IoT – a necessity for digital leaders

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Spending $6 trillion on Internet of Things solutions in the next 5 years demonstrates that businesses will rely heavily on IoT to process mine their activities. The number of devices that can allow for the optimization of business processes is rising rapidly while the cost of individual units is decreasing. A consumer example of this change is the RaspberryPi zero which cost only $5 but has most of the functionality of the original model B. This device allows for the automatization and monitoring of simple electronic controllers. It is obvious that businesses would employ the use of specialized devices for each process, but the example still stands as the small device enables the same functionality as the specialized ones.

Current business models can still benefit a lot from process mining as it allows a granular view and even, possibly, live control of activities, such as production material inflow. Monitoring and controlling whether the supply line is experiencing deviations from regular operating conditions and having immediate responses for irregularities minimizing the potential problems that wouldn’t have been noticed otherwise.

iot

The recent surge in IoT adoption in investment is probably due to the tie in effect with cloud, artificial intelligence and predictive analytics as it was not possible to process such big data streams before without incurring significant costs making the entire project not viable. Computing as a service has revolutionized the cost for companies as they should pay per use and not invest heavily when they decide to expand their process monitoring. Less local servers required, higher likelihood of implementing devices which only need to communicate with the cloud. As the cost of maintenance of IoT devices is significantly lower than maintaining the respective servers, companies are more likely to invest in IoT as the devices do not require incremental upgrades to improve functionality, they are purposed designed, hence are considered future proof.

Sources:

http://www.forbes.com/sites/sap/2016/12/08/turning-the-internet-of-things-into-an-internet-of-outcomes/#1d831ae67ca6

Raspberry Pi

 

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AWS Canada – Going local with the cloud

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Amazon Web Services launched today its first deployment of the infrastructure in Canada. After letting their clients wait a significant amount of time for launching the servers, Amazon finally delivered. It seems that having cloud computing as a service is possible, but for critical applications that heavily rely on latency, it is not the case. The cloud has countless advantages over having your own servers, but in several cases the cloud must be right next door to enable business applications which would not work over higher latency.
Current internet infrastructure connections allow to run many applications in the cloud, but this does not work for businesses which require millisecond response time. Most are aware the current system for fast inter-continental internet transfer relies on submarine cables which span across oceans.

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Because this is not the case between the United States and Canada as they are connected using direct lines, makes it interesting to understand why Amazon had to open local server centers to satisfy the needs of the businesses in Canada. It could be implied that it is necessary to open local servers in most countries that are not too far apart in terms of kilometers, this being dependent of the type of internet transfer infrastructure available. As this is the case for North America, it is highly likely that we will see Amazon opening more local server centers across Europe as the current offerings are quite limited and for specific use cases is not feasible.
In conclusion, it is interesting to note that companies which rely on low-latency operations and wish to outsource their computing to the cloud will require for the cloud to be right next door. This reduces the available options, as in some cases certain computing should be performed at the company and not in the cloud. A hybrid model is likely to emerge as organizations focus on minimizing costs and dependency on local servers.

 

Sources:

https://aws.amazon.com/

http://www.submarinecablemap.com/

Amazon debutes first AWS Region in Canada

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Let there be Light, as a Service

In 1924 the world’s largest light bulb manufacturers formed a cartel to control the manufacture and sale of light bulbs. The companies in the cartel determined a new standard for the lifespan of a light bulb as the bulbs kept on working so well that sales declined. This 1,000-hour standard is one of the earliest examples of planned obsolescence: designing a product with an artificially limited lifespan. In the past century, planned obsolescence led to an enormous amount of e-waste and pollution of the environment due to appliances that need replacement. Mix in the fact that most people do not care, for example, how their homes are lit as long as they are lit, a novel business model is readily born: Light(ing) as a Service (LaaS).

A true circular economy is within reach

LaaS is different from the traditional way of buying and owning a product that has to be replaced every now and then. LaaS, as the name implies, offers lighting as a service. In this way, Philips, to name one of the companies working with this concept, installs and maintains lighting for a small fee. The small fee could cover electricity costs and recycling as well. By letting the manufacturers themselves be solely responsible to deliver the service of lighting, there is a strong incentive for the manufacturers to use technology that is superior to what has ever been used before; Philips does want the light bulb to last as long as possible against low costs, to maximize the profit it earns with LaaS. As consequence, planned obsolescence is avoided and therefore less e-waste is produced. Besides, LaaS provides an easy access to the latest technology aiding in sustainable transitions without any huge investments upfront.

The possibilities to apply the business model of LaaS to other products are endless. Think about keeping your food refrigerated with Refrigerator as a Service. Are you up for Bike as a Service? Students in Delft can already make use of this service. What about offering appliances to small businesses in developing countries? Would this aid the local economy?

What other products could easily be “LaaS-ized”? Share your ideas in the comments.

References

http://www.makeuseof.com/tag/lighting-service-cut-energy-use-90/
http://www.mt.nl/series/de-4-businessmodellen-voor-licht-als-dienst/84981
http://www.duurzaambedrijfsleven.nl/industrie/6337/bruynzeel-storage-koopt-geen-verlichting-maar-licht-philips
http://www.ledinside.com/knowledge/2015/12/rethinking_lighting_as_a_service
http://chess-wise.eu/2016/06/06/light-as-a-service-why-how-to-shift-to-this-fortunate-business-model/

Documentary on planned obsolescence:
https://www.youtube.com/watch?v=zdh7_PA8GZU

More about e-waste:
https://www.youtube.com/watch?v=dd_ZttK3PuM

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The Smartification of Society

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From the advent of the Apple Watch, smart cars like the Tesla model S (not self-driving cars), the IoT, 3D printing, VR, Wearables and all the amazing tech trends we see it can be difficult to differentiate hype from reality. Here are some examples

 

What is certain is that everything in our lives is going to become smart the same way everyone in 1996 said the internet is going to change the world in 2000 but it really changed the world something like 2010. The deployment of accurate, easy to consume information from all things and objects around us to make our lives easier is going to hugely disrupt some industries forcing them to change the way they do things.

Let’s take the current education system for example as it is relevant to all of us and hypothesis how the combination of such trends might affect it. The descriptions that follow post might make you think I am not a fan of the current education system although these are just some observations and predictions meant not to offend but only to generate discussion. 

The university system is slowly losing its value proposition in face of the speed and intensity in the current business marketplace. Unfair debt structure of college loans can severely set a young person back. This brings to question whether college degrees are appropriate for everyone? It’s a hard conversation to have because the college dream has been so well branded. Yet it is fascinating how little parallel can be made between one’s level of education and success (financial) in the modern business world.

We can’t be so naive or misguided to suggest that time spent in a top university can’t help one get closer to financial success and diplomas are entry level requirements for thousands of jobs. If one wants to be a lawyer or doctor or many of the other professions that take a college degree to become that thing, then going to the best possible college that will help one get the job of their dreams is wise. If you want to run a business, be a photographer, an artist of any kind or a designer a degree is not necessary, though it will help. Many of us are lucky enough to go to university to soak up the experience, network and most importantly learn about ourselves (self-awareness).

The free education that will be available on the internet will be incredible and the current 10 year old’s may be the last generation that holds university to such high esteem. Online courses such as Khan Academy, Creative Live, Udemy, Udacity, Skillshare and tons of other startups are putting out incredible platforms that acquire incredible talent teaching courses on these platforms. Is this a better ROI than the college professors that have been out of the game for 5-10 years? There is definitely lots of money to be made within this industry as shown by new suppliers such as Masterclass entering the market where experts regardless of whether they went to university or not their work speaks for itself. Signs of a steady decrease in the quality university education are showing themselves as illustrated in a recent article published by the Guardian. It says “an Oxford graduate is suing the university for £1m claiming the “appallingly bad” and “boring” teaching cost him a first-class degree and prevented him from having a successful career”.

This brings to question is studying at home on the internet any different from going to a class with 400 students where you barely remember the lecturer’s name and education is standardized to make it efficient and very profitable.?

In addition, with coworking spaces and incubators slowly becoming a common denominator in many cities where one can network in combination with traveling to expand one’s horizons, why incur debt that you can’t even declare bankruptcy against.

One thing is for certain, university alone will not properly train you to be a prime time player in today’s business environment and many of the theories you might learn there about marketing or economics will already be too obsolete. The ENTIRE market moves at such a speed that even great entrepreneurs or experts have a hard time keeping up with it. Within a month of one’s graduation there will always be a new app, new platform or new channel or way for doing business that didn’t exist before.

How people judge anything is what brings value to the equation. Because decision makers in business today highly value a diploma from Harvard or MIT or Yale young students opt to go there and find it valuable. As soon as big companies or key players/individuals in the market such as Google come along and start valuing actual data and work to prove if you’re good at something the diploma will lose its value because whoever is judging dictates the rules of the game. Being a practitioner and student or teacher is very very different. We are slowly moving to a Post-GPA world.

Lazlo Bock the Senior Vice President of People Operations at Google says “The academic setting is an artificial place where people are highly trained to succeed only in a specific environment. One of my own frustrations when I was in college and grad school is that you knew the professor was looking for a specific answer. You could figure that out, but it’s much more interesting to solve problems where there isn’t an obvious answer. You want people who like figuring out stuff where there is no obvious answer.

However, the thought that we can switch the entire system; government, history, infrastructure etc is just not going to happen because the machine is too broken in the modern information world, it’s too big.. What could happen is what happens in business. Something comes along and disrupts it. A car was invented which disrupted the horse. Uber disrupted taxi services. All of a sudden taxi services are doing all these great things because they are forced to. They didn’t want to innovate.

Students are being taught information to regurgitate it from their heads using mostly short term memory, yet it is literally at their fingertips on their phones. If you really care about education you should not care how it’s being deployed, but instead about the accuracy and impact and how they execute that information. One can be informed in any way and that’s what we should focus on. Universities should pivot on putting young people in the best position to succeed in 2020, 2030 and not 2010.

“What you know doesn’t mean shit. What do you do consistently” Tony Robbins 

Inspired by the book #AskGaryVee: One Entrepreneur’s Take on Leadership, Social Media, and Self-Awareness.

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Hype cycle in commercial aerospace

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Emerging technologies and markets are exiting and can result in contribution for society. Business can prosper with new technologies. It is crucial to know where and how to invest in opportunities and show committed leadership which embrace renewal. A top-down approach with a transformative vision of the future. Initiatives are needed to empower the transformation (Westerman et al., 2014). In order to apprehend the implication for an industry it is interesting to look at Gartner’s hype cycle.

Due to the Commercial Space Launch Competitiveness Act, space is not a governmental program anymore (H.R.2262, 2015). Private businesses are playing a major factor and thriving innovation. The industry is growing and worth $ 314 billion in 2013. The business is powered by dominant actors such as billionaires and venture capitalists. They commit themselves to explore and exploit this largely unknown domain (Martin, 2014). Most of these actors are experienced in commercializing their initial businesses. They gained skills and a network which fuels hyping the industry and surrounding technologies. Such as SpaceX and the online announcement of their Mars endeavor for making humans multiplanetary (Musk, 2016). The hype cycle innovation trigger is already a decade behind us. The innovation is initiated by governments and got more and more commercial. The peak of inflated expectation is not on its height. Privatization more or less focused at less riskier and technological feasible projects between low earth orbit (LEO) and geostationary orbit (GEO). This new phase is riskier and has more technological challenges (Riebeek, 2009). Besides some minor failures, like exploding unmanned rockets, a lot of progress is made these days. The negative hype and trough of disillusionment in the hype cycle is often caused by failure. Mostly failure which does not match with the exaggerated expectations.

Most of the dominant actors behind the private space business made their wealth in leading companies within their industry. These business concede somewhat to Westerman et al. (2014) quote: “Digital masters see technologies as a way to rethink the way they do business, breaking free of outdated assumptions that arose from the limits of older technologies”. They know what it takes and how to achieve objectives. Is it possible to diminish the negative slope of the hype cycle with a strong transformative vision, leadership and a strong technological backbone? Can these billionaires and venture capitalists ‘beat’ the hype cycle and accelerate the commercial space technology?

 

References:

H.R.2262 – U.S. Commercial Space Launch Competitiveness … (2015, November 25). Retrieved October 25, 2016, from https://www.congress.gov/bill/114th-congress/house-bill/2262/text

Martin, K. (2014, December 2). The business of space: Exploring the new commercial space economy. Retrieved October 25, 2016, from http://america.aljazeera.com/watch/shows/real-money-with-alivelshi/articles/2014/12/2/the-business-of-spaceexploringthenewcommercialspaceeconomy.html

Musk, E. (2016, September 27). Mars. Retrieved October 25, 2016, from http://www.spacex.com/mars

Riebeek, H. (2009, September 4). Catalog of Earth Satellite Orbits. Retrieved October 25, 2016, from http://earthobservatory.nasa.gov/Features/OrbitsCatalog/

Westerman, G., Bonnet, D., & McAffee, A. 2014. Leading Digital: Turning Technology into Business Transformation, Harvard Business Review Press, 2014.

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The Genius Platform Strategies of Apple and Google

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Do you remember how Steve Jobs announced the iPhone? He mentions that this day is a day which he has been waiting for around two and a half year. Maybe he did know what position he was placing Apple in, maybe he was not aware of it. However, this day changed the position of Apple from a retailer of digital goods to an irreplaceable platform, where other platforms can base their platforms on.

As we spoke in the second session of Business Architecture and Consultany and as Westerman et al. (2014) write about. There are five types of business model archetypes which can be reinvented. The first one, the one with the most impact of the five, is about reinventing industries. The most familiar examples are AirBnB and Uber. We also see smaller changes, like food delivery applications, parking applications and festival applications. For example, the application for the Amsterdam Dance Event. Those are reinventions in other archetypes of business models.

When there is a change in how the industry is organised, archetype 1, all the firms must follow or they will be eaten away by their competitors (Westerman et al., 2014). We see a lot of changes in the past few years. However, somehow there are some players in the market who do not have to anticipate on those industry changes. Those players are Apple and Google. And in my opinion there are a few reasons for this.

To start, these two firms are not participants of the industries which are changing. The concept of their products is still the same after all these years. Despite all the new products which are announced every now and then. They enable other applications to create, shape and redefine industries. Think of Uber, the platforms of Apple and Google enabled this firm to offer a service which changed the taxi industry. Without being affected even a little bit.

Secondly, I hear you thinking: ‘Okay, that’s nice. But what about other players offering an enabling platform?’ and that is a fair point. However, big companies like Microsoft are not able to break the hegemony of these two platform enablers. And I don’t think that is going to change in a short period. Simply because there are large multi-homing costs (Eisenmann et al., 2006). All your information is stored within the enabling platform and changing brings very high switching costs.

Furthermore, due to the high network effects developers will develop applications in at least two languages, those of Apple and Google. Other platforms will always have a lower priority, and thus sustaining the current situations. Would you want to switch to a platform where not all your favourite applications are available? I wouldn’t.

Would Steve Jobs have known of the change he spoke about in 2007? I don’t know. But I do know that Apple and Google are laughing from the side-lines when an industry is disrupted. Let the changes come, they will enable it anyway. A strategy, smarter than anyone has thought of in the past decade.

 

References

Eisenmann, T., Parker, G., & Van Alstyne, M. W. (2006). Strategies for two-sided markets. Harvard business review84(10), 92.

Westerman, G., Bonnet, D., & McAfee, A. (2014). Leading digital: Turning technology into business transformation. Harvard Business Press.

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The difference between a CIO, a CTO and a CDO

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In light of the importance of leadership capabilities for the digital transformation of an organization, chances are high that you stumble upon abbreviations like CTO, CIO or CDO. I didn’t really know what the exact difference is, so I started to do conduct a little research and I would like to share the results with you.

The term CIO, Chief Information Officer, was first defined by Synnott and Gruber in 1981 as a senior executive of the organization responsible for information policy, management, control, and standards. They further added that the five primary functions of a CIO include participation in corporate strategic planning, responsibility for information systems planning, leading the development of corporate or institutional information policy, management of the organization’s information resources, and development of new information systems capabilities. I believe this definition is still quite accurate to describe the role of a CIO today. Just today the focus of a CIO is much more on actually increasing profits with the use of IT. From the definition, you can also tell that a CIO is rather internally faced and is mostly responsible for processes that happen within the organization.

The role of a CTO, a Chief Technology Officer, shares some common attributes with the role of a CIO. Both positions need to have a strong business understanding in order to bring added value to the organization and to align their respective responsibilities with organizational goals. They also need to have a technical background, so that they can understand and evaluate the underlying technologies in a business. In comparison to a CIO however, the CTO has a more customer facing role and is mostly responsible for enhancing the company’s product offerings. Connected to that, another difference of both roles is that the CTO is usually responsible for the development of new technologies in a company, whereas the CIO has its focus more on organizational problems and tries to solve these with existing IT solution.

Next to both roles, which have been around for a while now, the role of a CDO, a chief digital officer, has emerged recently. His major responsibility lies in digitally transforming traditional businesses to digital ones. In order to do so, the CDO needs to determine the parts of the business where influencers are able to support the change and to empower these influencers. That’s why, it is especially important that the person that fills in this role is not only a digital expert but also familiar with all parts of the organization.

I hope this short summary helped you to get a better understanding of these particular roles in an organization. Please keep in mind that these are not fixed roles and every company can interpret a role differently and the roles have been changing throughout the past. If you want to read further on this topic, I recommend you to check out my sources. Also, if you are curious how people actually became CTOs, CIOs or CDOs and what jobs they did prior to that, I recommend you to just use the LinkedIn advanced search and search for these positions in the country of your choice. This works fine even if you are not a Premium user.

I wonder what your opinion is on these roles. Does every company need to have all three roles on their board? Or do you think the CDO is just an evolution from the CIO and will make this role redundant?

 

Sources:

Penrod, James I. “The Chief Information Officer in Higher Education. Professional Paper Series,# 4.” (1990).

Synnott, William R., and William H. Gruber. Information resource management: opportunities and strategies for the 1980s. John Wiley & Sons, Inc., 1981.

http://www.computerwoche.de/a/der-cio-totgesagt-und-alle-haende-voll-zu-tun,2528153

http://www.forbes.com/sites/peterhigh/2014/03/03/why-your-company-should-consider-adding-a-cio-to-the-board/#4791a363e2f6

http://www.uniforum.org/publications/ufm/nov96/cio.html

http://www.huffingtonpost.com/don-tapscott/do-companies-still-need-a-cio_b_6214482.html

https://en.wikipedia.org/wiki/Chief_digital_officer#cite_note-8

https://en.wikipedia.org/wiki/Chief_technology_officer

https://en.wikipedia.org/wiki/Chief_information_officer

http://www.techrepublic.com/blog/tech-sanity-check/sanity-check-whats-the-difference-between-cio-and-cto/

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