds between a large number of logistic and trading partners. Only byleveraging digital technologies will companies achieve the levels of speed, accuracy, andagility required for operational excellence in 2020.
9

“ Global Flows in a Digital Age: How Trade, Finance, People, and Data Connect the World Economy”, McKinsey & Company,
April 2014.

83

CHAPTER 5

Accelerating Processes to Hyper-Drive
To meet the challenges of a digital economy, organizations must digitize their businessprocesses. This goes beyond merely converting paper records to electronic or automatingprocess steps. It requires close examination of key corporate processes, understanding
the needs of all stakeholders, determining new outcomes based on these needs, thenworking back and leveraging digital technology to fundamentally reinvent processes.
Ideally, companies should digitize core business processes from end to end, in their
entirety. When companies digitize portions of a process, they may achieve improved
outcomes but fail to produce an overall seamless experience. A team comprised ofexternal stakeholders and representatives is essential to ensure changes are fully
evaluated and cohesive and to take further action to redefine operating models,organizational structures, and roles.
External stakeholders

Business outcomes

Customers placing orders

Order to cash

Reduced time to processorder, ship, and collectSuppliers

Procure to pay

Shorter time to procure,better use of cash

Customers collaborating
on ideas

Concept to product

Better products,
greater appeal, andmore competitive

Customers making
service requests

Request to service

Better customer
satisfaction, repeat business

Prospects considering
an orderProspect to customer

Higher conversion tosales, more revenue

College graduates andprospective hires

Hire to retire

Faster to hire top talent

R&D

Manufacturing

Sales andmarketing

FinanceHR

FIGURE 5.3: Cross-Functional Processes10

In a digital-first world, each process is critical to empowering the digital enterprise
to operate in hyper-drive. The order-to-cash and request-to-service processes areimportant for rapid fulfillment of products and services. A tightly-interconnected supply
chain synchronizes trading partners and shortens the procure-to-pay cycle. Customer
insights and cross-functional collaboration fuel the concept-to-product process for fast
turnaround of new products and features. In the digital enterprise, technology enables
each of these processes to operate seamlessly, efficiently, and rapidly to meet theheightened expectations of customers and drive competitive advantage.

10

Connie Moore, “The Process-Driven Business of 2020”, Forrester Research, April 16, 2012.

84

D I G I TA L S U P P LY C H A I N

The benefits of digitizing information-intensive processes are numerous. Costs canbe reduced by up to 90 percent and turnaround times improved by several orders ofmagnitude.11 Errors can be reduced. New channels and new routes to the customer canbe leveraged. Replacing manual paper-based processes with digitized processes anddocuments allows businesses to collect data to better understand process performance,
costs, and risk factors. Real-time reports and dashboards can alert managers to address
problems before they become critical. Over and above these benefits, digital technology
helps to build more nimble and flexible processes.

Increasing Business Agility
While Logistics is often viewed as a supporting function and a “cost of doing business”,
a growing number of organizations appreciate its strategic importance. In order tocompete, organizations need to maintain superior levels of process excellence, while
rapidly responding to the changing needs of their market. Process changes that takemonths to implement are no longer acceptable or viable. For the digital enterprise,creating processes that are agile and flexible is a strategic priority. This can beaccomplished using technologies such as Smart Process Applications (SPAs) and
Dynamic Case Management (DCM).

Smart Process Applications
Digital enterprises are leveraging technologies like SPAs to quickly create and adapt
processes to the changing needs and expectations of their market. SPAs are an evolution
of Business Process Management (BPM) software that uses a “process factory”
approach for rapidly deploying new and/or updated case management processes. With
SPAs, users can assemble pre-built, ready-to-use software components to create anddeploy new service processes in as little as 30 days. Existing processes can be modified
just as easily.
Self-service capabilities can be integrated into SPAs to meet consumer expectationsfor 24/7 engagement. Self-service software allows subject matter experts to automate
answers and deliver step-by-step instructions for resolving common customer inquiries.
These automated, on-demand decision support systems can engage the customer—
anytime, anywhere—and provide instant answers to their questions or inquiries.

11

S hahar Markovitch and Paul Willmott, “Accelerating the Digitalization of Business Processes”, McKinsey & Company,
May 2014.

85

CHAPTER 5

Dynamic Case Management
DCM is another emerging technology that brings flexibility to the digital supply
chain for ad hoc service processes. Traditional BPM solutions automate structured,
repeatable processes with minimal human intervention and decision-making, except
when exceptions arise. In contrast, DCM solutions are designed to manage processes
that are unstructured or ad hoc in nature—processes that are not repeatable and often
require extensive interaction between human participants to achieve an outcome.12
These unstructured processes are foundational to the supply chain in service-based
and/or knowledge-driven organizations.

FIGURE 5.4: Mobile Case Management

DCM solutions enable an expert to access, review, and process information about acase—deciding the best course of action to achieve a desired outcome. They also bringcollaboration to the supply chain by enabling multiple people to share and work together
on a given output. Cases can be managed using mobile devices, so case workers canupdate information while they are located on-site visiting clients.
The speed and agility of supply chain operations will continue to be enhanced byapplications that synchronize data and exchange supply chain transactions withincreased speed, flexibility, accuracy, and security. In 2020, the digital supply chain will
gain many capabilities and advantages offered by B2B e-commerce and operations as
they move to the cloud.

12

Diana Davis, “Case closed? The Difference Between Dynamic Case management (DCM) and Business Process Management(BPM)”, Process Intelligence Network (PEX), http://www.processexcellencenetwork.com/business-process-management-bpm/
articles/case-closed-the-difference-between-dynamic-case-ma/ (accessed July 2014).

86

D I G I TA L S U P P LY C H A I N

The Information Supply Chain
To effectively orchestrate today’s outsourced and distributed supply chain,organizations must tightly coordinate the flow of goods, communications, andcommerce across business partners. B2B e-commerce (also called B2B integration)is comprised of a “set of technologies that facilitate the real-time transfer of
information, money, goods, and services”.13 Like consumers, businesses need topurchase merchandise, trade stock, and pay bills. B2B e-commerce is the information
supply chain that orchestrates transactions for the digital enterprise. With thecomplexity and frequency of business transactions, B2B e-commerce involves aheightened degree of coordination, data synchronization, and transaction automation.
B2B e-commerce dates back to the 1960s with the use of Electronic Data Interchange(EDI), a standard for exchanging data between companies. Today, however, B2B
integration applies to a broader category of technologies that are not only used topurchase goods and services, but also to manage entire supply chains and automate thetransactions between various trading partners.

• Contract Manufacturers• Transportation Providers Carriers/Brokers/Importers/Shippers• Warehouses/Contract
Logistics/Buying Houses• 3PLs Logistic Service Providers• Lead Logistic Providers

S e r vic e danService Providers

Plan, Source,
Make, Deliver,
ServiceP
Ot ro vid ers
h e rsCustomers (Downstream)• Dealers• Distributors• Retailers• End-Consumers

p p li e r s

stomersCu• Departments/Units:
Procurement, Manufacturing, Quality,
Planning, Sales and Marketing, Logistics,
Engineering, Finance, Legal, EHS, Plants,
Repair Sites, Warehouse, Distribution
Centers, Hubs
• Functions:Plan, Source, Make, Deliver, Service

Suppliers (Upstream)• N-Tier Suppliers• Raw Material - Component

Su

Company

Others• Customers• Banks• Government

FIGURE 5.5: End-to-End Supply Chain Business Partners14

With modern B2B integration platforms, an OEM can automate many of the interactions
and transactions in their supply chain—among designers, contract manufacturers,
Third-Party Logistic providers (3PLs), distributors, and aftermarket service providers.
Automating the order of parts using an electronic catalogue and purchasing exchanges
allows for Just-in-Time (JIT) manufacturing, as illustrated in the figure below. Oncethey are purchased and received, parts, sub-assemblies, and final products can be
automatically tracked across the supply chain using sensors or Radio Frequency
Identification (RFID) tags, discussed in more detail later on in this chapter.
13

Steve Keifer, “Herding Geese: The Story of the Information Supply Chain”, 2011.

14

 hristian Titze, William McNeill, and Ray Barger Jr, “Multiple Processes, Partners and Data Objects Must be Considered toC
Obtain Benefits from Supply Chain Visibility”, Gartner, Inc., July 25, 2013.
87

CHAPTER 5

Automating processes is critical for supply chain efficiency and effectiveness. Leading
supply chain management organizations, for example, are more likely to incorporate
automation tools to synchronize and manage product information and financial flows
across the extended global supply chain.15 B2B integration provides the complete
network of supply chain partners with a collaborative, secure, and automated platform
for dynamically managing business transactions and delivering the “perfect order”—theright product delivered in full, on time, every time.
Buyer

Electronic Data Interchange

Supplier

Sourcing Agreement
Merchandising& Sourcing

Purchase Order Change
Purchase Order
Acknowledgement
Advanced Shipment Notice

Supplier

Purchase Order

Buyer

Warehouse
Management

DirectConnection

Product Catalog

Value Added
Network

Proof of Delivery
Invoice
Accounts
PayablePayment
Remittance Advice

Web
PortalFIGURE 5.6: Automated EDI Transactions Supporting a Retail PurchaseEnd-to-End Supply Chain Visibility
As today’s supply chains become increasingly multifaceted and outsourced, end-to-end
supply chain visibility is becoming an important technology for agility and real-timedecision-making. Supply chain visibility provides transparency into and management of
information that travels across the supply chain and is related to product orders andshipments, including transport and logistics activities and events that occur in transit.16
Visibility is gained by tracking objects along the supply chain using sensors, RFID
tags, and communicating with enterprise business platforms via EDI. It is also
gained by incorporating supply chain status information from any number of othertracking technologies and systems. Supply chain visibility requires the processingof both structured and unstructured information from across the network ofsuppliers and partners. Once the data is captured, it is sorted and filtered to isolate
useful information.
15

B ob Heaney, “Supply Chain Visibility. A Critical Strategy to Optimize Cost and Service”, Aberdeen Group, May 2013.

16

Ibid.

88

D I G I TA L S U P P LY C H A I N

Ecosystem
Business
Partners

Information
andTechnology

Materials
Forecasts
Inventories

OrdersTrade Docs

AssetsJournals

Shipments
Quality

Waste

Websites

Supplier

Private Organizations

Structured Information

Unstructured Information

National Statistics

Carrier
Logistics Service Provider

News Agencies

Contract Manufacturer
UsefulInformation

Governmental Institutions
Educational Institutions
WebsitesN-tier Supplier

Information
Sorting
Algorithm

Warehouse/DC
Customs
CustomerOthersOthersFIGURE 5.7: Structured and Unstructured Data Sources for Improved Visibility 17

The ultimate goal of supply chain visibility is to enable organizations to respondin a timely manner with real-time decision-making and trade-offs for timely
order fulfillment, increased profitability, and reduced risk. If a parts shortage inmanufacturing is identified, for example, parts can be replenished but existing supply
can also be allocated, and/or customer demand steered away from products containingthat part—all according to an automated process.
In response to the pressures brought on by globalization and supply chain intricacy, endto-end supply chain visibility is becoming a top priority. In a recent study, 85 percent ofcompanies indicated they plan to increase their current level of visibility.18 As expected,
when asked about key pressures driving them to improve visibility (as shown in Figure5.8), executives identified dealing with the complicated nature of global operations (45percent) and the need to improve speed and accuracy (43 percent) as top drivers.
Effective strategies for dealing with these pressures include improving visibility into
internal supply chain transactions and costs, as well as increasing visibility into external
supplier-side processes with partners.19

17

 hristian Titze, Ray Barger Jr., “How to Enable End-to-End Supply Chain Visibility”, Gartner, Inc., January 23, 2014.
C
http://www.gxsblogs.com/morleym/2013/10/how-the-internet-of-things-will-impact-b2b-and-global-supply-chains.html(accessed August, 2014)18

B ob Heaney, “Supply Chain Visibility. A Critical Strategy to Optimize Cost and Service”, Aberdeen Group, May 2013.

19

Ibid.

89

CHAPTER 5

Growing global operations/complexity (e.g. longer lead times andlead-time variability, or need to gain visibility)

45%
43%

Need to improve supply chain operational speed and/or accuracy
Increased stakeholder and customer demand for accuracy andtimeliness of inbound/outbound shipment events

30%
26%

Business mandate to reduce supply chain execution costs
Need to reduce, proactively allocate, or manage inventory held at
various stages in the supply chain

15%

Need to optimize the numbers of trading partners, suppliers, carriers,
logistics service providers (LSPs)

13%
0%

10%

20%

30%

40%

50%

FIGURE 5.8: Top Drivers for Supply Chain Visibility 20

Collaboration in the CloudCollaboration across the supply chain requires trading partners to synchronize theirmaster data, gain visibility into the supply chain operations of other partners, andcoordinate their efforts to fulfill orders. While these activities have historically occurred
via B2B integration on private EDI networks, many companies are now shifting theiroperations to the cloud.
Achieving this scenario involves a major change in enterprise architecture. As depicted in
Figure 5.9, a cloud-based collaboration platform involves the implementation of sharedapplication logic and master data in order to synchronize data and connect processes
with each member’s internal systems. 21
Cloud-based platforms for B2B integration are ideally suited to facilitate collaboration
between multiple trading partners. With a cloud-based model, each partner acrossthe value chain can place relevant, internal data outside their firewall where it can be
exposed for external parties to consume. Collaboration in the cloud ensures all business
partners have access to a common source of master data. They can be confident it isaccurate and secure.
There are many benefits provided by cloud deployment and, as a result, we are seeing
a decided shift to the cloud. Today, although less than 20 percent of the logistics andtransportation industry have adopted a Software-as-a-Service (SaaS) model, thesesolutions are forecasted to increase through 2016 with a 21.4 percent five-year
compound annual growth rate. 22 In 2020, increasing numbers of global supply chains will
rely on a cloud computing platform for B2B integration and supply chain collaboration.
20

B ob Heaney, “Supply Chain Visibility. A Critical Strategy to Optimize Cost and Service”, Aberdeen Group, May 2013.

21

 hristian Titze, William McNeill, Ray Barger Jr, “Multiple Processes, Partners and Data Objects Must be Considered to ObtainC
Benefits from Supply Chain Visibility”, Gartner, Inc., July 25, 2013.

22

Ibid.

90

D I G I TA L S U P P LY C H A I N

Customers
ERP
Suppliers

WMS

TMS

Service
Providers

Cloud-Based
Integration &Collaboration Platform

Distributors

Financial
Institutions
CustomApplications

3PL

INTERNAL

EXTERNAL

FIGURE 5.9: A Cloud-Based Integration and Collaboration Platform

A Rich Network of Data
The digital supply chain of the future will seamlessly integrate data from across theextended enterprise, and it will include data from the Internet of Things (IoT). While inits infancy today, there will be a thirtyfold increase in web-enabled physical devices by
the year 2020 and an IoT that reaches 26 billion installed units. 23
Data will flow online from wearable technologies like Google Glass, 3-D printers, andlogistics drones. All sorts of products, appliances, and equipment will communicate
status updates and information. How is this useful to the supply chain? Once thedata is captured by a remote device, it is then transferred by fixed wire or wirelesscommunication over the Internet to a B2B integration platform. From here it can be
consumed by other devices in the network, including back-office enterprise platforms
like Enterprise Resource Planning (ERP) or Enterprise Information Management (EIM). 24
The presence of these IoT devices will create a network rich with information andinsights. This information delivers three primary benefits to the supply chain:25
Pervasive Visibility – Information about the physical location of products and/or
shipments (from the point of manufacture through to the point of delivery) enables
companies to plan operations with greater efficiency, reduce the number of items lost intransit, and fulfill orders with greater accuracy.
23

 ichael Burkett, Steven Steutermann, Noha Tohamy, “Digital Marketing, Internet of Things and 3D Printing are DigitalM
Business-Driven Disruptions for Supply Chains”, Gartner, Inc., March 11, 2014.

24

Ibid.

25

Mark Morley, “How the ‘Internet of Things’ will Impact B2B and Global Supply Chains”, Driving B2B Blog, Posted October 15,
2013. http://www.gxsblogs.com/morleym/2013/10/how-the-internet-of-things-will-impact-b2b-and-global-supply-chains.
html (accessed August, 2014).

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CHAPTER 5

Proactive Replenishment – Information about the physical location of products and/or shipments enables companies to replenish product as shortages are detected. Whenapplied to retail outlets, sensors in the store shelves, for example, can detect whenstock is low and trigger reordering.
Predictive Maintenance – Information about the status of equipment can also be used
to order replacement parts and schedule service before the part fails.

Supply Chain Orchestration
As digital technology evolves, more and more businesses will pursue supply chainorchestration. This involves outsourcing end-to-end supply chain activities to a single
entity for intensified levels of automation and synchronization.
The shift from collaboration to orchestration occurs in various phases. Historically,
supply chain processes have been performed by core business applications executed
within a corporate function or silo. These include applications such as Transportation
Management Systems (TMS), Warehouse Management Systems (WMS), Supplier
Relationship Management (SRM) systems, and other Business Intelligence (BI)applications. These applications provide enterprise visibility into specific functional
processes for production and logistics.
The first phase of transformation involves an “integration” phase in which ERP is
deployed for additional functionality, to connect data within the silos, and to allow
multi-directional communication and interaction within the enterprise.
Next, to enable multi-enterprise collaboration across the supply chain, tools such as acollaboration hub or control tower technology for logistics allow every partner acrossthe supply chain access to a “single source of the truth”. Collaboration occurs when allpartners in the supply chain work together to make production possible. 26 A cloud-based
collaboration platform allows all suppliers and partners to synchronize master data
outside their firewall and work together to achieve efficient production and logistics atvarious locations.
Orchestration occurs above and beyond collaboration, when a single company
takes responsibility for operating the entire end-to-end supply chain and provides
tight tracking, synchronization, and the secure exchange of goods, communications,and commerce. As described in the story below, Michelin has turned to B2B managed
services for orchestrating their global supply chain.

26

N . Viswanadham, “Orchestration: The New Form of Collaboration”, InsightOn.

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D I G I TA L I N N OVATO R S

Michelin
Michelin is the world’s largest tire manufacturer, notable both for its tire brands (including
Michelin, BFGoodrich, Kleber, Tigar, Riken, Kormoran and Uniroyal) and its company mascot
Bibendum —colloquially known as the ‘Michelin Man’. While the company’s global headquarters
are located in Clermont-Ferrand in the Auvergne region of France, tire production spans
the globe occurring in France, Spain, Germany, the United States, the U.K., Canada, Brazil,
Thailand, Japan, Italy, and several other countries. The company depends on a tightlyinterconnected network of global trading partners for efficient, coordinated operations.
Several years ago, when Michelin moved production capacity to other countries and needed
to work more closely with customers in emerging markets, Michelin evaluated several B2B
solutions. As explained by Jean-Luc Faye, EDI Manager, they wanted to replace their legacy
B2B platform with a modern, scalable B2B infrastructure that would support their complex andgrowing global operations and provide them with robust security. What follows are excerpts
from an interview with Mr. Faye.

FIGURE 5.10: Michelin - Operational Excellence with B2B Managed Services“Michelin had a legacy B2B platform which
was completely obsolete. Our operations were
becoming increasingly global in nature. We were
dealing with ever-increasing exchange protocols,
messaging standards, and security standards.
We were introduced to the concept of Managed
Services, in which our B2B Infrastructure would
be fully outsourced, hosted in the cloud, andday-to-day operations would be managed for us.
The Trading Grid and B2B Managed Services

had great appeal to us and completely alignedwith our B2B strategy for standardization, fast
deployment, and support for future growth. We
embarked on a journey in this direction and wehave been extremely happy with the outcome.
Managed Services experts performed allactivities such as mapping, connectivity,
onboarding, testing, monitoring, and end-user
support. With all required technology hosted in
an integration cloud, we did not have to invest
93

D I G I TA L I N N OVATO R S

in software or hardware. We started with 500
trading partners, but today this network has
expanded to include 750 trading partners.
We’re continually expanding. There’s no placein the world where we are not making newconnections. The managed service has provided
exceptional management of our mission-criticaloperations. It is flexible, scalable, and secure.
Michelin has been using the e-Invoicing solution
to process more than 1,200 invoices every
single day. In the last year, we have processed
nearly one million invoices with customers inFrance and Spain. Today, we have a scalable,
modern, B2B platform. Managed Services has
enabled us to extend the number of protocols
that we support, including any-to-any protocol
and any-to-any format. Other benefits include
enhanced supply chain monitoring, reporting,and visibility—capabilities that are incredibly
important to us.
By outsourcing our EDI, Michelin has offloaded
the complexity of day-to-day operations. In
return, my team has been able to focus moreclosely on managing our business operations,achieving business excellence, and working with
EDI and B2B integrators to help them better
understand the business. This is truly a win-win
situation that benefits the business, makes us
more efficient and cost effective, and provides
us with flexibility and scalability to support
our global operations both now and in theyears ahead.”94

D I G I TA L S U P P LY C H A I N

Layering Value to Create Business Networks
Recent innovations in SCM have expanded B2B integration networks with theaddition of value-chain support services in a managed-service business environment.
Many organizations are opting for an outsourced, SaaS, or Platform-as-a-Service(PaaS) managed-service approach for their B2B integration activities to reduce thecomplexities of connecting with partners, support multiple information exchange
protocols, and deal with messaging and security standards.
Unstructured Information from IoT Machines

Utilities

OfficeProduction

Warehouse

IoT API
Service
Providers

3PL
Big
Data

Big
Data

Procurement

Manufacturing

EIM

ERP

Distributors

Customers
Engineering

Services

HQ

Marketing

Sales

Financial
Institutions

Suppliers

FIGURE 5.11: The Business Network95

CHAPTER 5

As organizations depend on third parties to oversee all their day-to-day transactions,
the B2B integration network is being layered with more value. Solutions for BPM, EIM,
and big data analytics add value to networks. At the same time, the types of information
flowing over the network are expanding to include faxes, email, Short Message Service(SMS), and voice data alongside traditional EDI transactions. B2B integration gives
organizations the ability to build a broad B2B network that connects transactions,process collaboration, payments, information, and business intelligence. 27
Incredible value can be derived by collecting, managing, and analyzing informationfrom various business applications across the network. As a platform for the digitalenterprise, EIM can provide new intelligence for a multitude of purposes beyond
optimizing the supply chain. Integrating the following technologies controls the flow of
information across the enterprise with partners, suppliers, and customers each adding
a layer of value to the ecosystem:
1. EIM - Both unstructured and structured information flows across the extended
enterprise. EIM consolidates all information for a single version of the truth, uniting
front- and back-office systems based on ERP to manage information transparently
and securely throughout its lifecycle.
2. B2B Integration - Companies need to connect to a variety of external trading
partners using many different communication protocols and document standards.
B2B integration capabilities and the Trading Grid provide these capabilities. EIM
capabilities can then be applied to manage and secure data exchanged between
trading partners.
3. IoT Networks - As devices, machines, and sensors connect to the Internet, they willneed to exchange big data and information with the digital enterprise.
4. Internal Systems - In order to integrate information from IoT devices into
back-end enterprise systems, information will need to be exchanged throughdedicated Application Programming Interfaces (APIs). Many APIs are currently indevelopment, and in the near future, they will be available for integration with B2B,
ERP, and other systems.
The combined end result is a comprehensive and automated platform for the management
and exchange of supply chain information. EIM is a platform that enables and empowers
both users and technology to produce, access, and consume information with a secureand managed approach. Using EIM as a common platform, the digital supply chain
becomes empowered to connect, collaborate, and re-invent itself to lead in 2020.

27

 ob Ferrari, “GXS-The Hidden Gem in B2B Information Services and Application Support”, The Ferrari Consulting andB
Research Group LLC and the Supply Chain Matters Blog, June 14, 2012, http://www.theferrarigroup.com/supply-chainmatters/2012/06/14/gxs-the-hidden-gem-in-b2b-information-services-and-application-support/ (accessed July 2012).

96

D I G I TA L S U P P LY C H A I N

The Digital Supply Chain: A Strategic Imperative
In a digital-first world, companies will depend on supply chain operations to deliver asuperior customer experience. Supply chain excellence is strategic to the success of thedigital business, but incredibly challenging in today’s evolving business environment.
Supply chains must rapidly respond to changing service expectations of customers,
accommodate a new cycle of frequent product introductions and promotional offers,
cope with exploding volumes of cross-border trade, and operate seamlessly andefficiently within a fragmented, global ecosystem of partners and suppliers—all while
maintaining profitability and service levels.
While the new environment provides exciting ways of engaging customers andopportunities for revenue growth, it is also requiring companies to radically change or, inmany cases, completely overhaul their supply chain processes. As companies specialize
and outsource, their operations need to scale, shift, and contract depending on businessand market requirements. New channels need to be leveraged and new markets need to
be serviced.
Increased flexibility and agility is the key to success, and companies are achieving thisby digitizing core business processes and adopting emerging technologies for increased
flexibility, cost savings, and improved performance. Today’s leading organizations areassembling service processes rapidly with SPAs, automating service processes with
DCM, and delivering 24/7 engagement with self-service capabilities. B2B integration
is providing sophisticated synchronization of data and transactions for the automatedexchange of goods, commerce, and information. Sensors and RFID are increasing
the tagging and tracking of inventory. End-to-end supply chain visibility is providing
incredible insights for supply chain optimization. The IoT is enhancing the richness of
supply chain information creating value chains that are intelligent and instrumented.
Managing all of this information across a collaborative platform is the key to supply chain
optimization and for exchanging information in efficient, secure, and compliant ways.
To meet the challenges of the digital supply chain, the digital enterprise will dependon digital technology for increased global collaboration, seamless communication,
real-time insights, and action. The digital workplace will have to accommodate theseshifts in the market and provide the technical expertise required to manage disruptive
innovations, optimize a digital supply chain, and satisfy customers to drive competitive
advantage. This evolution is the focus of the next chapter on the Digital Workplace.

97

C H A P T E R

THE DIGITAL WORKPLACE

6

CHAPTER 6

C HAPTER 6

The Digital Workplace“By 2020, we believe people supply will be the most critical driving factor for businesssuccess. Companies may go to extreme lengths in their search for talent and, once they
have it, they will take measures to keep people ‘locked in’ to their organizations. Without
this talent, they will be unable to compete.”1
As the business world emerges from a period of economic uncertainty, business leaders
are setting positive growth expectations. After years of cost cutting, they are viewing
investment in talent as fundamental to meeting growth objectives and increasing
competitiveness. In a study of executives that spans 20 countries and 12 industries,
over 75 percent of those surveyed plan to scale up their investments in human capital,
with 65 percent planning to expand their workforce in the coming year. 2
19%

Total capital investment

45%

32%

4%

Significant increase
Moderate increase

Physical assets (such as real estate, facilities,
machinery or equipment)

16%

40%

40%

4%

Intangible assets (such as patents,
copyrights, trademarks or goodwill)

17%

36%

43%

3%

No change
Moderate decrease

Human capital assets (such as recruitment,
retention, training or other skills development)

35%

40%

0%

20%

Significant decrease

5%
100%

FIGURE 6.1: Increased Investment in Human Capital 3

These business leaders are ramping up for a disruptive future. In 2020, they will need
to be prepared by having the right skill sets in place to manage and optimize disruptive
technologies for competitive advantage. Both are top of mind: when executives wereasked to identify ways to improve competitiveness, a well-trained workforce (30percent) and the adoption of new technologies to drive productivity (29 percent)topped the list (see Figure 6.2). In 2020, business leaders will need to create a work
environment that embraces digital technology and incorporates modern employment
practices to empower employees as the engine for growth and competitive advantage.
1

“CEO Briefing 2014: The Global Agenda: Competing in a Digital World”, Accenture, 2014, http://www.accenture.com/
SiteCollectionDocuments/PDF/Accenture-Global-Agenda-CEO-Briefing-2014-Competing-Digital-World.pdf (accessed
July, 2014).

2

Ibid.

3

Ibid.

100

DIGITAL WORKPLACE

Better education and training of the workforce

30%

Adoption of new technologies to drive productivity

29%

Innovation creating new products and services

28%
26%

Reduce product regulations
Improved physical infrastructure(roads, ports, water, electricity)
Enhanced digital infrastructure(broadband, wireless)

26%
24%
21%

More flexible labor market
Greater openness to trade21%

Cheaper energy resources

20%

Less expensive labor costs

19%

Cheaper raw materials

16%

Move to low carbon economy

16%

Other, please specify 0%
0%

100%

FIGURE 6.2: A Focus on Workforce Training and New Technology Adoption

4

A Global, Shifting Workforce
Executives will need to attract and retain top talent to achieve their goals and objectives.
They will need to create a work environment that appeals to job applicants and, once
employed, keeps them productive and engaged. But, the employment landscape is influx—impacted by a confluence of disruptive forces that are transforming the workplaceand changing the nature of work. Among the most powerful of these disruptive forces
are digital technologies, globalization, and shifting demographics in the workplace. We
will discuss each factor in turn.
Digital technologies are already creating a world that is increasingly interconnected
and interdependent. By the year 2020, open communication platforms, collaborativetechnologies, video conferencing, sophisticated machine-language translation
technologies, and even holographic technology will fuel a global workplace by enablingzero-distance communications. As the lines continue to blur between professional andprivate lives, the workplace will have to support new ways to collaborate. A future,tech-savvy workforce will be self-empowered with consumer technologies like social
media, mobile connectivity, gesture-based interfaces, and wearable devices. 5 A digital
workplace will be required to transform the employee experience.
4

“CEO Briefing 2014: The Global Agenda: Competing in a Digital World”, Accenture, 2014, http://www.accenture.com/
SiteCollectionDocuments/PDF/Accenture-Global-Agenda-CEO-Briefing-2014-Competing-Digital-World.pdf (accessed
July, 2014).

5J ean-Pierre Garbani, “Prepare for 2020: Transform Your IT Infrastructure and Operations Practice”, Forrester Research,
October 24, 2012.

101

CHAPTER 6

Globalization and the growth of emerging markets are also impacting today’s work
environment. The flow of wealth into countries like China and India has produced
robust economies bolstered by a strong middle-class. Momentum continues in theirfavor: a second wave of globalization is supplanting developed nations in both the U.S.
and Europe as the dominant contributors to global economic growth. 6 Organizations
in developing regions are expanding their operations and extending their recruitment
efforts beyond their local ecosystems. As a result, the 2020 workplace will be morediverse and sophisticated, bringing together different languages, cultures, and ways
of working. Business leaders will need to create and nurture a work environmentthat is multicultural and cosmopolitan. New rules of engagement will be defined toaccommodate a complex set of employee needs and expectations for the workplace.

Traditionalists

Boomers

Generation

Generation

Generation

Born:
Age Range

1928-1945(69-86 years)

1946-1964(50-68 years)

1965-1976(38-49 years)

1977-1997(17-37 years)

After 1997
(less 17 years)

Values, Traits,
Characteristics

The Multi-Generation Workforce

Hierarchical, loyal
to institutions,motivated byfinancial rewards
and security

Idealistic, competitive,
Striving to achieve

Self-reliant, willingto change rules,
tribal andcommunity oriented

Confident, impatient,socially conscious,family centric,
technology savvy

Digital natives,
communicate withpeers throughtext messages

Traditional, instructorled, reading, homework“teach me”

Traditional groupeffort, expertdriven, self-driven,“lead me to
information”

Team-driven,collaborative,“wisdom of crowds,”
peer-to-peer“connect me
to people”

Give context andmeaning, make it
fun, search andexplore, entertain me“connect me toeverything”

Enjoy learning newthings, giving theiropinion, sharing
information“connect me only
to what is
important to me”

Learning Styles

T

B

X

Y

Z

FIGURE 6.3: A Multi-Generational Workforce7

6

“ Transitioning to Workforce 2020”, Cisco, 2011, http://www.cisco.com/web/learning/employer_resources/pdfs/
Workforce_2020_White_Paper.pdf (accessed July 2014).

7

 ersin, Josh, “A New Organizational Learning Model: Learning On-Demand”, Bersin by Deloitte, October 1, 2007,
B
http://joshbersin.com/2007/10/a-new-organizational-learning-model-learning-on-demand/ (accessed September 2014).

102

DIGITAL WORKPLACE

Global changes in demographics are also creating a more complex workforce. The
2020 workforce is both shrinking and aging, and this will result in a sizable reduction in
working populations over the next 50 years. 8 A global study revealed that large numbersof prospective retirees plan to delay retirement in Australia (44 percent), the U.S. (40percent), Mexico (36 percent), France (28 percent) and the UK (23 percent).9 While someretirees in these countries will remain in the workforce because they want to continue
working, the majority will continue to work out of financial necessity.
The most notable impact of demographics on the digital workplace will be its requirement
to support multiple generations in its workforce: Traditionalists, Baby Boomers,
Generation X, Generation Y, and Generation Z. For the first time in history, organizations
will be tasked with managing the very divergent needs and expectations of these fivedemographic groups. The younger generations will bring digital disruption and new
ways to work into the workforce. The older generations will take their knowledge andexpertise with them when they leave. Both will need access to integrated technologies
and approaches to working that facilitate knowledge exchange.
1. Traditionalists
Traditionalists (born before 1946) are the senior generation in the 2020 workplace.
They are hardworking, dependable, and loyal employees who tend to put their personalneeds aside for the greater good. While the tail end of this generation will be 75 years
old by 2020, many will postpone their retirement to remain in the workforce.10
2. Baby Boomers
Baby Boomers (born between 1946 and 1964) have dominated the workforce formany years and are approaching retirement. Boomers have a strong work ethic and a
deep loyalty to a single employer. In return for their loyalty, they expect to climb the
corporate ladder and be well compensated. Many in this generation are choosing todelay retirement. When surveyed, half of all working adults in the U.S. today between
50 and 64 say they will delay retirement and another 16 percent report that they never
expect to stop working.11

8

Jeanne C. Meister & Karie Willyerd, “The 2020 Workplace”, HarperCollins Publishers, 2010.

9 aniel W. Rasmus, “Global Trend 6: Fostering a Global Workforce in Dynamic Times”, Ernst & Young, 		D
http://www.ey.com/GL/en/Issues/Business-environment/Business-redefined---Global-trend-6--Fostering-a-global-workforce-indynamic-times (accessed July 2014).

10

Jeanne C. Meister & Karie Willyerd, “The 2020 Workplace”, HarperCollins Publishers, 2010.

11

Ibid.

103

CHAPTER 6

3. Generation X
Generation X refers to those born between 1965 and 1976. The attitudes of thisgeneration are markedly different from earlier generations. Many in this generation
began their careers in a period of social and economic change. Gen Xers are mercenary
in nature and place a greater emphasis on achieving a work/life balance than financial
success12 . As the Baby Boomers retire, Gen X will mentor the next generation:
Generation Y.
4. Generation Y
Generation Y (born between 1977 and 1997) are the first half of the Millennial
Generation. They have boundless ambition, optimism, and self-confidence. The rise of
the World Wide Web occurred during their formative years and they began using theInternet, mobile devices, and social platforms as children. Today, they are a digitally
savvy group that is adaptable to technology in the workplace. This generation wants
to work for an organization that does something they believe in, supports their desire
to learn and acquire new skills, allows them to be self-directed, and empowers them tomake a difference in the world.
5. Generation Z
Generation Z (born after 1997 as the latter half of the Millennial Generation) is considered
to be the “Net Generation”. Gen Z takes the hyper-connectivity of Gen Y to new levels.
Technology plays a central role in their lives; they have used it since toddlerhood forhomework and to communicate with peers. Nearly one in four (or 25 percent) connect
within five minutes of waking up (reading email, text messaging, etc.), while three in fourconnect within an hour or less. And while a full 100 percent are connected for one houra day; nearly half are connected ten or more hours a day.13 Their use of technology sets
Generation Z apart from other generations, and they will bring this with them into any
workplace. When combined with innovative technologies, Generation Z could very wellbe the greatest disruptors of the enterprise and current ways of working.

Catering to the Expectations of Generation Z
Generation Z represents the greatest generational shift the workplace has ever seen.
In 2020, they will make up almost 50 percent of the global workforce.14 Because they
inherently understand and rely on digital technology, they will play a critical role inshaping the digital workplace.

12

Jeanne C. Meister & Karie Willyerd, “The 2020 Workplace”, HarperCollins Publishers, 2010.

13

“ Millennials at Work Reshaping the Workplace” PriceWaterhouseCoopers, 2011, 				http://www.pwc.com/en_M1/m1/services/consulting/documents/millennials-at-work.pdf (accessed July 2014).

14

 ichael Scaduto, “Make Way for Generation Z” In Context Magazine, December 9, 2013, 			
M
http://www.incontextmag.com/articles/2013/make-way-for-generation-z.html (accessed July 2014).

104

DIGITAL WORKPLACE

Generation Z is the “digital elite”, and employers will need to cater to their expectations
to attract and retain them in 2020. As they enter the workforce, Generation Z will
expect to use the same tools in the office that they use in their leisure time—tools for
instant connection and immediate response, easy and effective collaboration, and fastand easy access to information. If the newest technologies are not provided, they will
either bring disruptive devices and applications inside the firewall or find a new place
to work.
Generation Z will require employers to create a work environment that supports
their work ethic. Transparency, self-reliance, flexibility, and personal freedom are
non-negotiable aspects of the Generation Z work ethic.15 How does this translate into
working conditions? The 2020 workplace will be required to adopt digital technologies
to empower employees to work in ways that are open, flexible, and fast. As a group they
will present profound challenges to leaders and Human Resources (HR) managers andinitiate digital transformation.

New Job Requirements

2/3

college students will ask
about social media policies
during job interviews

56%

will not accept a job from acompany that bans social
media, or they will
circumvent the policy

1/3

prioritize social media
freedom, device flexibility,
and mobility over salary

FIGURE 6.4: Workplace Expectations for Generation Z16

15

Michael Scaduto, “Make Way for Generation Z” In Context Magazine, December 9, 2013, 			
http://www.incontextmag.com/articles/2013/make-way-for-generation-z.html (accessed July 2014).

16“ Millennials at Work Reshaping the Workplace” PriceWaterhouseCoopers, 2011, 				http://www.pwc.com/en_M1/m1/services/consulting/documents/millennials-at-work.pdf (accessed July 2014).

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CHAPTER 6

Building the Digital Workplace
The digital workplace is a work environment that supports new ways of working, basedon integrated applications that make employees more efficient and productive. These
tools run the gamut, from intranets and portals to social networks and mobile devices,
crowdsourcing, gamification, holographic images—and for 2020 digital employees,
technologies that have not yet been conceived. The digital enterprise will need toprovide rapid access to emerging technologies to facilitate collaboration, knowledge
sharing, and communication in unprecedented ways. A key differentiator for the 2020
workplace is that digital technologies will help to create an environment that is flexible,
mobile, social, collaborative, and innovative. The digital enterprise will be required tostay on top of emerging trends and new technologies to support its digital workplace.

“If you understand the Net Generation, you will understand the future.
You will also understand how our institutions and society need tochange today.”17
Organizational Structures Are Flat and Decentralized
Digital technologies will help to transform the traditional hierarchies and structureof the enterprise. When interviewed, 65 percent of younger generations felt thatrigid hierarchies and outdated management styles failed to get the most out ofyounger recruits.18 Many anticipate a massive shift from a command-and-control to acoordinate-and-cultivate organizational structure. In 2020, a flattening of hierarchies,
decentralization of control, and the emergence of cross-functional teams will giveindividual workers greater autonomy.
The new decentralized enterprise will apply digital technology to create a dynamic, fluid
infrastructure that can form and reform according to current needs, using contractors,
consultants, and vendors located around the world. In the digital workplace, self-service
capabilities will become extremely important as direct ways to access information andresources and technology will facilitate this.19 Digital employees will expect to manage
their own profiles with personal information, access a pay stub, complete expense
reports, or find information about a health benefit in a fully integrated workspace.
17“ CEO Briefing 2014: The Global Agenda: Competing in a Digital World”, Accenture, 2014, 			
http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Global-Agenda-CEO-Briefing-2014-Competing-DigitalWorld.pdf (accessed July, 2014).

18“ Transitioning to Workforce 2020”, Cisco, 2011, 						http://www.cisco.com/web/learning/employer_resources/pdfs/Workforce_2020_White_Paper.pdf (accessed July 2014).

19

 ichael Scaduto, “Make Way for Generation Z” In Context Magazine, December 9, 2013, 				Mhttp://www.incontextmag.com/articles/2013/make-way-for-generation-z.html (accessed July 2014).

106

DIGITAL WORKPLACE

The digital workplace will allow for more freedom and control. Studies of Research andDevelopment (R&D) projects have found that when the members of project teams feel
more freedom and control over their work, they become more innovative. When people
make their own decisions about how to do their work and allocate their time, they often
put more energy, effort, and creativity into their jobs. 20

Remote and Mobile Access
There is growing evidence that employees are more productive if they have greater
autonomy over where, when, and how they work. The digital workplace will provide
employees with tools and information to work in ways that are flexible, open, and selfservice in nature.
Younger generations prefer flexible work arrangements over the traditional officeenvironment. 21 In one survey, three out of five employees do not believe they have towork in an office to be productive, 66 percent want flexibility in how they work andwould accept a lower-paying job it if meant more flexibility, and a significant portionof employees regard working from home as a right rather than a privilege (see Figure
6.5 below). 22
In 2020, the digital enterprise will have fewer on-site employees and leaner headquarter
facilities. Workers will be organized into global teams formed around expertise; they
will not report to offices or keep set hours. A wide range of digital technologies will
facilitate this global, virtual workforce.
Among End Users
100%
90%

36

80%

46

26

80

70%
60%

20

74

22

78

26

74

Right

21

23

21

79

77

79

59

82

71

Privilege
25

75
69

64

50%

31

54

40%

41

30%

29

20%
18

10%
0%

Total

US

MEX

BRA

n=1303 n=101 n=102 n=100

UK

FRA

DEU

SPA

ITA

RUS

IND

CHN

n=100 n=100 n=100 n=100 n=100 n=100 n=100 n=100

JPN

AUS

n=100 n=100

FIGURE 6.5: Working Remotely - A Right or a Privilege? 23
20

Michael Scaduto, “Make Way for Generation Z” In Context Magazine, December 9, 2013, 				http://www.incontextmag.com/articles/2013/make-way-for-generation-z.html (accessed July 2014).

21“ Transitioning to Workforce 2020”, Cisco, 2011, 						http://www.cisco.com/web/learning/employer_resources/pdfs/Workforce_2020_White_Paper.pdf (accessed July 2014).

22

Ibid.

23

Ibid.

107

CHAPTER 6

The 2020 workplace will be made up of mobile workforce. Most organizations, 88 percent
according to one study, are already offering their workforce personal devices such as
smartphones, PDAs, and tablets. 24 Digital technologies link physical devices with virtualand mobile environments to facilitate the transparent exchange of information. Mobile
devices connect mobile professionals with content, processes, and resources in theirpreferred environment for access from any place at any time to optimize productivity.
Even today, an increasing number of employees are bringing their own mobile devices
to work, regardless of whether or not there is a formal Bring-Your-Own-Device (BYOD)
policy in place. In the U.S., employees currently pay for over 40 percent of the devices
and data plans used for work, and they pay for 70 percent of the tablets used for work. 25
Combining personal and work information on a device, however, presents serious
security threats to the organization. As the digital enterprise embraces mobile devices
and tablets, or as wearable devices make their way into the workplace, security will be a
growing concern. This is discussed in the following chapter on Digital Governance.

A Highly Social, Collaborative Workplace
Younger generations of workers will expect a workplace ecosystem that is highly socialand collaborative. A recent report found that two thirds of current college students plan
to ask about social media policies during job interviews, and 56 percent say they will not
accept a job from a company that bans social media or, if they do, they will find ways tocircumvent policies. 26
In 2020, the digital workplace will provide a seamless and rich collaborative experience.
Social networking, instant messaging, video-on-demand, blogs, and wikis will dominate
communications. Unlike an intranet, which is typically organized by function or role,a digital workplace is socially-enabled, facilitating knowledge exchange according toareas of expertise or by project. Social technologies foster the natural formation ofcommunities around topics of interest. Within these communities, tools like wikis andblogs can be used to provide employees with a platform for exchanging and managing
workplace conversations and information.

24

Ramez T. Shehadi et al, “Designing the digital workplace: Connectivity, communication, collaboration”,
PriceWaterhouseCoopers, 2013.

25“ Prepare for 2020: Transform Your IT Infrastructure and Operations Practice”, Forrester Research, 2012.

26“ Transitioning to Workforce 2020”, Cisco, 2011, 						http://www.cisco.com/web/learning/employer_resources/pdfs/Workforce_2020_White_Paper.pdf (accessed July 2014).

108

DIGITAL WORKPLACE

When combined, digital tools can transform a corporate intranet into a dynamic andinteractive structure built by distributed peers. They can be used to share information,
innovate, and crowdsource to solve problems. In addition, as more people author, link,
and tag information, an organization’s content becomes more searchable, analyzable,
and manageable. When the processes around information are seamless and visible, it
becomes easier for an organization to meet regulatory requirements. With collaborative
capabilities bundled as part of an integrated enterprise information management system,
employees are able to access the information and expertise they need to do their jobs—
and can freely share ideas and knowledge to innovate in a secure but open environment.

FIGURE 6.6: A Social Community of PracticeMore than half of organizations (54 percent) in one study actively use Facebook,
LinkedIn ®, Twitter ®, and other tools to engage their workforce, customers, and otherstakeholders. 27 The benefits that social engagement offers include higher levels of
productivity and greater employee satisfaction. Empowered employees can connect
immediately, exchange information, and participate in conversations in real time.
Organizations that make use of social media tools have experienced a 20 percent
increase in employee satisfaction, are up to seven percent more productive, and havediscovered that when employees are engaged, retention rates increase by as much as
87 percent. 28
In the following feature, Givaudan is transforming its workplace using social tools likeonline communities and wikis to bring together its employees to share ideas and bestpractices, improve productivity, and foster innovation.
27

Ramez T. Shehadi et al, “Designing the digital workplace: Connectivity, communication, collaboration”,
PriceWaterhouseCoopers, 2013.

28

Frederico Herrera, “The Digital Workplace: Think, share, do”, Deloitte Canada, 2011.

109

D I G I TA L I N N OVATO R S

GivaudanGivaudan, headquartered in Vernier, Switzerland, is an established leader in the fragrance
and flavour industry, boasting over 25 percent in market share and ranking as one of
Switzerland’s top 30 companies. They are a global company with 9,000 staff located in 80
offices in 40 countries around the world. Over Givaudan’s 115 year history, they have grownboth organically and through mergers and acquisitions. As a result, they have accumulated amultitude of systems and processes throughout the organization—a situation that has hinderedeffective information management, sharing, and collaboration. In 2008, Givaudan set out
to digitalize their workplace—to provide employees with improved access to informationand tools for enhanced workplace collaboration on a global scale. Xavier Ainsiaux, Head of
the ECM & Social Collaboration Competence Centre at Givaudan, discussed the company’stransformational journey in a recent interview. What follows are some excerpts from theinterview.

FIGURE 6.7: Givaudan’s FlavorBook Wiki

“We always viewed information as an asset.
But we had a large number of systems in placeand information silos across the organization.
The task of making information from across theorganization globally accessible and usable wassomewhat daunting. We took it one step at atime. Our journey started by centralizing thecompany’s structured data and transactionsin an Enterprise Resource Planning (ERP)system. From there, we set out to consolidate
transactional data from numerous legacy
systems. A huge consolidation and legacy
de-commissioning project—which involved 30
factories around the world—produced incredible
cost savings and workplace efficiencies.

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D I G I TA L I N N OVATO R S

We wanted to establish a ‘single source of thetruth’ for our unstructured information—for our
documentation, presentations, spreadsheets,and more. We had a situation in which files wereshared by email attachment and employees
had no way to confirm they were working
with the latest version. After researching a
number of vendors, we implemented a content
management solution and rolled it out to all
9,000 Givaudan employees worldwide.
With content stored in a single, central
repository, employees can now search forcontent and, once located, be confident they
are looking at the very latest version of the
document. Teams can create project folders fortheir working documents and those assigned
access can open and save changes to project
documents. This technology has transformed
our organization—the way information is
managed and the way teams work together
on projects. Today, employees in all functional
areas use this system. Over the years it has justbecome the natural place where people go tostore documents.

Today, the Flavors and Creation wiki, called
FlavorBook, has become a hub for researchand collaboration in our workplace. Employees
have adopted it because it is user friendly. Pages
display information with images, whitespace,and navigation in ways that are familiar.
Content is searchable and easy to find. The
accessibility and usability of the wiki makes
employees more efficient and productive. It
allows them to collaborate, build their collective
knowledge, and use that knowledge to innovate.
By managing content effectively and embracing
digital tools for collaboration, we have createda work environment that no longer hinders
employees but empowers them.

As part of this project, employees in our Flavors
and Creation organization were looking to share
best practices and collaborate about productformulas. They envisioned using a wiki—a social
media tool like Wikipedia—where one person
adds an entry and another person builds uponit. By recording their best practices in a wiki—
what was tried, what the result was—othersin the organization can benefit. In time, whenanother person needs to create a product, they
can go to the wiki, search it, and learn from pastexperience. And they can build upon it with theirown experiences.

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CHAPTER 6

Innovative Models of Engagement
As demonstrated in the feature above, providing unrestricted or open access to
information, knowledge, and capabilities helps employees innovate, engage, andcontribute in ways not previously possible or imaginable.
Crowdsourcing is an example of this phenomenon. The term “crowdsourcing” was coinedby editors Jeff Howe and Mark Robinson at Wired Magazine in 2005. It means essentially“outsourcing to the crowd”. It occurs when organizations make their information (market
data, customer data, product plans, usage patterns, etc.) openly available for citizens,
employees, and others to share knowledge and innovate. As part of the open source
movement, providing free access to information and digital tools facilitates innovation
by giving anyone with the right mindset the capabilities to develop new solutions.
Crowdsourced innovation delivers amazing advantages to the digital enterprise.
Consumer goods companies, for example, can increase their speed to market for new
products and do so with lower development costs. In many instances, the outcomes are
more effective because products are more closely aligned with consumer needs. Today,
consumer goods manufacturers spend more than $20 billion annually on R&D. New
digital tools and technologies will make it easier and less costly to engage crowds andestablish on-demand, high-value connections with them. It is predicted that by 2017,
over half of consumer goods manufacturers will employ crowdsourcing to achieve 75
percent of their consumer innovation and R&D capabilities. 29

Online Community

EIM
Collaborative
Platform

Crowds...

Think of it

Design it

Build it

Test itSupport it

FIGURE 6.8: Crowdsourcing in the Digital Enterprise

29

Frederico Herrera, “The Digital Workplace: Think, share, do”, Deloitte Canada, 2011.

112

DIGITAL WORKPLACE

Crowdsourcing is currently being applied by governments and not-for-profits as aproblem-solving tool for community building, civic engagement, and funding, but it
is finding its way inside the firewall. Both the U.S. and Canadian governments are
crowdsourcing to improve engagement and performance. The SAVE Award (Securing
Americans Value and Efficiency) recognizes U.S. Federal employees for thinking outside
the box to make government more efficient and bring value for taxpayer dollars. To date,
Federal employees have submitted more than 85,000 ideas, with the most promisingideas included in the President’s Budget. 30
In the private sector, businesses are increasingly accomplishing work through innovative
sourcing models to leverage the crowd. Crowdsourcing is a new way of distributing work
across functional and departmental teams within an organization. Innovation labs areanother disruptive, new approach to teamwork. Typically made up of designated "tiger
teams", they function across departmental and even organizational boundaries tobrainstorm, research, and solve technical or systemic problems. The past two years has
seen an explosion in the use of innovation labs to identify, manage, and select innovation
opportunities, and this will only increase as the workplace becomes more collaborative
through disruptive technologies. For example, @WalmartLabs is currently focusing on
creating the next generation of commerce by combining online, mobile, and retail outlets
to let customers shop when, where, and how they want. Their mission is to transformthemselves into one of “the top technology companies in Silicon Valley” using their labs tofoster innovation and collaboration to create best-in-class e-commerce technologies. 31
In 2020, the digital workplace will be able to transform any surface into a collaborative
workspace. According to experts, by 2025, holographic technology will enable users
to invoke workspaces anywhere by using interactive surfaces. 32 Using holographs,
designers and developers will be able to touch icons in space and do things like draw
in mid-air with the added dimensions of real-space interactivity. Holograph technology
will be sold for integration into diverse applications, including medical training, military
simulation and situational awareness, 3-D entertainment, and gaming. As holography
like this develops, it will not only revolutionize industry, but also how we interact andcommunicate with each other.

30“ The President’s SAVE Award”, The White House, http://www.whitehouse.gov/save-award (accessed February 2014).

31Frederico Herrera, “The Digital Workplace: Think, share, do”, Deloitte Canada, 2011.

32

Mark Heraghty, “The workplace of 2025 will be wherever you want it”, BBC News, September 2012, 		
http://www.bbc.com/news/business-19639048 (accessed May 2014).

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CHAPTER 6

FIGURE 6.9: Holographic Images Take Collaboration to the Next Level

Digital Recruiting and Retention
Digital technology is also having a profound impact on talent management. With
increasing reliance on self-service technology, sensors, machine-to-machinecommunication, and Artificial Intelligence (AI), there will be a shift toward work thatis tacit and non-routine—and a shortage of workers with the skills required to fillthem. 33 As discussed earlier in Chapter 2, tacit jobs require a complex set of skills
such as problem solving, judgment, listening, data analysis, relationship building, andcollaborating and communicating with co-workers. Roles that fulfill tacit jobs will
increase and change the nature of the workforce.
Based on the anticipated skills shortage and a shrinking pool from which to attract
talent, the digital enterprise will compete vigorously to attract employees. In a digitalfirst world, organizations will need to attract and retain knowledge workers with theskill sets required to manage disruptive technologies. In a recent survey, 35 percent
of executives cite skills shortages as the biggest barrier to implementing digitaltechnologies and 60 percent list investments in attracting and retaining the best talent
as key to their business. 34 In a digital economy, the nature of work is changing, and it is
becoming critical to create a workplace and a work environment that will attract andretain the right talent.

33

Jeremy Rifkin, “The Zero Marginal Cost Society”, St. Martin’s Press, 2014.

34“ CEO Briefing 2014: The Global Agenda: Competing in a Digital World”, Accenture, 2014, 			
http://www.accenture.com/SiteCollectionDocuments/PDF/Accenture-Global-Agenda-CEO-Briefing-2014-Competing-DigitalWorld.pdf (accessed July 2014).

114

DIGITAL WORKPLACE

In 2020, job seekers will look for employment almost exclusively using social media
channels that match job seekers with available opportunities. Sites like LinkedIn,
Facebook, and Twitter leverage data analytics to identify compatibilities and suggest
pairings. Managing online reputations and profiles will become increasingly importantfor both corporations and individuals. Video resumes will feature prominently in 2020
recruiting, with 80 percent of employers expecting to use video as a standard tool for
recruiting, onboarding, and talent management. A video resume allows recruiters tofast forward through candidates, focus on those with potential, and complete 8 or 9
screenings per hour. 35 As well as adding efficiency and reducing the costs associatedwith multiple interviews, video resumes can be distributed to other stakeholders
in the hiring process to gain buy-in and approval before investing in the in-person
interview. While changes to recruiting processes introduce incredible convenience andefficiency, the processes, media, and information will have to be managed securely inthe digital workplace.
Once the right employees are attracted, the digital workplace will be tasked withretaining their top talent by offering exceptional training and career development
programs. To be effective, many of these programs will incorporate learning into social
media, gaming, real-time feedback, and simulations. 36
Gamification is a growing trend in the field of learning and involves using gaming elements
to teach a concept. Gamification presents users with an immersive (and typically social)
experience that deepens their engagement, which in turn increases user adoption toachieve a business objective. As the gaming industry grows, the enterprise will adopt
gamification techniques to gamify programs, websites, processes, and applications.
Gamification techniques work well in an enterprise setting and can result in higher
levels of employee satisfaction, improved performance, enhanced collaboration andteam building, and increased innovation and ideation.
Reciprocal mentoring is also a notable trend worth mentioning in the field of learning anddevelopment, and one that is favored by Generation Z (see Figure 6.10). For reciprocal
mentoring, members of different generations are paired and provide the other withcomplementary knowledge. Older employees share what they know about the industry,
how the organization works, how to navigate office politics, and how to do specificjobs—based on years of experience. The younger generations share their knowledge ofdigital technology. A member of Generation Z, for example, would teach a Baby Boomer
how to create a profile on Facebook or YouTube or upload images to Instagram. In theprocess of reciprocal mentoring, relationships are built, generations share knowledge
and experience, and each gains a better understanding of the values the other brings
to the organization. Both require the effective management of information to facilitate
secure and accurate knowledge sharing.
35

 ichael Scaduto, “Make Way for Generation Z” In Context Magazine, December 9, 2013, 			
M
http://www.incontextmag.com/articles/2013/make-way-for-generation-z.html (accessed July 2014).

36

Jeanne C. Meister & Karie Willyerd, “The 2020 Workplace”, HarperCollins Publishers, 2010.
115

CHAPTER 6

Which of the following training/development opportunities would you most value from an employer?
Working with strong coaches and mentors

28%

Changes/rotations of role to gain experience21%

Support for further academic training

19%

Collaborating with inspiring colleagues on key projects

18%

Formal classroom training

6%

e-Learning

5%0%

5% 10% 15% 20% 25% 30%

FIGURE 6.10: A Preference for Mentors 37

Preparing Today for the Workplace of Tomorrow
The collaborative model of the digital workplace will revolutionize job functions,management methods, lines of authority, and employee expectations. 38 Although thisis just around the corner, many organizations will fail to reinvent themselves as a digital
workplace because of poorly integrated information and processes, communication
silos, inadequate mobile and BYOD programs, and an inability to leverage consumer
technologies securely inside the firewall.
The new generations of employees are smart and savvy and they understand how digitaltechnology can deliver competitive advantage. They expect to use these technologies tohelp them create and innovate. Leading organizations are already preparing their digitalstrategies to win the quest for top talent. They are embracing disruptive technologies andmodernizing their HR practices. They are consolidating the technologies that promote
an open, flexible, mobile, social, and innovative workplace on a proven Enterprise
Information Management (EIM) platform. The digital workplace will create volumes ofdata and information. Beyond setting a strategy for digital transformation and putting
the appropriate digital tools in place, the enterprise will face many challenges in theareas of compliance, governance, and risk.
Globalization, digital technology, demographic changes, and the changing expectationsof new generations are converging to produce the digital workplace. They will put
pressure on the organization to adapt and evolve. When creating a digital workplace,organizations must implement an infrastructure that supports connectivity andcollaboration while enabling compliance. Information governance will be a key
requirement in 2020 and is explored in the following chapter.
37“ Millennials at Work Reshaping the Workplace”, PriceWaterhouseCoopers, 2011, 				http://www.pwc.com/en_M1/m1/services/consulting/documents/millennials-at-work.pdf (accessed July 2014).

38“ Transitioning to Workforce 2020”, Cisco, 2011, 						http://www.cisco.com/web/learning/employer_resources/pdfs/Workforce_2020_White_Paper.pdf (accessed July 2014).

116

C H A P T E R

DIGITAL GOVERNANCE

7

CHAPTER 7

C HAPTER 7

Digital Governance“By as early as 2016, 20 percent of CIOs in regulated industries will lose their jobs for
failing to implement the discipline of information governance successfully.”1
As the new currency in a digital-first world, information is a primary driver oftransformation and performance. Disruptive technologies will contribute to thecreation, distribution, and fragmentation of enterprise information. In 2020, theInternet of Things (IoT) alone will introduce a wave of new data into the enterprise. The
additional volumes of new data types will require that the enterprise be prepared togovern this information before it arrives.
If information is to be an agent of change, it has to be managed. Executives andIT leaders will be required to develop and execute strategies for information
management, including robust capabilities for Governance, Risk, and Compliance(GRC). Strategies for managing GRC will help the digital enterprise maximize the valueof its information, while minimizing risk. For many organizations, finding this balance
will be critical for survival.
Researchers predict that the market for GRC solutions will grow to $10 billion by as earlyas 2018. 2 As a sustainable platform for GRC, Enterprise Information Management (EIM)
arms the strategic CIO and empowers the digital enterprise to put policies and controls
in place to address compliance issues, while making critical information available toimprove performance and deliver competitive advantage.

A Disruptive Governance LandscapeIn every industry, organizations are under increasing levels of scrutiny. In response torecent food-safety issues, the mortgage crisis, and national toy recalls, organizations are
stepping up their efforts to improve the management of information that supports key
regulatory processes. Externally, the flow of new rules and regulations across regional,
national, and international borders continues to intensify. Internally, information is
impacted by Corporate Social Responsibility (CSR) pressures. How a company manages
its operations and its information has a direct impact on profit and shareholder value.
Poor management and non-compliance can lead to lost business, financial penalties, andeven criminal charges.
1

 ill O’Kane and Andrew White, et al., “Predicts 2012: Information Governance and MDM Programs Gain Traction”, Gartner
B
Inc., http://www.gartner.com/id=1856616 (accessed 12 Jul. 2013).

2

“ Enterprise Governance, Risk and Compliance Markets”, MarketsandMarkets, 2014, http://www.newportconsgroup.com/
wp/wp-content/uploads/Brochure-Enterprise-Governance-Risk-and-Compliance-Market2013-2018-Primary.pdf (accessed
July 2014).

118

DIGITAL GOVERNANCE

More than 100,000 rules and regulations worldwide and growing

SEC17a-4

Corruption of
Foreign Public
Canadian Officials Act
BASEL III
Electronic(w BASEL II)
Electronic Ledger
PIPEDA Capital Accord
Evidence Act
Storage Law
PCI

11 MEDIS-DC

HIPAA
FCPA

AIPA

DoddFrank

FISMA

GDPdU &GoBS &
DOMEA

Moreq
2010

ISO/PRFTR15081
FDA 21 CRF Part 11

DoD
50152

SarbanesOxley Act

NF Z 42-013

Federal Rules ofCivil Procedure

VERS
Financial
Services
Authority

BSI PD5000
UK Bribery
Act

FIGURE 7.1: Global Regulatory Pressures

New and disruptive technologies are also introducing concerns about fraud, ethicalbehavior, and data security to the enterprise. With the proliferation of big data, social
media, cloud computing, and Bring-Your-Own-Device (BYOD) policies around mobile
device usage, governance has become a major concern for those responsible for the
regulatory and legal ramifications of related technologies and trends—from the CIO tolegal counsel to records managers.
Connecting information, people, and processes across the IoT will also present
information governance challenges for the enterprise. In most countries, new datatypes will be subject to regulations. Organizations will need to determine if information
is subject to privacy legislation (and cannot be shared or resold without the user's
permission) to comply with data protection regulations. The impact of regulations will
have far-reaching consequences on many businesses with global office locations and adispersed workforce.
Many organizations have minimal control over their operational systems and businessprocesses that capture data required for compliance and litigation purposes. For large
companies, governance is a major issue, given the complexity of information systems
across many departments. In all industries, organizations have made progress in
improving the controls required to tap into their mountains of information. But in lightof changes to come, there is still work to be done. Digital governance puts processes
and controls in place to give full visibility into how information flows throughout anorganization. An integrated approach to managing information provides effective
solutions for GRC.

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CHAPTER 7

By 2020, IT budgets will have to significantly increase to meet the current and future
governance and compliance requirements. The majority of financial institutions (61percent), for example, expect to increase their IT investment by 25 percent in the next
three years to comply with regulations. 3 But digital governance goes beyond controlling
regulatory information, and when implemented correctly, it uncovers the value of
information in its many formats for improved operational performance.

Good Governance Is Good BusinessAs volumes of enterprise information increase, so too does the need for digital
governance to ensure that this information is managed, secured, and searchable. Poor
information access can impair the business and systems that rely on paper are a primeexample of this. When information is dispersed and copied across many environments,
it is harder to share and can hinder processes. There is value in understanding data andturning content into meaningful enterprise information that can be used to optimize
the business.
Information governance is the practice of implementing policies, processes, andcontrols to manage information in support of regulatory, legal, risk, environmental,
and operational requirements. From a technology perspective, governance relies
on integrated electronic records management, archiving, e-discovery, and storage
optimization.4 These technologies are applied to manage information throughout its
lifecycle, from creation or capture and classification to long-term archival or deletion.

Information governance is more than just "records management": It isa means to manage risk, ensure compliance, and achieve operational
excellence and competitive advantage from enterprise information.
Successful information governance programs demand that companies balance the needs
and priorities to mitigate legal and business risks with the costs required to manage both
unstructured and structured information. For a formal strategy for digital governanceto be effective, key resources and stakeholders need to be identified, empowered,and supported; policies must be incorporated into relevant processes; education andtraining should be provided to all employees; technology infrastructure optimized; andthe appropriate solutions implemented to support secure and reliable operations.

3J ohn Ginovsky, “Compliance needs tech booster”, ABA Banking Journal, July 21, 2014, 			
http://www.ababj.com/blogs-3/making-sense-of-it-all/item/4774-compliance-needs-tech-booster (accessed July 2014).

4

 lys Woodward and Carla Arend, “OpenText in Europe: Information Governance and Cultural Transformation”, IDC, AprilA22, 2014.

120

DIGITAL GOVERNANCE

The Stakeholders of Information Stewardship
For proven success, governance strategies must consider the contrasting ways in which
information stakeholders view corporate information. For business stakeholders,content is an important means to drive profitability. Their chief concerns areproductivity, integration with key processes, information access, knowledge reuse,
and time to market. For IT stakeholders, content must be managed efficiently. Theirfocus is on storage optimization, backup and restore procedures, security, encryption,
information lifecycle management, and vendor flexibility. Legal stakeholders regard
content in terms of the potential risk it may pose to the enterprise. They strive to put
airtight policies and controls in place to ensure that compliance, centralized policy
management, discovery and holds, early case assessment, and defensible dispositionof content are all working in harmony to mitigate as much risk as possible forthe organization.
Information Governance Reference Model (IGRM)
Linking duty + value to information asset = efficient, effective management
U N I FIED GO V ERN A N C
EBusinessPr

VALUE
Create, Use

DUTY

LEGAL
Risk

ASSET

Hold,
Discover

RetainArchive

Store,
SecureIT

Dispose

Efficiency
PR

RIM

OC

E SS T RA N SP A REN

CY

Risk

Duty : Legal Obligation
for specific information

Value: Utility or
business purpose of
specific information

Asset: Specific containerof information

FIGURE 7.2: Information Governance Reference Model 55

EDRM: http://www.edrm.net/projects/igrm (accessed July 2014).

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CHAPTER 7

Further complicating effective governance is the fact that content is created, modified,and stored by thousands of information workers across multiple business contexts. As
depicted in the Information Governance Reference Model (IGRM) above, it is challenging
for organizations to align stakeholders and properly address the competing priorities ofthese constituencies.

Drivers for Digital GovernanceIn response to these stakeholder needs, many executives are placing greater
importance on information governance. Almost two thirds of respondents in a recent
survey believe that an information governance program is somewhat or very importantto their organizations. 6 The same survey revealed that large organizations in highly
regulated sectors, such as defense and aerospace, financial services, and health care,consider information governance to be very important to their business.7 The more dataan organization stores and manages, the greater the risks for security breaches andnon compliance.
80%
70%
60%
50%
40%

Dec. 201230%

Dec. 2013

20%
10%
0%

Over 1000
Employees

101-1000
Employees

11-100
Employees

1-10
Employees

FIGURE 7.3: Importance of Information Governance Based on Company Size 8

Despite the growing awareness of the importance of governance, organizations areoften caught unaware in cases of litigation or non-compliance. Typically, a compelling
event impacts the business and this drives stakeholders to take action. When they findthemselves faced with a major lawsuit or the e-discovery process, organizations often
struggle to identify critical information within their systems. Sorting through volumesof information for relevant records can lead to excessive spending on legal reviews and,in many cases, fines related to the inability to defensibly demonstrate that information
has been produced in a timely manner. The same can be true of an investigation related
to a regulatory audit. When an organization has faced one of these situations, the costand business disruptions are often the drivers of governance initiatives.
6 avid Horrigan and Alan Pelz-Sharpe, “451 Data: Information governance falls flat despite the hype”, 451 Research, FebruaryD20, 2014.

7

Ibid.

8

Ibid.
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DIGITAL GOVERNANCE

Regulatory Compliance as a Key Driver
Regulatory compliance is the most significant driver of an information governanceprogram. Up to 70 percent of data management professionals consider compliance a
critical or high priority.9 However, organizations that adopt information governanceexperience additional benefits, including business continuity, savings on storage andinfrastructure, unimpeded knowledge sharing, stronger security and privacy, and theability to respond quickly and proactively to investigations of all types.10
Ability to comply with regulations
Better executive decision-making for strategic planning
Improved customer relationship (loyalty, experience, etc.)
Faster time to market with new and existing products and services
Increased revenue
Ability to react quickly to market changes and opportunity
Improved business processes
Improved purchasing power with partners and suppliers
Expanded and optimized manufacturing processes
0%
Critical Priority

High Priority

20%

Moderate Priority

40%

60%

Low Priority

80%

100%

Not a Priority

FIGURE 7.4: Compliance is Key Driver for Information Governance11

For organizations in all sectors, there are complex regulatory and legislative mandates
that dictate the way organizations manage their business content. Examples of theseinclude the following: Protection and preservation of content – In some industries, information must be

kept (archived) for 50 or 100 years.
 Defensible deletion of information – Some content, such as personnel data, that is

related to an incident can fall under defensible deletion within defined timelines.
 Specific Records Management regulations – Some regions have different

regulations based on very lengthy and complex implementation and feature
requirements and specifications.
 Privacy regulations – These exist in most regions with increased oversight overtypes of information stored by organizations, what is shared, and where informationis stored. An increasing reliance on cloud computing is causing scrutiny andextensions of this type of regulation requiring organizations to ensure information
is kept within specific geographical regions.
9 ichele Goetz and Henry Peyret, et al., “Data Governance Equals Business Opportunity. No, Really”, Forrester Research,M
http://www.forrester.com/Data+Governance+Equals+Business+Opportunity+No+Really/fulltext/-/E-RES83342 (accessed
May 2013).

10

Ibid.

11

Ibid.
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CHAPTER 7

No matter how large or diversified an organization is, many aspects of it are caught up
in a net of evolving regulations, making the digital enterprise subject to enforcement,
hefty fines, and in some cases, reputational risk.

The Benefits Outweigh the Costs“I didn’t know…”– KEN LAY, FORMER CEO, ENRON

With enforcement, fines, and business reputation at stake, the cost of non-complianceclearly outweighs the cost of investing in digital governance. A recent study of 160
business leaders at 46 multinational companies revealed that the cost of compliance
was more than $3.5 million, significantly less than the $9.4 million in estimated costs for
failing to comply with regulations.12$24.09EnergyTransportation$17.98Industrial$17.44

Financial Services$16.01

Pharmaceutical$12.77

Consumer Products$12.44

Technology$11.89Public Sector$10.20Communications$9.97

Retail

$9.24

Health Care

$8.86

Education & Research

$6.83
$0

$15

FIGURE 7.5: Compliance Costs by Industry (in Millions of USD)

$30
13

Non-compliance costs are the costs that result when an organization fails to comply
with rules, regulations, policies, contracts, and other legal obligations. On average,
companies budget about $1.5 million to comply with laws and regulations.14 Compliancecosts are based on activities that organizations use to meet specific rules, regulations,policies, and contracts that are intended to protect information assets.
12“ The True Cost of Compliance”, Ponemon Institute, January 2011, http://www.tripwire.com/tripwire/assets/File/ponemon/
True_Cost_of_Compliance_Report.pdf (accessed July 2014).

13

Ibid.

14

Ibid.

124

DIGITAL GOVERNANCE

There are greater benefits associated with compliance beyond mitigating risk andavoiding penalties. In theory, if an organization is complying with regulations, it
should also be achieving higher levels of efficiency and performance through effective
information governance. Companies that are not complying with regulations are often
paying for business disruption and productivity losses. Regulations are based on
demands that describe optimal business operations. By practicing active compliance,
organizations are ensuring that their businesses adhere to industry-establishedbest practices and procedures. Compliance gives organizations the mandate to takemeasures that can uncover value—proactive measures like best practices, employee
training, internal controls, and benchmarking.
Information governance plays a key role in empowering organizations to comply in a
cost-effective and efficient manner. It ensures smooth operations, proper delegationof authority, and the management of risk. Governance helps to overcome the inertia
of “silos”—organizational, functional, and process silos—and reduce the challenge of
tracking, monitoring, and reporting on regulations. To minimize error and control costs,
organizations need to have a framework in place to help manage these processes andcontrols and inform all employees about the necessity of implementing governancewhile meeting reporting and auditing demands.

Security and Privacy
There is a systematic correlation between investing in compliance and enforcing
information security. In many sectors, the ever-present threat of security breaches
is driving investments in information governance. In 2020, with increased access topersonal information, the digital enterprise will be required to ensure information
systems are protected and individual rights are respected.
Many government policies are focused around national security and privacy. In the U.S.,
these regulations include the USA PATRIOT Act, the Homeland Security Act, and the
Health Insurance Portability & Accountability Act (HIPAA). Canada’s counterpart is the
Personal Information Protection and Electronic Documents Act (PIPEDA). European
equivalents include the Data Protection Act (U.K.), the EU E-Privacy Directive, and theData Protection Directive.

125

CHAPTER 7

As transactions and interactions become more digitally based, organizations will have tometer collecting volumes of personal data with protecting the privacy of this information.
The mining of personal data is already a highly charged issue. In 2006, Wired Magazine
blew the whistle on AT&T and Verizon for giving the National Security Council (NSC)
access to network traffic without a warrant.15 Google’s 2012 privacy modification that
permits the company to share data across services and third-party websites is fuelingconcerns about the storage of millions of user-based Internet searches and information
in a cloud-based data warehouse.16
What would prevent these organizations from sharing information like this with any
party, including the government? This is disconcerting at best. Google is the world’s
largest search engine, one of the top three email providers, a social network, and ownerof the Blogger ® platform and the world's largest video site, YouTube. Facebook has thesocial contacts, messages, wall posts, and photos of more than 750 million people.17 At
the moment, private sector policies on data protection and law enforcement are notconsistent or clearly articulated across borders and organizations.
Americans’ Online Privacy Concerns(% of respondents indicating privacy concerns at least sometimes, among those who perform each activity)

January 201389%

Shopping online

87%

Using social networks

86%

Banking online

82%

Using email

Using mobile apps

77%

FIGURE 7.6: Roughly 9 in 10 Adults in the U.S. Worry About Their Online Privacy 18

15 yan Singel, “Whistle-Blower Outs NSA Spy Room”, Wired Magazine, July 2006, 				Rhttp://www.wired.com/science/discoveries/ news/2006/04/70619 (accessed February 2014).

16

 ob Brown, “Google previews new privacy policy”, Network World, January 31, 2012, 			
B
http://www.networkworld.com/ news/2012/013112-google-privacy-policy-255529.html (accessed February 2014).

17J ames Ball, “Me and my data: how much do the internet giants really know?” The Guardian, April 22, 2012, 		
http://www.theguardian.com/technology/2012/apr/22/me-and-my-data-internet-giants (accessed July 2014).

18

 erickson, “Americans’ Online Privacy Concerns”, e-Strategy Trends, January 29, 2013, 			
D
http://trends.e-strategyblog.com/2013/01/29/americans-online-privacy-concerns/7737 (accessed July 2014).

126

DIGITAL GOVERNANCEThe USA PATRIOT Act, created to prevent terrorism post-9/11, gives the U.S.
government broad powers to access personal data. With provisions extended by the
President, the PATRIOT Act has become a trade issue in selling cloud computing services
due to fears that providers could be forced to hand over data to U.S. authorities. Thismeans essentially that any company that deals with a company in the U.S. can have its
records accessed by the U.S. government. Fears about security of information caused
governments in Europe to consider banning U.S.-based cloud firms from competing forgovernment contracts.19 So who owns information in the cloud and who protects thedata? And, in the wake of big data—with many different data points amassed, examined,
compared, and analyzed—how will this impact privacy for the 2020 consumer?

Casting Digital Shadows
In 2020, the digital enterprise will collect information from the digital shadows cast by
its customers. Online interactions and devices will be tracked to determine the sum
total of data shared online. Algorithms will be used to predict customer preferences,interests, purchases, and more. There are already services available today that trace
digital shadows, such as myshadow.org and Ubisoft’s “Digital Shadow”, which assigns adollar value to an individual’s personal data.

FIGURE 7.7: Tracing A Digital Shadow 20

19

 avid Saleh Rauf, “PATRIOT Act clouds picture for tech”, Politico, November 2009, http://www.politico.com/news/
Dstories/1111/69366.html (accessed February 2014).

20

Trace My Shadow: https://myshadow.org/trace-my-shadow (accessed September 2014).

127

CHAPTER 7

When consumers visit a website, often they are asked for a name and email address inorder to access information. Some even ask for title, company, and profession. Stage two
authentication requests a phone number to protect an account from being hacked. The
value of social media exponentially increases based on the amount of information its
subscribers enter. Facebook tracks likes, comments, pictures and videos shared, groups
joined, and events attended. All of this data is highly accessible to host sites that canmake it available to third-party organizations—and it is free.
In 2020, personal data may not be free as consumers barter to exchange their personal
information for goods and services. A technically savvy consumer will demand quality
engagement or goods and services in exchange for their personal data. Society will haveto determine the cumulative value of personal data.
In the future, both public and private sector organizations will have to manage
information effectively and transparently to ensure the accuracy and authenticity ofsensitive data. Large-scale data mining will be strongly regulated. Record-keeping
processes will be streamlined on a common information management infrastructure
to simplify and secure the processing of information. As society becomes digital andthe Internet engenders a faster pace of crime, governments and regulators will need tofocus on the development and enforcement of interoperable policies, standards, andsystems to prevent identity theft and online fraud.

Where Do Security Threats Come From?
As digital technologies have evolved, so have information security threats. Attacks today
are multi-stage, hard to discover, and highly targeted. From organized crime syndicatesto hacktivists, vulnerabilities permeate all levels of enterprise IT systems.
In 2013, more than two million stolen passwords used for sites such as Facebook,
Google, Yahoo ®, and other web services were posted online. 21 Login data was taken fromcomputers that were infected with malicious software. The stolen information could be
used to extract and then sell people's personal information. In February of the same
year, Microsoft ® announced that it had been hacked following a series of cyber-attacks. 22

FIGURE 7.8: Malware Scraped Details from Users on a Daily Basis 23
21

B BC News, “Stolen Facebook and Yahoo passwords dumped online”, December 4, 2013, http://www.bbc.co.uk/news/
technology-25213846 (accessed January 2014).

22

Damon Poeter, “Microsoft Joins Ranks of the Tragically Hacked”, PC Magazine, February 22, 2013.

23

 BC News, “Stolen Facebook and Yahoo passwords dumped online”, December 4, 2013, http://www.bbc.co.uk/news/
B
technology-25213846 (accessed January 2014).
128

DIGITAL GOVERNANCE

The costs associated with data breaches are staggering. In 2012, losses related to
identity theft totaled $21 billion in the U.S. alone. The average annualized cost of cyberbreaches for 56 benchmarked organizations was $89 billion. The largest insurance claim
payout was $20 million, and overall, there was an 18 percent increase in average
financial losses associated with security incidents from 2012 to 2013. 24
Companies and their data are vulnerable. In 2020, cyber security will be a criticalrequirement for combatting trends such as nation-state backed espionage, more
vulnerable service providers, big data, mobile apps, encryption failures—all exacerbatedby an IT skills gap. Even today, the value of information must be considered in thecontext of security. The protection of corporate Intellectual Property (IP) is becoming
an increasing concern for IT organizations as confidential information is housed indigital format. Threats from both inside and outside the company must be considered.
While many organizations have good external defenses in place, the real threat of asecurity breach comes from unauthorized access by employees. As was the case with the
WikiLeaks incident and the National Security Agency-PRISM scandal, the risk of security
breach is often from the inside out. The rise of the mobile workforce contributes tothis, increasing risk through the lack of clearly defined or implemented BYOD policies,
instances of lost or stolen devices, or the accidental sharing of confidential information
across devices.

Unauthorized
Staff
Other

Staff

13%

53%

Malware/Viruses

14%49%

External
Hacking

20%

Unauthorized
Ex-Staff

4%

FIGURE 7.9: The Most Likely Source of a Security Breach 25

24“ Threat Horizon 2016”, Information Security Forum (ISF), 2014.

25

Mark J. Barrenechea and Tom Jenkins, “e-Government or Out of Government”, OpenText, 2014.

129

CHAPTER 7

Another security-related consideration is the need to ensure disaster recovery. While
it is a regular function of IT organizations to consider backup and recovery, this typeof project highlights the importance of information and systems that are critical inprotecting the enterprise from information loss.
When information needs to be retained for litigation or compliance purposes, theinformation must remain intact, defensible, and discoverable. Without the requisite
controls and discovery mechanisms, information can become a threat to the enterprise.
It could be the defense of a lawsuit or audit or the data required for submission to bring a
new drug to market—in either case, compromising the information represents a financial
and/or competitive risk to the enterprise.

Effective Risk Management
No real risk can be mitigated to a zero percent likelihood of occurring, and some risks are
100 percent likely to happen. So how can the digital enterprise determine which risks
to mitigate and which consequences to prepare for? A risk profile helps the enterpriseexamine the likelihood of identified risks and their potential impact.
If an organization is a litigation target, it makes very little sense to try and prevent
court action. Defensible deletion is a better tactic as it leads to reductions in discovery
costs and legal fees. According to research, the average organization needs to keep one
percent of its information for legal holds, five percent to meet regulatory requirements,
and 25 percent for business analysis and insights. By implication, this research indicatesthat it is possible that 69 percent of enterprise information could be thrown out, without
suffering negative consequences. 26
Keeping everything means higher storage and infrastructure costs. It increases the costof investigation as content must be searched, examined, and reviewed from all of its
sources. With the dramatic growth in content volume, this approach becomes less andless tenable. The route to avoiding this is defensible deletion—when content is governed,
understood, classified, and then managed consistently. An added benefit of a defensible
deletion program is that it makes organizations more efficient by reducing the amountof irrelevant information that users have to sift through to get work done.

26

Lorrie Luellig, “A Modern Governance Strategy for Data Disposal”, CIO Insight, 				http://www.cioinsight.com/it-management/inside-the-c-suite/amodern-governance-strategy-for-data-disposal.html/ (accessed
July 2013).

130

DIGITAL GOVERNANCE

Know Your
Risks
Know Your Business
ManageKnow Your
Company

PeopleTeams
Communications
Processes
Information

Know Your
Employees

Know Your
Customer

FIGURE 7.10: Policies and Controls Mitigate Risk

When creating a risk profile, it’s important to look at the organization as a whole andassess the different types of information individually. Not all information is createdequally and not all information exposes an organization to the same risk. Identifying
information that is critical to continued business operations allows organizations tocraft policies that result in expending resources where it provides the biggest benefit.
Identifying information that, if lost or disclosed, would cause nothing more than aminor nuisance prevents organizations from expending resources where there is little
appreciable gain. In other words, there’s no point in buying flood insurance if your houseis on a desert mountaintop.
The protection of enterprise information should be holistic, covering all bases to avoid
information risks that might violate legislation, cause non-compliance, or adversely
impact the organization's ability to perform. Digital governance allows access to
information on a “need to know” basis, while preserving an overall integrated archiveof information.
In the following feature, security and governance are top priorities for Bruce Power.
CIO Sarah Shortreed discusses the challenges around protecting sensitive data in anenterprise IT environment.

131D I G I TA L I N N OVATO R S

Bruce Power
Bruce Power is Canada's first private nuclear generator. Its 2,300-acre site on the shores of
Lake Huron is home to eight CANDU ® reactors, each one capable of generating enough lowcost, reliable, safe, and clean electricity to meet the annual needs of a city the size of Hamilton,
Ontario. Bruce Power has approximately 4,200 employees and is the world’s largest nuclear
facility, generating 6,300 megawatts to deliver power to over one in four hospitals, homes,
schools, and businesses in Ontario.
Formed in 2001, Bruce Power is a partnership between TransCanada, Borealis InfrastructureManagement, the Power Workers’ Union, and the Society of Energy Professionals. A majorityof Bruce Power's employees are also owners in the business. As a private entity, driving a
profitable business for shareholders and stakeholders is top of mind for CIO Sarah Shortreed.
In an asset-intensive and highly-regulated industry, Sarah’s focus is on maximizing the life
expectancy of the plant’s critical assets—securely and efficiently—based on the convergence ofIT and OT (operational technologies). Her strategy combines technology and operations, witha philosophy rooted in effective information management as the foundation for innovation andgrowth. What follows are excerpts from an interview with Ms. Shortreed.

FIGURE 7.11: Bruce Power“Security is paramount. In a sector that’s
governed by longevity and security, we haveto be selective about our investment in digitaltechnologies. The nuclear industry is basedon stability. We have just restarted two units
that will now run for another 40 years. Someof these new, disruptive IT technologies have alifespan of just three to five years. We need tothink long term, so some are not a goodfit. Within the plant, we have equipment andinstruments that talk to each other to keep
operations running smoothly. In the future
we’ll be securely connecting more sensors
between machines and using automatedsystems to facilitate preventative maintenance,
for example.
Our top information security challenges are
information breaches, which compromise132D I G I TA L I N N OVATO R S

intellectual capital and proprietary information,
as well as the cyber incidents that can affectour key systems. Like every business out there,
we fight the day-to-day battles of viruses andphishing. Since many breaches in any company
are often ‘from the inside out’ and assisted byunwitting victims, we are expanding our training
program to encourage ‘digital health’ at home
as well as in the workplace. It’s a whole-life
experience approach that’s similar to healthand wellness: if an employee’s home life is moresecure, then they’ll bring that mentality withthem when they come into work.
All of the information related to our corebusiness must be managed to ensure security
and compliance. The important thing for
us is the life of the reactors and the plants.
We're obligated by law and regulation to keepsome records for the lifetime of the plant. Our
retention schedules are for ‘as long as thefacility functions’. A drawing from 1965 has
to be accessible and readable today. And adrawing that's drawn tomorrow will have to beaccessible and readable 100 years from now.
It’s our job to ensure that records are preserved,
protected, and accessible. For this reason,content management is one of our top criticalinfrastructure applications.
Having an information management system
also helps us learn from our records. We havelarge construction projects with billion-dollar
budgets. We need to be able to comb throughproject records and find the lessons learned, sothat these can be applied to the next project.
Our project-related information has to beconsolidated and metadata applied so that oncethe project is complete, it can be accessed andused productively in the future.
As far as other disruptive technologies areconcerned, we’re using cloud, mobile devices,and communities of practice. On the non-coreside of the business, we are moving nonoperational systems, like human resources andfinance, to the cloud. Since these systems don’t
contain nuclear data, having them in the cloud
doesn’t compromise our security. In

this industry, for innovation to happen, there
has to be a secure infrastructure in place. Firstand foremost information has to be secured
and to standard. So there is a correlation
between innovation and information. For
example, CANDU® reactors are unique
Canadian products and our engineers needaccess to accurate data, when and where theyneed it. That empowers them to make great
engineering decisions.
We are also working to empower our employees
using mobile devices. We’re testing tablets in thefield. Our plants are massive spaces—equivalent
to the size of many football fields. A pilot mobile
app helps field workers connect to criticalinformation when they perform maintenance,
for example. With a mobile device they can
get all the information they want, when andhow they want it. They can download specs,
instructions, checklists, without leaving theworksite, which saves time, and reduces the
chance of error.
Mobile apps will also appeal to our demographic,
as 35 percent of our employees are under theage of 35. We want to channel the energy andfresh ideas these younger employees will bringwith them to the plant, so we’ll have to equipthem with the tools they like to work with, likesocial and mobile technologies. But we’re also
thinking long term and building a legacy. People
will work their entire careers in this industry.
It requires a unique skill set. And again, that’s
where the platform is so important. We haveto set up reliable IT platforms so that whensomeone wants to make a decision, they canfind and access the content they need quickly—
whether its Business Intelligence (BI), content
storage, or risk management tools. If all thosetechnologies are in place in a secure platform,
then the immediacy the younger generations
require will be there. This takes planning now
to anticipate what parts of the platform will
be important years down the road. For ourindustry, information management will always
be a fundamental part of this platform.

133

CHAPTER 7

A Holistic Approach to Governance
When an information governance system is implemented across the enterprise, thetechnology archives and manages content across all environments. Archiving ensuresthat content is stored only once and is accessible in the event of discovery or audit,
reducing the time it takes to find information from weeks to mere hours. Storage andinfrastructure savings can be multiplied with each content source that is brought under
digital governance.
When an electronic investigation (audit or legal review) is initiated, these systems haveto be examined, information identified, and policies well understood and documented. If
policy is maintained centrally, then one central source can be understood, documented,
and defended. This approach results in significantly less cost and time invested, insteadof examining each and every different system of record for corporate information.
When organizations have disparate systems and no overall governance, content deletion
becomes very difficult and ineffective. Before content can be deleted, it must be wellunderstood and the corporate value of it assessed. A high percentage of organizations
are not able to do this because they do not have complete governance—including content
lifecycle management—in place.
Enterprise Information Management (EIM) delivers a seamless compliance, governance,and risk management solution. It connects procedural guidelines with documentation,
process execution tools, reporting and audits, with Enterprise Resource Planning(ERP) systems. It brings consistency and scale to the management and preservation of
information by incorporating records management with solutions for archiving, email
management, search, and e-discovery.
Deep Integration
with ERP

EIM+

Content Enriched
Business Processes=
Workspaces natively extend
ERP processes with EIMEnterprise Asset Management

Deep connection with ERP
data, structures, roles
and permissions

Project Management

Seamless integration
with various ERP UIs

Case Management

Workflow
Archiving

ERP/EIM always ‘in-sync’

And Many Others

Document Management
Collaboration & Social Media
Records Management
Content Access
CaptureCustomer Relationship Mgmt
Quality Management
Procurement

FIGURE 7.12: EIM - A Fully Integrated GRC Management Solution

134

DIGITAL GOVERNANCE

EIM gives organizations the ability to apply governance across departments, content,
and application silos. EIM manages the lifecycle of enterprise content, while embedding
information directly into processes to give content a consistent context. Effective
records management allows content like emails, documents, and paper files to beclassified as business records and managed to comply with information governance andregulatory requirements. Combining structured and unstructured data to align with
operations adds value to mainstream organizational activities.

Digital Governance Challenges
While governance is a growing priority for executives, many organizations do notbelieve they have reached a significant level of data governance maturity. “In fact,
only 15 percent rate their data governance maturity as high or very high—defined asincorporating both business and IT, with top-level support and spanning major parts of
the organization.” 27Some organizations have implemented digital governance programs, faced governancechallenges and been unsuccessful. This may be because they’ve not achieved strong
enough user acceptance of the systems. Governance should be built into systems andprocesses rather than presented as a manual task for end users. The key is bringing thegovernance technology to the user’s environment of choice and making it easy, enablingthem to spend their time doing their daily activities instead of finding ways to get aroundusing the system.
In addition to poor user adoption, governance challenges emerge when commitment
from all governance stakeholders is not incorporated into digital governance planningfrom the outset. Members of the legal and compliance groups, IT, and line-of-businessexecutives should come together to plan and implement an information governanceprogram. Many organizations form a stewardship committee to make critical decisions
about the program. Carefully choosing the members of the committee ensurescommitment and decision-making power.
For most organizations, implementing a digital governance program is hindered bypoor information management. Along with disparate silos, systems, and processes,
information is further fragmented by the disruptive technologies that introduce newformats to the enterprise.

27

 ichele Goetz and Henry Peyret, et al., “Data Governance Equals Business Opportunity. No, Really”, Forrester Research,M
http://www.forrester.com/Data+Governance+Equals+Business+Opportunity+No+Really/fulltext/-/E-RES83342 (accessed 20
May 2013).

135

CHAPTER 7

Disruptive Technologies and GovernanceDigital governance challenges are likely to increase in the short term. As connectivity
becomes zero distance and devices are more powerful, the digital enterprise will be
expected to control the flow of information in any format across every channel—from
mobile devices and tablets to social media shared in the cloud. Challenges aroundcompliance and governance will increase as digital content grows and people continue
to use mobile devices and social software to create and share information. In the publicdomain, there are obvious data and privacy protection issues, along with security
breaches and potential for reputation damage. How do government regulations suchas HIPAA, PIPEDA, and the Stored Wire and Electronic Communications Act impact
social media? Is it realistic for organizations to enforce corporate policy outside thework environment?
In 2020, the digital workplace will support a social, mobile workforce. Generation Z will
work where and how they want to. Many will use mobile devices and social applications
to create and collaborate on their content, resulting in corporate information existingoutside the firewall, and more importantly, outside information governance policies.
In the extended digital enterprise, end-to-end supply chain management will involve
partners synchronizing data and collaborating outside the firewall. In many cases thiswill occur via cloud-based platforms and mobile devices.
As mobile devices are adopted by the enterprise, security will be a growing concern.
Security on a mobile device is a combination of security over-the-air, over-the-wire, andpermission-based access to systems. Mobile platforms can verify permissions muchin the same way a web browser checks access permissions to an EIM repository or
intranet. As data is transmitted or collaborative spaces accessed, the platform ensuresthat version history, audit capabilities, reports, security, and permissions containedwith the system translate directly to the mobile device. Device governance is provided
so that content can be stored and used on mobile devices, and if the device is lost, thecontent can be removed remotely.
Like mobile devices, social media introduces similar concerns around information
governance and security. According to research, 58 percent of organizations today
use social media to connect with their customers; in 2020, this percentage will besignificantly higher. 28 Currently, social media is used without governance systems inplace. Social compliance programs can help ensure governance and protect brandreputation. Organizations with social compliance programs in place are 15 percent lesslikely to violate requirements governing brands and organizational activities, avoiding
costly impacts on brand image and legal repercussions. A social compliance program
requires storing and centralizing social content in a secure EIM repository where it canbe managed as a corporate record. 29
28“ Social Compliance: Protect Brand Equity and Ensure Governance”, Aberdeen Group, January 2012.

29

Ibid.
136

DIGITAL GOVERNANCE

As outsourcing to the cloud continues, and Software-as-a-Services (SaaS) becomes
the standard platform for enterprise applications, organizations will be required to
manage records in many locations. EIM provides visibility for IT governance and data
management and reduces risk by eliminating duplication and supporting automatic
disposition of records according to corporate policy. While mobile devices, social media,
and cloud computing are paving the way for new opportunities and dramatic increases in
productivity, widespread usage must be protected with the robust security and privacy
mechanisms inherent in an EIM system.

Balance Matters
As the technology that underpins information governance, EIM is designed to protect
information where it is used: at the point of interaction in the application itself, offering
security mechanisms such as access and permissions, information audit capabilities, andsecure information exchange built right into the system.
EIM will help the digital enterprise to create and maintain a trusted governancerepository, through establishing controls that address information policies, procedures,
business rules, and roles and responsibilities. Internal controls are typically based onprocesses designed to provide reasonable assurance regarding the effectiveness andefficiency of operations, reliability of financial reporting, and compliance with applicablelaws and regulations.

ssD
Ma efici
na en
ge cy
m
en
t

nt/
sme gt.
ses
M
As ertions
As

Scope &
Ide
Risk ntityAs
seTesting

s
rol
nt
Co

FIGURE 7.13: Internal Process Controls

137

CHAPTER 7

Once guidelines around GRC have been communicated, an organization needs to give
employees the support they require to implement the defined processes. As a key
component of EIM, Business Process Management (BPM) delivers an effective processcontrol engine—initiating processes, defining and distributing tasks, recording theircompletion, and reporting on the outcomes of a given process. A governance systemwith a supporting best practices repository not only helps to support compliance andgovernance, it enables best practices to be followed and documented.
Digital governance is not just about complying with regulations and minimizing risk, it’s
about maximizing the value of the information to create a good, profitable business. It
applies to all enterprise information, regardless of format, function, or location. Digital
governance doesn’t impede the enterprise’s ability to do good business—it enhances
it. It helps the enterprise to maintain stakeholder trust, improve transparency into
performance and practices, reduce costs related to storage and e-discovery, anduncover new opportunities for business.
EIM provides an integrated GRC platform and all of the technology and services
required to provide end-to-end digital governance. To thrive in a digital-first world,
the strategic CIO must steward the digital enterprise to meet ongoing complianceregulations and requirements, identify gaps, and properly protect information tominimize risk and maximize value. In the following chapter, we examine the evolving roleof the strategic CIO in more detail—and how EIM helps the CIO manage risk without
curtailing the potential rewards of enterprise information.

138

C H A P T E R

THE STRATEGIC CIO

8

CHAPTER 8

C HAPTER 8

The Strategic CIO“Savvy CIOs will get their CEOs to recognize that changes being brought about by
disruptive shifts come at an accelerated pace and a global level of impact. IT is no longer
just about the IT function. Instead, IT has become the catalyst for the next phase ofinnovation in personal and competitive business ecosystems.”1
In 2020, the enterprise will either evolve or it will become obsolete. As outlined inthis book, a digital-first world will force a radical overhaul of enterprise strategies,
processes, products, services, and relationships. To empower the digital enterprise,
the strategic CIO will need to break out of operations mode to better align themselveswith the business, embrace future trends in technology, and identify new value streams.
Successful IT leaders of the future will apply the technologies described throughout thisbook to re-engineer and digitize old business models.
Technology is now a part of every aspect of business. As the structure of businesschanges in 2020, the IT functions and systems that support it will need to change
as well—from software to processes to governance and the required skill sets.
As innovators continue to disrupt industries, CIOs will have to restructure IT toaccommodate the rapid pace of change. The IT organization will play a pivotal
strategic role in digital transformation. This transformation will require a pervasive
shift throughout the enterprise toward digitized tools, processes, and informationthat create customer value and competitive advantage. Managing and harnessing
information is essential to driving digital strategies for innovation and growth.
In the year 2020, the attention of the strategic CIO will shift to systems of engagement
to sustain strategies for growth and innovation. Over the last 30 years, CIOs have been
focused on automating processes and transactions in systems of record with Enterprise
Resource Planning (ERP) systems. For the next 30 years, CIOs will concentrate on
automating processes and transactions for unstructured information in systems ofengagement with Enterprise Information Management (EIM).

1 aryl C. Plummer et al, “Gartner Top Predictions 2014: Plan for a Disruptive, but Constructive Future”, Gartner Inc., OctoberD
7, 2013.

140

THE STRATEGIC CIO

CIOs Are Under Siege
As emerging digital technologies promise to transform the way businesses interact with
their employees, customers, and suppliers, CIOs need to understand both the threats
and opportunities that disruptive technologies pose. For many organizations, however,digital disruption is poorly understood. While 74 percent of companies participating ina recent report have a digital strategy in place, only one-third of executives feel that
their strategy is accurate, only 21 percent are confident that the right leaders are inplace to guide and implement the strategy, and fewer still feel they have the skills andcompetencies needed to execute on a digital strategy. The responsibility falls on the
CIO’s shoulders to lead the discourse on digital transformation. 2
The role of the CIO is transforming to accommodate many factors in today’s global
economy. The velocity of business is intense. For many companies (77 percent), morethan one-third of their business processes rely on digital technology. As technology
becomes the foundation for business, it can no longer be separated from the processes
that it drives. As a result, the CIO must shift from tactical to strategic—from leadinga reactive department that responds to requests to leading a department thatproactively applies technology to enhance the business and anticipates how to support
digital transformation.
“Assessing your organization’s digital readiness, how much do you agree with the following statements?”(8, 9, or 10 on a scale of 1 [completely disagree] to 10 [completely agree])

Our CEO sets a clear vision for digital in our business21%

We have the right people to define our digital strategy

21%
19%

We have the necessary technology to execute our digital strategy
We have the necessary people and skills to execute ourdigital strategy
We have the necessary processes to execute our digital strategy

15%
14%

Base: 1,254 executives in companies with 250 or more employees

FIGURE 8.1: Executives Doubt their Readiness to Execute on a Digital Strategy 3

2

Nigel Fenwick and Martin Gill, “The Future of Business Is Digital”, Forrester Research, March 10, 2014.

3

Ibid.

141

CHAPTER 8

In a complex business landscape, the role of IT is also evolving beyond a mandate to“keep the lights on”. Board members and executives are looking for IT to contribute
more than operational responsibility to the enterprise. According to a report by
The Economist, C-level executives believe the IT function will undergo substantial
transformation: 57 percent of the 536 C-Suite executives surveyed expect their IT
function to change significantly over the next three years and 12 percent predict a"complete overhaul." At least 43 percent say their company will increasingly use IT asa commodity service that is bought as and when needed.4 The traditional centralized IT
function is under tremendous pressure to support disruptive technologies, such as cloudcomputing, the proliferation of consumer-focused mobile devices and applications, andbig data analytics. Many IT leaders struggle with balancing a vision of how IT can add
value to the enterprise with ongoing levels of service and support, risk management,
and program delivery.
“What level of impact will digital have on the following functions in the next 24 months?”(8, 9, or 10 on a scale of 1 [no impact at all] to 10 [huge impact])
Marketing63%

e-Business or e-Commerce

63%

IT

63%
44%

Sales
Line-of-Business Operations

30%

Research and Development (R&D)

29%
20%

Human Resources
Finance
Manufacturing

16%
14%

Base: 1,254 executives in companies with 250 or more employees

FIGURE 8.2: IT Is Being Digitally Disrupted 5

4

“ The C-suite Challenges IT: New Expectations for Business Value”, Economist Intelligent Unit, The Economist, Jun 13, 2012,
http://www.slideshare.net/Management-Thinking/the-csuite-challenges-it-new-expectations-for-business-value (accessed
August 2014).

5

Nigel Fenwick and Martin Gill, “The Future of Business Is Digital”, Forrester Research, March 10, 2014.

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THE STRATEGIC CIO

The same report found that two-thirds of CIOs feel their function is well aligned withthe business, but less than one-half of C-level executives feel the same way about their
CIOs. Only 46 percent of C-level executives say their CIOs understand the businessand 44 percent say their CIOs only understand the technical risks involved in new waysof using IT. 6 Many CIOs are still perceived as enablers rather than strategic drivers ofbusiness. There is a gap between expectation and delivery: only 28 percent of CEOs
characterize IT as offering proactive leadership, 34 percent describe the role of IT as
poor, and 24 percent characterize IT as innovating only when pushed to do so.7
Both the CIO and the IT department need to change in fundamental ways. The strategic
CIO will support sustainable business growth through infrastructure investments that
increase the speed of business. In 2020, the strategic CIO will use technology to: Grow the business Create competitive advantage through differentiation
 Automate mundane processes Make better decisions
 Provide superior customer experience Engage with customers, suppliers, and employees in new ways

True transformation requires shifting mindsets around infrastructure, information,
integration and innovation—all of which is possible when processes are based on
accurate information.

Infrastructure
CIOs are continually faced with the complexity of many systems accumulated over
the years. Legacy technology and a plethora of departmental, best-of-breed, andhomegrown applications are crippling agility and innovation. Adding emerging
technologies to the mix further complicates the IT landscape. Current CIOs and their
IT departments are too often regarded by other business units as the “Department
of No” 8 , placing limits on business growth and development through protect-andrespond approaches to security. Instead, CIOs need to establish a holistic view of theirenterprise IT foundation that is digitally based and structured to support agility andtransformation. Efficiency and cost-savings can be realized through outsourcing to
the cloud, virtualization, and data center optimization. As described in the previous
chapter, governance, risk management, and compliance are key aspects of thisintegrated infrastructure.
6

“ The C-suite Challenges IT: New Expectations for Business Value”, Economist Intelligent Unit, The Economist, Jun 13, 2012,
http://www.slideshare.net/Management-Thinking/the-csuite-challenges-it-new-expectations-for-business-value (accessed
August 2014).

7

Ibid.

8

 ray, Patrick, “The Department of No”, TechRepublic, December 19, 2011, http://www.techrepublic.com/blog/tech-decisionG
maker/the-department-of-no/ (accessed September 2014).
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CHAPTER 8

Integration
A holistic IT infrastructure requires integration of data repositories and enterpriseapplications. CIOs should strive for consolidation onto platforms that allow for
rapid innovation and application development, based on continuous iteration andimprovement. Many enterprise architectures are made up of unconsolidated data
centers or siloed data repositories. Processes and information cannot flow freely acrossdepartments, efficiency is hampered, and data quality is low. Integration across silos andprocesses provides CIOs with the “glue” needed for end-to-end transparency across anextended enterprise of suppliers, partners, and customers. Integration enables accessto big data to improve data quality, governance, and innovation.

Information
Many CIOS are not responsible for managing the information that their business depends
on. Instead, their focus is on structured data management in ERP systems, with little
understanding of the importance of unstructured information. As a result, IT manages
more technology with more interfaces that their users are capable of adopting. The
strategic CIO manages both structured and unstructured content and strives to provide
business units with the technology tools they need, where they need them—from thedesktop to mobile devices.

Innovation
CIOs will always be mandated to do more with less, but this doesn’t necessitate atypical project-based and problem-focused approach that is constrained by Six Sigma ®
or ITIL® (Information Technology Infrastructure Library) frameworks. The strategic
CIO implements solutions quickly, smartly, and sustainably. With a consolidated
infrastructure in place, they can innovate to create processes, value, and experiences.
Borrowing from an entrepreneur’s mindset and a startup approach, their strategies are
based on co-creation with vendors, suppliers, and customers.

2020 IT: The Way Forward
The 2020 strategic CIO will invest in disruptive technologies to empower their business.
The enterprise infrastructure will be holistic and expansive to include the extended
digital enterprise. The IT ecosystem will be consolidated and processes improved tosupport superior customer experiences and employee productivity. Under a strategic
leader, IT will optimize access to technology across devices, applications, and systems.
The CIO will also be responsible for driving the enterprise information strategy.
Creative leadership and strategy will be the focus. Specifically, the strategic CIO will
use technology to accomplish the following:144

THE STRATEGIC CIO

 Embrace digital disruption
 Align the business with technology through agile processes
 Implement systems of engagement
 Empower executives, users, customers, partners, and suppliers Focus on information as enabler

Embrace Digital Disruption
In 2020, a passive approach to disruptive technologies will lead to missed opportunities
to create competitive advantage. CIOs who fail to evolve will lose their functions to otherbusiness teams, find themselves reporting to the CFO, CMO, or COO, and could evenend up “on the chopping block”. Strategic CIOs need to begin now to assess the potentialof disruptive technologies for creating differentiation through next-generation businessmodels, growing profit, and delivering money-saving market efficiencies.
Current IT spend is shifting. Although global investment in IT will be conservative(at 4.1 percent in 20149), leading organizations place a greater importance on digitaltechnologies like cloud computing, mobile, data analytics, and enterprise social
networks. While certain technologies are seen as critical to business operations, amajority of organizations have identified e-commerce and data analytics (54 percent
and 53 percent, respectively) as critical to their business in the coming years, especiallywith regards to increasing efficiency, improving customer experience, and attracting
and retaining top talent.10
How important are investments in digital technologies (such as cloud computing, e-commerce, data analytics,
machine-to-machine communication, social and mobile) to the following areas of your business?
Grow sales

20%

Improve the customer experience

24%

Open new sales channels

19%

Create new products and services

18%

28%

Improve management control, oversight, and governance 17%

27%

Attract and retain the best talent
Improve the efficiency of our operations

25%

31%

37%
25%

21%

13% 2%
0%
5%
21%
0%
5%
17%
0%
5%
22%
1%

24%
30%
31%
28%

39%

35%

26%

35%

11% 3%
0%

22% 7% 1%
1%
100%

0%
Extremely
importantModerately
importantSomewhat
important

4%
1%

20%

Slightly
important

Not at allimportant

Don’t
know

FIGURE 8.3: Importance of Investment in Digital Technologies119

 arc Ferranti, “IDC cuts IT spending forecast on mobile slump, emerging market uncertainty”, PCWorld, May 16, 2014,M
http://www.pcworld.com/article/2156520/idc-cuts-it-spending-forecast-on-mobile-slump-emerging-market-uncertainty.html(accessed August 2014).

10

S arah Murray, “CEO Briefing 2014 - The Global Agenda: Competing in a Digital World”, Accenture, 2014.

11

Ibid.
145

CHAPTER 8

The same report finds that 70 percent of companies surveyed plan to use disruptive
technologies like smart machines and automation to drive process efficiencies, while
45 percent will use them to find new revenue by expanding sales, opening new sales
channels, or creating new products and services.12
In 2020, digital technologies like the Internet of Things (IoT), smart machines, digitalprinting, and wearable technologies will force organizations to explore new ways toengage with customers, create new products and services, and increase time to market.
This moves beyond merely digitizing processes and, in many cases, will require radical
shifts in core competencies, especially in IT. Smart machines, for example, will begin to
infiltrate IT planning and infrastructure as automated replacements of human labor.
CIOs will need to identify where these systems will improve efficiencies and reduce
costs, how to implement them as standard equipment, additional benefits they may
offer including increased safety, and changes in legislation, regulations, and liability thatthey might incur.

FIGURE 8.4: Increased Automation Through Robotics

The strategic CIO will need to position their IT organization in relation to theseemerging digital technologies and build business use-case scenarios. This will entail
monitoring advances in these technologies along with the information they produce inorder to operationalize the technology. As mobile, smart devices, and analytics become
ubiquitous, processes will have to change to support them. Technology will continue
to force the enterprise to change business models quickly. In an intensely competitive
landscape, the speed of business will shorten product lifecycles and call for faster times
to innovate—and this will all be driven by technology.
12

S arah Murray, “CEO Briefing 2014 - The Global Agenda: Competing in a Digital World”, Accenture, 2014.

146

THE STRATEGIC CIO

CIOs must be prepared to capitalize on the potential of information fueled by disruptive
technologies, especially in terms of how they build apps to satisfy digital users and maketheir products, services, and infrastructure more flexible. As a smart Personal Assistant(PA), for example, Apple’s Siri®, could serve as a “knowledge navigator” app that helps
mobile users to find information or resources quickly and perform tasks based on web
services that integrate with enterprise systems. As the lines blur between users andtechnology, the CIO will be responsible for exploring the cultural, ethical, and legal
ramifications of deploying specific devices in an enterprise setting.
As disruptive technologies become part of the IT infrastructure, CIOs will grapple withinformation security as a growing challenge. Many organizations have experienced acyber-security breach—more than 96 percent have experienced a significant IT security
incident in the past year. While most admit to having inadequate security measures, only
33 percent are confident that they can improve these measures to prevent breaches
in the future.13 EIM systems are integral in preventing both internal and external
data breaches.
Other challenges for integrating disruptive technologies into the enterprise architecture
include the education, training, and skills needed to run these technologies. In a recent
study, 42 percent of executives identified change management and 35 percent citedskills shortages as the biggest barriers to implementing digital technologies.14 Overall,
investments in digital technology are becoming a priority in many organizations with arecognized impact on enabling opportunity and innovation.
The strategic CIO must take initiative to capitalize on the potential that disruptive
innovation presents to the enterprise. The widespread adoption of digital technologies isalready forcing IT departments to evolve to accommodate complex systems. Those that
don’t embrace these innovations will lose out as laggards in a digital-first marketplace.

Align Business with Technology
The relationship between business and IT will undergo radical changes in 2020. As
business applications are outsourced to the cloud and easier to manage, IT skills will
become decentralized and incorporated into departments. This will fundamentallychange the relationship between the business and IT groups. Digital technologies will
drive these changes and the digitization of information-centric processes across theenterprise. Line-of-business leaders will become empowered to manage their own
solutions. The strategic CIO will facilitate these changes by implementing strategies for
digital process transformation.

13

 olin Barker, “CIOs must grasp emerging digital business technologies or face being marginalized”, ZDNet, July 15, 2014,C
http://www.zdnet.com/cios-must-grasp-emerging-digital-business-technologies-or-face-being-marginalised-7000031604/(accessed August 2014).

14

Murray, Sarah, “CEO Briefing 2014 - The Global Agenda: Competing in a Digital World”, Accenture, 2014.

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CHAPTER 8

To transform the enterprise to a digital enterprise, CIOs will need to broaden their role
beyond the IT function to strategically align with other business executives. Expanding
their role will require making changes to leadership skills, the IT organization, enterprisetechnologies and architecture, and IT skills and talent. Success will be based on effective
collaboration with business units and executives to deliver on corporate goals andcontribute directly to the success of the enterprise.
Corporate goals include improving time to market. In 2020, the strategic CIO will
partner with the heads of Research and Development (R&D) and marketing to create
an environment that fosters innovation across geographically distributed teams.
Innovation begins with market research and discovery and is developed throughcollaborative ideation and rapid development processes to targeted demand creation.
A partnership with marketing will facilitate objectives in terms of awareness, demand
generation, and field enablement.
y Alignme
ateg
nt
Str

oc

ie

nt

es

Or

sD

es

rive nS ervic

Integration&
Implementation

Pred

FIGURE 8.5: New Strategic Function of IT

Decreasing time to revenue is another important corporate goal that is particularly
critical for product manufacturing functions such as operations, assembly, andproduction. The strategic CIO will partner with line-of-business managers to focus
on operational excellence, quality, and cost by optimizing the supply chain andmanufacturing processes using digital technologies.
Improving time to satisfaction requires the strategic CIO to partner with the heads ofsales and services to deliver a seamless, engaging customer experience from awarenessto purchase through to follow-on digital services. The goal is to transform customers
into repeat buyers over an extended lifetime of value. As discussed in previous chapters,
engagement is delivered through personalized, compelling, and consistent customer
experience across all channels.
148

THE STRATEGIC CIO

All of these corporate goals can be achieved through the implementation of an EIM
strategy and supporting information and process management technologies. The
decisive strength of EIM is its ability to cross departments, applications, and repositories
to integrate with existing ERP systems across value chains and make information
available for daily use. EIM embeds information management and security directly into
processes, combining structured data with unstructured data to align operations withstrategic vision. EIM arms executives with the technology and approaches they need totransform and empower the digital enterprise.

Implement Systems of Engagement
As the enterprise moves from governing systems of record to enabling new systems ofengagement, the strategic CIO will help to articulate a digital strategy that balances
innovation and growth with security and risk.
Enterprises are already evolving from systems of record to systems of engagement.
Systems of record are the ERP systems that run an organization’s business (financials,
Customer Relationship Management (CRM), Human Resources (HR), etc.). As records,
data has to be accurate, accessible, and integrated. Systems of engagement are systems
that engage employees, such as email, social networks, collaborative technologies, andlearning systems. Systems of engagement are digital and interactive, and will support
the digital enterprise in 2020.
This shift is demonstrated by a change in focus from customer transactions to customer
interactions; from hierarchical command-and-control systems of governance to flat,
globally-enabled collaboration; and from facts and commitments to ideas and evennuances. With systems of engagement, discovery and dialogue influence the single
source of the truth and conversations are communal, replacing documents as primary
record types. Usability is intuitive, accessibility is ad hoc and open, and retention istransient. Finally, policy moves from concentrating on security mechanisms to protect
corporate assets to protecting the privacy of enterprise users.
In 2020, the strategic CIO will build the digital enterprise according to a digital strategy
that focuses on information as a key competitive differentiator in creating opportunity
and mitigating risk.

Facilitate Agile Process Development
According to one report just 75 percent of IT budgets are dedicated to maintenance andupdates15, making it a challenge for IT to allocate resources and solutions to transform
processes. Business leaders, however, will not wait for IT to implement solutions: they’ll
outsource these to the cloud, leaving IT behind while they pursue their own informationand process management solutions.
15“ Why isn’t IT spending creating more value?”, PriceWaterhouseCoopers, June 2008.

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CHAPTER 8

Human Resources

Accounting

MarketingLegal

Call Center

FIGURE 8.6: End-to-End Process Agility

In 2020, IT will have to adapt to support changing business models with new processes.
Strategic CIOs will do this by transforming their systems of record into systemsof engagement to support dynamic, mobile, and real-time customer transactions.
This will fundamentally change business processes, which will have to move beyond
departmental silos to support customer-centric processes. Agile process development
and dynamic processes like case management will enable the digital enterprise to be
more nimble and focused. Processes will move beyond packaged applications to EIM
and Business Process Management (BPM) tools that are cross-functional, dynamic, easy
to change, and repeatable.
Transformed processes build upon systems of record and integrate with customerfocused technologies using Smart Process Applications (SPAs). Future enterpriseinfrastructures will have to expand to support and incorporate the whole businessecosystem. Process integration will increase the speed of business. New processes will be
deployed on premise, in the cloud, and to support mobile apps. CIOs will have to expand
their function beyond the firewall to deliver value and business growth. Enterprisearchitecture will have to extend beyond the enterprise to incorporate new businessmodels based on the needs of employees, customers, and partners and suppliers.

150

THE STRATEGIC CIO

Customers

e
pris
ter
En

end

os

ite

ch

c
ite

20

tur

e2

020

ss

ar

ar

c

to
re

tu

tu

ec

ss

ine

ine

h

20

Leading

ec

hit

a rc

hi t

arc

ss

bus

Lea d in gState of

bus

ine

ss

e

bus

pr

ise

Bu

ur

ness
Busi work
Net

Bus
ine
ss
Un
Sta te o f bitu si n
e

ct

e

t

y

ur

re

a
od

m

ct

y

te

ite

St
da

ys

ch

ter

Ec

ers
old
eh
ak

En

ed

Par
tne
rs

si

ss

c
Ar

t
hi

ec

Ar

ne

Ext

e
tur

FIGURE 8.7: The Extended EnterpriseBusiness will be transformed through the consolidation of technology onto platforms
that allow for rapid application development of next-generation products, replacing
development that moves at the speed of “zero-fault” tolerance. Continuous iteration,
rapid feature enhancement, and short-term solutions will be developed as cheap, fast,and scalable pilots, replacing longer deployment cycles and the IT backlog that hinders
the ability to capitalize on new opportunities. In implementing these new applications,the strategic CIO will not be afraid to take risks or fail.

Empower the Digital Enterprise
In 2020, spending on cloud software, platform, and infrastructure services will growfrom approximately $28 billion today to $258 billion in 2020—reaching 45 percent of
total IT services spend.16 As infrastructure moves to public or private clouds, the demandfor IT to implement and maintain systems will be reduced. Software-as-a-Service (SaaS)
will become the norm and IT will increasingly be seen as a “broker” of technologies,
providing consulting services to employees and customers who are driving technology
decisions. As services move to the cloud, IT will have more time and resources to focus
on digitization and empowering end users through self-service applications and bringyour-own devices.
Agile and process-driven IT teams will replace the current structure of IT, no longer
confined to organization around siloed technologies like servers, storage networks,
desktops, mobile, and departmental systems. To add value to the enterprise, IT will haveto shake off the shackles of legacy systems and their associated operating costs andinflexibilities and open up to the possibilities of co-creating or crowdsourcing solutions.

16

Jean-Pierre Garbani, “Prepare For 2020: Transform Your IT Infrastructure And Operations Practice”, Forrester Research,
October 24, 2013.

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CHAPTER 8

Security andGovernanceEnterprise App StoreBusiness
Data

Business
Apps

Cloud
Apps

OnlineData

User Experience

Web OS Integration
FIGURE 8.8: App Store Infrastructure

The trend toward the consumerization of IT will continue as individual users andconsumers drive product and service design. The digital enterprise will focus ondeveloping mission-critical apps and making these available from architecture thatallows for the development of mobile apps and distribution in a private cloud. In
essence, every agency that maintains a firewall and a proprietary repository of content
could create a private cloud apps environment. Self-service kiosks provide a set ofvery personalized apps unique to each department or business unit. EIM makes thisinfrastructure possible by providing a set of integrated tools for managing process andinformation applications, while guaranteeing security and privacy.
Tech-savvy employees and customers will become self-sufficient. IT departments will
struggle to control the corporate use of consumer-oriented technologies, but resisting
this trend will impede digital transformation. In fact, 37 percent of U.S. information
workers today use consumer technology to address business requirements, and morethan half admit to having better technology at home.17 IT will be required to matchor exceed experience with consumer technologies like social networking and mobile
apps. The strategic CIO will embrace the social revolution to move at the “speed of
the customer.”
Consumer-oriented technologies are far easier to access, use, and manage thanmany enterprise systems—giving employees the confidence they need to use mobile
apps, social networks, and cloud computing to do their jobs. Employees are alreadycircumventing IT to work more efficiently. In the digital enterprise, everyone will bean IT expert, to some degree, as technology becomes core to the business. Flexible IT
portfolios will support the business using enterprise apps, BPM solutions, Dynamic
Case Management (DCM), SPAs, social media, collaboration, and mobile apps.
17

 im Sheedy, “The era of empowerment”, CIO.com, December 23, 2010, http://www.cio.com.au/article/370779/era_Tempowerment/ (accessed August 2013).

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THE STRATEGIC CIO

The IT department will be required to optimize workforce experience through anytime,
anyplace access to tools and information. They will need to accommodate demographics
and a changing workforce with technologies that support the way they work. A good
portion of the workforce will be remote: 66 percent of information workers in North
America and Europe already work remotely.18 IT will need to mobilize access to
information and processes to accommodate these users.
In 2020, the IT landscape will become more multidimensional and complex—basedon new business models, shifting corporate strategies, industry transformation,organizational changes, skill shortages, a multi-generational workforce, and digital
disruption. To generate value for the business, CIOs will have to determine if current
IT activities and projects contribute to the digital strategy and corporate objectives
for growth. To master an infrastructure in flux, the strategic CIO will have to examine
current processes, explore new business and engagement models, and embrace digital
disruption—while maximizing security and minimizing risk. It’s a tall order but witha sound EIM infrastructure in place, the strategic CIO is well equipped to digitallytransform the enterprise.

Renew Focus on Information as Enabler
As part of consolidating the IT ecosystem and streamlining process integration, thestrategic CIO stewards the enterprise information strategy. Well-managed informationis central to increasing business growth, controlling cost, minimizing risk, andpromoting innovation.
In 2020, the digital enterprise will leverage big data analytics to drive sales,
performance, and opportunity.19 The strategic CIO will invest in predictive andanalytical technologies to deepen understanding into consumer preference, improveinsights, and create more targeted offerings. The use of big data will accelerate in2020. CIOs will add technologies to help them extract, analyze, and visualize complex
data sets to the enterprise toolbox. Information gleaned will be incorporated intobusiness processes and the insights used to drive more effective decision-making.
Recent research shows that the majority of CIOs believe that they are missing
significant opportunities with their unstructured information. At the same time,they feel vulnerable to its risks. An EIM system empowers the enterprise to better
understand its content, connect it to the right resources, and use it to innovate andfind opportunity. To realize its true value, however, information must be managed andprotected, especially in terms of privacy, security, and compliance. Despite having thisknowledge, relatively few CIOs feel that they have a solid approach to EIM. 20
18

Connie Moore, “The Process-Driven Business Of 2020”, Forrester Research, April 16, 2012.

19

 arry Evans, “Disruptive Technologies: Winners and losers from game changing innovation”, HSBC Global Research,
G
October 2013.

20“ Unleashing the Power of Information”, CIO Magazine, 2012.

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A strong EIM strategy is based on data integration across silos and systems, an increased
access to accurate information, the standardization of customer information acrossthe organization, improved information flow across processes, and data governanceand security.
Disruptive innovation and advances in IT will empower employees, customers, partners,
and suppliers through increased access to information. As discussed in this book, thesestakeholder groups will drive new business models based on collaborative relationships
across an extended digital enterprise. Information about products and services will
become more accessible and create new levels of market transparency. To accelerate
the pace of digital transformation, organizations need to ensure that information flows
uninterrupted across functional silos and processes. EIM delivers a holistic approach tohelp ensure that information is accurate, integrated, and governed.
Beyond the enterprise, information can be opened up to create opportunity and drive
economic development. Organizations in the public sector are opening up access tomassive data sets to entrepreneurs to create products and services, develop targeted
apps, and find new markets. The “Open Data” revolution—making information available
in digital machine-readable format and reusable under open license terms—is wellunder way. Government is ahead of industry, but the digital enterprise will find value
in opening up its information to allow external stakeholders to use information tocreate and crowdsource new products. Opening up the flow of ideas through external
collaboration is a form of open innovation. For data to be shared, it must be managed
and protected. EIM provides the balance between accessibility and security.
EIM combines systems of engagement with systems of record. Managing these systemsof record—ERP systems that maintain finance, supply chain, resource planning, andhuman resources—will remain a critical function of the digital enterprise. The hightech industry has spent considerable time and effort developing the solutions needed
to support transaction-oriented processes that produce structured information. Partof the CIO’s IT strategy will focus on consolidating these fundamental technologies.
A good portion will be devoted to outsourcing to the cloud and orchestration. The
strategic CIO will work with business leaders like the CMO to optimize customer
engagement based superior customer interactions. EIM delivers the backbone required
to streamline information-centric processes and securely support fully integrated
customer experiences across many channels.

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THE STRATEGIC CIO

Top business objective over the next 12 months: Increasing business productivity
Increasing business productivity

26%

Growing revenue

43%

Improving the quality of information

12%

2%
5%

80%

15%

1%
7%

77%

18%

3%
4%

75%

55%
34%

24%

51%

Reducing costs/improving efficiency

33%

41%

18%

4%
4%

74%

Improving customer satisfaction

30%

44%

20%

2%
4%

74%

26%

4%
4%

66%

25%

7%
4%

64%

9%
7%

63%

Increasing business agility

22%

Improving employee engagement

44%

15%

Creating competitive advantage

50%

26%

36%

22%

100%

0%

CriticalVeryimportantSomewhat
importantNot very
important

Not at allimportant

(NET)
Top 2

FIGURE 8.9: Top Business Objectives Identified by Executives 21

EIM helps to minimize and control risk. It protects Intellectual Property (IP) and enables
CIOs to manage disruptions caused by a mobile workforce, unstructured data, theproliferation of devices, cloud computing, and social media. EIM systems can deliver
benefits such as better data access and analysis, consolidation and standardization,
reduced costs, and better alignment of IT activities with business objectives. But EIM
does more than this—it provides a secure context in which innovation can happen. It
unleashes the value of content, so that it can be discovered. Job #1 for the strategic CIOs
is to establish clear EIM strategies and processes, which can then serve as a foundation
to transformational business practices.
In the following feature, the Alberta Energy Regulator (AER) is applying disruptive
technologies to information to streamline the regulatory process and empower both theorganization specifically and the general public.

21“ Unleashing the Power of Information”, CIO Magazine, 2012.

155

D I G I TA L I N N OVATO R S

Alberta Energy Regulator
Energy regulation in Alberta spans more than 75 years and has evolved over time. In 2013,
the Alberta Energy Regulator (AER) was established to regulate energy development inAlberta—from application and exploration to construction and development to abandonment,
reclamation, and remediation. Today AER ensures the safe, efficient, orderly, andenvironmentally responsible development of hydrocarbon resources over their entire life cycle.
This includes allocating and conserving water resources, managing public lands, and protecting
the environment while providing economic benefits for all Albertans. The AER currently
regulates over 181,300 wells and 415,000 km of pipelines, 782 gas processing plants, nine oilsands mines, more than 50 thermal in situ and 200 primary/enhanced schemes, 11 coal mines,
and four coal processing plants.
Tara Mulrooney is Chief Technology Officer for the AER and is accountable for developing thetechnology strategy and services to support the business strategy. In the following excerpts
from an interview with Mrs. Mulrooney, she discusses the roles that digital technology andinformation play in the transformation program at AER as they migrate to an integrated
resource management framework.

FIGURE 8.10: Alberta Energy Regulator“We regulate the oil and gas industry for theprovince of Alberta. Very recently we took
on new regulatory responsibilities to include
jurisdiction for water, air, and biodiversity.
We’re the first of our kind and our mandate
now includes the impact of development on theenvironment in terms of pollution, air

quality, water usage, and increased engagementwith our many stakeholders. With digitaltechnologies making communications so farreaching, social, and immediate, everything we
do is under the microscope. Data and science
are becoming more and more critical as we takeon these additional responsibilities.

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D I G I TA L I N N OVATO R S

Digital technologies are having a profoundeffect on the oil and gas industries, especially interms of collecting information on our projects
for monitoring or compliance purposes. For
example, remote sensors are now a part ofevery pipeline and every major project in theoil sands. They allow us to capture informationin real time, so rather than requiring operators
to physically report on compliance, we canaccess information and validate it ourselves.
While this is a more efficient way of regulatingcompliance, it does present us with a big IT
challenge because we have to be able to pullup information in our Geographic Information
System (GIS)—a system that houses all types ofspatial or geographical data—and correlate thisdata with sensor data.

that allow us to route and change how wemake decisions on the fly. As well as flexibility,
we want a system that puts the business
and workflow rules right in the hands of ourusers. If a scientist wants to do a cap rockintegrity model they should just be able toroute information to the field office and build
this kind of application. It’s a new way oflooking at application development that could
potentially wipe out ERP systems. ERP works
great for commodity processes like finance or
Human Resources (HR), but more and morebusinesses are fine-tuning their processes basedon lightweight, flexible and personalized apps
to become more agile and competitive. From a
regulatory perspective, it gives us the ability to
be proactive to any changes in regulations.

When we start a project we need to be able toaccess any related information—whether its
inspection reports, project plans, or surveys—for
historical context. And it has to be integrated
with the GIS and real-time sensor data. We
have a wealth of information about every wellthat’s ever been drilled in for Alberta for thelast 75 years. With hundreds of thousands ofoil and gas wells in Alberta, as well as oil sandsand coal development, there is a lot of related
infrastructure and many wells that are either
producing or have stopped producing resources.
Much of this information has been captured,stored, manipulated, analyzed, and managed
as spatial or geographical data. When we hit
thresholds on water, pollution, or noise, weneed to refer to all of the unstructured content
we have about a project. We’re using digitaltechnology to give our scientists and approvers
instant, accurate, and integrated information attheir fingertips in a single interface, and this ischanging how we regulate today.

As part of our transformation program, we’re
working on using GIS to give organizations
access to geological information, boundaries,
roads, water bodies, and more so they cansimulate the creation of a mine and receive
the regulatory compliance rules that would be
associated with the project. This new approach,based on improved access to information,
helps increase efficiency and awareness about
potential investment costs for example, around
potential projects. The old approach was tomodel the data and focus on governance. Thesedays, people are more technically savvy. They
want immediate access to information so they
can mash it up, apply it, analyze it, understandit, and present it in new ways. The younger
generations especially don’t understand theold world of SDLC (Software Development Life
Cycle). Instead, they expect to be using tools
and technologies that are bleeding edge, like
Facebook and Google. We have to be aware ofthis in ways that we interact with stakeholders,engage the public, and communicate with our
1,200 employees located in 15 locations acrossthe province.

Right now our business processes aren’t
standardized, so regulation takes place on acase-by-case basis. Each project is affected byfactors like geology, the risk to the operator,
thresholds, and much of this changes hourly. We
need tools like dynamic case management

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D I G I TA L I N N OVATO R S

We’re also giving the public access to spatial
information digitally. As Alberta grows anddevelops, we’re seeing increasing construction
in closer proximity to abandoned well sites
or other energy infrastructure. We provide a
website where people can go, click on a mapof Alberta, zoom in, and find old well sites. We
share this information with the Governmentof Alberta (GOA) and to date, it's the mostpublicly used interface at the GOA. A second
project we developed is our new public noticeof application tool. This was a key feature of
our new regulatory mandate and required bylegislation. The tool provides any Albertan who
may have a concern with proposed activities intheir area to learn more and formally express
those concerns with the AER. Every time an
application or approval goes through, it’spublished on our website within 30 minutesof the decision or application being made.
The public can opt to submit a statementof concern which is reviewed as part of theapplication process. It’s a great example ofcivic participation.

As the younger generations enter the workforce,
physical office space and standard hours will
disappear. Work is more a part of people’s
lifestyles these days, and they want more
flexibility with their work. Organizations thatcreate an environment that empowers theirpeople to work from any place at any time will
be more successful. As we work more remotely,
however, we’ll need to find better ways tosimulate face-to-face interaction and foster asense of community. I think these are important
aspects of communication. We have great
communications tools with our smartphones
and tablets, but we need a better way to meetand perhaps this will be achieved throughteleconferencing or even holographic images.

Our job is to educate and protect our users as
they traverse the Internet. To do so, we needto make them aware of the risks and give them
the tools they need to manage these risks.
This involves a different security model. We
are custodians of industry proprietary andtrade secret data but we’re trying to minimize
collecting, managing, and storing so muchinformation. Where possible, we’re considering
accessing information onsite with an operator,
rather than storing it in a physical repository.
In other words, do we need to keep all of theinformation we see? We are certainly concerned
about all the typical phishing and hacking
and from a generational perspective young
people are pretty aware. The older generations
need to be better educated because in the
public domain people need to be cautious andaccountable for the information they share.

158

THE STRATEGIC CIO

The CIO Call to Action“CIOs require a new agenda that incorporates hunting for new digital
innovations and opportunities, and harvesting value from products,
services, and operations.”22
Given the benefits of deploying a comprehensive EIM solution and the risks of notdoing so, in 2020, CIOs and other IT managers will make information management a
top priority.
Digital executives have been able to bypass their technology colleagues in the past by
turning to SaaS vendors or agencies. That approach isn’t sustainable. Technology teams
must step up, hire for digital skills, and help drive enterprise-wide transformation. Thisrequires CIOs to champion a digital agenda by demonstrating how technology canfacilitate change and making investments in EIM technology, systems, and processes totransform the business.
The journey to digital transformation requires a radical overhaul of culture,organizational structures, technology, and operating models. Since it is the new
way forward, CIOs will need to figure out how to get there. EIM provides a strategic
blueprint for transformational success. The next chapter outlines the key components
and transformational benefits of EIM for the digital enterprise.

22Gartner, “Gartner Executive Program Survey of More Than 2,000 CIOs Shows Digital Technologies Are Top Priorities in 2013”,
Gartner, Inc., January 16, 2013, http://www.gartner.com/newsroom/id/2304615 (accessed March 2014).

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THE DIGITAL ENTERPRISE

9CHAPTER 9

C HAPTER 9

The Digital Enterprise“Enterprise Information Management (EIM) is the key transformative technology for thedigital economy. It equips the digital enterprise with the ability to simplify, transform, andaccelerate its business in a digital-first world.”
We live in the time of unprecedented technologic disruption. Technologies ranging
from mobile devices, analytics, and social media to cloud computing and the Internetof Things (IoT) are triggering innovations that are challenging the established rules ofbusiness. What all these technologies have in common is that they enable a new wayof using information. Information is not just a cost factor—it has become the key toinnovation, growth, and competitiveness. Information is becoming the core componentof a corporate digital strategy.
We are entering the digital age, and information is becoming the currency of a digital
economy. Information has replaced size, scale, access to resources, and geographic
presence as a key driver of competitive advantage for the enterprise. Organizations thatleverage their information to innovate and grow will be the ones that succeed.
In the digital-first world, digital information lies at the core of interactions, processes,
transactions, and experiences. When information is harnessed and protected, the digitalenterprise can reach the maximum level of efficiency, impact, and value while reducing
security, compliance, and litigation risks.
Amidst these disruptions and the emergence of the digital economy, the goal for everyorganization is to transform itself to take full advantage of information and digitaltechnologies—to become a digital enterprise to compete in a digital-first world. But
how can the enterprise unlock the power of its information to transform itself, withoutcompromising productivity and security? Enterprise Information Management (EIM) is
the transformational technology that helps the digital enterprise innovate and thrive ina digital-first world. This chapter explores EIM as an integrated set of technologies andoutlines an agenda for digital transformation.

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THE DIGITAL ENTERPRISE

EIM: A Platform for Transformation
A digital business, as outlined in Chapter 2, is one in which digital technology is both
pervasive and central to its overall success. A digital enterprise, as we will describe
further in this chapter, is a business that manages its information across its businessecosystem to drive value and competitive advantage. Digital enterprises adopt EIM as
their foundational platform for change.
EIM is a set of technologies and practices that maximize the value of information as it
flows across the enterprise. Its core technologies work together to create an end-toend platform for sharing, collaboration, analysis, and decision-making, based on theeffective management of information to harness its potential while mitigating risk
through governance, compliance, and security.
The Digital Enterprise: Reconceptualize the future

Disruption

DigitalCloud
Internet

2000 Y2K
Client Server
Connected (People, Devices, Organizations)
FIGURE 9.1: The Digital Enterprise - Re-Conceptualize the Future163

CHAPTER 9

An EIM framework supports the CIO to: Digitize all information assets and processes Build applications that drive the top-line results, such as revenue, customer

satisfaction, innovation, and growth Integrate structured and unstructured data into a single source of the truth
 Facilitate social collaboration to foster engagement, idea sharing, and innovation
 Mobilize information and processes across any device, withoutcompromising security
 Deliver a proven framework for information governance across all functions

and applications
 Consolidate IT platforms and applications to manage information flows
 Protect the enterprise with robust, multi-layered security
 Capitalize on opportunity and expand into global markets

B2B Integration

Create to Consume

Content

Issue to Resolution

Capture to Archive

Experience

Discovery

Process

Exchange

AppWorks

SAP

Microsoft

OracleDocumentum

FIGURE 9.2: A Comprehensive EIM Platform

164

FileNetTHE DIGITAL ENTERPRISE

As depicted in the image above, EIM bundles core technologies together to add value
as information flows across the digital enterprise. EIM is comprised of the following fiveintegrated suites: Process Suite: Business Process Management (BPM) solutions for flexible,

agile business processes that empower employees, customers, and partners tocollaborate, streamline operations, and work efficiently.
 Content Suite: Enterprise Content Management (ECM) solutions for managing

information throughout its lifecycle—from capture through to archiving anddisposition—applying secure and consistent governance policies across any typeof content.
 Experience Suite: Customer Experience Management (CEM) solutions fordelivering responsive, compelling, and relevant user experiences across multiple
channels to drive revenue, and customer satisfaction.
 Exchange Suite: Information Exchange (IX) solutions for exchanging complex or

sensitive information quickly, securely, and reliably—between specific organizations
or across a network of trading partners.
 Discovery Suite: Applications that derive value from growing volumes of content

produced as the output of enterprise business processes or exchanged between
business partners. These applications help the enterprise transition from query toinsight to action.
In addition to the EIM suites, a development platform called AppWorks enables users
to create purpose-built applications that assemble and consume enterprise informationfrom across EIM suites in unique and highly customized ways.
Finally, Business-to-Business (B2B) integration technologies are used to manage
information flows across an enterprise’s entire business ecosystem. For instance,
The Trading Grid is a cloud-based B2B integration platform that allows for the secureexchange of business documents with a global network of trading partners, quickly
and efficiently. Also available as a fully managed B2B service, organizations with highly
complex supply chains can outsource their operations by connecting with partners
using multiple information exchange protocols in accordance with messaging andsecurity standards.
This chapter describes each of the core EIM technologies and services in more detail. It
includes stories about organizations that have embraced EIM to address the challenges
of information and capitalize on its potential. Each story illustrates the transformative
power of EIM.

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CHAPTER 9

Accelerating Processes with BPM
Business Process Management (BPM) is one of the core technologies of EIM. Whether
conducting thousands of high-volume processes per day for case management or
running a lower volume of high-value procedures, BPM helps organizations track theinformation that flows through their operations, gives them process knowledge, andenables them to optimize efficiencies.
Enterprise Resource Planning (ERP) systems lie at the core of business operations—managing everything from financials and human capital management to casemanagement, vendor invoicing, and other critical aspects. Administrative work, like casemanagement, forms the basis of many services or knowledge-based businesses. This typeof work typically results in volumes of data housed in disparate databases across thebusiness. Data generated by administrative activities is typically numerical and, in many
instances, this information is not easily accessible. While ERP systems do an admirable
job of executing process and serving as the system of record, they fall short when it
comes to offering process agility and adaptability to changing business requirements.
As a result, BPM technology has moved beyond legacy processes and workflows to allow
for the rapid modeling and automation of processes and the ability to easily update them.
As illustrated in Figure 9.3, Smart Process Applications (SPAs) are evolving to support
both structured and unstructured business processes and enable rapid adaptability tochanging business requirements.

Business Business
Rules
Process
Integration Process
Modeling
Workflow
Process
Enterprise Control
Application
Integration
1990

1995

BPMS

Web
Services

BPMS
+SOA

BPMS
+MDD

BPMS
+ACM

2005

BPMS
+Intelligence

Advanced CaseManagement(ACM)
SocialBusiness Intelligence
Networks + Process Mining

MobileDrivenDevelopment
BPMN

2000

BPMS
+Social

2009

2010

2011

FIGURE 9.3: The Evolution of BPM

166

2012

Smart
Process &Predictive/
Diagnostic
Analytics

2013

THE DIGITAL ENTERPRISE

Digital Innovators: Federal Government Agency
In response to growing concerns about federal detention, a prominent G20 government
established a federal agency to manage the confinement of persons in federal custody.
With an average daily population in excess of 55,000 detainees across 94 federal judicial
districts, they have an annual federal detention budget exceeding $1 billion. Operating
under budget is a primary concern.

FIGURE 9.4: Business Process Management*

To reduce costs, the agency set about automating the administrative prisoner
designation process—which crossed several independent organizations. The process ofdesignating a convicted felon requires information contained in numerous documents
and controlled by several agencies. In the past, each step of the process involved moving
paperwork between multiple agencies and geographic locations using fax, postal mail,and FedEx ®. The manual nature of this process led to slow processing times and limited
audit trail capability with no way of effectively tracking status information.
The agency turned to BPM technology to streamline and digitize the designation
process—while protecting sensitive prisoner information. Today, with access to a web
server, all agencies can check on the status of any prisoners’ designation document inreal time. The solution provides easy access to all employees, regardless of location,and enables the agency to track, report on, and measure ongoing performance metrics.
It is cost-effective, saves time, reduces errors, and provides transparency across theprocess. The system is currently operational in 82 districts and will be fully implemented
in 94 judicial districts. Based on projected savings in the 82 districts, total approximatedcost avoidance for all 94 districts would be $38.8 million.
*

For demonstration purposes only. This is not an actual depiction of software running on the featured company’s system.

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CHAPTER 9

Governing Information with ECM
As the governance facet of EIM, Enterprise Content Management (ECM) technologies aredesigned to help businesses manage an exploding volume of information and minimize therisks and costs associated with unmanaged content. Enterprise information is a criticalasset in the digital business yet, as mentioned earlier, it carries risk if poorly managed.
Access to increasing amounts of information requires a comprehensive ECM solutionthat can address demands for backups and auditing, tighter security, compliance, dataclassification (metadata), protection from threats of litigation, effective risk mitigation,and discovery technologies.

Content Lifecycle Management
End-to-end management as information flows through critical processes
Applications

Devices

Information GovernanceCaptureClassify

ManageRetainHold

Archive

DisposeEnterprise Archive

Enterprise Disk

Modular Disk

SATA/JBOD Disk

Optical/Worm Tape

Capacity Tape

FIGURE 9.5: Managing the Full Lifecycle of Content

ECM provides end-to-end management of information as it flows through missioncritical processes throughout its lifecycle—from capture through to archive anddisposition. It enables employees and business partners to share and collaborate
on documents, control access to them, and manage versions efficiently. In addition,
documents can be linked to a BPM workflow to ensure the latest version of content isused for business operations.

168

THE DIGITAL ENTERPRISE

Many organizations look to their information systems to manage their businessprocesses in the most efficient way possible and ensure competitive advantage throughoperational excellence and innovation. Virtually all business operations have content
associated with them. Within business processes and applications, ECM plays animportant role ensuring correct information is made available, actions on content are
tracked and audited, and security is maintained.

Solutions

Unique Business Value

Process

Content

Drives The Work...

...Provides The Context

FIGURE 9.6:
The+Business
Valuebusinessof Integrated
ECM
BPM delivers
valueECM and BPM

BPM combined with ECM drives timely decision-making and helps enforce compliancewith corporate policy. The ability to create and work with business processes is built
into ECM. Businesses build processes to review and approve document sets, create andmanage procedures, manage projects and cases, and more.
Beyond process management, there are dedicated business applications built to address
specific sets of business problems. Examples of these applications include Contracts
Management, Regulated Documents, Invoice Management, Employee File Management,
and Learning Management. The following story demonstrates how ECM makes content
accessible and integrates critical content with business processes. ECM delivers aseamless experience across multiple environments, helping a world-class university
unlock the potential of its information for greater access and innovation.

169

CHAPTER 9Digital Innovators: World-Class University
A large Asian university with more than 30,000 students and nearly 3,500 teachingand non-teaching staff offers over 230 programs on campus. The student population,
number of employees, and courses offered have increased significantly over the years
and led to a huge growth in data generated. With the intention to better manage andleverage this information, individual departments had implemented independent andisolated document management solutions. These disparate systems, however, weredifficult to manage. Realizing that the ability to manage, control, and secure information
was critical to their success, the university implemented ECM.
Managing information throughout its entire lifecycle creates business value andcompetitive advantage. From information capture to classification, management,
storage, distribution, archiving, and disposition, ECM helps control the flow of
information across various departments and administration within the university. Fastand seamless access from multiple environments (web, desktop, and mobile) within
business processes and applications improves user productivity and organizational
efficiency. The seamless integration of content with processes, collaboration tools, andsocial media platforms has addressed growing data needs, increased data integrity, andgiven the university better control over its content.

FIGURE 9.7: Enterprise Content Management 1*

1

Mark J. Barrenechea and Tom Jenkins, “e-Government or Out of Government”, OpenText, 2014.

*

For demonstration purposes only. This is not an actual depiction of software running on the featured company’s system.

170

THE DIGITAL ENTERPRISE

Delivering Exceptional Experiences with CEM
As one of the five foundational suites for EIM, Customer Experience Management(CEM) aims to create a richer, more interactive online experience—across multiple
channels like websites, mobile devices, social networks, and more—without sacrificing
requirements for information governance.
90 %All CEM users

85%
81%

70 %

68%

65%

50 %

30 %
Customer
retention

Customersatisfaction

Response time tocustomer inquiries

Customerlifetime value

Percent of respondents indicating as valuable metrics to measure CEM performance, N=252

FIGURE 9.8: The Value of CEM

CEM powers the world’s highest traffic brand sites, the most compelling mobile
experiences, and the most recognized e-commerce portals on Earth. Managing thedigital customer experience across multiple touchpoints in the journey, from readinga review or using a mobile app to conducting a transaction, a compelling experience iscritical to success in the digital age.
As a comprehensive platform for managing media, web, social, and interactive content,
CEM delivers a consistent user experience across multiple channels, while adhering
to information governance policies and regulatory requirements. Media, website, andcommunications management capabilities combine to empower employees to optimize
brand experiences. As described in the story below, a leading interactive entertainment
agency uses CEM to manage its global brand.

171

CHAPTER 9Digital Innovators: Interactive Entertainment Agency
Global brand management is a key priority for a leading interactive entertainment
agency. To optimize customer engagement, they strive to maintain a consistent look,
feel, and voice across different regions and languages. Like many companies, theirmarketing content has traditionally been maintained in numerous systems, making it
difficult to locate and distribute content, and ensure a consistent experience.
Using CEM, the agency established a centralized repository for their valuable digitalcontent including broadcast commercials, print ads, and web content. For the company,
the launch of a new title represents a significant investment and requires a highly
coordinated, global team effort. With the system, internal users are now able to securely
access these assets via the web as they develop new marketing campaigns. Once created,
this marketing content is securely distributed to regional offices and affiliates across 26
territories and 8,500 employees throughout the world. Through this enhanced ability
to reuse existing content, the company has increased its website traffic and revenue,
while experiencing significant cost savings that are based on reductions in production
and distribution costs.

FIGURE 9.9: Media Management 2 *2Mark J. Barrenechea and Tom Jenkins, “e-Government or Out of Government”, OpenText, 2014.

*

For demonstration purposes only. This is not an actual depiction of software running on the featured company’s system.

172

THE DIGITAL ENTERPRISE

Secure Information Exchange
Information Exchange is the practice of conversational data exchange. It defines
a set of offerings that support business conversations occurring internally among
employees and externally with customers and partners—from electronic faxes andcloud services to large managed file transfers. These services generate truly massive
amounts of data and are often tied into other practices, such as ECM, with very specificcollection parameters.
As an EIM category of offerings, Information Exchange solutions help safely move
information from where it is to where it needs to be, regardless of which business system
it resides in, what devices it is required on and from user to user, company to customer—from anywhere at any time.

HACKERSTHIEVESSPIESEmail is unsecure and limited by size

HACKERSHACKERSTHIEVESTHIEVES

SPIES

SPIES

Secure information exchange with messages, documents and extremely large files
FIGURE 9.10: Secure Information Exchange

Information Exchange empowers businesses to accelerate and control how information
is delivered across the extended enterprise. Organizations can execute transactions inways that are fast and secure. Data integrity and security are built in to protect against
threats of internal information leaks and cyber attacks.
The opportunities to drive business value through effective, secure informationexchange are countless and demonstrated in the story below about the cost savings
realized by a company managing operations at a prominent international airport.

173

CHAPTER 9Digital Innovators: International Airport
One of India’s busiest international airports is managed by a joint venture company
that oversees its business operations. Each month, the company’s employees send andreceive hundreds of faxes to and from vendors and government agencies. Unfortunately,
these paper-based methods were inefficient, and the close to 50 fax machines requiredconsistent and costly maintenance. Along with the inefficiencies of handling paperbased faxes, there was a lack of security for sensitive documents sitting on fax machines.
With help from document delivery and fax software, the company has eliminated fax
machine queues and gained reliable security for all faxed documents. Employees now
send and receive documents without leaving their workstations. Instead of printing
pages to feed through fax machines, employees can fax documents right from theirdesktop computers. Integration with email allows any sent or received fax to appear
alongside emails for secure and easy reference, forwarding, or storage.

FIGURE 9.11: Secure and Streamlined Information Exchange*

Expenses associated with maintaining dozens of fax machines are now designated ascost savings. The company expects to eliminate close to 40 fax machines, keeping theremainder as backup devices in case of email failure. In addition to cost savings, newoperational efficiencies are being realized. Faxes that used to take from 15 to 20 minutes
to process are now delivered and tracked electronically within seconds. Employees wholink to the office via mobile devices when they are traveling also stay on top of urgent
faxes and staff members have increased efficiency because the solution has optimized
their time.
*For demonstration purposes only. This is not an actual depiction of software running on the featured company’s system.

174

THE DIGITAL ENTERPRISE

Improving Insight and Reducing Risk With Discovery
As a facet of EIM, Discovery solutions organize and visualize all relevant information to
make it possible to find and learn about the right information at the right time and place.
The integrated set of technologies that comprise Discovery enhances an organization’s
capacity to “remember”.
The expense and time associated with traditional legal or other information discovery isvery high. Having a set of tools available to reduce the data sets retrieved in a discovery
and make them more accurate represents immediate savings for an organization.
Applying analytics to large data sets gives the digital enterprise insights into productivity
gaps and can provide techniques for improving efficiency.
Discovery solutions leverage search, content analytics, and discovery capabilities.
These solutions break down organizational information silos, integrate informationfrom across the enterprise, and amplify the value of information through better access,collaboration, and content re-use. Business insight is gained by capturing, combining,
and transforming information to identify relationships, risk, and new opportunities for
growth. Improved transparency into outcomes allows for the consistent measurement
and monitoring of performance metrics, arming businesses with the information theyneed to improve productivity and the quality of their performance. Unlocking this dataor large data sets is critical to identifying new opportunities for growth, minimizing risk,
and promoting innovation.

Semantic
patternrecognition
FIGURE 9.12:
Semantic
Pattern
Recognition

With solutions like semantic search and content analytics, organizations like those in
the feature below gain leading-edge capabilities to mine, extract, and present the true
value of information for improved research and analysis.

175

CHAPTER 9Digital Innovators: Engineering Research Institution
One of the world’s leading engineering research institutions makes major contributions
to top national and international research via 9,000 employees and 24,000 students.
According to its mission, the organization operates along three strategic fields of action:
research, teaching, and innovation.
The institution needed a leading-edge solution that would give researchers, students,
and the general public a faster way to find information across its 600 websites andthe associated 200,000 web pages. On the back end, they required a robust website
management solution that would support their 1,300 editors worldwide on a day-today basis by supplying metadata, key phrases, and the ability to automatically generate
extracts of text—a collaborative platform that would bring together researchers,scientists, and students.
The institution implemented semantic navigation and content analytics in combination
with website management to optimize web pages and provide relevant search results.
Previously manual tasks that were labor intensive have been replaced by an automatedsolution that assigns metadata and supports entity extraction by generating teaser texts
for new pages, saving users time and reducing error. Visitors are now given personalized
access to highly relevant information facilitated by faceted search and related hits—
resulting in a more satisfying end-user experience. With improved access to informationand the ability to connect with researchers in similar areas of study, the website has
evolved into an advanced research network that successfully meets the needs of all
stakeholder groups.

FIGURE 9.13: Content Analytics 3 *3Mark J. Barrenechea and Tom Jenkins, “e-Government or Out of Government”, OpenText, 2014.

*

For demonstration purposes only. This is not an actual depiction of software running on the featured company’s system.
176

THE DIGITAL ENTERPRISE

AppWorks Development Platform
The digital enterprise is fueled by unrestricted access to information from within
the enterprise and across the extended enterprise. AppWorks is an EIM technology
designed to help streamline information flows across the digital enterprise. It is acommon development platform that enables the creation of purpose-specific apps
for information from any EIM core technology, making it available on a desktop, webinterface, or mobile device. Examples of enterprise apps are depicted in Figure 9.14;
development options are endless, limited only by business requirements and theimaginations of developers.
What Apps can be built with AppWorks?

Supply Chain
Management• Orders• Invoices• Materials & Returns

Human CapitalManagement• Recruiting• Retention/Advancement• Retirement

Customer RelationshipManagement

Financial Management• Audit, Compliance• Regulatory, Fraud• Collections, CAPEX• Correspondence• History/Transactions• Install Base/Revenue

Case Management

and more...

• Approvals• Claims, Loans• Quality, Projects• Email and ERP• CAD• CorrespondenceContract Management• Legal and Templates• Terms and Entitlement• Renewals and Revenue

Asset Management• Physical or Digital• Acquisitions to Disposition• Management to Revenue

FIGURE 9.14: Building Enterprise Apps with AppWorksEnterprise apps are built simply and easily using modern web technologies (HTML5,
CSS3, and JavaScript), can be written once but deployed on any platform and can be
managed securely from a centralized location. Using AppWorks, businesses can deliver
push notifications to enterprise apps, deliver seamless application updates, collect usage
reporting, and more. AppWorks makes it easy to manage and use enterprise information
securely and conveniently in ways that accelerate innovation and drive business in thedigital enterprise forward.

177

CHAPTER 9

FIGURE 9.15: Fast, Simple Deployment of EIM Apps

Business-to-Business Integration
In a digital-first world, business operations rely on fast, efficient, and secure informationexchange between employees and partners located around the world. Information
Exchange is an important component of EIM for facilitating transactions andinteractions within a global business network. B2B integration falls under the umbrellaof Information Exchange solutions, yet focuses explicitly on managing informationtransmitted between supply chain trading partners.
B2B integration is a set of technologies that support the real-time, automated transfer of
information, money, and goods and services, creating an “information supply chain” forthe digital enterprise. It empowers a tightly integrated network of employees, suppliers,and partners to exchange communications, products, and commerce in ways that are
rapid and accurate and to make decisions that are timely and intelligent.
Electronic Data Interchange (EDI) and integration services give organizations capacity
for reliability and reach beyond traditional Value Added Networks (VANs). These
technologies enable transactions while providing end-to-end visibility into supply chain
operations for real-time decision making and improved orchestration of operations.
As a result, efficiencies are increased as the number of items lost in transit is reduced,
stock is proactively replenished, and equipment maintenance is scheduled for overall
operational excellence.

178THE DIGITAL ENTERPRISE

The Trading Grid
The Trading Grid is a cloud-based B2B integration platform that enables the electronic
exchange of business documents in a secure, fast, and reliable manner. Documents canbe sent in XML and EDI document standards. The Trading Grid™ Messaging Service canbe accessed via the Internet using a variety of communications options.

Managed Services
With supply chains becoming more complex, many organizations are outsourcing
B2B integration to a third-party. Managed Services is a hosted B2B cloud service
that provides the expertise, technical infrastructure, and process support for critical
B2B programs. Managed Services experts perform all activities such as mapping,connectivity, onboarding, testing, monitoring, and end-user support to quickly connectbusiness partners and resource projects on an as-needed basis.

Managed Services
Customers
Global System Visibility andManagement
Alerting

ERP

ERP
Data and Process
Integration
Intelligence
Suppliers

Service
Providers
TM

WMS

TMS

Trading Grid
Distributors

Financial
Institutions
CustomApplications

INTERNAL

Mapping andTranslation

Partner
Program
24/7 Monitoring
Onboarding Management and Resolution
SupportManaged Services
FIGURE 9.16: Managed Services for Outsourced B2B Integration

179

3PL

EXTERNAL

CHAPTER 9Digital Innovators: European Automotive OEM
A European automaker is one of the world’s leading manufacturers of luxury, sports,
and off-road vehicles. They have 25, 000 employees located around the world with
manufacturing operations at multiple sites across the U.K. and India and a joint venture
operation in China. They are a global organization with a complex supply chain.
When this company was divested from their parent company, they needed to establish
their own B2B infrastructure while still maintaining continuity of operations andmanagement of their global suppliers. They decided to focus on their core businesscompetencies and outsource their entire B2B environment to B2B Managed Services.
The service team managed the onboarding of 1,000 EDI suppliers in North America andEurope and provided mediation between global standards. The platform was extended
to support a new engine plant in the U.K. Today, the company has an efficient, tightly
integrated global network of business partners, but the complexity of operating thisnetwork day-to-day is fully managed. The company has the option to integrate theirB2B environment with their ERP system at a later date. As their operations expand overtime, the company has the flexibility to scale their B2B network to facilitate growth.

FIGURE 9.17: Managed Services Via the Trading Grid**

For demonstration purposes only. This is not an actual depiction of software running on the featured company’s system.

180

THE DIGITAL ENTERPRISE

EIM: Bringing It All Together
The core sets of technologies and services described in this chapter form a comprehensive
platform for EIM. As shown in Figure 9.18, an integrated EIM platform delivers betterbusiness results, improved relationships with customers, and helps to create an open,
compliant IT infrastructure for business success in 2020 and beyond.
An integrated EIM strategy will deliver better results, relationships, and IT infrastructure.
Business Results

Customer Relationships

Revenue

Cost Reduction

Customer Insight

Productivity

Decision-Making

Improved Customer
Rentention

IT Infrastructure
Data AccessComplianceStandardization

FIGURE 9.18: The Business Value of EIM

To become a digital enterprise, organizations must reduce cost, improve efficiencies,
and increase their competitiveness by automating information processes. They must
consolidate and upgrade their information management platforms for the requirementsof a new workforce and new clientele in a new disruptive world. And organizations
must increase the speed of information delivery through integrated systems within
and beyond the boundaries of the enterprise. EIM helps the enterprise achieve all of
the above, giving it the ability to simplify, transform, and accelerate its business in adigita-first world.
The priorities for change are clear: to effectively manage unstructured information
and business processes; to automate B2B transactions that power business networks;
to ensure security and privacy through information governance, compliance, and risk
management; and to make access to information available from any application or
device—on premise or in the cloud. By the year 2020, the most successful organizations
will have already transformed themselves and the laggards will face unsustainable
competitive pressure.
The time for change is now. As they start on a multi-year journey toward digitaltransformation, businesses are looking to IT for leadership. To help articulate thisvision and execute on a plan for digital reinvention, the strategic CIO will partnerwith functional leaders across the enterprise. The following chapter explores change
management strategies to help executives transform their organization into a digitalenterprise to lead and succeed in a digital-first world.
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C H A P T E R

STRATEGIES FORCHANGE MANAGEMENT

1 0

CHAPTER 10

CHAPTER 10

Strategies for Change Management“The biggest barrier to innovation in digital engagement is not technology but culture andlack of imagination.”1
In 2020, success will depend on the enterprise’s ability to transform itself into the digitalenterprise. For transformation to be effective, the entire C-Suite—from CEOs to CMOs
to CIOs—will have to articulate a vision of their organization as a digital enterprise.
To stay competitive, the enterprise must continually reinvent itself in a businesslandscape that is continually disrupted by technology. To maximize transformation,organizations need to create an environment in which innovation thrives. Businessand technology leaders should be ready to take risks, follow digital strategies witheffective leadership, and define new models of engagement. And they must be readyfor a substantial shift in culture built on openness, innovation, and trust. Businessproblems should be examined and new processes created to solve them fearlessly andwith imagination.
To make the digital vision a reality, IT will play a crucial role in supporting theenterprise’s top business objectives. CIOs and other IT managers will need to highlightthe connections between information management and core business objectives, andleverage technology to respond to the trends driving digital demand. In the future,transformational objectives will be rooted in Enterprise Information Management (EIM)
strategies and solutions.
A holistic EIM solution is a fundamental enabler of digital transformation based on an
integrated infrastructure that delivers secure information and services. An effective
EIM strategy is guided by processes, principles, and standards.

Transformational LeadershipAs explored in earlier chapters, CIOs and other leaders will have to develop theleadership capabilities required to drive digital transformation. To achieve digitaladvantage, business leaders will be called upon to motivate their companies arounda strong, unifying vision articulated through an achievable and well-governed digitalstrategy. Typically, executives build their visions based on operational effectiveness(inside-out) or superior customer experiences and sales (outside-in). Centralization anddigitization are fundamental to both approaches. 2
1

 alcolm Turnbull, “Australian Minister Calls for Innovation in Digital Media”, FutureGov Summit Australia, December 2013,M
http://www.futuregov.asia/articles/2013/dec/04/australian-minister-calls-innovation-digital-gover/ (accessed February 2014).

2“ The Digital Advantage: How digital leaders outperform their peers in every industry”, Gapgemini Consulting and the MIT
Center for Digital Business, 2012.
184

STRATEGIES FOR CHANGE MANAGEMENTThe operations of any business could not be
achieved without strong leadership based ona coherent strategy. A strategy accounts for
cultural shift and technology infrastructure
challenges while supporting engagement
across departments, partners, suppliers,
and customers. A transformational leader
has to overcome outmoded structuresand old management styles to empower
Generation Z employees to self-direct,
make decisions, experiment, generate
ideas, and take risks. In 2020, the focus will
be more on leadership than on managementand designated “Information Czars” orleaders such as Chief Digital Officers may
be appointed to lead the charge.

C R E AT I N G A
BUSINESS CASE

Transformational CIOs andbusiness leaders need toestablish a business case for
digital transformation. What
will the pay-back period be forthe project? Most projects do
not move forward without ascrutinized business case. A
business case should be basedon existing processes, industry
best-practices, and the positive
impact an EIM solution canhave on performance.

In order to build a digital business strategy
based on disruption with EIM at its core,executives need to shift their focus awayfrom cost efficiencies and tactical operations to providing value for the company
through innovation, developing new products and services, and overall business growth.
For the digital enterprise, the strategic CIO is often the champion of a strategy that isbased on sound business practices enabled by technology.

Building Capacity“Consumer data will be the biggest differentiator in the next two to three
years. Whoever unlocks the reams of data and uses it strategically, will win.”- CEO OF BURBERRY, ANGELA AHRENDTS

As data has shown (see chapter 6), future spending will focus more on investments
in human capital. The digital enterprise of the future will attract and build capacity
by bringing together people with highly specific skill sets to collaborate on projects.
To successfully transform, organizations will have to coordinate their initiatives
and assign the right resources. More effective human capital management will be
required, specifically by offering ways for employees to develop the skills required by
future business models. Capacity can be built either by training existing employees
or aggressively recruiting those with requisite skill sets. Organizations need tocreate and maintain a culture that both attracts and retains talent while supporting
underlying values for diversity, corporate responsibility, and career development.
185

CHAPTER 10

In 2020, for example, there will be an increasing demand for the skills needed toaccurately analyze and extract insights from customer big data. As a result, entire
departments could be designated to manage customer insights, requiring headcountand budget for customer data analysts. The digital enterprise will have to determine
where its skills gaps lie, and either hire to fill these gaps or train and certify current staff
to expand capabilities.
Mobility and Big Data are the most significant contributors to increased demand for an
enterprisewide information management strategy.

An increasing mobile/remote workforce

49%

39%

17%

9%

74%

Big data/increased demand for analytics

36%

34%

22%

8%

70%

24%

6%

70%

The need to manage information across a wide
variety of devices

Cloud computing deployments

Increased interest in collection and analysis of datafrom social media initiatives

Significant
impact

29%

41%

23%

34%

12%

37%

Moderate
impactLittle to no
impact

15%

58%

38%

13%

49%

Not
applicableNET
Impact28%

FIGURE 10.1: Near-Term Drivers for Technology Adoption Are Mobility and Big Data 3

Building up communities of practice, promoting collaboration using corporatesocial networks, and allowing employees to bring their own devices into work andwork remotely are ways of engendering a workplace that is attractive to an evolving
workforce. Activities like innovation labs and highly focused “tiger teams” can be
implemented and held accountable for producing actionable initiatives. In the customercentric digital enterprise, individuals and teams can be rewarded for outstanding
performance based on objectives linked to customer-focused initiatives to foster a senseof pride and ownership. Investment in digital education programs for executives helps
to promote digital as core to overall growth and success—and aids in the trickledown
effect in communicating the digital strategy as an enterprise-wide imperative. New teamgoals, performance plans, and incentives will have to be defined. The adoption of digitaltechnologies will aid in building capacity. The 2020 workforce must be empowered toharness the potential of digital technologies and apply these to transform the business.

3

“ Unleashing the Power of Information”, CIO Magazine, 2012.

186

STRATEGIES FOR CHANGE MANAGEMENT

Redefining Processes
Moving away from traditional structures, practices, and solutions often requires startingfrom scratch in redefining processes. Effective technology leaders can add strategic
value by driving the development of next-generation processes. In the digital enterprise,processes will be re-architected to support end-to-end customer-centric processes.
EIM can be used to rapidly create new processes that support customer service—within
hours—without requiring IT support or software development skills. By combining wellstructured modules with pre-built components, an application-factory approach allows
a line-of-business manager to build new processes easily. Alternately, an existing process
can be used as a template and modified to suit business needs across customer service.
This means that employees can be creative in anticipating service requirements anddesigning ways to address them. An on-demand environment is supported by flexible
EIM infrastructure, new technologies, and the ability to re-engineer evolving customer
processes and services.

New Models of Engagement
Collaborative EIM technologies facilitate the free flow of ideas and the exchange ofknowledge. To truly transform, the digital enterprise will have to create networked
environments based on new engagement models to empower all of its stakeholders
in an extended enterprise. If employees are engaged, motivated, and unified undera consistent vision, they are less resistant to change. New engagement models often
lead to a richer exchange of ideas, opportunities, and crowdsourced solutions.
Inter-departmental collaboration helps to eliminate information and process silos.
Business units are more inclined to engage with IT to adopt new technologies andadvance transformation. Externally, enterprise relationships are complex and difficult
to manage, yet they offer a way to apply resources to projects that are beyond anorganization’s firewall, network, and scope. This dynamic requires a substantial shift in
culture and good governance.

Redesigning the Supply Chain: B2B Integration
Business and technology leaders will have to work together in 2020 to integrate
systems to support collaboration across value chains and the extended enterprise.
From a change management perspective, many outmoded processes will be replacedwith flexible and dynamic processes. The appropriate technologies will need to be inplace to combine information and processes, based on cloud computing, mobility, data
analytics and the Internet of Things (IoT). Old value chains will be replaced by responsive,
resilient, innovative, and dynamic fulfillment networks. Connecting digitally tosuppliers helps the enterprise more readily outsource specialized products or services.
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CHAPTER 10

Collaborative tools can be deployed for real-time and secure information exchange andthe sharing of best practices between virtual, cross-functional teams. EIM provides
a platform for this open market approach with visibility into supply chain logistics,
streamlined information flows, and a secure single source of the truth across the digitalenterprise. EIM helps to orchestrate logistics, increase speed of business, enable just-intime delivery, and ultimately improve customer satisfaction. EIM is the glue that holds
the extended enterprise together.

Enterprise ArchitectureEnterprise architecture provides a framework for organizational change and includes
plans for transitioning to future business models. Before resources are committed to
implementing change, mapping and examining enterprise architecture can identify
capability and risk. An enterprise architecture should outline ways in which data andinformation can be integrated with services effectively. Data integration—a criticalenabling capability for transformation—must be reliable, secure, and accessible. Data
integration combines operations and analytics to unify the enterprise. Enterprisearchitecture helps to ensure the interoperability of systems and the sharing of
information resources across agencies. As an integrated suite of targeted functions, EIM
supports digitization, data integration and discovery, customer experience management,
secure information exchange, and records and information management.

Assessing (and Taking) Risks
Strong leadership directs transformation. To effect change, leaders should be willing totake risks and redefine processes. IT issues need to be addressed and a risk assessment
completed. Where does the largest cost and risk exist? This is typically the starting point
for many projects.
Leaders must continually quantify and monitor their progress toward digitaltransformation so that initiatives can be measured and refined. Key Performance
Indicators (KPIs) and digital scorecards can be used to help measure impact and change
corporate culture.4
How to create shifts in culture and support technology adoption are outlined in
the feature below, an excerpt from an interview with ClearCadence, based on theirexperience with change management in government organizations.

4“ The Digital Advantage: How digital leaders outperform their peers in every industry”, Gapgemini Consulting and the MIT
Center for Digital Business, 2012.

188

D I G I TA L I N N OVATO R S

ClearCadence
ClearCadence provides their clients with innovative and cost-effective business solutions
through the efficient deployment and integration of information technology. The Company
partners with large federal, state, and local government agencies to re-evaluate, re-define, andimprove their processes.
What follows is an excerpt from an interview with David Dye, Co-Founder of ClearCadence
and Jim Conklin, Managing Partner of the BPM Division, ClearCadence.

FIGURE 10.2: ClearCadence“Most of the projects span across agencies andtouch multiple systems. A good example is acourt system. The clerk’s office is managing
all the files, but the prosecution, the publicdefender, and law enforcement also needaccess to files. Coordinating multiple agencies
is the bigger challenge, more so than thetechnology itself.
Moving from paper to electronic (often a firststep) transforms the way they’re doing business,so the adoption takes a generation phase. You
have the younger people, and they adapt wellbecause they have grown up using technology.
But some of the older generation may be a bit
fearful of technology and are uncertain about it.
So the adoption levels are completely different.
We build a process based on what the agency
needs to move forward with. When it comes tosome of the traditional judiciary structures, wemanage change one-on-one when necessary.

189

D I G I TA L I N N OVATO R S

Whether they’re improving efficiencies,
reducing cost, or adding durability to generate
revenue—and the closer they can get their
Return On Investment (ROI) model to alignwith a key performance indicator—that’s what
helps to justify the cost of the project. Thatgets an executive’s attention. We typically ask
our customers: ‘What is the easiest project toimplement that will provide the highest KPI?’ Anattainable first win that’s realistic to achieve inallotted timeframes is critical.
The Court System in the U.S., for example,
has experienced budget cuts, but they still
have to produce with limited resources. We
implemented a paperless project in one divisionof the court system. Court papers needed tobe filed, put in a manila folder, and processed
through the system. Content came in fromvarious sources, including electronically throughan e-filing solution. But these files needed tobe verified with the clerk’s office, processed forcourt review and/or signature, sent back to theclerk’s office—all while keeping the attorney’s
office in the loop.
There is a lot of content flying back and forthacross government organizations and locations.
If I’m an attorney and I have an emergency case
30 miles away in a different building, when theprocess is digitized and automated, I can pullup the electronic file quickly and easily without
disrupting my work. When the files are digitally
stored, the government has an audit trail ofeverything. So it’s much more efficient for all theagencies and the constituencies. The result is
a combination of offering a better service leveland doing so at a lower cost.”

190

STRATEGIES FOR CHANGE MANAGEMENT

Challenges to Change Management
As a foundational aspect of any digital journey, adopting EIM poses technical,
operational, and cultural hurdles. The challenges associated with implementing
comprehensive EIM strategies are the lack of standard processes and designated roles
and responsibilities for information management. Challenges beyond standardization
are technical in nature and include the variety, velocity, and volume of information andthe complexity of IT systems. Having information fragmented across silos also hampers
effective management and poses potential risks.
The organizational and cultural obstacles to implementing EIM include making
adjustments to behavior and adoption. Most organizations must make structuraland chain-of-command decisions when they change their processes. In many highly
regulated industries, for example, organizations have been working according topredictable, command-and-control structures and processes for years at the sacrificeof initiative and performance. The younger generations are more comfortable with the
new ways of engaging and the adaptability required to respond to changing markets andconsumer demands.
To further complicate change management, many organizations have multiple anduncoordinated information management efforts underway. In one study, respondents
identified that only 15 percent of their current information management initiatives
were highly integrated. The same study found that more than one-quarter of current
initiatives were siloed and lacked cross-initiative coordination and common goals. 5 To
combat this, CIOs need to establish a centralized EIM strategy and guidance to ensure
discrete initiatives are prioritized, coordinated, and compatible.
Lack of standardized processes and/or organizational role definitions, as well as internal politics andcultural issues, are top barriers to implementing an enterprise-wide information management strategy.

39%

38%

35%

35%

Lack ofstandardized
processes

Clarifying
organizational roles
and responsibilities
for information
management

Internal politics

Corporate culture

FIGURE 10.3: Challenges to Implementing an EIM Strategy 6

5

“ Unleashing the Power of Information”, CIO Magazine, 2012.

6

Ibid.

191

32%
Dealing with anincreasing variety
of data sourcesCHAPTER 10

The risks of failing to establish a comprehensive EIM solution can be significant. These
include decreased levels of productivity and performance, increased cost and IT burden,
limited insight and poor decision-making, compromised security and the inability tocomply with regulations.

Implementing an EIM Strategy
The benefits of deploying a comprehensive EIM solution are clear. Overall, EIM helps
the digital enterprise align its efforts under a common vision and structure, engage all
stakeholders, and govern their efforts. In 2020, CIOs and other IT managers will make
EIM a top priority.
IT is no longer simply a provider of information. In 2020, IT will be responsible for
empowering people with information that is usable. For this to happen, the digitalenterprise needs to be able to access, manage, and protect its information—and make it
actionable for a wide range of stakeholders.
When implementing an EIM strategy, a good first step is to take inventory of current
enterprise information assets. This includes the following: Fragmentation - How many disconnected sources, flows, and archives do you have?
 Velocity - Which information processes are accelerating or need to do so?
 Variety - What kind of information, media, documents, and discussions are you mostconcerned with?
 Volume - How much information are you talking about?
 Security - What kind of information security risks are most threatening to

your organization?
 Governance - How are you ensuring that your digital efforts are coordinated,

efficient, and moving in the right direction?
 Compliance - Which legal or regulatory requirements and risks exist in yourcompany and your industry? 7
Efforts need to be prioritized and targeted—and linked to an articulated business case.
Prioritization should align with the executive team’s top business objectives, whether
they are productivity, cost reduction, revenue growth, innovation, competitiveness, orgovernance. The objective that benefits most significantly from improved information
management should be identified. These business needs are the pilot projects for
effective digital transformation.

7

“ Unleashing the Power of Information”, CIO Magazine, 2012.

192

STRATEGIES FOR CHANGE MANAGEMENTAs EIM projects or initiatives are successful, they can be expanded to encompass moreusers, technologies, and processes. As discussed in Chapter 9, the core technologies of
EIM include business process management, content management, customer experience,
information exchange, and discovery. When these technologies are integrated, the full
spectrum of transformational benefits can be realized, based on a data-driven approach.
Digital transformation is an ongoing process. Transformational leaders must be
flexible and organizations agile enough to accept this truism. Beyond structuraladjustments, a change of attitude is already underway. Many organizations are adopting
entrepreneurial, innovative approaches to communicating and collaborating and taking
steps to digitize their operations.
There are many examples of significant performance improvements. All of the stories
and interviews included in this book are about digital transformation. The vision oftransformation is being defined and recognized as one that will be in a perpetual stateof flux. So structures and processes must subsume this, and journeys down the pathto making the vision a reality will be many and variant. The good news is—as we haveillustrated throughout this book—the technology is available, and many enterprises havealready taken their first steps toward implementing a digital strategy with Enterprise
Information Management at its foundation.

193

BIBLIOGRAPHYDIGITAL: DISRUPT OR DIE

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206

INDEXDIGITAL: DISRUPT OR DIE

Index
A
Age of the Customer, 26, 60, 61, 76, 80
Alberta Energy Regulator (AER), 155, 156, 158
App Store, 152
Application Programming Interface (API), 95, 96
AppWorks, 164, 177
Archive, 10, 44, 121, 131, 134, 164, 192
Archiving, 120, 134, 165, 170
Artificial Intelligence (AI), 12, 15, 66, 71, 79, 81, 87,
91, 95, 114

Classification, 30, 120, 168, 170
Clayton Christensen, 2, 3
ClearCadence, 188, 189
Cloud, 2, 10, 14, 24, 44, 53, 75, 86, 90, 119, 136,
142, 150, 162, 173, 181
Cloud Computing, 6, 9, 10, 24, 45, 123, 137, 145,
152, 187
Collaboration, 25, 32, 50, 75, 91, 105, 111, 134,
148, 163, 170, 186
Communities of Practice, 133, 186

Asset Management, 134, 177

Compliance, 36, 45, 54, 77, 82, 94, 116, 130, 143,
153, 162, 177, 181, 192

Automation, 2, 14, 20, 32, 72, 87, 88, 92, 146, 166Content Analytics, 48, 175, 176

B
Baby Boomers, 103, 104
Barrick Gold Corporation, 27, 28
Big Data, 10, 24, 30, 41, 66, 95, 119, 127, 142, 153,
186

Content Lifecycle Management (CLM), 134, 168
Content Management, 72, 94, 111, 133, 165, 168,
170, 193
Content Suite, 165Contextualization, 71
Contract Management, 177

Bio-Printing, 18, 19

Corporate Social Responsibility (CSR), 118

Blog, 7, 17, 26, 55, 65, 81, 91, 120, 143

Cross-Border Trade, 82, 83, 97

BRIC nations, 31

Cross-Functional Processes, 84

Bring-Your-Own-Device (BYOD), 116, 119

Crowdsource, 56, 65, 109, 112, 154, 187

Bruce Power, 131, 132

Crowdsourcing, 19, 56, 106, 112, 113, 151

Business Intelligence (BI), 29, 72, 92, 133, 166

Customer Experience, 22, 28, 60, 71, 97, 143, 154,
165, 171, 184

Business Process Management (BPM), 51, 85, 96,
138, 150, 165, 189
Business-to-Business (B2B), 26, 34, 86, 95, 164,
178, 187
B2B Integration, 178C
C-Suite, 142, 184
Case Management, 34, 52, 85, 134, 150, 157, 166,
177

Customer Experience Management (CEM), 61, 68,
73, 77, 78, 165, 171, 172, 188
Customer Relationship Management (CRM), 72,
149, 177

D
Data Mining, 66, 128
Data Protection Act, 125
Data Security, 119

Change Management, 147, 181, 188, 191

Deep Web, 42

Chris Anderson, 2, 5

Defensible Deletion, 123, 130

Citibank, 74, 75

Demographics, 32, 101, 103, 153

City of Barcelona, 13, 14

Digital Business, 10, 20, 30, 37, 75, 97, 147, 163,
184, 188
208

INDEX

Digital Consumer, 61, 63, 66

Exchange Suite, 165

Digital Customer, 20, 24, 60, 71, 78, 80, 171

Experience Suite, 165

Digital Disruption, 2, 5, 6, 10, 23, 30, 60, 78, 103,
141, 153

Extended Enterprise, 22, 23, 37, 80, 91, 144, 151,
173, 188

Digital Engagement, 31, 57, 60, 71, 77, 184
Digital Enterprise, 24, 30, 45, 56, 71, 80, 96, 97,
106, 125, 138, 149, 162, 177, 192
Digital-First, 25, 40, 47, 55, 80, 118, 138, 147, 162,
178, 181
Digital Governance, 31, 36, 47, 108, 118, 120, 134,
138
Digital Media, 75, 184
Digital Native, 25, 37, 102
Digital Shadow, 34, 41, 46, 47, 127
Digital Strategy, 13, 14, 36, 141, 149, 153, 162, 184,
193

F
Fax, 44, 96, 167, 173, 174
Fifth-Generation (5G) Wireless Networks, 6,8
Fraud, 177

G
Gamification, 106, 115
Gaming, 63, 72, 113, 115
Generation X (Gen X), 32, 102, 103, 104
Generation Y (Gen Y), 103, 104

Digital Supply Chain, 29, 31, 34, 80, 86, 91, 96, 97

Generation Z (Gen Z), 24, 103, 107, 115, 185

Digital Transformation, 23, 40, 71, 105, 116, 140,
162, 181, 192

Geospatial, 56

Digital Workplace, 31, 55, 97, 101, 112, 136

Global Positioning System (GPS), 6, 11, 16, 93

Discovery Suite, 165

Globalization, 5, 24, 30, 80, 89, 101, 102, 116

Disposition, 121, 137, 165, 168, 170, 177

Gordon Moore, 2, 4

Disruptive Innovation, 3, 4, 97, 147

Governance, 24, 36, 40, 56, 69, 75, 108, 122, 137,
144, 163, 181, 192

Distell, 49, 50
Distributed Manufacturing, 34, 35, 81
Dynamic Case Management (DCM), 85, 86, 152,

Givaudan, 110, 111

Governance, Risk Management, Compliance(GRC), 118, 119, 134, 138

157

H

E

Health Insurance Portability & Accountability Act(HIPAA), 119, 125, 136

e-Commerce, 33, 36, 86, 87, 113, 142, 171
e-Discovery, 36, 45, 120, 122, 134, 138
E-Privacy Directive, 125
Electronic Data Interchange (EDI), 87, 88, 96, 119,
178, 179, 180
Encryption, 121, 129
Enterprise Content Management (ECM), 51, 94,
110, 165, 168, 170, 173
Enterprise Ecosystem, 22, 34, 37, 53, 80
Enterprise Information Management (EIM), 40, 51,
73, 91, 116, 134, 149, 162, 173, 184, 185, 191
Enterprise Resource Planning (ERP), 44, 71, 91,
134, 157, 171, 179, 181
EU E-Privacy Directive, 125

Holographic Technology, 101, 113
Homeland Security Act, 125
Human Capital Management, 166, 177, 185
Human Resources (HR), 44, 116, 133, 149, 157, 185

I
Identity Theft, 128, 129
Information Exchange (IX), 27, 53, 75, 95, 137, 165,
188
Information Governance, 36, 61, 77, 118, 135, 168,
171, 181
Information Governance Reference Model (IGRM),
121

209

DIGITAL: DISRUPT OR DIE

Integration, 34, 80, 87, 97, 121, 150, 170, 178, 179,
189
Intellectual Property (IP), 6, 12, 18, 30, 47, 71, 119,
125, 155
Internet of Things (IoT), 2, 6, 11, 30, 41, 80, 91, 118,
146, 162, 187
Interoperability, 188
Intranet, 106, 108, 109, 136J
Just-In-Time (JIT) Manufacturing, 34, 87

K
Key Performance Indicators (KPI), 188, 190

L

National Security Council (NSC), 126
Near Field Communications (NFC), 27, 33, 64,
76
Net Generation, 106

O
Omni-Channel, 26, 33, 67, 68
Open Data, 30, 55, 56
Operational Agility, 24
Original Equipment Manufacturer (OEM), 35, 81,
87, 180P
Personal Digital Assistant (PDA), 108
Permissions, 134, 136, 137

Litigation, 40, 45, 119, 122, 130, 162, 168

Personal Information Protection and Electronic
Documents Act (PIPEDA), 119, 125, 136

Logistics, 34, 81, 85, 87, 92, 188

Platform-as-a-Service (PaaS), 95

Long Tail, 3, 20

Portal, 14, 33, 70, 88, 106, 171

M

Predictive Maintenance, 92
PRISM, 129

Machine-Language Translation, 101

Privacy, 30, 45, 119, 123, 137, 149, 152, 181

Machine-to-Machine (M2M), 9, 11, 114, 145

Privacy Legislation, 119

Managed Services, 179, 180

Proactive Replenishment, 92

Manufacturing, 6, 17, 35, 44, 61, 81, 123, 142, 148,
180

Process Suite, 165

Media Management, 172
Metadata, 133, 168, 176
Michelin, 93, 94
Micro-Electromechanical Systems (MEMS), 11

Procurement, 23, 87, 95, 134
Public Web, 42R

Millennials, 104, 116

Radio Frequency Identification (RFID), 11, 41,
87, 97

Mobile App, 9, 33, 48, 65, 126, 129, 133, 150, 171

Reciprocal Mentoring, 115

Mobile Financial Services (MFS), 64

Records Management, 48, 120, 123, 134, 135

Mobile Shoppers, 63, 64

Recruiting, 26, 114, 177, 185

Mobility, 14, 65, 105, 186, 187

Regulatory Compliance, 45, 123, 157

Moore’s Law 3, 4, 18

Research and Development (R&D), 84, 107, 112,
142

Multimedia, 41

NNanobots, 15
National Security Agency (NSA), 126

Retention, 100, 109, 114, 133, 149, 171, 177
Retirement, 31, 77, 103
Risk Management (RM), 39, 51, 72, 92, 121, 134,
149, 181

210

INDEXSSAVE Award, 113
Scalability, 45
Search, 2, 22, 49, 71, 100, 141, 176
Security, 9, 24, 28, 46, 75, 95, 121, 136, 152, 173,
174, 181, 192
Security Breach, 53, 122, 125, 129, 136, 147
Semantic Search, 42, 175

Trading Grid, 96, 165, 179, 180
Traditionalists, 32, 102, 103
Training, 53, 101, 120, 147, 185
Transparency, 52, 88, 105, 138, 144, 167, 175
Transportation Management Systems (TMS), 91,
179

U

Sensors, 6, 11, 34, 62, 70, 92, 114, 132, 157

Unstructured Data, 44, 57, 77, 89, 135, 149, 155,
164

Sentiment Analysis, 48, 55, 72

USA PATRIOT Act, 125, 127

Short Message Service (SMS), 96
Six Sigma, 144V

Smart Cities, 13, 14

Value Added Networks (VANs), 178

Smart Machines, 12, 20, 32, 146

Value Chain, 8, 22, 35, 80, 97, 149, 187

Smart Process Application (SPA), 85, 97, 107, 150,
152, 166

Video Resumes, 115

Smartphone, 4, 6, 9, 16, 27, 62, 108, 158

Virtualization, 143

Social Media, 4, 20, 44, 69, 76, 101, 128, 152, 162,
170, 186

W

Social Network, 62, 106, 126, 145, 166, 171, 186

Warehouse Management Systems (WMS), 91,
92, 179

Software-as-a-Service (SaaS), 90, 95, 137, 151, 159
Storage, 5, 10, 45, 119, 120, 126, 170, 174
Stored Wire and Electronic Communications Act,136

Wearable Devices, 12, 17, 62, 101, 108
Web Analytics, 72
Web Content Management (WCM), 72

Structured Data, 44, 51, 57, 77, 110, 135, 144, 149,
155, 164

Wiki, 55, 108, 110, 111

Supplier Relationship Management (SRM), 92

Workflow, 134, 157, 166, 168

Supply Chain Management (SCM), 83, 88, 136, 177

WikiLeaks, 129

Supply Chain Orchestration, 92

Z

Supply Chain Visibility, 88, 89, 90, 97

Zero-Distance Connectivity, 8

Systems of Engagement, 67, 76, 140, 145, 149, 150,
154
Systems of Record, 67, 76, 140, 149, 150, 154

T
Tablet, 6, 9, 33, 50, 72, 108, 133, 136, 158
Tacit Jobs, 32, 114
Talent Management, 114, 115
Third-Party Logistics (3PL), 23, 35, 87, 91, 95, 179
Three-Dimensional Printing (3-D Printing), 18, 80,91

211Mark J. Barrenechea joined OpenText™ (NASDAQ: OTEX, TSX: OTC) as President
and Chief Executive Officer (CEO) in January 2012 and also serves as a memberof the board. Under Mr. Barrenechea’s direction, the company has grown bothorganically and through strategic acquisitions into a $1.6B company. Through its
commitment to innovation and customer-centricity, OpenText has successfully
realigned its products to transform itself into a leader in the Enterprise Information
Management (EIM) market.
Before joining OpenText, Mr. Barrenechea was President and CEO of Silicon Graphics
International Corporation (SGI), where he also served as a member of the board.
During his time at SGI, he led the company’s strategy and execution. Prior to SGI,
Mr. Barrenechea served as Executive Vice President and CTO for CA, Inc. (CA),(formerly Computer Associates International, Inc.) and as a member of the executive
management team. Mr. Barrenechea was also Senior Vice President of Applications
Development at Oracle Corporation, responsible for managing a multi-thousand
member global team. He has also held a number of other positions including, Vice
President of Development at Scopus, a software applications company, and Vice
President of Development at Tesseract, where he was responsible for reshaping thecompany’s line of human capital management software. He holds a Bachelor of Sciencein Computer Science degree from Saint Michael’s College. Mr. Barrenechea currently
serves as a member of the Board and Audit Committee of Dick’s Sporting Goods.

Mark J. Barrenechea

Mr. Barrenechea has authored several books about the evolution of the enterprisesoftware industry, including e-Government or out of Government, Enterprise Information
Management: The Next Generation of Enterprise Software, eBusiness our Out of
Business, and Software Rules: How the Next Generation of Enterprise Applications Will
Increase Strategic Effectiveness.

P. Thomas (Tom) Jenkins is Chairman of OpenText (NASDAQ: OTEX, TSX: OTC) andhas served as a member of its board since 1994. Mr. Jenkins also served as President
and Chief Executive Officer of OpenText from 1994 to 2005, and as Executive
Chairman and Chief Strategy Officer from 2005 to 2013. Prior to that, he servedin several managerial and technical capacities at various technology companies.
Mr. Jenkins has been active for more than 30 years in innovation and economic
development in both the private and public sectors in Canada. He is also a member ofthe Board of Thomson Reuters Inc. and of TransAlta Corporation. He is an Executive
Fellow at the School of Public Policy at the University of Calgary, a Director of the C.D.
Howe Institute, an appointed member of the National Research Council of Canada,
and Director of the Canadian Council of Chief Executives. Prior to his work in theprivate sector, Mr. Jenkins served as a commissioned officer in the Canadian Forces
Reserve and currently serves as Honorary Colonel of the Royal Highland Fusiliersof Canada (RHFC), a reserve infantry regiment in the Waterloo Region. Mr. Jenkins
is a member of the board of the Canadian Forces Staff College Trust in Toronto.
Mr. Jenkins holds an M.B.A. from the Schulich School of Business at York University,
an M.A.Sc. in Electrical Engineering from the University of Toronto, and a B.Eng.
& Mgt. in Engineering Physics and Commerce from McMaster University. Mr.
Jenkins also received an Honorary Doctorate of Laws (LLD) from the University ofWaterloo and an honorary Doctorate of Philosophy (PhD) in Military Science fromthe Canadian Forces College (Royal Military College). Mr. Jenkins was appointed
an Officer of the Order of Canada (OC) in 2011 for his contributions to educationand innovation in Canada, the Canadian Forces Decoration (CD) in 2013, and theQueen’s Diamond Jubilee Medal (QDJM).

Tom Jenkins

Simplify. Transform. Accelerate.
Discover digital transformation to compete in a digital-ﬁrst world.
Digital is coming, like a fast moving train.
Fueled by recent innovations in technologies like mobile devices, analytics, social media, cloudcomputing, and the Internet of Things (IoT), business models are shifting to reshape entire
industries. In the midst of all this disruption, the goal for every organization is to transform itself
into a digital enterprise.
In 2020, organizations will use digital channels to discover new customers, new markets, and newrevenue streams. The winners will successfully reinvent themselves. The losers will fail to competeand become obsolete in a digital-ﬁrst world. We see evidence of this all around us, with the fall of
giants like Blockbuster, HMV, and Barnes & Noble in the tailwind of innovators like Apple, Netﬂix,
and Amazon.

On average, digital leaders are more proﬁtable than their industry competitors by
26 percent. They generate more revenue and create more value. But how can theenterprise of today transform itself into the digital enterprise of the future?
Information lies at the heart of digital transformation. In a digital-ﬁrst world, information is the new
currency. Only through maximizing the potential of its information while minimizing risk will theenterprise be able to differentiate its products and services. Enterprise Information Management(EIM) is the key transformative technology. It empowers the digital enterprise to simplify,
transform, and accelerate its business in a digital-ﬁrst world.
Digital: Disrupt or Die is a discourse on digital transformation. As told by global companies, analysts,
innovators, and thought leaders, it explores the future of digital technologies, their impact on theenterprise, and how EIM equips the enterprise to brace for change and opportunity in the year
2020 and beyond.
The time for change is now. Are you ready?

“EIM empowers the digitalenterprise to simplify,
transform, and accelerate its
business in a digital-ﬁrst world.”$29.00 US© 2014 by Open Text Corporation. All rights reserved. Printed in Canada

SBN 978-0-9936047-3-7