One of the surprising technology trends of 2013 was the rate of massive mobile adoption. We witnessed how Facebook suddenly pivoted to mobile within a year, with an astonishing 73% of their user base accessing the site on a mobile device. And, we saw Paypal become a standard for mobile transactions, with a 93% increase in transactions over the previous year.
Mobile is the fastest technology adoption in human civilization history and is creating a new playing field for companies and consumers. According to data from the International Data Corporation (IDC), vendors shipped more than a billion smartphones in 2013, up 38.4% from the 725.3 million devices shipped in 2012. For consumers, the revolution means freedom of use, location and computing power that increase every year in their pockets. For companies, it offers an unprecedented scale to reach billions almost instantly.
The mobile wave is just here and being massively adopted over the next 3 years. It is becoming mainstream in an accelerated way and expected to overcome desktop-based computers this year. Prior to this was the desktop and server computing wave, which started at enterprises and then moved to consumers (PCs); now we are experiencing the opposite. Consumer use is impacting what devices are used at an enterprise and what enterprises sell/how they communicate with their customers.
As many of the prominent new Internet companies are building real high-growth businesses, every company is now becoming a digital business, and building great mobile experiences will be at the heart of every company strategy in the next 10 years. For many people, mobile is just a new channel to extend their business. However, even though omnichannel looks good on paper, very few companies master it. Companies simply have translated their internal systems and organization complexity to their customers, and that needs to change in order to increase engagement and loyalty. Therefore simplifying, refocusing and reimaging every touchpoint are a must. Those touchpoints will be increasingly mobile in nature, as systems of engagements will have mobile devices as a centerpiece. At the same time, it’s not just technology that is changing:
New business models
Digital enables new business models to be explored. The media industry is an example of how business models are changing, where content is king but convenience has become the queen. A great example of this is the subscription-based model of Netflix, which has become a Hollywood disruptor and enabler. Netflix provides shows and movies on demand–allowing viewers to break away from cable companies and movie theaters for entertainment. The content is still consumed, but in a different manner. Business model innovation is a must in a market where consumers want access to everything, at any time, on any device.
A B2Any world
Not long ago, we used to differentiate companies that address the consumer market (B2C) and companies that address other businesses as their market (B2B). Today the rise of bring-your-own-device (BYOD) and the success of SaaS (Software as a Service) business models allow distinctions to blur. As friction to conduct business is reduced and engagement channels automate, we will see B2Any companies taking over markets and addressing customers in a personalized way on a large scale.
Classic industry distinctions appear to be no longer valid in an all-digital world. Digitization of business is leveling the field and lowering barriers of entry, which is blurring the lines between industries. For example, is Amazon a retailer, a media company or a shipping company? Companies must become a customer company and fight for consumer loyalty: the mission, purpose and a consistent way to express it across touchpoints will become a competitive advantage.
As digitalization of businesses progress, real time has become a must-have feature. From large scale recommendation engines to real-time messaging platforms, the need to be “right here, right now” and allow consumers, employees and partners to make informed decisions is key.
Ways we use mobile
With business lines blurred and real-time becoming a must-have feature, companies are creating new ways to include mobile into everyday items, like using your smartphone as a hotel key or embedding your identity into your phone instead of carrying around a driver’s license or social security card.
In order to capitalize on this opportunity, companies have to deal with their existing landscapes and overcome some aspects to capitalize fully on this trend. For many of them this will be a survival effort.
Outdated and legacy platforms not optimized for user engagement
Systems are not prepared for the level of activity that mobile brings. Platforms are optimized to conduct transactions and reduce costs–not to engage users.
Rise of the user experience
After a decade of interacting daily with consumer-friendly platforms, consumers demand the same form of easy-to-use interfaces from all interactions, including banking, marketing, home automation.
Explosion in data and integration points
Companies will create and store more than 7 zettabytes of data in 2014–almost 10 times more than in 2009–but the future will require a different infrastructure to create, manage and store more than 44 times the data we manage today by 2020. In addition to data, widely available web services can now be easily integrated, whether they are internal or external. The APIs are here to stay but there is no structured approach today to integrate such complexity.
No record of building and managing great software products
Building successful software products remains a core skillset of the internet consumer companies (probably their least understood competitive advantage) to build a great product and attract a massive audience. It is clear that almost every company must acquire this skillset and partner with leaders in this industry, as building a system of record (ERP, SCM) is different than building a system of engagement that grows revenues and keeps consumers loyal. Many companies have used in part Agile Methodologies to build software, but process is just a piece of the puzzle–a dynamic organization, a Product Development practice and a culture that foster innovation is also required.
Aspects of a successful strategy:
Start small scale aggressively
Placing small bets at the beginning are the best way to start. The reason is the faster your organization learns, the faster it will move ahead. Changing an organization and adopting new skillsets is not an easy task, but you need a program that ensures continuity and is structured for the long term.
Focus on simplification and engagement levels
Companies must focus on redesigning the user experience, using tools like customer journey and identifying bottleneck areas from the user perspective, and then apply mobile technologies to engage and simplify life and reduce friction to do business with your company. A clear example of this approach is how retail banks move more operations to mobile apps–increasing engagement while reducing costs.
Assemble cross-disciplined teams
Technology adoption is just a small piece of the adoption puzzle; organizational change is probably the most challenging. Companies are generally structured around silos, with a centralized IT organization. This type of single-system thinking must change to adopt a customer-centric view as cross disciplined teams that are part of a mobile strategy will foster collaboration and set a new way to approach projects.
Create a mobile architecture blueprint
(1) Master the open web
(2) Re-architect your middleware to support next generation mobile applications
When a company scales from a few scattered set of mobile apps to a more comprehensive strategy integrating customers, partners, employees and smart devices, the typical ad-hoc architecture needs to be revised. Event driven, task oriented and real-time are the nature of the majority of highly successful mobile apps. In order to support these, legacy architectures have to evolve. Consider updating your current architecture to support a new set of use cases and the type of infrastructure consumer internet companies have by applying the Reactive Applications concept. Current architectures are not ready to support growth coming from mobile engagement and new scale out cloud-based models are more cost effective, resilient and extensible. New frameworks like Node.js and runtimes like Akka that extends Java Virtual Machine offer the best support for these scenarios. Unlock your data from legacy systems by designing REST APIs for either internal or external consumption. In the end, the goal is to enable an ecosystem where your developers and partners can quickly innovate and create easy ways to access your data and engage customers in new ways.
Big Data technologies will allow you to collect manage and exploit vast amounts of information coming from every interaction with your customers. It was simply unthinkable several years ago to allow companies like Amazon to run their recommendation engine or advertising companies to send relevant ads to you. This type of system architecture which was only within reach of big internet companies in the past is at your reach now. Mobile will be the window to your company but the intelligence in each interaction will rely on your cloud and big data infrastructure.
(3) Make improvement decisions driven by data and real time insights
By collecting every client mobile interaction and analyzing patterns, you can improve engagement and effectiveness of apps in a rapid feedback loop. The same way A/B testing is working at a massive web scale, you can integrate those technologies easily into your mobile apps. This will transform the usual “design, build, deploy and forget” approach in a closed positive feedback loop that will allow continuous improvement in your apps.
We are just now scratching the surface in this new business transformation. Impact will be big and will include customers at the center of a company’s ecosystem. By lowering the barriers for customers to have a dialog with brands and establish relationship of equality, companies will gain their loyalty. Digitization of your business through Mobile First strategy adoption will allow you to unlock value and serve customers in new ways, increase your profits by delivering new models to engage them, and optimize your existing technology investments to further increase productivity.
Juan Cabrera is VP of Technology at GlobalLogic. He has over 13 years of experience and is currently based in San Francisco, California.