IT out in the cold? Why wearables could warm things up for tech teams
Far from being marginalised by developments in wearables and personal data, IT departments that play it right could become key agents in generating new commercial models to exploit them.
Changes under way in business are offering the IT function a chance to extend its remit, according to Paul Roehrig, global managing director at services firm Cognizant's Center for the Future of Work.
"We are in the very early days of a major shift in commerce beyond a simple technology or business cycle shift," he said.
Roehrig and his colleagues have been conducting primary research and examining market information about the exploitation of data by businesses.
"As we assessed what was happening, we began to conclude that the companies that are winning are in fact beginning to create an outsized level of value based on how they manage data and information around every person or device or organisation."
Roehrig calls that field of information around, for example, an individual a 'code halo'.
It could be the combined information and data fields that people might exchange with a Hulu, Spotify, Netflix, or Amazon in their personal life.
"That interaction is now moving into the business world quite rapidly. Industry after industry, sector after sector, the winners in this new economy — and it's still early days — are beginning to compete based on how well they manage code halos," Roehrig said.
"In fact, the losers are demonstrating that they haven't managed on code halos. You can look at companies like HMV or Blockbuster — and the list is getting longer every day of companies that have not been able to manage or compete based on data, and meaning, and information."
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Wearable technologies fit into this trend as conduits for data fields between the individual, organisation or process.
"It's things that fit on your body, or in your body somehow, that are creating these fields of data that are quite extraordinary," Roehrig said.
"There are ways to track medical compliance but to have an actual chip on a pill in your body like Proteus is building — I'm not sure how else you would get that rich field of real-time data."
Roehrig refers to devices such as the Nike+ Fuelband, the Fitbit or Garmin's Forerunner as 'amplifiers' because they amplify and manage a code halo.
"So what's key is not whether it's your handheld mobile device or something embedded on your clothing, or it's an RFID tag or a tattoo that's communicating data, what matters is that is an amplifier and it's the kind of data that it's sharing and a company's ability to harness that data," he said.
Disney's MagicBand is an example from the consumer arena of how a wearable can help a business harness existing or past buying behaviour to create a better customer experience than employees alone could ever provide.
"Disney is trying to create a curated guest experience throughout the theme park. If I'm college student who is going there, I may have a vastly different ideal park experience than I would have if I was a parent going there with one or two children," Roehrig said.
"The MagicBand is designed to help Disney create that customised customer experience, which it would never be able to get just by looking at you. They wouldn't have the capability to do that."
The need to create systems to manage code halos provides an opportunity that could transform the organisation of IT within a company.
"The IT function has unfortunately been to some extent very successful at doing keep-the-lights-on technology but less effective — or maybe not invited to participate — in driving new revenue, new business models," Roehrig said.
One area, for example, where IT should assume responsibility is design.
"Many enterprises don't have a solid design function. Now in a code halo world, being able to create not only a beautiful customer experience but a beautiful partner experience and a beautiful brand experience — those are all critical elements of brand distinction," he said.
"A company might struggle with where that design capability should go. We think IT should extend its remit to be able to include, maybe not on-staff designers in every case, but at least partnerships to be able create a code halo solution.
"So, what's the application interface? But also what's the user experience design in line with that moment of engagement in the customer space in the supply chain?"
Roehrig said IT is in most cases really solid in managing the underlying technology of these systems but it should work with the relevant business unit on the creation of engagement in the value chain.
"You might say it's a bit of a barrier because it requires an organisational shift in some cases. But it's a tremendous opportunity for IT to extend itself and become at the forefront of innovation within many companies," he said.
Other barriers that businesses face in the management of data fields lie in security, privacy, business ethics and compliance with regulatory agencies.
"As code halos begin to gain traction in the market, begin to gain increasing relevance, the questions about security, privacy and compliance come to the forefront," Roehrig said.
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"It's going to go very quickly to a reality where the company's brand will be predicated on how well they manage trust in a code halo world," he said.
"If you're a bank or a retail firm or any other company that's deploying these code halo solutions, the ability to be transparent with participants — whether it's a consumer or another business in your supply chain — is going to be paramount to be able to maintain a brand promise in the market."
The first measure businesses need to take is to be transparent about the data they are collecting and why.
"Even though in business analytics there are a lot of unknowns that require some exploration, you should be very clear with participants in a code halo interaction what kinds of data you are collecting. What are you taking from me and what do you intend to do with it?" Roehrig said.
Also vital is the ability to opt out of any data interaction and the return of any data if requested. "You're already starting seeing companies begin to do that. Google has got a tool — it's not for all of their apps — where I can go in and say I'm opting out. Please send me my data and they'll package it up and they'll actually send stuff back to you," he said.
Finally, it is important to be explicit about what Roehrig calls the give-to-get ratio.
"What 'give to get' means is if I listen to Pandora, the fact that I like John Coltrane more than Justin Bieber is of interest probably to nobody. If that information gets out, that does me personally no harm and I get very good content from Pandora. So it's a very low give and a medium high get for me," he said.
But in healthcare, the give-to-get ratio has to offer the giver extraordinary value, and a company that's building a code halo system must be clear about its intentions.
"It's got to be more than, 'Hey we're interested and we think we might be able to figure something out'," Roehrig said.
"They should be thinking very clearly and have a clear articulation of what is that exchange, what is the value that I as a participant would get in return for exchanging that information with that company.
"If my AIDS diagnosis or my cancer treatment drug prescriptions or my criminal record gets shared out in exchange for something, now I've got real risk."
With Malcolm Frank and Ben Pring, Roehrig has co-authored a book, Code halos: How the digital lives of people, things, and organizations are changing the rules of business.