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Next week I am attending the Smart City Expo World Congress in Barcelona. I’ve have been an attendee, exhibitor and speaker at this annual gathering for many years now, and it’s great to see that in the past couple of years there has been a growing focus on inclusion.

Gone are the days when speaking about bright and shiny new tech toys was enough. Cities are eager to understand how to become truly people centric, including for people with disabilities. On the inclusion front, one topic that I’d like to hear more about at the Expo, in 2022 and beyond, is how to make cities autism friendly.

A Global Phenomenon

According to the World Health Organization, one in every 100 children has autism spectrum disorder (ASD). The US Center for Disease Control estimates it is one in every 44 in the US. If we consider a conservative estimate of one in every 100, then of the 4 billion people worldwide that live in urban areas, 40 million would have ASD. UN projections indicate that we’ll have 7 billion urban dwellers by 2050, meaning 70 million with ASD, assuming the prevalence of ASD does not change.

Autism is a challenging neurodevelopmental disorder. It’s a broad spectrum that includes people with cognitive, speech and motion disabilities, people with milder challenges but that still have a hard time speaking and socialising, and people with high-functioning autism (such as Asperger’s Syndrome), who can be like the genius “good doctor” in the TV series of the same name, but with the crying, screaming and lashing out when overwhelmed by stress, shiny lights, loud noise or unexpected events — stress that can be caused by hypersensitivity to noise, light, smell, touch and an inability to comprehend social interactions. Coping with ASD in a hyper stimulating environment like a city is like trying to share a file between a Mac and a PC in 1985. I know this because I have a beautiful eight-year-old son who has ASD.

Making the Urban Space and the Community Liveable

Making cities liveable for the millions of people that have ASD is a global inclusion imperative. Cities such as Aberdeen, Edinburgh, Liverpool and Glasgow in the UK; Phoenix, Mesa and Austin in the US; Prato in Italy; and tiny villages such as Clonakilty, in Ireland, are exploring how they can reimagine urban spaces and community services to become more autism friendly.

When it comes to urban spaces — both indoor, such as shops, theatres, cinemas, restaurants, museums, public transport, and outdoors, such as streets and parks — unpredictable noises, lights, smells and queues may cause sensory distress to people with autism. Adjusting ventilation, acoustics, heating, lighting, creating quiet spaces to recalibrate after a stressful moment, deploying visual signage that combines words with images, making available sensory guides and social stories to reduce the unexpected and making available small kits with “stim” toys can go a long way to improve liveability for people with autism.

When it comes to the community, lack of awareness about autism can lead to judgements. Autistic people talking to themselves in a library, for instance, can get unfriendly looks. As a result, people with autism and their families tend to isolate from social life.

It’s essential to educate people working in shops, restaurants, cinemas, museums, libraries, schools and healthcare facilities. Business owners need to understand how they can leverage the great skills that many autistic people can bring to the workplace, such as declarative memory.

Government institutions have a role to play to provide coordinated support across family allowance programmes, mental health services, job training and placement, and schools, without requiring people with autism and their families to explain their condition and needs at every point of interaction with the public administration.

How Technology Can Help

Technology is not a silver bullet. Cities have had enough smart techno solutionism. Autism is the least suitable area for cookie-cutter approaches because every person with autism is at a different place on the “spectrum”, with their own special characteristics and needs. But technology can help.

When it comes to urban spaces, using location-based intelligence, digital twins and other tools can help map areas of the city that are the least liveable for people with autism and plan alternative designs. Apps can be used to offer people autism-friendly sensory and navigation maps.

When it comes to the community, online training can help increase awareness. Apps can help communicate with people with autism who are not verbal.

Online services can be used to pre-book fast-tracking entry at certain facilities to avoid the stress of queueing. And public administrations across the city ecosystem should scale trusted data sharing to do a better job of coordinating public services that support people with autism and their families.

I look forward to hearing and learning more about autism-friendly cities at the Smart City Expo and beyond. My son and the tens of millions of people with autism deserve to be included.

Massimiliano Claps - Research Director - IDC

Analyst Profile

Massimiliano (Max) Claps is the research director for the Worldwide National Government Platforms and Technologies research in IDC's Government Insights practice. In this role, Max provides research and advisory services to technology suppliers and national civilian government senior leaders in the US and globally. Specific areas of research include improving government digital experiences, data and data sharing, AI and automation, cloud-enabled system modernization, the future of government work, and data protection and digital sovereignty to drive social, economic, and environmental outcomes for agencies and the public.

On October 13 and 14, IDC Retail Insights Team Europe joined AWS for a two days’ AWS London Analyst Tour to give first-hand examples of how technology enables innovation of the entire retail value chain, transforming retail fulfillment and physical store operations to better serve customer experience in real-time.

On day one of the tour, the analysts visited two fulfillment centers, Ocado’s CFC4 fulfillment center in Erith, and Amazon’s Tilbury fulfillment center (FC), while stores in Central London were the focus of day two with visits at Amazon Fresh in Hackney, Sainsbury’s in Holborn and Nike Town in Oxford CircusIn this post, we briefly summarize what we saw during the tour and why this is significant for the retail industry.

Automation for Efficient and Sustainable eCommerce Fulfillment: Day One, Ocado’s CFC4

On a cloudy Thursday morning, we left St Pancras for a one-hour minivan ride to Ocado’s CFC4 in Erith, East London. The site, a 600,000 square feet fulfillment center, is the company’s largest CFC globally and does stand out for the high level of automation that characterizes the facility.

Erith’s CFC4 is an outstanding example of the application of Ocado Smart Platform (OSP) in large-scale grocery distribution. OSP is Ocado’s proprietary technology that leverages a combination of AI, machine learning, robotics, IoT and data science to boost efficiency and flexibility in highly complex end-to-end eGrocery operations.

According to Ocado, OSP improves dramatically efficiency of fulfilment operations—99.9% fulfilment accuracy vs about 80% of other leading UK supermarkets—and ensures waste reduction by making operations more sustainable. Logistics and fulfillment operations play a huge role in meeting customers’ expectations, improving efficiencies and making operations sustainable, currently among the top retailers’ priorities.

That is why more and more retailers are deploying advanced analytics and automation to streamline logistics and fulfillment. Over 70% of retailers confirm their plans to adopt AI and cognitive for order orchestration and robotics for warehouse automation, latest IDC research reveals.

As we visited the facility, what stood out was the large area dominated by a seemingly immense grid surface on which thousands of bots move around at lightning speed in apparently random directions. On the grid, bots travel at a speed of 4 meters a second, with 5 millimetres of distance between them.

Of course, their journey on the grid is not random. Bots are orchestrated, not autonomous, and operate through a proprietary RF solution designed by Ocado to ensure ultra-low latency which is needed given the high density of the bots on the grid and the speed at which they move around. Ocado partnered with AWS to run its thousands of OSP’s microservices in the cloud and ensure bots and operations orchestration.

The circa 3,000 robots are working non-stop for 20 hours a day, picking up to 2 million food items in a shift from 50,000 individual chilled and general grocery products. An average 45 items grocery order is completed in 5 minutes. Scalability and the impossibility of a single point of failure, both ensured by the modular nature of the OSP and its orchestration on AWS cloud, is the huge advantage of Ocado’s technology stack, which makes it suitable not just for Ocado’s operations but also to the requirements of other grocery retailers worldwide—including Groupe Casino, Auchan, AEON and Kroger, who partnered with Ocado to power their eGrocery operations.

Empowering Workforce in eCommerce Logistics: Day One, Amazon’s Tilbury FC

Sun was out as we approached Amazon’s FC in Tilbury in the afternoon. The Tilbury FC is one of the largest European Amazon’s TC, with 2.2 million square feet facility over 4 floors.

The FC is highly automated with extensive use of technology including robotics, AI and computer vision in all aspects of operations, all brought together and enabled by AWS cloud-native services. Over 2,000 people are employed at any given time in the facility, showing how despite the high level of automation, the employee remains key in retail fulfilment operations.

The FC provides a great example of augmented workforce by showing how technology is helping people to work efficiently. According to latest IDC Retail Insight research, 43% of retailers consider as a high priority to empower their staff by providing employee experience services, with the right technologies and tools to perform tasks timely.

We started our visit from the sorting stations, located on level 2,3 and 4. At this stage, staff pick items from boxes received from the inbound area, and put the products in yellow stacks based on their weight. Lights are guiding the staff by showing them where to place the item in the stack. The stacks are then moved around by an army of about 4,000 autonomous bots that fit under the stack and use AI and algorithms to sequence the tasks they need to perform.

QR codes printed on the floor are scanned by bots’ cameras and sensors to make them find their way around the massive facility area. While bots are fully autonomous and not controlled by humans, employees in control areas—workstations that look like bank’s trading rooms on which operation flows are shown on numerous displays—overlook every aspect of the process and alert colleagues on the shopfloor if any issue arises.

The next step is the picking area, in which staff collect items from the stacks and place them in black boxes, or totes, in a reverse process. The products are picked in sequence, so at this stage, the staff is not putting together a single order, but rather an aggregate. The boxes are then placed on spiral conveyor belts that move the totes down to the ground floor to the packing stations, where employees pick items from the totes and place them in pigeon-hole wall units, in which each hole corresponds to single customer orders.

On the other side of the wall, staff members pick items from the holes, pack them in single orders and put barcodes on the boxes for identification.

In the last mile of the process, the boxes are placed on a conveyor belt in the slam area, where robotic arms scan the labels and check if the weight of the box matches the content the label describes – if not, the box gets expelled from the belt for a member of staff to check it up. At the end of the conveyor belt, employees pick the boxes and place them in containers that are forklifted on outbound trucks to be taken out of the facility to sortation centers closer to the end shopper for last-mile delivery.

Unleashing the New Role of the Physical Store: Day Two, Central London Stores Tour

Hailed by another cloudy morning, day 2 focused on the application of technology in physical store environments to deliver more engaging, frictionless, shopping journeys and improve the customer experience. The physical store remains crucial in omnichannel retail, but its role is changing as the brick-and-mortar store becomes increasingly connected and integrated with the entire omnichannel experience. The visit offered great examples of how the role of the physical store is evolving in the context of today’s omnichannel shopping complexity, as we cover more in-depth in IDC PeerScape: Practices to Enable the New Role of the Physical Store.

We started our tour at Amazon Fresh convenience store in Hackney, one of the most recent additions to Amazon’s autonomous stores network in London, and continued the morning with a visit to Sainsbury’s first autonomous store, Smartshop Pick & Go, in Holborn.

The two stores deploy AWS technology—cameras, sensors, AI, and computer vision— to offer a fully automated grocery shopping experience that removes any possible point of friction, making the trip to the shop quick and effortless. Shoppers can scan their app to be identified as they enter the store, pick up items from shelves, and walk out without going through checkouts as the technology detects shoppers’ purchases and charges them accordingly through their app.

We ended our tour with Nike Town in Oxford Street, the company’s flagship store for the UK, for an example of what experiences technology enables in non-grocery physical store shopping. While with the grocery stores priority was given to reducing frictions, the focus of the application of the technology in the sportswear and lifestyle brick and mortar retail store rests on the personalization of the customer journey and in merging digital and physical.

The Nike App is the interface that enables the shopper to access personalized offers, benefits, and experiences, such as Find and Research, which enables shoppers to reserve an item on the app for in-store collection, Nike Scan, through which shoppers can scan barcodes on the item to access product information such as sizes and color availability and request store staff to try the item on, and Triggered Reward, which sends shoppers personalized alerts on exclusive promotions based on their location in the store.

Key Takeaways: Learning Points from the AWS London Analyst Tour

What we saw during the AWS London Analyst Tour are significant examples of how technology is instrumental for retailers to streamline future-proof omnichannel retail operations. As IDC’s recent survey results show, over the next two years retailers plan to invest in incremental and emerging technologies to improve new customer loyalty mix and CX personalization, enhancing sensory and immersive commerce.

At the same time, the Tour confirmed how leading retailers are already preparing for the future of omnichannel retail. Ocado showed us how to drastically increase efficiencies and pursue sustainability goals through clever automation.

Amazon reminded us that automation and AI need to empower the workforce, as staff remains key to navigating the complexity of today’s omnichannel fulfillment. Finally, the visits to Amazon Fresh, Sainsbury’s and Nike Town are significant examples of how to transform the physical store to make it a central piece of the new omnichannel customer journey.

Since we last reported on IT inflation in June, the situation has evolved as both buyer and supplier behaviors have adapted to the new reality that inflation is most likely here to stay. The reasons for the price increases may be changing, as well as the areas of IT most impacted, but navigating rising prices for IT supplies, services and talent remains a challenge as we finish 2022.

Hardware

“Technology buyers have now had a full budget year to adjust to the reality of rising costs. What began initially as COVID-related supply chain disruptions coupled with COVID-related demand for remote work technologies soon erupted into huge price increases for key IT components such as CPUs, storage, and cabling,” says Chris Murphy, VP for IDC’s vendor benchmarks. Looking back into the Summer of 2021, this was the start of the first IT hardware increases lasting into first half of 2022, a period with 20% price increases on client devices and 15% on servers, storage, and networking respectively, as vendors could no longer absorb rising component costs which kept prices relatively stable from the start of the pandemic early in 2020.

Now entering the Fall of 2022, our review of hardware list pricing history and recent transactions with customers show that hardware price increases have been minimal. Stability of hardware prices is a positive trend but not a full correction to the normal price dynamics of hardware in which prices decline as a hardware generation ages. Much like used cars holding their value, the cost of technology as measured by performance or capacity is stable. Last year’s hardware offerings continue to sell for roughly the same price this year, with newer generation hardware costing more, therefore upgrading hardware with newer technology still costs more that pre-COVID. The net effect is that IT budgets are still being stretched by the cost of hardware. Stable prices are an improvement from earlier this year, but a hardware market without price decreases is still out of the ordinary and costing technology buyers more of their IT budget.

Software

Unlike hardware, software costs are not influenced by supply only by demand. During the height of the pandemic, key software categories led the transformation to remote work, leisure and learning and price became no object for many technology buyers who needed to enable these solutions. As the market moves past COVID, software vendors in most categories have found a way to extend user acceptance of higher prices. The race to subscriptions is accelerating and many vendors have discovered new ways to influence conversion like requiring a subscription over perpetual licensing for portability to the cloud. Annual subscription terms cost up to three times higher than a software maintenance renewal, and therefore subscription conversion provides vendors in most cases an automatic increase in annual revenue from a customer.

Subscription licensing and its outgrowth into PaaS and SaaS-based implementations shifts pricing power to the vendor. A user can no longer waive support and continue to use their perpetual licenses or seek out a lower cost third party software support provider. Vendors who have wooed customers into their PaaS platforms with low cost or free services to create applications and integrate their data, are now capitalizing on the “stickiness” created. Users can no longer separate and shop for the most economical hosting options for infrastructure. Renewal discussions have a clock that runs in the vendor’s favor and comes with poor choices for migrating to any near-term alternatives if discussions fail to achieve user goals.

For these very reasons, private equity interests have accelerated their push into software. Large conglomerates Broadcom and the newly formed Cloud Software Group (Citrix/TIBCO merger) will continue to capitalize on user software technology setups that are difficult to abandon, and these conglomerates are trying to make it even more complicated to negotiate on price by creating bundles and dependencies between solutions to achieve the best pricing. “Recent customer experiences show flat installed base renewals running up to 400% higher in price among these conglomerates, and that will incent the investors of these conglomerates to further tailor price extraction methods and find more acquisition candidates to move to their umbrella,” says Neil Stewart, a Senior Research Director in IDC’s Sourcing Advisory Service.

Even those software vendors not part of a large conglomerate realize that the environment is ripe for raising prices whether it is just feeding off the bandwagon effect of the conglomerates, the expectation of future inflation or the resignation among users that software will cost more. Most software historically has around a 3-4% annual increase in price at renewal, increases are not new, but in 2022 software vendors are pushing this range to 6-10% price increases.

Labor

AWS recently raised consulting day rates by 7-8%, Adobe increased pro-serve rates by 20% and plenty of more examples exist as the cost to deliver professional services continues to rise due high demand for this service and a corresponding critical IT skills shortage. Will demand for these services continue or is the knee jerk reaction to build the new post COVID technology infrastructure that is now nearing completion. Recent rounds of layoffs within the high-tech community may alleviate labor shortages, but their focus will be on internal operations. The security or Kubernetes expert is expected to remain in high demand.

Infrastructure as a Service

Following both general component price declines and increasing operational efficiencies gained by hyper scaling, cloud computing services have a history of average decline in price. This trend downward in price eased late in 2021 to where we are at present with most of the cloud providers now enacting price increases across their offerings as they are not immune to higher component, labor and energy costs no longer have as steep of an efficiency curve as their businesses have matured.

Advice to Technology Buyers, Can You Wait?

This very well may be “peak market” from a technology cost standpoint, no category hardware, software, labor nor services is immune to increased cost. Being selective on new installations, expansions, renewal terms and projects conserves limited IT budgets and acts as a hedge that markets work in cycles and buying conditions may become more favorable soon. Instead of doing a storage upgrade now while storage controllers are scarce and generally reserved for new installations, wait, and buy a complete storage replacement later.

For software, finding savings might be trickier as software vendors are having their moment to shine with higher prices, but besides working closely to optimize usage to spend, many users are shortening renewal terms from 3 year to 1-year terms. This protects cash flow and bets that windfall price increases seen at present will not last if the economy changes for the worse as forecasted, making next year’s renewal more favorable to the buyer. This can be a risky move as 1-year terms can cost up to 30% more than locking into a 3-year term, but today’s market shifts the focus to the short-term given the mixed outlook that may bring relief to today’s exorbitant pricing, so why lock in large price increases now?

Our advice for professional services is similar, demand is still high for these services but there is plenty of good reasoning pointing to a return to a normal spend on digital transformation projects without the accelerators brought by recent macro trends. Thus, slowing down the implementation of new projects or waiting until next year when the labor market offers more availability may benefit IT budgeting.

For many if not most technology buyers using a cloud first approach, IaaS remains a runaway cost item. Accurately forecasting cloud consumption costs is a daunting task, and the first step to controlling costs is identifying costs by investing in spend management tools that specialize in the cloud. Incentivizing internal users to be cost efficient, using cloud optimization tools to buy spot instances, scaling resources to avoid costly overprovisioning will help, but one of the clearest ways to save is to keep an open mind to all possibilities. “We have seen moving some workloads back to on-premise or managed off-premise infrastructure result in savings of one-third the cost of running equivalent workloads in the cloud,” say Freddie Diaz of IDC’s Sourcing Advisory Service. In fact, many vendors now offer robust hybrid cloud solutions that still offer the flexibility of the cloud but reside on-premise (i.e. Dell APEX, HPE Greenlake) and we find these solutions priced well below the equivalent cloud solutions and only 10-20% more expensive than a traditional on premise capital purchase.

For more information and guidance on IT spending, IDC’s Sourcing Advisory Services provides clients with the world’s leading price benchmarking service supported by a core team of sourcing experts who help IT buyers drive new savings and efficiency across any of their technology purchases & partnerships, spanning all categories across IT hardware, software, services, and labor rates. Click the button below to access IDC’s Sourcing Advisory Services.

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Brian Clarke - GVP, Research - IDC

Analyst Profile

Brian Clarke, Group Vice President of IDC's Pricing Evaluation and Sourcing Advisory Services, is responsible for managing a global portfolio of research services examining the value of information technology equipment, software and services. Mr. Clarke developed several innovate research practices and tools that bring an understanding to complex and ever changing pricing structures resulting from digital transformation. Mr. Clarke consults on pricing and financing strategies to IT manufacturers, and reviews purchasing, contracts and provides deal analysis to technology buyers. Recent projects include helping software vendors evolve from perpetual to cloud based pricing, and providing technology buyer's with guidance on how to measure and compare on premise costing with cloud and other utility-based solutions.

Retail has undergone a huge transformation in the past few years. It’s also still under pressure from external forces and changing buyer behaviour. With buyers changing how they shop and why they shop, retailers need to ensure that their brand purpose aligns with their customers and enhances their internal operations. At the recent IDC Retail Summit, IDC analysts and industry leaders got together to discuss how retailers can operate in a purpose-led world.

Watch IDC’s 2022 Retail Summit on demand here.

The Need to Bridge the Gap Between Online and Offline Retail Experience

The pandemic has forced many changes in retail and now, with offline beginning to expand again, retailers need to bridge the gap between expectations created by online experiences.

Customers are used to a certain experience online, and this can cause friction between their online experience and their experience in brick-and-mortar stores. Technology can help bridge this gap, bringing aspects of the online experience such as personalisation, rewards and speed into the offline experience.

A huge part of bridging this gap is identity management. Identity management isn’t just about security. As digital shopping experiences pick up, retailers can gather more and more data on buyer behaviour. Customers and the way they buy are changing quickly. Understanding who your customers are and how they are buying is important to ensure your company can adapt to a changing buyer.

Digital Transformation Needs to be Practical

Digital transformation is a key part of retailers’ development, and is key to bridging the gap between offline and online experiences and communicating and demonstrating brand purpose. But with all change, it must be effective. Technology that is implemented must be useable and easy to adopt, for employees and customers. Incremental changes that bring value without too much disruption are ideal.

Technology can be a bridge between stores, HQ and employees. Implementing technology as part of digital transformation can help break silos in retail organisations and drive innovation and collaboration by streamlining processes. It can empower teams in stores by giving them information and connecting them to the wider team. It can provide HQ with real-time store data and ensure that teams that work in all parts of the retailer work together effectively and efficiently. Collaboration and communication are vital. When introducing new programmes, tech or functionality, being able to communicate why is important across the organisation. Retailers’ key personas and employees need to understand business priorities but also feel that changes are there to help them and build towards achieving their goals and brand purpose.

Brand Purpose Impacts Everything from Buying Decisions to Employee Productivity

Purpose is becoming increasingly important to brands, but especially those in the retail sector. Customers are becoming more conscious of the social, ethical and environmental impact of the products they buy, and purpose is now part of many customers’ buying decisions.

Customers have expectations for a brand or company experience, not just for the retailer itself but for the whole supply chain. While some of those expectations might not be realistic, retailers have to ensure that their brand purpose is as much a part of their messaging as product information.

Brand purpose is also important for employees. A clear brand purpose that aligns with the products sold is effective in both recruitment and in creating a strong company culture. A strong company culture impacts productivity and improves the customer experience. A company purpose that reflects the core values of your staff and products is now crucial.

Purpose connects value for retail optimisation. It defines the what, the why and the how of a retailer’s business, and it is one of the most influential connectors for retail proceedings and a powerful facilitator of operation and process optimisation.

Retailers are operating in a shifting environment. Purpose is key to ensuring they continue to align with their customers. It also promotes internal coordination and the drive towards an aligned and connected organisation that delivers value. It enhances performance and creates value. This is why, of all the topics discussed at IDC’s 2022 Retail Summit, purpose stood out.

For more information, please watch IDC’s 2022 Retail Summit on demand here. For more insights and key takeaways from the summit from IDC Retail Insights analysts, see Retail Operations in a Purpose-Led World: Key Insights from the IDC European Retail Executive Digital Summit 2022.

For more on our coverage of the retail sector, please visit our website.

Agile development empowers teams with many benefits but also presents challenges around managing and measuring its effectiveness. The way to resolve these is Function Point Analysis.

From business impediment to business enabler, IT development has come a long way since Agile has become the favored practice. Now empowered with speed and responsiveness, organizations have left the days of slow, cumbersome, inflexible, and unresponsive practices behind in the dust. Instead they’re able to support business needs and experience better alignment with changing business environments better than ever before.

It’s easy to understand why Agile is experiencing a strong increase in adoption; as companies become more nimble to embrace the pressures they’re facing in digital transformation, IT development is able to respond aggressively to evolving competitors and exploit markets more easily. But these benefits rival the frustrations on the management side of Agile teams. The nature of Agile makes it so that IT has lost visibility and scope control while the business has lost predictability. While Agile might make teams fast and responsive, businesses don’t know when projects will be delivered, and quality of delivery is often poor.

This is due to story points. Story points is a relative and subjective effort measurement that allows teams to estimate how much work of a certain item is required compared to a certain reference story with a fixed number of points. Story points can be used as an assessment method within a team. But how do these points happen? In an Agile Scrum environment, productivity is often associated with delivered story points, often expressed in Velocity as an estimation unit. The problem is that story points are not standardized, and productivity based on story points means nothing outside of a team itself. Even within a team, story point deflation is always lurking.

Is it even possible to objectively measure productivity? This blog will show that using a ratio scale is the way to objectively measure productivity as proven by IDC Metri’s years of helping clients turn around this common challenge. Management information can be established through a ‘unit of measurement’, bringing answers to long-sought after questions such as which teams are performing well, which teams are not performing so well and when is which functionality ready at what cost?

If you want to use productivity to compare teams, departments, organizations and/or suppliers, or the market, it’s a necessity to use a standard measure of output. Even when this data is about trends on your teams, this insight creates a unified and common view.

For years IDC Metri has been offering function points to create this factual view to clients. Function point analysis was developed in the 1970s to determine the productivity of development teams when it was impossible to do this by counting lines of code. By making function point analysis independent of the technical implementation (programming language, architecture, etc.) and the development method (Waterfall, Agile, etc.), it’s also relevant today and fits into the solution that Agile teams and management need to resolve the challenges that story points create. In short function points are the de-facto standard to express the amount of functionality in a standardized size unit.

Several manual standards are available and one international ISO standard is available for automated function point analysis: ‘Automated Function Points (AFP)’. IDC Metri prefers to use automated measuring of functional size but also employs certified analysts who can manually measure when automated measuring is not possible for whatever reason.

To measure the size of the output of a team, it is also important to not only look at the added functionality but also at the changed and removed functionality. IDC Metri uses automated measuring of ‘Enhancement Function Points (EFP)’ to measure how much functionality has been added, changed and/or removed during a sprint, release or project. This gives the ‘Project Size’ in EFP, a standardized method to measure the output of a sprint or release.

While Agile is hard to measure and manage for full value, the IDC Metri proven approach of using function points transforms a team-driven, fast-moving, rapid iteration process that evaluates progress on qualitative measures into something that can be quantified and predicted.

I recently attended a tech vendor conference and an analyst from another company presented on how we should all be “customer obsessed“. This set me thinking in a Carrie Bradshaw (from Sex in the City) kind of way: is customer obsession really a good thing?

When I think about obsession, I think about Glenn Close in Fatal Attraction, boiling bunnies and doing other strange non-functional things. The Clint Eastwood film Play Misty for Me is equally unsettling.

Google defines obsession as “a persistent disturbing preoccupation with an often unreasonable idea or feeling” which is consistent with the above observations. Meaning, too much focus on one thing can severely damage everything else. For example, former British Prime Minister Liz Truss’ obsession with her growth agenda revealed a lack of balanced thinking that had calamitous consequences.

Balancing the Books

There are good reasons why the most important financial statements are “balance sheets” and “profit and loss”. They are designed to show a balanced, objective and factual view of the business performance and viability. There is no room for an emotionally charged item such as “customer obsession” in these documents.

The most famous management framework of the 1990s was Kaplan and Norton’s “Balanced Scorecard”, which suggested good management is about balancing the needs of four constituents:

Customers
Finance
Internal staff and process management
Innovation and learning

Jim Collins’ extensive research on top performing companies in the book Good to Great revealed that “success comes from many tiny, incremental pushes in the right direction”. Richard Branson gleefully puts customers second in importance, putting his own staff in first place.

The old idea that “the customer is always right” has thankfully largely been debunked. The customer is sometimes right, but not necessarily always. As Steve Jobs said, “It’s not the customer’s job to know what they want.” Henry Ford famously said of the Ford Model T car’s success: “If I had asked people what they wanted, they would have said faster horses.”

Conformance to Customer Requirements Is Key

As any quality manager will tell you (spoiler: I used to be a quality instructor), quality is about conformance to customer requirements, not about customer obsession. Really listening aggressively and taking customer requirements seriously and then harnessing the power of your organisation to deliver on those requirements is the real trick to customer experience and customer success.

Contrary to what some corporate executives may believe, this success does not come overnight by announcing that you are a customer-obsessed company. Actions (and investments) speak louder than words. You need to be fully committed to customer experience (CX) for the long term to build an end-to-end customer-centric organisational culture. This is how Amazon and John Lewis have created powerful and successful brands that are synonymous with excellent customer experiences and customer service.

Since its founding in 1999, customer success has been one of the five Salesforce “core values” (the other four being trust, innovation, sustainability and equality). This is Salesforce’s “Balanced Scorecard”, which is customer centric, not customer obsessed. This balanced customer focus has enabled Salesforce to surpass SAP as the world’s leading enterprise software applications company — despite SAP having a 27-year head start.

The Bottom Line

I can understand the allure of the customer obsession idea. Some might believe that the customer obsession phrase will differentiate their CX from their competitors in an “ah, look, this proves our CX is better” sort of way. I believe the opposite is true.

Customer obsession puts a dangerous false expectation of primacy in the mind of the customer, pressure on customer-facing staff to bow to unreasonable customer demands and the opportunity for competitors to heap derision on your well-meaning intentions.

My advice: Customers don’t want to be obsessed over, so don’t creep them out with a feeling of unhealthy over-attentiveness. Seek to serve them better, not obsess over them. Keep a laser-beam focus on customer requirements, CX and EX (employee experience) and leave the idea of obsession on the film set or on the perfume counter. Build customer-centricity and customer success into your mission, vision and values and then operationalise your execution, using technology and positive employee attitudes and senior management support as your key enablers.

For more information, please contact Gerry Brown, or head over to https://www.idc.com/eu and drop your details in the form on the top right.

Bauma is one of the world’s biggest trade fairs for construction machinery and mining machines. It takes place in my hometown, Munich, and this was my first visit to the show. I was very impressed. Not just because there is a lot of very big construction machinery, but also because digitalisation is happening there. In this blog post, I will briefly share my key takeaways on digitalisation (in particular) and sustainability (in passing).

Digitalisation Is All About Utilising Machine Data

When it comes to digitalisation, construction machinery manufacturers are primarily concerned with harnessing the data generated during the use of their machines. For example, data can be used to automatically generate reports on how accurately special drilling machines have drilled the holes. This is particularly relevant when there are specific documentation requirements. Data can also be used to remotely monitor machine condition and performance in visualised dashboards.

Data-Based Services: Still Only a Moderate Share of Revenues

I asked manufacturers about customers’ willingness to pay for these data-based services. Their replies were mixed, as it strongly depends on the investment volume and the costs incurred in the event of a machine standstill. The competitive situation also plays a role in whether customers simply expect these data-based services as an add-on free of charge. My general impression is that the share of revenues accounting for data-driven (connected) services is still fairly low on average, but there are exceptions.

The Drivers of Investments in Data-Driven Services Are Most Likely Not the Customers

Interestingly, it’s often not the client itself that drives investments in data-driven services, but rather the client’s customers or other stakeholders. In road or tunnel construction, for example, it’s often the clients who demand that certain drilling documentation be available. Or financial stakeholders who demand the use of data-based machinery monitoring services.

Lack of Skills

Software is becoming an increasingly important component of every machine. It’s quite a challenge for manufacturers of large construction machines to meet the demand for the necessary software skills. It seems these manufacturers are seen more as large plant and metal manufacturers and — compared with smaller industrial machinery manufacturers — less so as potential employers for programming talents.

From Egosystems to Ecosystems

While machine manufacturers are promoting their own digital platforms — such as Herrenknecht (which manufactures tunnel boring machines, and its Herrenknecht.Connected customer portal) and Liebherr (one of the largest construction machine manufacturers in the world, and its MyLiebherr portal) — the longer-term goal seems obvious: connecting all those different machines via a single data communication standard. This makes a lot of sense. In factories and construction or mining sites where there are different machines it makes sense for the construction machine industry to agree on a common data format for machines from different vendors.

Communication Standardisation — Still a Long Way to Go

Machines in Construction 4.0 (MiC 4.0) is a working group in the German Mechanical Engineering Association (VDMA) whose goal is to develop a uniform, cross-manufacturer and machinery-independent communications form for the entire construction process. I believe there is still a lot of work ahead as it’s not just about communication among construction machines on sites — it’s also about ensuring secure connections from the edge to the cloud, which, from my perspective, would also require collaboration with cloud hyperscalers such as AWS and Microsoft or cloud-based IoT platforms and connector providers.

Sustainability Drives Investments in Electric Vehicles

A lot of vendors were exhibiting products with electric motors. This is driven by the need to develop construction machines that generate fewer CO₂ emissions. Besides cutting emissions, electric vehicles are also low maintenance and are quieter than vehicles with combustion engines. This makes them suitable for low-noise areas such as near hospitals and at construction sites in the city.

For more information, please contact Stefanie Naujoks, or head over to https://www.idc.com/eu and drop your details in the form on the top right.

ICT Governance – Does the New Environment Mean You Need to Make Changes?

Thursday 27th October 2022 17:00 CET

Recent IDC research shows that ICT Governance is a growing area of concern for Digital Leaders. New facets such as API, IoT and data governance are expanding becoming recognized as business issues. The success of ICT governance – making the right decisions at the right time – can, increasingly, make a huge difference to the success of the whole organisation. The concepts of Agile and Pervasive Governance should be part of your thinking and be incorporated urgently into your organisation. In this session topics we expect to cover are:

Is your current governance structure really fit-for-purpose?
Given the importance of IT in the future of your organisation are the right people involved in your Governance processes?
How do you really build an agile pervasive governance structure?
Do you really need to change anything or are sure your processes are right?

Are Business Process Discovery Tools Worth the Cost and the Effort?

Thursday 24th November 2022 17:00 CET

Every business initiative needs a solid business case. Back in the day when businesses grew by intuition rather than by design there was scope for experimentation and IT had to “catch up” and provide the systems to match the processes that were already in place.

In this session we will look at the rise of tools discover how your organisation actually works and can serve as a template for the changes that should be made to obtain the best business return.

In this session we expect to discuss:

The reality of using business process tools,
The impact of tools on business agility and successful ROI,
The challenges of implementing these tools and the changes they imply to the way the organisation functions.

Web3, The Metaverse and the Bight Distributed Future. Why It Really Is Something to Consider Today, or Maybe Not?

Thursday 8th December 2022 17:00 CET

Will going to work as an avatar be any different from a video meeting today. I cannot imagine going back to purely voice calls for my meetings with clients – will we feel the same in a few years about being present in the Metaverse?

From a business perspective how could a distributed economy where commerce has moved into the virtual world change your organisation? Is there going to be an advantage to being a first mover in your industry? How do you explain the importance, or lack of importance, of this area to you less digital knowledgeable collegues?

In this session we will discuss the how we should approach this topic:

Developing a presence in the Metaverse – is it a priority?
Are Web3 wallets and apps going to survive hype, regulation and cyber-crime,
Managing the complexity increased distributed data,
The security, sovereignty issues around the use of these technologies?

We hope you will join us.

If you already receive invitations to our sessions, I hope to see you there. If you would like to join this community, please email us at mdowd@idc.com.

https://www.idc.com/eu/digital-leadership-advisory

https://www.linkedin.com/groups/8992748/

We were delighted to host the third quarter IDC Digital Leadership Think Talk of 2022 on September 29. Around 40 digital leaders from across Europe joined the call to share their challenges, successes and experiences of data and how it is managed within their organisation.

Marc Dowd and Tracy Keeling from the IDC Executive Advisory team led the discussions.

All About Data

At the start of the session, Marc Dowd set the scene by asking the audience to think about how they manage data access, secure data as it is transferred, manage data cleansing, data integrity, duplication, building data culture, and how to align the business and IT with data.

Our first CIO contributor explained that you need a data glossary as well as a data catalogue as everyone will have a different definition of what they believe data is and what it involves. Secondly, it is important to have a clear view of the data types, including human and machine created data, and how to manage it via stewardship.

Another contributor described how they had also used data journey maps to show where data comes into or is generated by the organisation and how it is transformed and stored as live or archived and allocated ownership to the people closest to the data mainly within the business. This helps them to manage the difference with dealing with your own data versus external data, which may have to be given back to the owner in some cases or returned to you by the vendor at the end of a contract if moving to another product.

Ownership and Management

This sparked a lot of comments from other CIOs on the call — one spoke about democratization to give bounds to data by starting with regulatory rules and GDPR, then you can decide who can have access, how they can access it, and how long it should be kept.

Our next contributor, from the government industry, responded to the question on whether data stewardship is an IT function or business function.

They compared IT to a car leasing company that provides the asset with a set of rules. It is up to business owner to drive the car (or use the data) in the way they want. This was reiterated by another member who mentioned the exception — that machine-generated IoT data, by far their biggest source, is managed by technical teams.

A further comment was around data management in government. One CIO felt it depends on the size of the organisation and that it should sit in IT, but only if the organisation is not too large. If it is a private sector organisation, they felt it was best to push ownership towards the business side, with business ownership of the quality of the data. IT could then manage the system side of where data sits and flows.

Another member from the pharmaceutical industry explained the segregated model they use. One area was where they have a local person who is responsible for data from local trials, while a central team provides governance and IT provides the infrastructure for it to demonstrate and manage its integrity.

Practical Examples

The discussion then moved towards practical examples. We discussed low code/no code and how data was managed within this. Although they worked differently to standard applications, the participants agreed they still need system architects to create a reliable system.

An example of this was an AI low code/no code chatbot solution for doctors. Another contributor highlighted the complexity by explaining that they can consume data from 25 different sources. The healthcare business stakeholders were responsible for the quality of data and set up content checkers to ensure that what the doctors created was understandable.

Another CIO said they asked an important question before they created the data — do they really need the data they intend to collect or create? Once you have established what you need and why it is important, you have to check the quality of the data. The example discussed was around automated systems that are taught about relationships between entities and how to eliminate bias in algorithms for better quality data. Another person mentioned the need to have independence in the process and diversity in the people designing/reviewing algorithms for automatically generated data.

The conversation continued, demonstrating the wide range of data management strategies and use cases. The exchange of information demonstrated the value of these meetings and the value of peer conversations and experience.

Moving to Best Practices

One contributor talked about how they started their data journey with a small step. For example, if you are exploring data mesh or data virtualization, it is best to start with PoC in one region. If successful, you can productize across the whole company with a business change champion to face off to other areas of the business.

To achieve better data governance, you could either “blame” the risk compliance teams, etc., to get business to develop and stick to data governance rules (stick), or you could also explain to business the value they will get from smart use of data (carrot).

Another idea discussed involved getting line of business leaders to “sell” the data initiative to the rest of the organisation, then go back to IT to provide the tools. Sometimes, the result is that too many business-focused colleagues will ask for access — but that is a good problem to have.

Marc Dowd asked about approaches to governing the demand pipeline for data work, prompting several responses. One was if the business becomes super excited about new data streams, etc., you need a steering committee to prioritise data investments based on business return. Some contributors had set up monthly reviews with a data governance board and an executive committee making the final decision.

We discussed the “carrot or stick” approach and which one the contributors used in their businesses. The biggest “stick “is regulatory, often requiring a separate analytics platform gathering data from many systems, including people and machine generated data for compliance.

Just as important, even for the quality of data and even if there is a big “stick”, is that business users need to understand the value of the exercise, with one comment with a quote from Simon Sinek’s work to “repurpose the why”.

It was felt that leadership needs to understand that data-based decisions are better than pure intuition and be informed enough to know all measures are in place to trust the data. And they need to spread that belief throughout the organisation to promote data as an integral part of business operations.

As we ended the session, it was clear that the challenge of data was difficult as it involved not just the creation and journey through the organisation, management, and storage, but also the challenges around ownership and corporate culture to make data interesting and engaging to optimise its management and use to create insight.

The IDC CIO Advisory team would like to thank everyone who came to the call for their input. It is always inspiring to hear from those working with data challenges across the business. We hope this session was valuable and provided many takeaways for you.

Our next session will look in more detail at ICT governance — Does the new environment mean you need to make changes? We will be looking at new trends such as Agile and Pervasive governance.

If you already receive invitations to our sessions, I hope to see you there. If you would like to join this community, please email us at mdowd@idc.com.

https://www.idc.com/eu/digital-leadership-advisory

https://www.linkedin.com/groups/8992748/

What is Good Content Marketing?

Good content marketing engages your target audience and compels them to move along your buyer journey. It is not enough, however, to simply produce a lot of content. In fact, 80% of content that is created, is not consumed. A strong digital content marketing strategy needs to consider how to provide relevant and personalized content to the end user, with a goal of driving more leads and shortening your sales cycle.

To see success with digital content marketing efforts, it should have the following traits:

Quality content that establishes your credibility as a brand

Conveys thought leadership within your industry

Appeals to your market at every stage in their journey: explore, evaluate, and purchase

The problem is, many B2B marketers are encountering common agitations with their digital content: not seeing enough traffic and not generating enough leads, it takes a long time to develop quality content and it’s a challenge to prove its effectiveness.

“Without orchestration, customer interaction is “noise”.”

Laurie Buczek, Research Vice President, CMO Advisory Practice, IDC

“80% of content that is created is NOT consumed.”

Jason Cunliffe, – Group VP, Content Marketing Services, IDC

How to Create Compelling Marketing Content That Converts

Your content must provide a unique perspective on your business, industry trends and challenges. Quality content that is steeped in research and offers a level of personalization, not only establishes your credibility as a brand, but delivers on your buyer’s needs and becomes a strong demand generator. Make sure that your content strategy addresses the specific concerns of your target personas, and is delivered in various, high-production digital formats. One way to ensure your content marketing plan provides the research your buyers are in search of, is to capitalize on the market intelligence and insights that IDC’s content marketing services can provide.

Download: A New Framework for B2B Marketers and Sellers

The Most Effective Content at Each Stage of the Buyer Journey

IDC’s 2022 B2B Tech Buyer survey studied buyer communication and content preferences and behaviors at each stage of their journey. It’s clear that today’s buyers are embracing interactive content but also expect a blend of physical and digital experiences.

Why IDC Content Marketing Services is the Right Fit for Tech Vendors

IDC’s marketing content is research-based and provides your target personas with the market intelligence they’re looking for online. We support your content marketing strategy and help you stand out with data-driven insights from the most influential tech analysts, worldwide. For greater flexibility and speed to market, our content can be licensed or, you can select customized content that focuses on the value that your business delivers to its end users and elevates your thought leadership.

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