June, 2013

Unified Communications — The Next Disruption?

That notwithstanding, Siemens has caused me to do some deep thinking about product category rollouts and their lifecycles and that has made me go back to Arnulf Grübler’s classic, “The Rise and Fall of Infrastructures: Dynamics of Evolution and Technological Change in Transport”.  Grübler was associated with the International Institute for Applied Systems Analysis in 1990 when he published this and while the book might be getting old, it still offers some great insights.

Grübler traces transportation from the days of canals through the beginning of air transport after World War Two and yes, there is an important CRM component to this.  If you look at the figure supplied here, you notice that each type of infrastructure has its rise and fall, as the title implies and as the S-curves amply demonstrate.  If it looks like the curves were traced over by a fourth grader, it’s because the idealized shape is imposed on actual data.  See how well they overlap?

The 55 year span between peaks of each curve is also significant as it represents a “long wave” interval first recognized by Kondratiev and others.  It is the duration of an economic wave or paradigm and there is a great deal of writing available on this subject.  Quick question: Where are we on the IT long wave?  If we assume it started in about 1960, this paradigm where we all earn a living is getting old.  But I digress.

Here’s what’s most interesting to me.  Canals were developed to move heavy raw materials like coal and iron ore (and later some finished goods) from the mines to the factories.  But they were replaced by railroads that, in addition to moving freight, began doing business transporting people.  In each case, the transportation mode supported a kind of communication.

Canals moving raw materials had little need to be more explicit communicators.  Directions, bills of lading and the like were hand delivered on paper with the order.  Rails, on the other hand, began to move people associated with raw materials as well as finished goods.  People came along to sell the goods and train others about them.  People also came along to provide pure services.  Ball teams, politicians (arguably), business people, and circuses all traveled by rail and their principle interest was either communicating ideas or delivering a personal service to patrons.  Life became richer because of transportation.

Rails also moved people not associated with goods too, people on private business and those bringing information from place to place.  It is also no coincidence that the telegraph spread at the same rate as rails, at least initially.  When pure information was the only thing to be transported, telegraphy was better, faster, and cheaper than sending a body.

Roads accelerated the trend started with rails of enabling movement of goods, people, and it should be said, ideas.  Newspapers, for instance, extended their reach with trucking and eventually the telephone working on the same or very similar infrastructure replaced the telegraph for most voice communication.

The revolution in air travel has gone differently.  While airfreight has gained an important and lucrative part of the transport market — sending an over night package is no longer cheap — air travel has not replaced roads and rail to the extent you might have expected.  We travel long distanced by air but the flying car never took off due to energy concerns and because humanity’s dreadful driving record is no endorsement for making everyone a pilot.  But the communication theme remains in place.  People fly to communicate ideas in business and to communicate on a more personal level when flying for pleasure.  But lurking in the background is the new fangled Internet, which nicely takes on the functions of the earlier telephone and telegraph and which is competing with conventional transportation infrastructure.

We increasingly trade in information and not in goods and we have the ability to separate physical delivery of goods from virtual delivery of ideas.  So, at least in some forms and for some needs, communication is in the process of replacing transportation.

The potential for disruption that this presents will be huge.  For example, during 2009 (the latest year I have insight to, though there is more information on line) the U.S. Business Travel Association estimates that American business spent $234 billion in business travel costs.  If business can find a way to communicate more through electronic means than by transporting people, that number will surely go down.  It will hurt a part of the economy in the same way that the interstate highway system and trucking drove a few nails into railroads’ coffin.  But it will also raise up a new industry and a new technology platform which might likely exceed the revenues of what is being lost.  That’s the creative destruction that the economist Joseph Schumpeter wrote about in the 1930’s.

Unified communications — bringing together Internet, telephone, conferencing, software, video, and social media — has the capacity to be the disrupter of transport and the plain old next disruption.  It might be the next thing on the horizon and the next platform we need to think about beyond ERP and CRM.  Already Microsoft, Shoretel, ATT, Siemens, and many other vendors, have product sets that they are working to build out in this space.  There is more work to do to bring so many disparate technologies together but that work is ongoing.  There is also a great deal of work to be done explaining unified communication to a skeptical market.  Naturally, there are early adopters to be found too.  But I also think unified communication will inform how we think about CRM in the years ahead.