SA475: Trends in Technology
Presented for
BlueCross BlueShield of South Carolina
By
The Rushing Center
Furman University
1
Key Learning Outcomes
When you complete this course you will be able to:
1)
Contrast the evolutionary versus the revolutionary approach to
technological innovation.
2)
Distinguish between sustaining and disruptive technologies and
innovations
3)
Discuss the elements of an innovation strategy.
4)
Give a brief description of the following emerging
technologies/innovations:
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Grid (distributed/utility) computing
Virtualization
The Cloud
Crowdsourcing
Social Networking and Social Analytics
Context Aware Computing
Data mining
Nanotechnology
Quantum computing
Bio Technology in computing
2
CONTENTS
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Module 1: Evolutionary vs. Revolutionary Change
Module 2: Sustaining vs. Disruptive Innovations
Module 3: Some Emerging Technologies/Innovations
Module 4: The Innovators Dilemma
Module 5: Elements of an Innovation Strategy
References
3
MODULE 1
Evolutionary vs. Revolutionary Change
BlueCross and BlueShield
of South Carolina
The Rushing Center
Furman University
4
Organizational Agility
Kathy Harris, Vice President and Distinguished Analyst in Gartner's
Executive Leadership and Innovation team, recently made the
following observation:
“Agility is an organization’s ability to sense changes and to
respond efficiently and effectively to them. In 2009, if there’s
one thing that organizations need, it’s agility. Our economy and the
business environment are a steady stream of ups, downs and rapid
change; in such an environment, the ability to sense, respond and
react are true survival skills! … Aim to make your organization agile
throughout – this means ensuring that people, processes and
technology are flexible and adaptable to change.”
5
Being a Change Leader
Peter Drucker, who has written extensively about innovation and
change, declares that it is “a central 21st-century challenge that
[organizations] become change leaders.”
He further asserts that change leader organizations will see change
as opportunity, and hence will actively seek out the right kind of
change for the organization.
While we might be tempted to assume that such organizations
would embrace bold and daring steps to establish themselves as
change leaders, the process Drucker describes for doing this is
an evolutionary as opposed to a revolutionary one. He
advocates an analytical and systematic approach focused on
creating continuous improvement as the primary basis for becoming
a change leader.
6
Good to Great
In his book, Good to Great, Jim Collins also finds evidence of the
value of an evolutionary approach to change. In his study of
companies that rose from good to great he found no pattern of
singularly identifiable, transforming moments to which they could
attribute their remarkable success.
He writes, “revolutionary leaps in (company) results were
evident, but not by revolutionary process.” In other words, he
found that, consistent with Drucker’s assertions, evolutionary, not
revolutionary, processes were at work.
7
Revolutionary Results
Total I/S Staffing Levels: 1993-2008
8
Revolutionary Results
Total Online Transactions: 1993-2008
9
Evolution, Not Revolution in I/S
The BCBSSC Information System Division has
taken a unique, evolutionary, and systematic
approach in the development and
implementation of its administrative and
operational practices over the past 20 years.
I/S Management Practices Manual
10
I/S Organizational Architecture: OSD-IT Model
External Influencing
Factors
Client Business
Environment
• Customers
• Client Business Definition
• Client
Choices
Mission
Guiding Principles
Strategies to Influence
External Environment
• User
Goals & Objectives
IT Industry
• IT Skill Sets
• Computer Technology
• Best Practices
11
A model-based evolutionary and
systematic approach in the
development and implementation
of an IT Organization’s
administrative and operational
practices.
Organizational
Culture
Outcomes
Advantages of the Evolutionary Approach
- Balancing Change and Continuity 


This approach has resulted in the creation of innovative, functionrich, and award-winning healthcare administrative systems based
on a standard, yet flexible systems architecture which
incorporates current and future business requirements that can be
leveraged across various business segments.
It has also provided the benefits of increased technological
economies of scale by leveraging technical capabilities within an
effective IT Service Management framework across various
business segments to efficiently handle increased operational
volumes.
And most importantly, it has provided the ability to integrate IT
staff as required while ensuring management philosophies and
administrative and operational practices remain intact.
I/S Management Practices Manual
12
The Nature of Innovation
Sustained improvements over time lead naturally to process and
product innovations.
Drucker has advocated that innovation is much more the product of
systematic hard work – what he calls the practice of innovation –
than of flashes of insight and genius.
He expresses it as follows. “To be effective, an innovation has to
be simple, and it has to be focused. The greatest praise an
innovation can receive is for people to say, ‘This is obvious!
Why didn’t I think of it? It’s so simple!’ By contrast, grandiose
ideas for things that will ‘revolutionize an industry’ are unlikely
to work.”
13
The Practice of Innovation
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The process of systematically anticipating and proactively responding to change is very closely aligned
with the practice of innovation.
An innovation is more than a brilliant new idea.
An innovation is accomplished by creating something
new that also proves to be appropriate and useful for
some purpose.
14
Technology Brokering
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Andrew Hargadon explores the idea of innovation as
systematic work in his book How Breakthroughs Happen.
Based on ten years of study into the origins of historic
inventions and modern innovations the book’s findings
reinforce that innovations do not usually result from
flashes of brilliance.
Instead, innovations are much more likely to come about
from the creative combination of ideas, concepts, and
products from existing technologies in ways that
spark new technological initiatives.
Hargadon calls this process technology brokering.
15
Hargadon’s “Rules”

The future is already here
 In other words, organizations that seek to anticipate
and exploit change will do well to consider carefully
the activities, products, and services they and others
are focused on in the present.
 It is almost always the baseline of present activities
that allows organizations to make the insightful moves
that position them as change leaders in their industry.
16
Hargadon’s “Rules”

Analogy trumps invention

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Instead of searching for insights and flashes of brilliance that no
one else has thought about or considered, a more promising
approach is to look for successful ideas and inventions in other
areas and think creatively about how to combine them, modify
them, and apply them to the opportunity or problem you have at
hand.
This approach has more promise simply because it is much
easier to recognize the similarities between two situations than to
come up with something neither you nor anyone else has ever
thought of before.
In this approach, you attempt to think inside other boxes, to use
Hargadon’s phrase, instead of trying to follow the more common
advice of thinking “outside the box.”
17
I/S Guiding Principles
Technology itself is never a primary cause of either greatness or
decline in a business. Avoid technology fads and bandwagons.
Recognize that you cannot make good use of technology until you
know which technology is relevant to the business it supports.
Technology can accelerate business momentum, but not create it.
Therefore, you need the discipline to say no to the use of technology.
Crawl, walk, run is a very effective approach to technology
change!
18
I/S Guiding Principles
Keep your eye on the goal. Inventing the “Next Big Thing” is not the
goal. Building the “Current Big Thing” better than anyone else is the
goal. We are not Alpha inventors, we are Beta improvers!
19
I/S Guiding Principles
If you start with a blank sheet of paper, you’re dead. “Thinking outside
the box” has come to mean thinking of a solution that is somehow
outside of what you already know and do, and coming up with
something wholly new. Pushing people to think outside the box doesn’t
work. Instead, our approach to innovation is to take an idea or
solution that has been used somewhere else, combine a number of
existing ideas or solutions, and introduce them as a solution never
seen before.
20
I/S Guiding Principles
Maintain an attitude of healthy discontent. Sound management requires
a probing, inquiring mind. Satisfaction with the status quo should be
avoided. As you carry out your responsibilities as a manager,
intelligently question existing practices and procedures. Ensure the
most effective, up-to-date methods are being used. Actions based on
the rationale, “that's the way we've always done it" should be examined
closely. As a manager, you must not be afraid to challenge precedent.
Be alert for antiquated or improper practices, which must be changed.
21
Team Exercise
1)
2)
Can you identify some examples of evolutionary
innovations that the I/S Division has implemented?
Can you identify some examples of attempted
revolutionary change in the IT industry that didn’t
work out so well?
22
MODULE 2
Sustaining vs. Disruptive Innovations
BlueCross and BlueShield
of South Carolina
The Rushing Center
Furman University
23
Group Exercise: Case Study of DEC

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Listen to the first part of the lecture by Clayton
Christensen.
What happened to DEC?
How did this happen?
Could it have been avoided?
What would it have taken to do this?
24
Sustaining Technology/Innovation
A sustaining technology/innovation is a
technology or innovation employed to improve a
company’s product or service to better meet their
customers’ needs.
Sustaining innovations can be:
• evolutionary
• revolutionary
• incremental and gradual
• discontinuous and dramatic
The distinction is not about the innovation
itself but rather what it is used to do.
25
Disruptive Technology/Innovation
A disruptive technology/innovation is a technology or
innovation employed to appeal to or even create a new
market.
Disruptive technologies and innovations
are often characterized (at least at first) by:
-
• inferior performance
• lack of appeal to established
customer base
• lower profit margins
+
• convenience
• appeal to a select group of potential customers
• lower cost
26
Sustaining or Disruptive?
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Microsoft’s development of Internet Explorer
Open-source software (like Linux)
More fuel-efficient cars
Sustaining vs.
Electric cars
disruptive can
depend on your
The personal computer
perspective
Selling computers via the Internet
Selling stocks via the Internet
Education via the Internet
Online banking
Insurance claims processing via the Internet
27
Market for Disruptive Innovations?
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The personal computer (in the early 1980s)
PDAs
Electric cars
Buying computers via the Internet
Buying stocks via the Internet
Open-source software (like Linux)
Online banking
Digital goods (books, music, movies, newspapers) via the
Internet
Books & travel via the Internet
How can such markets
change over time?
How might the rate of
potential change differ
for these examples?
28
Markets and Technology Innovations
sustaining
performance that
market can absorb
disruptive
time
Adapted from The Innovator’s Dilemma, Clayton Christensen
29
Group Exercise
1)
2)
3)
Identify some sustaining technologies or
innovations that BCBS of SC has implemented.
Would you classify any of these as potentially
disruptive technologies/innovations for others?
Can you identify potential future disruptive
technologies or innovations for the company?
30
MODULE 3
Some Emerging Technologies/Innovations
BlueCross and BlueShield
of South Carolina
The Rushing Center
Furman University
31
Some Emerging Technologies
 Grid
(distributed/utility) computing
 Virtualization
 The Cloud
 Crowdsourcing
 Social Networking and Social Analytics
 Context Aware Computing
 Data mining
 Nanotechnology
 Quantum computing
 Bio Technology in computing
Photo by Randall Schwanke
Emerging Technologies, MIT Technology Review
32
Grid (Distributed/Utility) Computing
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Computing grids pool together and manage resources
from isolated systems to form a new type of low-cost
supercomputer
Makes supercomputing available where economics
would otherwise prevent this
Grids remained a bit of an oddity in the domain of
researchers for many years
Sustaining or disruptive?
33
Grid Computing: Non-commercial Uses
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Most well-known example is the SETI@home
project (more than 5,000,000 volunteers and
more than 2,000,000 computing-years of CPU
time volunteered)
Oxford and Intel-United Devices cancer research
Photo by Jenny Rollo
project is another example (over 3,000,000 volunteers)
IBM sponsors an effort called World Community Grid that
connects volunteers with worthy scientific projects that could
benefit humankind (relatively new, 50,000+ members thus
far)
All of these involve:
 Volunteer efforts
 You sign up your computer and download a screensaver
which runs background processing whenever the
computer is idle
34
Grid Computing: Commercialization

Sun President, Jonathan Schwartz,
compared grid computing to history
of the electric power industry:
“The world does not need 5,000 different
custom electrical generators with 5 million
electricians customizing the distribution of
electricity. ... The industry around IT will likely
go through the same transformation that the
electric industry did about a hundred years ago.“

Bill Gates told InformationWeek six years
ago that grid computing is “the holy grail of
computing.”
35
Grid Computing: An Example
Video
Burlington Coat Factory Warehouse Corporation has deployed an enterprise
Grid computing infrastructure utilizing Oracle 10g software. The retailer's
adoption of an Oracle Grid computing solution has begun the enablement to
deliver higher application service levels, improve Information Technology (IT)
resource utilization, and allow for scalability of IT systems to support future
growth.
"Grid computing is viable with Oracle 10g," said Michael Prince, CTO, Burlington
Coat Factory. "Oracle 10g does away with the complexity related to deploying
and managing a grid. Our grid is automated, redundant, and delivers a pool
of IT resources large enough to deal with the spikes in demand that occur."
"Our Grid infrastructure allows us to maximize the use of our hardware and
software infrastructure which is key to our ability to support mixed
workloads," said Brad Friedman, CIO, Burlington Coat Factory. "With a grid at
our disposal, we can run transactional, decision support and administrative
operations simultaneously while maintaining high levels of system availability
and performance."
36
The Cloud
What is Cloud Computing
Why Cloud Computing

The latest state of grid computing commercialization is often referred to
as cloud computing, or simply the cloud.

The name apparently derives from the fact that cloud computing
involves software that resides in the “clouds” of the Internet.

According to Vinton Cerf (one of the creators of the Internet and VP
and Chief Internet Evangelist at Google):
“At Google we operate a number of data centers around the world,
each of which contains a large number of computers linked to one
another in clusters. In turn, the data centers are linked through a highspeed private network. The data centers support applications and
services that users can access over the Internet to tap into virtually
unlimited computing power on demand, a process known as cloud
computing.”
37
The Cloud (cont’d)

Conceptually a cloud operates by creating virtual
machines (VMs) on servers. These VMs can be
created and configured in an instant, and
disappear just as fast when no longer needed.

These dynamically allocated VMs give users
access to essentially as much computing power
as they need for a very low price, compared to
what it would cost for them to provide the same
computing power on their own.

In addition to a low price, the user is relieved of all
maintenance issues.

The analogy with the electric grid captures the
concept very closely.
38
The Cloud (cont’d)

For example, Gmail, Twitter and Facebook are all
cloud applications.

The load and performance demands of each of
these are unpredictable and vary considerably
over time.

The almost-immediate expansion capabilities of
the cloud makes applications like these robust at
a reasonable cost.
39
The Cloud (cont’d)

Amazon, IBM, Microsoft, Sun, Salesforce and others are
implementing and experimenting with systems similar to
the one that Google has developed.

Currently, all these clouds operate in isolation
communicating only with their users.

Cerf suggests that one of the great challenges for cloud
computing is to create ways for the clouds to
communicate with each other, giving users the option of
moving data form one cloud to another without first
downloading it and then uploading it again to another
cloud.

Cloud computing service providers offer server space and
processing and often operate these servers for many
businesses
40
Computing in the Cloud
The 3 Ways to Cloud Compute

Cloud computing includes three main areas of
service:

Infrastructure as a Service (IaaS)
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
Platform as a Service (PaaS)
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Delivery of a computing platform over the Internet
Software as a Service (SaaS)

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Delivery of a networked computing structure over the
Internet
Delivery of software applications over the Internet
Cloud computing is more cost-effective
41
Infrastructure as a Service: Virtualization

Using virtualization, one host machine can operate as if it
were several smaller servers
Video
Virtualization can
generate huge savings.
Some studies have
shown that on average,
conventional data centers
run at 15 percent or less
of their maximum
capacity. Data centers
using virtualization
software have increased
utilization to 80 percent or
more
42
Platform as a Service:
Application Development in the Cloud
PaaS facilitate deployment of applications without the cost and complexity of
buying and managing the underlying hardware and software and hosting
capabilities.
PaaS provide all of the facilities required to support the complete life cycle of
building and delivering web applications and services entirely available from
43
the Internet.
Platform as a Service:
Application Development in the Cloud
Azure Video
Azure
Google App
Engine
Force.com video
44
Software-as-a-Service

Software-as-a-service (SaaS) – delivery model
for software in which you pay for software on a
pay-per-use basis instead of buying the software
outright




Use any device anywhere to do anything
Pay a small fee and store files on the Web
Access those files later with your “regular” computer
Makes use of an application service provider
Force.com video dashboards
9-45
Consumer Applications in the Cloud

Cloud computing makes it possible for companies to offer Webbased versions of popular personal computer programs

Google Apps - Replace Microsoft office?
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Gmail, Google Calendar and Google Docs
Google Calendar
 Share your schedule
Get your calendar from your phone
Get event reminders via email or have text messages sent right to your
mobile phone.
Gmail
Google Docs
Google Reader
 Stay up to date: Google Reader constantly checks your favorite news
sites and blogs for new content.
 Share with your friends: Use Google Reader's built-in public page to
easily share interesting items with other people
 Use it anywhere, for free: Google Reader is free and works in most
modern browsers, without any software to install.
Google Sites
ZohoWriter
Microsoft Office Live
46
Business Applications in the Cloud

The Salesforce Service Cloud allows businesses to
pay as they use services, instead of owning
comparable software. Force.com video customer service
47
Application Programmable Interface (API)

Specifies the programming interfaces required
for software applications to interact with other
applications



Much as a user interface specifies menus, screen
layouts, and other aspects of how people interact with
software applications
APIs are software modules that enables
software applications to interact with each other.
Web services are APIs that Web applications
can request to run over the Internet
Creating New Applications from Data in the Cloud
Mashups
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Mashups are Web applications that combine content or data from
multiple online sources into new Web applications
Contents are continually updated
Content for mashups often comes from Web feeds and Web services
Amazon uses mashup technologies to aggregate product descriptions with
partner sites and user profiles, commentaries, and images.
Travel sites, such as Travelocity, Kayak, Matador, and Travature, integrate
standard content (such as airfare search engines, travel guides, maps,
and hotel reviews) with comments, ratings, and images from users.
Creating mashups usually requires significant Web development
experience
Mapping mashups are the most popular type of mashup
HousingMaps.com
SpotCrime.com

SpotCrime displays the locations of criminal incident reports on a Google Map to
illustrate where crime takes place in a neighborhood.
49
The Cloud – Security Issues

In cloud computing, thousands of different clients use the
same hardware on a large scale – the key to the efficiency
of the cloud in providing such low cost services.

However, security researchers have demonstrated that
when two programs are running simultaneously on the same
operating system, an attacker can steal data by using an
eavesdropping program to analyze the way those programs
share memory space.

Could this same technique be used in clouds when different
virtual machines (VMs) run on the same server?

Several researchers recently demonstrated that this could in
fact happen utilizing Amazon’s Elastic Compute Cloud.
50
The Cloud – Security Issues (cont’d)

In 2008, a single corrupted bit in messages between servers
used by Amazon’s Simple Storage Service which provides
online data storage by the gigabyte, forced the system to
shut down for several hours.

In 2009, a hacker who correctly guessed the answer to a
Twitter employee’s email security question was able to grab
all the documents in the Google Apps account the employee
used.

Also in 2009, a bug comprised the sharing restrictions
placed on some users’ documents in Google Docs.
Distinctions were erased: anyone with whom you shared
document access could also see documents you shared
with anyone else.

Late in 2009, a million T-Mobile Sidekick smart phones lost
data after a server failure at Danger, a subsidiary of
Microsoft that provided the storage.
51
The Future of the Cloud

Amazon’s cloud customers include the New York
Times and Pfizer.

The City of Los Angeles uses Google Apps for
email and other routine applications.

The White House recently launched
www.apps.gov to encourage federal agencies to
utilize cloud services.
52
The Future of the Cloud (cont’d)





According to the Gartner Group:
 “By 2011, early technology adopters will forgo capital expenditures and
instead purchase 40 percent of their IT infrastructure as a service,”
 “Increased high-speed bandwidth makes it practical to locate
infrastructure at other sites and still receive the same response times."
69 % of America’s Internet users are using some form of Internet-based
computing, such as web-based e-mail or photo storage, according to a study
by Pew Research Center.
By 2013, 12 % of the world software market will be Internet based forms of
SaaS and cloud computing, according to Merrill Lynch.
What impact will a long-term, global recession have on cloud computing?
 A survey by ScanSafe, a SaaS provider of security services, revealed that
78% of IT managers believe economic uncertainty makes SaaS more
appealing.
"A move towards clouds signals a fundamental shift in how we handle
information," writes Stephen Baker in Business Week. "At the most basic
level, it's the computing equivalent of the evolution in electricity a century ago
when farms and businesses shut down their own generators and bought
power instead from efficient. industrial utilities."
53
The Future of the Cloud (cont’d)
The focus of IT innovation has shifted from hardware to software
applications. Many of these applications are going on at a blistering pace,
and cloud computing is going to be a great facilitative technology for a lot
of these people.
Dale Jorgenson, Harvard Economist and
expert on the role of IT in national productivity
Clouds are systems. And with systems, you have to think hard and know
how to deal with issues in that environment. The scale is so much bigger,
and you don’t have the physical control. But we think people should be
optimistic about what we can do here. If we are clever about deploying
cloud computing with a clear-eyed notion of what the risk models are,
maybe we can actually save the economy through technology.
Peter Mell, Leader Cloud Security Team
National Institute of Standards and Technology (NIST)
54
Crowdsourcing

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•



Crowdsourcing organizations (involve their users in
the design and marketing of their products.
Shoe startup company RYZ (see next slide) sponsors
shoe design contests to help it understand which
shoes to create and how to market those designs.
Example: Netflix announcement of reward for
technology solution to its movie recommendation
Crowdsourcing combines social networking, viral
marketing, and open-source design, saving
considerable cost while cultivating customers.
With crowdsourcing, the crowd performs classic inhouse market research and development and does so
in such a way that customers are being set up to buy.
Video
Design by Crowdsourcing
The Future of Social Technology
 Gartner predicts that by 2016, social
technologies will be integrated with most
business applications.
 Companies should bring together their social
CRM, internal communications and
collaboration, and public social site initiatives
into a coordinated strategy.
57
Social Networking in Business
• Businesses can use these tools to reach out and market to
potential new customers.
• Many businesses have Facebook sites to market their
product to specific groups on Facebook.
• They can use these tools to support and give added
value to existing customers.
• A software company could have a blog that discusses indepth use of a software product.
• Businesses can use these tools within their company to
communicate between departments and share knowledge.
• Wiki – allows you (as a visitor) to create, edit, change, and
often eliminate content
• A company wiki could be set up as a repository of
expert information.
How Can Businesses Utilize Social
Networking Applications?
Social networking application


A computer program that interacts with and
processes information in a social network
Examples:

Survey Hurricane, a Facebook application created by
Infinistorm (www.infinistorm.com).


Users who install that application on their page can survey their
friends on topics of interest.
Applications for buying and selling items, comparing movies,
and so on
Social Analytics


 Social analytics describes the process of
measuring, analyzing and interpreting the results of
interactions and associations among people, topics
and ideas
These interactions may occur on social software applications used in the
workplace, or on the social Web.
Social analytics is an umbrella term that includes a number of specialized
analysis techniques such as:

social filtering,







techniques that identify information a user might be interested in
used to create "recommendation systems" that can, for example, enhance your
experience on a Web site by suggesting music or movies that you might like
social-network analysis,
sentiment analysis
social-media analytics.
Social network analysis tools are useful for examining social structure
and interdependencies as well as the work patterns of individuals, groups
or organizations.
Social network analysis involves collecting data from multiple sources,
identifying relationships, and evaluating the impact, quality or
effectiveness of a relationship.
Sentiment Analysis




Web Site
Video
Wikipedia defines sentiment analysis as the process that “aims to
determine the attitude of a speaker or a writer with respect to
some topic.”
Automated sentiment analysis is the process of training a
computer to identify sentiment within content through Natural
Language Processing (NLP). (Google Translate)
Various sentiment measurement platforms employ different
techniques and statistical methodologies to evaluate sentiment
across the web. Some rely 100% on automated sentiment, some
employ humans to analyze sentiment, and some use a hybrid
system.
The social media health of a brand is how it’s public sentiment
compares to that of its competitors.


If your sentiment is 20% negative, is that bad? The answer is, it
depends.
However, if you see your competitors with a roughly 50% positive and
10% negative sentiment, while yours is 20% negative, that probably
merits investigation to understand the drivers of these opinions.
Context Aware Computing
Video
 Using information about an end user’s
environment, activities, connections and
preferences to improve the quality of interaction
with that end user.
 The end user may be a customer, business partner or
employee.
 A contextually aware system anticipates the user's needs and
proactively serves up the most appropriate and customized
content, product or service.
 Gartner predicts that by 2013, more than half of Fortune 500
companies will have context-aware computing initiatives, and
by 2016, one-third of worldwide mobile consumer marketing
will be context-awareness-based
Context aware computing discussion
Context aware computing in the future
For instance, sensors attached to a TV remote control can collect data on how the
remote is held by different users and build profiles based on that. Such a remote, of
which Intel showed a prototype at the conference, could identify who’s holding the
remote and offer recommendations for TV shows based on that
Web 3.0
•Web 3.0 is the vision of the next generation of the Web in
which all of the information available on the Web is woven
together into a single experience.
•The related movement called the Semantic Web is a
collaborative effort to add a layer of meaning to existing
information to reduce the amount of human time spent in
searching and processing that information.
•This potentially could have huge effects on businesses as
simple analysis becomes mechanized, requiring fewer
humans to perform this basic task.
Linking Data in Context:
A Prelude to Web 3.0 and Beyond

Web 3.0 is the name that is being used to
describe emerging trends that allow people and
machines to link information in new way


Personal Web assistants called Agents can make
decisions and take actions based on a user’s
preferences
Many describe Web 3.0 as the rise of the
Semantic Web

Intelligent software tools can read Web pages and
discern useful information from them.
64
Linking Data in Context:
A Prelude to Web 3.0 and Beyond
65
Linking Data in Context:
A Prelude to Web 3.0 and Beyond
66
Data Mining

We hear a lot about information overload

Information overload is often more accurately data
overload

Utilizing vast amounts of data requires smarter
methods for extracting information from data

Bioinformatics and the human genome project is a
prime example

Data mining is the technology
developed to attack such
problems
Photo by Elvis Santana
67
Data Mining

Data mining relies on advances in machine learning

The goal is to create a program that can
automatically analyze large data sets and decide
what information is most relevant for a particular
problem domain
This distilled information can then be used to
automatically make predictions or to help people
make decisions faster and more accurately

68
Data Mining: Two Models

Predictive models can be used to forecast unknown or
unseen values, based on patterns determined from known
results

Also called supervised data mining

Model developed before analysis

For example, from a database of customers who have
already responded to a particular offer, a model can be
built that predicts which prospects are likeliest to respond
to the same offer

Statistical techniques used to estimate parameters

Examples


Regression analysis – measures impact of set of variables on one
another
Used for making predictions
69
Data Mining: Two Models


Descriptive models describe patterns or
underlying processes in existing data, and are
generally used to create meaningful subgroups
such as demographic clusters
Also called unsupervised data mining


Apply data mining techniques and observe results
Analysts create hypotheses after analysis to explain patterns
found


No prior model about the patterns and relationships that might
exist
Common statistical technique used:

Cluster analysis to find groups of similar customers from
customer order and demographic data.
70
Regression Analysis
CellphoneWeekendMinutes = 12 + (17.5 * CustomerAge) +
(23.7 * NumberMonthsOfAccount)


Using this equation, analysts can predict number of
minutes of weekend cell phone use by summing 12,
plus 17.5 times the customer’s age, plus 23.7 times
the number of months of the account.
Considerable skill is required to interpret the quality
of such a model
Uses of Regression Analysis:
• Predicting sales amounts of new product based on
advertising expenditure.
• Predicting wind velocities as a function of temperature,
humidity, air pressure, etc.
• Time series prediction of stock market indices.
Data Mining: Sampling of Business Applications
Video













Market segmentation
Error detection
Evaluation of sales patterns
Credit risk analysis
Ad revenue forecasting
Claims processing
Credit risk analysis
Cross-marketing
Customer profiling
Customer retention
Electronic commerce
Exception reports
Food-service menu analysis













Fraud detection
Government policy setting
Hiring profiles
Market basket analysis
Medical management
Member enrollment
New product development
Pharmaceutical research
Process control
Quality control
Shelf management
Targeted marketing
Warranty analysis
72
Neural Networks
NN Video
Neural networks



Popular supervised data-mining technique used to
predict values and make classifications such as
“good prospect” or “poor prospect” customers
Complicated set of nonlinear equations
See kdnuggets.com to learn more
2020?




Through data mining, companies, known as “data
aggregators”, will know more about your purchasing
psyche than you, your mother, or your analyst.
If you use your card to purchase “secondhand clothing,
retread tires, bail bond services, massages, casino
gambling or betting” you alert the credit card company of
potential financial problems and, as a result, it may cancel
your card or reduce your credit limit.
Absent laws to the contrary, by 2020 your credit card data
will be fully integrated with personal and family data
maintained by the data aggregators (like Acxiom and
ChoicePoint).
By 2020, some online retailers will know a lot more about
you, data aggregators, and most consumer’s purchases
than we’ll know ourselves.
Semantic Security

Security is a difficult problem


Unintended release of protected
information
Physical security



Protect through passwords and permissions
Delivery system must be secure
Semantic security


Unintended release of protected information
through release of unprotected reports
Equally serious and more problematic
Nanotechnology




Ability to manufacture extremely small devices
“Smart” nanodust may be combined with wireless
technologies to provide new environmental monitoring
systems
Current approach – start big and squeeze, press, slice, and
dice to make things small
Nanotechnology approach – start with the smallest element
possible (i.e., atom) and build up
This nanomechanical structure fabricated by a
team of physicists at Boston University consists of
a central silicon beam, 10.7 microns long and 400
nm wide, that bears a paddle-array 500 nm long
and 200 nm wide along each side. This antennalike structure oscillated at 1.49 gigahertz or 1.49
billion times per second, making it the fastest
moving nanostructure yet created.
76
Nanotechnology Impact
Video

Pharmaceuticals


Drug delivery encapsulated in “nano-spheres”
Electronics



Video2
Faster, smaller processors
Immense storage capacities
Material Science


Stronger materials
Super conductivity
Buckyball from Wikipedia
77
Quantum Computing

Many believe that quantum computing systems represent the
next major revolution in computing

Quantum computers will be exponentially faster than today’s
fastest supercomputers
78
Quantum Computing
Video

Quantum computing uses qubits instead of transistors (bits)

A single qubit (utilizing particle spin) stores and processes twice
as much information as a regular bit.

Combining qubits delivers exponential improvement
Two qubits are four times more powerful than two bits
 A 64-qubit computer would theoretically be 264 (=18 billion trillion)
times more powerful than the latest 64-bit computers!
The first prototype quantum computer (with two qubits) was created in
1998



In 2001, Almaden Research Center demonstrated a 7-qubit machine
(using 10 billion billion atoms) that could factor the number 15

In early February 2007, D-Wave Systems, Inc., a privately-held Canadian
firm headquartered near Vancouver, announced: “the world’s first
commercially viable quantum computer”
79
Quantum Computing and Security

RSA (public key) encryption is the basis for
securing data across networks today

The integrity of RSA encryption systems depends
on the practical difficulty of factoring the product
of two large primes

The incredible speed of quantum computers could
render this defense against unauthorized
decryption useless

But the news isn’t all bad, some researchers
believe new encryption methods depending on
characteristics of quantum computing could
provide the solution
80
Biometric Security

Best security is 3-step
1.
2.
3.


What you know (password)
What you have (card of some sort)
Who you are (biometric)
Today’s systems (ATMs for example) use only
the first two
One reason why identity theft is so high
9-81
Integrating Biometrics with Transaction
Processing


TPS – captures events of a transaction Video
Biometric processing system – captures
information about you, perhaps…





Weight loss
Pregnancy
Use of drugs
Alcohol level
Vitamin deficiencies
9-82
Integrating Biometrics with Transaction
Processing
9-83
Integrating Biometrics with Transaction
Processing



Is this ethical?
Can banks use ATMs and determine if you’ve
been drinking?
How will businesses of the future use biometric
information?


Ethically?
Or otherwise?
9-84
Biometric Self Tracking Tools


Monitoring tools now used in hospital ICU’s will
be wearable gadgets
Automatically send data to wearer’s cell phone
or computer around the clock.




Compared to doctor office visit .


Blood pressure
Hear rhythms
Mood
Could reveal a person’s health in context
Currently available to track


REM sleep patterns
Diet - diabetes
85
Big Data, Data Analytics and Hadoop

What is Big Data

What is Hadoop
More about Hadoop

86
The nature of the industry:
Online Retailers
BI Applications
Analysis of clickstream data
• Customer profitability analysis
• Customer segmentation analysis
• Product recommendations
• Campaign management
• Pricing
• Forecasting
•
•
Dashboards
Online retailers like Amazon.com and Overstock.com are examples of high volume operations who
rely on analytics to compete. As soon as you enter, their sites a cookie is placed on your PC and
all clicks are recorded. Based on your clicks and any search terms, recommendation engines
decide what products to display. After you purchase an item, they have additional information that
is used in marketing campaigns. Customer segmentation analysis is used in deciding what
promotions to send you. How profitable you are influences how the customer care center treats
you. A pricing team helps set prices and decides what prices are needed to clear out merchandise.
Forecasting models are used to decide how many items to order for inventory. Dashboards
monitor all aspects of organizational performance
MODULE 4
The Innovators Dilemma
BlueCross and BlueShield
of South Carolina
The Rushing Center
Furman University
88
View the Lecture
The Opportunity and Threat of
Disruptive Technologies
Professor Clayton Christensen
Harvard Business School
89
Group Exercise
1.
Do you see disruptive technologies looming in
your industry?
2.
Are these threats or opportunities?
3.
What are the key characteristics of the
disruptive technologies that your company
faces?
4.
Are the technologies strategically significant?
5.
What are their initial markets?
6.
How could your company address these disruptive
technologies?
90
MODULE 5
Innovation Strategy
BlueCross and BlueShield
of South Carolina
The Rushing Center
Furman University
91
Elements of an Innovation Strategy I

Look for growth outside of, but not too far from, your
core business
 What jobs can existing customers not do?
 Who are your worst customers?
 Where are the barriers that constrain consumption?
92
Elements of an Innovation Strategy II

How can we serve this market?
 Existing solutions are too expensive, too complicated
or do not quite do the job
 The solution is good enough along traditional
dimensions, but superior in dimensions that matter
more to the customer
 The business model has low overhead and high asset
utilization, and therefore allows lower prices or smaller
markets
 Powerful incumbents are not interested in pursuing the
strategy initially
93
Elements of an Innovation Strategy III

Pursue innovative opportunities
 Create specific opportunities
 Focus on patterns rather than numbers


Make “number of zeros” estimates – Guess at impact
Execute and adapt
 Good enough can be great
 Step, don’t leap
 The right kind of failure is success.
Video
94
Group Exercise: Innovation and Organization
1.
Does having an organization that utilizes
specialists contribute to innovation?
2.
Do you think a company could better promote
innovation if it had a group specifically devoted
to innovation?
3.
What are some of the pros and cons of having
such a group?
95
Key Learning Outcomes
When you complete this course you will be able to:
1)
Contrast the evolutionary versus the revolutionary approach to
technological innovation.
2)
Distinguish between sustaining and disruptive technologies and
innovations
3)
Discuss the elements of an innovation strategy.
4)
Give a brief description of the following emerging
technologies/innovations:


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
Grid (distributed/utility) computing
The Cloud
Crowdsourcing and Social Technology
Web 3.0
Data mining
Nanotechnology
Quantum computing
Biometric Security
96
WRAPPING UP!


Review of our original key
learning outcomes
Questions?
97
References
98


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How Breakthroughs Happen, Andrew Hargadon,
Harvard Business School Press, 2003.
“The Change Leader,” Chapter 3 in Management
Challenges for the 21st Century, Peter Drucker,
Harper Business, New York, 2001.
Andrew Hargadon, an interview with the ACM online
journal Ubiquity, at
http://www.acm.org/ubiquity/interviews/v4i30_hargadon.html

Kathy Harris, Article on Gartner Blog found at:
http://blogs.gartner.com/kathy_harris/2009/04/28/innovation-andagility-two-do%E2%80%99s/

“Security in the Ether," David Talbot, MIT Technology
Review, February 2010.
99
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


The Innovators Dilemma, Clayton Christensen,
HarperBusiness Essentials, 2002 (originally published
in 1997 by the Harvard Business School Press).
The Innovators Solution, Clayton Christensen and
Michael Raynor, Harvard Business School Press,
2003.
"The Rules of Innovation," Clayton Christensen, MIT
Technology Review, June 2002.
"Disruptive Innovation: A New Diagnosis for Health
Care's 'Financial Flu'." Healthcare Financial
Management, John Kenagy and Clayton Christensen,
May 2002.
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