State Street Corporation is known for banking and one of the reasons that Boston is a financial services hub on global scale. They are also looking ahead to predict how technology will impact their industry and released its Vision Report. The report,  “The Evolving Role of Technology in Financial Services,” looks at the impact of forthcoming advances in three specific areas: analytics, electronic trading and regulation, as well as portfolio allocation and modeling.

The report looks at the impact that next generation technology such as cloud computing is expected to have on the industry. According to the report, investors will obtain significant benefits through greater automation and capacity on demand, accelerated time to market of innovative new products — including custom analytics and data — greater security and strengthened client service.

It opens with this statement: “Technology has long played a key role in the financial services industry. Today, however, a number of new and rapidly accelerating trends are emerging that promise to usher in an entirely new paradigm. Information technology can no longer simply be an “add on” at the periphery of the business, but rather must be deeply embedded at its core.” It has come a long way from simply counting beans.

State Street’s Vision report also explains that, unlike today, the financial services industry will soon deploy increasingly sophisticated, forward-looking technology tools and analytics that will enable investors to understand and model actual precursors of performance.  For example, instead of today’s simple descriptions related to risk position and market stability, investors will soon be able to see more acute and intricate insights and the actual factors that contribute to those risk positions.  These factors alone, the report states, will have reverberating impacts on the habits, business processes and decision-making of institutional investors around the globe.

The report is divided into three main sections:

Technology with a Purpose: The Next Generation Today section discusses the integration of risk and return technology by investment service providers to address asset managers and asset owners’ growing need for more detailed portfolio analytics, process transparency, risk management and dashboards to improve the speed and kind of information they are receiving and their access to it.

Using Technology to Adapt to the New Regulatory Environment section examines the review of electronic trading by regulators following the start of the financial crisis in 2008. Technology has been at the forefront in enabling the exponential growth of electronic trading and has become the only solution to effectively meet the challenges inherent in new trading regulations.

Portfolio Allocation and Modeling — Look at the question: Technological Arms Race? And explores technology’s solutions to meet today’s leading global asset management challenges, including market crowding, pricing inefficiencies, risk and rebalancing.

The report states the drivers of the changes they cover include several factors. One is clients’ demand for more and faster information, greater transparency, and improved risk management. We can certainly use all of these, especially the last one. Another is that the perceived value of data has fundamentally shifted. This was the theme of several session sat the Boston Enterprise 2.0 conference (for example see: My 2011 Enterprise 2.0 Conference Notes: Big Data Analytics for Social Media).

In addition, the globalization of the workforce, which has led to around-the-clock schedules, the acceptance of open source-based strategies and the use of multiple procurement partners, is also an important factor. Taken together, these changes have set the groundwork for the emergence of a new business and IT model that will likely disrupt conventional thinking about the roles and capabilities of IT systems within financial services.

Here is some good news. According to a new forecast from Forrester, global tech spending will rise 7.1 percent in 2011 to $1.7 trillion, according to new forecast data from Forrester. Analyst Andrew Bartels writes that while the 2011 global tech market will be similar to the 7.2 percent market growth experienced in 2010, there will be significant differences between the two years in terms of both products and geographies.

Andrew projects that after the computer restocking and replacement boom that propelled the tech market in 2010, hardware growth will slow to 7.4 percent, with software starting to accelerate. Enterprise demand for wireless, unified communications, and videoconferencing is also increasing. The IT services and outsourcing market will be mixed, with growth in some areas (e.g., project services in the US and outsourcing in Latin America) but weakness elsewhere.

It is interesting to note that what is often considering the developing areas (Latin America and Eastern Europe, Middle East, and Africa (EEMEA) regions) will have the highest growth rates in 2011, both at 9.8 percent. Asia Pacific, at 8.5 percent, and the US, at 7.5 percent, will grow slightly faster than the total global market. This is consistent with general growth in GDP in some of these areas. For example, the report mentions that according to the latest poll of economists by The Economist, both Argentina’s and Brazil’s real GDP will grow by 5.1%, with Chile’s growing 5.9%

After a strong 2010, the Canadian IT market will only grow at 4.9 percent. Western and Central Europe and will have the lowest growth rate, at four percent, with the combination of weak economic growth and a depreciating euro combining to hold dollar-denominated growth down. The weakest markets in this area will be Italy, Spain, Belgium, Greece, Ireland, and Portugal. Best performing will be the UK, Sweden, Denmark, Norway, Finland, and Poland.

The US tech industry will grow about twice as fast as nominal GDP in 2011, at 7.4%, as investments in cloud and Smart Computing solutions provide the IT tools for companies to grow profits despite weak revenue increases. Software sales will be stronger than hardware.  The government market for IT will lag, though, as federal, state, and local governments struggle with high deficits. I can see this as I read about struggling state and local budgets and federal efforts to cut spending.

There is much more detail in the 38 page report which is available at the Forrester site. I appreciate receiving a review copy.

Forrester has released its report, US And Global IT Market Outlook: Q3 2010, by Andrew Bartels with Christopher Mines and Chétina Muteba.  They have reduced their forecasts for the year to a still positive 8.1% IT market growth for the US (down from our 9.9% forecast in July), with 7.4% growth predicted for in 2011.  Forrester used data from the US Department of Commerce and the reports of 53 vendors. US business and government purchases of Communications and IT products and services will total $758 billion dollars in 2010.

Breaking down the details shows a divers range across sectors within IT. For example, US computer equipment is set to raise by 19% in 2010, with all categories growing at double-digit rates. US software purchases should rise by 9.1%, with operating system software, middleware, and applications sharing the growth. Communications equipment raise by only by 5.5%, led by enterprise and small and medium-size business (SMB) buying.

On the other hand, IT services growth will lag a bit, with systems integration projects picking up late in 2010 as licensed software buying increases. The laggard of the group is US IT outsourcing and telecommunications services.  Sales here will lag, with the former rising by only 2.8% and the latter dropping by 0.9% in 2010.

I was pleased to get a review copy of the forecast and there is a lot more detail with the report.

Is asking ‘why something fails’ the right question to find or solve the real problem?

Michael Krigsman reports on Information Technology (IT) project failures, a great topic deserving of attention. On his hosted phone discussions, featured speakers share their stories.

Stories are wonderful mechanisms to thread together relevant facts. They often become objects of entertainment where facts are embellished with each telling — stories morph into ‘tales’. I suggest that failure often starts with basing business design on fairytales and folklore. Ironically, the best clues for changing this, are found among people who create fairytales professionally.

Pixar Storytelling

Lurking in your own DVD collection may be a treasure of clues. In the ‘extras’ for the movie Finding Nemo, is the documentary Making Nemo.

Their story starts with a premise, shared by Writer-Director, Andrew Stanton:

“We just want to make a good movie.”

There are many examples of journeys that started with “We just want to make/deliver a good [fill-in-the-blank]. A few ‘outtakes’ might suggest why Pixar’s results are different.

Executive Producer, John Lasseter says things I’ve never heard uttered from a leader in any enterprise I’ve been in, including some responsible for design (perhaps you have):

“I always believe in research. No matter what the subject matter is, you cannot do enough research…because so much believability will come out of what’s really there.”

Software, processes, products, services: these are all all abstractions of reality. To be successful they must approximate reality, they must be believable.

Lasseter then mentions:

“I went to every single person early on in the film and said…”

Whait! Personal contact from an executive leader? Is that in a rulebook somewhere? Lasseter continues:

“We cannot make a movie about the underwater world without you experiencing it firsthand.”

John insists they go onsite for research, and that they all get certified in scuba diving.

Suggesting any of this to Project Managers typically results in blank stares. Let’s start here: IT fails because of its methods. The methods are flawed. Requirements gathering is not the same as immersive research.

With a foot still in research, the Pixar team explores possibilities. Stanton asked his people:

“What is it that makes you believe that it’s under water?”

Figuring out what “under water” would look like resulted in “My First Ocean”. They got believable water, but it was more like a chlorinated swimming pool than ocean water. Stanton worked with his team:

“Each of these individual aspects of being under water looked great, but we couldn’t get them all to work in concert together. I just picked a couple shots of things above water and things below water from real footage [referring to live artifacts from their research] and I said, ‘Using exactly the tools that we have created and nothing else, I want you to see how close you can mimic these actual shots.’”

The results were too good. They came back two weeks later and the animation could not be distinguished from the live images. But their goal was believability, not reality. They still needed the feeling of a make-believe world for their animated creatures to live in.

Another telling differentiator in methods comes from Bob Peterson, Co-Writer:

“It’s really important for us sortof at the head of this big pipeline — before it gets to layout and animation, and lighting — to work this thing out right. That includes the pacing of a film, that includes the emotion — making sure that people are feeling things as the movie progresses.”

Unlike other projects, they started this one with a full screenplay, written by the Director. They thought this would make the effort easier. Lee Unkrich, Co-Director says:

“But the reality is that once you put these movies up in storyboard form, a lot of things come to light that aren’t clear when you’re just reading words on a printed page.”

Let me interject briefly: Requirements are just words on a printed page — they are insufficient for success. Another critical element that Stanton points out (the inverse of ‘final’ requirements as a goal):

“The thing that finally makes it on the screen is all about rewrite, rewrite, rewrite, rewrite. A good portion of the rewrite process is not done by the screenwriter at a word processor…it’s the story department.”

They have a story department? Who are these people? Stanton explains:

“…the guys that sit in a room with you for close two years, batting out ideas, countering your ideas, drawing up story panels, putting them up on a wall, pitching things, putting things on a reel down in editorial. It’s a very maleable, messy, glorious process.

When it works, it’s amazing. The power of what you can do with a group of great minds. But at times it can be very frustrating.”

When they reached an impasse the co-writers would get in a car and drive to some destination on their schedule rather than fly (e.g. for TV interviews, etc.). Sequestered together for hours, this forced them to just “talk it out” with no other distractions. Peterson says:

“We worked a lot of good stuff out that way. When I watch the film now I remember where we were on I-5 when this idea was brought forward.”

Storyboards are followed by story reels — complete threads of a story with pieces of animation (often both digital and hand-drawn artifacts) with voiceovers, music and sound effects to approximate the complete film experience. This is the template for the movie.

Then it’s back to the drawing board for the details — LOTS of details. The sketches of the original storyboard are replaced by full-color swatches, hand-drawn with pastels, to show the color themes and inform successive levels of detail, like lighting and motion.

Animators don’t just draw characters, they develop them — drawing them from different angles, with different emotions. Sculptures are then created of the characters. Now we’re talking 2D and 3D artists who inform each other’s work. Art Director, Ricky Nierva:

“That’s really when the magic happens. Starting to see that 2D drawing come alive in 3D. I get all this amazing information from it. I start seeing it in a new way. I start turning it around. I look at it from the top and the bottom, because you never know if that’s the way they’re going to be seen in the movie.”

This project required abandoning things learned before. All of the previous Pixar movies focused predominantly on bipedal characters (i.e. 2 legs). Dealing with marine life moving through water required new frames of understanding. No matter how talented or experienced the contributors, these circumstances were different. They had to adapt their work habits to a new set of heuristics.

As more and more people become part of the production, play and contests served a critical cultural purpose: getting people together to check out each other and their work. Their production is not a phase where leadership throws the work over to the team to be led by project managers — there is continuous review/feedback of the work by the leadership.

Their work is immensely collaborative. It’s not collaborating on bringing parts together. Various specialists touch the same pieces over and over again, adding their own value in its evolution. In the end, there are no individual star performers. The star power shifts to the results of the collective effort: the movie itself.

Let’s Recap

These are the artifacts of creative, immersive work at Pixar.

• Immersive Research
• Premise-Challenging Questions
• Multiple Leaders “Work Things Out” Together
• Possibilities Created by Storytellers, Sculptors, Animators, Modelers…
• Physical Reference Artifacts used for Conversations
• Specialists for: Color, Shading, Photography, Motion, Sound, even a Professor of Physiology…
• Plans that Change via Continuous Discovery, Continuous Design
• Incredibly Collaborative Work (including inspiring leadership)
• Immersive Play

Thank you Pixar, for giving the rest of us a real life example — a model — to look at from different angles, to perhaps see solutions and business in a new way. Imagine what we could accomplish if we were to fundamentally change the way we approach our work — right now!

Postscript: Tweetpeep @nenshad immediately shared this great piece from the Wall Street Journal “How Pixar Fosters Collective Creativity“.

(Cross-posted to the AppGap blog)

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Notwithstanding the points raised in recent and past posts about hesitation, resistance and other various challenges to E2.0 implementation and adoption as organizations circle it like a group of neighbourhood dogs nervously eyeing and sniffing a porcupine, it seems clear that eventually organizations will have to realize that the tools and services that comprise what we call Enterprise 2.0 are tools and services that address in fundamental ways how people do knowledge work.

It’s that simple … to do much of what we call knowledge work (other than filling in boxes on forms) people need to connect, talk, listen, point to sources and noodle together over ideas and new information.  They look, in conversations, for ways to stitch information and knowledge together so that it becomes useful.  That’s what humans have always done .. it’s only in the last 100 years or so that we have had the sequential arranging and measurement of tasks and highly-structured division of labour that we have understood as work during most of this lifetime.  As Bill Ives points out in the previous post, things are changing, and (relatively) fast, even though I am fond of the phrase "it takes a long time for change to happen quickly"  (think about that for a second).

One more piece of evidence that "organizations will have to realize …" is the recent announcement that Microsoft is testing, and may offer the corporate market, a Facebook-like application called TownSquare, a business-user-focused social networking application..  Whether one think Microsoft is the answer to E2.0 for their organization or not is not the point here … the point is that most or all of the large vendors are now adding features and functionality (or acquiring them) such that the platforms being used to support the work of knowledge workers will have been substantially re-tooled  before another 5 years passes.  And that re-tooling will consist largely of social computing capabilities.

And then there’s the culture issue

Will Management 2.0 be needed before or after an organization addresses E2.0 ?

The excerpt on Microsoft below via ZDNet:

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Microsoft to show off a corporate Facebook-like prototype
Mary-Jo Foley

Office Labs – an incubator within Microsoft testing business-focused technologies that may or may not end up part of future Microsoft products — is showing off this week yet another of its ideas.

The latest, known as “TownSquare,” is a business-user-focused social-networking tool. According to Computerworld, Microsoft will demo the new offering at the Enterprise 2.0 Conference in Boston on June 12.

TownSquare, via a layout similar to Facebook’s, provides internal company information, ranging from promotions and anniversaries, to a list of shared-document modifications pertinent to individual users.

TownSquare was launched inside Microsoft in January, according to the aforementioned report, and has been test driven by 8,000 Microsoft employees so far.

Microsoft has been stepping up its work on a number of other social-networking-related projects throughout the company. At its TechFest research fair earlier this year, Microsoft officials showed off a FriendFeed-like aggregation tool, codenamed C2, which is likely to find its way into Windows Live for Mobile some time in the relatively near future. And earlier this week, Microsoft rolled out a test build of a SharePoint Server plug-in for producing/managing podcasts.

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Euan Semple is one of acknowledged experts with respect to the use of social computing inside the firewall of an organization, based on his work when employed by the BBC to facilitate the use of wikis and blogs as part of the organization’s intranet.  He is also a contributing editor emeritus of this blog.

His recent blog post titled "Most companies who try to do Enterprise 2.0 will fail" resonated with me, notwithstanding Andrew McAfee’s point (made at several presentations I have attended) that he is not aware of any social computing pilot projects / initiatives that have gone catastrophically off the rails.

Amongst those who follow the domain known, for want of a better name, as Enterprise 2.0 will also recognize that it is becoming conventional wisdom that the main challenges to effective implementation and use appear to be cultural and related to widespread assumptions-in-use about effective management … a notion that Gary Hamel takes to task in his recent book "The Future of Management" (earlier post on this issue here).

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Most companies who try to do Enterprise 2.0 will fail

And it will be for these reasons in no particular order:

1. They think it is about technology.

2. They aren’t prepared to deal with the friction that allowing their staff to connect generates.

3. They will assimilate it into business as usual.

4. They will try to do it in a way that "maximizes business effectiveness" without realizing that it calls for a radical shift in what is seen as effective.

5. They will grind down their early adopters until they give up.

6. They will get fleeced by the IT industry for over engineered, under delivering solutions, think that Enterprise 2.0 failed to live up to its promise and move on to the next fad.

7. Lack of patience

8. It is not companies who do Enterprise 2.0 it is individuals.

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Today I noticed this piece in Canada’s national newspaper, the Globe and Mail, announcing that Open Text has just signed a 7-year contract to lay "the foundation for the government’s 2.0 strategy".

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Open Text strikes Web 2.0 deal with Ottawa
MATT HARTLEY

The Canadian government is getting a Web 2.0 upgrade.

Waterloo, Ont.-based business software maker Open Text Corp. [OTC-T] announced Tuesday it has landed a seven-year maintenance contract with the federal government to supply the tools that will “provide the foundation for the government’s 2.0 strategy.”

Open Text said the agreement will see its software used in all federal departments, agencies and crown corporations helping to create internal wikis, forums and blogs to help the government be more responsive to Canadians.

Open Text, which became Canada’s largest software company when International Business Machines Corp. purchased Ottawa-based Cognos Inc. last year, produces “enterprise content management software” that helps businesses to store, organize and analyze records and documents.

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Perhaps I’m mistaken, I can’t help but think that this will be the knowledge-worker equivalent of acquiring and implementing a large ERP system which will require enormous amounts of training so that everyone uses the tools in the same way, so that they push and pull content to and from each other in the same ways. Will it become a new form of email for use internally ?

From what I have been able to understand about using social software to carry out social computing inside the firewall, this approach (or my interpretation of it) flies in the face of much of what we have learned about social computing.  I strongly suspect that different government departments of varying size and scope will carry out different kinds of knowledge work, and have different requirements for when and how to use collaboration to develop policy and deliver services.  However, I am sure that there will have been consultant studies and recommendations backing this decision.

I think it might be better to consider a 2.0 strategy that takes into consideration those different requirements and look at a range of possible solutions, with the intention of acquiring and implementing that which will work best.  After all, many of the 2.0 collaboration platforms can co-exist nicely with existing information technology architecture and what differentiates with respect to effectiveness is the take-up and use of the 2.0 capabilities by the end-user.

My sketchy opinion notwithstanding, it may be the case that such issues have been considered will be addressed with the Open Text solution.  Open Text has been a leader in the collaboration space for some time now, and my thinly-informed interpretation of a short newspaper article does not have the benefit of the details of the Canadian government’s 2.0 strategy.

But my knowledge of the structure and dynamics of the work of government departments (I have consulted to a number of them in the past) suggests to me that there will be many procedural binders and lots of day-long training sessions trying to help workers become familiar with the new tools and which categories to use for which piece of content, etc.

I believe that control is still a very important consideration, if not the primary factor, in the design of work in government departments.

It will be interesting to check in 3 or 4 years down the road and see how things are going.  Nothing would be more pleasing than to discover that my country’s government is reaping the benefits of using social computing inside its firewalls.

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I just discovered, tangibly, something I have thought of before and had imagined might happen.  I did not experience it until today.

I have been writing and blogging more over the past six months or so about social computing inside the firewall, and have spoken at several conferences about the issues and dynamics therein.

Today I used Google to search for references to me and my work, and so rediscovered a blog post I wrote four years ago about the use of blogging in organizations to stimulate dialogue, learning and innovation.

Obviously, people looking for references to my past writings on the use of blogging inside the firewall have helped this old and forgotten blog post to surface.

Update for the fact that there are now more collaboration platforms and applications, change the verb tenses and few words to make it pertinent to today’s Enterprise 2.0 context, and I think it’s still relevant.

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Blogging, Dialogue, KM and Learning
by jonh on Thu 03 Jun 2004 12:17 PM PDT | Permanent Link | Cosmos

Over the past couple of years many knowledgeable and committed bloggers have held forth on how blogging can replicate the dynamics of dialogue. They have also offered opinions and examples of how blogs and blogging can (potentially) be extremely useful for what we call "knowledge management".

In addition, there have been various anecdotes and examples of how reading blogs, commenting on blogs, and creating blog posts are activities that accelerate learning.

All this makes good sense. There are core aspects of blogging that facilitate learning in simple and effective ways.

Firstly, individual or group blogs that are focused on a domain of information and expertise chronicle and catalogue the blogger(s)’ knowledge. Over time, this grows to create a recognizable "body of knowledge".

Secondly, by offering the capability of commenting and interacting, the information on offer can be better defined, refined, explored, tested, and built upon.

Thirdly, the information on offer provides a latent platform for action – information that can be acted upon often turns into knowledge that can be shared and used in various ways.

Fourth, by linking to the blog or blogs that offer related information, the knowledge that is built can be shared more and more widely, if desired.

Fifth, the rhythym and cadence of the posting, reading, commenting and linking replicate the dynamics of dialogue in very effective ways. There aren’t the same kinds of interruption and distraction that so often occurs in conversations that only weakly replicate the dynamics of dialogue.

Finally, an ecosystem of knowledge can develop that consists of the aggregated sets of links and content the participants in a blogalogue create. And this "body of knowledge" and understanding remains online, available to anyone who cares to become involved.

I think these dynamics hold great promise – they demonstrate the characteristics that many have suggested are desirable and necessary for learning communities and learning organizations.

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Tags: Enterprise 2.0, blogging, dialogue, accelerated learning

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I recently completed work on a survey report for Evans Data measuring the impact and trends shaping Web 2.0 projects within the enterprise.

The survey of 385 corporate managers and developers covered Web 2.0-based development mechanisms — such as mashups and gadgets/widgets — as well as social networking tools. Both types of environments are now very much a part of the corporate scene, and have become important tools for corporate applications, the survey finds.

Demand for Web 2.0/Enterprise 2.0 talent is hot, as a matter of fact. Two out of three respondents say their demand for such talent will increase over the coming year. That’s because there is a lot of strategic business-to-business and internal business development going on by software developers in the survey. Developers are working on Web 2.0 software for business applications in several areas, including interface design, gadgets and widgets, and social networking.

Most Web 2.0 applications are being targeted at internal corporate requirements, versus consumer engagements. Close to half of the survey participants are focused on developing applications for internal use inside their companies. Less than a third are building Web 2.0 applications intended for delivery on a subscription base to online users.

Forty percent of interfaces for Web 2.0 applications are “mixed” web-rich clients that include AJAX for fast downloads of pages that include live feeds of data (gadgets) and other dynamic components found in Web 2.0 applications. An overwhelming majority of respondents are using gadgets and widgets (portable Web parts) from Google, Microsoft, Yahoo! and others to deploy fast, lightweight business applications and services.

More than four out of ten companies encourage social networking; however, most feel the business value still needs to be demonstrated at this time. Social networking is strongest among developers in scientific and technical fields, who see social networking as a communications and collaboration medium, and among OEMs and systems integrators, who see benefits in product delivery.