Jan 162017
 

Should a business spend a lot of time on its digital strategy? A recent article in the Harvard Business Review suggests many businesses, and consultants, are focusing too much on the technology.

Freek Vermeulen, an Associate Professor of Strategy and Entrepreneurship at the London Business School, describes how strategists may be making a mistake in responding to digital disruption. He argues many industries are learning the wrong lessons from disruptors like Amazon, Uber and Google.

In Vermeulan’s view, the world is not a globalised as we’d like to think and the network effects that work so well in internet based industries don’t necessarily translate to other sectors.

As a consequence, businesses that work on the assumption their industries will be affect the same way as, say, the taxi industry with Uber or newspapers by Google and Facebook may well be making their own strategic mistakes.

Digital is changing the nature of competitive advantage in many businesses – just like major technological developments have done before. However, the change will not be uniform across all industries. Digital technology is affecting and will affect different businesses in different ways. Miss these nuances and your strategic decisions could lead you seriously astray.

That’s certainly true and how technology or a rapidly changing economy affects each industry, or business, is far from uniform.

One of the case studies Vermeulan uses is that of a consulting firm that has largely eschewed digital platforms and focused on its human assets – primarily the skills and connections of its associates and staff.

While that’s undoubtedly true of all consulting businesses to some degree, the use of digital tools and marketing is changing that industry dramatically as well.

Vermeulan is right in that some industries may want to respond more slowly than others to digital or economic changes, however a business that disregards them or reacts too slowly may not know what hit it.

Dec 132016
 
Does the digital divide really exist

Earlier this year, Telstra released the Digital Inclusion Index along with its report on measuring Australia’s digital divide.

Last week in Sydney the company hosted a half day conference to look at the ramifications of the 2016 report.

Overall the report was good news with most indicators showing improvements although the gap between the connected and the most disadvantaged has widened since the first index was compiled in 2014.

In general, wealthier, younger, more educated, and urban Australians enjoy much greater inclusion. All over the country, digital inclusion rates are clearly influenced by differences in income, educational attainment, and the geography of socioeconomic disadvantage. And over time, some Australian communities are falling further behind.

The one factor the survey found that is declining nationally is affordability which the authors put down to Australians’ increasing reliance on the internet.

The Affordability measure is the only dimension to have registered a decline since 2014, but this outcome does not simply reflect rising costs. In fact, internet services are becoming comparatively less expensive – but at the same time, Australians are spending more on them.

Sadly affordability isn’t going to improve should the government’s proposed broadband levy of seven dollars a month become reality to subsidise rural users.

That such a levy would be proposed by a government that was opposed to a National Broadband Network and to ‘Big New Taxes’ while in opposition is an irony left for Australian political historians to discuss but it shows how comprehensively the NBN project has failed.

Even sadder is the NBN  isn’t delivering for businesses as it increasingly becomes apparent the network being built will struggle to deliver 21st Century services to most of the nation.

That businesses are struggling to connect emphasises just how serious the digital divide is becoming for the economy – as supply chains in every industry become increasingly globalised regions that aren’t connected risk being isolated from their markets.

Policy makers have to consider the costs of those communities and groups being isolated from the modern economy. If we are going to be serious about building a twenty-first century society then we have to consider how disadvantaged groups and regions access global networks as well as making sure they have the skills to benefit from these technologies.

Mapping the areas of the disadvantage is a good first step but we have to look at how we address the segments of our society that are being left behind.

Nov 162016
 

Following last week’s US election attention has fallen onto the role of Facebook in influencing public opinion and the role of rumours and fake news.

The CEO of Facebook, Mark Zuckerberg, says claims that his company’s news feed influenced the US election are nonsense but, as Zeynep Tufekci the New York Times writes, the platform has shown in its own experiments that the service does influence voters.

Sadly misinformation is now the norm on the web given anyone can start a blog and post ridiculous and outlandish claims. If that misinformation fits a group’s beliefs, then it may be shared millions of times as people share it across social media services, particularly Facebook.

Facebook’s filter bubbles exacerbates that problem as each person’s news feed is determined by what the company’s algorithm thinks the user will ‘like’ rather than something that will inform or enlighten them.

Those ‘filter bubbles’ tend to reinforce our existing biases or prejudices and when fake news sites are injected into our feeds Facebook becomes a powerful way of confirming our beliefs, something made worse by friends gleefully posting fake quotes or false news that happens to fit their world views. If you click ‘Like’, you’ll then get more of them.

Over time, Facebook risks becoming irrelevant if the news being fed from the site becomes perceived as being unreliable

For Facebook, and for other algorithm driven services like Google, the risks in fake news don’t just lie in a loss of credibility, there’s also the risk of regulatory problems when news manipulation starts affecting markets, commercial interests or threatens established power bases.

The fake news problem is something that affects the entire web and its users, for Facebook and Google it is becoming a serious issue.

Nov 022016
 

A year back this blog asked if Chattanooga’s experience shows how city infrastructure can drive private sector investment.

“The Gig”, as Chattanooga’s civic leaders have branded the city’s broadband rollout, came about because the city decided to treat internet services as a utility like water and roads. Vice Motherboard reports how this has reaped dividends for the town.

As Vice’s Jason Koebler describes, Chattanooga’s unemployment rate has halved since the depth of the Great Recession and in 2014 was listed as having the third highest wage growth among the United States’ mid-sized cities.

There are downsides though, Koebler warns, and one point is that having good broadband on its own isn’t a sure fire bet.

“Like the presence of well-paved roads, good internet access doesn’t guarantee that a city will be successful,” he writes. “But the lack of it guarantees that a community will get left behind as the economy increasingly demands that companies compete not just with their neighbors next door, but with the entire world.”

The advantage Chattanooga had though was its electricity company was owned by the city which meant a major part of the existing infrastructure was already in public hands and made it relatively easier and cheaper to roll out the network.

What Chattanooga does show is a well planned and structured fibre roll out can be done, it is easy or cheap and takes sensible planning. The latter is something other broadband projects can learn from.

Jun 302016
 

Two years ago Buzzfeed’s head of global operations visited Sydney and laid out the company’s vision of being the New York Times.

As Scott Lamb explained, an important part of the Buzzfeed model was generating traffic through social media shares — at that time a tactic which Iwas working well.

Since then the gloss has gone off Buzzfeed as the company misses financial targets and traffic plateaus.

Now Facebook has announced further changes to its newsfeed which sees more emphasis on users’ family and friends’ posts than news and brands.

Sites like Buzzfeed are left in a bind as one of their key sources for traffic dries up and, once again, Facebook’s cahnges show how risky it is for publishers and marketers to rely on individual online platforms.

In truth all of the major online services are predators with Facebook, along with Google and Amazon, being at the top of the food chain, just like tigers.

For those riding the internet tigers, the risk of being mauled is real. As Buzzfeed and others are finding.

Jun 102016
 
business return on assets is falling away

Ride service Uber has raised the game for logistics and delivery services in opening a group of Application Program Interfaces for third party developers.

The four functions available in the Uber Rush package cover delivery tracking, quotes and history. They make starting a logistics service or adding functions to a business far easier.

While there is a downside in the risk of being locked into Uber’s service this move will give a lot of developers the opportunity to develop delivery tracking products, for incumbent postal and courier services, this API is bad news on a number of levels.

Jun 062016
 

Ben Terrett, the former head of design at the UK Government’s Digital Service, tells GovInsider why the agency banned mobile phone apps with the British taxpayers saving £4.1bn over the following four years.

Instead the GDS insisted agencies built responsive web sites so pages would adapt to the devices they were being read upon, saving time and money being devoted to developing and maintaining individual apps for different platforms.

Apps are “very expensive to produce, and they’re very very expensive to maintain because you have to keep updating them when there are software changes,” GovInsider quotes Terrett.

For those of us who worry about the increasingly siloed and proprietary nature of the internet, Terret’s story is very good news. Apps are particularly problematic as they stunt innovation, lock users into platforms and give those who control the App stores – mainly Apple and Google – massive market power.

It’s no co-incidence Facebook are currently in the process of restricting web access to their messenger service. Locking users into their app gives them far more power over users and much more control over their data.

On the other hand, the open web means sites are more accessible and not subject to the corporate whims of whoever controls a given silo. It also means that any data collected is far more likely to be commoditised, something Facebook hates.

That government agencies and large corporations are realising the costs, risks and value they are handing over the gatekeepers by developing apps is encouraging. It would be good if they considered the other downsides of giving the web over to a small clique of companies.