However, implementing the stack is a whole different ball game. Each of the pillars that make up the SMAC stack has its own body of knowledge and requires a highly specialized skillset. To connect the 4 pillars (social, mobile, analytics & cloud) into a unified digital platform can be daunting.
PricewaterhouseCoopers (PwC) has some compelling ideas around the desired end state, which they call the digital operating model. However, there isn’t a step by step guide of how to get there. In the next few blog posts, I will share a non-industry specific approach on how to become a SMAC enabled enterprise.
At a high level, there are just 4 steps.
1) Shift your mindset
2) Pick the right process to SMAC
3) Choose the appropriate toolset
4) Implement and iterate
Shift your Mindset
The early 20th-century economist Joseph Schumpeter observed how innovations and advances in technology are often accompanied by a process of “creative destruction,” which shifts profit pools, rearranges industry structures, and replaces incumbent businesses. This process of creative destruction is well underway and early SMAC adopters are disrupting industries. The companies that are winning didn’t begin with a “technology first” approach. They began with a better understanding of the digital landscape. A different mindset.
So what are the ideas that helped shape this winning mindset?
The list below is not exhaustive but it is a good start:
If you believe the now somewhat clichéd though widely accepted premise that software is eating the world, you will agree that every business is increasingly in the technology business. And in the technology business, there is an approach that separates the winners from the losers. It’s called Platform Thinking. This approach differs from traditional “pipe” business models, where companies create stuff, push it out and sell to customers. Almost every traditional business is a pipe. In a platform business, however, users (producers) can create value on the platform for other users (consumers) to consume.
TV channels use a pipe model but YouTube is a platform. Encyclopaedia Britannica is a pipe but Wikipedia is a platform.
In my opinion, every company can find ways to project its business model through software, and become a platform.
To learn more about this approach, check out this blog post from Sangeet Paul Choudary.
Mass Personalization at Scale
Customers love personalized attention. Usually, this involves a high-touch or labor-intensive approach, which is expensive.
However, a SMAC-enabled enterprise can do things differently. Consider the following examples: Amazon knows you better than the local grocer and can cross sell you items that you would have never thought of. Netflix knows you better than the cable company and can give you custom recommendations based on your viewing habits. Google, sadly enough, probably knows you better than your mother!
These examples follow a common pattern. They favor high insight over high touch.
In other words, the clever use of data can help you create segments of one and deliver on the promise of personalization at scale.
Interactions, not just Transactions
Traditionally, businesses have focused on transactions.
ERP, CRM, and transactional web applications are classic examples of systems processing transactions.
Interactions are about how people and things work with each other or with your business. Interaction data is everywhere – web logs, social media, app usage data. etc. But most companies are not doing anything with this data. It’s a shame, because interaction data is the key to understanding customer behavior. Without it, how can you be “customer centric?”
Interaction data is the new “voice of the customer.”
Historically, storage costs were high and companies wisely limited the amount of data they collected. As costs plummeted, the scenario has reversed. Now it makes sense to keep an ever growing repository of data. This sounds wasteful at first, but if you understand the concept of Data Gravity presented by Dave McCrory, it makes more sense. In a nutshell, think of data like a planet with its own gravitational pull. Larger planets exert more pull. Similarly, larger amounts of data attract more stuff. Valuable stuff – like apps and services which ultimately translate to $$.
Data Gravity helps explain why companies like Google and Amazon behave the way they do. For example, Google’s acquisition of Nest (the thermostat and detector company) could be viewed primarily as a data grab of rich, behavioral data, that Google did not previously have. Amazon makes it easy to get data into their cloud but getting it out is not as easy.
Data Gravity reminds me of something Tim O’ Reilly once said, “The guy with the most data wins.”
Rise of API’s
I think of APIs like networking for software programs. Software that is not connected to other software is like a computer that is not connected to the Internet. The more broadly accepted metaphor is that APIs are like the glue that bind apps together. The API economy is on the rise and according to PwC, APIs are the best way to create a modular and “permeable enterprise.” APIs lower the cost of integration and allow developers and partners to co-create and co-innovate on a shared platform. They are the lifeblood of the SMAC stack. As a modern enterprise, if you ignore APIs, prepare to have your lunch eaten by the competition!
In the next blog post of this series, I will provide guidance about how to pick the right process to begin your SMAC journey. If you are keen to discuss further please contact us.