Much Ado about Apps – A Long Transformative Tail (Part One)

By now anyone who has a smartphone or a tablet also has an app, or rather, several pages of apps.  Apps are ubiquitous in digital life.

Apps alone can provide business benefit.  But apps plus a business platform, plus a business ecosystem, plus universal connectors can  position the enterprise to become elastic, primed for highly scaleable growth.

In this post we will describe how apps are being used to create elasticity through the customer ecosystem, improving customer engagement, customer experience and customer innovation.  In a second post, we’ll describe how apps are used to make the enterprise more elastic through different ecosysstem communities.

"Fruit Seller"

” Fruit Seller” Louise Moillon, 1631

Let’s start with the customer ecosystem.  The Baroque era, 17th Century painting by Louise Moillon, “Fruit Seller,” captures the essence of the merchant and customer relationship.  The customer contemplates the basket of fruit and considers whether the product might fulfill a need.  The painting embodies the customer lifecycle, as it has existed for eons, in one dramatic and artistic moment.

But today, the customer ecosystem expresses the dimensions of customer life in a highly connected world.  Customers talk with other customers.  Customers talk with competitors.  Customers share experiences about products.  Customers help other customers.  And in some cases, customers help companies make products and services better.  With the right app strategy an enterprise can engage the customer in ways never possible before, transform their company and create a long tail for competitive growth.

Nike’s early foray into apps with its social running site Nike+ and its alliance with Apple provided an enhanced customer experience with a long tail.  By Fall 2011, 5 Million+ Nike customer track runs, monitor performance, access training programs, share and compete with friends, and receive encouragement from top athletes. Nike customers can also design and order custom shoes and accessories.  What began, as a sensor in a shoe became Nike’s entre into the world of business platforms and business ecosystems.   Nike, once a sports equipment producer, is now a highly engaged purveyor of personal performance products, entertainment, value-added services and lifestyle advice.

In contrast a number of companies, while on the journey to an elastic enterpirse, have yet to truly generate ecosystem activity. Take a look at these API projects.

Other firms are working a similar formula.  In 2010 DIRECTV released an iPhone app so customers can control their DIRECTV satellite receiver when away from home.  In less than a year over 1 million customers downloaded its DVR Scheduler app for the iPhone.  Now DIRECTV has apps for virtually all smartphones and has expanded mobile apps for special products such as NFL Sunday Ticket and the iPad. In the world of financial services USAA, PayPal and Chase have apps to scan checks and make deposits from their smartphones and Fidelity Investments, eTrade, TD Ameritrade, Schwab and others have launched apps for investors and traders.  Note that all of these companies already have existing business platforms: DIRECTV with its satellite network, USAA with Auto Circle, PayPal with it payment servicing platform, and Fidelity, eTrade, TD Ameritrade and Schwab with investment trading platforms.

eBay was one of the first to release an app to support their peer-to-peer marketplace so customers can manage their bids and eBay business from their smartphones.  eBay recently announced its plans to expand its business platform and a truer business ecosystem strategy with PayPal mobile payments, Facebook Open Graph, Red Laser, and also support developer communities (e.g. eBay Mobile iOS SDK and Zong’s Android SDK) to create apps to further enhance their X.commerce (i.e. a suite of commerce services available to merchants, developers and vendors) marketplace.   The goal is to offer more services and more capabilities to customers and merchants.

Apps have begun to transform traditional retailers as well.  No longer content to be a showroom for e-tailers, some retailers have begun to fight back with apps of their own.  Tesco, a UK-based international retailer, offers apps for major mobile platforms (Apple iOS, Android, and RIM) to enhance the retail customer experience (see Tesco apps).  In South Korea, Tesco released an app called Homeplus to create a “virtual store” where customers use smartphones to scan barcodes of over 500 products posted on the walls of a subway station.  Products scanned during the morning commute are waiting at home that evening.

Apps are transforming the B2B customer space too.  General Electric Aviation designed a myEngines ™ app to enable aircraft fleet managers to access individual aircraft engine performance and fleet performance statistics (see GE app video).  The GE app provides global access to the GE Aviation business platform and the GE global aviation business ecosystem composed of communications, avionics, and aircraft maintenance partners.

Caterpillar has deployed an app for resale of heavy equipment that includes a catalog and prices of over 40,000 equipment items globally.  A maintenance manager or fleet manager can rapidly locate and negotiate a purchase for used Caterpillar-certified equipment.  The app and related business platform transforms a formerly opaque resale marketplace into a transparent global swap meet for heavy equipment buyers and sellers.

John Deere recently launched an agriculture equipment plus business platform plus business ecosystem approach called FarmInsight™ (see John Deere).  Customers can manage equipment, field activities, MRO with local dealers, and integration with mobile devices.   Deere has also deployed an iPad app for “property care” enthusiasts and iPhone, and Window web apps for control of course property and clubhouse management.

So here is a summary of the implications:

  1. Standalone apps are good, but apps combined with a business platform, business ecosystem, and a customer ecosystem is much better.
  2. When apps are combined with a business platform and a business ecosystem, the strategic options available to the company are virtually unlimited.
  3. Global software standards and universal connectors enable companies to assemble business platforms readily and create new offers for customers.  The ability to extend the value proposition creates “stickiness” and encourages customer engagement. Customers learn to expect a long tail experience.
  4. Apps when structured around a long-tail strategy create significant opportunities to continually increase customer engagement, customer loyalty and future options for an enhanced value proposition.
  5. Apps, whether dedicated or web-based become a pivot point or entry point for multi-channel customer service (e.g. phone, chat, social networking), opportunities for natural upsell activities, continuous innovation with customers, innovation in product features, and innovation in business processes.
  6. Apps, when properly designed for a well-defined set of tasks encourages customer engagement and ongoing interaction whenever and wherever, on the customer’s terms (i.e. pull vs. push).
  7.  Companies must embrace a multi-OS or multi-device strategy to maximize customer engagement.  Apps must be offered on all major mobile platforms.  Web-based apps offered through a browser are also a good idea to include customers using feature phones, particularly in developing markets.
  8. Apps can be a productive first step for traditional enterprises interested in becoming an elastic enterprise.

Indeed.  Much ado about apps.  In Part Two, we will examine the much ado about apps for employees and business partners.

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