IDC Sees Massive Disruption From Industry’s Platform Shift

The global IT industry is in the middle of an epic platform shift and the rules for survival in a market built on mobility, big data analytics, social business and cloud computing will be very different than those that applied to the previous client/server generation.

Download Frank Gens’ slides here

That was the message from IDC Senior Vice President & Chief Analyst Frank Gens as he kicked off the research firm’s Directions 2012 conference in Boston this morning. Gens, who has tracked the computer industry since the days when mainframes ruled the earth, outlined a dramatically new economic structure that will emerge as economies of scale take hold.

Frank Gens, IDG
Frank Gens (photo by Jeff Ballard via Twitter @jballard)

“Volume is going way, way up and price is going way, way down,” he said of the new software market. “If [technology companies are] going to drive large-enough volumes to support the revenue levels they’re used to, they’re going to have to drive the number of customers way up. You’ll need millions of customers in order to compete.”

Gens outlined some striking changes in the platforms and architectures that underlie what he called the “third platform” of computing after mainframe and client/server. Among them:

  • Spending on mobile data services will surpass spending on fixed data services this year for the first time. “That’s a crossover that will never cross back,” he said.
  • The 700 million mobile devices shipped in 2012 will roughly double the number of fixed devices shipped during the same period. Spending on mobility will exceed spending on PCs and servers for the first time.
  • The volume of unstructured data in corporate data centers will exceed the volume of structured data for the first time.
  • China will surpass Japan to become the world’s second largest IT market at about $170 billion.

But the most startling changes Gens outlined concerned the software applications market, where downloadable free and low-cost apps are redefining the economics of the business. IDC forecasts a five-fold increase in annual apps downloads to 137 billion by 2016. Only about 18% of those apps will be paid for, and average prices will fall from $1.59 today to 82 cents. “That’s spooky stuff when you consider that PC apps average about $25” and that that market isn’t growing, Gens said.

Technology companies will need to overhaul their business models to accommodate these shifts. In order to attract the thousands of new customers they’dd need to recruit each day, vendors will have to become experts at cultivating communities and working with partners and even competitors. In other words, word of mouth marketing is the only viable promotional model.

Will Microsoft be a player in mobile platforms? It may be, but Redmond has a lot of work today, Gens said. A recent IDC survey asked developers which platforms they were “very interested” in targeting. Apple IOS for the iPhone came in first at 90%, followed closely by Google’s Android for smart phones. HTML 5 was a strong third. Microsoft’s Windows Phone 7 was a weak fourth at under 40%. Can Microsoft compete? “We should know in the next 12 to 18 months,” Gens said.

Tech firms will also need to serve a wider variety of vertical markets because price deflation won’t permit the luxury of focusing. Fortunately, IDC has identified more than 40 new specialty industries made possible by platform shift, including medical assistant online, social mobile commerce and smart buildings.

And if these pressures weren’t intense enough, don’t forget overseas competition. Gens said the business models that support high-volume, small-transaction markets are being honed right now by Indian, Chinese and Russian companies that have worked in that environment for years. US firms, with their high costs and margins, are going to struggle to adapt to a leaner and more competitive way of doing business.

This is one in a series of posts sponsored by IBM Midsize Business that explore people and technologies that enable midsize companies to innovate. In some cases, the topics are requested by IBM; however, the words and opinions are entirely my own.

Transforming P&G

When Stan Joosten first contacted me about joining Procter & Gamble’s Digital Advisory Board, I initially hesitated. The volunteer position would demand a few days of my time every year just as I was beginning to transition my focus to B2B and away from P&G’s consumer markets. But this was P&G, after all, and Stan, who is Innovation Manager for Holistic Consumer Communications, is a persuasive guy who had already signed up several people I respect. I said what the heck.

It was the best decision I’ve made in the last five years.

This week I sat in an auditorium at P&G headquarters in Cincinnati and heard CEO Bob McDonald talk about the centrality of one-to-one relationships to the company’s future and declare “We want to be the most digitized company in the world.”

Mark Pritchard, who heads global marketing, echoed the one-to-one theme, noting “Digital marketing is past. Brand building in the digital world is the future.” That’s an impressive statement coming from one of the world’s largest TV and print advertisers.

The fact that this week’s event was even going on was notable in itself. Organized in just seven weeks and spearheaded by John Battelle’s Federated Media Group, Signal P&G brought top executives from Google, Facebook, Yahoo, AOL, Microsoft, Coca-Cola and many other digital and consumer brands to talk about the future of marketing. About 300 P&Gers crowded the John G. Smale Tower Auditorium in Cincinnati and another 1,300 watched online. Most people in the room stayed till the very end.

From my conversations with employees and the discussions I overheard in the hallway, I came away convinced that this is a company that is successfully transforming both its culture and its approach to market. When you consider that P&G has nearly 130,000 employees spread across the world and marketing practices that have made it an icon of excellence for a century, that’s no small achievement.

New Measures of Success

P&G has been called the world greatest marketing company. Success can be a curse, though, and the maker of Crest, Tide and about 25 other billion-dollar brands has struggled to wean itself from a traditional focus on coupons and samples in favor of a culture of engagement.

It’s not that P&G doesn’t understand its markets. The company’s almost obsessive approach to research has marketers and engineers routinely visiting customers’ homes to spend hours watch people doing laundry, diapering their babies and brushing their teeth. P&Gers understand that the reason moms buy Tide goes far beyond clean clothes and gets to issues like self-esteem and peer acceptance. Its brand marketers are some of the savviest marketing pros I’ve ever met.

This deep understanding of customers was evident even in the Advisory Board’s earliest meetings with brand managers. What was missing was a sense of how to engage. P&G marketers create brilliant campaigns, but their success milestones have been defined by traditional metrics like impressions, coupons and trials.

Assumptions are breaking down, however, thanks to a willingness to change and the success of campaigns like last year’s Old Spice “The Man Your Man Could Smell Like,” which combined traditional TV advertising with a brilliant series of companion videos on YouTube. This week Federated Media showed off StyleUnited, a new P&G community for “want it all women” that logged one million page views in its first three months and is already driving new sales.

Support From the Top

More important, though, is the support shown by top executives like McDonald and Pritchard. They’re obviously keenly aware of the Innovator’s Dilemma, Clayton Christensen’s theory of how successful businesses destroy themselves by being unable to discard the tactics that made them successful. P&G’s revenues continue to be strong, but its traditional retail channels are under intense pressure, warehouse clubs are squeezing margins and Amazon wants to trump its brands. Consumer packaged goods companies today face the risk of being marginalized as commodities. Digital channels are the lifeline that can establish long-term connections with their customers. It appears to me that the key people at P&G understand that, and once a company of this caliber gets on board, entire industries change.

I’m not sure there’s much I can tell P&G marketers that they don’t already know at this point. While P&G has never paid me a fee, they have enabled me to connect with people I would never otherwise meet and to get the briefest of glances into how a great company stays on top of its game. It is been an amazing experience and I’m grateful to Stan, Tonia Elrod, Daniel Epstein and the others who have permitted me to be a part of it. If I can ever be of service, don’t hesitate to call.

CIO Challenges Educators to Stay Relevant

Wichita State University CIO Dr. Ravi Pendse last month issued a provocative challenge to educators to rethink their tools and tactics if they are to remain relevant a decade from now.

Addressing a regional edition of the popular TED conference in Wichita, KS, Dr. Pendse, who is both the CIO of Wichita State University and an award-winning professor, said he chose the term “relevant” deliberately. In his view, educators who continue to rely upon lectures and chalkboards as the tools of their profession are becoming dangerously out of step with the ways in which young people learn.  Educators must not only adopt the tools the students use but also adapt their curricula to the topics that interest those students.

“If the goal is to get people excited about history, shouldn’t we study the history of Google?” he asked. “Our young people are looking for complete convergence. If you can’t provide it to them, you have a problem of relevance.”

To illustrate how out-of-step some educational institutions have become with even everyday technology, Dr. Pendse asked audience members to exchange cell phones with each other. He noted the nervous rumbling the exercise created among the crowd. “It’s uncomfortable not to have those devices with you,” he said. “So why do we tell people in the schools to turn them off? We should be using them as educational tools instead.”

Facebook is ubiquitous among college students, but many higher education administrators don’t use any social networks at all. With the social network expected to surpass 1 billion members sometime this summer, “Wouldn’t a class be popular that studied the sociology of Facebook?” he asked.

Dr. Pendse acknowledged that his views aren’t universally shared, but he expressed little sympathy for educators who refuse to change. “I call them CAVE people,” he quipped. “That stands for Colleagues Against Virtually Everything.”

The analogy of the caveman may not be lost on an older generation that is falling further behind. By the age of 21, many young people today have played 10,000 hours of online games, Dr. Pendse noted. Educators may not approve of that fact, but they need to accept it and discover some of the virtues of video games, since they improve motor skills and concentration, that’s why so many people get the best hardware for their games, like processors from this amd fx 6300 review so they can play games as Overwatch using different OW Guides.

For example, “They require creativity. They even have built-in assessment tools; you can’t go to level 15 without completing level 14. And young people are collaborating across the world to figure out how to get to that next level.”

If educators are to get to the next level themselves, they need to put down the chalk and pick up the mouse. “Technology will never replace teachers,”’ he said, “but we can use technology to help a much greater number of students learn from each other.”

You can see Dr. Pendse’s 23-minute presentation below.

Palmisano Reflects on a Decade as IBM’s CEO

As he retires from IBM after 10 years as CEO, Sam Palmisano reflects on what he’s learned about leadership, making tough decisions and thinking strategically (video, transcript and downloadable audio).

IBM CEO Sam PalmisanoPalmisano is disarmingly modest and candid in an interview with Wharton management professor Michael Useem as he discusses his “temporary stewardship” of the IBM legacy. Like many successful CEOs, he is guided by a few simple and logical principles: Always put the organization first, think long-term and leave the company better than you found it.

Palmisano speaks honestly about the mistakes IBM made that nearly capsized the company 20 years ago and how those lessons changed him as a leader. Among the topics he covers:

  • The controversial decision to sell the PC division to a Chinese manufacturer and why the sale intuitively made sense;
  • Why IBM has continued to invest $6 billion annually in research and development, even during tough economic times;
  • The toughest decision he made a CEO: restructuring IBM’s pension plan.
  • What he learned from his college football career and why he’s glad he turned down the opportunity to try out with the Oakland Raiders in 1973.

Palmisano has kept a low public profile during his tenure as CEO, so the opportunity to see him let down his guard a bit and talk about his personal style is a rare treat. I came away from it with greater respect for the man and even the impression that he’d be a good guy to have a couple of beers with.

Update: Harvard Business Review’s Joseph Bower posts a retrospective on Palmisano’s tenure. “They don’t give Nobel Prizes in management, but if they did, Sam Palmisano would deserve one,” he says.

Live Blog: 3M Unites Global Workforce With Technology

Lotusphere 2012When it comes to innovation, everyone wants to know what the leaders are doing, and you won’t find many firms with a better innovation track record than Minnesota Mining & Manufacturing (3M). At Lotusphere today, two representatives to 3M outlined some ways the company is using collaboration platforms to improve access to expertise and information across the far-flung company, which has people in more than 60 countries.

Jeff Berg, 3M, at Lotusphere 20123M’s track record of innovation is legendary, but globalization has presented new challenges. “We’re a century-old company founded on the principles of collaboration, but now we’re worldwide, said Jeff Berg (left), IT eBusiness Architecture and Development Manager.

Internet-based tools have been embraced across the company to compensate for the loss of physical proximity. 3M engineers have adopted a microblogging platform called Socialcast behind the firewall to tie together 800 members across 30 channels. The tool is enabling point questions to be answered quickly.

A sampling:

  • “I need information on 3M Japan products (name withheld) and what are the Eurpean substitutes?”
  • “Does somebody know whether (unnamed competitor’s product) is approved at (unnamed customer)?”
  • “Anybody have a good print anchorage test for films or a test apparatus that performs a wiping motion repeatedly?”

Michael Lynch, 3M, at LotusphereThese questions were all answered in minutes, said Michael Lynch (right), Manager of IT Advanced Personal & Workgroup Solutions. People have gravitated to Socialcast “because of the speed and light touch.”

Not all problems lend themselves to brief answers, though. 3M has also experimented with more ambitious projects involving live seminars, group brainstorms and even contests.

One division launched a contest seeking 50 unique prototypes that contained 3M technology. The deadline was six weeks. The group held live live webcasts and chats to explain the event and succeeded in getting 45 prototypes from across the U.S. 3M filed seven patents on the work that resulted.

The research & development organization has used IBM Connections to take a long-standing technical conference online. The Virtual Technical Information Exchange (VTIE) renders in cyberspace what used to be done with speeches, posters and conference calls.

Last year the event went virtual with IBM Connections, drawing 10,000 participants from around the world who contributed to 140 presentation threads with nearly 1,000 posts and comments. “This was supposed to be a two-week event when it started last summer,” Lynch said. “It’s still running.” The time-shifted conversation has drawn significantly more participation from overseas employees, he added. Presentations are recorded and posted as audio files, which participants can follow up in forums.

Time to Market

Online collaboration is also being used in non-technical functions. A private community of about 200 consumer-focused field sales reps and service engineers now post monthly blog-like summaries of field activity reports, customer wins and innovative marketing ideas. “Not only does this helps us understand what problems need solving in the field, but it helps the headquarters team feel more connected with customers,” Berg said.

For 3M’s largest customers, account managers can now connect with each other to seek innovative solutions. Berg cited one customer in the hospitality industry that needed a noise-mitigation solution that couldn’t be addressed by 3M’s Thinsulate or Bumpon products. A Connections search found just the thing in a completely unrelated industry.

From the Top

Collaboration tools aren’t just for peer connections. Executive managers recently found them useful when communicating with employees about disruptions that would stem from a major renovation of the company’s Minneapolis headquarters.

“Temperatures in Minneapolis can drop to 20 below in winter, so the need to force people outside during renovations was a concern,” Lynch said. “The decision to use for the renovation plans to employees was controversial at first because news has always been top-down.” A wiki devoted to the project proved to be just the ticket, however. “It’s become the most popular internal social site in the company” with 340,000 page views and more than 200 comments, Lynch said. “We’ve been able to listen to discussions, manage objections and actually get great ideas.”

And when it’s 20 below, the creative juices really get flowing.

This is one in a series of posts sponsored by IBM Midsize Business that explore people and technologies that enable midsize companies to innovate. In some cases, the topics are requested by IBM; however, the words and opinions are entirely my own.

Live Blog: Day 2 Kickoff Strikes Transformation Theme

Day Two of Lotusphere kicked off with a celebration of business transformation enabled by collaboration technology. Representatives from TD Bank Group and the author of a hot new book told stories of businesses that are rethinking the way business is done.

Wendy, Arnott, TD Bank Group

TD has grown to become North America’s sixth largest bank through acquisitions and a focus on listening to customers. A new social media team listens and responds to blogs, Facebook posts and tweets, the process “learning to be a better bank,” said Wendy Arnott (right, @Wendy_Arnott), VP for Social Media and Digital Communications.

The company has also transformed its internal communications using social networking technologies anchored by IBM Connections. Arnott ticked off the three key imperatives as aligning with core values, delivering real value and facing risks head on. To that end, the bank is endeavoring to involve employees in critical decisions.

Acknowledging the technical orientation of the Lotusphere audience, IBM also brought out TD’s CIO, Glenda Crisp (left, @GlendaCrisp) to talk about the importance of the IT-business partnership. Crisp said traditional project management was complemented by a collaboration steering committee that addressed issues like adoption barriers as well as technical problems like SharePoint integration.

The committed deemed it critical to make the shift to a shared platform as transparent as possible Single sign-on simplified access to Connections and Google search appliances were brought in to make enterprise-wide search seamless. Interviews with users also surface the importance of supporting mobile users of the bank’s dominant BlackBerry platform. “We made that a key factor in our selection criteria,” Crisp said.

The result of this active employee involvement was an adoption rate that exceeded expectations by a factor of seven. More than 50,000 users in Canada are up and running, and US deployment is expected to grow from 3,000 to more than 25,000 in less than a month.

Arnott ticked off success criteria:

  • Get executive leadership sponsorship.
  • Put a dedicated organization in place to oversee deployment.
  • Deal with resistance by “getting into weeds with business teams and helping them discover how social will help them address business challenges.”
  • Get employees involved on a volunteer basis and make sure their ideas count.

IBM next brought out Fast Company editor Bill Taylor (@practicallyrad) to address the need for business transformation. Taylor, whose new book is Practically Radical, asserted that in this age of commoditization, “The only way to stand out from the crowd is to stand for something special. Winning organizations today stand for new ideas,” he said. “The middle of the road has become the road to nowhere.”

Bill Taylor, Fast Company at LotusphereTaylor talked about the radical innovation embodied in the Henry Ford Health System in Detroit, which broke the mold when it built a new hospital in West Bloomfield, MI three years ago. Executives at the health care provider realized “they knew everything about surgery and pharmacology, but they knew nothing about what it took to make people feel right.”

Common Area, Henry Ford Health CenterHenry Ford Health recruited consultants from the hospitality and restaurant industries and conceived of a 160-acre facility that looks more like a resort (left) than a hospital. They created a file of more than 2,000 original healthy recipes that are in such demand that the hospital now books $1 million annually in catering revenues.

The result is “a business home run because the approach from day one was so unconventional,” Taylor said.

Taylor also sang the praises of USAA, an insurance company that solely serves military customers. The 10-week employee orientation process there is more like a boot camp than a training course, he said. New recruits wear 65-lb. backpacks to simulate the working conditions of a infantry soldier and eat military rations. “They want to immerse their people in are the lives and experiences of their customers, which creates bonds not only with customers but also between employees,” he said.

Bottom line: “As you think about making your business more memorable, also think about how you make it more social.”

This is one in a series of posts sponsored by IBM Midsize Business that explore people and technologies that enable midsize companies to innovate. In some cases, the topics are requested by IBM; however, the words and opinions are entirely my own.

Live Blog: Lotusphere 2012 Opening Session

Michael J. Fox at Lotusphere 2012Michael J. Fox kicks off as guest speaker, telling about his diagnosis with Parkinson’s Disease at the age of 29 and how it sparked his interest in the Internet. “I found out I was part of a community.” Web activism has enabled him to raise $270 million to battle Parkinson’s. Fox’s brief speech isn’t very relevant to social business, but the audience receives him well.

IBM’s Alistair Rennie kicks off the core session.There’s nothing new about social business, he says. It’s about sharing ideas and trust, having those actions persist so we can learn from them. We finally have a way to deliver those insights in a ways that they can be used at that moment.

IBM’s internal think tank, the Institute on Business Value, discovered that collective intelligence delivers three major benefits:

  • Discover new ideas
  • Leverage skills and distribute workload
  • Improve forecasting effectiveness
Alistair Rennie at Lotusphere 2012

Alistair Rennie at Lotusphere 2012

There are many ways to apply these benefits, ranking from improved product design to global sales contests. “Ultimately, Social Business is a competitive differentiator.”

This is not new tools, it’s a complete reinvention of systems that form the core of how a business operates. Five years from now, the people who win will be talking about a completely new way of doing business, one with new platforms, cultures, skills and insights. “This is rethinking. It’s like Moneyball: analytics + baseball = new game.”

When you get serious about transformation, you stop thinking about tools and start thinking about platforms. It means a core platform for communications, botn internal and external, Rennie says. “I would shut off e-mail if I wasn’t running Lotus Notes.” Like many core technologies, e-mail has been abused.

The Social Business platform that IBM is building has these components:

  • Social networking
  • Content
  • Analytics

We need deep analytics around everything in the organization. This is what drives business change, Rennie says.

Together, these create a platform for action that transforms process and innovation.
“Social Business cannot be an IT project,” but IT must be closely involved. “If you understand the potential of social business, grab a Red Bull and a nearby nerd and get going.”

The Demos Begin

It’s impossible to describe all the screen stuff going on during the fast-paced demo portion of the program, but here are some highlights.

IBM’s Jeff Schick introduces a demo of the new Lotus social business platform, which borrows liberally from Facebook, Hootsuite and The user interface is a Facebook/Google+-like internal social network. The news feed is the core experience with e-mail and calendar available through pop-up windows. Interesting evolution from traditional e-mail in-box. Lotus is effectively replacing the inbox with the social network.

Documents can be edited directly from browser. Workflow is overlaid to enable tasks to be assigned to others on a team from within the document. Those assignments go directly into a user’s activity stream.

Statistics are available about activity in any community you manage. “Do you ever wonder who are the most active members of your communities or what content is most popular? Now you have those statistics instantly.”

There’s also a cool, quick demo of a coming group video feature (technology provided via Polycom). Looks just like Google Hangouts.

The demo also shows integration with back-end content management systems so that community managers can share content such as PDFs and Word docs from within the Enterprise Content Manger directly with the community. Content can be organized by various views, including a custom news page and topical filtering. “This is the destination for all your work actions.”

The next demo shows IBM Docs. This is collaborative Web-based editing performed in the cloud or on premise. Social content management can unlock the content stored in every repository and enable new business processes. The new release of Notes Connections (available now) will make it easier to share content.  Users can view a stream of user comments in a Twitter-like view. New Sametime integration intercepts messages and re-routes to the appropriate communication server,such as Apple messaging. Directory integration enables dial-back from a Sametime message for a voice/video call.

Business partners Polycom and Aruba Networks provided the platform integration for these features.

New mobile systems management features enable organizations to do a partial data wipe on a mobile device in order to maintain enterprise security without erasing user data.

Larry Bowden, VP, Web Experience Software, IBM shows the new IBM Customer Experience Suite. Noting that 30% of customers abandon Web pages within five seconds, he highlights the close-to-real-time analytics built on top of a scalable social network.

The IBM Customer Experience Suite is aimed at making it as easy as possible to reach mobile customers, deliver engaging experiences and apply analytics for informed decision-making. The beta of the suite is available now. This includes Portal & Community Pages, Web Content Manager and Web Experience Factory.

A demo show how a website manager can use a tablet to change a company website to deliver an optimized experience on any platform. The resulting site can resize and present content according to the capabilities of the device. This might be a click on a desktop or a swipe on a tablet. Integrated content management enables content elements such as text and video to be dragged, dropped and published. The content team can then be notified through an annotation feature that draws on the screen and shares those markups with others.

Surveys and user comments can be quickly added to content and made part of the published page. In-line analytics overlays visitor activity directly on the published page, making it simpler to identify trends. Survey/poll results can also be viewed instantly.

A social analytics demo shows data from SAP overlaid on sentiment analysis information from social monitoring tools (below). This helps a business to understand in near real-time how customers are reacting to news or a new product and how that’s reflected in sales from transaction systems.

Social Analytics in Lotus

User Presentations

Kurt De Ruwe, CIO Bayer MaterialScience

A division within the company wanted to take advantage of the knowledge and expertise distributed throughout the company’s worldwide operations. This division makes materials for the auto industry, where a 10% weight reduction yields a 5% energy consumption reduction. Bayer MaterialScience was looking for new lightweight materials.

IBM Connections was installed out of the box and made available without formal training. The first deployments were small but the software was so easy to use that it grew to several thousand users within 18 months. “By next month, over 125,000 internal users and business partners will have access to Connections.”

One of the most useful features is the tag-based user directory. Previously, employees had to find others within the organization by downloading and searching Excel spreadsheets. With the tagging function so, people can be found by expertise, location, title, division, etc. Bayer now has 54,000 profile tags in Connections, and the rapid and always-current directories is transforming the way people work together.

Collaboration in Medicine

The session features presentations from two users in medicine.

Denise Hatzidakis, CTO of Premier Healthcare AllianceDenise Hatzidakis, CTO of Premier Healthcare Alliance said, “At Premier, being exceptional means doing what we need to do so members can remain among the top hospitals in the country. We use the power of collaboration to lead transformation to high-quality, cost-effective health care.”

“Kids are the new normal. They think nothing about connecting with people and sharing actionable information. Health care information is easy to find, but useful data is hard to find. People are treated episodically by providers who only hlave access to a limited amount of information in a short exam.”

Getting health care providers to interact social is a big challenge. Data doesn’t flow easily. Premier has to find the trigger points that stimulates action. The requires collaboration across the industry.

The U.S. is plagued by 80 million health care mistakes a year, causing $800 billion in waste. The biggest fault point is in data handoff. In our business, operating socially improves outcomes and saves lives. Connected care is becoming the new normal, enabling providers to easily share knowledge. This addresses the biggest challenge health care providers face today: improving quality while reducing cost.

Premier is building a new platform that will allow it so measure, gain insight and imnprove the health of our populations. Data and social tools will be embedded in daily work. Patients will have greater certainty they’re getting the most effective treatment possible and the platform integrates expertise from the best health care providers in the nation.

The wrap-up speech was by Dr. Jeffery Burns, Chief of the Division of Cricital Care Medicine at Children’s Hospital in Boston

Dr. Jeffrey Burns, Childrens Hospital, at Lotusphere 2012

“I’m convinced medicine can’t move forward without collaboration with you,” he told the audience. Dr. Burns (left) told the story of working with a team of 20 doctors and nurses to save the life of a girl stricken with a bloodstream infection. “It was shutting down her vital functions: I was anxious about whether she could survive this,” he said. After multiple interventions and many tense moments, the girl was saved. “Last Hune I spoke to her mother and she told us how the girl had just finished sixth grade,” he said. “That is the greatest reward of my work.”

Dr. Burns was able to apply the lessons he learned to helping physicians in Guatemala City save a girl there who suffered from a similar condition. The physicians used telemedicine to consult between their locations. When the doctor later met that little girl he marveled, “My God, we did this over the Internet.”

Collaboration is instinctive to today’s young people. Dr. Burns’ 15-year-old son plays video games with people in faraway locations whom he has never met with the help of services as elo boost offered from the other site of the world. “He was doing the same thing I was doing: working in teams, breaking down tasks, forming hypotheses and testing hypotheses. These are scientific skills but in a game format,” he said. The potential exists to revolutionize medicine through these techniques.

“Ten million children die every year of preventable diseases,” he said. “There aren’t enough doctors and nurses trained to take care of a critically ill child. We need a solution that works as well in resource-constrained environments as in resource-advantaged ones.”

Childrens ia building a solution in partnership with several other hospitals. It enables health care providers to access the information they need ot provide care to critically ill children from anywhere in the world. Underlying the collaboration platform is a social network that enables experts to share their wisdom with those who might need it. Participants can then interact through avatars to transfer knowledge and discuss. Expertise gleaned from one intervention is thus available to everyone on the network. The underlying platform is IBM Connections.

Other User Presentations

Kurt De Ruwe, CIO Bayer MaterialScience

One division at the company was trying to take advantage of knowledge and expertise distributed throughout world. The division made materials for the auto industry, where a  10% weight reduction yields a 5% energy consumption reduction. Bayer MaterialScience was looking for new lightweight materials.

“From the start we were aware that the main challenge would be to change the culture” DeRuwe said. IBM Connections as installed out of the box and made available without formal training. The first deployments were small but the software was so easy to use that it grew to several thousand users within 18 months. “By next month, over 125,000 internal users and business partners will have access to Connections,” he said.

The deployment is opening up the culture at Bayer by making it easy for people to reach across organizational lines to find expertise. Rather than maintaining employee listings sers in Excel, Bayer now uses a tagging function so that people can search for others by expertise, location, title and other factors. Bayer has 54,000 profile tags in Connections, and the ability to find people in real-time by latest meta information without having to download and open spreadsheets is transforming the way people work together.

Joerg Dreinhoefer, GAD

GAD is a leading provider of secure processing capabilities to 430 banks in Germany. Dreinhoefer described how the company noticed consumers using iPhones, iPads and tablet PCs to conduct banking transactions. Banks needed to accommodate these changing preferences, so GAD created an initiative called Wave to not only address changes in consumer technology but also deal with cost pressures, core process refinements and regulatory and legal requirements in Germany.

The system basically ties together an assortment of systems that were built for different input/output devices into a single browser screen. “Bankers can now be independent from a local client-server environment and leverage mobile devices.” This has yielded a reduction of operational expenses and operational efficiencies, since offices can be set up with much less overhead.

The initiative also includes Bank21, a browser-based solution in a private banking cloud. It was developed to be indpendent of end-user devices and to use open standards to reduce complexity. “It’s the first end-to-end browser-based retail banking system that solved the connectivity problem between all banking devices,” Dreinhoefer said.

“We have had to reform our own processes to deliver this capability,” he added. New collaboration tools are now deployed internally via an app store metaphor in which bankers can order new products as if they were on Amazon. A Web-based office suite enables live documents to be exchanged between people with full audit tranils to show who worked on a document and when. All back-end integration is handled in the cloud.

This is one in a series of posts sponsored by IBM Midsize Business that explore people and technologies that enable midsize companies to innovate. In some cases, the topics are requested by IBM; however, the words and opinions are entirely my own.

Cool & Useful Sites for the Holidays

Webby AwardsThe folks at the Webby Awards sent along a super-helpful list of Web resources to use over the holidays. They range from social shopping to gift recommendations to real-time TV and music sharing. While I was familiar with several of these sites, I hadn’t heard of gems like, Wantful and Trippy. Definitely bookmarkable. The descriptions below were provided by the Webby Awards.

1. Skype 

Video chatting is now a standard activity for most Internet users – in fact, earlier this year, Skype reported that their users log 300 million minutes of video calls daily. Skype has recently added a new multi-party platform that allows up to 10 people to video chat with each other, which is a great way to get the family together, even if you’re all far away from each other.

2. Google+ Hangouts

Yet another way to connect groups of people over video chat – but Hangouts also enable the chat participants to share and enjoy digital content like YouTube videos in real time.

3. Crackle

Sony has brought together two of its popular platforms by creating virtual movie theaters on Playstation 3 that stream content from Crackle – and it’s planning to add more digital hangouts later this year.

4. brings together the social experience of the Web and music. Users can create or join listening rooms for friends – or strangers – and DJ their favorite songs for each other.

5. YapTV

A great app that brings people together around their favorite TV shows – it shows every program on television at any moment and lets you socialize with other viewers. It pulls in tweets about the show and has a built-in chat functionality so you can talk while you watch. This is especially useful for every “Elf” re-run on TBS or if you’re sucked into another “A Christmas Story” 24-hour-marathon.


Through sites like this, shopping online is no longer an isolated event. Shopping online is now social. These sites allow you converse with friends (through Skype and chat), compile lookbooks for your friends and family’s seal of approval, and most importantly, buy online.

7. SocialVest

SocialVest is an online retail platform that allows customers to buy and give at the same time. With SocialVest, you can make purchases at your favorite stores – like Target, Walmart, Bloomingdales, and more – and a percentage of all your purchases will go to a charity of your choice.


Make someone’s day brighter with this site that allows you to send a lucky person a gift of your choosing. All you need to submit is your first name, general location, and a picture of the gift you’re sending, and the site will generate a random address.


The site suggests an array of thoughtful gifts based on information you provide about the recipient – everything from age and relationship status to how often the cook and their level of neatness.


With a well-designed, streamlined interface and smart use of filters, Hipmunk makes it easy to find the right flight or the best hotel. The site also has an app available for your phone or tablet device.


It makes it easy for you to get recommendations and tips for what to do (whether you are heading home for the holidays or on a dream vacation and have a nice picnic and bring your cooler from Survival Cooking List of Best Coolers) from your friends who already know you and your interests and needs, helping you travel better.


Whether it’s a 6-hour flight home or over-the-river-and-through-the-woods, every trip is a little shorter with good book. Now, Amazon allows you to share your favorite books with your friends. Each loan lasts 14 days and are automatically returned to your library at the end.

As Business Goes Social, CIOs Sit on Sidelines

CIOs scrutinize social mediaThe disconnect between CIOs and the emerging world of social business became clear to me at a conference I attended about two years ago. I entered the room late, but figured I could quickly catch up on the proceedings by checking the Twitter stream of attendees. With an estimated 300 senior IT executives in the room, I expected there would be plenty of chatter going on.

To my surprise, not a single tweet had been logged during the past hour. A technology that was revolutionizing the way business people communicate was being completely unused by the executives who manage technology in America’s largest corporations. As I began prodding my network of CIO contacts, I learned that this was not unusual.

Most CIOs are taking an attitude of, at best, benign neglect toward social networks. A large percentage of them are still actively blocking employee access to sites like Facebook and YouTube. The most recent research by Robert Half Technology found that 31% of U.S. companies block social networks completely and 51% limit access to business purposes only. While those numbers have improved from two years ago, they still indicate an entrenched suspicion that social networks are at best time-wasting extravagances and at worst latent security threats.

Same Old Song and Dance

These fears are legitimate, but we’ve heard them before. The argument that employees will waste time on new technology goes back to the introduction of the personal computer. CIOs also closed ranks against Internet-based e-mail and the Web itself in the early days of those technologies, citing fears that employees would use their new toy computers for games or would subvert the central control of the IT organization.

In fact, that’s exactly what they did. And given access to social networks at work, people will use them to play and waste time. CIOs should not only accept this fact but embrace it.

Anyone who has children knows that playing is one of the most effective learning techniques humans have. Experimentation unearths ideas that have practical applications. On the early Web, people “surfed.” In the process, they learned the skills that have redefined office productivity. Today, the people who can quickly find, organize and interpret information are among the most valuable in the workforce. Playing pays off.

In its formative years, social media has been largely relegated to marketing departments under the assumption that it’s just another form of communications. BtoB magazine asked 375 marketers last year who was primarily responsible for social media within their companies. Only one person identified the IT department. My anecdotal observations pretty much echo that. CIOs just don’t see social as part of their charter.

What a shame, because social technologies has about as much to do with marketing as enterprise resource planning (ERP) does with accounting. This is about the finding new ways of doing business with a customer base that’s empowered with information. It’s the very center of where business is going.

Demand-Driven Economics

How Companies WinIn their book, How Companies Win: Profiting from Demand-Driven Business Models, Rick Kash and David Calhoun argue that developed economies are in the process of transitioning from supply-constrained to demand-driven. We are awash in goods and services today, they point out, and prices are flat to declining in many markets. That means that there’s little incremental benefit to be had from making supply chains more efficient. In the future, value will come from generating demand that never existed, as the iPhone has done.

A decade ago, CIOs played a key role in implementing ERP and optimizing supply chains in many companies around the globe. While some of that was a byproduct of the Y2K problem, their willingness to lead such mission-critical projects was a feather in their cap.

Now the rules have changed and the new challenge is to drive demand. The information-empowered customer will impact every business at every level. We are in the first stages of the shift in market conditions from supplier push to customer pull. Understanding the dynamics of these new interactions and organizing businesses around them will be the major business challenge of the next five years.

Why would CIOs not want to be at the center of all that?

John Dodge agrees with me. Writing on the Enterprise CIO Forum, he suggests that one reason CIOs aren’t more active in social business is that they see themselves as analytical types, making their skills ill-suited to social interactions. That may be true, but I’d argue that analytical skills are sorely needed to help companies make sense of the cacophony of conversations going on around them and their markets. Social business isn’t just about engagement, but also about listening and understanding. CIOs have a lot to contribute by applying algorithmic discipline to that process.

How Will Technology Affect Employment?

Live-blogging from the IBM Watson University Symposium at Harvard Business School and MIT Sloan School of Management. Additional coverage is on the Smarter Planet Blog. .

Panel discussion: How Will Technology Affect Productivity and Employment?

Moderator: Erik Brynjolfsson – MIT Sloan, CDB

Panelists: David Autor – Economics, MIT; Irving Wladawsky-Berger, MIT, IBM Emeritus; Frank Levy, MIT

The Next Big ThingThis is one in a series of posts that explore people and technologies that are enabling small companies to innovate. The series is underwritten by IBM Midsize Business, but the content is entirely my own.
David Autor

David Autor

Autor: The idea that machines eliminate jobs is a fallacy. A century ago, 38% of the US population worked on farms. Today it’s 2%. But we don’t have 36% unemployment. We’re in a period where the scope of what can be done by machinery is expanding rapidly. If we look at 10 categories of occupation (shows a chart), there are three categories: Low-paid positions like food service work; mid-level, relatively low-paid positions like clerical jobs; and relatively highly paid jobs like professional, technical and managerial.

What we see is a decline in operative production jobs and clerical/administrative support jobs. The middle third are the jobs that are declining most quickly. Should we be worried about that? Probably, because it can lead to policies that are intended to preserve these positions instead of moving toward the jobs that are growing.

Employment Polarization, 1979-2009

Changes in Employment Share by Job Skill Tercile, 1993-2006

Wladawsky-Berger: About 80% of the job growth is in information-intensive service jobs. We’re living in a time of sustained high unemployment and this is concerning. Who will pick up the challenge of providing these jobs? People are looking to large businesses, but they are shedding these jobs along with everybody else. Others look to government, but in my experience government won’t do that.

Irving Wladawsky-Berger

The top-down approaches aren’t going to work, but neither do I want to tell people that they’re on their own and that they have to take a more entrepreneurial approach. The world is becoming more entrepreneurial.

Levy: Everything we see here is colored by the recession, but this recession doesn’t have much to do with computers, it has to do with housing bubbles. The mid-skill decline is very real. Development is very uneven. Natural language processing has improved a lot, machine vision hasn’t and technologies like judgment and practical sense really haven’t gone anywhere.

People look at the Google truck and say it’s remarkable that it’s gone 2,000 miles without an accident. What really happened was that Google made detailed maps of the infrastructure it would be traveling. Without that infrastructure, this car doesn’t have the driving ability of a 16-year-old who just got a permit. So while this technology is promising, the Teamsters shouldn’t be protesting yet.

Brynjolfsson: Is there a future for the people who have those kinds of jobs?

Wladawsky-Berger: It has to be more entrepreneurial than top-down. The kinds of jobs that MIT and Stanford graduates have don’t scale very well. Small businesses don’t tend to create many jobs.

Can we apply technologies that have traditionally been available only at the high end and make them easier to use? Can there be new retail services, trades, sustainability-oriented businesses where these skills can be applied?

Frank Levy

Frank Levy

Levy: I can give you an example of one of our graduates who is now running a business making high-end stationery. It’s a good living, but it’s a small piece of the market.

Autor: in a lot of countries there are businesses that we might call entrepreneurial but which are really people just getting by. Most people want to be employed. When the economy booms, people tend to stop working for themselves and go to work for other people. Asking people to create new jobs is asking a lot.

What are the advantages of humans? Common sense, judgment, physical flexibility, understanding. It’s solving novel problems. Positions like cleaning driving actually require  those capabilities.

Wladawsky-Berger: Will global enterprises create these jobs? they’re becoming more distributed and moving a lot of tasks to the supply chain. A lot of people in the supply chain could be these mid-skilled people.

Autor: Cleaning restrooms requires a lot of flexibility, but it’s not entrepeneurial.

Erik Brynjolfsson

Erik Brynjolfsson

Brynjolfsson: So what skills should we be training people for?

Levy: One of the problems is you’re problem-solving by analogy. In the old world, where you were problem-solving by algorithm, it was pretty simple. Now you need to understand how things are similar and how you would use analogies to make decisions.

Autor: Germany has done a good job by training for needed skills and by reducing wages and increasing flexibility. It was painful, but when the shock hit, they were able to handle it better.

The US has a very good system for elite education. We don’t have a particularly good way to handle the people who can’t go to college. The traditional feeders like unions and apprenticeships aren’t as available today. The jobs that are emerging are those that require some level of post-high-school education. We have an incredibly big for-profit post-high-school education sector, but the only guarantee you have is that you’ll come out with a lot of debt. We’re squandering a lot of mid-level talent.

Levy: When you’re talking about a lack of training for people oer 30, you also have to look at where we are in training people under 18. That’s a problem in the pipeline.

Wladawsky-Berger: For these mid-skill jobs you need post-high-school education. I’m not saying a BA in English – in fact, that might be a bad idea – and I’ve been hoping that government agencies would decide that this is better than paying welfare and unemployment.

Autor: Health care will grow and there will be opportunities. If I were asked what people should study for, I’d say a health care worker. I don’t think we’re over-investing in college, I think we’re under-investing in other areas. The high school graduation rate is falling for males in the U.S. We ought to think carefully about how we would use that talent for a set of opportunities that’s appropriate. They need skills beyond the generic skills they find in high school. They need vocational education.

Levy: In the case of medical care, the whole issue of judgment is very important. When you’re talking about eliminating unnecessary procedures, there’s quite a bit of judgment involved. These are not problems that machines can address.

Autor: Look at an example of something that’s been automated out of value: Horses used to be our main form of locomotion but now they’re hardly needed. The difference between people and horses is that horses don’t accrue wealth from the internal combustion engine and we do. We’re getting wealthier collectively but not individually.

Audience question: I’m concerned with how we communicate these changes who aren’t economists so we can avoid reactions like what happened with stem cell research?

Wladawsky-Berger: The consensus of everything I’ve read is that when we transitioned from the agriculture to the industrial age, literacy went way up. High school became the ticket to the mid-skill, mid-pay class. In today’s world you need the next level of education: information-based literacy. You need to be comfortable working with information and you need social skills. This prepares you to be much more flexible in the new working environment. People who learn to use these tools can make a good living.

Audience question: It seems that our society fails people who need to change careers. Our unemployment system doesn’t encourage people to try new things for fear that they may lose benefits. Our education system also doesn’t foster skills training.

Autor: We have very little of what other countries call activation systems for people who have lost their jobs. We have a trade-adjustment system that does a terrible job. The problem is that the Republicans hate trade adjustment and blame everything on trade, and the unions hate re-skilling. So we have trade adjustment, which does very little.

Audience question: What about the possibility of trading off standard of living for other benefits, such as fewer work hours?

Autor: There’s a societal choice to trades off work for standards of living. You can work two days a week and make less money and some people might choose that. But we want to work less and have higher standards of living. We have more and more, but the rewards are concentrated in fewer hands. Having more rewards doesn’t solve the skill problem.

Wladawsky-Berger: I think we need more collaboration between the private and public sector. So the government does more to help people while they’re training for jobs, but the jobs are provided by the private sector.