Business Brains

10 game-changing business innovations for 2012

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The year ahead will see an even greater reliance on information technology and a greater willingness to try more unconventional ways to innovate.

Is business at an inflection point?  The economy continues to wring its way through a major, pain-inducing shift, and organizations are emerging from the other side of the recent downturn looking very different than before they went in. There's a greater reliance on information technology, more global approaches to problem solving, and a greater willingness to try more unconventional ways to innovate.

Here are 10 disruptive forces that stand out as game-changers for the year ahead:

1) Analytics. Analytics is seen as the competitive differentiator — perhaps the only competitive differentiator — between companies competing in the new global realm. A global survey of 4,500 executives, managers and analysts, released earlier this year by MIT Sloan Management Review and the IBM Institute for Business Value, finds the information ‘haves’ — companies with in-depth experience with analytics technologies and methodologies — increasingly saw competitive advantage, and were more than twice as likely to have outperformed their analytically challenged peers over the past year. (Full report available from MIT SMR or IBM.) Overall. adoption of analytic capabilities has been rapidly proliferating as of late. Fifty-eight percent of organizations now apply analytics to create a competitive advantage within their markets or industries, up from 37% just one year ago, the study confirms.

2) Watsons. Earlier in 2011, IBM's Watson defeated two reigning Jeopardy! champions, demonstrating that artificial intelligence has matured to a point where it can address queries in areas relating to business intelligence, medicine, engineering, and more. Expect to see more systems capable of responding to natural-language queries supporting decision-making across a variety of disciplines and industry areas.

3) Do-it-yourselfers. The New York Times' Tom Friedman described it as the emerging DIY economy, made possible through "the mass diffusion of low-cost, high-powered innovation technologies -- from hand-held computers to Web sites that offer any imaginable service -- plus cheap connectivity. They are transforming how business is done." It's all about self-service, and the ability to start, fund and staff businesses through online resources. The barriers to entry have fallen dramatically, and expect to see a boom in startups with very low capital requirements. This may offer a partial explanation as to why the actual size of the workforce has remained flat over the past decade (declining 1.1%), while corporate profits, GDP and productivity have risen.

4) Cloud. Computing power is almost becoming "too cheap to meter" --  thanks to the cloud, massive data center power is available for literally pennies. This is a good value proposition for companies looking to expand or needing to expand their IT capabilities. Cisco's latest Global Cloud Index, finds that organization’s data centers will be moving to the cloud in a big way.  This also good news for economic growth. Thanks to the availability of powerful and low-cost on-demand technologies, innovators now have access to computing and information resources unheard of even a few years ago. There was a time when launching a serious startup required serious capital for hiring talent, marketing and promotion, office space, and for technology to make it all happen. Thanks to cloud computing and social networking resources, it now costs virtually pennies to secure and get the infrastructure needed up and running to get a new venture off the ground.

5) Crowdsourcers. Talk about outside-the-walls innovation. Many organizations will increasingly be turning to online resources for new ideas or to solve tough business problems. From digitizing library collections to prediction markets, online resources and collective talent will be brought to bear on many areas. One example is prediction markets -- there are external markets, but organizations will be increasing applying their own internal markets to help drive decision making.  Internally, organizations may have thousands of employees and petabytes worth of information -- prediction markets and crowdsourced competitions may help capture that knowledge efficiently.

6) Smartphones. Smartphones will continue disrupting just about everything that moves. A entire new delivery channel has emerged for the delivery of data and services to consumers and partners. The rise of the smartphone is also disrupting an unheard-of number of product markets.  Things now disrupted by smartphones include cameras, portable music players, video games, GPS devices, PCs, watches, remote controls, alarm clocks, levels and other measurement tools, thermometers, radios, microscopes, calendars, advertising, and, oh, yeah -- cellphones and landline telephones. Who knows shat's in store for disruption in 2012?

7) 3D printers. Greater efficiencies through IT, combined with eEmerging developments such as 3D printing brings more production back to North America.  Research by The Boston Consulting Group (BCG) suggests that production of transportation goods such as vehicles and auto parts, electrical equipment including household appliances, and furniture will soon return to US shores. The most promising new concept with the greatest implications for manufacturing and production, however, is “desktop manufacturing,” made possible by 3D printing. If 3D printing takes hold, mass production within the US could be far cheaper than producing and shipping products from overseas.

8 ) Games. 'Gamification' may be the latest buzzword du jour, but there's big money now riding on it. A 2011 survey of 755 Internet users conducted by the Pew Research Center confirms the economic viability of the game business: 19 percent of respondents said they had purchased online games in the most recent quarter. Considering the fact that there are about two billion Internet users across the globe, that translates into one big, big market.  Gartner predicts that 50% of organizations that manage innovation processes will gamify those processes by 2015, 70% of global 2,000 organizations will have at least one gamified application by 2014, and M2 Research predicts there will by $2.8 billion in direct investment in gamification by 2015. (Nice infographic here.)

9) Talent (not enough of). While it may seem paradoxical at a time when unemployment is still running high, many organizations are having difficulties finding the skills they need to move forward with greater automation. A survey of 1,201 CEOs by PriceWaterhouseCoopers (PwC), finds business leaders are confident about their growth prospects in 2012, but are not confident they will be able to find enough talented employees to carry that growth forward. As economic worries recede to the back burner, new priorities now occupy the business leaders’ agendas: driving innovation, and finding the right talent to drive that innovation. A majority of business leaders say looming skills shortages is a big issue: Two-thirds say they face a “limited supply of candidates with the right skills,” and 54% cite “challenges in recruiting and integrating younger employees.” Another 52% even report they are having issues with “competitors recruiting some of our best people.” However, organizations have been stingy with support for training -- which would close a lot of the skills gaps now being experienced.

10) Social responsibility. Corporate social responsibility will enhance engagement with customers and communities. Companies are far more transparent now, thanks to information technology and social media. This calls for a new type of relationship with the world. As reported by my colleague Heather Clancy, management consulting firm KPMG shows that a vast majority of top companies around the world are now reporting on their corporate social responsibility activities as a matter of course. Areas benefiting from CSR include reputation and brand, ethics, employee motivation, innovation and learning, and risk management.

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Joe McKendrick

Contributing Editor

Joe McKendrick is an independent analyst who tracks the impact of information technology on management and markets. He is a co-author of the SOA Manifesto and has written for Forbes, ZDNet and Database Trends & Applications. He holds a degree from Temple University. He is based in Pennsylvania. Follow him on Twitter. Disclosure