Smart Farmers

Last week I held a presentation on urban evolution and the digitalization of our cities at the Swedish TechDays it was a conversation on the drivers behind the smartness or our cities. On how internet of things was enabling this.

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If internet of things can digitalize our famers. Our cities can’t be far behind. The above image is from my technology vision talk, I shared this in the smart cities talk because I believe that what is happening here is important. We are not seeing robotic cows, but we are seeing the blur of the physical and digital worlds.

When a farmer painlessly can put a chip into cow and let it transmit data. Correlate that with data on milk quality, weather, food and all other data possible to capture. The farmer will embark on a journey that makes his business digital.

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Similarly to what I discussed in my post about smart vending machines the farmer can draw insights and get a better understanding of his business. He can use these insights to optimize his farm and ensure the best quality of milk.

But this digitalization opens up for other business models as well. What if this farmer sold his insights to other farms? He could be rewarded for the effective way he runs his farm in more then one way. He could create new revenue streams. For a non-digitalized farmer this would be unthinkable.

For a digitalized farmer, this is just the art of the possible realized.

The need for digital innovation in the service sector

A few weeks ago we discussed with a client on the possibility to replace their point of sales system with a modern solution built on Dynamics AX for Retail and a customized device UI’s. They provide a service to their customers with a POS and logistics of goods. Their current solution was very near end of life and they had heard that we built something in their industry they wanted to see.

For this client, service innovation is not luxury. It is what they offer to their clients. Today they deliver a single service and feel the pressure from other vendors. Even their customers demand more, something I discussed in my post on digital innovation and the bear experience. By not bringing new services and innovations to their customers, the market opens up.

If you are a service company, what you bring is unique value. At the moment you can be replaced, you will. To ensure that this doesn’t happen you need to create a chain of services. This client need to start innovate, start bringing more of digital to their customers or they will soon be out of business.

This could be thought as a simple product or service development. But as long as they just create monolithic services that can be replaced, they will. Service by service.

This is where we as technologists can help them. By bringing the latest in technology and marry that with their business knowledge – it is possible to create strong service chains that helps them bring new value to their customers.

For this client we discussed that in the addition of bringing our solutions and technical knowledge we could bring our iDays methodology. By embedding an innovation methodology into their processes we could aid them staying ahead of their customers.

I believe that this is the future of the consultant industry. It will not be in answering RFP’s, but to co-create value in a process where we bring technology insights and cross market experience to a business that wants to move a head.

From Software as a product to Software as a service

This is a reflection I’ve done as an assignment for a class I am taking at Karlstad University on Service Innovation.

How does the shift to service dominant logic affect the software industry? Is it possible for the software giants to provide value in use instead of value in exchange? How can they bring innovation to their customers and how do they work with networks to do so?

This text examines how service dominant logic is changing how software vendors are approaching their business, their partners and their customers.

The force in SalesForce.com

In 1999 SalesForce.Com declared “The end of software”. What they really meant was “The end of software as a product”. Since then the software industry has increasingly moved towards providing their software as a service and customers are applauding this shift.

This makes business push software companies to deliver a higher value faster. They expect new features, new services and new value without the requirement of running IT-projects.

All the major software vendors have had to adapt and are now focusing on providing the function, not the binary bits. Which gives their customers value in use.

Enter software as a service

SalesForce.Com is a pioneer in providing software as a service. In the late 90’s they had, correctly, identified that the real value to their customers where not the product but the functionality, the use. They also identified that CRM is moving at a high pace, innovation is happening all the time and it is hard for companies to keep up. The CEO Mark Benioff’s vision is to help their customers to transform into, what he calls, “a customer company”. Clearly using their software as just the platform, a piece in the service chain, to help their customers achieve their end goals.

There are several examples of this today. Companies like Adobe with Creative Cloud – Creativity as a Service, Amazon with infrastructure as a service – Hardware as a service, and Microsoft who has set out to deliver the complete IT as a Service experience to their customers.

Microsoft has changed their business strategy and today their mantra is “lead with cloud” which is an IT synonym for delivering as a service. For them it started delivering infrastructure for web sites as a service in 2008 and today they are offering their complete office suite and Microsoft Dynamics CRM as online services on top of a complete stack of infrastructure services. This strategy is transforming the company not only in how they deliver the software, but also how they recognize value for their customers.

Microsoft is transforming their value metrics from value in exchange to value in use. During their fiscal 2015, sales will no longer be measured in sold licenses but in the extent their customers uses their software.

To achieve this, they are reaching out to their network of partners to find innovative solutions for their customers on top of their service offerings. Avanade is an example of a partner that is doing this together with Microsoft and their customers. Partnerships that has created business innovations like the connected fitting room and predictive health analytics using Microsoft’s software.

The new norm.

Some critics claim that this is just a different packaging. That the software companies are still thinking in terms of products and that the addition of value in use is limited.

Microsoft’s shift to metrics based on usage and the vision of SalesForce.Com CEO Marc Benioff clearly shows that this is much more than just a shift in packaging.

This is a shift in business models for software companies to adapt a service dominant logic over a goods dominant logic.

It is quite clear that software companies are thinking more in terms of service then products. There are several reasons why we are seeing this shift but the common theme for them all is that business wants to see value in use of their IT investments and have no interest in running costly IT projects without predictive results.

It is also quite clear that they will not be able to deliver on this shift by themselves. To understand what services to deliver and to understand what value can be realized, they need to partner with others.

This shift has been more rapid the last few years and in a few more we will have seen a large portion of the software industry transformed to a truly service dominant industry.

Read more:
Digital Innovation and the Bear Experience (blog post)

New role, new focus – CTIO Patrik Löwendahl

Fotolia_71219196_Subscription_Monthly_M I joined Avanade March 2011 with a challenge presented to me; head Avanade’s collaboration business. It was my first step from being pure technical into a business role. Three years down the road and here we are.

In June I was asked to step into the Swedish leadership team as our Swedish Chief Technology and Innovation Officer – a role that started in Avanade with my old colleague Florin Rotar moving to Seattle stepping into the global CTIO role.

Satya Nadella had a profound quote in his first speech as CEO:

“Our industry does not respect tradition – it only respects innovation.”

With this in mind a role like this in a company like Avanade with it’s ties to Microsoft makes a lot of sense. I gladly accepted.

This of course changes things for me.  This is a new journey. A journey I decided to share on the blog. The blog will re-focus on digital, bleeding edge technology and innovation. Less code, more ideas.

If you want to join me on this journey you can subscribe to the RSS feed, join me on Twitter or add me on LinkedIn.

Looking forward to seeing you around.