Trend Watch #2: The McKinsey Quarterly “Eight Business Technology Trends To Watch”

In this Trend WatchI’m taking a closer look at the following article from The McKinsey Quarterly: Eight Business Technology Trends To Watch.” While you can see the full list of trends at the bottom of this post, here are the five items that I think are most important for customer experience:

#2) Using Consumers As Innovators. Excerpt: “As the Internet has evolved – an evolution prompted in part by new Web 2.0 technologies – it has become a more widespread platform for interaction, communication, and activism. Consumers increasingly want to engage online with one another and with organizations of all kinds.”

  • My take: What’s a trends doc without a reference to Web 2.0?!? I’m not sure that online consumers will become the core innovative force for companies in 2008, but firms definitely need to tap into the online voice of customers — as they blog, write customer reviews, and connect with each other in new ways on the Internet. This is particularly true if you’re going after younger consumers.

#3) Tapping Into A World Of Talent. Excerpt: “As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence… The best person for a task may be a free agent in India or an employee of a small company in Italy.”

  • My take: The Net definitely makes it easier to tap into a variety of workers in new ways. But it’s hard enough to keep a centralized workforce aligned; think about how hard it is when the talent is ultra-dispersed. In this environment, it is even more important that companies have a clear sense of purpose and a well defined and internally-communicated brand (see principle #2 of Experience-Based Differentiation). These items will help maintain consistency across the myriad of activities and decisions that go one across your company.

#5) Expanding The Frontiers Of Automation. Excerpt: “Companies, governments, and other organizations have put in place systems to automate tasks and processes: forecasting and supply chain technologies; systems for enterprise resource planning, customer relationship management, and HR; product and customer databases; and Web sites. Now these systems are becoming interconnected through common standards for exchanging data and representing business processes in bits and bytes. What’s more, this information can be combined in new ways to automate an increasing array of broader activities.”

  • My take: The combination of service-oriented architecture (which connects disparate applications) and business process management systems (which can flexibly control processes) opens up the opportunity to automate many processes. Firms will squeeze inefficiencies out of customer-facing processes like applications, problem resolution, and credit approval. But don’t just automate processes; redesign them to better meet the needs of customers.

#6) Unbundling Production From Delivery. Excerpt: “Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever-smaller increments cost effectively… Unbundling is attractive from the supply side because it lets asset-intensive businesses raise their utilization rates and therefore their returns on invested capital. On the demand side, unbundling offers access to resources and assets that might otherwise require a large fixed investment”

  • My take: Interestingly, in 2000 we wrote a report called eBusiness Networks in which we predicted that: “Processes like customer care that span manufacturer, distributor, and retailer can be shared in eBusiness networks. Rather than design captive business processes, companies will plug into shared systems.”So I’m bought into this unbundling trend. Every firm needs to ask themselves: “How can my product/service be delivered as a metered service?”

#7) Putting More Science Into Management. Excerpt: “Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models… The holy grail of deep customer insight-more granular segmentation, low-cost experimentation, and mass customization-becomes increasingly accessible through technological innovations in data collection and processing.”

  • My take: No doubt; there’s more data than ever. So make sure you’ve got some strong left-brainers around to look at Web analytics and customer analytics; there’s a lot of valuable insights to be mined. But don’t get caught over-focusing on analysis — it’s only one part of the equation. Your organization needs to treat customers differently based on the insights and this often takes more “art” than “science.”  

8 Business Technology Trends To Watch from McKinsey

Here are all of the items listed in The McKinsey Quarterly:

  1. Distribution co-creation
  2. Using Consumers As Innovators
  3. Tapping Into A World Of Talent
  4. Extracting More Value From Interactions
  5. Expanding The Frontiers Of Automation
  6. Unbundling Production From Delivery
  7. Putting More Science Into Management
  8. Making Businesses From Information.

Also see: Trend Watch #1: The Economist “The World In 2008 (Business) 

The bottom line: Look for a lot more connectivity; but temper it with common sense.

Written by 

I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about leading-edge XM topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

2 thoughts on “Trend Watch #2: The McKinsey Quarterly “Eight Business Technology Trends To Watch””

  1. Great article.

    Your readers might want to try a leading customer service review website where people share reviews with other users and with companies. Companies that are involved with and value customer service read Measuredup to keep up on what people are saying and to be able to improve customer service.

    It is free and easy to use.

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