IT Transformation with SOA

Envisioning the Business Impact of Technology

"This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us."

Western Union internal memo, 1876

It happens all the time. . . Too often, the industry leader invariably misses the chance to grab onto an emerging business. Wells Fargo failed to get into the railway business, Western Union did not get into the telephone industry, and the Rail Companies, lords of transportation in the nineteen century, missed out on the chance to capture the automobile industry.

One can prognosticate the future of technology with techniques that suggest the importance of maintaining a proactive effort in monitoring new developments coming out from the world’s R&D labs, but the challenge is to understand the transformative impact these technologies can have on the business. The problem is that figuring out the future of business will always be more of a divination-based exercise.

Even today, it’s difficult to predict, let alone prognosticate, the ultimate future business impact that the emergence of Web 2.0 services such as Youtube.com, Facebook.com, or Twitter.com represents. This is not to say that techniques used to prognosticate technology cannot also help in imagining “what-if” scenarios for business, but the ability to prognosticate with sound information and well-founded assumptions is at the core of what it means to be a true visionary. After all, most resumes today include some form of “I am a visionary” claim rather than that of “I am a prognosticator”, which would not sound as legit.

Envisioning the future of business is as intriguingly fun as it is difficult. If it weren’t so, there would be far more billionaires roaming the face of the earth these days. Look at how Amazon has transformed the book industry (and continues to do with devices like the Kindle), or the way Apple took the music industry by storm when it properly combined a number of differing technologies and created a viable online music distribution business model (a business that no one from the traditional music industry had the foresight to invent, perhaps because they were focusing too much of their energy fighting Napster rather than riding the winds of change!).

Granted, although the Virtual Presence example may be a bit obvious, there can be no question that a formally established Virtual Presence would seriously impact the travel and hospitality businesses; not to mention the possible impact on industries such as entertainment, education, and healthcare.

True, worrying about this impact might be, well . . . a bit premature, but nevertheless, visualizing possible outcomes can help to position your business as a leading entrant. It can’t hurt to be prepared should something develop more quickly than expected.

We can envision that the initial versions of Virtual Presence will be so expensive that its use will have to be leased from large, well-established Virtual Presence providers. This service can be viewed as the start for a potential transformative development in the future but still unclear is whether hotels will be the natural focus centers for these types of services.

As the cost of technology drops, its availability becomes the realm of opportunistic service providers. Witness the emergence of Internet Cafes; still popular in countries where Internet access is not prevalent, and I still remember that as a child I had to pay twenty cents to watch TV episodes of The Lone Ranger at my neighbors.

Once the technology cost becomes affordable by individuals, you begin to see a gradual segmentation of services based on quality of service. Most of us can use Internet based video-conferencing using “free” tools like Skype, but for more professional Videoconferencing, you would utilize professional office support businesses such as those from Kinko’s. Also, for large employee teleconferencing gatherings, you could lease the services of movie theater operators who advertise this service.

From my previous blog example, if you are trying to understand the implications of Virtual Presence to your hospitality business, you would do well to evaluate whether there is a business model that combines a future Virtual Presence capability with meeting room facilities. For example, you could estimate additional food and beverage revenues, plus sleeping room accommodations for people arriving from regional distances to attend this Virtual Presence event.

Then again, although Virtual Presence technology does not yet exist, this should not stop you from imagining its eventual advent and deciding whether it makes sense to position your system by entering the present Teleconference business. For example, notice today’s placement of high-end Telepresence services like Marriott’s and HP’s announcement[1] to enable the use of HP’s Halo Telepresence Technology from Marriott’s conference room facilities. Clearly, Marriot is looking ahead in this area.

In any case, as much as this prognostication/envisioning exercise showcased the importance of continuous technology monitoring, defining your very own R&D roadmap, and assessing the impact technology can have on the business. While you should avoid becoming an order-taker when it comes to articulating the IT Transformation plans, you should never forget that ultimately everything revolves around the business.

At the core of any prognostication and envisioning exercise is how to match your transformation direction with the business strategy. If your hotel company (in this example) is typically focused on leisure travel, for example, then the idea to push for investments in Telepresence technology will likely not to be well received. That is, unless you find an angle that leverages the use of teleconferencing by vacationing guests, in which case you might end up with a powerful competitive differentiator.

In the end, no matter what, you will need to business-justify the investment on technology transformation, if you are to get it done. This is the subject of my next blog!

Labels: Business Impact, HP, IT Transformation Defined, Marriott, Skype, T, Telepresence, Videoconferencing, Virtual Presence, Vision, Web 2.0, Westen Union

posted by IT Transformation with SOA @ 1:57 PM

Virtual Presence—A Prognostication Example

Let’s play around a bit with the techniques covered in my prior Blog. My most recent experience is from the travel and hospitality industry. It’s my believe that this industry is on the verge of major tectonic shifts due to changes in travel patterns caused by the energy costs, economic restructuring, and yes, technology. For example, when travel costs rise and the economy tightens, people change their leisure travel habits, and there is a reduction in business travel as more business is conducted via telephone, emerging online meeting means, or via old-style videoconferencing.

Still, anyone who has ever tried to hold a productive meeting via a 25 inch TV screen knows how hard is to detect nuances in facial expressions or to read the body language from other attendees—aspects of human interaction that are undeservedly underrated. The quality of such business meetings usually turns out to be less than satisfactory. Good business communication is about sensing moods, detecting reactions, and establishing the kind of warm rapport that only seamless proximity can provide.

Could there be room here for an emerging technology in this area? I suggest we can try to answer this question by following the prognostication techniques I covered earlier:

· Reinterpret the past, don’t ignore the value of second generation pruning

· Extrapolate what is known and to imagine what would happen if a known element were to become pervasive

· Identify the various technology trends whose trajectories will make them combine in novel ways

· Define a likely frame of reference with assumptions bound by bracketed extremes

Original Videoconferencing can rightly be seen as a first generation technology, something like the Atari was for Videogames, but now technology has advanced to a degree that overcomes some of the original limitations thanks to the use of large high definition screens and better control of the interaction. Clearly, companies like CISCO and HP have already identified enhanced teleconferencing as an area of great opportunity for the future. However, even though both companies refer to their enhanced teleconferencing products as “Telepresence”, what if an economic and effective form of actual 3-Dimensional Telepresence were developed? What I have in mind is something more like the stuff shown in the latest Star Wars movies—something I will refer to as “Virtual Presence”.

Just like with this very important meeting between Ki-Adi-Mundi, Yoda, and Mace Windu,[1], wouldn’t be great to use Virtual Presence in order to avoid having to fly from LA to New York for just a two hour meeting?

If Virtual Presence were to become ubiquitous, efficient, and economical, it could definitely become a transformational technology. The real question is this: How close are we to developing it?

Economically speaking, if past trends are an indication, chances are the initial engine for introduction of this type of capability will come from the so-called adult entertainment industry—especially if Virtual Presence is complemented with technologies intended to enhance sensory experience. There could be the addition of gloves with actuators to simulate the sense of touch, and . . . you get the idea. Smirk all you want, but economics wouldn’t be a problem in that area!

What would be next? Just as travel became a leading application in the early Internet days, its avoidance will surely drive Virtual Presence technology. After all, business travel takes time, money, and energy (in a world that's becoming more aware of energy consumption, this is not a small issue). Also, let’s be frank: business trips are not often as fun or effective as we would all like them to be.

I once participated as a panelist in a conference, answering questions related to the aftermath of 9/11. One of the questions was how I would recommend companies reduce travel. Being a representative from the hospitality industry, my answer was plain and sincere: “please don’t cut your travel, just stay in one my company’s brands!”

Clearly, business travel avoidance is not good if you happen to be in the travel and hospitality business. Now, I know some of you may argue that travel avoidance was precisely the goal original videoconferencing was meant to achieve, but I’m not talking here about dated NTSC TV screen resolutions. Virtual Presence is all about truly replicating the experience of being in the same room with someone who may be several thousand miles away. Compared to that, existing videoconferencing systems are just primitive thinker toys.

To create Virtual presence, we will need a 3D scanner—perhaps a laser-based system that will rapidly trace each participant, digitizing the contour of their bodies and faces in real-time.

Next, we are going to need an extremely fast network to transfer the digitized information generated by the scanner. We will certainly need a very fast pipe to transfer what are certain to be terabytes of scanned data even after compression. Also, in order to rapidly compress this information, we’re going to need a very fast computer. After all, we still won’t be able to exceed the speed of light and there’s just so much information that can be transferred on a sub-second basis.

Fast computers on the receiving end will be needed to decode the scanned images and 3D technology will then be needed to project the resulting image, using hologram techniques, somewhere in the virtual conference room.

Do we really have the technologies to make this happen? Well, not quite yet, but we could be very close…

• Huge bandwidth: Take the shift from analogue to digital spearheading novel uses for the telecommunication networks. The first time ever that telephone wires carried more digital data than voice conversation was in 1997. Yet, it took only 7 additional years before, of all the data transmitted across telephone networks, only 3% consisted of voice.

In 1999, Bell Labs was able to transmit 1.65 gigabits of information across a single fiber optic line in one second. This is equivalent to transmitting the entire contents of the Library of Congress in about six seconds. Only five years later, in 2004, a record announced at the Spring 2004 Internet2 Conference was the transmission of data over nearly 11,000 kilometers at an average speed of 6.25 gigabits per second, and in 2007 it went up to 9.08 gigabits per second.

• Moore’s Law to the max: hardware costs continue to be driven down

• 3D holographic display technology is currently being tested in labs

• Basic 3D scanners are now on the market and their prices are dropping

Virtual Presence could just be around the corner. In my prognosticating opinion, we should expect real, albeit expensive, applications no later than 2015 (remember when the 50” plasma TVs went for $100K?). So the main questions are these: when will economics allow for its broad deployment? And better: What is the business impact of such a technological development likely to be?

Next week, I’ll go over some thoughts on how to envision the business impact of technology.

Till then!

Labels: Cisco, Future, Hospitality, Hotels, HP, Marriott, Prognosticaing, technology IT, teleconferencing, Telepresence, Travel, Virtual Presence

posted by IT Transformation with SOA @ 1:01 PM