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Our 2013 Research Agenda - From Inside-out to Outside-in

A few months ago I was meeting with one of our clients, who stumped me with the following challenge. She said: “LEF did a great job identifying consumerization many years ago, but now everyone is talking about consumerization. You folks need another word!”

Outside-in

It won’t be long before consumerization’s larger impact in areas such as identity, privacy, security, data ownership, self-service (do-it-yourself) computing and double-deep employees also becomes clear.

We have been thinking about this a lot since then, and generally agree. While we believe that the marketplace is still underestimating consumerization by associating it so overwhelmingly with BYOT, it won’t be long before consumerization’s larger impact in areas such as identity, privacy, security, data ownership, self-service (do-it-yourself) computing and double-deep employees also becomes clear.

More importantly, consumerization has always been only a part of the dramatic change occurring in business today, as IT becomes paradoxically both much more strategic and much more commoditized. The term we have chosen to capture the combination of consumerization with these broader business/IT shifts is outside-in.

We have actually been using this term for several years – especially as part of our Janus model and our Business Relationship Management work (and others have used ‘outside-in’ in contexts spanning everything from Six Sigma to customer experience). But it’s the sheer range of changes now under way that led us to make outside-in a unifying theme of our research in 2013 and beyond.

As we discussed in our April and December commentaries, companies need to take an outside-in approach to better serve markets requiring various combinations of customer-centricity, collaboration, co-creation, open innovation, ecosystem development, and real-time sense and response mechanisms. Outside-in also encompasses most of the key challenges facing traditional IT today – public infrastructure, SaaS, cloud computing, consumerization, mobility, deperimeterization, BYOT, user-generated content, social media, the Internet of Things, and so on. In the most advanced firms, external and internal systems are increasingly one and the same.

We particularly like outside-in because it stands in such sharp contrast to traditional Enterprise IT, which is often the embodiment of an inside-out mindset – internal service provision, limited customer contact, lack of relevant metrics and situational awareness, ever-higher firewalls, etc. As technology moves to the very front of the firm, new approaches and organizational models will clearly be required. Understanding, tracking and applying these new models will be a major LEF research focus in 2013, as depicted in the figure below, and described further in the following text.

2013 LEF research approach and topics

As we wrote in our October commentary, we are struck by how many of our clients are currently rethinking the long-standing fundamentals of their IT operating models, and we believe that this willingness to open basic existential conversations stems from today’s shifting inside-out/outside-in balance. This project (which I will lead) will explain the directional and organizational shifts required for an effective outside-in strategy. In this sense, the project is designed to be analogous to our Consumerization of IT Position Paper, written in 2004. In addition to laying out the key dimensions of an outside-in strategy, we will provide a series of checklists and self-assessments that clients can use to gauge their position and progress.

New skills in areas as diverse as mobility, apps, cloud, social media, data analysis and vendor management will be required as technology moves to the front of the firm. Conversely, many traditional hardware, software and network skills will be in much less demand. Equally important, as IT becomes pervasive across the modern organization, executives, professionals and employees will need to be double-deep – able to apply technology to their particular job requirements. This project, led by Kirt Mead (in conjunction with prominent experts in the recruitment industry) will assess how clients are coping with the rapidly changing enterprise skill requirements that come with today’s outside-in technology strategies and pressures.

As noted earlier, the next phase of consumerization will move far beyond BYOT. Whether we are looking at double-deep skills, identity and privacy, data ownership and control, advanced agent applications or new security paradigms, outside-in progress will be increasingly grounded in consumer technologies, as customers and employees assume ever-more control and responsibility for their technology decisions. In this project, Doug Neal and Jim Ginsburgh will help firms get ready for the next wave of Do-It-Yourself technologies and practices, with a particular focus on working with (or bypassing) gatekeepers such as regulators, HR, security and procurement, which can either facilitate or block the adoption of self-service computing models.

Enterprise Resource Planning systems are still the single best example of inside-out IT, and ERP’s high costs and low agility are clearly at odds with today’s commoditized, as-a-service IT industry. More broadly, internal systems are still the dominant sensing mechanisms in most firms. But how will this change as the fastest, most accurate and most revealing information increasingly comes from the unstructured conversations of the external marketplace? In these two projects (led by Venkatesh Rao and Warren Burns respectively) we will assess how Big Data, unstructured information, and new tools and services are driving a data renaissance that is shifting the inside-out/outside-in balance, and what this means to the future of ERP and similar internal systems.

Our 2012 research into the relationship between Marketing and IT clearly struck a nerve. Many of the outside-in issues we identified – customer-centricity, co-creation, social media, user-generated content, data analytics, etc. – are essentially equal parts Marketing and IT, and there is no obvious way to draw a line between the two. Tellingly, it’s not hard to imagine that marketing technology budgets will eventually exceed those of traditional IT in many consumer-driven firms. During 2013, Frank Cutitta will continue his research into these areas, with a special focus on our clients’ ability to listen effectively to the mass conversations of the global marketplace and use this information for competitive advantage. Particular attention will be paid to the role of Enterprise IT, and what this says about the future of the Marketing/IT relationship.

In addition to these research initiatives, we are pleased to announce that Simon Wardley is planning to write a book for us this year.

In addition to these research initiatives, we are pleased to announce that Simon Wardley is planning to write a book for us this year. As many of you know, through his research into technology lifecycles and patterns, Simon has developed a powerful and tightly integrated set of ideas, models and strategic frameworks with which to assess, predict and respond to the many changes in Business/IT today. For example, Simon’s Innovate/Leverage/Commoditize (ILC) model is an important manifestation of the outside-in value creation process. Since Simon’s work spans such a wide range of historical, technical and business contexts and applications, we believe that a book is the appropriate format. We wish Simon luck on this important new challenge and expect to have more details shortly.

As always, we encourage clients to participate in the projects that interest them, and we greatly appreciate any comments or feedback you might have. Despite today’s precarious economy, these are very exciting times for Business IT, and we look forward to working with you in the year ahead.

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AUTHORS

David Moschella
Research Fellow
David Moschella, based in the United States, is a Research Fellow for Leading Edge Forum.  David's focus is on industry disruptions, machine intelligence and related business model strategies.  David was previously Global Research Director of the programme. David’s key areas of expertise include globalization, industry restructuring, disruptive technologies, and the co-evolution of business and IT.  He is the author of multiple research reports, including Disrupting the Professions through Machine Learning and Digital Trust, 2016 Study Tour Report: Applying Machine Intelligence, There is Now a Formula for Machine Intelligence Innovation,  Embracing 'the Matrix' and the Machine Intelligence Era and The Myths and Realities of Digital Disruption. An author and columnist, David’s second book, Customer-Driven IT, How Users Are Shaping Technology Industry Growth, was published in 2003 by Harvard Business School Press.  The book predicted the shift from a supplier-driven to today’s customer-led IT environment.  His 1997 book, Waves of Power, assessed global competition within the IT supplier community.  He has written some 200 columns for Computerworld, the IT Industry’s leading publication on Enterprise IT, and has presented at countless industry events all around the world. David previously spent 15 years with International Data Corporation, where he was IDC’s main spokesperson on global IT industry trends and was responsible for its worldwide technology, industry and market forecasts.    

CATEGORIES

21st Century
Adaptive Execution
Assets/Capabilities
Identity/Strategy
Proactive, Haptic Sensing
Reimagining the Portfolio
Value Centric Leadership

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