I am told that Midwesterners have what they call “patio season.” This is a lovely though brief period that arrives pre-football, pre-fall and pre-school.
I think we are in technology’s patio season; we are definitely pre-something. From the perspective of 30 years out, we are pre-singularity — that moment when machine intelligence exceeds human intelligence and control. Tightening our predictive lens and looking just three years out, most organizations now find themselves in what I call the “Pre-DD Interregnum.” “DD” stands for “digital delivered,” and it refers to that moment in time when all the technology around us actually works and/or is recognized as not working. In other words, IT — all IT, both enterprise and consumer — has three years to get its act together.
Its work is cut out for it. Listen carefully and you will pick up a general grumble of dissatisfaction with the overall experience of using technology.Don’t let hyperbolic CES press releases, a constant stream of CIO awards programs and impressive technology IPOs and startup valuations lull you into thinking otherwise.
Consumers and boards of directors expect their technology to work, to interoperate securely, and to make their lives and/or bottom lines better. They are inevitably disappointed as they run smack-dab into the paradox of the computer (as pointed out by futurist Alvin Toffler and others): A machine designed for dealing with complexity in fact added a whole new layer of complexity.
Patience is running thin, though. During the next three years, boards of directors are going to demand significantly more transparency in the area of IT performance. They are going to want to know what they are spending on technology and what they are getting back from those investments.
Those demands will have effects. I forecast that by 2018:
- A next-generation measurement company will develop a metric that assesses the health and value-creating capability of an organization’s IT organization. Heads will roll, with unprecedented numbers of CIOs being sacked.
- The stock price multiple of publicly traded companies will be directly linked to the capabilities of their IT organizations.
One of the most significant effects of greater IT transparency will be changes in IT investment. Business school professors talk about the “Three Horizons Model” of investment. Horizon 1 investments, looking out as much as 18 months, are concerned with the now, and seek to extend and defend existing businesses. Horizon 2 investments, which look out to that time period that is 19 to 36 months away, are centered on what’s next and seek to build emerging businesses. Horizon 3 investments, covering the period running 27 to 72 months from the present, are interested in what comes later and are used to fund experiments and pilot programs designed to create viable options.
Historically, the vast majority of IT funding has been allocated to Horizon 1 initiatives. Whatever remains tends to be invested in Horizon 3 proof-of-concept pilots. Totally starved of attention and resources is the critical Horizon 2 activity of “building new revenue streams.” I forecast that by 2018, creating new digital businesses will be IT’s new high ground.
For that to happen, something will have to give. I envision a boom time for IT service firms in the “modernization” business. They will be increasingly called upon to aggressively and professionally manage Horizon 1 IT operations. That in turn should free up IT executive “head space” to focus on the important but forgotten task of building new digital businesses.
Tech feudalism
Consumers’ demands will also result in seismic shifts. I foresee a move toward technological feudalism, inculcated by the frustration of trying to get various technology piece-parts to interoperate. Consumers will conceptually, emotionally and socially align themselves with one tech feudal lord and begin the process of going all-in on one of the major platforms. It won’t be features and functions that determine who wins the hearts, minds and wallets of mainstream consumers; it will be the post-purchase customer experience. Apple has a big lead here. Everyone else — Microsoft, Google, Samsung, Amazon, Facebook — has to play catch-up.Only a few are likely to give up on technology entirely, but I still expect a surge in the number of Luddites among us, if you give the term a stricter definition than “technophobia.” Ned Ludd was, over 200 years ago, the symbolic champion of human work vs. machine work, concerned that machines were stealing textile jobs. The roots of his violence against labor-saving machinery is captured in the following poem:
They said Ned Ludd was an idiot boy That all he could do was wreck and destroy, and He turned to his workmates and said: “Death to Machines They tread on our future and they stamp on our dreams.”
Automation — substituting machines for human labor — was a driving force during the Industrial Age. In the 20th century, as computers became more powerful and more affordable, more and more tasks became automatable. That process has not expired. Carl Benedikt Frey and Michael A. Osborne of Oxford University opine that up to 66% of the U.S. workforce has a medium to high risk of being displaced by technology in the next 10 to 20 years. Computers are now eliminating not just low-skill manual labor, but moving up-market into heuristically driven knowledge work as well.
A factor mitigating humanity’s understandable antagonism toward livelihood-threatening automation is the emerging phenomenon of augmentation. In this mode of operation, machines do not diminish and/or eliminate us — they augment us. They make us better.
I forecast that in the next three years companies will begin considering how to augment knowledge workers rather than automating them — moving from AI (artificial intelligence) to IA (intelligent augmentation).
Futurist Thornton A. May is a speaker, educator and adviser and the author of The New Know: Innovation Powered by Analytics. Visit his website at thorntonamay.com, and contact him at thornton@thorntonamay.com.
