Internet of Thinking: Beyond Clean Restrooms

Internet of Thinking: Beyond Clean Restrooms

Why would you want to connect a public washroom to the Internet? Is this nothing more than an overly complicated way to get the janitorial staff to do their jobs? After all, if they just check the paper towels every two hours like they are supposed to do, can’t we just move on to a more important subject?

Yes, using sensors to detect low stockage of paper products or soap products in public restrooms is pretty basic. It sounds rather mundane as an Internet of Thinking (IoTh) use case, doesn’t it? 

What if such application could do far more than help schedule tasks for the workforce? What if it could provide value well beyond the automation of an otherwise manual process?

Let me offer two examples of a different, more robust approach:

1. Pathogen detection: What if we use washroom sensors to detect pathogens, and report those findings to public safety organizations?  In New York City, an outbreak of Legionnaires’ disease has killed 10 and sickened more than 100. DNAinfo reported that “the city’s Health Department never inspected a South Bronx public school after a teacher there died of Legionnaires’ disease in April while hundreds of students were attending classes.”

Even better, what if the city had long ago installed sensors on the water towers suspected of being responsible for this outbreak?

2. Insurance compliance: What if operators could provide insurance carriers proof that restaurant staff are practicing good hygiene habits and following protocols? This could reduce insurance claims, allow top operators to save money on their insurance, and allow consumers to make better judgments about which restaurants to patronize.

Some might view this as an invasion of personal privacy, since the restroom experience is among the most private moments of our normal days. We need to decide whether the public good outweighs a modest intrusion on personal privacy.

The current focus of washroom Internet of Things initiatives is to enable efficiency in the servicing of commodity products that are dispensed in those locations. That’s not thinking big enough.

The same IoT infrastructure might also help us detect public health threats and drive down the costs of hygiene-related food service industry insurance.  And, all of this new capability can be brought to market “As A Service” – with the purveyor of the technologies unifying all of this into a neat package of defined services. The data collected, and correlated, is truly valuable. Think of a “command center” coordinating the monitoring of restroom quality and service availability as part of a broader public safety network.

There will be non-trivial cost to internet-enable such fringes of the information eco-system as restrooms.  If it’s a worthy thing to do, then there must be a social and/or economic case to be made. Efficiency in deploying janitorial staff won’t be a sufficient source of economic benefit. The thinking needs to be expansive around the return on investment in multiple dimensions.

Big opportunities come from thinking beyond the customary use cases … creating capabilities that do not exist today. They come from applying the Internet of Thinking logic.

 

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.

 

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Internet of Thinking

The Internet of Thinking

For more than a decade, people have been talking about the Internet of Things (IoT). But many “use cases” have been a victim of limited imaginations, perhaps because so many possibilities are way beyond our experiences … until now.

By connecting people and devices and everything else, we open up tremendous new possibilities for human thought. The primary opportunity for the IoT is not to tell you when your laundry is done, but rather to unleash your best thinking.

Thanks to these new interconnections, we will increasingly understand reality, instead of a crude approximation of reality.

Wild new applications are taking flight (think drones) because of a few fundamental breakthrough capabilities that are being knitted together in elegant ways.

There are five core requirements that must be addressed to bring any IoT application to reality:

1. Data from Sensors and Controls: IoT is all about enabling remote collection and activation of otherwise “dumb” devices. We must specify what those devices are, and how we want to interact with them. Yes, we want those devices to provide us with data. But we also need to decide what data we really want. We risk being overloaded if we aren’t purposeful in knowing what we want, and why.

2. The Access Network: You must position properly the pathways that control devices and retrieve the data they generate. An IoT application requires that information be collected for post-process interpretation and analysis.  Collection requires movement, and that’s the need for a network strategy.

3. Data Storage: Once moved, IoT application data has to be organized and deposited in a logical repository. The sheer volume of this data stream presents an immense challenge to the orderly indexing, storage, and retrieval of information.  We can store all of this data on high-cost spinning disks, or in memory, so … we need a tiered storage strategy.

4. Correlation: The most clever IoT applications will be those that combine data from one system (e.g., farmland equipment) with data from various other sources (e.g., weather monitoring).  Call this “Big Data” if you must, but some innovative companies will create immense value by combining one system’s data exhaust with others.

This will give rise to a new discipline around protecting data rights in systems that combine data to draw conclusions. Data will be a monetized asset. What data does your company generate that might be of value to someone else in the IoT ecosystem? This is the domain of innovative thinking! IoT brings access to new sources of information that can be used in new and exciting fashions.

5. Business Model: Finally, all of this technology must come together in business models that work in the real world. That means that they must create value for consumers and businesses as a result of the combinations of devices and services. Monetizing IoT can take many different forms, but it’s important that the economic outcome be part of the design.

A recent client dabbled in IoT for a commodity product … automating the process of monitoring supply levels for a consumable consumer item.  The CEO was unimpressed.  The business case was shallow.  Technologists, left alone, can deploy clever sensors but lose sight of the bigger picture of value creation.  There was data to be harvested … and monetized!

The Internet of Things is the fulcrum for the Internet of Thinking (IoTh). We can reach beyond our historical limitations by embracing new ways to control devices and to collect information.

IoTh is about thinking differently, but not just to create some cool new app. It’s about enabling people to think differently about the world around us, and in doing so to better understand it.  There’s gold in the hills of IoT, but not without IoTh.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.

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Eight Ways Outsourcing Is Re-Inventing

 

If your company is a buyer of outsourced services - or a provider of outsourced services - you likely know that yesterday’s recipe for success no longer makes sense. It was a nice business model while it lasted, but the forces of progress have moved onward.  Re-invention is at work.

Like other industries that rely almost entirely on technology, the outsourcing industry has evolved at a rapid pace as each new wave of technological capability comes to reality.

Many now recognize that the outsourcing industry is the implementation arm for new service models made possible by technological innovations. 

For the past twenty years, large services companies with a heritage in “systems integration” found that their core competencies in knitting together a complex rubric of pieces and parts were ideal for the outsourcing industry. You could succeed by being good at managing complexity, either as a buyer or as a provider. You could earn nice margins in the grey area between yesterday’s mess and tomorrow’s promise of industrial-grade utilities.

More recently, many companies turned to the outsourcing industry to manage down their legacy operations. The theory was this would free up time and resources for the adoption of disruptive new capabilities.

Today, the outsourcing industry is spending more time than ever before at the front-end of the technology adoption lifecycle. This is true for the development of automation and for the application of analytics.

There’s a lot of talk around robotics and automation of work processes. Superficially, this is about replacing people with ‘bots’. That begins to challenge the fundamental labor arbitrage lever of outsourcing. Much of the promised new world capability never materialized because the industry stalled at squeezing wages for the elusive margin.

Here’s a comparison of outdated outsourcing models versus the latest thinking from progressive buyers and providers.

1. New: Micro-scale specialized arrangements for built-for-purpose services versus the old: large-scale contracts for generalized scope

2. New: Transactional modularity providing maximum flexibility to the buyer; rapid adoption of new service platforms versus the old: long-term commitments; half the term devoted to transformational programs

3. New: Economies of automation (eliminating work) with focus on productivity versus the old: economies of standardization (procedural efficiencies) with focus on unit costs of effort

4. New: Optimizing bundled business services; measuring value delivered and total cost of operations versus the old: optimizing commodity volumes with committed purchases of scale

5. New: Integration of services platforms that are specific to the functional domain versus the old: holistic enterprise applications

6. New: Bundled and turn-key services that are paid for based upon attainment of desired effect versus the old: asset focus; counting and charging for pieces and parts

7. New: Agility through a future state model; flexibility to create new capabilities over time versus the old: lower cost for today’s environment; optimizing the known

8. New: Ease of switching; maximum freedom to realign the service components of the enterprise versus the old: transition & termination complexity; hostage-taking

Each of the “new world” characteristics enables the buyers of outsourcing to increase the degree to which they run their companies on the balance sheets of their service providers.  Make no mistake, that’s the economic underpinning of any services proposition.

More to the point, the successful industry service providers will embrace this new responsibility through confidence that their expertise in the bundling of components into business-relevant services can yield higher margins.  Alas, that’s the litmus test that determines survivors of reinvention versus those holding onto yesterday’s vapor.

To take advantage of these new approaches, buyer organizations need new skills and the talent for services integration.  If you want to accelerate an IoT aspiration, for example, you’ll need built-for-purpose partners that are linked up to deliver specialized services.

These shifts are just getting started. We will continue to see exciting new forms of outsourced services, new means of adoption and integration, and enhanced commercial terms. We’ll also see many new players on the field of competition.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, and in assessing sales and marketing effectiveness. He is now a Boston-based Managing Director at Alvarez & Marsal.

 

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How to Monetize the Internet of Things

 

Several years ago, one of my colleagues commonly used the phrase “data exhaust” to observe that so many business processes occurred without any attention to the metrics they produce. In other words, these processes generate valuable data that is being ignored or treated as waste products.

Today we have the Internet of Things (IoT) movement. At its heart, IoT is about leveraging our ability to control and measure devices, sensors, and virtually any living or inorganic item. In this realm, data exhaust is gold.

Remember this old adage? “If it’s measured, it can be managed.” With IoT, if it’s measured, it can be monetized.

This is the real breakthrough that IoT brings us. Businesses will discover wholly new sources of revenue from being expert at the collection, correlation, and packaging of data insights. This knowledge will come from massive amounts of data relating to a broad range of things.

This isn’t an entirely new trend. Look at the online advertising market that has been powered through the monetization of page views and click-through rates. During the first Internet boom, the most common business model could be described as "get a ton of traffic, then figure out how to make money".

Often, the way those businesses tried to make money on that traffic was to use display or text advertising. Advertising is fixated on impressions. Making money from advertising is still possible, but it's no longer as easy as building a site and putting some ads on it. Impressions, after all, are a means to an end.

Fortunately, there are a number of business models from which to choose, and IoT is a driving force for innovation around the value of data – for advertising and well beyond.

My career focuses on the world of technology-enabled business processes. Using the interconnection of people, processes, and systems, I often explore “How do we improve efficiency, accuracy and resilience of business?” Up until recently, we’ve lacked the ability to generate, store, correlate, analyze, and interpret real world data so that we can impact our future, not just record our past. 

Today, I see virtually unlimited potential in the exhaust that was previously thought to be without value.  Before you internet-enable anything it’s best to know what decisions can be made differently as a result of this new connectivity.

It’s a great time to be open-minded about new sources of value. Data exhaust can help us make better decisions about the allocation of precious resources. The best ideas will look nothing like what we’ve done in the past

In my mind, IoT is about the Internet of Thinking.

Peter Allen has many years of operating experience as a top executive of rapidly-growing multi-billion dollar companies and in assessing sales and marketing effectiveness. He is now a Boston-based Managing Director at Alvarez & Marsal.

 

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Three Steps Bring Agility to Corporate Services

If you want to increase the agility of your back-office functions, you need to consider three essential steps. All are a bit on the immature side in the market today, but all are also evolving quickly.

 

1. Adopt a Services Catalog. While the term may conjure images of a restaurant menu, a Services Catalog enables informed decisions around service design, sourcing, and lifecycle management. A Services Catalog applies the disciplines of product/category management to the world of back-office support functions.

A well-designed Services Catalog provides an assortment of building blocks. These blocks represent capabilities that are managed through a holistic lifecycle. By this I mean that they are created, deployed, scaled and eventually retired in response to competitive requirements in the markets you serve, even if those markets are frames by internal business units.

We are still early in the adoption of a Service Catalog governance model for IT or for a Shared Services organization. There is, however, an obvious nexus for the application of a Service Catalog – it’s the point of intersection among the demand-side business and the supply-side support functions.  This is not a tool, but rather a management discipline.

2. Embrace and empower the role of DevOps in their support for business partners. This is a cultural shift, not a technology job description. Firms that adopt such a mindset are demonstrating true progressiveness in capitalizing on a generation of knowledge workers who are central to innovation. 

The Service Catalog has the potential to conjure fears of overly structured and tightly disciplined constraints that restrict innovation; DevOps is the perfect offset to such fears.

I ask every one of my clients whether their organizations utilize DevOps techniques to accelerate the business-to-IT agenda. Over the past several years, I’ve seen the positive responses increase dramatically.

The DevOps role is to make change happen both quickly and efficiently within the operating parameters of business expectations for resilience. Those are tough hurdles to meet: rapid innovation, with positive effect, without undue risk. But the mission of DevOps is to drive speed to effect.

3. Create a mature and transparent Charge Back mechanism. This is another term that evokes images of bureaucratic cost allocations within the hairball of corporate structures. In reality, it’s actually an essential discipline for effective governance through a program of change. 

Most companies recover the costs of back-office operations by applying allocations of those costs to their market-facing business units. The most common techniques for making the allocation decisions are to spread the costs based on such factors as net revenue, or headcount, or office locations. While the accountants might favor the mathematical ease of these algorithms, most business leaders detest allocation-based cost recovery approaches.

Achieving progressive capabilities in back-office support functions demands high correlation between the needs of the business and the form of the associated support. That fidelity implies choice. Those choices – such as the quality of the office space, the speed of response, etc. – carry varying costs.

A modern Charge Back mechanism empowers innovation by making clear the effects of decisions around business options. A business unit that can lower costs and/or increase revenues will enjoy those benefits directly.  Like the prior points, this is less about a tool than it is about a management philosophy.

When combined, these three ingredients – Service Catalog, DevOps, and Charge Back – will improve your organization’s agility. Without them, agility is just a pipe dream.

Peter Allen has many years of operating experience as a top executive of rapidly-growing multi-billion dollar companies and in assessing sales and marketing effectiveness. He is now a Boston-based Managing Director at Alvarez & Marsal.

 

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Who Could Want Me As a Mentor?

Over the years, colleagues have approached me with a request that sounds benign and that has been increasingly common, “Would you be my mentor?” For reasons I haven’t fully understood, I find these requests uncomfortable; recently, I have been trying to understand why.

It’s not the time commitment that bothers me. I am more than happy to help, and am willing to invest in the development of a colleague. 

Rather, it’s the presumption that I have any wisdom worthy of sharing that nags at me. I interpret the question with more formality than it likely deserves, but can’t seem to think otherwise.

To find the most effective way to diffuse my anxiety, I’ve recalled mentoring situations from my own past.

In my first job out of college, I rose through the ranks of an ultra-scientific firm doing research on the early forms of computer networking. I wasn’t smart enough to discover new science, so I focused on the management side of the business. 

Bill Dlugos was a recently retired USAF Colonel and he was hired into a role that oversaw my scope of responsibility. While I reported to Bill, he also served as a coach and mentor to me, without either of us ever using those words. 

Over the next few years, Bill would ask me how I was approaching problems and generously offered his time to give me advice around how I was thinking about the tasks at hand. The projects I was leading were cutting-edge and complex: deploying a communications capability to the FBI, connecting NATO’s operating locations across Europe, and working on sensitive intelligence programs.

I listened intently to Bill because he was experienced in the business and thoughtful about me. I can’t recall him ever directing me. He always asked what I was thinking about a situation, and what alternatives might be practical. Being a junior manager leading my first complex assignments, this was uplifting because of the confidence it showed Bill had in my abilities – even when my judgment was poor.

A few years later, in a job for which I felt similarly unprepared, Don Bowen (retired USAF Brigadier General) recognized my anxiety and reached out with an offer that we have coffee once a week to talk about what I was experiencing. No agenda, just coffee.

Both of these men initiated the mentoring relationship. They didn’t wait for me to ask for it. Both of them were in positions of authority, but never used their positions as the framework for our conversations.

Bill and Don were career military officers, accustomed to structure, discipline, planning, and order. For whatever reason, they saw in me a potential that warranted the investment of their precious time.

I hadn’t thought about Bill Dlugos or Don Bowen for many years. I lost touch with them long ago.

As I place these memories in the context of being asked by colleagues to serve as a mentor, I am ashamed. I should not need to be asked, I should initiate. There does not need to be any formality to the act; it ought to be natural and casual.

In fact, much later in my career when I carried considerable management responsibilities, the CEO of my firm said to me one day, “Your value is much greater by BEING, rather that DOING.”

I work today with a great group of young professionals, and maintain a rich network of past colleagues. I will be offering coffee more often than before. I may just be old enough now to overcome my insecurities.

 

Peter Allen has many years of operating experience as a top executive of rapidly-growing multi-billion dollar companies and in assessing sales and marketing effectiveness. He is now a Boston-based Managing Director at Alvarez & Marsal.

 

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To Go Digital, Go Find Excellent Partners

For four years I led global sales and marketing for a large IT Services company, and experienced first-hand the powerful impacts of digital transformation. To deal with digital initiatives, many of the CIOs with whom I worked grappled with the choice between buy/subscribe versus build/operate.

 

This experience really emphasized for me that digital transformation redefines the nature of any underlying business, and changes the nature of services partnerships. This is not outsourcing as the industry previously defined it. 

In most cases, companies must increase their proficiency in the use of services partners (i.e. buy/subscribe), because the very nature of Digital business models demands agility and networked ecosystems. 

Getting comfortable with the structuring of external partnerships and a central strategy for driving a Digital agenda is no small feat. Here are five lessons I tallied during my operating experience:

1)    Digital is a Business Model, not a Technology. Companies that are well established in their markets recognize that digital enables new operating structures. This doesn’t just mean mobile; many others are emerging quickly, including social networks, multi-modal communications, edge computing, sensor-based data models, in-memory database processing, and others. 

Beyond the established organizations, look at the new entrants that are building their operations around a digital ecosystem. Both start-ups and carve-outs, many fueled by venture capital and private equity, insist on running their business via digital operating models; they are leaving behind the organizations and systems that defined business of yesterday.

The Internet-of-Things (IoT) conversation is a business model discussion, not a technology discussion.

2)    Digital is Everyone’s Business.  Even the most mundane industry segments are faced with digital threats and opportunities. If you’re a manufacturer, or a distributor, or a maintenance company, or a services entity … you’re likely spending time considering new ways to develop, sell, and service your customers using digital techniques. 

I’ve been impressed by some otherwise traditional business segments that have teams of people working to conceive new sources of operations through the use of emerging digital techniques. Many are using crowd-sourcing ideation programs to engage their employees in this process – a testament to the urgency of bringing everyone along on the journey of change.

3)    Digital is a New Muscle. Most of the companies that I work with readily admit that they are lacking in the expertise to transform their business via digital. The expertise they need is well beyond technological skills. They are missing a fundamental understanding how to conceive and operate new digital business models.

In most case, two realities fuel a burning ambition. First is the competitive threat that exists across industries from more nimble entrants who are more aggressive in embracing digital operating models. But the more powerful forcing function comes from reimagining how customers want to do business. When you apply an outside-in perspective, it’s often a liberating experience for employees who can see new ways to operate the business.

4)    Digital is Holistic. Unlike the era of Enterprise Resource Planning (ERP) platforms that focused on efficiencies in back-office operations, the digital promise touches on every aspect of the business cycle. It’s about how you win the right to serve your customers, all the way through the management of your supply chain.

 

5)    Digital Requires Partners. If you buy into the shift to digital in how business is conducted, then you are implicitly buying into the need for a robust eco-system of partners. Digital, by definition, implies the knitting together of buyers and providers through platforms and channels of commerce. 

This last point resonates most intimately with my own background in shared services and outsourcing. Executives are looking to their existing back-office service resources through the lens of enabling a digital ambition. Can the current shared services organization acquire the skills, orient the service model, and reach forward through the business?  Can the current outsourced service providers bring purposeful investments to bear through leveraged services in a digital business model?

It is the responsibility of executive leadership to mandate service partners to foster innovation in the delivery of front-office, mid-office, and back-office innovations. They can do this through automation, analytics, interconnectivity, and all of the other features of a digital business model. Digital is as much how as it is what.

The excellence of your service partners, and in the dynamic use of built-for-purpose solutions, is what will enable your business to be a leader in digital transformation.

 

Peter Allen has many years of operating experience as a top executive of rapidly-growing multi-billion dollar companies and in assessing sales and marketing effectiveness. He is now a Boston-based Managing Director at Alvarez & Marsal.

 

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