The dawn of the thin enterprise
In my role I get involved in lots of client discussions. People look at me to bring ideas to life that help tackle the disruptive challenges on their horizons. In support of this, we’ve created ‘The Future Enterprise’, a view of what an enterprise, city or government department will look like in five to ten years’ time. This explores the business drivers, technology enablers and the things to think about to prepare for the future.
One of the themes that has emerged from this is the Dawn of the Thin Enterprise. This effectively represents the movement of an organisation to focus on its core value proposition, or sticking to your knitting. It explores what an organisation will look like if it outsources, crowdsources, open sources and digitises all of its non-core activities.
In this world digital will be the primary transaction channel, leading to more automation and targeted business process outsourcing. A place where robotic process automation will be widely used to replace repetitive tasks performed by humans and where many enterprises move their non-differentiated development to Open Source.
Going back to your youth
But how do you actually do this and what do you need to be in place? A component for this is the socket to which these blocks can be plugged. It’s very much like the digital equivalent of the Lego blocks we all used to play with. In the digital domain these are known as APIs or Application Program Interfaces. A set of routines, protocols, and tools for building software applications. Once common API standards are in place there is huge potential for the development of useful apps.
Thinking about the skills necessary to take advantage of this transformative power I’m inspired by the likes of Calvin Harris and Avicii, DJs who can mix and blend numerous channels simultaneously, monitor music via a laptop dashboard, and respond to audience (customer) requests on the fly. They crowdsource energy and channel it leaving fans wanting more.
Reinvention versus invention
Top DJs can take home more than the musicians whose content they are reinventing. The ability to take the available digital building blocks or APIs and quickly plug them together in a mix and match manner is powerful and highly valuable.
Add this capability to the impact of Ray Kurzwell’s Singularity Theory, the he hypothesis that the invention of artificial superintelligence will abruptly trigger runaway technological growth, resulting in unfathomable changes to human civilization and Moore’s Law, the observation made by Intel co-founder Gordon Moore in 1965. He noticed that the number of transistors per square inch on integrated circuits had doubled every year since their invention, and you have an incredibly powerful transformative moment. We have a scenario where applications and products that a year ago weren’t economically feasible are now perfectly doable.
APIs are everywhere. They are physical and virtual, hardware and software. We can wear them, implant them and plug into them. They are fuelled by data. Check out my Big Bang Data piece.
The challenge facing legacy banks
One example of this transformative change can be seen in banking and financial services. In recent years Banks and their peers have regularly faced criticism for not doing enough for their customers and for being slow to pass on the benefits of innovation to their customers. After undertaking a damming report on retail banking, the Competition and Markets Authority (CMA) has ordered the UK’s leading banks to introduce and apply a new set of rules by 2018. Banks have been told to develop Open APIs that will make customer data universally accessible. Not a small ask. In addition the banks also have to create tools to help small businesses apply for loans. The CMA’s vision is to encourage the use of a single app to compare banks in one location. This collective initiative has been called ‘Open Banking’, aiming to improve customer experience by creating competition between FinTechs and established retail banks. But what effect will this have on the banks themselves? Could Open APIs lead to the death of retail banking?
The entire point of the CMA’s requirements is to change the banking industry to improve customer experience and financial processes. Making UK finance more homogeneous will force start-ups and established firms together, encouraging innovation and technological development. Sharing secure data with other banks using Open APIs could give customers more freedom to explore the services offered by different branches, also intensifying competition. Achieving this type of change will not happen overnight but the impact of this change will be seismic.
APIs are the path to digital transformation and the thin enterprise. How are you remixing them?