Digital Business

Digital Business insights: What is innovation all about?

“IF I’D ASKED my customers what they wanted, they would have told me a faster horse.” - Henry Ford.

 

DON’T ask somebody who doesn’t know, for an answer that defines solutions … ask them to more clearly define their problems.

Then think about them.

Is there a better way to get the job done?

Big organisations and government are blinded by and tied to a historical investment in better ways to get their job done more efficiently, consistently and effectively.

The business practices they use evolved during the industrial revolution as manufacturing and business processes were segmented, compartmentalised and departmentalised to ensure greater efficiency. This approach was successful for hundreds of years right up until the latter part of the 20th century and much of our society is still structured in this way.

It helped us build machines, improve our health, win wars, produce more food, go to the moon and get us to where we are today.

But what was good practice then is disabling now.

Big businesses and governments have established cultures that have evolved around efficiency and productivity and best practice and profit with associated rewards for employees who best support these approaches.

Employees who don’t support them are encouraged to move on. “I’m sorry, you don’t fit into the culture of our organisation.”

This is fine in periods of economic stability. It is fine when organisations are growing and maturing.

It is not fine in the current period of digital disruption and it is not fine when organisations have completely lost the skills and ability to respond with intelligence to change.

Today, we see all organisations being impacted by digital disruption and only a few even recognise the source of their new problems.

And it is not about the computers and digital devices. It is about the impact that more connection, more collaboration and more integration and convergence are having on our world.

As far as responding with intelligence and vision to the new challenges, there is little evidence to suggest any success, whether we look at government, large established businesses, academia, unions, associations, chambers of commerce or not-for-profits.

It is not for lack of intelligent people within those organisations. It is for lack of ways and means to engage their brainpower with these new problems and challenges.

The effort required to respond agilely in solving societal problems is impacted by the resilience of the cultures and structures that have been built since the industrial revolution to deliver and maintain stable efficiency, growth, productivity and profit.

And the open mindedness and vision required to recognise, understand and respond to external and internal digital disruption is way beyond most organisations.

Even though they have powerful resources – money, smart people and influence – gathering and focusing these resources upon the problem is beyond them.

There is a conflict between talk and action. Big businesses can speak about innovation and they do. But they don’t do it.

The culture and structure of big business and government actually punishes innovation, in the same way our immune system attacks and kills bacteria and viruses. Foreign. Out of sync. Not attuned.

It is ingrained. It is done without thinking. It is done subtly. It is done automatically. That is why whistle-blowers have such a hard time.

Anyone pointing out a flaw or inconsistency is branded a traitor and attacked. Edward Snowden is just one of a long line of people punished by cultural immune systems.

It is even done under the guise of innovation. The real potential innovators, the mavericks, the oddballs within organisations are moved on.

Risk is not rewarded, it is fined. Experiments are not allowed when they threaten or interfere with daily process and operations. They cannot be justified under a regime of business as usual.

The ‘shareholders’ are used as an excuse to stifle innovation.

Processes are put in place to mitigate risk not encourage it. Can’t do anything without more research. Must put it to more committees, more focus groups, give it more consideration, take more time.

Everything that waters down, dilutes, slows down and stifles innovative change. Avoids leadership, spreads responsibility.

Government can speak about innovation and it does. It even includes the word in its departmental titles.

Department of innovation?

Dream on. Not going to happen.

Government spends a lot of time and money on conferences and events discussing and promoting the idea of innovation.

But it can’t do it.

Government and business continually trot out various combinations of approaches that worked “once upon a time” in the good old days of the late 20th century.

Back when business plans were possible. Back in an environment with milestones and targets.

An environment with landmarks, and reference points and KPIs.

The past. History.

We are now all adrift in the digital ocean, with no landmarks, just waves of change.

There are no borders in the information ocean.

In an environment of more connection, more collaboration and more integration, what used to be none of my business now becomes all of our business.

In an environment of more connection, more collaboration and more integration, the implications are profound.

In an environment of more connection, more collaboration and more integration, how do you define what your business is or isn’t?

That is a tough question for Telstra, Microsoft, HP, Yahoo, IBM and the others.

How do you speak about borders and boundaries and constituencies when there are none?

That is tough for councils, mayors, states, premiers and nations.

In an environment of more connection, more collaboration and more integration, how do you go it alone?

You don’t. Collaboration and shared value is the new currency.

Google has got it right in many ways. It just looks at whatever it decides it wants to look at and gets on with it. Search. Maps. Health. Death. Whatever.

There is an overwhelming amount of data about past and present.

There is no data about the future.

Just imagination and vision.

That is what innovation is all about.

 

 

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping businesses and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

Digital Business insights: Cloud?

 

THERE is a lot of hype about the 'cloud'. If you believed it, you would think that everybody was rushing to adopt cloud solutions, when there is little evidence to support that proposition at all.

Our research over the last few years shows that movement into the cloud by small businesses and not-for-profits in Australia is very slow, often painful and problematic.

Cloud isn’t a problem for the larger organisations In Australia with CIOs and IT departments, who can pay for reliable high speed broadband, VPNs, systems integrator support and disaster recovery when things go wrong.

Which they do.

But for the nearly 2 million non-employing and small to medium sized businesses in this country … beware and take care.

Cloud is a fog.

Some services delivered over the internet are undeniably successful – most of the time. Especially the free ones.

Web based email is the stand out cloud success at 26 percent. But even webmail is still mostly used as a supplement to traditional MS Outlook or Outlook Express.

The wise and the thoughtful are taking a 'belt and braces' approach. Which is a good idea.

The best plan for any of us is to mitigate risk in a business, not to add to it.

It is the same with cloud storage at 13 percent. It is proving very useful for mobile workers to capture and transfer data back to home base. And that is how most people are using it.

There is slow but steady adoption of cloud based accounting software, especially by new businesses – 3 percent using Xero. But this core business decision is often first promoted and then supported by a business accountant.

Salesforce is very successful at the top end of town, but most smaller organisations can’t afford it. It’s not the cost of the package it is the cost involved in customising Salesforce if you want it to suit the way you run your business.

And on top of all that is the fact that we don’t yet have reliable, affordable high speed broadband in this country, and there is a good chance we won’t have for many years.

That impacts all businesses that try to use cloud solutions and the following story illustrates some of the risks involved.

“We are a small wholesaler (about 10,000 parts). We tried a cloud solution for a few months but had to abandon it. It was way too slow. Previously, we could take a 20 line phone order in less than a minute (about 60 screen refreshes). With cloud, those refreshes took a couple of seconds each and so added two minutes of 'pause' to a one minute order! Both our clients and our phone operators were frustrated. The death knell came when a minor storm left us without internet for four hours! 
Our clients are normally very loyal – but if you can’t fill their order for more than 10 minutes, they will ring your competitors! That exercise severely damaged our business.” -- Small wholesaler.

There are many other stories like this, but you can see that until cloud solutions and their customers can rely on a platform that is fast, robust and affordable, problems will occur.

The NBN would have provided that platform in time. Now we don’t know what is going to happen.

In the meantime, if speed isn’t a mission critical issue for you, then many managed services solutions may be useful, as long as internet access is maintained.

Because, speed is one issue, but reliable connectivity is another.

“I understand your frustration” – NO TELSTRA YOU DO NOT – neither do you even care! Have you EVER tried to run an SMB without any internet access or landline, do you get that prospects who call or want a remote demo WILL GO AWAY we lose business as a direct result – I can't even count the lost opportunities that disappear, or reputation damage because people suddenly think we have shut up shop as the phone does not answer. The lost productivity because we cannot access our cloud based tools and systems. I CAN NAME LOTS More. NO TELSTRA YOU DO NOT UNDERSTAND!” -- Unhappy customer on Whirlpool.

Every business needs a reliable and firm foundation to operate from, with backup options for when things go wrong. In a digital economy reliable connection is critical for most business categories and their operations.

Privacy isn’t important to everybody, but for those who are concerned about privacy, protection of intellectual property and data security, Edward Snowden’s ongoing revelations about the NSA hoovering up any data they can get their hands on, clearly shows that storing your data on an American cloud storage platform is probably not a wise thing to do.

That won’t bother all business owners, but it will bother some.

And even worse, the Patriot Act means that even if data is stored in Australia but managed by an American company, then the NSA can still access the data if they decide they want to. And the American company in Australia will not be allowed to inform you that anything has happened.

Probably won’t happen, but could happen, and yet another thing to consider carefully especially if you manage private and personal data for customers.

If that is a real issue for you, then local Australian storage using Australian, not American companies for storage, hosting and software solutions is the only way to go.

And even if privacy and data security isn’t an issue for you, supporting the Australian ICT industry is still a good thing to do, because even though movement into the cloud is slow, it is also steady.

We will increasingly rely on services delivered across the internet on a subscription model and the closer to home the services are managed, the more reliable they are likely to be.

Something goes wrong. Who are you going to call?

Somebody just down the road? Or somebody that makes it just about impossible for you to find a contact telephone number in the first place … connecting you with a person that barely speaks your language, and is outside of your time zone?

It is only when something goes wrong, that you realise how alone you really are. And how little leverage you have with a big multinational.

"You are caller 228 in the queue, please hold.”

It is better to be an important customer to a local supplier than one of millions.

So the more we can build and support local hosting, storage and managed services tailored to our distinctly Australian digital economy needs … the better it will be for our businesses, our ICT industry, our regions, our industries and our future.

- John Sheridan, April 2014.

 

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping businesses and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

 

Threat to digital mobility: wireless spectrum has ‘peak data’ limits - CSIRO

 

CSIRO has released a report warning about what it calls ‘spectrum crunch’ – limits to data flows imposed by limitations in wireless communications.

CSIRO has labelled the threat ‘peak data’ and the report focuses on what that could mean for the way we connect and access essential services in the future.

Director of CSIRO’s Digital Productivity and Services Flagship, Ian Oppermann said wireless technology had been adopted at “breakneck pace” in Australia and around the world.

“The data rates that people now expect from their mobile services are about a hundred times the amount we thought possible only two decades ago,” Dr Oppermann said.

“Some estimates suggest that spectrum demand will have almost tripled by 2020, and existing infrastructure will need to rapidly expand its currently available capacity if it’s to meet this demand.”

The CSIRO report, World Without Wires, points out that wireless communications rely on the availability of radiofrequency spectrum. The spectrum has practical limits and more spectrum cannot be created, so the world is faced with a finite resource and growing demands to use it.

Dr Oppermann said today’s technologies and infrastructure will be hard pressed to support further increases in demand, both in terms of speed and volume, for wireless data and services over the coming decades.

Many global cities, including thos in Australia, are fast approaching the point of ‘peak data’ – where user demand for wireless internet, telephony, and other services can no longer be fully accommodated by the available radiofrequency spectrum.

“Currently the useable spectrum is divided up and allocated to various uses, such as TV/radio broadcast, emergency services, and mobile phone communications for example,” Dr Oppermann said.

“In the future, how spectrum is allocated may change and we can expect innovation to find new ways to make it more efficient but the underlying position is that spectrum is an increasingly rare resource.

“Some estimates suggest that spectrum demand will have almost tripled by 2020, and existing infrastructure will need to rapidly expand its currently available capacity if it’s to meet this demand.

“With more and more essential services, including medical, education and government services, being delivered digitally and on mobile devices, finding a solution to peak data will become ever more important into the future.”

World Without Wires examines the role that ubiquitous access to high-speed wireless connectivity will play in enabling a range of future applications and social developments, including:

The replacement of digital TV and telephony services by internet-based, personalised streaming services;

Widespread sensing technologies that optimise and improve almost every aspect of our daily lives;

The widespread use of wireless positioning technologies, from making driverless cars the norm to enhancing retail experiences through ‘virtual concierges’;

‘Tele-services’ as the default model of service delivery for government and businesses, with education, healthcare and other public goods being delivered via private digital networks;

A radical improvement in the way existing wireless infrastructure accommodates ongoing growth in service demands, including smaller cells, smarter antennae, and beyond.

“Such developments will have a profound impact on both Australia and the rest of the world, constituting significant market opportunities, and a chance to deliver widespread public good from our wireless research and enterprise community,” Dr Oppermann said.

CSIRO’s World Without Wires report: www.csiro.au/wireless

CSIRO’s Digital Productivity and Services Flagship: www.csiro.au/dpas

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Leading businesses win with clicks-bricks mix

A SURVEY of 600 entrant businesses in last year’s Telstra Business Awards shows the gap between revenues developed through e-commerce – referred to as ‘clicks’ – and ‘bricks and mortar’ trading is closing fast around Australia.

Results from almost 600 Business Health Check Reports, provided to entrants of the 2013 Telstra Business Awards, showed 75 percent sold or distributed their products via a physical sales force and 73 percent used websites.

Telstra Business group managing director and Telstra Business Awards ambassador, Will Irving said it was clear Australia’s best small and medium businesses (SMBs) had embraced the boom of e-commerce, with internet shopping, online sales and marketing closing the gap with physical sales as the primary distribution channel.

The analysis showed the direct-to-customer business model is cutting out middle men –  referred to as disintermediation – with only 34 percent using third-party online channels. Resellers, agents, brokers and wholesalers were each used by only 10 to 17 percent of businesses.

With entries for the 2014 Telstra Business Awards open until March 31, Mr Irving urged businesses to finalise their entries and give themselves the opportunity to receive a free personal Business Health Check. He said the report evaluates every entrant’s business performance against international benchmarks, current legislation and accepted industry best practice.

“Since the Business Health Check was introduced in 2010, thousands of awards entrants have found the individual report on their business invaluable as a guide to help them grow by identifying areas to improve,” Mr Irving said.

“Analysis from last year’s entrants shows us that the cream of the crop of small business have a high level of digital maturity – they recognise the importance of regularly updating content, making their websites more search-engine and mobile friendly.

“With Australians spending $14.9 billion on online retail in the past year [according to the NAB Online Retail Sales Index] equivalent to 6.5 percent of spending with bricks and mortar retailers, it is crucial for SMBs to optimise their online channels.

“These businesses have shown us that the bricks versus clicks argument has been surpassed, leading the way instead to adopt innovative ways of combining both, such as ‘click and collect’ where shoppers buy online and collect their purchases from a store.”

Analysis of the performance of the 2013 entrants by the NSW Business Chamber also showed social media ranked highest among 15 types of marketing activities used by the 2013 awards entrants, closely followed by website and referrals marketing.

This reversed the result in 2012 when website and referral marketing were the highest used, ahead of social media marketing.

The analysis found SMBs favoured less-expensive online activities including social media, email and search engine optimization. Online advertising and mobile marketing do not rate highly among their online activities.

Entrants nominated lower-cost activities such as referral marketing as their best performing activity, followed by face-to-face, website and social media marketing. Telemarketing was nominated among the lowest performing activities.

Mr Irving said more than $800,000 in prizes are available in 2014 for winners of state, territory and national Telstra Business Awards, “a national program that has celebrated brilliant Australian SMBs since 1992”.

www.telstrabusinessawards.com 

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Digital Business insights: Retail future?

RETAIL is a big sector employing 11 percent of the Australian workforce, hundreds of thousands of people – part time as well as full time, including students, men, women and retirees. 

Retail has a social, economic and practical value in our society and communities, yet it is steadily being disrupted, eroded, undermined and transformed by the digital revolution.

Retail has been through revolutions before, but this one is the most disruptive ever.

And the solution isn’t simple. It is not enough to say, “Get a web site and use social media and you will be fine."

Not true.

It is not enough to say, “Retail needs to train its staff better.”

Or enough to say, “We need to force people to pay GST on overseas purchases.”

Too late for that.

A perfect storm of commoditisation of products – largely produced in Asia, simple to use payment methods supported internationally, and improved logistics has transformed the whole world into an online store, where the gap between manufacturer, wholesaler and retailer has blurred forever.

The old world retailer has been squeezed out. Plus, existing supermarkets and superstores are using their scale, bargaining power and efficiency to suck the air out of the room in retail category after category.

Competition is diminishing between the big and the small. Only the big incumbents and big multinationals have a chance of playing seriously in this new retail first division. Woolworths, Coles, Aldi and Costco, and the network of IGA stores across the country.

You need money and ICT smarts. And if you have both, you can then move into other products and services at will – liquor, fuel and hardware are examples. Which is really confronting for retailers who thought there was some territory they could control.

No longer.

In the second division – the chains and franchises, the problem can be worse in many ways, because new competition can come from anywhere. Not just from elsewhere in this country, but from any other country. Not just from retailers, but from any wholesaler or manufacturer that decides to change the business model.

And also from the “pure online” players with a good idea and enough powers of persuasion to convince suppliers to shift allegiances.

In the third division are the small retailers, the high street shops and stores in the multitudes of small malls in suburbs across Australia. All under threat.

Having a unique or specialty offering is their only protection. Or the fact that their customer base is mainly local, and turnover is too small to be of competitive interest to anybody else.

Google has changed the game.

Customers have changed their view of the world. People have woken up to the fact of choice.

“I can find things easily and with enough confidence I can and will buy”.

There are still plenty of bad websites and online shopping sites out there. And for the time being this offers some protection to Australian retailers.

But that is not a sustainable way to be protected. It is only a postponement.

And because the online marketplace will continue to get better, threat and erosion is inevitable.

There are now 580 million products indexed from over 500,000 online stores. Shopping search is becoming more personalised and therefore more responsive.

But it is not all smart technology and social media delivering results.

When it comes to converting interest to sales, Coles still finds that its paper based magazine delivers the goods. And Facebook is a poor performer.

Multi media, multi channels, deep pockets and the ICT sophistication to understand and manage all channels and relationships, is what gives the larger retailers the edge. And not just an edge, they are ahead of other retailers by miles and miles.

What used to be a simple business – shopkeeping – has become one of the most sophisticated businesses in the world.

And that means small retailers are history unless they have territory they can defend – local and/or specialty.

As foot traffic declines, we will see retail contraction. We will see an increase in online sales across the board.

That will flow onto less demand for space in bricks and mortar and more vacant high street stores.

This isn’t going to help the government with its overall employment figures as mining sector employment continues to shrink.

There is no simple fix here.

Solutions have to start with deep consideration of the underlying retail business model and what it could and should be, taking into consideration the internal and external threats in Australia.

No point dressing up – by investing time and money in a new website and a social media campaign – if you are on the way to an execution.

Best to avoid the execution altogether if possible. Then once you have a confirmed future, start working on how best to improve it and make it sustainable.

The questioning has to go back to where the real issue and disruption began.

The internet, Google, mobile devices and smart logistics have changed the world.

Do I have the understanding, the ability, the will and the money to compete now that the world has changed?

- John Sheridan, March 2013.

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping organisations and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

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Digital Business insights: Jobs, jobs, jobs

JOBS are important not just for income, but for identity, status, security, social cohesion, regional and national resilience. 

So where are 21st century jobs going to come from?

Technology has allowed us to automate many processes that were once performed by humans. It has allowed us to build robots and machines that replace people.

It has allowed us to streamline administrative and management tasks and effectively “hollow out” most businesses and not-for-profit organisations, by increasing the capacity of individuals to perform more work, become more productive and “do more with less”.

Technology has pushed people up the “thinking chain”. Dumb tasks can be automated. Imagination, ideas and vision can’t be.

We need the skills, education, training and application of brain power to add value to all of our working activities and industries for Australia to be successful.

Blue collar or white collar? It doesn’t matter.

Both require a higher level of skills, training, insights and education in the 21st century, because we aren’t just competing with other businesses and countries, we (individuals) are now competing with machines and automation for jobs.

So technology is a blessing and a curse.

The economic downturn and the GFC have forced government, corporates and organisations of all sizes to review their operations over the past five years. Not just within Australia, but across the whole world.

Multinational companies have looked for and found efficiencies by closing down operations altogether – Ford, Holden, Toyota are top of mind in Australia. And many other organisations, including government, corporates, health, education and academia are trimming and sometimes slashing their workforces radically.

The efficiencies gained are providing a solid foundation for growth as the economy slowly regains strength, but this doesn’t necessarily mean more jobs. Initially, it just means more return on investment.

Jobs will be added only when necessary and extra care will go into selection.

And jobs themselves have changed.

More jobs are contract jobs and part time jobs, or outsourced to maintain the core flexibility and agility to survive in a disrupted environment.

Highly paid professionals in healthcare, education, academia and government – the traditional safe spots – are now being moved onto contracts.

There is no safety at the top any more.

Flexibility is being forced upon the nation at a time when nobody really knows where we are heading.

Security of tenure is a thing of the past. Historically, having your own business or being self-employed was viewed as a risky option, and getting a career and job for life was the safe and sensible thing to do.

We have trained a workforce of followers – following orders, leaving ideas and initiative to others, waiting to be told what to do.

Studies show that net job growth comes from startups in their first five years*. We need more startups. We need more entrepreneurs. We need innovation. We need individuals wishing to take control of their destinies and start up new businesses.

Jobs will come from startups. And the more we can help startup businesses to either fail quicker or succeed faster, the better it will be for the overall job market. And for Australia.

Because startups will broaden the job base across all industry sectors, making us less reliant on one or two industry sectors.

Jobs will come from value adding to Australia’s productive industries – manufacturing, agriculture, tourism, cleantech, medtech, greentech, biotech, creative industries, ICT, education and training, design led professional services, trades and infrastructure, and then exporting the resulting products and services.

Startups in the 90s created an average of 7.5 jobs each. Today, that average has dropped to 4.9 jobs per startup because of the efficiencies of technology and outsourcing.

But startups are still a powerful driver of employment growth.

Our education system and employment system trains people to be good followers. We need more innovators who don’t wait for permission – but get stuff done.

The technology that destroys jobs can be used intelligently to support startups through the first five years, creating new jobs.

Incubation doesn’t just have to happen in iLabs and other real world business incubators, it can happen virtually for all businesses and industries across the whole country.

Technology can be used to deliver the information, business insights, knowledge, support, networks, customers and mentorship that will help startups to succeed.

It cuts both ways. We lose jobs because of technology. But we must then create and support jobs because of technology.

* Kauffman Foundation 2010

- John Sheridan, March 2013.

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping organisations and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

http://www.db-insights.com/

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