The value of automation question

Is there too much reliance on software to lead businesses into the future? Strategic thinking should arguably come from within firms, not as purchased generic techniques & enabling tools.
Written by Oliver Marks, Contributor

The new year saw the usual deluge of predictions from the software industry, with the 'software is eating the world' meme playing neatly into vendor marketing messaging around performance optimization wins for business enabled by big data, sales and relationship automations and various flavors of software suite and platform inspired voodoo.

The social business premise that consumers are signaling their wants via their social network life commentaries and shopping patterns and will be waited on hand and foot by powerful customer relationship management is now something even the average guy in the local bar understands is happening with their digital presence and information, whether shared or tracked.

From point of sale computers all the way back up the supply chain, digital transformation and innovation of selling has been all the rage for the last twelve months or so, with the front office dominated by rapidly increasing marketing technology budgets and the back office getting ever more sophisticated with analytical data crunching.

Software is automating the business world as we understand it today…but that world is changing so fast, those who rely on processes defined by software vendors rather than using their own common sense about what their business needs are at risk of all being on the same playing field playing by the same rules and restrictions, which is called conformity, not competitive advantage.

The question of whether it is stale, out of date generic processes that are being automated looms large when considering the inevitable one size fits all thinking of the enterprise world (with room for tailoring modifications via integrators).

SAP, whose HANA powered Business Suite launch event I attended for a few hours last week in Palo Alto, are under pressure to reduce the cost of their integrated transactional and analytical real-time data management platform  offerings but are understandably holding firm on pricing, Apple style.

I noted last summer during their 'Sapphire' conference the comment on the keynote stage of marquee customer Ron Dennis (who leads Formula One motor racing team McLaren)

'It's scary that we need as much (SAP) as we do as we don't have the scale to justify the investment'.

SAP are making giant strides with their sophisticated structured data offerings and making the difficult transition to hosted software applications reasonably well, but this customer-wallet-scale-to-technology-investment issue is arguably an increasing challenge for the entire hi-tech sector in a very dodgy economy.

The power of expensive collected centralized data puts a lot of information in a few people's hands but doesn't necessarily lead to innovation.

As much as tech would like to be seen as the hero and solve crippling economic problems created by an out of control banking and credit system, the reality is that ultimately it's going to be their customers product innovations that drive their growth and not the digital tools they choose to help run their business. Those product innovations may well be achieved with much lighter weight technologies than the enterprise software industry would like.

Last decade sophisticated trading technologies enabled cynical behavior by a few innovative people in the financial industry for their gain and everyone else's loss. The power of expensive collected centralized data puts a lot of information in a few people's hands but doesn't necessarily lead to innovation. 'The new real time'' is batch processing of manufacture resource planning data that used to take an hour now taking 7.2 seconds - but if that data shows sales falling off a cliff its going to be harder to recoup your investment in the HANA technology that saved you an hour.

This is the conundrum many firms face today: the solution has to be to keep innovating on your own terms and stay on top of change while driving towards specific business goals on your own terms. 'Design Thinking' is currently highly fashionable in the tech industry, ostensibly to map user interfaces to client real world experiences - increasingly though I've heard complaints that vendor organized 'Design Thinking' meetings are really pre sales fishing expeditions to find out what a customer is looking for, and then put together the pitch.

Companies are full of different personality types, and there are often wide gulfs between people who specialize in structured data and information and those who live more in a world of tacit knowledge and unstructured data. In formal business terms bankruptcy is a form of innovation when used by bean counters to solve specific structured business problems, whereas salespeople at the top of their game tend to accumulate vast amounts of tacit knowledge about their prospects.

Taking vendor and analyst/booster hubris and hype with a bigger pinch of salt is necessary in an era when it has never been more important to find exactly the right tactical tools for the chosen strategic direction, and to be ready to rapidly change course when circumstances and business conditions change.

Today's software tools have never been more powerful or capable - or more dominant as the proposed nervous system of businesses, increasingly automating human jobs. The larger question is how much contextual information is being lost as human participants decline to share their knowledge in the face of the onslaught of 'big' structured data. Sometimes companies can't see the wood for the trees in seeing where true value lies.

Editorial standards