deal architect

The end of Cloud history?

In 1989, Francis Fukuyama, then deputy director of the State Department's Policy Planning Staff (he has since taught at Johns Hopkins and Stanford among other institutions) predicted the fall of Communism and the world beyond in an article titled “The end of history”. In 1992 he elaborated his thoughts in a book. His view was optimistic – that Western democracy had prevailed and would survive as the “final form of human government”

Margaret Thatcher, one of the major contributors to the Fall of communism, and conservative herself is said to have reacted to Fukuyama’s article thus “The end of history? The beginning of nonsense….” No doubt, history marched on – there were wars in the Middle East, the EU and China both emerged as major global powers, Russia has not exactly disappeared.

Cloud computing is entering its third decade (NetSuite was founded in 1998, Salesforce a year later) and in many ways we can say it has won out over on-premise computing. And we can like Fukuyama say it is the end of cloud history, but how will the next decade and beyond play out?

Based on my research and consulting the last few months, we could see at least five scenarios emerge: 

a) Next-gen enterprise apps continue from current market leaders

The current crop of leaders – Workday, Salesforce, Oracle may continue to go from strength to strength. To SAP’s credit it has through its cloud acquisitions managed to survive the onslaught of those three and others and is poised to lead again. As I wrote a few weeks ago, it will take a next generation of apps with changing UX of voice interfaces and digital assistants, a lot more integration of automation like drones, robots, wearables and functionality which reflects today’s business practices not those brought forward from client/server world. This is a challenge for the incumbents. They want to keep selling what they have versus developing their next-gen of apps, and may give SAP a chance to get to leadership again. Having said that. in the last couple of decades, SAP has missed out on several trillion dollar markets as I wrote here. All these vendors are somewhat myopic – they keep looking at each other as competition and ignoring the white space around them.

b) A verticals led market

In the first two decades of cloud apps we mostly saw financials, hcm and crm functionality – horizontal across industries. Major chunks of functionality – utility billing, insurance claims processing, electronic medical records, retail merchandising,  manufacturing execution and countless others have stayed in client/server and prior architectures. By my estimate that leaves 80% of the market uncovered and opens opportunity for a new set of vendors (or outsoucers like Accenture) to come at enterprises with industry functionality partnered with horizontal functionality available  in the market today.  In other industries, large customers may themselves port their legacy industry applications to micro-services architectures.

c) Portfolio of technologies from multiple vendors

My colleague, Brian Sommer and I have looked at several business processes which the current apps leaders offer, and even there there are enough SMAC – social, mobile, analytical and cloud components you can use to craft far better purchase to pay or recruiting or shop floor capabilities. Customers prefer to buy versus build but many are finding they can combine components from multiple software, hardware, sensor and other vendors and create far more relevant and cost efficient processes.

d) A data led world

A radical new way to think of applications may be emerging. As John Wookey explained “And rather than ask people to type data into a system and then spit it back at them, {which is honestly what most applications do) ...ask for data and then give it back to you…you start with the idea of, here's the business objective, AND there's all the data in the world. What kind of an application would you build? The analogy I always use is Waze, which is to me, like the application that showed the best value or the best shift that will happen. When you go from a world in which you have an app that shows you red lines, yellow lines and green lines on a hard to read Google Maps, which is kind of what used to be in the traffic apps, if you remember them. To Waze. No one cares what the traffic is like in that area. What they care about is finding the best route to get home. How do I get from A to B as quickly, easily as possible. And tell me my options in doing that. And then feed me, turn by turn what I should be doing.”

We are starting to see vendors talk about machine learning – but those are in context of their current flows. Workday has Prism analytics which bring data together from multiple sources, SAP is talking about intelligent apps, but a new wave of business applications which works backwards from goals and objectives may be emerging. It could be data centric vendors like Google and others like IBM with Watson type capabilities which lead in this market

e) An infrastructure led world

The fastest growing segment of the cloud market today is that around IaaS. Amazon and Microsoft with their massive data center footprint and platform ecosystems could start through acquisitions and partnerships start to redefine the application landscape.

The problem with infrastructure led vendors is usually they think in speeds and feeds not features and functions or business outcomes. As an example, Oracle could have run away with the cloud apps market in the last decade, especially with SAP’s issues. They could have replaced hosting in tens of thousands of their PeopleSoft, JD Edwards, EBS and other customer bases with their IaaS. They have chosen to chase after Amazon. They could have listened to their legacy customer base which went to third party maintenance. These customers consistently ask for support of their customizations and improvements in ticket resolution. Oracle responds with “ours is more trusted – secure”. It’s ships passing in the night.

Yes, we are approaching a pivot in the cloud apps market. This is where the geopolitics were in 1989. The next decade and beyond will be tumultuous – exciting for some, disrupting to others.

It is the end of cloud apps 1.0.

A Midsummer Night’s Musing: Clouds, Renewables and Digital

In November, I ran a 3 part series titled “Raising the Bar” around cloud computing, renewables and digital transformations. 

Over the next few days I will provide an update on each. Each post should benefit from the vendor event season which seemed unusually busy this year, from the consulting I have been doing, from the on-going research and interviews for the next volume of SAP Nation, and from analysis of global events and twists and turns at major companies.

Each of the markets is at a pivot. It shows in changing fortunes of companies like GE and Oracle. With renewables, we are seeing the results of a long experiment in Germany and the beginning of a new one in China. With digital, we are starting to see some tech vendors open up about the impact transformations at their customers/clients are having on their operations and business models.

In the meantime, hope each of us is enjoying the summer. Hope you have found your version of Shakespeare’s contentment

“I know a bank where the wild thyme blows,
Where oxlips and the nodding violet grows,
Quite over-canopied with luscious woodbine,
With sweet musk-roses and with eglantine.”

Relational Databases: Gradually, then Suddenly?

In The Sun Also Rises, the Ernest Hemingway character is asked “How did you go bankrupt?”. His response ‘Two ways. Gradually, then suddenly”

I thought of that relative to relational databases during a meeting with Hasso Plattner of SAP in Orlando recently. There was a palpable sense of vindication that his view on columnar databases like HANA has been tested and validated by thousands of customers

“Yeah, that's mainstream. I feel good about that, ten years ago, I had an idea which really worked: streamline ERP applications to basically record only transactions.

And, for everything else there are algorithms to exploit the data….Facebook doesn't know what aggregates are. Why do we have aggregates? They have no aggregates.

Today, it's all on demand. People are not permanently rolling up and looking at rolled up data. And, if they do that, then it's fast. If they want to change it, it's instant.

That is really gratifying”

Then I read this Werner Vogels (CTO of Amazon) post

“We found that about 70 percent of our operations were key-value lookups, where only a primary key was used and a single row would be returned. With no need for referential integrity and transactions, we realized these access patterns could be better served by a different type of database. Further, with the growth and scale of Amazon.com, boundless horizontal scale needed to be a key design point--scaling up simply wasn't an option. This, ultimately led to DynamoDB, a nonrelational database service built to scale out beyond the limits of relational databases.”

He then proceeds to talk about a wide array of databases Amazon now offers, including a relational one.

I still believe relational databases are declining “Gradually”, not “Suddenly” about to hit the wall. New applications are increasingly running on non-relational options. Converting legacy applications will take a long time. Retraining DBAs, adapting systems management tools to support new databases for stringent SLAs will take time. It’s unclear if the Teradata lawsuit will slow down HANA adoption. (we met Hasso before that announcement).

But I am now prepared to say that the “Gradually” decline is starting to accelerate.

Hey Amazon, Google, Microsoft, IBM, Oracle…

… a nice opportunity to show off your machine learning capabilities – specifically with transcription help for my next book.

I tend to interview lots of executives for my books. For each of my last 6 books I have tried some speech-to-text technology – various versions of Nuance Dragon, Siri etc. with very little impact. I keep going back to human transcription services.

With ML having matured so much – and voice interfaces starting to show up in so many applications – would love to have the transcription be automated this time. Over the next 3 months I will likely have 100 audio files to transcribe.

Many of these files will be captured from a speakerphone on a Zoom recorder, and I will be able to upload those MP4 file. So, there will be some degradation due to the call quality. Also many of the speakers will have German, other European, Indian and other accents and will use tech jargon. But the conversations will be in English.

Amazon, you have the inside track. We use your KDP platform to publish the Kindle version of books. Having said that, the first use of AWS Transcribe did not produce very good results.

Google you also have an inside track. Most of these MP4 files are stored in Drive. I got excited when I saw the GCP  Speech to Text conversion, but my conversations are longer than a minute. Can you help with longer conversions?

IBM, Microsoft, Oracle – same offer to try out Watson, Azure and Oracle ML services on my project.

Look forward to your support!

SapphireNow: Event Scorecard

Readers know I prefer going to vendor analyst summits compared to user conferences. I feel like I am intruding on customer time and access to vendor execs at the latter. But in many ways, SapphireNow last week managed to bend laws of gravity and as a result I really enjoyed the conference. Here is a post-mortem:

Pre-briefings – A-

I offer vendors the opportunity to provide a sneak preview on the blog. In the past Oracle and Workday have availed of that. I offered SAP that opportunity but we could not make that post happen in time. In exchange, however, SAP had a series of pre-briefings under NDA. A full day in NYC, and several phone calls in prep for the Orlando event. Impressively, they actually listened and modified some of their presentations based on our feedback.

Customer Access - A

I was blown away by the number of customer meetings SAP set up either one on one, or in small groupings of analysts. The one negative is that filled up my agenda and I could not attend some customer sessions or meet folks on the show floor I would have liked

Vendor Executive Access – A+

Having time with vendor executives tends to be elusive for analysts and media at user conferences. Yet, I was with Hasso Plattner in the same room three different times for a total of 4 hours! That’s a new record for an event. Other executives were available for several sets of panels or small group meetings. And the SAP AR staff tried really hard to set up even last minute meetings we asked for. I hate to think how exhausted the poor executives were given the customer meetings and social activities they are also expected to grace at such events.

Hotel and conference logistics – B-

Even for a Floridian, Orlando this time of the year can be miserable so I really appreciated staying at the Hilton with a covered walkway to the Orange County Convention Center. I also appreciated being warned the wifi at the OCCC was poor and the keynote theater a bit cramped so I watched couple of the keynotes in my hotel room and took screen shots of slides. BTW Shame on the OCCC - SAP has been a loyal, highly visible patron for a decade now and to not have decent wifi is inexcusable. I hope the SAP events team have an SLA with the OCCC and get some credits for future events there. As a balance, the catering at the OCCC was surprisingly good. Well stocked coolers and coffee stands and the meal buffets had enjoyable diversity. The open floor layout which has become standard in most industry events these days hurt SapphireNow this year. We had too many meetings where people had to scream to be heard.

Social activities – A

The best evening by far was a small group dinner our AR coordinator, Stacey Fish organized. I skipped most parties but enjoyed some quiet time at one that Franck Cohen threw with some of his friends from Cirque du Soleil. I tend to avoid concert night – usually past my bed time to be terrorized by the strobe lights and throbbing subwoofers. But I went this time to humor my daughter who has grown up with Justin Timberlake. Stacey managed to get her a ticket. The logistics of ferrying the audience to the Amway Center were impressive. The show itself : I was pleased to see everyone having a good time, but yes I did miss my nap and I was terrorized by the strobe lights and booming subwoofers

Will SAP lead the next generation of enterprise applications?

Franck Cohen, President SAP Digital Core & Industry Solutions, presented the slide below at SapphireNow last week. He did not spend much time on it and I would likely have not thought much of it if he had not shown it in an earlier meeting. It is a simple slide yet could herald the next generation of enterprise apps. I have taken his thoughts and added my commentary.

Digital Age UX

I had a chapter in the 2010 The New Polymath about emerging interfaces.  It’s taken a while, but at home we are getting used to digital assistants like Alexa. In our cars, we are starting to feel haptic interfaces and get comfortable with heads up displays. On the shop floor (see this Plex keynote) we are moving to digital capture, wearables and AR/VR. (and the Kopin WhisperChip described there should make voice interfaces work even in noisy environments). During the Super Bowl earlier this year, I was struck by a Dr Oz commercial where he described how wondrous the five human senses are. The enterprise is (finally) starting to recognize that and diversify beyond the keyboard and mouse.

Automation

In Silicon Collar I described how BP is using robotic crawlers on rigs and drones for pipeline inspections, how KPMG is redefining audits with cognitive computing, how digital agencies like Grok are using CGI, how Amazon is leveraging Kiva robots in its distribution centers, how banks are using RPA and many other man-machine combinations. No profession or business process is exempt yet amazingly enterprise software has been somewhat oblivious to this automation-everywhere trend.

Next-gen processes

Today’s cloud solutions have mostly taken features and functionality forward from the last wave of client/server ERP, CRM, EAM etc. They have adapted to compliance driven changes, but not so much for business model and practice changes.  And they have mostly tackled horizontal accounting, HCM and CRM functionality.

So much has changed in the last two decades. If you are a utility your billing needs to factor net metering where your consumers are selling power back to the grid. If you are a retailer you deal with your customers across multiple channels, through countless delivery methods and have to adjust to reverse logistics like you never did in the past.  If you manufacture, your bill of materials has a lot more silicon and software as products become smarter. You have plants around the world close to your major consuming markets.   In reverse, you may also be dealing with contract manufacturers. If you are a CPG company, your marketing budget is increasingly digital and social but you still have plenty of analog spend – radio, print, billboard, events. HR processes – recruiting, training etc. – appear oblivious to the fact that only 10% of the US civilian work force now works for the Fortune 500. No, the rest are not contractors. The talent is in their supply chain, in their service firms (accountants, attorneys, advertising firms), on their platforms, in their franchises etc. We need new processes to track and develop this very widespread talent base.

It’s nice to hear Franck lay out his vision, but can SAP wake up Rip Van Enterprise Software from its 20 year slumber and catch up to modern business? It’s not like SAP’s performance has been stellar in the same period

• SAP has often been distracted by infrastructure and platforms, not applications – NetWeaver, Sybase, HANA have taken a lot of attention.
• S/4HANA is largely a re-skinned ECC. It has not pushed the ball forward on new functionality. It has not even begun to focus on industry book of record functionality.
• SAP has been timid about cloud computing. Its acquisitions – SuccessFactors, hybris etc have brought it cloud revenues, but the majority of customers are still on on-prem software. Early S/4HANA adoptions have been mostly on-prem or in private cloud
• It continues to be very dependent on its traditional SI partners who themselves missed out on the many new trillion dollar markets which have emerged in the last couple of decades.

Yet, for the first time in the last several years at SapphireNow, as I wrote here, I felt some optimism about the application vendor buried in that organization. Maybe that will spur some more action in the competition.  Oracle has appeared to be more interested in catching up to Amazon and Microsoft in the IaaS market than in growing the application footprint. Infor had a grand vision of servicing several verticals but has been slow to do so. Workday is highly focused on finance and hr, Salesforce on its somewhat narrow vision of CRM.

The biggest strength for SAP is its customer base across industries and geographies. My books have cataloged many of the innovators in that base. The opportunity awaits to turn their innovation into application features and functions.

Will SAP grab it?

Not your Dad’s CRM

I was looking at our Amazon credit card statement. I expected plenty of Whole Foods charges after I told my wife we get another 5% off if she used the card, but I was taken aback by the number of charges from a vendor called “AMAZON MKTPLACE PMTS”. Turns out we are not unique. Amazon has started sharing stats about its marketplace including “they sell half the products that Amazon customers buy, and more than 140,000 small and medium-sized businesses surpassed $100,000 in sales on Amazon in 2017.”

Turns out marketplaces are a thriving global phenomenon. Sameer Patel, CEO of Kahuna who has pivoted his company to sell SaaS solutions to such marketplaces says much of his traction is outside the US to vertical marketplaces. His customers include Mudah, the largest shopping marketplace in Malaysia and Restorando, a dining marketplace in Brazil and Argentina. His team demoed me insights that they provide marketplaces to balance interests of sellers and buyers and continue to generate vibrancy that keeps them coming back.

While these marketplaces attract businesses who want to leverage their commerce and fulfillment engines, vendors like NetSuite have been strengthening their own commerce engines for businesses who don’t want to become over-dependent on a marketplace channel. Former CEO Zach Nelson, for years, argued that CRM was poorly defined, since it left out customer-facing transactional systems.

Zach is right and CRM vendors are increasingly welcome to tackle other customer facing transaction areas – order to cash, with unique pricing/promotion and mass customization needs, and vertical billing, claims processing and other areas. Some of that functionality was delivered by ERP vendors decades ago, and they have not exactly kept them up, opening up significant new opportunities.

On a recent visit to Uptake, I saw a brochure which said “Machines don’t have to break”. Such a simple statement, yet such a dramatic impact on field service. Analysis of customer data from railroads, utilities and other businesses with complex assets, and their recent acquisition of APT with its vast library of equipment failure modes, they are moving maintenance away from traditional break-fix and scheduled visits to much more predictive work. Think of the impact that has on crew scheduling, employee skills and maintenance business models. Its no longer just old CRM service functionality.

More HCM/CRM integration - SAP’s acquisition of Callidus takes it into the sales compensation space, and adds configure-price-quote (CPQ) applications to its hybris commerce engine. ServiceNow is hosting its user conference, Knowledge18 next week. I am impressed how many HCM analysts are attending. In fact, I think they outnumber CRM centric analysts. LinkedIn, which used to be a recruiting tool has under Microsoft, increasingly become a CRM tool. Digital assistants like Amazon Alexa and Amelia are joining the services workplace.

Nearly a century ago, John Wanamaker, a marketing pioneer famously said “Half the money I spend on advertising is wasted; the trouble is I don't know which half”. Today’s CMO would get fired for even thinking that. Google, Facebook, even Accenture (with the slew of digital agencies they have acquired) have changed marketing in the last decade. We are about to see another road bump as GDPR and other privacy related legislation kick in.

I was briefed a couple of months ago by WorkSpan. Their tag line is “Alliances have a solution to call their own.” It is surprising, given how many businesses go to market through channels and partners, that CRM has not evolved much earlier to include PRM for Partners. More CRM evolution.

People snickered when Bill McDermott, CEO of SAP recently said “..we know the world needs a next generation CRM concept….” Other people roll their eyes when they see Oracle has been branding its Sales, Service, Marketing and Commerce products under the moniker of MCX or Modern Customer Experience. Both vendors could see their ERP product functionality cannibalized by next-gen CRM. But both are pointing to how CRM has been morphing and extending into a whole bunch of new areas. As I wrote after a recent Oracle MCX event, we are not in Kansas anymore.

Mostly analog in a digital world

My friends in tech like to constantly talk about how fast technology is evolving. I like to remind them the supply side of technology is accelerating, the adoption and implementation of technology lags considerably.

I got a reminder this week, following another earlier in the year how some processes have not evolved much since the time of our ancestors. It’s a process called Lost and Found, which Google can show 54 million results for if you search for “best practices” around it. And many more million search results bragging about the Internet of Things. 

I lost my FitiBit One tracker in Miami. I am pretty attached to it given it has been an appendage for 4 1/2 years and nearly 7,000 miles in steps. It is constantly communicating with FitBit servers and I get weekly activity reports and periodic milestone badges. You think FitBit could facilitate interaction between finder and owner like Uber does. Uber says “The best way to retrieve an item you may have left in a vehicle is to call the driver. Here's how:” FitBit has chosen to not get in the middle. So you get comments in their community  like this to a finder who was trying to identify the owner “Put a sign on a telephone pole where you found it or found in the local paper. Fitbit will not be able to get it to the original owner”. Actually FitBit does even less. I tried to replace and pair with my wife’s tracker. She has not used it much over the same period. I charged it, and it displayed fine. Once off the cable it would not display. FitBit decided it was a display, not a battery, problem said it was out of warranty and the best they could do was offer me 25% off a new tracker. To add insult they also sent me an email this week about compliance with upcoming GDPR rules. Yes, they have lots of data about you, your location etc. but don’t expect them to help you much if you lose the device.

But this is not just about FitBit. My search for the device and that for my wife’s keys earlier in the year has allowed me to see how different entities handle lost and found. Southwest Airlines has one of the most thorough processes. You fill out an online form and item description, and they send you weekly emails on the search results. AA is similar except they limit the likely place lost you can report to just one location (it could have been lost at the originating gate, on the plane or destination). They text you periodic search information. The two offices I visited in Miami checked promptly and reported back they had not seen it. I dealt with 2 Marriott hotels and they politely took my information but did not call back with any details.  Avis has an online form but they don’t communicate back much when a search of the returned car is all they need to do. Tampa airport keeps a digital list of found items but you physically have to go into the office to see if there is a match with yours. The taxi service which my wife used was pretty useless. She is convinced she lost the keys in the taxi but they could not even identify the driver or the car.  The café in Miami I was at did not bother to call back. TSA wants you to call a number at each airport you may have passed through to see if they can help with lost items.

Someday we will have tracking tags embedded in everything valuable. Till then let’s just accept we live in a mostly analog world even as we pretend we are in digital nirvana. 

Hold on tight to your valuables folks. Even if Good Samaritans try to get your stuff back, processes to facilitate a reunion are pretty poor.

Verticals, the Uptake way

Readers know I have lamented for a while that enterprise software has paid lip service to verticals. Two decades of cloud and in-memory computing and still most of the available functionality is around horizontal areas - accounting, HCM and CRM. In the meantime, customers continue with client/server and older architectures around utility billing, retail merchandising, electronic health records, insurance claims processing, hospitality reservations and countless other “books of record”.  And even in verticals they have kept investing in, functionality has not kept up with changing trends. So, in manufacturing which many ERP vendors have supported for decades the functionality seems oblivious to growing digital capture via wearables on the shop floor, growing automation in the form of robotics and 3D printing and other contemporary practices.

So, I was a pig in mud this week visiting with Uptake in Chicago and hearing them talk about failure prediction, fuel management and label correction around complex industrial assets like locomotives and wind turbines in industries like railroads, mining and energy. These are industries with complex, expensive, mission-critical assets.  Connecting such assets is allowing for predictive maintenance, better asset performance monitoring and much more sophisticated field service.

Uptake is the brainchild of Brad Keywell and fellow serial entrepreneurs who have transformed Chicago’s tech landscape – see my post here.

The concept of having assets talk to us about how they are feeling is not new. In The New Polymath I described how as far back as 2004, BP was deploying motes, sensors, RFID tags in its tankers and in refineries in what it called a “sensory network”. In later books and blogs, I have extensively covered GE and its vision of the Industrial Internet.  Over the last couple of decades, our knowledge of complex assets, their components and failure rates and root causes of failures has exploded. Sophisticated companies now routinely make decisions about trade off between cost of unplanned maintenance versus cost of downtime.

Enterprise software vendors should have been all over this opportunity but most still just glibly talk about the “internet of things”. Uptake’s platform built atop cloud infrastructure from Google, Amazon and Alibaba ingests gobs of asset sensor data, applies machine learning to separate signal from noise, supplements traditional physical models and leverages a growing army of of domain-aware data scientists. It has lined up a group of demanding customers – 50+ so far in its 4 year history. Its platform can increasingly support a wide range of industries as it can apply its libraries horizontally to an expanding portfolio of use cases.

Uptake will not magically make up for lack of updated transactional capability from software vendors. As an example, most asset management software in the market still focuses on depreciation accounting and planned, not predictive, maintenance. Some continue to call their modules “fixed assets” and their last innovation was reading bar codes to track asset location.  Uptake should allow customers to continue to leverage such older transactional software, move them to cheaper third party maintenance and other “coping strategies” I described in SAP Nation.

In that sense, Uptake is showing that the value is moving away from process and transactional capability to intelligence and analytics.  Enterprise software vendors will attempt to do the same or at least talk a good game. Which is why Uptake’s most recent executive recruit, its President Ganesh Bell, ex JD Edwards, PeopleSoft and SAP is a timely one.

Can Uptake go even further and adjust to the world of outcome based economics? OEMs like GE who make such assets are trying to move away from the business model of one-time asset sales to multi-year contracts based on uptime and other outcome metrics. Buyers are skittish about such value contracts because they cannot precisely tie payback to product functionality. Still others view ML algorithms as voodoo science. Then there is the growing battleground about who exactly owns the data and how best to secure it.

Uptake is today a small player surrounded by giant OEM makers and sophisticated utilities and railroad customers. Again here, Ganesh’s recent stint at GE Digital should help.

It’s investment in understanding complex assets and OT (as different from IT) should make it a key player for the next several years as we evolve field service (factoid – the Bureau of Labor Statistics says wind turbine techs were the fastest growing job in 2017) and move to outcome-based contracting.

In the meantime, through his portfolio of other companies, Brad and his colleagues have their fingers in consumer markets, logistics, healthcare, advertising and other sectors. When it comes to verticals  I have a feeling they have already contributed more and and we will see more from them than we have from many enterprise vendors.

Business Process Re-imagination: Turning rectangles into octagons

Two starkly different experiences last week have me thinking about boring business processes.

My wife and I drove by a recently opened Carvana  “vending machine” near us– their octagonal, 8-story glass and metal robot which delivers the car you just purchased on the web. I was telling her how they have re-imagined so many things about the used car market. No depressing giant car lots. No used car salespeople. A 7-day return policy. Website with multiple views of cars as their virtual sales location.  Algorithms applied to wholesale car buying. All kinds of logistics - if you cannot pick up the car at one of their locations they subsidize a one way plane ticket or they arrange for the car to be transported to you. All kinds of paperwork around car defects, customer financing and other areas digitized. And then there is the distinctive pick up point.

Have bar codes evolved in the last 15-20 years? It was a rhetorical question a client asked a vendor presenting on next-gen shop floor ideas. Vendor after vendor had demoed good old fashioned rectangular bar code readers. You think they could have at least talked QR codes. Even better they could have shown digital calipers, ring scanners, augmented reality goggles and industrial robots.

What’s the difference between the two besides octagons and rectangles? One unconstrained their thinking. The latter was just trying to sell you what they have and have had for a long time. There is a time and place for both models. We are at a stage where we should be doing more of the former, unconstrained thinking.

We are living in remarkable times. 

Clouds and in-memory technology have given us virtually unlimited storage and compute. Telecommunications and logistics have massively increased our addressable markets. You can apply cameras and all kinds of sensors to capture all kinds of data digitally. We can communicate with machines without our fingers. Consumers have better technologies at home than enterprise users have at work. Even common citizens can develop new applications with no or low code tools.  Every morning on New Florence I have an example of such unconstrained thinking. The first entry was way back in March 2005.

Most clients we deal with today have a “modernization” itch. Their ERP systems are entering their third decade of service. For some their cloud solutions are in their third or fourth 5 year renewal cycle. They are getting old in the tooth. Their vendors have tried to modernize the systems through waves of social, mobile, analytical, sensory, automation iterations. Others have spend enormous efforts digesting tens of acquisitions they made. Few, however, have rethought processes at a cellular level.

Most vendors have tended to apply their technology efforts “in bulk” – move all their functionality to a common UX or common cloud architecture. That is more efficient for them, but misses the opportunity that each business process should be reimagined on its own.

Think of the accounts payable function. If you could start from scratch, you would ask for invoices to arrive and be ingested in digital format. Your MRO purchases and contractor timesheets would arrive through networks like Ariba and Provade. You would apply machine learning to detect fraudulent charges and prevent duplicate payments. You would capture employee travel and expenses via their mobile phones. You would be applying robotic process automation to routine AP tasks. You would pay your vendors with a myriad of procurement cards, mobile payment applications, electronic transfers, currency applications and yes, even old paper checks. And yes, you would be looking at potential Blockchain applications. Now try to find a single vendor which has rethought their accounts payable processes so thoroughly.

And that’s just one, well-trodden business process (interestingly one which Michael Hammer famously used to trigger a wave of process reengineering activities in the 90s). So much has changed in the last couple of decades when you look at industry and country specific practices. So much technology is available to re-imagine each of those. 

My colleague Brian Sommer and I help clients with some of this re-imagination, and as a hobby we frequently discuss what-if scenarios around a wide variety of processes.

We are geeks who like to reshape rectangles into octagons. We want many more to try the new calculus. And push their vendors to try it even more. There has never been a better time.