My prediction for 2013 concerns the end of work for most of us — which may not necessarily be a good thing.

Back in 1995, social activist and economist Jeremy Rifkin wrote a controversial book called The End of Work in which he argued that both blue and white collar jobs across the globe were increasingly becoming the private preserve of information technology intensive systems. Rifkin claimed that “software surrogates” were leading to a steady and permanent decline in the number and types of jobs that humans could do better. The inevitable question society soon had to face, he argued, was what actions were urgently needed to deal with the end of work as we understood it.  Depending on the decisions society took, a near worker-less global society might be a “safe haven,” a nirvana of personal advancement and social transformation, or an “abyss,” one pocketed by poverty and crime for all but a small, wealthy elite.

The book was generally dismissed at the time as an overly pessimistic or even Luddite vision of the future. Critics argued that every technological revolution has naturally experienced a displacement of currently-employed workers for a period of time, but that the introduction of the new technologies were more  net job creator than a job destroyer. For instance, in 1900, 38% of theU.S.labor force was engaged in farming; by 1990 that had dropped to 2.6%, as technology radically decreased the need for farmers while simultaneously increasing food production. In 1900, one farmer could produce enough food to feed 10 people; by 1990 that same farmer could feed 129 (today it is about 153 people).  In addition, farm mechanization increased the labor supply available to work in factories, like those needed to support the nascent automobile industry, a child of transportation-related technological improvements. While the introduction of information technology inU. S.manufacturing in turn helped spur a loss of jobs in that industry sector, many lost jobs there were replaced by a strong growth in jobs in the burgeoning service sector economy.

Critics also argued that Rifkin was overestimating how easily humans could be replaced by technology.

For the past fifteen years, Rifkin’s critics have looked comfortably correct in their predictions. In addition, the Internet, which was just beginning to take hold in 1995 and its impact on helping create new jobs categories that didn’t even exist in 1995 wasn’t even considered by Rikfin. However, there is a growing disquiet about another source of technological unemployment that may be qualitatively and quantitatively different than those of the past.

The ongoing economic slowdown over the past five years has led businesses to shed workers or outsource their work overseas, as well as to invest even more in information technology to maintain their productivity and profit. Some economists estimate that around 2.5 million U. S. jobs have permanently vanished as a result.

Other economists are now talking about the great “hollowing out” of middle-wage jobs.  According to economic estimates, from 21% to as much as 42% of all current jobs in theU. S. are at risk of being outsourced over the next few decades, with the proliferation of and improvement in ever inexpensive information technology acting as a catalyst.

Another source of disquiet is the ever increasing global demand for jobs: world population growth alone will require the creation of 600 million new jobs in the next decade above the existing job base.

One area that caused Rifkin to be concerned about future employment was increasing the rise of robots, and their capability to eliminate massive number of jobs. His worry may not be so farfetched. The past year have seen some remarkable advances in robotics (you can read about – as well as watch – the latest in robotics at IEEE Spectrum magazine’s Automaton blog) as well as some interesting announcements in replacing workers with robots.

For instance, last year the Taiwanese manufacturer of the Apple iPhone, Foxconn, announced plans to replace many of its 1.2 million workers with 1 million robots within 3 years which will be used in the beginning for routine work such as spraying, welding and assembling. This month, Foxconn announced that it had already installed 10,000 robots and it plans to have 300,000 in place by the end of 2013. A motivation for installing the robots, Foxconn stated, is to cut rising labor expenses and improve efficiency. Foxconn’s investment in robots will be around $15 – $20 billion.

Earlier this year, Amazon announced that it had bought robot maker Kiva for $775 million in cash. The robots Kiva makes stock shelves in warehouses. The expectation is that Amazon will use them to reduce its current 15,000 warehouse staff – or at the very least, eliminate the need for Amazon to hire more workers by making its current staff much more productive.

California followed Nevada’s lead and approved the use self-driving cars, which will be legal in 2015, with several other states likely to follow suit in 2013. Most major automotive manufacturers will likely offer self-driving vehicles by 2020, and it should surprise no one that as a means to control traffic congestion, several major cities will require self-driving cars by 2030 if you want to park downtown. Volvo has gone further, and argues that with self-drive cars, all accidents can be eliminated within a decade. It has even staked its future on self-drive cars, and I would not be surprised that the promise of eliminating crashes will be used by governments as a reason to mandate self-drive cars for everyone by 2050 if not before.

Then there is iRobot, a leader consumer and military robots, and InTouch Health, a leader in acute care remote presence telemedicine, who jointly announced this summer their Remote Presence Virtual + Independent Telemedicine Assistant (RP-VITA) aimed at assisting ICU and emergency room healthcare providers. RP-VITA which stands 5 feet, 6 inches tall and weighs 175 pound is a remote-controlled telepresence robot that is equipped with cameras, microphones, a video screen, built in stethoscope, navigation system, and Wi-Fi enabled communication system. The purpose is to quickly get patients medical help from specialists who may be geographically distant, e.g., in another hospital in another state. By 2013 RP-VITA should have government approval to navigate hospitals autonomously.  It is expected that over hundreds of hospitals will have RP-VITAs roaming their halls in the next few years.

Then more in the realm of the artificial intelligence side of robotics, in October IBM announced that its Jeopardy-winning cognitive system Watson would be a “student” at the Cleveland Clinic Lerner College of Medicine of Case Western Reserve University. The purpose is to develop Watson into a specialized doctor’s assistant, one who is up on all the latest research findings. Medical knowledge is said to have a half-life of about 4 years now, which makes much of what doctors learned in medical school obsolete.  In March, Memorial Sloan-Kettering Cancer Center in New York City and IBM came to agreement to use Watson to eventually assist doctors in their diagnoses.

While IBM insists that Watson is not about replacing doctors, no one is betting against this happening in the future. Vinod Khosla, one of the co-founders of Sun Microsystems, claims that with cognitive systems like Watson accessing the information from hundreds of millions of electronic health records (part of the information technology revolution now occurring in U.S. healthcare) that will becoming available over the next decade, the number of doctors needed will decrease significantly.

In almost every industry, from agriculture to high-end medicine, robotics is now starting to radically change the employment dynamics. The robotics community insists that robots will not replace human workers, but instead will act as their assistants, although this statement always seems qualified by “in the near term.” When pushed about the “long term,” they are less confident.

Maybe even a greater impact on the future shape of employment will be in the area of 3-D printing. In the past five years, proliferation of 3-D printers has exploded as their costs have rapidly dropped. Universities have been working hard on developing ways to print a wide range of 3-D objects, from blood vessels to buildings.  Last year, EADS announced that it was researching ways to make parts for its aircraft using 3-D printing techniques, leading to the thought of someday printing out most of an airplane this way. This year saw Shapeways, a Netherlands-based online printing service company, open up its “Factory of the Future” inNew York City. The company prints designs created by customers in a variety of materials; its new factory will allow up to 5 million products to be printed a year. If the technological and cost issues associated with making 3-D printing a wide-spread business practice are overcome, 3-D printing has the potential for eliminating whole industry supply chains.

The rapid growth in robotics and 3-D printing – not to mention other IT technology – will have a negative impact on employment in a number of wide-ranging industry sectors simultaneously.  The questions will be whether their introduction will create new industry sectors that contain more jobs than are destroyed, how long it will be before new jobs appear, what will be the qualifications of those needed to fill them, and what will those new jobs will pay?

So expect the technology unemployment argument to start becoming intense in 2013, especially if the economy doesn’t improve. Also expect this argument to spill over into education, both in terms of how to best educate young people in what subjects to cope with a radically changing and shrinking job market, and how to provide skills to those workers displaced by the new technology.

I don’t expect the end of work to happen anytime soon, but I do expect that a lot of jobs that look secure today will not look so nearly secure by 2023 — and sooner.

Last year, organizations across almost every industry became really serious about using mobile technology. The majority of these initiatives involved companies enabling existing applications and business processes with mobile capabilities to extend their usefulness to workers in the field or those on the go, as well as to customers and partners beyond the firewall. This trend will accelerate in 2013, with organizations continuing to deploy mobile apps in the form of management dashboards and tools for supporting the three main domains of CRM (i.e., sales, marketing, and service).

That said, however, I believe that in 2013 we are also going to see end-user organizations and vendors develop applications that apply mobile technology in conjunction with other so-called disruptive technologies such as social networks, the cloud, analytics, and location-based services to create new game-changing or “killer” applications and services. In fact, some forward-looking organizations are already doing this now.

Mobile + Analytics + Social = Improved Collaboration and Decision Making

The number-one goal organizations seek by adopting mobile technology is increased productivity. The goals of improved response to customers and better knowledge sharing and collaboration among employees rank second and third in importance. In reality, however, these activities are actually quite dependent on the efficiency of one another. For this reason, I believe that organizations stand to reap the greatest benefits from mobile technology by combining its use with analytics and enterprise social networking to facilitate better collaboration, knowledge sharing, and informed decision making. It is this combination that will lead to optimum productivity. For an example of the advantages afforded by combining such technologies, we need only consider the recent US presidential election.

The Obama election campaign was powered by workers in the field and those in offices constantly being fed information that had been collected via email (from the Obama campaign website, etc.), phone calls, marketing lists, on-location volunteers, and so on. This info was not just stored in a database; it was analyzed and crunched by an elaborate system (VoteBuilder), which then churned out detailed lists of potential voters to target, along with their likes and dislikes.

Campaign workers also collected information while canvassing voters, entering the information into the system via smartphones, tablets, or laptops. (The campaign also had many volunteers dedicated solely to inputting information collected from surveys, phone calls, and other voter interactions.) Thus, as more information came in, it was added to the existing data — in effect allowing the generation of ever-more-detailed information about possible Obama-leaning voters. There was a social component, too. For example, users working on the same campaign committee could easily share information with each other, yet were able to shield it from workers on other committees.

The result was that Obama campaign workers in the field were not going neighborhood-by-neighborhood, street-by-street, and house-by-house knocking blindly on doors. Nor were those in the campaign offices having to resort to cold-calling potential voters. Rather, they were able to target specific prospects at specific residences in certain neighborhoods. Moreover, Obama workers were informed about what the person they were talking to was likely to be interested in hearing about. Consequently, workers didn’t have to waste their time trying to deduce what they might possibly say to the prospective voter in order to engage them. Instead, they could just start discussing Obama’s views on the environment, banking regulations, healthcare reform, alternative energy, or whatever — in other words, subjects that were likely to catch the voters’ interests.

While you might consider this a fairly unique application, it does offer valuable insight. Trying to market a presidential candidate does not differ terribly from trying to market cars or shampoo or some other consumer product. At some level, they are all just brands. Thus, Obama campaign workers told prospective “buyers” what they wanted to hear in a manner that was interesting and engaging for them.

Combined Technologies Leading to New Applications and Streamlined Services

The combination of mobile with the cloud, analytics, location-based systems, and other technologies is also making it possible for companies to practically implement new applications that automate formerly labor-intensive or difficult-to-perform tasks. Some good examples include using mobile technology to remotely monitor patients outside of healthcare facilities and for audience tracking and participation-enhancement for live performances and events.

Remote Patient Monitoring

One interesting example is The BodyGuardian System, developed by mobile health solutions provider Preventice in conjunction with Samsung. This application allows physicians to monitor key biometrics in patients with cardiac arrhythmias outside of a clinical setting, allowing patients to go about their daily lives while remaining connected to their physicians.

It uses smartphone technology to create a dedicated mobile environment to provide a secure, reliable wireless connection for transmitting biometric data. Patient data is captured with a small, wearable sensor and delivered via Bluetooth to a dedicated (Samsung Galaxy S II) smartphone. Physiological data is then transmitted via cellular network to the BodyGuardian system deployed in the cloud. Physicians and other personnel in monitoring centers can access the data using tablets and other devices.

Mobile technology (and the cloud) makes remote patient monitoring practical; moreover, it is expected to significantly change the way patients with heart disease and other chronic conditions are treated, helping to reduce expenses for care providers, while freeing patients from time-consuming office visits.

Real-Time Monitoring and Influencing of Live Crowds

We are also seeing the application of real-time analytics in conjunction with location-based services and mobile devices to assist organizations with monitoring and influencing the electronic behavior of live crowds.

A particularly interesting application is CrowdOptic, which lets producers of live events — such as sports matches, concerts, and other performances — monitor and track what crowds are looking at and what they’re photographing and sharing (via Facebook, etc.) during a live event, in near real time. It also allows event organizers to display information on the audience’s mobile phones, depending on what they are looking at, and can alert event organizers to shifts in crowd focus and momentum. The purpose is to optimize and enhance the in-venue experience for fans and to give sponsors and event organizers live feedback they can apply immediately or utilize for future performances.

CrowdOptic uses triangulation and real-time streaming analytics to sense where crowds are focusing from moment to moment, thus tracking the precise paths of spectators’ phones as they view and take photos and video of live action. It monitors the GPS location and compass headings on each of the hundreds or thousands of mobile phones in a crowd (using GPS to locate the phones and compass headings to determine the direction the phones are pointing) and finds the point where two bearings, taken from two different locations, intersect. This triangulation provides the exact location where phones are pointing and pinpoints where the action is. CrowdOptic can identify clusters of fans in the crowd looking at the same spot at any given moment, even when the action is constantly moving, such as during a sporting event when fans are taking photos of the athletes.

When I first discussed CrowdOptic about a year ago, the technology was undergoing testing with several companies. Today, the technology is utilized in a number of applications.

Ticketek, a ticketing partner to sports and live entertainment businesses inAustraliaandNew Zealand, offers Friend Spotter, an iPhone app that lets friends locate each other instantly in a crowd using their smartphones.

Friend Spotter combines Facebook data and CrowdOptic technology to enable friends to spot each other in the stands at Ticketek events, simply by scanning the crowd through their camera viewer. In this manner, fans can share the live event experience with friends during the event itself.

CrowdOptic has also applied its focal clustering technology for smartphones to analyze photos posted on social media sites in order to reveal the top locations photographed when Hurricane Sandy recently devastated the east cost of theUS.

This application analyzed a set of thousands of publicly shared, crowd-sourced photos from social media sites containing Sandy-related hashtags. The analysis revealed instances in which multiple lines of sight by amateur photographers converged around specific locations, pinpointing these locations as the most frequently documented by witnesses of the storm.

To identify the photos of greatest significance, CrowdOptic used the existing photo meta data, as embedded in image EXIF format — including GPS position, compass heading, and time stamp — and applied statistical and analytic algorithms and triangulation techniques to arrive at a relative significance value for each photo object. (The company claims that analysis using such algorithms took a total of 1.216 seconds to complete.)

Some of the most significant focal clusters that were revealed include a downed tree caused by the hurricane and a devastated home documented by onlookers, owners, and insurance appraisers. In short, CrowdOptic technology was able to create a cohesive chronology of an event location over time by annotating and authenticating all photos taken of the site by various onlookers. Such an application has potential uses for broadcasting, publishing, marketing, and, potentially, disaster aid.

CrowdOptic is mainly positioning its technology for use at live performances like concerts, sporting events, and debates and for after-the-fact analysis (i.e., analyzing large image repositories). However, I can also see it used for other events as well, such as big store promotions, parades, and political rallies. For that matter, it also probably has applications for monitoring crowds at protests, demonstrations, and other civil disturbances. (For more on CrowdOptic see ” Innovative Applications of BI.”)

Conclusion

These are just a few examples of how mobile technology — in conjunction with other disruptive technologies — is leading to new applications that were either impossible or impractical to implement just a few years ago.

In particular, I think that the use of mobile technology — in conjunction with analytics and enterprise social nets — is going to lead to an increased focus on knowledge management over the next few years. Organizations should consider and investigate further how they can take advantage of the unique capabilities offered by combining these technologies.

 In my prediction last year I mentioned:

In 2012 practically all electronic devices will be internet based. As people progressively learn to explore and mature the use of this technology, the growing impact on business models and collaborative working models will trigger new rules of survival in the new internet-based global economy. Successful organizations will transform accordingly.

I also mentioned a number of factors like “Changes in political systems, environmental concerns and issues, climate changes and natural disasters…” that would create additional pressure for the development and use of internet-based technology and software systems.

The year 2012 has confirmed (without a shadow of doubt) that organizations of all types are changing their business models to adapt and leverage the intensive use of Internet and related devices that promote mobility and “virtualization” of working processes.

However, in my opinion, this past year has further revealed two major trends. First, Internet performance improved below the expectations — especially in developing countries, like Brazil, where economic activity is booming and upon which much of the practical usefulness of mobile technology depends. Secondly, there is a growing concern with Internet control, security and therefore a trend for increasing restrictions.

A significant (and desired) improvement of Internet performance requires significant investment in infrastructures. As major players are currently affected by the economic crisis in the developed countries, they seem more concerned with cost efficiency and increasing their profit from developing economies, rather than investing heavily in new infrastructures. In some of the BRICS countries like Brazil, Internet performance is so poor that one can hardly speak using mobile VoIP solutions like Skype and Viber (amongst many others).

On the other hand, the emerging negative side effects of globalization in the developed economies are raising concerns that may encourage more control and restrictions over Internet-based business processes. Not to mention the extreme caution that other major growing economies like China are considering over the free use of Internet.

Despite these trends, the commoditization of Internet-based services, especially cloud and instant messaging services will continue to grow. These products and services are less dependent on real-time fast Internet performance and will continue to evolve and influence ongoing changes in business models and processes.

My prediction for 2013 is therefore a slowdown in the IT developments that depend on high performance and free Internet, and a shift of concern (back) to security and related control systems and software. Products and services that can exist in the current scenario of Internet performance will continue to mature and perhaps bring about some interesting novelties in 2013 – with mobility continuing to be the major theme.

Is this a reverse process, or a permanent limitation, to the intensive use of Internet-based solutions and business processes? I don’t think so. In my view, this is a natural reaction to ensure the necessary balance between speed and agility on one side, and control and security on the other side. The focus of IT developments and business process will always alternate between these two concerns.

 Having recently conducted a survey of the Department of Corrections in each of the 50 states, we found their systems ages ranged from 5 years- to more than 35 years-old, with a mean average system age of over 20 years. This inventory of aging systems is driving a new wave of modernizations and, unfortunately, project failures as well. So, in 2013, we’ll see the wave of modernization for many government entities in the US (particularly large counties and states) continue. Inasmuch as there are a significant number of systems being selected and installed, we still find that many of the organizations try to manage this process by themselves.

No Definition of Business Requirements

Unfortunately we continue to see a lack of business and technical requirements definition during the planning phase for modernization. Many clients simply take the vendor’s plan and processes and implement them in spite of their sometimes unique and custom requirements for effective business.

Project Failures

A recent set of studies published by McKinsey Quarterly provides further evidence that projects large and small fail. However, large projects not only fail more often, they deliver less. According to the McKinsey/Oxford study half of IT projects with budgets of over $15 million dollars run 45% over budget, are 7% behind schedule and deliver 56% less functionality than predicted.

Business Driven Project IV&V

More government organizations are deciding to drive the project management themselves from a Department perspective vs. IT supporting this type effort. In spite of strides in developing Project Managers, many public sector Information Technology organizations still lack significant Project Management experience. The current trend is that Government Department leadership is directly taking responsibility for project success instead of depending on their IT organization.

Department leadership is selecting independent consulting firms to provide a detailed look at business requirements and technical capability assessment as well as managing the selected vendor over the life cycle of implementations. Large-scale system modernization requires a look at the business first, then a determination of how and what technology can best meet the business objectives.

We see successful enterprises utilizing outside expertise to fully engage the business community in developing a set of business requirements that reflect the current and future processes which will in turn drive efficiency and effectiveness once the system is implemented. In addition, developing an enterprise architecture that reflects the business is essential to successful modernization. The Independent Verification and Validation (IV&V) support brings not only expertise in vendor management, but also in building relationships within the client business organization and across organizational and political barriers.

Bottom Line: Independent Experience Counts

IV&V is becoming increasingly recognized by the business as an essential ingredient in modernization of technology, processes and the business itself.

Crowd sourcing, through various social media sites as well as commercial sites such as Amazon’s Mechanical Turk, has become a common form of collectively gathering knowledge. Though forms of professional collaboration, commonly known as concurrent engineering or concurrent collaboration, have been around for years, an emerging trend for both public- and private-sector businesses deviates from that concept in that knowledge is shared across corporate and business unit barriers and into an individual’s personal/professional network and beyond.

Blogs and even message boards have been a basis for some of this activity; however more global efforts for specific problem solving approaches are taking place with amazing results. Consider Foldit.

Foldit is a website developed to attract individuals worldwide to play with puzzles. The collaborative group follows defined baseline rules of problem-solving to complete what appear to be puzzles. But the puzzles are actually protein models. By solving these puzzles — “folding” the protein molecules — individuals participate in developing differing structures for proteins. Knowing the structure of a protein is the key to understanding how it works and how to target it with drugs. Before Foldit, it would take scientists months and years to accomplish what can now be done in weeks. Pretty amazing results have already been found. Although the initiative is still in its early stages, it appears that humans’ pattern-recognition and puzzle-solving abilities make them more efficient at pattern-folding tasks than existing computer programs are. Here, computers and people are changing roles. New roles are being developed in the technology/human knowledge exchange.

Foldit is an example of WorkSourcing™. With WorkSourcing, work is sourced to people from all walks of life who want to participate in something they feel either has a high value purpose or is a game that challenges their creativity. This brings a broad spectrum of thinking to the problems under consideration. (To witness a phenomenal example of WorkSourcing for innovation, take 15 minutes to watch Eric Whitacre conduct a worldwide group of individuals who’ve collaborated via YouTube to create a chorus of 2000 people.)

The key underlying trend here is that rather than rotely using computers for standard business productivity applications, innovative organizations are viewing humans not just as users, but as partners with technology. Organizational innovation is at a new tipping point: using WorkSourcing as an effective productivity tool and a resource pool.

I see the emphasis on managing customer experience accelerating. Some progress has already been made in the area of customer-centric measurement, largely due to an increasing emphasis on Big Data and process analytics. In 2013, more organizations will begin to understand that this calls for a shift in management attention to a more systemic view of business. Some organizations may begin to appreciate that overall performance for customers is dependent on what the organization measures, manages, and rewards and therefore requires a systemic view that pays attention not only to customer-focused metrics, but also to business models, governance, and reward systems.

The quips “You are what you eat” and “You are what you read” capture a universal truth: for better or worse your actions define your persona. As of 2013, I believe, “eat” and “read” in these quips will be superseded by “expose.” The APIs you choose to expose will define the kind of services you, your company or your company’s eco-system will be able to offer. It is going to be an “APIs beget services” pattern rather than “Services beget APIs.”

If you think I am smoking something strong, take a look at the recent articles Cutter published on the API Economy herehere and here). Perhaps the most striking piece in these articles is the figure from ProgrammableWeb pasted below, showing the growth pattern of public APIs, i.e. those that have been exposed (as distinct from internal APIs). Extrapolating the pattern indicated in this figure to next year, we could expect something like 10,000 exposed API’s at one point in time or another during 2013.

This forthcoming API explosion changes the nature of your company’s assets. The assets might be physical, but they have corresponding information representations that are potentially valuable to numerous applications. For example, various users are already spawning off bazaars on top of the Instagram photo sharing service (click here and here for recent articles on the subject). Imagine the limitless possibilities that could open if/when an advertising API is exposed in the Instagram application(s). Needless to say, other kinds of APIs that might be exposed by Instagram could be very tempting…

The nature of the phenomenon we are examining here is not restricted to photos/images. Rather, it is generic. Regardless of the physical nature of your company’s assets, any information about them that flows through the “pipes” of your company is potentially a productive asset. It can be utilized (once an API is exposed) through an app store that mines the information for its flow, currency, accuracy, relevance, etc.

Historically, decisions about APIs and their design were largely the realm of programmers. Over the past few years they became more and more the realm of marketers. Expect them to soon become the “stuff” that business designs are made of.

In the coming year, instead of viewing social media as a marketing tool, similar to ads (even targeted ads), organizations will begin to recognize that the potential for social media lies in the using the tools to build communities around products and services. The resulting communities can be invaluable in providing feedback on design and level of service issues.  Customers and prospective clients can become engaged from early design throughout the life cycle, becoming valued partners with the organization in a mutually beneficial community, focused on improving product and service satisfaction.

Like last year, I focus my predictions on how current trends will impact Enterprise Architecture in 2013. I see three things coming:

1. Make sense of big data.

Big data will continue to get a lot of press, and vendors will be keen to show off new tricks with data integration. The enterprise architecture teams need to beef up their information architecture capability and develop appropriate Enterprise Patterns to participate in this debate and to be able to respond intelligently to this pressure.

2. Mobilize for mobile.

The EA team need to expand application patterns to show how a multitude of disparate apps work in conjunction with a more traditional legacy application landscape.

3. The forecast is cloudy.

Cloud computing and XXX-as-a-service will continue to stake their claim in the enterprise architecture. Enterprise architects need to start shifting their thoughts up a layer. As well as having an infrastructure architecture response, they need to consider the business architecture impact and opportunities.

Recent developments in the Cloud Computing market space lead me to believe we are nearing the “tipping point” in the commoditization of IaaS (infrastructure-as-a-service) offerings. This will drive further adoption by enterprises.

Earlier this year, Google, a leader in the PaaS market, publicly announced its intention to enter the already burgeoning IaaS market with its Google Compute Engine (GCE) service offering (currently available only in limited preview by Google). Most analysts interpret Google’s spin up of GCE as an aggressive move to go head-to-head with Amazon’s EC2 on all fronts: price, performance, and features. Other IaaS contenders, including HP with its recently launched OpenStack-based HP Cloud Compute, IBM, and Microsoft (notwithstanding its current focus on PaaS solutions and strategic bet on PaaS market expansion) will also likely influence the IaaS market in the coming year. In fact, among the top-tier IaaS providers, we are already seeing early evidence of an increasingly competitive IaaS price war, which will benefit consumers through 2013 and beyond. Those same competitive pressures are also likely to force some 2^nd-tier IaaS providers entirely out of the market space in 2014.

Stay tuned for what I predict will be the rapid rise of a new market segment that will come to be known as Cloud “Brokers” in the wake of the IaaS fray!

As the internet became established as a tool of commerce and industry over the past 15 years or so, IT departments fit new titles of web developer, user experience designer, and network security engineer into their existing department structure along with the many programmers, systems analysts, and technical gurus needed to keep systems running and serve the enterprise.

Now along comes the cloud and IT departments are beginning to realize they may not need so much of these skills, but are going to need more of the skills associated with contract, vendor, and customer relationship management.  While this won’t be news to IT departments that were stricken with the outsourcing bug a few years ago, everyone else is going to be scrambling to find the right people and figuring out to whom they should report.

For sure, the hype on cloud services is high, but I predict that 2013 will be the year it hits the “knee in the curve” and really takes off.  IT management will be reorganizing to deal with cloud services, increasing the number of “relationship managers” of all types and, as those involved in the previous outsourcing frenzy will tell you,  it won’t be by retraining programmers.

Predictions are always difficult in interesting times, because tomorrow’s concepts depend upon activity which has not yet occurred. We expected flying cars; we are getting autonomous cars.  In the 1950s, the computer revolution, robotics, GPS, and today’s traffic patterns would have been difficult to envision.  Today, we are seeing rapid evolution across Information and Communications Technology, affecting every component and every meme. But we can see the direction that some areas of recent concentration are likely to take.

Concepts of Agility will continue to evolve, moving beyond specific processes such as Scrum toward more comprehensive programs capable of incorporating a wider variety of projects, under more conditions and supporting greater integration with governance. This can be seen in the growing devops movement, which brings together development and operations in a vision of agility, as well as in the migration of principles and practices from Agile Development into other areas, such as Risk Management and Resilience. So, 2013, is likely to see a higher profile for DevOps, and development of new concepts that integrate Agility, Operations, and Governance.

Next year is also likely to see an increasing emphasis upon multi-device usage over the current focus on mobility. Mobility is useful, but will become an expected attribute of all devices, and new ways will be found to use the growing array of devices together. This will inevitably involve greater use of the Cloud, and we will see a strengthening of the concept of Personal Cloud (a Cloud linking all personal devices and permitting data and app sharing) as a result. Expect the Personal Cloud to emerge as an important concept in 2013, and to become commonplace by 2014.

Resilience will become increasingly important, and will unify risk management, business continuity, and agile management practices. It will be increasingly supported by software as well as in management frameworks, and will come of age in 2013.

“Big Data” will be superseded by “Complex Analytics” as the velocity component — real time analysis — becomes more critical, and the need to integrate a variety of different analytic processes becomes more acute. Increasing emphasis will be placed on the wide variety of analytics choices and their potential outcomes. This will happen gradually over the next three years.

Until now, cloud service providers have essentially proposed to their users the equivalent of those click-through terms of service that people accept because they don’t have a choice. As for the standards that would make it less risky to adopt a cloud service, by making it easier to integrate with or to migrate to a different provider, they have been vendor-driven and highly technical; these standards are necessary but not sufficient.

In 2013, look forward to more user involvement in prioritizing the standards development effort, and to the emergence of practical advice to negotiate more balance SLAs and User Agreements. In the area of performance and reliability, providers will have to stop hiding behind the “nature of the Internet” (a term used by Amazon in the past to refuse to guarantee anything). Some will start providing a clear commitment to handle their part of potential availability issues, and to proactively monitor the end-to-end performance and notify customers of degradations. This new attitude will become a competitive advantage. In the area of security and privacy, providers currently demand compliance to strict rules but offer nothing in return. But once the Cloud Standards Customer Council publishes its detailed guide to Cloud SLAs, expected in March 2013, suppliers will feel the pressure to provide a reciprocal commitment to safeguarding their clients’ (and their clients’ clients’) data.

Due to the uncertainty of our times, I’m going to make two predictions. First, the world will come to an end on December 21^st, exactly as the Mayans DID NOT predict hundreds of years ago. Granted, the Mayan calendar runs out on the 21^st but to be quite frank my calendar runs out every year on December 31^st and the world has still gone on despite of that dire prediction. The Mayan calendar myth dates back to the mid-1970s, a time when we were seeing Sasquatches in every forest, aliens eviscerating cows in every farm field, and chariots of the gods in the skies of South America. At that time we were also doing prodigious levels of pharmaceuticals, a level that is only seen on California university campuses today, so should we really be surprised of a Zombie Apocalypse prophesy based on an ancient chunk of rock?

– OR –

Assuming the world is still here on December 22^nd, the year 2013 is going to prove to be very interesting when it comes to shifting development paradigms. There are four converging trends in the IT marketplace which makes me believe this:

1. New architectures. Platforms such as Cloud and SaaS, although clearly overhyped, are in fact enabling small firms to run rings around established competitors. While incumbent organizations are holding meetings trying to reach a decision as to whether it’s safe to experiment with these technologies, new entrants to the market are already deploying them in innovative new products. The incumbents aren’t stupid and they’re starting to see the light.
2. Collaborative development strategies. Open source and crowdsourcing have proven themselves over the past decade and continue to grow in popularity. Are there any IT departments out there anymore that aren’t using open source tools and infrastructure products, either knowingly or unknowingly, in some way? More and more organizations are starting to realize that in many cases they can get more advanced products, and very often far better support, free of charge. It’s amazing what happens when developers are no longer constrained by commercial products forced upon them by senior management.
3. Mobile.  The move away from the desktop in favor of mobile devices such as tablets and phones, in combination with bring your own device (BYOD) policies, are throwing both operations and development teams for a loop. With app stores offering a myriad of inexpensive yet sophisticated applications and ubiquitous wireless connectivity, our stakeholder’s expectations have risen dramatically. The only way we can meet those expectations is by choosing new ways of working.
4. Software process. Over the past two years there have been three exciting trends when it comes to software process. Eric Ries’ Lean Startup book has gotten a lot of people, and not just those in startups, rethinking and slimming down their approach to development. The DevOps movement is motivating organizations to get serious about bridging the gap between the development and operations side of the house, although the DevOps community is arguably overly focused on continuous delivery at the current moment. The Disciplined Agile Delivery(DAD) process decision framework has put critical agile and lean strategies together – including Scrum, XP, DevOps, Kanban, Agile Modeling, and Lean Startup – in a coherent and non-religious manner for the first time. The new ways of working that I mentioned earlier exist and have been proven in practice; now is the time to start getting serious about adopting them.

I believe that these four trends are motivating organizations of all kinds – financial institutions, manufacturers, retailers, telecoms, and even government agencies – to seriously rethink how they approach software development. The marketplace will no longer tolerate the multi-year, big-bang, high risk projects of yesteryear. Nor will prevailing economic forces support ad-hoc hacking by two-day “Certified Masters”, at the one extreme, or the scientific-façade of traditional techniques founded in the 1970s at the other extreme. As a result, my prediction is that 2013 will mark the beginning of a multi-year paradigm shift within the IT community towards a leaner, swifter, and more disciplined way of working.

Just as the monster Frankenstein was put together from pieces and parts of many people, so are some of the enterprise collaboration vendors. For example, Jive just acquired Meetings.io, and Producteev to add videoconferencing and task management.

Salesforce.com is another vendor that is building a collaborative Frankenstein, as is VMware, and others. The idea is that as these vendors acquire smaller companies and fold them into their framework, they begin to add more and more collaborative functionality: IM, activity streams, integration with social networks (Facebook, Twitter, etc.), audio/video/data conferencing, online meetings (permanent or temporary). As each piece is added to the framework, unfortunately, the tools and the overall suites tend to become more complex, and require a higher learning curve. The integration with other functions or tools from that vendor is often minimal at the start, but becomes stronger later, once a deeper integration has been done through an API. But, is putting together a hodge-podge of collaborative tools with different features and functions the best way to go? Many of these tools are being aggregated by cloud companies, yes, but they are still using the old paradigm of a tool suite.

Another way companies can get a collaborative suite of tools is make their application: Podio (now Citrix Online) allows you to put together smaller functional pieces that are sure to integrate.

But all of this presupposes that you know what you want in a collaboration tool, and how to apply it once you have access. Generally this is not the case. Most social tools are picked by some IT guy who thought they were “cool” and not by those who need to use them. Although purchasing and implementating social tools is moving more to marketing, the problem is still the same. It is knowing what you want, what kind of outcome (clearly articulated) before you even look at collaborative technologies. I suggest you start with a process rather than a test on some siloed group.

Last year I wrote about the effect of turbulence on us IT folks and, more importantly, to the business/government users of IT. So has “turbulence” and its cousin “uncertainty” been reduced as we peer into 2013?

Let’s see: political direction (in the US: more or less taxes; more or less government regulation; health care; less gridlock; sequestration; Europe; regulations’; the imminent beginning of the 2014/2016 campaigns)?  Huh. Don’t see anything much resolved here.

Let’s see:  economy (Europe again; individual European states e.g., France, Greece; impact of US energy independence; consumer spending? taxes again)?  Oh, maybe a little more direction can be seen –- but not much.

Let’s see:  technology (products/services; Cloud, et al; all the piece-parts of the technology apparatus including the users stuff)? Huh. Doesn’t look like any of this will slow down, though some things seem clear like more users with things.

But overall, turbulence and uncertainty will reign again. So my prediction is pretty much the same as last year: both business and IT management will continue to emphasize back-to-basics, like the short list below:

• Operational excellence
• Cost reduction
• Concern about value
• Skill availability
• Sourcing: out, in, re-, etc.

Back to the Future? In short,  CIOs and CTOs will be focusing on improving IT’s performance in the tried-and-true areas of IT management activities. And as I said last year, we’ll certainly continue to be overwhelmed with continuing hype about new technologies, the disappearance of the traditional IT organization and/or the CIO, and the wonders of new opportunities (read “BI”, etc.). These will be factors for some, and perhaps the means for achieving some of them will have changed for some (e.g., agile, architecture).

But for the largest group of CIOs and CTOs, 2013 will indeed be a year of focusing on traditional areas of IT’s performance. This is the sad part: Back to the Future means everyone is especially challenged to do more than pay attention to the tried and true things.

Regardless of Microsoft’s massive 2012 marketing and rollout campaign for Windows 8, we will find that large enterprises, most of which are comfortably stable and satisfied with Window 7.0 or other non-Vista Microsoft operating system options on the standard corporate desktop and notebook will not actively evaluate or consider Windows 8.0 in the enterprise until after 2013.

Let’s face it: Windows 7.0 (and to some extent Windows XP)  is considered by many to be the most stable and feature-rich operating system in Microsoft’s history. Enterprises now have the knowledge and resources to drive productivity through this operating system.

But as enterprises shift even more of their computing capacity to mobile devices that require more integration than is found in today’s BYOD environment, they will find that Windows 8.0 may be a solution. Today the mobile industry and market share is dominated Apple (iPhone) and others (Android). This will continue through 2013. In 2014 and beyond, Windows 8 (and variant mobile operating systems) will begin to gain enterprise attention as it ( and the variant WinRT architecture, with a significantly revamped and somewhat disorienting interface) will prove to be a valiant move by Microsoft to capture at least part of the emerging mobile (including tablet and smartphone) market.

Last year I predicted that enterprises would take an increasingly holistic systems view. I said “they will take an increasingly strategic view of improvement, coordinating change across divisions and functions to achieve a higher overall level of performance. This trend is reversing [of] short-term, every-division-for-itself fractionalization…[so that] the Enterprise, at the end of 2012, will look more like an effective, coordinated whole and less like a collection of disparate…parts.”

This happened as predicted. One of the best indicators of it is the rapid acceleration since that time of “reverse offshoring” or “inshoring.” Reverse offshoring is the return of business from lower labor-cost nations where it had been transferred in previous years.

Offshoring is a useful tactic — in some situations. Most of the time it is one of the most myopic tools in all of business. For the last 50 years, all major business schools have defined labor and overhead costs in the most simplistic and suboptimal way possible (as they still do today). They taught upcoming leaders to use the narrowly-defined “unit-cost equation” to drive critical business decisions. They ignored significant and subtle system-level costs, thereby harming many companies and entire nations. As Patrick Dixon of Red Prairie recently said, “we cannot manage supply chains …with the complexity we now have across very long distances.”

But in 2012 we also saw more and more leaders turning towards a systems approach. A 2012 EEF manufacturer’s association survey found that 40% of companies are bringing production back inhouse. Another 25% are returning to local suppliers. IBM’s famous prediction that IT would one day begin inshoring has come true as companies have realized that “new jobs being generated in the current information-intensive economy require management and analysis skills, which typically need to reside close to core operations” (per a 2012 study by The Hackett Group).

A systems perspective acknowledges the hidden and critical holistic costs and risks. It increases velocity and agility. Reverse offshoring and other signs show that more and more businesses are understanding the “extra factors” they must consider to become a more-effective business system.

The heart of a modern enterprise is the knowledgework it does. How to run a factory effectively is fairly-well understood these days. Strategy, market positioning, effective services and the like are what makes for an effective business. These are all knowledgework activities.

We will see enterprises and knowledgework leaders who began adopting the systems view in 2012 start to move it out, in 2013, from under the mass production paradigm into the Lean paradigm.

Mass production institutionalizes suboptimization through principles like maximum utilization (aka “efficiency”), large infrastructures, and technocentrism. Lean knowledgework emphasizes getting the most from people through appropriate distribution and types of decisionmaking (executives through workers); value as the key driver; flow; pull; and perfection. Lean is the natural philosophical environment for systems thinking: it enables systems holism, and is the only mental framework that is fully consistent with it.

Almost all knowledgework today is done under the mass production paradigm. Just look at the classic IT front-office/back-office divide: as sacrosanct as ever, in the name of efficiency, it is inherently wasteful. It throws an impenetrable wall between those doing the work and those for whom the work is being done. Vanguard (U.K.) and others have conclusively demonstrated that this divide is both unnecessary and inferior to Lean business-system integration.

Ten years ago the Lean paradigm began permeating software knowledgework on a large scale. Five years ago it began infiltrating knowledgework services like healthcare, government (primarily in theU.K.), and call centers. Now it is time for the Lean paradigm to percolate into the business-system level.

This is not the “pseudo-Lean” that many businesses adopted a decade ago…the endless kaizen programs and ossifying Six Sigma programs which no major player in the evolution nor front lines of Lean today accepts as consistent with the foundations of Lean. This is the revolution that is inevitable when you begin applying the root principles of the Lean paradigm to running an enterprise as a system. It is what, in just a few decades, tookToyotafrom being a tiny manufacturer in a devastated country with no resources or infrastructure, to the world’s largest auto manufacturer. Much of that transformation was due to Lean principles in its knowledgework. We will see small but growing pockets of other enterprises begin down this path in earnest in 2013.

All the signs are here that this is coming: In 2013, a second dedicated “Lean Systems” conference will be held for the US Dept. of Defense, as will two expert panels on the subject at major industry conferences. True Lean systems consultants are finally available — people with significant experience in both systems and Lean. There is enough theoretical and practical framework to make it possible for executives who have no work experience at the classic Lean companies to begin following the same path philosophically…and obtaining similar results.

Those who wish to ride this wave should gain knowledge and experience in how Lean systems thinking works at the business-system level. You have a few avenues for this: You can hire knowledgeworkers from classic Lean businesses like Toyota Motor Manufacturing Kentucky (TMMK) or Honda (e.g., the Marysville,Ohioplant). Lean Japanese-company knowledgeworkers have successfully made such a transition to other industries. Or, you can hire thought-leaders from the handful of non-Japanese businesses that have been the frontrunners of this trend. Finally, you can jumpstart your program by using qualified Lean-systems consultants to advise you on how to make the transition, and to facilitate the changes your own people must make.

The major risk in undertaking this transition is raising major resistance from the existing workers within the company. In some cases people may previously have been exposed to pseudo-Lean programs that used layoffs and major disruptive role changes and called them “Lean” (they are not). A skilled transition will lower people’s defenses by starting where people are, moving them gradually toward the improved system, and involving them in the transformation decisions.

2013 is the year in which Lean concepts such as strategic value, operational kanban and several others will begin to transform entire enterprises in several industries. This will further unleash the power of the systems thinking that gained a foothold in 2012. Lean will amplify both the effects of the systems thinking already at work, and the competitive advantages of those enterprises that choose to move further down this path.

Here’s the bad news:

1. As more and more moves to the cloud, expect more security breaches. We do way too much in security theater now. My merchant account provider makes me change my secure password every x days no matter where I am, even if I am in a hotel, on not-so-secure public network. Security theater. This will only get worse.
2. More and more organizations will jump on the water-scrum-fall bandwagon. Oh, they will claim they are doing agile, but they are not. The more they are addicted to their enterprise architects, their lack of project dashboards, their tracking of project hours, and their need to predict project cost so they can manage the project portfolio, the more this will happen.

Now, for the good news:

1. There are organizations out there that will learn to hire for culture. Hint: It’s not about tools and technology. They will hire the real best and brightest.
2. There are organizations out there that will create cultures with enough transparency and openness that they will successfully transition to some variety of agile or lean. They will start pushing out more products or systems than they would have thought possible.
3. There are enough organizations out there that will make the difficult decisions at the most responsible moment that they will find the hard-to-achieve balance between too many projects in the project portfolio and just enough projects staffed for now.

Which side of the prediction news will you be on? I’ll be helping the people who want to be on the good news side. Please join us. The other side is too depressing.

It’s not going to be a pretty year ahead, unless you’re in the “doom and gloom” business. As one of the “risk guys,” I’m in a sweet spot for the year ahead, but I don’t think I have a lot of company. I believe a lot of businesses are going to retrench even more deeply, hoarding capital and waiting for some semblance of stability in terms of business regulation. I don’t believe that stability will be forthcoming, which means that the money that has been holed up for several years now will begin to find its way off shore.

This makes for an interesting year ahead for the folks outside the States and outside the EU (both of which are in for a very daunting year), as countries outside those environs will be seen as the new horizons on the business development front. Countries that have been seen as Third World or backward will come to the fore, and nations that were not considered forward-thinking will suddenly become the darlings of the corporate globe. Looking for opportunity? Pick a country with modest infrastructure and lax regulation. Looking for the bigger opportunity? Find a way to help them leverage the modest infrastructure they have. Those opportunities will be the gems.

And yes, once again, I believe we’ll all have flying cars.

For years I’ve been writing about and implementing a multi-channel, multi-device, n-tier architecture and often would say “I don’t know what the next device is going to be, but I’m sure there’s going to be one, and this architecture will allow us to be prepared”. Well, I think that era is upon us now and I’m ready to predict what the next device will be: It’s your car. New cars these days are equipped with multiple computers, multifunction touch screens, voice recognition, GPS, and much more. So where are we prepared for this, and where will we need to think differently?

Architecturally (if we have done things right in the past) we should be ready now for this new device in our end-to-end solutions. But there are clear distinctions that need to be made to support the device, especially in the interaction model. For example, what functions should we allow a driver to do? What other safety concerns are there? How do we design the new user interaction models?

Another major issue will be access to the device. Today, most access is controlled by dedicated networks such as OnStar. In the near future, will that change to 4G and other mobile networks? What will location and presence mean when you’re in a moving car?

I’m pretty sure that all of these issues will not get resolved for the industry at large in 2013, but expect to see the emergence of some new applications on your dashboard this year.

For nearly 20 years now, management theory has been changing. It started with single books, such as Peter Senge’s Fifth Discipline.  By the end of the 90s it had developed into several independent movements/management models. One of them was the Agile Software Development movement; others included the Beyond Budgeting movement and the Human Systems Dynamics movement.

Though each of these movements was launched from a completely different perspective (e.g., organizational development, software development) each came to a very similar conclusion: The traditional way to organize companies is well suited for industry and mass production but hinders knowledge work and is unable to adapt to the ever-growing pace of the market. Traditional companies are based on a deterministic divide-and-conquer management model that is very well suited to a stable environment. But if the environment becomes turbulent, you need to switch to a management model based on complex adaptive systems theory.

Over the last several years these new adaptive-systems-based models have begun to be adopted and we’re starting to develop an understanding of what they means for organizations. Some early-adopter organizations have demonstrated that economic organizations can be built upon these theories (though it’s not simple).

I expect that in ten years management models (and organizations) will have matured to the point where they will be embraced by the early majority. In some markets these organizations will show such a competitive advantage that they will successfully attack their respective market leaders and subsequently be recognized for the role their modern management practices played in that success.

Now is a good time to start understanding these management models and observe the field. Though we’re not far enough along the learning curve to provide off-the-shelf solutions, it may be fatal mistake to ignore what’s going on here.