Tuesday, June 20, 2017

Mass personalization is dead; welcome to the age of nano segmentation !

Attending this conference around analytics, marketing and understanding the customer behavior using segmentation as a discipline, almost all the speakers talked about targeting improvements as the segment sizes got smaller. Complexity of algorithms and the availability of hardware resources on the cloud as well as lower cost of acquisition has made it possible to churn data – a lot more data – than it was possible not too long ago. Marketing effectiveness is waking up and is moving away from the conventional world.

Companies that engage customers directly and those with high volumes of transactions have already begun to garner benefits from these technologies. Even others with a few degrees of separation between the brand and the consumer are exploring alternative strategies and business benefits. Almost every conference also has a mandatory presentation from a research house. The analyst on stage is expected to shower thought leadership on the audience; it is a rare occurrence when they actually make any practical sense.

One such session started with anecdotes of individual attention to the consumer in the pre-technology days and predicted the return of individualization in the near term. Given enough data points, oodles of hardware and highly optimized algorithms around machine superintelligence (the next level after deep learning according to the speaker), the engine will be able to segment the large volume of data into buckets of one, i.e. identify and predict behavior and thus target individuals and capture wallet share.

It has been an aspiration of software and solution builders to use technology to predict the future; we have all seen demand forecasts and revenue predictors with Sales & Operations Planning, most of which hovered in the 70 percent range with a swing of 10 percent on either side. Definitely better than the binary state of tossing a coin or 50 percent, these solutions removed error rates when 70 percent was off target to 70 being on target ! Predictive analytics has had better success than fortune tellers on accuracy levels.

Artificial intelligence at some levels is already influencing our behaviors with our every keystroke and click being recorded by some websites and mobile apps whose terms and conditions we hardly read and comprehend. Changing privacy policies and updates render our choices ineffective with every update leaving us exposed and vulnerable. Data privacy coupled with sieve like security allows the good, the bad and the ugly equal opportunity to use our digital footprint to coerce and nudge us to buy at one end and pay up on the other end.

Enterprises mired in Paleolithic technology, archaic mindsets and rusted skills are struggling to deploy and use such solutions effectively ethically, at times veering away from virtue. Consultants and technology providers are effectively creating Fear Uncertainty & Doubt with a promise to bring the Holy Grail to them. Despite their inability to deliver any credible design or strategy, many large consulting companies continue to rake in the moolah; CXOs and Promoters are shy of accepting they have been taken for a ride.

On the sides of the conference a conversation thread discussed the waste of precious resources and lost time with one of the premier consulting companies. The angst of the CMO was palpable, the drinks brought together a few other victims of the same company whose voluminous reports were gathering dust in their cupboards. Common sorrows bring feelings of brotherhood that only misery can keep together; they found light at the end of the tunnel with success that one of them had with a frugal startup solution.

Nano-segmented Earth’s billions, does provide individual as the atomic unit who can be observed and experimented upon to identify triggers that work. As the number of attributes rise, effectiveness improves, but we have known this for a long time and that contemporary solutions did not have the ability to provide the actionable insights in a timeframe that makes the action relevant. Lack of data integrity and clean data rendered analytics ineffective; algorithms did not know how to overcome these limitations.

The future of consumerism, customer behavior, segmentation, marketing, engagement, targeting, influencing, shadowing, nudging, bombarding, and swamping the hapless customer is closer than we think. Look around your behavior across life stages, daily innocuous decisions, and how they are being shaped by invisible forces. As an enterprise there are too many choices and options; the company with better quality data, compute and algorithms will be the winner albeit with a short window until competition catches up.

As an individual I am worried that have limited choices !

Tuesday, June 06, 2017

Tossing the CIO around from BAU to Innovation to OT, bring it on …

Evolution never stops, at least for the CIO who has been pushed around with ever changing technology and business paradigms. In the early days the push was to automate internal processes and then the focus shifted to the external world – suppliers, distributors, customers, basically the entire ecosystem. IT did a good job embracing mainframes, client server, browser, mobile, and everything in between. As technology invaded our lives, democratization led to expectations moving to business roles and innovation.

CIOs obliged by taking on additional roles based on their expertise, passion and organizational need to infuse loads of technology into parts of the company for operational efficiency or leadership position in the industry. They helped finance, sales and marketing, supply chain, human resources, legal and compliance, customer engagement, facilities and administration, everyone who asked for technology input, they received a helping hand from IT and the CIO even when the industry kept throwing new disruptions.

If you are not on the internet, you will be dead; if you don’t implement datawarehousing there is no way information will be meaningful; cloud computing is changing the world; social media is necessary for us to invest in – our customers are there; the smartphone revolution is changing the way our end customers engage, we should be on their phone; mobile wallets, digital payments, what about artificial intelligence and chatbots or machine learning; heard that deep learning is the new snake oil which we should invest in…

Connect into the innovation network, drive change, manage expectations, service level agreements moving up with time, outsource what is not critical, manage multi-vendor deliverables, cross-functional projects, and run an efficient department. Every fad raised a bogie which needed to be addressed; every publication and conference also discussed various aspects of how technology will impact the business or change the industry or kill existing businesses with disintermediation. The plate of the CIO overflows and how !

But wait, manufacturing automation took a quiet journey towards implementing PLCs and SCADA; they did not involve the IT folks, they bought their own equipment with automation capabilities, bundled with computing infrastructure, uninterrupted power supply, interface using basic protocols with the machines which evolved slower than the rest of IT. Lagging behind, they survived Y2K and other scares with minimal impact; cheap compute power and algorithms to analyze machine data suddenly catapulted Operational Technology into the forefront.

There are benefits with analysis of machine data, it helps reduce downtime, improve productivity and lower cost of maintenance and operation. Longer life for the machines impacts capital required for renewal of plant and machinery; it made sense to get the IT folks into the room and leverage the humungous data. IT accommodated the new use cases by providing the requisite support to their new customer. Resultant benefits are large enough to raise attention and elevate the need to a strategic level requiring investments.

Many CIOs have taken this in their stride adding to their portfolio of capabilities and services, opening up a new avenue of technological benefit especially since past investments were quite rudimentary and value of data was unknown. Advent of Internet of Things and the ability to create correlations has changed the nature of the beast. Operational Technology is now mainstream and requires skills that IT has had for some time now. CIOs are happily taking on the new thereby adding one more feather to their cap.

It is a matter of time that across other functions like supply chain too, the data gathered through warehouses, vehicular movement, transit points, and traceability with serialization, all will add to the desire and ability. For the CIO this is a great opportunity to spread his/her circle of influence and provide enterprise value. For those who do not or are unable to, they shall probably be marginalized and find themselves struggling to stay relevant. OT combined with IT will drive the business of the future, it is up to the CIO to take advantage.