Enterprises are increasingly operating in a dynamically changing and fluid environment. They are constantly changing gears just to keep pace. CXOs are constantly looking for ways to overcome or create disruptions in a world becoming increasingly complex. Infosys Consulting Blog gathers a community of subject matter experts who are driving pragmatic conversations around that which is changing and that which needs to be rethought, redefined and redesigned for enterprises to achieve market-leading performance roadmaps.

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April 24, 2012

Could De-Mail solve the Identity Crisis of Online?


In the 1998 Spiderman comic, Peter Parker adopted four costumes different from his usual superhero outfit; each with different crime fighting personae. He had to do so because he was framed for murder by the evil Trapster. Four also seems be the average number of online identities an individual has nowadays. Looking at current numbers on online fraud, however, it's obvious that some users have less heroic intentions. 

During the 2012 CeBit in Hannover/Germany, the BSI (the Federal Office for Information Security of Germany), accredited the first three providers of De-Mail services*.  The key difference between a De-Mail and a regular email is that the receiver can be 100% sure about the identity of the receiver and the sender can be sure that the message has been delivered completely and correctly to the right receiver.

While the value of the actual mail service is disputable, it is "en passant" introducing a service called De-Ident which - as a concept - might be more suitable to solving the identity crisis of online.

Since De-Mail is a quite specific German idea, for the benefit of my international colleagues let me give you a brief introduction.

Any individual or institution resident in Germany can sign up for the service and will receive a new email account in the following format: <name>@<de-mail-provider> for individuals, or for institutions, <name>@<institution> As you can see, all email addresses are a sub to the domain independent from that of the provider.  This is to signal to the receiver of a De-Mail that he can trust the identity of the sender.

De-Mail was created to enable compliance with the EU Directive on services in the internal market. Although the directive is primarily about the exchange of services in a unified market, it also requires EU states to accept electronic communication as legally binding. Interestingly, the directive in question has been in effect since 2009 so we are pretty late.

Accessing your De-Mail account in general is web based (there are gateway solutions for companies) and the use of most features requires a "strong" identification such as a mobile TAN (a one-time authorisation code sent to your mobile). Official prices are not quite clear yet, but providers will probably charge the sender around 40 Eurocent per message.

So since now we have De-Mail why would you want it? Why would anyone want yet another new email address and pay a fee for each email sent? For the De-Mail service providers, the market is not so much the conservatively estimated 40 billion emails, but more the 7.5 billion paper letters sent in Germany (of course it's emails per day and letters per year).

De-Mail leaves open many questions around encryption and data privacy. Equally, since the De-Mail doesn't give the message a different legal status, only transport of the message is secured. Therefore, the application seems limited. The system is usable by German residents only so any communication even across EU borders, let alone international users, is out of the picture. In summary I would question that De-Mail is going to solve the identity problem in day to day communication.

But now about De-ident, which I find really interesting and which potentially goes beyond the scope of exchanging messages. You probably guessed already that this service provides the means to validate the identity of an individual - in real time. In contrast to sending and receiving De-Mail the process for De-Ident is pretty simple and pretty much like a normal registration process on any website. But De-Ident adds the benefit of knowing that the user is indeed the person he claims to be. 

De-Ident also has open questions, but today many services on the web require a verification of age or identity.  For arguments sake let's assume the numbers of De-Mail users would indeed achieve critical mass, since the similar "ePostbrief" gathered 1m users very quickly this seems possible (although only 100k use the service actively). I think De-Ident could really speed up and simplify online signup processes.

Couldn't De-Mail in the end help companies provide a better service to users because they know who they are dealing with? Wouldn't that make fake users a thing of the past? Facebook alone has more than 40 million of them.

* I apologize for most of the links provided in this post point to German websites but it's pretty hard to find a lot of information about them in English.

April 22, 2012

From Paper to Pingit: Retail Transactions in the Digital Age


The horror and fascination of witnessing the global financial system on the brink of collapse is compelling. We all worry but there is little we can do about it. Many have lost their shirts while others have turned to invest in gold. Why gold? Because it can be trusted, it's scarce, and throughout history people have been able to exchange it for other things of value.

Gold has its drawbacks, however. It's heavy and there isn't really enough of it to go around. For these and other practical reasons, the concept of 'currency' was born. Paper money and other forms of currency became ubiquitous. Combined with gold and silver or "backed by the full faith and credit" of governments, currency has been the way our society has done business for several hundred years.

This status quo has been under threat in recent decades, however. Personal checks and debit and credit card systems backed by large financial institutions, dominated 20th Century business - consumer transactions. This system is being phased out as first magnetic strips and now near field communication (NFC) do the same thing; ensure that the seller is paid by the buyer.

This credit intermediary system has two fundamental characteristics that make it successful. It works and it can be trusted. However, it too has its limitations. It is expensive to maintain. This cost is passed onto the consumer and skimmed for profits. Retailers don't particularly like it, but in the land where the consumer is king, they accept the preferred cards of the customer. The customer pays as well, but they don't really 'see' the cost.

Not all merchants can afford such systems or find them useful (market traders, convenience stores etc.). Meanwhile, many automated systems -- parking meters, vending machines and toll booths, for example - still involve cash, and transactions between individuals are barely possible outside cash and checks. Remember barter?

Nonetheless the credit intermediary system remains highly effective, in large part because it is trusted and secure. Its limits, such as they are, have been set fundamentally by technology. However, these limitations are being removed. The system is about to change and change profoundly. We are about to enter the era of mass market transaction capability.

Up until very recently only big systems with serious security and large investment could provide the necessary assurance and reliability to process transactions. In the near future any member of the public with a smartphone will be able to securely and reliably perform a transaction with anyone else directly. No paper, no notes, no cards, no signatures (if you don't count iris recognition) and no visible intermediaries.

Call it peer to peer finance, call it digital wallets, call it what you will. It's already here and in no time at all it's going to be everywhere. The tipping point has already been reached and our society is about to undergo a transformation that the like of which we haven't seen for a few hundred years and may not see again in our lifetimes.

The trends are unmistakable. The use of cash in modern economies has reduced dramatically over the last ten years, and the use of non-cash payments and value transfers in developing economies is shrinking just as fast. These trends will continue as the public demand for greater convenience and control over how we spend our money keeps driving businesses to find new ways to provide services.

Traditional financial services corporations such as banks no longer have a monopoly on the customer's wallet. Mobile phone companies such as Vodafone with mPesa in Africa, supermarket chains such as Tesco, and even banks such as Barclays with its SMS based "free to all" money transfer system Pingit in the UK are active in creating financial services offerings. They recognize an opportunity to be part of a revolution in the way retail commerce is transacted. They see that the old systems are no longer the best available.

So why do these and other banking and non-banking enterprises bother investing massive sums of money in creating their own versions of new systems?  They'll each have their own answer, but fundamentally it comes down to grabbing market share of a fast evolving system that is likely to form the basis for how we (Joe Public) conduct transactions for a very long time to come. It's going to be fascinating watching how technology, innovation, revolution, money and cut-throat competition contribute to this evolution. Watch this space.

April 19, 2012

Are some business functions more suited to opening up to customers using social channels?


In my previous post, I introduced certain business functions that might lend themselves better than others for opening up to external partners and customers using social channels. Let's explore those functions in more detail here.

For too long, companies have operated behind multiple process layers with limited knowledge of customer/partner needs. Now, for the first time, social channels are enabling companies to truly be in touch with their customers. Companies should take a systematic approach to dissecting each business function and identify opportunities to facilitate discussions with external partners to benefit both the company and its key stakeholders (customers, partners, employees and ultimately investors).

In the area of supply chain, for example, package delivery companies are making effective use of social channels to enable customers to track their packages, providing them with a richer and more satisfying experience. Another example is how companies are using mechanisms such as supplier networks and open bids to provide higher visibility of their needs to partners and enable suppliers to work with each other to meet the needs of the company.

During product design and manufacturing, companies can encourage feedback and enable collaboration with customers and partners. An example is how certain luxury auto and yacht makers give customers a window into the design process to enable them to customize and personalize what might otherwise be a somewhat standard, albeit high-end product. This lets the customer be more involved in the details and the product becomes a reflection of his or her personality and lifestyle.

Another example being how companies are developing forums to encourage discussions amongst suppliers, partners and customers to share challenges of working with the company and tweak their processes to enable these stakeholders to better work with the company.

Companies spend considerable amount of time driving demand through marketing. However few of them have figured out the right approach to build customer relationships using social channels most are using the same old marketing approaches and hoping for different results. The social consumer is more demanding than his or her more traditional counterpart.

To meet the needs and satisfy the demands of these new consumers, a company must use social channels to better understand their needs and desires, and then determine if its product is the right one for the customer as well as if your current customer is the right consumer of your products. 

On the customer service front, a number of companies have come to realize that their best support staff are customers themselves; users who have encountered similar problems and come up with solutions for their fellow consumers. One example is how companies realized that providing a platform for customers to help each other made sense because often the best customer support person is not a customer support person at all but a fellow user who has encountered similar problems and has easy solutions for fellow users.

Additionally, customers are pushing products to the limit and using them in ways that the company did not originally intend them to be used and who better to advise on this than others users who have done the same. Another example is how airlines, hotels have embraced social forums such as Twitter and Facebook as another channel to be "where their customers are" and serve them through that avenue as well. 

What about functions such as finance, pricing, fulfillment, order management and other operational enablers? I believe these might be harder to open up to external stakeholders however I am interested in hearing from others who have had success in this area.
As always looking forward to your comments and ideas.

April 13, 2012

Social Commerce - Just a Fad or Here to Stay?


Of late, I see increasing articles and blogs on social commerce, fuelled by recent news items such as the Facebook IPO filing, the increasing user base of Google+, the growing popularity of Twitter, etc. This growing interest has re-kindled debate over the relevance of social commerce to online business.

One camp seems to be excited about the prospects of social commerce and how it can shape the future ecommerce space. For example, Booz & Company estimates social commerce market size to be of USD 30 Billion by 2015 (Source:

However, there is another camp that sees social commerce as a fad, and questions its ability to drive sales and revenues. Adherents of this view include Sucharita Mulpuru of Forrester Research, who characterizes its commercial viability as being " trying to sell stuff to people while they're hanging out with their friends at the bar".

So, which side is to be believed? To me, the answer is quite simple - the true potential exists somewhere in-between. Before I justify that statement, however, there are a few important points to keep in mind:

* First, social commerce is a platform-independent global phenomenon.  Although it's true that Facebook, and more recently Twitter, Google+, etc., were instrumental in driving  the astounding growth of social networking (which is the foundation of social commerce) , fact remains they represent the means, not the end. The larger issue of the future of social commerce per se is quite separate from the success or failure of any specific platform.

* Second, social networking on global scale is indeed new, but there is ample precedent for concept itself in business. Decades old practices such as product user groups, consumer focus groups, bulletin boards, chat groups are all forms of social networks in some sense.  Companies have successfully used these forums for product research and design, test marketing, redressing consumer complaints, etc., for years. What has really changed now is advent of new global platforms which have fundamentally expanded the speed and scale with such activities can be carried out.

In the light of above, it's necessary to re-examine the revenue potential of social commerce from two different perspectives:

1. Direct revenue generated by businesses through exclusive pages and "shops" set-up on social platforms such as the Facebook. In this model, social commerce is considered as a distinct channel to business. People who question the revenue potential of social commerce often refer to this model and their assessment is based on both online businesses and platform providers today struggling to find how to convert social network dynamics into dollars or pounds.

2. Influenced Revenue refers to revenue generated by online businesses by seamlessly integrating the near-unlimited powers of social networks into their other channels of business like Mobile, Stores, Online, etc.

I believe future of social commerce lies more with influenced revenue than the direct model. It opens up plethora of opportunities for platform providers, intermediaries (companies that build innovative apps to help online businesses integrate with social platforms), as well online businesses. Such a mutually dependant eco-system would enable online businesses to harness near-unlimited power of social networks in a variety of ways.

To conclude, social commerce is here to stay and the key to success depends on how well online businesses are able to integrate their social strategies into their other channels of business to drive sales and how platform providers and intermediaries enable this seamless integration.