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Is a Silicon Valley earthquake turning your company into a software vendor?

James Staten | March 24, 2014
Systems of engagement and systems of record

A movement that began in Silicon Valley, is starting to have profound impacts on corporations throughout the world that are far from obvious but critical to your success and maybe even your company’s survival. This is a massive shift that all CIOs need to start preparing for — a seismic shift that is documented in my latest report released to clients this week.

As we enter the age of the customer we are leveraging cloud, mobile and big data technologies to build better and more complete experiences with our customers. In doing so we are creating new digital experiences, radically different interactions, and redefining what our companies do and how they should be viewed. Nike’s FuelBand is both a device and a collaboration solution (that’s why Under Armour bought MapMyFitness). Siemens Medical’s MRI machines are both a camera (of sorts) and a content management system Heck, even a Citibank credit card is both a payment tool and an online financial application. Any company that is embracing the age of the customer is quickly learning that you can’t do that without software.

This new class of software we are building follows the teachings in Forrester analyst James McQuivey’s book Digital Disruption It’s built fast and cheap using cloud technologies and modern application architectures It's iterated frequently using continuous integration methods and taps online services (like Facebook single sign-on, Google Maps or Zuara payment engines) for any shared capability or pre-existing function that can help us get new value propositions to market more easily. These Systems of Engagement applications are radically different than the traditional enterprise applications that we’ve built for years.

Traditional enterprise applications like enterprise resource planning, financials, logistics, plant management and data warehouses are large complex entities with lots of custom modules and significant stickiness. It’s in these Systems of Record that we store transactional data, protect customer identities, and store and archive patient interactions. As such these systems are slower to iterate both due to complexity but also based on the importance (and compliance) of the data and the processes they have helped solidify.

You might think that the radical, chaotic and disruptive nature of the new Systems of Engagement wouldn’t have an impact on the solid, stable part of the business but you would be wrong — and such a conclusion might just be very dangerous. Because Systems of Engagement aren’t fully divorced from your traditional business — they are extensions of it. And as such they are increasingly needing to connect back to these Systems of Record. What’s the value of a health engagement solution that doesn’t know your past history? Would you trust the reports in Mint if it couldn’t talk to your banks?


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