‘Place to Space’ – Physical Assets to Information Assets

My first 3 blogs were a high level view of current business change as information technology becomes the foundation of business process. I’m now going to talk in a little more detail about each asset and its shift.

Leverage Physical Assets to Leverage Information Assets.

Think about this in two ways; Product and User/Meta-data

Product – On December 25th Amazon.com sold more e-books than physical ones – any product that can be converted and delivered electronically will be. The physical attributes of these products are becoming less important than the ability to deliver them faster and cheaper.

User/Meta-Data – Wrapped around both electronically delivered products and physical products is more and more data. Online consumers are becoming used to a level of tailored service that is based on data from the wider pool of behavior (User/Meta-Data). Who wants to repeat a flower order address when it is easily saved in an address book? Netflix recommendation engine is a perfect example of this.

I am sure everyone knows the reason milk is at the back of the grocery store* or why beer and diapers stick close together at the convenience store** – ‘Leverage Physical Assets’. These conventions have been tested and tweaked over decades but bricks and mortar business are going to struggle to match the personal nature of Amazons ‘someone who bought that also bought this’.

Business that continue to treat the ‘web’ as another channel are missing the massive opportunity to leverage information assets collected online to extend and improve the customer experience in the physical world.

Not sure? Blockbuster is closing 22% of its stores during 2010 partly because of alternate delivery methods for movies but also because it failed to innovate around the information assets it held.

Prediction : Large bricks and mortar retailers will find margins squeezed even more as Smartphone apps offer augmented reality price overlays based on real time visual recognition of products.

Next Up – Brand and Rating Agencies…

*you have to walk past all the other products.

** men sent to buy diapers can not help picking up beer.

‘Place to Space’ – Understanding why technology will change your industry – Part Three

 

“Physical Assets” to “Information Assets”

During a MIT CISR session Peter Weill described the change in a businesses physical assets in context to new information assets. This really explained what the enabling information revolution could offer business – a light bulb moment.

I have reproduced the slide (with permission).

Place	Space
Physical World	Virtual World
Leverage Physical Assets	Leverage Information Assets
Brand	Brand and/or Rating Agency
Value Chain	Competency Nets & Complementors
Fixed Pricing	Dynamic Pricing
Proprietary Systems	Open but not frictionless with multiple infrastructures

The migration is of course slow and painful for large enterprises.

Pick an industry..  Real Estate.

Real Estate has seen some major changes and still has a long way to go.

The behavior of buyers has shifted from finding an agent to help with an initial search to almost self service online house research then contacting an agent with a shortlist.

Place	Space
Leverage Physical Assets: Limited data delivered to Agents	Leverage Information Assets: Cheap data available to agents and buyers

Prediction : Any ‘Premium’ information provided to the agents will be eroded over time in favor of access to all. The value will be understanding and using it.

How about finding an agents? How do you know your agent does a good job? Perhaps they work for a large firm and have industry awards. Currently their is little in the way of agent rating services available on-line.

Place	Space
Brand: Works for large firm / tells you they are great!	Brand / Rating Agency: Clients rate agents online.

Prediction: More open agent rating service will be common.

I will expand on each shifting asset in later blogs..

‘Place to Space’ – Understanding why technology will change your industry – Part Two

 

Two important progressions have driven business migration of ‘Place to Space’

Firstly : availability of networked computers. Much is written about the progression of computing and the impact on business so here is my short take on it:

1950,60,70s	Miniaturization of the transistor and microprocessor	building blocks
1980s	Software and Personal Computing	flexible use of technology
1990s	Networking and the Internet	mass acceptance of network software
2000s	SaaS and Cloud Computing	shift in delivery
2010s	Ubiquitous Computing and Wireless Internet	extension of networked devices

The maturing of network services and software is key to a sustained change business use.

Secondly: the shift in business use of computers and software as a process efficiency tool to a core platform to build from. For example, accountants love spreadsheet software because it makes the process of accounting faster and more efficient but does it really change accounting? If you took Excel away you could carry on using paper journals.

New business models like eBay or iTunes simply don’t work without technology cores.

We have started building business process ON software not software on business process ……

Which leads me to ‘Physical Assets’ and ‘Information Assets’  and part three

‘Place to Space’ – Understanding why technology will change your industry – Part One

8 years ago I listened to Peter Weill present ‘Place to Space’ at the MIT CISR summer sessions. What really impressed on me at the time was the clarity with which he outlined the high level transition businesses would face over the next few years.

Around the same time I also saw F. Warren McFarlan from Harvard Business School talk about the stress of the industrial revolution as integration of new technology created industrial giants and killed off old businesses, professions and trades.

My conclusion?
I expected the same radical shifts during this ‘Information Revolution’, change that would completely reinvent some professions and industries.

What happened?
Things moved slower. ‘Place to Space’ is perhaps even more important now than 8 years ago. Why? Because while some businesses have understood this change and have reinvented the way they do business others have stuck it out – business as usual.

Business as usual can not last.