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How, What and "Devices" (with a comment on SaaS)

  • The discussion about enterprise automation swings in a pendulum from “What do we automate?” (starting with the most repetitive business processes) to “How do we automate?”  (starting with in house custom, to off the shelf applications and now to SaaS ) and back. We have definitely swung towards “How do we …?” recently with the SaaS revolution.  

     But, another phenomena – just as significant – is definitely pushing the “What needs to be automated?” agenda. Business models are no longer a series of processes that define how people do business.  People no longer hold the monopoly as the only autonomous actors within the model.  Devices (from computers to cars to embedded devices) are becoming independent players – becoming much more than just  cogs in the wheel of business automation.
     
    It is similar to the changing role of workers. At one time, a workers role in the business model was to merely do what they are told. In the 21st century workers are have become independent players. Business models must be designed to get workers to become productive independent contributors.  Business models are no longer designed with human beings as automatons rather as people influenced by an alphabet of feedback mechanisms: KPI, MBO, etc. The best business models not only manipulate the supplier and the consumer, they must “work” the worker.
     
    “Devices” (for lack of a better term, suggestions?) are becoming autonomous actors within a business transaction much like employees, suppliers and customers. Now – I am not saying that these devices are truly intelligent and have a free will  – I will leave that to futurologists. Nor are they truly independent – they “work” for someone.  They are agents for businesses and consumers – they act on behalf of humans. But they do so without constant instruction and they are quite capable of making decisions without explicit permission from their owners.  
     
    A device that can make decisions is a device that can be manipulated. The ability to design business models that effectively manage devices is a important as models that extract the highest value from consumers, suppliers and workers.
     
    So what are some of these devices? Some examples:
    ·        Suggestion applets on social networking sites  and mobile phones
    ·        Automated trading programs in finance
    ·        Advertising on the web
    ·        Least cost routing algorithms in telecommunications
     
    So… what is my point? It comes back to my conviction that the design of the business model should drive automation – not the other way around. Commodity business models make sense where there is little competition (one monopoly operator can happily imitate another monopoly in another country) or where the number of actors in the business model is very restricted ( models where just one party represents supplier, retailer and wholesaler as in wire line in the 1990’s). More actors and more competition – the hallmarks of maturing markets – make the design of business models critical. Adding devices into the mix makes this more true than ever.
     
    Clearly, the “How do we automate?” question is driving SaaS. But we equally need drive SaaS  into addressing “What do we automate?” – and just commodity models is not the answer.  In fact, each SaaS application could act as “device” – adding yet another actor to the business model. SaaS itself could be a key driver in making sure SaaS is dynamic.
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