The Digital Lab

lx-factory
Trainspotting was a movie that above everything but becoming a hipster. The characters where real like, embodied in some past memory we lived during our 20’s. Twenty years something after, version 2 of the movie is released. Together with the soundtrack of the latest incarnation, apart of Iggy Pop’s Lust for life, it was released an umpteenth version of Underworld’s Born Slippy, probably, the song that catapults the band to the mainstream.
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During this week I attended a digital transformation academy and the only component that caught my attention was the need to deploy a digital creative lab. A place on which companies will experiment, test, fail and learn the road ahead of digitise operations.
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On 2014, Underworld created a DJ set on the influences of the album dubnobasswithmyheadman for BBC’S Radio 6 program, the 6 mix. Karl Hyde mentioned across the broadcast – a tribute to the bands that influenced the production of the record – hey were meeting in SoHo with other important bands at the time like The Chemical brothers, Moby, Goldie the Orb and many others, and how they shared experiences and ideas for the records they were producing, in a way that some of the remixes that Underworld and their peers created for other bands – pay it forward – included the best of its work, feeling they were giving away instead of using it on their own records. The trade-off as they learned, is about the importance of being part of the animal collective creative process and how all the musicians learned how to produce much better music.
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When I was an entrepreneur, I used to work time to time, at LX Factory in Lisbon, a co-work space – hotels where a depressing place to be, like to in house arrest – on which I could meet other entrepreneurs, artists, fashion hairdressers and designers. Co-work facilities always have rooms for people to ideate, however, the best place on which I share, learn and watch passing by so many inspiring ideas, was at the cafeteria where people meet to grab a cup of coffee and a sandwich. There, we were in full bloom. I remember how no-one blocked other people ideas, values and pre-conceptions, everyone was learning and was adding always news ways of interpretation, translating to his owns words or better, to his own domain expertise. For example, in those days, the Adaptive Case Management (ACM) was taking off and looming in the corporate agendas, opposite to the workflow automation. When I was referring about that fact and how it was being used in a project I was leading for an healthcare clinic in Berlin, someone that was doing some work in literature, told me about William S. Burroughs’s Naked Lunch. A book that does not follows the natural law of a narrative – ultimately, drove me to Der Mann ohne Eigenschaften – and like ACM, which the process closure is defined by the human when the goal is achieved, opposite to workflow automation that reaches the same outcome over and over again by the art of infinite repetition. Understanding the way Naked Lunch writing technique was used – the cut-up technique is an aleatory literary technique in which a text is cut up and rearranged to create a new text [1], opened to myself a new perspective how to articulate the ACM driven solution instead of using the common references around system thinking theory.
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Digital transformation requires a new mind-set, creating a digital transformation lab that is not about being able to execute the toolbox, like creating rapid and agile idea prototype or storyboarding or apply design thinking techniques, it is how companies create an human interaction environment of highly creative people, that by the combination of multidisciplinary domain expertise they craft the next big idea. This is more a human resources challenge, upskilling your workforce rather than create the facility and the collaboration tools for people to ideate.
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References:
Image credit – LX Factory
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BPM a year in review 2016

During 2016 we heard a lot about digital transformation, considered as the new Industrial Revolution 4.0, providing the catalyst for new business models, products, services and customer experiences that impact not only businesses but society overall. The societal impact will not reach the end of property or the end of financial flows or money but will increase the power of commons in a more open society.

Technology is playing an increasing role in everything we do, collectively with our customers shaping growth, disrupting industry landscapes and providing the catalyst for change. The ability to connect and manage all assets, products, employees and customers globally, like a network, has not really ever been possible or feasible, as well. Why is this important?  Because we are definitively in the era of the platform. We cannot optimize parts of the platform once we will sub-optimize the whole. We cannot be solely focused on social listening and incorporate it in customer and marketing management, we must listen and empower the commons to participate in the creation of changing business models and promote the efficiency of the ecosystem we belong. Recently, Tesla provided what is leading trough digital transformation. Sparked by a customer complain, that could not use the vehicle charging bays, in 6 days only, Tesla re-invented the service and induced efficiency and increased customer satisfaction as follows. As the Tesla example shows, digital transformation is about move beyond just thinking about our customers and start thinking like them, or if you prefer, put in your customer shoes.

6-days-for-a-new-idea

Business model change – time to market: 6 days

We designed the Supercharger network to enable a seamless, enjoyable road trip experience. […] we understand that it can be frustrating to arrive at a station only to discover fully charged Tesla cars occupying all the spots. To create a better experience […] we’re introducing a fleet-wide idle fee that aims to increase Supercharger availability. […] The Tesla app allows […] alerting them when their charge is nearly complete and again once fully charged. For every additional minute a car remains connected to the Supercharger, it will incur a $0.40 idle fee. If the car is moved within 5 minutes, the fee is waived.
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The era of the platform is contributing slowly to the end of asset ownership. But contrary of many views, similar of Ida Auken, member of the Danish parliament, this is not the beginning of the end of capitalism. The total cost of ownership will decrease, but will not be eliminated, money will continue to flow towards a consumption based economy and will be re-invested by companies to innovate and to create new products.
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Previously businesses models were designed to create a product, introduce in the market and, then customers bought it. That was the end of the era. Chemical companies are helping farmers to increase harvest regardless if the farmer relies on a IoT array of equipment or it communicate crop conditions using a mobile app, Healthcare providers changed their business model to extend life-expectancy by monitoring on real time vital signs, instead of reactive surgeries and post-surgery recovery. Today organizations are building in endless feedback loops – sensors in products, services, customer feedback from a variety of channels.
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Business model transformation requires the development of an open ecosystem that merges technology, people and business process that enable these feedback loops, and define an organization’s competitiveness and ability to change the entire landscape of the industries in which it participates.
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2015 entry and backward years can be found here.

BPM Blogs worth reading 2016

Here is the list of BPM blogs I think work reading for inspiration purposes. More than a hall of fame, make a reflection on how BPM is evolving by clicking in the last years list and backwards.

On BPM at large:

On Analytics:

On Social Business:

On Complexity:

On Enterprise Architecture:

  • Mastering ArchiMate – If you model architectures this is a great source to take a deep dive.

If you are interested in 2015 list click here.

BPM Conference Portugal 2017 – Artificial Intelligence

BPM Conference Portugal 2017 is going to talk about artificial intelligence.

Artificial Intelligence (A.I.) is for the time being and important new domain to be discussed. As far I am concerned, perhaps the most productive debate we can have at the conference in the 2017 edition isn’t the one of good versus evil, the rise of the machines or singularity is near. The debate could be about the guidelines instilled in the people and organizations using A.I., something that cybernetics tried to push back in the 60’s.

Why the human element still matters?
At the same time that demand for efficient, transactional, prediction-driven workplace systems is on the rise, just look around you and you will realize that most of the interactions you have with companies or even to perform daily tasks – like find the better route to commute – have embedded intelligence and are context aware, taking into consideration your location, profile and transactional history. However, there are a set of skills we seemingly don’t want systems to perform. Despite new techniques like deep learning are denting our ability to prevent we will become dispensable, emotional intelligence is said to be among the fastest-growing job skills, and some experts say the ability to collaborate and listen thoughtfully can even protect your position and help advance your career over the next decade as automation progresses. This is probably the reason that contact centers were not totally replaced by robots. Yet.

Ultimately, humans and machines will work together, not against one another. This is already a reality. Imagine if human and machine work together to solve society’s greatest challenges like providing healthcare services, probably one of the areas on which we have seen the deepest progress, as well as, fighting insurgency and keep our cities safe. Other area that is being disrupted is transportation. Some car manufacturing companies are already assuming that in the future most of the people will not own a vehicle and autonomous commute will be a de facto-standard in high density population areas.
This is probably one of the most sensitive areas of discussion, but we will see that today we can do much better humans if we combine our work together with A.I. systems.
How to enforce principles in the design of A.I. systems?
I would argue that perhaps the most productive debate we can have isn’t one of good versus evil. The debate should be about the values instilled in the people and institutions creating this technology. We must enforce technology with protections for privacy, transparency, and security. A.I. must be designed to detect new threats and devise appropriate protection and must be inclusive and respectful to the human being. This put an extra challenge –  more than discussing on rules, policies and how to implemented coding, is the foundation principle on what is right and what is wrong. The definition of a concept, a domain, is a consequence of the surroundings, of the environment we live and the multitude of human principles and beliefs. What in a society can be accepted as a practice, in other can be condemned.
If in the future A.I. can bring transparency, in what kind of transparent society we want to live? Being transparent means you are not afraid of hiding your medical records because it can save your life, as also you are not afraid of exposing your earnings and tax situation. Becoming transparent will also contribute to avoid crime, bribery, and corruption? Or being transparent is the realization of the classic Orwellian apocalypse that looms and take control of our society? Anyway, from a solution design perspective it is necessary to define the particulars about data protection and security, among others, setting-up specific rules concerning the processing of personal data in the electronic communication sector. What people most often want is a sense of control over their data (even if they don’t exercise this control very often). Many people feel that this control is a fundamental human right (thinking of personal data as an extension of the self), or an essential part of your property rights to your data.
To that end, this is something we must debate during the event.
Will A. I. power the next industrial revolution?
Advances in technology is powering the next industrial revolution, basically blurring the physical and the digitaldivide. Technology is today omnipresent. Capitalizing on this phenomenon is the key to innovation. From the rise of A.I. and related technologies, the challenge and opportunity for business leaders is to harness the ubiquitous, disruptive force of technology to be more agile, fuel efficiency and ultimately shape the shape of the industry destiny. Definitely in this next industrial revolution, we are facing a range of new technologies that combine the physical, digital and biological worlds. Failure to understand how to embrace A.I. into operations and business models, may end up of being out of market.
Having said this, should companies do a deep dive with A.I. or not?
How can we put A.I. work for the goodness of our own society?
For healthcare, A.I. can advance recommend the most effective treatments for their patients, as well as, predict human body organs failure and increase our life expectancy.
For transportation, A.I. can improve the efficiency transportation systems, integrating supply chain on real time, prevent incidents, optimize the fuel consumption and safety and support maintenance of infrastructure.
For public safety, A.I. can deploy predictive models for crime and help security forces to find associations in massive amounts of information to spot insurgency and handle complex crime cases.
For financial services, A.I. can manage must better risk exposure, by ingesting millions of data segments used in risk models, reduce fraud and tax evasion, assist in providing the best insurance coverage at the right cost combining data provided by the customer and its relationships.
For individuals, A.I. can assist humans in developing personalized recommendations based on the stage of life the individual is, combining data about the individual preferences, beliefs and transactions.
In this globalized world, economy growth crucially depends upon the creation of new business models that rewards more effective outcomes and overall benefits to society. If business model innovation was always behind differentiation and competitive advantage, A.I. is for sure a technology can enable a more innovative society.

Digital Banks – Providing Banking Platform as Service

During the course of last two weeks, I was involved with a series of workshops with the IT department of a bank that operates in more than 30 countries. The workshops objective was to define a digital banking transformation roadmap.

During many years, for those that are involved in BPM projects have discussed the meaning of what is the definition of end-to end processes. One of the classic examples in the banking industry is when the account opening process ends. It ends when the account number is created or it ends when all the channels which the customer can consume financial services and execute operations are available and operative?

Today, opening a bank account trough a friction-less process is not a common desire. The wish of any customer that belong to retail banking is how it can construct the Bank of Me, how it can incorporate using the bank mobile app making transactions with 3rd parties, like a youngster paying the school fees, do social banking (transfers, borrowing from Facebook friends). Corporate banking, oriented to trading operations, which to integrate supply chain operations between, customers, suppliers, road haulage companies, combining the flow of documents, status of merchandise movement and money transfers.

Five years ago, under the new e-CMR regulation, there was the possibility in road freight to eliminate the famous paper based system (that still exists) and exchange information digitally between all the involved stakeholders – buyer, seller, transport company and banks [1]. The CMR is a document that underpins the legal transport contract between a seller, a transport company and a buyer. It ensures the goods were shipped and received accordingly, on which banks rely to wire the money between the involved trading parties. Without such a document, financial transactions are halted, supply chain document reconciliation is blocked, as well as financial close activities. Now, that piece of document travels physically in the truck. Some long haul trucks return to logistics head quarters every 15 days – because they need to optimise cargo utilisation, a key KPI for business viability – this means only when the physical CMR arrives to the logistics back office, payment processes between buyer and seller can start (digital copies are ignored, due fraud and contractual implications between the parties involved). In such kind of transactions there is room for optimisation and automation, but unless companies do not embrace the concept of open systems architecture is very unlikely that operations will suffer from the tangled syndrome.

The era of Open Socio-technical Systems

Fred Emery defined and evolved the concept [2] and defined such kind of systems as:

“Is a purposeful system composed of an interrelated social component (people, culture, norms,) and technical component (technology, tools, materials) which is embedded in a greater context, an environment, which the system is influenced by and also influences.”

Later, Merrelyn Emery [3] evolved the concept to “Socioecological” means:

“people-in-environments,” which is expressed by the concept of the open system […] expresses the transaction of system and environment, all components of which are governed by laws which are able to be known. “

Gartner [4] defines in the Magic Quadrant for Enterprise Integration Platform as a Service:

“integration platform as a service (iPaaS) is a cloud service that provides a platform to support application, data and process integration projects, usually involving a combination of cloud-based applications and data sources, APIs [5] and on-premises systems”.

Gartner single focus in the technical platform enablement plays the de-stratification of the Open Socio-technical Systems that goes against experimentation, multiplicity and intense social human interaction and important component of Open systems. When designing IT strategy, the peril for the CIO and the IT teams is to overdose the enterprise with integration technology and superpower the enterprise service bus, over-dosing on too much de-stratification decoupled from the new business models and human relationship management of digital banking.

Providing Banking Platform as Service

Exposing the Banking Platform As a Service – BPAaS, allows banking services to talk to other services. In this sense, leveraging on API allows you to open up data and functionality to other developers, to other businesses or even between departments and locations within the bank. It is increasingly the way in which banks exchange data, services and complex resources, both internally, externally with partners, and openly with the public.

BPAaS, can provide a common root so that transactions can flow from wherever they originate: mobile apps, integrations with clients, the client’s website or physical devices. All mapped into a strong ecosystems of partners that repurpose, resell and re-bundle assets to reach new customer segments – like the millennials – that the bank could never have reached alone.

Imagine for example, you want to offer a mortgage service coming from a real estate website or you want to open the possibility to customers subscribe financial products from 3rd party, like Brokers or the case were the bank can outsource loan services to partners keeping costs low. Providing the banking platform allows customers and partners to integrate them as a self-service adapted to their particular needs or bringing the reality of the Bank of Me.

Regulation want banks to embrace open ecosystems
The UK regulator, issued a report [6] that sates in the remedies section:

“mobile banking tools have been rapidly adopted, and a growing financial technology (‘FinTech’) sector is developing and applying new tools. Application programming interfaces (APIs) will allow publicly available data and customers’ own data to be shared with trusted third parties, and ‘open standard’ APIs can be particularly powerful (with necessary safeguards for security and privacy) in opening up new customer information and advice services.”

 

CMA states clearly about the importance of:

“development and implementation of an open API banking standard has the greatest potential to transform competition in retail banking markets […] by making it much easier for both personal customers and SMEs to compare what is offered by different banks and by paving the way to the development of new business models offering innovative services to customers.[…] APIs may also be used, with the customer’s informed consent, to share securely their transaction history to enable access to tailored current account comparisons and other services.”

As I pointed before in this post, banks can offer for example, in the retail segment, custom services like automated financial management based on your spending patterns, risk appetite and the phase of your personal life – before entering into labour market, in labour market, retirement – this is just a matter how soon banks want to enter in this new kind of business models before they are expelled from the market.

From a strategic point of view, some banks consider the remedy with a very strong dose or as a threat to their outdated business models. In my experience dealing with CIO’s and CEO’s from different banks is clear that the younger generations are much more prepared or already sparked business model transformation and look to this more as an opportunity. The generational gap – a self-acquired soft skill – can play a key role how the organisation perceives the way forward.

 
References:

[1] Unfortunately, due protective measures related with entry in force of the regulation, most countries in European Union delayed the application of the new regulation, meaning that a cargo travelling from Portugal to Germany will only benefit from the electronic act when enters in Germany, meaning that all way down the road the paper document should exist to present to customs and other government authorities. In other terms, the digitalisation of the process is impracticable, an outcome that is still a reality.

[2] Magic Quadrant for Enterprise Integration Platform as a Service, Worldwide, 2016. […] “Integration PaaS delivers some combination of the capabilities typically found in enterprise service buses, data integration tools, B2B gateways, managed file transfer products and API management platforms. IT departments, line-of-business developers, mobile application development teams, application teams and even business users (aka “citizen integrators”) leverage these capabilities to develop, execute and manage integration interfaces (or “integration flows”).”

[3] Emery, Fred E. “Characteristics of socio-technical systems”, in Design of Jobs: selected readings, Davis, L. E. And Taylor, J.C. (Eds.), Penguin Books, ASIN: B013KQY62S

[4] Merrelyn Emery “The current version of Emery’s Open System Theory” Systemic Practice and Action Research.

[5] Application Programming Interface

[6] CMA – Retail banking market investigation. Summary of final report. August 2016

Losing assertiveness in a macro-cosmos world

Today in Lusaka, I was sharing a ride with a literature historian.

We were talking about writing quality and how the publishing industry changed the way we read. Today, books must catch the readers attention in the first chapter or are condemned to be shelved.

During the short interaction, I came up with the idea that I remember during the first season of the TV series Californication, novelist Hank Moody was complaining about writing was changing from books to blogs (it was the era of social 1.0) and how writing quality was decreasing in favor of easy writing, as well as, the lack of depth, what Thierry de Baillon, refers to the lack of sensitivity humans are experiencing in reading come collapsed or compressed text. This is not occurs only in book writing, it also become a pattern in journalism, which journalist echoes what others say, without challenging, questioning or even being able to tell a story. In advisory and research services this is also true like the twitter feed as follows. A company announces a new feature and immediately this becomes a fact without proper verification, suffering from the maven dysfunction like it happen when a new consumer product is rumored or is launched. Fortunately, in the activity stream bellow, the players are all non-believers.

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On open Text new cognitive BPM offering

The historian did not concur with my point of view, leveraged on the allusion of the TV series and on her point of view, what was important is the information explosion and ease of access, that allowed people to read and be exposed to new ideas, connect with others and expand the knowledge. She also pointed out, that without social media, hyper connectivity, combined with mobile, self writing agents, would never had a chance to publish a book, because classic book publishers are focused on the business economics.

Despite the fact this is somewhat close to the truth, not only in publishing industry, but also in music industry – think for example what happened with David Bowie’s the Leon Tapes case – is also true that today we are accelerated not to think properly on facts.

Everything is becoming to fast, temporary and instantaneous.

As I am diverting to more complex reading these days, like A Thousand Plateaus, probably because like Hank, I am an analogue person in a digital world, but as Thierry points

We being lead in a world of rising distrust, hate and despair

We are losing assertiveness .

A Thousand Plateaus

On June 2014, I was at Enterprise Architecture Conference Europe in London to present my work on the theme of cybernetics, called Viable System Model meets Enterprise Architecture. During the preparation of the presentation, I was exposed to the concept of the rhizome, created by two French philosophers, Deleuze and Guattari, designed to bring some random pointers about complexity theory, deeply related with the challenges a cybernetician like to reflect on. The rhizome was brought to life in a book called A Thousand Plateaus, that according to the authors, was written in random mode. Every day, they decide in which part of the book they will work on with no direction, rejecting ‘the law of narrative order’, like Robert Musil’s masterpiece Der Mann ohne Eigenschaften (the man without qualities), that by coincidence, was one of my inspirations for the talk at the conference. I bought the book when I was in London but once I buy more books I can read, I only started to read the book these days.

A thousand plateaus is broken down is many directions, that I would like to point only some, as follows:

  • Epistemological – how the models we create to understand the reality are fit in terms of meaning, completeness and de-territorialization (what Deleuze and Guattari refer to the true meaning of systems out of context of operation);
  • Ontological – how the meaning of concepts evolve in a way they are the result of constant change;
  • Anthropological – how human beings are able to interpret signs that will tell about the necessity of change. A theme I explored with Amy Santee in February 2015, when I was in Seattle;
  • Social – how individuals can self-organize in a knowledge oriented world, contrary to Kant’s ideas of following the natural order of laws, rules, regulations and procedures.

The emergent self-organization is a matter in focus which is materialized in the concept of chaosmos, that explain the functioning of the universe as a meta-system composed of abstract machines, very well aligned with cybernetic principles. Exciting days are coming.