What's Your Weakness?

Techworld recently published details on 29 of the worst security incidents to have affected UK residents in recent years. (The title actually says 31, but one incident appears to be duplicated and one really is not an incident).

Looking at this, there are no Denial of Service incidents or ransomware attacks in this class. Almost half of all attacks can be attributed to straight forward hacking. The rest come down to sloppy or inadequate management and administration.

3 of the worst arose from poor configuration and system administration. A further 3 were caused by granting or leaving open access control to unauthorised users. 1 was caused by poor programming.

6 were due to poor practice and accidents: use of live data for testing, failure to wipe data media before disposing of equipment, lost data media, lost laptops and one case of wilfully selling on personal data without authorisation.

This leaves 3 cases of inside jobs by disgruntled employees.

This reinforces the old adage that engineering a security solution is not enough. Businesses need to build in security as part of their culture and work their processes as well.

Wearables Wear Down The Barriers

In a week when Swiss Watch Manufacturers reported their lowest exports in the last 10 years of Quartz based watches, Apple has stolen their slot in market share.

Statista reports that there were 453 million connected wearable devises worldwide in 2017 and expects this figure to rise to 593 million. This is significant as it shows that mass adoption is inevitable, even if people are still trying to work out what to do with a smart watch, the dominant wearable device.

Also, wearable technology is rapidly moving into the work place to provide safety benefits to workers in factories and hazardous conditions.

Overall, this looks like the market for mobile phones around 2000 to 2002, its poised to explode.

Digital Strategy Burps

McKinsey claims that many organisations are making serious mistakes with Digital Strategies.

Putting aside thos companies whose strategies are just a wish list of possible opportunities, McKinsey believes that typically there are 5 issues with enterprise Digital Transformation Strategies:

1. Unclear definitions;
2. Misunderstanding the changing economics that digital is driving;
3. Overlooking eco-systems;
4. Focusing on familiar competitive threats, rather than emerging ones;
5. Failing to understand that it's not just existing business that needs to be digitised - and not discarded - but that new businesses need to be invented, too.

 Though they note that in some industries, digital is accentuating the gap between winners and losers, with small numbers of winners grabbing huge market share and squeezing out the losers, whilst they also change the nature of the market.

Though more pragmatically, at a recent Gartner conference four CIOs spoke about the practicalities and emphasised focusing customer and people outcomes and experiences, using demonstrators to illustrate cross fiunctional opportunities and experimentation to build new business opportunities. Here too there was a theme of building on the existing legacy capabilities to blend the existing with new opportunities.

Analysis by the Boston Consulting Group reinforces some more orthodox lessons:

1. Harness the Power of Data
2. Redefine Your Customer's Journey
3. Build Digital Capability Through the Whole Organisation
4. Transform Governance and Explore Collaborative Ways of Working
5. Re-inforce Innovation Capabilities

 Broadly speaking this all fits with the DAF framework and principles contained within the Way of DAU.

Digital Partnerships

In the Way of DAU it was mentioned that most Digital Businesses need to develop partnering as a key capability and competence. In fact part of the underlying modus operandi of digital is that an enterprise is building on an industry ecosystem of partnerships which deliver highly commodotised digital components which can be used to construct the technical aspects of a digital business. 

Recently Singapore Airlines (SIA) announced digital partnerships with 4 public sector bodies as part of its "digital innovation blueprint" initiative. The partners include National University of Singapore (NUS), Agency for Science, Technology and Research (A*STAR), Economic Development Board (EDB) and Civil Aviation Authority of Singapore (CAAS). This ups SIA's game in what is already a well weaponised area of digital business, the air travel business. SIA seeks to improve operational efficiency and effectiveness, as well as gain better insight into customer behaviour and tune its marketing appropriately.

PWC has published its thoughts about how to approach building a digital partnership. Key features include:

• Clarity about shared goals;
• Agreeing mutual plans for time frames, milestones and outputs;
• Cultural alignment and trust building;
• Definition of essential service or success criteria;
• Agreeing mutual conventions around data ownership, privacy, protection and hosting locations;
• Shared partnership management and governance frameworks;
• Building Agility into exploitation of mutually developed capabilities, products and services.

Interestingly enough, as pointed out in a recent report by the Economist Intelligence Unit, cities are getting in on the act, partnering to provide the best digital business environment and infrastructure. Ratings by local business leaders have established some interesting global leaders and laggards with Bangalore and San Franciso topping the list. London, Madrid and New York are neck and neck sitting at 9th, 10th and 11th in the survey's league table, with Berlin lagging at the bottom in 45th place. Paris, which has been setting itself up to rival London post Brexit sits at 20th.

Connecting The Digital Dots - Vision, Strategy and Capability

Having worked in a number of global and international organisations, I have come across the received wisdom of National Stereotypes. One of the biggest beleifs that is often propgated is that Americans focus on Vision, Europeans major on Process Performance and Asian Companies prioritise Inoovation and Learning. I never really took this seriously until ISACA commissioned a ddutch academic to research the effectiveness of their COBIT framework.

The report into COBIT effectiveness was based on a survey of over 300 enterprises around the world who had adopted COBIT as their IT management framework (although ISACA would call it a governance framework). The analysis attempted to verify whether there was any correlation between using COBIT and positive outcomes in delivering strategic objectives, i.e. to validate the value. Unfortunately, any linkage was almost none existant. Further reading suggested that it would have been impossible for COBIT to have affected the outcome as most organisations were only using a few of the COBIT processes. It turned out that the organisations had really followed these stereotypes and the American organisations were only using the strategy processes, the Europeans seemed to be only using delivery focused processes and the Asian ones really were only doing innovation and training. 

Further to this, I have seen arguments between European and American attendees at at an International conference over what a Strategy actually contains. It seems that there is a transatlantic split over whether a Strategy should contain a plan or not.

So what does it mean to digitalorganisations and why is it important. Well digital organisations aim to be disruptive and aim to be agile, otherwise they become irrelevant. Yesterday's bright new product will get swamped by today's Me-too Copycats. So an organisation has to join up everything from Understanding the Market, To working out What Happens if you Re-write the Big Rules or assumptions that dominate the Market today (i.e. the disruption), to being able to deliver rapidly, learn from experimentation and perhaps failure, to continuously modify or even pivot the product so that they win and keep dominant positions. Richard Rumelt in Good Strategy Bad Strategy explains the need to diagnose the market, identify a course of action and chose proximate goals. Steve Denning covers Business Agility in a recent article in Forbes.

So this brings me to the Business Model Canvas. This is often touted as a strategic tool for defining your business model. To me it is does not facilitate the outward looking open question type thinking needed to look at the market and identify the New Business Rules and the Opportunities. A SWOT analysis would be better for that. Howvere it is basically a good structure for guided thinking which helps an enterprise think through and communicate what needs to be done to deliver against strategy.

Then there is the Lean Business Model Canvas, an adapted approach. Again it does not do the big outward thinking, but it does start with the Problem to be addressed. So it is useful for a Product Manager and a Product Marketing Manager to enage with the rest of an Integrated Product Team to plan what they are going to do to develop, sell and deliver the product (or even a customer facing set of products) effectively.

Has Big Data Lost its Mojo?

A number of surveys were published during 2017 which suggested that Big Data has lost the CxO mind share that it had.

The overall impression gained was that business leaders are putting their emphasis on Artificial Intelligence (in particular Machine Learning) and IoT, whilst CIOs and Technical Leaders are worrying about Security and Lean (Agile and DevOps). 

At the same time the consumer and gadget end of things are focusing on wearables, voice and VR/AR based devices (implying other types of AI are getting important). 

Somewhere in the mix, people are worrying about culture, product management and marketing, and organisations designed around empowered product teams.

There almost appears to be an assumption that big data has been cracked and apps are easy. Also, data governance is not really getting the attention that it should do and vendors are pushing APIs for integration.

This suggests not just a gap between business vision and technical capability to deliver, but also that the consumer led boom in exploitation is going places which don't necessarily fit well with classical business environments. Open plan offices are not the place where people should all be talking to their digital assistants.

The lessons I draw from this are than business management teams need to start thinking holistically about what is needed to deliver their new business (i.e. digitally augmented) strategies and models, but also about what the future workplace looks like. Is the office finally dying?

They also need to get real about data. It needs to be managed using lean data principles. Integration and security are vital to get right. IoT and other exploitation approaches are going to emphasise Big Data's importance further. So it's vitally important to develop data specialists who understand your business and are networked with the right people. A recent article in the Harvard Business Review suggests that most organisations have focused on technicalities and need to look at a more immersive approach and organisational issues too.

Google puts a SOC in it

Google X

So Google (or Alphabet as the parent is now called) has announced today that they are joining the SOC market with proactive security defence based on capture and analysis of events.

This has come out of their X projects division which aims to rapidly develop new breakthrough products.

What's Google Planning?

Presumably Google aims to provide Machine Learning based measures capitalising on the scale of its services and analysis across customer environments hosted on its GCS platforms. This should give it certain predictive advantages, enabling it to home in on certain types of attack.

What would be good to know is how will Google differentiate between poorly configured devices, failing devices and real attacks. As many APT style in infiltrations will mimick poor configuration and failures to disguise their intents. Also what will they be doing around major incident management, remediation and forensics to provide a complete service?

Details are thin on the ground so far and this is bound to spur me too imitations from AWS and Azure.

SOC Fundamentals still Apply

However, as ever the fundamentals for a working SOC will remain:

• You need to know what assets you are managing and keep CMS/CMDB accurate, complete and up to date;
• As far as is practicable, ensure that all assets are implemented with standard configurations, to avoid mis-configuration and creating the noise in which APT infiltration can hide;
• Use automation and software as infrastructure to implement standardised asset configurations and maintain patching up to date;
• Then deploy logging, automated monitoring and analysis;
• Invest in remediation and incident management capability;
• Use scenario planning and practice exercises to ensure that there are no gaps and you are prepared for problems.

What Else is Google Doing?

The SOC services are only part of the offering. The new business unit called Chronicle will also be offering threat intelligence and products from its VirusTotal acquisition.

IoT Adoption Drag

IoT Makes Slow Progress

Despite all the hype and general acceptance of its possibilities, IoT is making slow inroads into enterprises and can still be regarded as being in the early period of adoption in many businesses.

I have talked about CxO behaviour and culture in previous blogs as well as security and other issues, so what is holding IoT back?

Business Leader Perspective on IoT Adoption

A recent survey by the Economist Intelligence Unit (sponsored by IBM and ARM) involving over 800 executives around the world looked into the issue. This suggested that fewer than 10% had extensive IoT implementations, although many had dipped their toes in the water.

More positively, around 25% stated that IoT adoption was sparking innovation within their organisations with 22% indicating that IoT offered new opportunities, 20% saying it was changing business models and 16% believing that it was enabling entry into new markets and initiatives. So the overall picture is quite positive about its transformational potential.

Only 15% believed that IoT would significantly reduce costs, suggesting that IoT adoption is more about re-imagining their businesses than old fashioned cost cutting.

Interestingly enough, few executives saw technical issues as blockers to adoption. The key constraints cited were the Size of Investment needed (29%), Security and Privacy concerns  (26%) and lack of CxO Knowledge and Commitment (23%). 

This points to a smoking gun around Cost and Executive Behaviour / Team Buy In.

IT Leader Perspectives

Interestingly enough the British Computer Society's (BCS's) survey on Digital Leadership shows some mismatches.

Over the last 4 years the principle concern of IT Leaders in the Digital Space has been Security (averaging 60% of responses, plus or minus 2% over this period). The second most important concern has been Cloud (at 50%). In the last 2 years, Governance has moved into third place at 35% followed by Agile and Big Data at around 25-30% each. IoT was only cited by respondents as a major interest by 18%. Although Cloud, Agile and to some extent Big Data are involved in IoT adoption.

This suggests 2 things. Business Executives are over confident about implementation issues and that IT Leaders have a mismatch in alignment and understanding with business aspirations.

IoT Success Factors

So it appears that CxOs need to get together and agree a common vision and set of priorities. IT Leaders need to build IoT into their plans and there is a need for education and collaboration to get a coherent approach in place.

Are You as a CxO The Real Culprit?

Digital Impacts on Business

In a recent article in the Sloan Management Review, it was mentioned that 87% of executives think that Digital will affect their market place. Yet out of the 75% who thought that their enterprises are adequately prepared, only around 10% saw it as a potential threat to their business.

This is only one symptom of the many aspects of CxO behaviour which are affecting the success of organisations which want to adopt a digital business model. Overall, there is often a lack of realisation that the CxOs themselves are inadvertently sabotaging their organisations' efforts.

Executive Behaviour Can be a Problem

In many cases, in the same manner that many executives don't understand what it means to be a project sponsor, CxOs have failed to actually engage with the issue. They don't seem to think that they should spend the time to get involved in deep market analysis and identify real game changing opportunities. They just want to automate yesterday with some sexier technology.

Additionally, they don't get the need for acting as a joined up team or building a positive culture which supports experimentation and innovation. In fact, many executive teams don't seem to understand that innovation means doing something that no one else has done before, so there are bound to be a few issues along the way as a product team discovers what works and what does not.

David Snowdon provided a great framework with the Cynefin model to explain what is involved with emerging practice and chaotic conditions.

This is why the DAF (Digital Adoption Framework) places significant emphasis on cultural change as promoted in The Way of DAU. Culture is a known inhibitor to strategy implementation, as witnessed by the well known quote that Culture Eats Strategy for Breakfast. Culture change starts with the C-Suite and ripples down. So any CxO looking for digital success, should be asking whether he or she needs to reach out work with C-suite peers to build a better team. Otherwise, failure beckons.

Executives Need To Learn How to Promote Innovation

On another tack however, a research based article on innovation and executive behaviour published in the Harvard Business Review, outlines some personal behaviour characteristics of entrepreneurial CEOs and other top executives: 

• associating, 
• questioning, 
• observing, 
• experimenting, 
• networking.

Their observation was that CEOs in successfully innovative companies take more ownership of innovation, look outwards and provide leadership to the innovation process and get personally involved.

Bitcoin's Sticky Plaster

It appears that moves are afoot to try and save Bitcoin from its scalability problem. It can only handle a few transactions per second due to the distributed ledger nature of blockchain (Bitcoin ledgers are replicated over roughly 200,000 computers) and the compute intensive nature of the calculations required to ensure transactional integrity. Also fees for processing transactions are high, making small payments impracticable.

Enter stage left an idea called Lightning Network which is based upon establishing a private channel between 2 parties through which multiple transactions can be routed for a finite period of time. At the end of this time, the channel closes and reconciliation of the final state is broadcast under a single transaction. This enables quick initial transactions and reduces fees. It also includes protocols for dealing with any claims one party has against the other.

Apparently, a number of startups (e.g. Acinq and Lightning Labs) are bringing inter-operating solutions to market very soon which exploit Lightning network. The question is will this be effective. On the one hand, one can see that for B2B trading, it has some advantages and it may work well for B2C transactions where there is an account relationship, with say monthly statementing. However to my mind it is moving Bitcoin from being a cryptocurrency and into the realms of becoming a crypto credit card. Given the current mood for regulation, this means that Bitcoin could get dragged into the scope of consumer credit regulation, which as it will cross many jurisdictions is a potential night mare.

So on the one hand, Lightning Network may help. On the other it may cause immense complications. So, it may be an accelerator for certain types of trading, but it is not a universal panacea.

The Bitcoin Rollercoaster

Bitcoin has been in the news recently for a lot of the wrong reasons. In one article, the results of an analysis of unusual trades suggested that the recent Bitcoin price may have been manipulated by a single person. Which, if true, underlines recent decisions of regulatory authorities in China, Korea, India, the UK and even Bali and the Philippines to pay more attention to either blocking or regulating its trade.

At the same time, the extremely volatile price dropped dramatically to under $10,000, raising squeals from some late-to-the event me too investors who saw their holdings half in value overnight. There is a great graph from Sentifi showing the correlation between various announcements, romuors etc. and costs in an article from the Singapore Business Times.

Meanwhile a number of billionnaires have been meeting at the Crypto Finance Conference in St Moritz with Blockchain entrepreneurs, government officials and investment managers to discuss opportunities in cryptocurrencies. So as I mentioned in a previous blog, Bitcoin was last years most successful proof of concept experiment. The appetite for investment has been established. The markets for trading are emerging and regulators are getting in on the act, hopefully to make things safer.

So it looks like there will be a lot more ICOs soon.

Digital Reputation Is All

In some of my early posts, I likened Digital Disrupters to Vikings, in terms of being fast moving, launching asymmetrical market attacks and continuously changing their angle of attack to pursue value, whilst using light weight tools, agility and simple instrumentation to facilitate this. 

Latterly, I have been stressing reputation, which was important to vikings too. In fact some people would say that a Viking's name and reputation were more important to him (or her) than gold and land. As they wanted their reputations to last for ever and reputation was a strong means for recruiting a band of warriors for the next viking voyage or raid.

In the digital world, reputation is important to digital enterprises, becasue customer loyalty is much more volatile than with traditional businesses and a whole new set of organisations are embracing Customer Care (CC) as well as Customer Experience (CX) in what could be termed C2X. I touch on this in my book ( The Way of DAU ). If culture eats strategy for breakfast, then loss of reputation destroys company value for lunch. A strong digital brand should have a positive and engaging reputation based on positive values.

A recent story about Cloudflare in Wired, is a salutary lesson about reputation and proactive reputation management. For those of you who don't know about Cloudflare, it provides a cloud service for intermediating and absorbing DDoS attacks. It does this by sitting between a cloud service and its users and sampling traffic to detect patterns associated with DDoS attacks and filtering out any DDoS transactions against the service.

The founder & CEO, Mathew Prince, takes a strong stand on Freedom of Speech so is happy to provide services to some organisations which many may find distasteful. Interestingly enough early experience with escort services in Turkey showed that learning to protect a service which many people attack, actually improved the overall capability of the DDoS service to defend against similar attacks against more innocent targets.

Cloudflare relied on simply stating its position and liberal principles which are enshrined in the American Constitution. Unfortunately this was not enough and providing services one particular Neo Nazi organisation began to lead to a snow ball of assaults on Cloudflare's reputation, until the CEO felt compelled to take action and modify their stance on what protecting free speech actually meant for the company, leading to the banning of this particular customer.

This goes to show that reputations have to be actively managed and part of this is continuing review of an organisation's ethical stance as well as actual customer experience is essential; something which might be termed Ethics Sustainability, Customer Care and Experience (ESC2X), with the accronym pronounced Essex, redefining the old joke about someone with a lisping estuary accent saying that "Ethics isn't a place East of London".

At the same time, many other people and organisations are beginning to question what free speech should mean on the web. To my mind, with freedom comes responsibility, as I define freedom as the right to make your own decisions and mistakes, and not to have them imposed upon you. This is a two way deal. In the Cloudflare example, the Neo Nazi organisation appears to have gone beyond free speech to threaten and bully people, as well as slander the leadership of Cloudflare by implying that they were sympathisers to their ideology. So they broke the free speech contract and deserved to be kicked off Cloudflare's service. Cloudflare probably needed to encourage more debate about their stance and code, as part of their overall leadership practices.

It's not Brexit which Challenges London's Fintech Position

Whilst people have been focusing on the local broo-hah-ha of Brexit and worrying about whether Paris will steal London's FinTech crown, another competitor has been quietly getting on with its plans for dominance.

Singapore boasts the worlds largest Fintech Exhibition and has been building relationships with other ASEAN countries and organisations. The most tangible evidence of this is a pact with Hong Kong to build blockchain supported trading mechanisms between their financial trading exchanges, with over 20 banks already signed up to participate. This promises to be a classic implementation of Blockchain doing what it is good for, whilst keeping within the current scalability challenges of Blockchain's distributed ledger approach.

Interestingly enough, singapore sees great opportunities for Fintech as Asia currently has what is referred to as a massively unbanked population, i.e. one where most people don't have bank accounts. This is probably a once in a lifetime opportunity for banks to gain a massive increase in customers and lock them into their ecosystem if they pitch it right. The consumer based lifestyle opportunities that digital products offer are only fully addressable if consumers have an electronically based payment means available to them. So there's a choice for them: banks or crypto currencies.

Who wins out in this market where consumers are notoriously suspicious of banks, but authorities want to clamp down and regulate crypto currencies is anyone's guess. But there seems to be lots of opportunity.

Digital's Impact on the C-Suite

One of the interesting things about Digital Adoption and Transformation is the way in which it is impacting roles in the C-suite.

In some early adopters, the default leader for digital transformation was the CMO, as digital marketing initiatives picked up and marketing ran away with the ball.

In second wave adoption there has been a bit of a split between whether a specially appointed person, the Chief Digital Officer, should manage the business's strategic response and run all things digital. In others they have handed this to the CIO. Though occasionally the CEO has decided that this is too important and grabbed the reins him/her-self. The longer term trend does appear to gradually hand this back to IT and CIO (as discussed in previous posts).

However, there is a growing realisation, as discussed in a recent Forbes article, and in my book that culture is crucial to success. Culture needs to be aligned to a number of positives:

• Collaborative working across functional siloes
• Product and value focus
• Opex Thinking
• Tolerance of Experimentation and alignment of Risk Appetite with Value and Learning from Failure/Experience
• Customer Focus

Apparently, this is now leading to the situation where enterprises are beginning to appoint Chief Culture Officers.

Additionally, some are also appointing Chief Customer Experience Officers to reinforce the idea that the key value proposition of Digital is Excellent Customer Experience. Although in design led organisations this may be Chief Design Officers who are also interested in the customer engagement by design thinking.

One of the questions that we have to ask is how will this mature? at the end of the 19th Century as electricity started to be adopted, some organisations flirted briefly with Chief Electricity Officer roles, but they did not last long.

Will Chief Culture Officers be subsumed into Chief HR Office roles and will this change the face of HR for the better? will customer experience revert to the Chief Marketing Officer, or will CIOs hybridise and pick up aspects of these roles as part of the CDO element of their job as they delegate more technical aspects to CTOs. Or will CTOs have to become more human?

Whatever happens, CxOs will all have to rethink what their core attributes and operating models should be. Digital required disciplined team play, as well as skills and flair.

Singapore's Digital Transformation

Asia is known for the appetite of its businesses for innovation and within Asia, Singapore is often seen as the leading city for innovation and innovative thought. So it's interesting to see the results of surveys published in the "The Business Times".

In 2016, 49% of business leaders were said to be in denial of the need to for Digital Transformation. Yet by 2017, in another survey, only 16% of organisations said they had done nothing about digital transformation. Interestingly enough 50% were actively progressing a digital strategy and about a third had a strategy, but had not really got going on delivering it yet.

This is reinforced by claims in a ZDNet article  that over a quarter of businesses see Digital Transformation as essential to survival. The Singapore Business Federation has expressed concern that a significant proportion of businesses have not made a start on any form of business transformation and within this section two thirds demonstrate lower than average profitability.

However the latter survey was not without its apparent contradictions. three quarters of the survey respondents thought that new data insights would lead to new revenue streams, yet their highest priorities were customer engagement, optimising operations and empowering employees. Transforming products and enabling new business models trailed in at 4th in terms of priorities.

When it came to enabling technologies, Big Data (for Insight) was not mentioned. IoT was the leading technology, followed by AI, then wearable technology, and VR, followed up by quantum computing. Again this does not appear that consistent with enabling the stated priorities.

So whilst the enthusiasm is there and appears very strong, the clarity of thought appears to be not quite crystalised. Perhaps this is a symptom of rapid change in attitude.

Interstingly enough, the top 3 roles associated with leading digital transformations in the 2017 survey were CDO, CIO then CEO. CMOs appear to be out of the running there.

Enterprise Digital Adoption

Last Year's CIO survey by Harvey Nash and KPMG pointed to the resurgent role of CIOs in taking responsibility for driving enterprise digital agendas. This goes with rising acceptance and adoption of Digital As Usual (DAU) or Digital as the New Normal.

Yet a recent article from MIT Sloan business school (by Gerald Kane) pointed to the blindness that appears to exist in many large corporations. 4 times as many CxOs see the opportunities as those who recognise the risks that digital poses to them. They don't seem to recognise the competitive risks or the erosion of brand loyalty which is much more volatile amongst digital customers.

Interestingly enough, nearly 90% of CxOs appear to believe that digital disruption will affect their businesses, but less than 50% believe that their businesses are properly prepared to address the challenges.

So there is an apparent disconnection between CxO understanding and reality, when it comes to addressing digital challenges.

Another survey, this time from Deloitte, may provide some diagnostic context. This survey show that CIOs basically operate in 3 different modes: Trusted Operator, Change Instigator, and Business Co-creater. 55% are still locked into the Trusted Operator model, whilst a third claim to be operating in Business Co-creator mode. This number needs to double, if CIOs are genuinely going to help lead digital adoption.

In another diagnostic produced by the survey the top 5 priorities were listed (in descending order of priority) as Customers, Growth, Performance, Cost and then Innovation. Showing that priorities are starting to move towards a digital friendly model, but are not quite there yet. As TQM gurus such as Demming said, focusing on Growth and Cost above quality (which is not really mentioned) leads to higher costs and lower growth. Also, Digital Customers expect Innovation, Experience and Ethics above everything else. Note, previous surveys had put Customers lower down the priority list, so this does represent some gradual cultural progress.

Interestingly enough the survey identified a number of CIO capabilities as core to success: Strategic Alignment, Execution, Vision and Strategy, Innovation and Talent & Culture, which at least recognises the criticality of culture to positive digital exploitation.

Putting this together, what does it all mean. One diagnosis would be that existing enterprises will gradually learn to adapt, but they are not quite there yet. So whilst they will survive, they are still leaving room for innovative companies to enter their market places or create new market places and grow rapidly to become competitors. So the composition of the FTSE 100 and definitely the FTSE 250 is going to change significantly over the next few years.

Human AI Integration Gets Closer

In another mind-blowing breakthrough TNW (the next web) reported on an AI which reads and interprets human brainwaves to understand what you are seeing.

Although this is early days, as a proof of concept it is very powerful, showing that the ability to read and interpret human thoughts and senses reliably is not as far away as you would think.

Obviously there is still a lot to do to refine this particular example, as it focuses on sight and recall of images only, but it definitely puts Elon Musk's vision of direct HCI integration into the next twenty years of achievability (allowing for the need to deal with volumes of data and presentation, psychological and ergonomic issues, as well as security and miniturisation.

But it's definitely coming. So there's an ethical debate to be had too around privacy and safeguards.

Also, recently there have been reports on brain hacks to use AI to control electrical stimulation of the brain and improve its performance.

More prosaically, adoption of implantable chips in people is growing; at present, see Brian Jonhson's video, the chips are for single function usage, e.g. access control or train tickets, but the potential is there for multi-functional  implantable chips with flexible reprogramming. So the seeds are being being sown for full human computer integration, and the potential for embedded AI enhancement.

This leads to the question of how obsolescence and technical upgrades will be managed as current approaches to patching are likely to be inadequate.

Updated 9th Feb 2018

The Value of Data

Today I realised that the evidence for Digital being the New Normal was compelling when I read about the way that the agricultural industry is embracing IoT, Big Data and Machine Learning (see: FoodIT: Fork to Farm ) which provides comprehensive overview of the 4th annual conference examining how to join the ecosystem from consumer to farmer up, so that farms respond to consumer tastes, improve yields, avoid waste and provide the provenance etc. that consumers now want. There are great opportunities to provide the next Deliveroo for farm products and by-pass the super markets entirely. This would greatly improve profitability for farmers and the experience for customers as they get fresh, seasonal, sustainable, quality products directly. It could also bypass the scandal of the modern monopoly of slaughter houses, if the right investments were made.

I especially enjoyed the redefining IoT by the conference as the Internet of Tomatoes, spelling out how much the industry has got into it.

There were also some interesting predictions for Data in another couple of articles on the data makes possible  site by Kirk Borne of Booz Allen Hamilton about trends for this year. Personally I found his comments on graph analytics the most compelling as this is an area of growing maturity in which it is now possible to easily uncover insights into linkages of cause and affect and networks of people and activity. He also had interesting things to say about hyper personalisation and realigning AI with a people centric model of mutual assistance to do more (similar to some of my previous observations). Finally he coined a new phrase DataOps to describe lean development approaches as applied to big data.

Does Your SOC Need Darning?

Microfocus (the new owner of much of HPE's former software division) has released the 2017 State of Security Operations Report.

This analyses the findings of analysis of the Maturity Model levels of practice in enterprise Security Operating Centres or SOCs. For those who are uninitiated, SOCs are a relatively new organisational construct within IT and are responsible for assuring that there is ongoing monitoring and analysis of an organisation's IT operations to ensure that vulnerabilities are detected, intrusions are caught and problems are rectified. Although there does seem to be a great deal of diversity in people's interpretation of the exact scope of this remit.

Maturity Models (see CMMI) typically categorises maturity in 5 levels which address process and practice standardisation as well as feedback loop control via metrics and optimisation. 1 is ad hoc, 2 is repeatable, 3 is uniformly standardised and so on. So most organisations will aspire to level 5 as an acceptable level of conformity. Though the actual scope of coverage is important too.

Many enterprises have adopted SOCs to help deal with the ongoing climate of cyber threats arising from things such as simple viruses,  spear pfishing, ransomware and Denial of Service attacks.

The report is quite sobering. Close to a quarter of the assessed organisations failed to achieve a score of even 1. only a fith appear to be making headway and the overall average score is less than 2.

The report finds that much SOC effort is wasted dealing with false positives arising from little standardisation and poor configurations of equipment. This underlines the operational hygiene issues of having accurate CMS data and consistency in build and installation. Knowing what you have and standardising as much as is practicable, does not just make it easier to operate an IT estate, but also to protect it by detecting anomalies and other problems. These are practices which not just ITIL but DevOps considers essential to robust operations and change management.

The report also shows problems with working out the right blend of insourcing and outsourcing as well as skills retention.

Overall there are signs within the report of slow but gradual maturing of approaches as well as better pooling of knowledge within organisations. But t is understandable, given the scale of issues that people face, that Splunk for instance promotes the adoption of a Lean SOC approach and gradual incremental implementation of SOC capabilities to address business priorities, 1 at a time.

The Launch of Human 2.0

CES is America's annual gadget show. Whilst the tech giants such as Google and Amazon don't normally announce much here, the ecosystem of companies who exploit products such as Android and Alexa/Echo use this as a platform for launching new products. Apparently, this year's theme is Voice as a host of home automation products, exploiting voice commands and Alexa's AI capability, are using CES as the platform for their launch. Although you may be interested to know that Alexa will soon be available on Windows 10, challenging Microsoft's Cortana assistant.

Meanwhile, the latest cool device in the Wearables arena has been announced by Innomdle. This is the Sgnl which is a wristband cum watch strap which converts your fingers into a telephone receiver. When paired with a phone, it transmits vibrations down your hand to your fingers, so you can hear your phone by touching them to your ears. The device also has notification and fitness features. Initial reviews are positive and the shipping date has been announced as March.

At the same time the range of new Wearables announcements include: 

• The Eagle a wearable home theatre system from Kopin and Pico Interactive. A key feature of this is that you retain awareness of the outside world, lending it to scenarios such as automated plant control.

• Omron's forthcoming Heartguide which promises to deliver accurate blood pressure monitoring (countering reports that many smart watches are innacurate);

• Fitbit's hint that it will be delivering blood sugar monitoring technology.

So what does this mean to people looking at digital exploitation? my thoughts are this is the year when Human 2.0 gets launched. What do I mean by this, well Human 2.0 places people at the centre of automation and control of an extended network of digital assets and automated devices. So a person can control an automated production cell or a power plant with integrated feeds of information, slave AI bots to carry out standard operating procedures, and all relevant KPI information and alerts fed to him or her. At the same time, a raft of wearables will monitor and tend for the person, as it is only a short step from wearable monitoring to automatically administering nutrition, hydration and medecines.

This means that most current concepts around Industry 4.0 need to change.

Brave New Worlds of Emerging Technolgies

People focusing on Digital Businesses often forget about all the other advances being made around them. However, many Digital Businesses rely on a fusion with other types of established and emerging technologies themselves. At this time of year, it is traditional to let optimism rush to one's head and indulge in a drop of futurism and see what might be coming around the corner. So whilst everyone else is getting excited by AI and cryptocurrencies, I thought that I might look at what else will change our lives, industry and society in general. 

ENERGY

Almost everything we do and all future innovation relies on a plentiful supply of affordable energy. In the big science corner, the champion for future generation is Nuclear Fusion. Although the last 50 years or so have shown that this is more difficult to deliver than originally thought in the 1970s, when governments started to put interesting amounts of money forward for research establishments and pilots. Recently, scientists have started to get more upbeat about it and make more promising noises.  Given the huge capital cost of building working fusion reactors, I think we are 20 years off a robust and operable design being commissioned as a working facility. The issue will be whether this is economic and makes sense by the time we get there. With current day technology, this makes sense as a reliable form of base power generation is needed to supplement renewables, which tend to fluctuate with tides, winds and daylight.

Renewables, however, are making rapid progress. The costs of producing PV cells for solar power have fallen dramatically in the last 20 years, whilst the means of encapsulating them in things like roof tiles and road foundations have advanced impressively. Hand-in-hand, research into battery technology is advancing well to improve energy density (energy per kilo of battery) and battery compactness and since Elon Musk launched Tesla, battery management system technology has advanced significantly to assure the likelihood that the internal combustion engine in its fossil fuel forms at least is likely to disappear in almost all new vehicles within the next 10 years. Although, in the case of China, if its vision for roads which also act as solar farms is fully implemented, vehicles will be able to recharge via microwaves or induction, whilst they drive over the road surfaces, reducing the emphasis on large battery storage.

The other outliers for adoption are hydrogen and geothermal. Hydrogen's issue is not really the amount of power needed to split water and produce a plentiful supply, it is a matter of energy density. Vehicles need to be roughly half the weight that they are now to make hydrogen propelled vehicles a practicable proposition. This is probably doable, but needs a revolution in the construction and manufacturing methods used to build them. Geothermal, is again interesting and promises much. However, geology and costs of drilling and extracting thermal energy in a usable form present difficulties for mass adoption. Although there does seem to be a good case for certain types of building in the right locality.

HUMAN CENTRED DEVELOPMENTS

It seems that we are now on the cusp of delivering a whole raft of medicines, treatments and devices which will address issues of ageing and disability. Medical science is gradually cracking the mysteries around many of the issues which cause dementia, wrinkles, poor cardio vascular health etc. and the promise is that not only will people live longer, but that they will enjoy better health for a longer period of time too. Other developments are advancing rapidly around artificial organs and body parts, using diverse techniques to grow or even 3D print replacements. So problems arising from wear and tear, disease or accidents will gradually be  addressed by grown parts rather than donor parts or metal joint replacements, and a wider range of problems will be addressed.

Although we are still at the very early stages of cracking the direct computer to brain interface, significant progress is being made in a number of point technologies for applications such as controllable artificial limbs with sensory feedback, bionic vision and bionic hearing. Further to this, there already is a small counter culture movement of people who have installed other sensory devices built into their bodies to provide feedback on things which extend the normal range of human senses, moving towards a cyber person model. 

Given other social trends around personal identity, sexuality and gender fluidity, it may well be that in 20 years time we will not only be living longer and healthier, but be multi-gender and cyber enhanced to extend our range of limbs, experience and senses. Though it is unlikely that we will get to the point of actually having 2 heads or additional gills for swimming underwater (as in certain science fiction stories).

On route to this, other automation developments offer hugely improved quality of life for disabled people who are still beyond treatment. The automated home is just about here. Many of the building blocks which let a relative look after an aged grand parent or invalided child at a distance are there awaiting universal adoption as an integrated home care package. Although in some cases this may require architects to rethink design and layout of homes to facilitate this. Autonomous vehicle technology promises to keep people mobile, when they can no longer drive and may even remove the need to learn or pass a test, offering greater freedom of movement to everyone. 

TRANSPORT

Whilst Elon Musk and some other ventures are worrying about faster mass transit systems and sending the first people to Mars, there are a significant number of people working on flying vehicles using multiple fans. Lighter materials, lighter and stronger electric motors, lighter batteries, improved automatic control and guidance are all making this practicable. The regulatory framework may not be there, but we are moving to denser high rise cities where 3 dimensional transport is needed to make them work. So in 20 years time, we should start to see mass adoption of Jetson style transport as envisaged in 1950s cartoons.

Matter transporters, however are unlikely to get there any time soon. Research is still based around moving photons and other very small particles around labs. Scaling out is going to take a long time.

THE WORLD OF WORK

Manufacturing and Industry have changed massively since the 1960s. Flexible automation, CADCAM, Lean Manufacturing, new processes and materials, biotechnology and Globalisation are only some of the things which have changed the way in which things are made. The 3D printer in its many forms is beginning to look like the new game changer. Whether it is for complex shaped parts, printing chemicals or assembling nanites, the basis for totally changing the production of goods is already there. The next steps will address the range of materials involved, sophistication of control over their properties and the overall economics. For many items, it may well be that we buy a licensed copy of a design and print what we want or need, be it clothing, kitchen utensils or prescription drugs. Manufacturing in China just to ship something to Europe (say) will decrease.

Offices, however, are interesting. It is repeatedly shown that people need to be together regularly in the same room to build relationships and trust in order to work effectively together. But other trends also mean that people are increasingly looking for portfolio careers where they work in several more flexible jobs at once. Additionally, digital business models tend to encourage the organisation of teams into smaller more autonomous units. So it is quite possible that offices and hotels will merge to provide flexible pay by use spaces with overnight accommodation, meeting rooms and VC facilities to enable more fluid and dynamic working. 

Towards the end of 20 years from now, brain computer interfaces may become robust and capable enough to enable working without screens or key boards. So much so, that people will be able to do office work whilst pounding away on a running machine or a rowing machine. The office will then gradually disappear.

CONTEXT OF DISRUPTION

China is aiming to be the next world super power. Africa is beginning to stir as an economically active continent (beyond subsistence and extraction or primary goods), South America is showing promise of delivering on its promise, whilst Saudi Arabia and the Middle East look increasingly unstable especially as oil revenues fade and other aspects of economic development fail to grow quickly enough. At the same time climate is changing, raising the likelihood that major cities everywhere will need to move inland or disappear. Global warming will happen irrespective of whether CO2 output drops or not, so viable crops and rain patterns will change in many countries. 

This will drive mass migration of people in many directions and change social attitudes, putting pressure on economic development. China could loose its manufacturing wealth to the changes in manufacturing methods which are coming. Raising lifespans will also change demand patterns. The downside being that some advances could kill others off.

It may well come to the point where countries start to build mass floating extensions to their landmasses to accommodate population growth and counter the threats of rising sea levels.

Bitcoin - Last Years Most Successful Prototype

By now most of us are tired of hearing about Bitcoin and its outrageous valuations. We all know that it is a bubble, but still the juggernaut ploughs on.

If you step back however, this is just the latest and most public example of a prototype which accidentally became the operational product. The history of IT is littered with them and most techies have experienced the pain of replacing a decades old legacy system which was never intended to do the essential mission critical function which it now performs. Unfortunately Bitcoin is a lot like this.

This does not mean that Bitcoin is a failure, just that it is limited and, in a spirit of Agile / Lean adoption, the world and the Blockchain industry needs to learn from the experience and move on.

On the plus side:

Bitcoin is a great technology pilot of the original Blockchain Protocol Specification written by the mythical Satoshi Nakamoto (whoever (s)he/they happen to be).

Bitcoin has been widely and enthusiastically adopted outside the virtual world game space for which it was originally intended and is now often used in real world transactions.

Banks have started to trade in Bitcoin just like conventional currencies.

Other cryptocurrencies have become viable as a consequence, e.g. Ethereum.


Where we need to learn to do better:

Bitcoin and vanilla Blockchain don't have scaleable architectures. there is a limit to the number of coins which can be mined. Transactions and mining consume excessive amounts of power, so Blockchain now has the power consumption appetite of a small country. Transactions have now become as slow as traditional clearing system transactions.

Bitcoin never exploited the conditional contract features of Blockchain. This remains an area which is under exploited in many other Blockchain implementations outside the currency area.

Bitcoin has become an unregulated market. Some analysts refer to it more as a repository of value, than a currency. Its value has become extremely volatile due to over speculation. It definitely has attracted exploitation by criminal networks, leading to China's decision to ban it. The bulk of its coins are owned by a small number of people or organisations, offering the opportunity for extreme and pernicious manipulation.

There are multiple platforms and technologies, but no apparent standards body to facilitate evolution and interoperability.


So where next and what is the future? To me one of the big questions for future cryptocurrencies is around regulation. The thing which made bitcoin so interesting to many people was its global ubiquity, unshackled by government regulation. Governments have become interested and think that they should involved. At the same time, many consumers distrust governments and see this as just another way to extend the modern feudalistic grip of their taxation systems. Additionally, as all national currencies are now based on promises or monetary brownie points rather than any tradeable commodity such as gold (with its notional intrinsic value) there is no reason why a consortium of international banks or other businesses/stakeholder could not do this equally well and there is even an opportunity for the United Nations to flex its muscles and get involved to deliver a truly global and frictionless currency. This could have implications for current leading currencies such as the US$ which dominates world trade due to early 20th Century International Agreements to use it as the international currency for shipping.

Additionally, quantum computing offers both enablement and risk. The complex mathematical protocols involved in mining currency and validating transactions would easily be handled by quantum computing, lending capacity to deal with volume scalability. However this same risk, also could undermine some of the security built into Blockchain.

Whatever the future, I believe that 2017 is the year that Bitcoin peaked and it is now time to hand over the reins to other successor cryptocurrencies.