There are two main factors that act as inhibitors as companies work toward the consumerization of the enterprise. Commoditization of IT and Offshoring and Existing Process/structure.

Commoditization of IT and Offshoring

Although the enterprise may be moving toward consumerization, certain factors act as inhibitors as companies attempt to evolve as well. Chief among them is the commoditization of IT and offshoring.

What we hear from analysts and see in our experiences is that corporate IT organizations are not structured in ways that are highly conducive to the idea of being user-centric and consumer-oriented.  Many organizations have embraced the concept that IT is a commodity, and therefore, the focus should be on lowest cost offshore bodies.  There may be a role for offshore development at low cost, but it is not likely to be focused on building the user experience that is going to re-invigorate the business service provider-customer relationship.  It is unrealistic to expect that sending a 100-page MS Word document to the other side of the planet will result in an engaging experience after several months.  Creating a meaningful user experience is a collaborative and iterative process.

Stagnation of IT Procurement

There is an important point on which to set the record straight.  IT procurement organizations remain stuck in the early 2000s, after the dot-com bubble burst, when the market faced a glut of IT resources.  This oversupply resulted in a flight from IT-oriented careers.  The number of IT majors was cut almost in half between 2002 and 2006, from 23,000 to 13,000 in just four years.  As the market demand for IT resources has increased over the past few years the supply has not kept pace.

As evidence of this supply-demand imbalance, the number of H1B Work Visa applicants for IT workers in 2007 was double the quota the first day that applications could be submitted.  From April 2007 until October 2008 there were no H1B Visas available, and this dearth has continued to be the case over the past couple of years as Congress has been unwilling to relax immigration restrictions.  “Exacerbating the situation is the looming retirement of a generation of baby boomers. All this is occurring when the government projects that the IT workforce will grow nearly 25 percent, more than twice as fast as the overall workforce, between 2006 and 2016.” *

*Sources:

http://www.cioinsight.com/article2/0,1540,2248193,00.asp?sp=0&kc=HOTTOPICS012208STR2

http://www.thelibertypapers.org/2007/04/05/us-reaches-h1-b-visa-limit-on-first-day/

http://techcrunch.com/2008/04/21/house-republicans-move-to-increase-h1b-visa-quota/

A Mindset of Quantity over Quality

In addition, there is a phenomenon that is all too prevalent in IT procurement organizations.  The commodity mindset of IT resources has caused procurement to focus on buying IT services as if they were buying toilet paper.  The problem is all IT resources are not the same.  Numerous studies have shown that in a typical development project  most of the work gets done by about 20-30% of the team.  In one project with 30 developers, data collected showed that six developers were doing over 90% of the work on the project.  In addition, only one of those six was doing 40% of the project’s work on her own.  The other 80% of the developers were net distractors slowing down the 20% who were doing the work.* (For more on this topic, see Grady Booche’s Managing The Object Orient Project, p. 189. See also PeopleWare by Tom DeMarco and Timothy Lister, p. 48).

* John Miano, “The Myth of the Interchangeable Programmer: Can’t We Just Offshore Him?”, Datamation, July 2008

This phenomenon is exacerbated by the fact that when organizations go offshore they think that since labor is low cost and perhaps not the highest quality, they will compensate by hiring more workers to get the job done.   Now, however, a large group requires a good deal of additional management, and the two or three stars probably have their hands full keeping  the rest of the workforce from driving the project into the ground.  Add to that the high turnover with offshore development firms, the language barriers, and the inherent difficulties of working with people on the opposite side of the planet—such as time zones and team building—and this is a model that has its challenges when it comes to creating a compelling user experience.

The offshore model can be a recipe for disaster for organizations trying to collaboratively reinvent the customer experience and engagement model for what could be the most-used channel for interactions.

Insufficient Processes and Structure

Many enterprises don’t have processes or structure built around a user-centric IT delivery approach.  A basic understanding of the user experience and its delivery tends to be the furthest most enterprises have gone, and  many have no capability at all.  This new and evolving area has really grown up significantly in the Web era.  This space has rapidly evolved in the past few years and even a solid Web 1.0 experience design process is not quite adequate anymore.

This young field went through a significant evolution with the advent of rich Internet applications (RIA).  Prior to RIA, it was reasonable to leverage a fairly serial process of creating page schematics (wireframes) and then applying visual design to them; then the project would be handed off to an HTML resource, who would then bring it to life and provide this light front end to the J2EE or .Net development team.  With RIA, this serial approach is antiquated and significantly less effective.   As interactions become more cinematic, the motion of page elements communicates information and guides the user to the next action.  These interactions blur the line between the role of an information architect—who lays out the page and page flow—with the visual designer—who, instead of just coloring the page, is now integrally involved with leveraging the creative page elements to communicate action and flow (see Figure 6).

Figure 6: Integration Leads to Greater Effectiveness, Efficiency

As RIA technologies continue to mature and evolve, there is a powerful give and take between the technologist and the design team. The technologies don’t just bound the design by what is technically feasible, but also push the design further by introducing capabilities that the design team never dreamed possible.   This process has been reinforced by the emergence of Agile Design and Development methodologies.  It is not necessary to fully embrace the Agile nirvana to gain the benefits of key Agile ideas, such as multiple spirals throughout a development cycle. In such an instance, incremental capabilities emerge early in the process, providing business users an opportunity to interact with the solution and provide feedback along the way.

New Emphasis on Conceptual Design

A key shift has been the importance of conceptual designs to communicate the direction early in a project’s life cycle.  These concepts help to crystallize business intent, provide something tangible to test with users, and as importantly, can be utilized to help secure buy-in and project funding.  These are frequently manifested in a Flash prototype but can also exist in a series of design comps and accompanying documentation.

Many organizations lack an understanding of the new design and development processes necessary to producing rich and engaging experiences. They also lack the specialized skill sets and resources to deliver on these methodologies.   We have seen the emergence of whole new roles that did not previously exist, but are keys to project success, such as the Flex Styler.  This is a role similar to an HTML/CSS resource but requires additional skills with graphics modifications, animation and Action Script (the language of Flash/Flex).   These resources are key to bridging the gap between a user experience design and the object-oriented development team that makes an enterprise application come to life (see Figure 7).

Figure 7: New Skills Bridge the Gap

In the next post I will explore the future of the enterprise.

Consumerization of the Enterprise Part 1:  A Call To Action

It has traditionally been assumed that enterprise users are very transactional in focus and not interested in fluffy experience stuff.  There are a few key ideas that no longer hold in this assumption.  First of all, the fluffy experience stuff isn’t just fluff.  Enterprise users, even more than consumers, don’t have time to waste.  Forcing an enterprise customer to porpoise in and out of multiple systems through various interfaces and different logins to accomplish a simple, logical task flow is bad for them and your relationship with them.

In the early days of the Web, people were happy to have the ability to get at information and perform self-service.  Enterprise systems exploded with Web offerings and experimentation in the early 2000’s only to have money pulled back after the dot com bubble burst.  These systems continued to creep along and organically evolve into cobbled together sets of offerings.  Meanwhile, this channel moved from being experimental to a core business channel and in many industries, such as financial services, it is now the primary interface to customers.

These customers don’t just interact with the tortured experiences they have with their business partners. In their personal lives they have experiences on Amazon.com, Facebook, iGoogle, and iTunes.  These users come into work and legitimately ask themselves why the business partners they spend millions of dollars on subject them to an experience so far below what they get from the above consumer offerings for free.  It’s this paradox that is fundamentally the forcing function behind the consumerization of the enterprise.

In this series of blog posts I am going to examine the factors a company must consider as the enterprise evolves.  First, I will examine the factors that are driving the consumerization of the enterprise key amongst these: The Shift-consumer digital experiences are driving the demand for a richer experience in the enterprise, The Arrival of the Digital Native in the Workforce-the impact of Digital Natives entering and moving up the workforce dramatically changes the talent pool.  Second, I will examine the factors that directly affect the capabilities of a company to proactively evolve the enterprise: Commoditization of IT and Offshoring-IT organizations are not structured in ways that are highly conducive to the idea of being user centric and consumer oriented, Existing Process/Structure-a basic understanding of User Experience and deliver capability tends to be the furthest most enterprises have gone and many have no capability at all.  Finally, I will provide a very compelling case study that exemplifies the success that can be obtained by reinventing a company’s digital offerings and experience.

Let’s start with examining why the consumerization of the enterprise is not just a luxury, but an essential next step for businesses.

The Shift
In the traditional enterprise model, organizations dictated the tools and technologies employees could use in an inside-out push model.  During this time, enterprise level investment from industry and government (military) fueled both the demand and profit for cutting-edge technological innovations.  New developments trickled down into consumer usage.

Source: Forrester, February 2008.  Embrace The Risks And Rewards Of Technology Populism

However, key forces have shifted the balance of influence, with employees and individuals voicing greater expectations on the tools and technologies they work with, creating a strong outside-in movement.  Users in turn bring their consumer expectations into their work environments.

This trend continues to gain momentum from a combination of:
1.    Vast consumer market growth and rate of tech innovation in consumer products.  Innovation is no longer concentrated at the enterprise level.
2.    Shifting social demographics of the workforce as the boomer generation shifts into retirement or other activities and a growing population of digital natives/millenials/generation Y enter the workforce bringing their native tech skills and expectations (more on this topic below).
3.    Blending work boundaries with employees expecting mobile access to information anytime, anywhere.  Workers are exercising greater flexibility with telecommuting/mobile computing accessing both work and personal information in a location agnostic way.

The enterprise 2.0 user is not attached to a desk in an office. Sixty-four percent telecommute at least part-time, compared with just 34% of non-enterprise 2.0 users.  And more enterprise 2.0 users spend time working at locations other than their desk around the office and at client sites than their nonuser counterparts.  As such, large numbers of enterprise 2.0 users have laptops (55%) and smartphones (27%) — the tools that allow for flexibility in working location.

Source: Forrester’s Workforce Technographics US, Canada, and UK Survey, Q3 2009.

Source: Forrester,  February 2008.  Embrace The Risks And Rewards of Technology Populism

The enormous volume of the consumer market and fast adoption cycles draws new tech innovation efforts.  Users in turn bring their consumer expectations into their work environments.

Source: Forrester, November 2008.  The Hour Of The Vendor Strategist: Three Mega Business Trends Will Reshape The Tech Sector”

Users enjoy rich interactions online and via a growing range of networked devices.  Similarly Social Media has permeated the fabric of life.  As people adapt to and embrace new technologies, the gap between consumer and enterprise experiences creates pressure on organizations to leverage the best tools to enhance worker productivity rather than hinder.

Smart phones/mobile is definitely a huge part of this phenomenon and will be explored further in a separate set of blog posts as it is worthy of its own focus.  Smart Mobile devices are not just valuable to hip consumers but also to sales and services resources in the field and to all workers on the go.  Likewise Social Media is worthy of extended discussion in its own post and is becoming an increasingly important part of the enterprise landscape.

Here Come the Digital Natives
The impact of Gen Y, also known as Millennials or Digital Natives, entering and moving up the workforce dramatically changes the talent pool.  As this generation has entered the workforce their expectations of being able to network and interact on-line has met with woefully poor intranet and extranet capabilities and experiences.  Having not grown up in a disconnected world they are intolerant of this lack of capability and not easily impressed by merely being able to get by with basic functionality  Often missed is that this group is far larger than the generation that proceeded it and depending on how they’re counted, larger than the famous Baby Boomer generation.  They are becoming recognized as an echo of the Boomers.  Much attention has been paid to the impact of the Baby Boom generation and their impending retirement but the impact of the Digital Natives is just beginning to be felt.

The key thing to remember is that increasingly users don’t view there to be a major distinction between the technologies they interact with in their personal lives and in their business lives.  Business in the consumer market emphasizes usability, personalization, and customer intimacy.  In contrast business service providers emphasize security, central control, compliance, cost efficiency, and standards.  When designing new or updated services, companies can leverage the benefits of consumer technology usability and personalization.  People who understand consumer behavior can translate best practices into the enterprise environment.  Total cost of ownership should take into account improvements in productivity and speed of response.

In the next post I will examine the organizational inhibitors that create setbacks as companies work toward the consumerization of the enterprise.