1055RA Realizing Synergies in the Boundary-free Enterprise™: Mobile Payments
What is Happening? As the emerging Master Architecture takes shape, enabling the Boundary-free Enterprise™ with solutions that free the mobile knowledge worker and executive from their desks and build on the Cloud, as well as other capabilities (such as social/collaboration, data analytics and integration), will stimulate business innovation through synergies of value.
According to a current article in the trade press, a new study from the Pew Internet & American Life Projectand Elon University, indicated that by 2020, the majority of U.S. consumers will use smartphones to pay for goods and services. While we believe this is an exciting development, Saugatuck regards the real interest in this trend to be in the way in which mobile payments will become a part of the emerging master Architecture and enable business innovation in the Boundary-free Enterprise™.
Why is it Happening? In the recent 2012 Saugatuck Global SaaS Survey, the top five business goals of business and IT leaders were: 1) Increase sales revenue, 2) Reach new customers, 3) Increase market share, 4) Improve product or service quality, and 5) Sell more to existing customers. Moreover 61 percent agreed with the statement that “Mobile devices significantly improve the value and usefulness of Social Cloud solutions.” And, as we have previously noted in a recent published research, it is the power in the combinations among mobile, social, data analytics, integration and collaboration, all playing off each other and exchanging value in their interactions that is the real potential for business innovation in today’s emerging Master Architecture (See Figure 1).
Figure 1 – Emerging Master Architecture Enabling Boundary-free Enterprise™
A more complete discussion of the emerging Master Architecture and how best to manage its assembly and coherence will be the subject of an upcoming Saugatuck Strategic Report and Strategic Perspective. However, for quick reference to these important concepts, please see 1052CLS, Boundary-free Enterprise™: Empowered by the New Master Architecture, 11April2012 and 1054RA, The Emerging Master IT Architecture – Client / Server Gives Way to CMSA, 12April2012.
Market Impact We agree with the conclusions of market and thought leaders cited in the Pew study that Smart phones will replace credit cards and cash for many consumer purchases and that by 2020 more than half of consumers will use smart phones for purchases. We believe the pace of adoption may actually occur more rapidly.
Clearly, industry and thought leaders are concerned about two factors that at present are not yet enabling the adoption of mobile payments by merchants: a secure and accepted wireless network infrastructure for payments processing, and the support and adoption of mobile payments by the financial services industry.
The key is merchant adoption, which is in turn dependent on a secure and accepted network for payment processing, using wireless technology and also dependent on industry-wide payment systems today controlled by banks and other financial services companies that have a huge and profitable investment in the current credit and debit card infrastructure.
However, once the mobile-payments network infrastructure is in place, financial services companies would likely embrace the mobile payments system and today are planning for that eventuality. New players like Google, Apple and startups like Square could compete with financial services companies for a piece of the action, potentially restructuring the industry.
But the promise of mobile payments is a real plus for the Boundary-free Enterprise™. Consider the following scenario as one example:
||Makes a mobile purchase|
|Social||Tweets or Facebooks about it|
|Data Analytics||Purchase data is captured|
|Social net data is captured|
|(via Integration)||Correlated with uploaded|
|Advertising campaign data|
|Collaboration||Shared with others in|
||Ad and marketing departments|
|Plans formulated for next campaign|
|Mobile||Emails and text messages|
|Sent to traveling executive who|
|Authorizes the new campaign|
This new mobile payments capability is a good example of how synergies within the emerging Master Architecture enable business innovation in the Boundary-free Enterprise™. Saugatuck research indicates that it is the synergy among the functions, rather than any single capability or platform that delivers the value that business leaders seek: Increase sales revenue, Reach new customers, Increase market share, and Improve product or service quality, Sell more to existing customers. These are the business goals of the Boundary-free Enterprise™.