[This excerpt from iPad in the Enterprise is reprinted with permission of Wiley.]
The term consumerization first gained popularity in 2001 when it was used by Douglas Neal and John Taylor as a description for how information technology innovation was emerging in consumer-based technology, with the expectation that it would eventually migrate into the enterprise.
In 2005, Gartner, Inc., released a report saying, "The growing practice of introducing new technologies into consumer markets prior to industrial markets will be the most significant trend affecting information technology during the next 10 years." The traction found by the iPhone, which went from 0 percent to 80 percent of the companies in the Fortune 100 between June 2008 and June 2010, demonstrates undeniably the powerful impact of this trend.
The consumerization of IT
But what does the "consumerization of IT" actually mean to a corporate leader of information technology? In my search for a clear definition of this concept, one of the best explanations I've heard was from Mike Blake, the CIO of Hyatt Hotels. He shared with me the journey that Hyatt went through to both recognize and then ultimately embrace this trend of consumerization with the iPad. In Blake's words:
"When iPad came out it was the latest "shiny object" introduced by one of the most innovative companies in the world. Everyone had to have one, yet no one really knew what it was for. The power in the product, aside from its beautiful design and solid operating system, was found in the spark that it created in the imagination of its users. Users were defining ways of leveraging the tool to prove that it is more than just flash, that it could offer true utility. In our case, IT embraced the iPad from day one, helping to get the product out into as many people's hands as possible. From that grass roots trial we have found ways of serving our customers in new ways, and providing powerful tools to our employees that they truly enjoy using. That's where consumerization of IT really comes into play. It is IT recognizing the power of a consumer product, cultivating it, and giving it a fair chance to succeed. We have shed our arrogance, but we keep a little bit of our skepticism and our conservative approach to make sure the enterprise systems are still secure and our help desks are not overwhelmed. The end result is to have an employee to be able to get the data and information they need to better inform decisions. These consumerized tools enable people to better use and interpret information: they are easier to maintain, and have a higher satisfaction level with the user base than any previous generation of tools."
I believe that Blake has demonstrated that the "consumerization of IT" is ultimately a positive trend for corporations. It may involve some painful changes in the status quo of corporate IT, including, as Blake said, how IT groups have to "shed our arrogance" in order to give the underlying technology a chance to succeed. But this trend provides the business, the entire company, and even the whole economy with an improvement in efficiency, productivity, and ultimately profit.
How long has the consumerization of IT been going on?
Scot Finnie, the editor-in-chief of Computerworld, believes that consumerization has been happening for a long time. He said, "The rise of consumerization of IT has become highly visible over the past several years. The immediate causes of the trend include the prevalence of powerful and versatile smartphones and tablets, the popularity of simple and useful mobile apps, and the recession, which has driven the need for greater levels of productivity and effectively longer workdays."
"Even so," Finnie continued, "the consumerization of IT has been evident for 20 years, beginning with the advent of the personal computer. Microsoft, for example, rose to dominance in the early ‘90s in part on its intense focus on the end-user usability of its operating systems and applications. Apple, of course, has been a consumer electronics company for some time. The key for IT organizations is to recognize and embrace massive consumer trends, because they almost always manifest themselves in business environments, as well. Enterprises ignore or attempt to thwart the consumerization of IT at their own peril."
There is a big up side to the business if IT embraces consumerization. The upside is that the users themselves are bringing the latest technology into the company sooner than would otherwise happen. That can mean better integration, better communication, better tools, and ultimately a competitive advantage for the company.
Finnie offered hope to discouraged leaders: "At its core, the consumerization of IT is about employee freedom and employee productivity. At some point you have to just trust your employees and not only let them do their jobs better, but support them in doing so. The ROI will follow."
Donald Ferguson, the CTO at CA Technologies, agrees with Finnie, saying, "The consumerization of IT has been gradually occurring for years. The iPhone followed by the iPad has made ‘consumerized' IT the new normal. Enterprises can either enable and support iPhone, iPad, and new consumer devices, or their employees will go around IT."
Frank Slootman, the former CEO at Data Domain and executive chairman of the BRS Division at EMC, shared similar sentiments: "Consumerization of IT is not a new phenomenon with the emergence of the iPad or even the smartphone. As far back as the mid-1980s, the very first Macs and LaserWriters were ushered into departments of the enterprise completely against the tightly locked-down policies of the IT department who refused to support them. It is an unstoppable grass roots dynamic many decades under way now. I am sure we ain't seen nothing yet."
iPad in the Enterprise
The article was excerpted from iPad in the Enterprise, a guide for how business and IT must collaborate to develop a mobile strategy to take advantage the transformative technology of the iPad. More information is available at iPadintheEnteprise.com.
How did the iPad seem to leapfrog the Technology Adoption Lifecycle?
According to Robert Stephens, founder of the Geek Squad and CTO at electronics retailer Best Buy, the iPad is facilitating an even more fundamental shift within the enterprise: user-driven design, which is driving improvements in business processes. "Up until recently," Stephens said, "most business executives didn't have any confidence to know what to ask IT for. But now they see that they can track a FedEx package right from the iPad, and see exactly where it is or who signed for it. You can customize and order a pizza from Papa John's right from your iPhone. IT no longer has the unique set of knowledge about what is possible. The user now knows what they want, and now they can and will demand it from IT."
Crossing the chasm
Ever since best-selling author Geoffrey Moore wrote Crossing the Chasm in 1991, this book has served as a strategic guide for technology product entrepreneurs and marketers everywhere. In the book, Moore describes the Technology Adoption Lifecycle, where new technology products are adopted according to a bell curve pattern. In this pattern, the initial purchases of a product are Innovators, after which come the Early Adopters, the Early Majority, the Late Majority, and finally the Laggards. Rather than a smooth curve, though, there is a "chasm" in the Technology Adoption Lifecycle within the segment of the Early Adopters. This is because customers tend to look for references from other companies in the same segment. Since Innovators buy products simply to have the latest and greatest technology, they do not serve as very good references to Early Adopters, who are focused on the benefits provided by the technology, not the technology itself. This makes it very challenging for the marketers of innovative new products to "cross the chasm" as they pursue mainstream customers.
With the launch of the iPad, though, it seemed that this technology was able to defy the pattern of adoption that has held fast within enterprise IT for decades. How was Apple able to pull this off?
I asked Moore how the iPad was able to jump over the entire Technology Adoption Lifecycle, and he shared with me his thoughts regarding the iPad and the consumerization of IT. His response was, "The key thing about the iPad and iPhone, and the consumerization movement in general, is that there is no technology adoption lifecycle for the end users—no training even—so there is no adoption lifecycle for enterprise when the technology is being brought in by the end user. Indeed there is a pent-up demand based on decades of retro user interfaces and user experiences. There is some adoption shock for IT, but this time around it is not so bad because there is more flexible infrastructure to absorb it."
But Moore also believes that this provides a dramatic opportunity for enterprises. He continued, "All that is really left is for executive teams to understand the ROI for these deployments. I believe this will come from empowering the legions of middle managers responsible for negotiating actions across a distributed global value chain. These people have intense need for communication, coordination, and collaboration facilities of the sort that the consumer market has already embraced, but the enterprise has never had the opportunity to deploy before now."
But again, how did the iPad achieve such rapid adoption within the enterprise? How did Apple penetrate 50 percent of the Fortune 100 in less than 90 days? Of everyone that I talked to, I think Frank Modruson, the CIO of Accenture, had the most vivid explanation of how the iPad penetrated that organization:
"The day the iPad was introduced we had some discussions about adding them into our environment; 24 hours later, we had 500 devices accessing e-mails. People expect their personal devices—iPads, iPhones, and the like—to be usable at work. They want to be more productive, they want do a better job, and there's an expectation that they'll be able to integrate their consumer devices with enterprise applications at the office. It's a sensible and reasonable expectation, and we feel it's imperative to oblige them. Indeed, we see it as an opportunity. We're always plowing ahead, moving toward the next generation of technology because the next generation is almost always better, faster, and cheaper. "
Zero to 500 devices overnight! That represents an incredibly rapid rate of change for CIOs who have traditionally embraced stability. Is Modruson correct in not only allowing this rapid rate of change, but also believing that CIOs don't even have a choice?
Ken Dulaney, a vice president and Distinguished Analyst at Gartner, agrees with Modruson. According to Dulaney, "These devices have become inexpensive enough that end users can overwhelm IT through widespread consumer-fueled adoption. It's kind of a parallel with the Egyptian Revolution of 2011, a relatively peaceful protest that the government cannot ignore. The IT dictatorships of the past do not work any longer; the end user is more than equipped to adopt compelling technology and to work around IT when necessary. Either IT helps the end user with new technologies or risks widespread criticism."
Many IT leaders believe that while the iPad adoption rate was rapid, it was also superficial. This is a widespread view among quite a few of the IT leaders I talked to, but the only executive who was willing to go on the record with that point of view was Kate Bass, the CIO at Valspar, who said, "Personally, I think that the fact that 50 percent of FORTUNE 100 have adopted the iPad is a gross overstatement. Yes, we have iPads in the organization but that does not mean widespread adoption nor that iPads are being used for daily processes. They work great for ‘consuming' information that is available to the ‘consumer.' They do not work well for creating information. I do think that they introduce an imperative, however, for the ERP [Enterprise Resource Planning] vendors to make it easier to ‘consume' data that we have spent years locking up in Fort Knox databases and storage systems."
Bass's imperative is felt in the exponentially growing demand for high-quality apps that can consume and add value to data.
What does this mean for the enterprise software industry?
The founder and CEO of Salesforce.com, Marc Benioff, agrees that this is a transformative shift that is just as much about the software as it is the hardware. He says, "Our industry has gone through many shifts, but ultimately, the big ones have always been about software, not hardware. Now, we are seeing a simultaneous software and hardware revolution. Sales of mobile devices and tablets have far outpaced PCs. The key apps we use will all be rewritten to take advantage of this fundamental transformation. That transformation even extends to where we use these apps. Because devices like the iPad are so easy to carry and can be used anywhere, it creates a truly mobile workforce. That's why I plan to put an iPad in the hands of all my salespeople."
MicroStrategy, the enterprise software firm focused on business intelligence, has also recognized how consumerization is creating a highly productive mobile workforce. According to Executive Vice President and Chief Operating Officer Sanju Bansal, "People expect to be able to access any information they need at any time of the day from a mobile device, whether at home or at work. More and more companies are recognizing the value of mobile devices for their businesses and are building mobile apps for employees, executives, suppliers, and business partners. The phrase ‘I'll get back to you' will eventually disappear… The ability to access business information 24/7 shortens decision-making time, streamlines business processes, enhances collaboration, and makes every location an office."
In many ways, to embrace this trend is make a complete reversal in many positions that IT has traditionally taken. Once IT led users to new technology; now the reverse is true. Over the last 50 years, the focus of IT has progressed from the back end to the front end; now the mobile experience, led by the iPad, is creating new demand for intuitive UI, ubiquitous connectivity, and greater access and control of the back end. The direction is reversed.
But are IT leaders ready to embrace consumerization? David J. McCue, the CIO at CSC, believes so. He says, "The iPad is a transformational platform for the delivery of services and applications. Enterprises have been criticized for not adapting the iPad quickly enough, and IT departments have been castigated for being obstructionists. The reality is that every CIO I know has already bought into the value of the device and is deploying it."
Rick Fabrizio, the CIO of propane giant AmeriGas, sees this disruptive transformation as an opportunity for positive change. Fabrizio said, "Companies that embrace ‘New Tech' will have a competitive advantage over those that don't. Adoption of technology by the business has always been a challenge for IT, so here's an opportunity for IT to adopt and leverage technology that the business community is already using. The iPad and iPhone are perfect examples of this."
At paper-giant Weyerhaeuser, CIO Kevin Shearer views the iPad as a positive opportunity for IT. According to Shearer, "The lightning-fast speed of adoption of the iPad into the business world caught everyone by surprise. Now business execs are showing up with their own iPads, bought with their own money, expecting full and seamless connectivity and integration between personal and business applications. It's what every CIO dreamed of, but we all thought we would have more time to prepare for these customer expectations."
While the topic of consumerization remains a controversial subject, Brian Carlson, the editor-in-chief of CIO.com, believes that strategically embracing enterprise mobility is an imperative for those in IT leadership positions. According to Carlson, "The convergence of consumer electronics and the enterprise IT organization is in full swing now, and nowhere is this more evident than in the exploding mobile enterprise market. Enterprise mobility is set to eclipse cloud computing as the biggest trend in the technology industry in 2011, with businesses expanding the use of smartphones, tablets, and mobile apps for all levels of employees. Expect to see enterprises mobilizing all their core applications from CRM [customer-relationship management], ERP, expense management, inventory management, and time tracking. An effective enterprise mobile strategy is no longer a nice-to-have, but a necessity for business growth."
Embracing disruptive change
The iPad is an incredibly disruptive technology; there is no debate about that. But exactly what the ultimate impact of the iPad and the overall trend of consumerization will have on enterprise IT is yet to be seen.