Tuesday, November 15, 2016

What is a "digital business" and why should I care?

A "digital business" is one that leverages technology to collect and analyze internal data sources along with non-traditional, external data sources to create a more responsive organization that can:

1.       better anticipate and respond to changing customer demands,
2.       provide a better customer experience,
3.       increase productivity across all business units, and
4.       drive innovation within its organization that enables those things. 

It is not just about adopting new technology and goes far beyond building mobile apps, incorporating cloud technologies, or increasing the number of "likes" on social media.  Rather it is about using technology to transform the way a company does business.

Drivers include:
1.       The emergence of the "connected consumer",
2.       The proliferation of communications, sales, and distribution channels,
3.       The explosion of customer demand/sentiment data,
4.       Increasing customer expectations for quality goods and services, consistent and positive experiences, greater choices and personalization, and speed of delivery.

With the proliferation of smart phones, consumers are now connected 24/7, everywhere.  This shift in the time and location aspect of customer engagement creates new opportunities as well as new demands.  This is true for B2B as well as B2C companies.  Not only have they impacted the engagement opportunities, smart phones have changed the expectations of our already-fickle customers around service, availability of information, and speed of transactions.

 A quick review of the success of ride-sharing services, such as Uber and Lyft, over the past couple of years shows that their model was not even possible prior to the connected customer coming on the scene.  Uber and Lyft disintermediated the relationship between riders and the cab companies: Their respective applications not only "hail" the ride but also provide a real-time view of the driver's location and ETA and then handle the payment automatically, providing a much smoother experience for the rider and the driver alike.  How quickly will this impact the traditional cab companies?  Recently, Yellow Cab Cooperative, Inc of San Francisco, Uber's birthplace, filed for bankruptcy protection citing "competition from newer app-based ride-sharing services" as one of three primary challenges faced by the cooperative.

In a report on digital banking from McKinsey & Company, the authors state that "being able to take advantage of, or react to, the digital revolution requires [companies] to behave in ways that they are not quite accustomed to. It requires extremely clear and quick cross-functional collaboration."  So, an organization's response to the above drivers can have serious long-term impact to its business but the question is not "what technology do we need?" It is, rather, "how are we going to organize our business in such a way that we can incorporate fast-moving digital innovations to respond successfully over time?"

As the digital and physical worlds converge, leadership should search out people with skills and aptitudes to help organizations navigate the opportunities and threats that will arise over the next few years.  How business adapt will determine their relevance (and existence) over time.

Tuesday, November 1, 2016

How to accelerate adoption of Connected/Autonomous Vehicle technology

Innovation will always outpace regulation (I use that phrase regularly, so bear with me). In some cases, the regulatory aspect is not a great concern but this is not so when it comes to connected/automated vehicles. As fascinating as the CV/AV space is, there are still some huge technical and non-technical hurdles that must be overcome.
  • Designing infrastructure and controls that work mixed environments with traditional, assisted, and autonomous vehicles; 
  • Imbuing "judgement" in the artificial intelligence of the AVs - How does the car decide which object to hit if it is unable to avoid a collision;
  • Securing the data collection and controls from hacks;
  • Defining liability issues when an autonomous vehicle is involved in a collision;
  • Communications standards between various manufacturers as well as the infrastructure.
In this article from the Texas A & M Transportation Institute (TTI), authors Jason Wagner and Ginger Goodin discuss the policy question of data security: Who owns the vehicle data and who gets to see/use it?

Personally, I am always interested in tracking my own data, typically associated with my workouts (read: bike rides).  Pulling similar data on vehicle health and driving statistics also intrigues me but I don't necessarily want to provide that data to anyone without my permission. 

I've been known to engage in spirited driving when no one is around.  Sometimes I speed down the tollway, hitting booths faster than someone going the speed limit would.  My maxim is that I am happy to share my data, just don't use it against me.  Would my insurance company raise my rates due to the occasional rapid acceleration/deceleration or high-G turns, even though I have never caused an accident (true statement)?  Could the police retroactively ticket me after mining my information from some pool where my data ended up without my knowledge?

My response to these types of scenarios, and I'm not unique, would be to turn off the data, if possible.  The problem with me not sharing my data, though, is that it deprives the "good" analysts of another sample and, as any statistician will tell you, the more samples, the better the understanding.

As the Internet of Things expands into every aspect of life, these questions must be answered in a way that satisfies private entities' concerns within the public/social framework.  This use case just highlights some of the challenges we are experiencing in this space but is reflective of any new technology.

There is a regulatory drag that can slow down wholesale adoption of these types of technology, similar to what we see with the FDA and new drugs.  In this space though, I have found that it is not a Luddite reaction on the part of regulators but a lack of understanding about the technology and a lack of time to think through the various implications of deploying it within the populace.

Something with as grand a scope and scale as connected/autonomous vehicles creates a prime opportunity to involve the regulators and legislators much earlier in the cycle.  By doing so, the auto manufacturers can help drive adoption, but it will require a new level of cooperation among them, even as they try to gain competitive advantages.  It also helps to have academic researchers involved on the development side, driving standardization and a more objective viewpoint on which the regulators can rely.

That's why I'm glad to be involved with an organization like TTI which is bringing together all of these parties to work through the regulatory questions as the technology is developed, thereby accelerating the adoption so we can realize its benefits sooner and, hopefully, allowing me to collect my data without my insurance rates going up.