Game changers will leverage on Code Halos: Cognizant

The most successful businesses today are making use of what Cognizant Technology Solutions calls 'Code Halos' to win. These businesses extract more meaning from the data that can now be recorded from and about consumers, devices, employees and brands, and it is this information that forms the Code Halo.

Source: Cognizant. Roehrig.

Specific data include digital clicks, swipes, "likes", purchases, comments and search actions, which can be built into a unique identity or Code Halo. Cognizant further says Code Halos can scale predictably to push market leadership from the traditional blue chip companies to challengers.

Paul Roehrig, Global Managing Director of Cognizant’s Center for the Future of Work and Co-author of Code Halos: How the Digital Lives of People, Things, and Organizations are Changing the Rules of Business, which reveals how organisations can catalyse business with Code Halo thinking, says that a growing number of businesses are finding new ways to compete with Code Halos.

"We’ve already seen early winners—for example, Google, Amazon, Pandora, and Netflix—and losers—like Kodak, HMV, and Borders. What’s exciting for business and technology leaders all over the world is that this same shift is starting to impact more traditional firms in banking, insurance, manufacturing, and retail. Our expectation for a technology experience that is intimate, complete, enjoyable, and natural was initiated by digital native companies, but this shift is now impacting businesses in virtually every sector in many parts of the world," he said. "Public and private organisations in Asia Pacific are absolutely embracing digital transformation."

In the private sector, financial institutions like the Bank of China are embracing Code Halo thinking, Roehrig said. "They are applying analytics to customer purchase behaviour to minimise credit case frauds and lost card transactions. In Australia, Ubank has created a website called peoplelikeU that allows people to compare spending habits to people similar to your profile. It’s a great example of how they can capture a person’s code and provide immediate value back. In Japan, Docomo Medical Insurance has a service that uses mobile device sensors to monitor your body’s Code Halo. Rewards are offered for healthy behaviours, and alerts can be sent if a potential problem is observed," he said. 

Roehrig stressed that Code Halos may look similar to big data and analytics, but are a larger concept. "It’s true that just about every business is dealing with data large and small. Big Data is certainly a part of the Code Halo story, but it’s not the whole story," he explained. "For a Code Halo solution to really take off, it needs to have five critical components. First is a device. This can be anything considered part of the 'Internet of Things'*. Next is the application interface. This is the intersection point of the user experience. Without this, nothing else matters. It’s through this interface that the data and meaning of the Code Halo is displayed."

The third component of a Code Halo solution is data, while the fourth is a process, Roehrig continued. "Data is the raw material for analysis and meaning-making. Without good data, you’re really still guessing and your Code Halo solution is pretty unlikely to really take off. Every Code Halo solution needs a process to draw business meaning from imagination being applied to data captured and de-coded by algorithms," he said. 

Finally, every successful Code Halo solution also needs a compelling business model in order to monetise the meaning that has been extracted, Roehrig said, listing car insurance company Allstate’s new commercial model connected to the telematics device, as well as Google ad placement.

As personal data is involved, Roehrig said that business leaders typically worry about worst-case scenarios spanning data security, privacy, and regulation. "In the context of near daily spying scandals and security breaches, this is completely understandable. Some leaders hope that governments and industry regulators will help balance the risks and rewards of our online lives. For example, recent changes to Australian privacy laws require organisations to respect the integrity of a person’s Code Halo. And just recently the European Union moved to codify the 'right to be forgotten',” he noted.

"This trend will certainly continue, but legislation has never been able to outrun technology. It’s up to business leaders to get in front of regulatory changes and begin to generate and maintain trust in the irrepressible digital economy. We see five key actions critical to making this work:

i. Create an 'Opt-in' moment: Make sharing data an elective 'opt-in' decision for customers. Allowing people to decide how their data can be used will help build and protect trust while still providing valuable insight.

ii. Give your customers a delete button: Regulatory requirements are not going away, so you’ll have to continue to adhere to them. But if someone wants to opt out, they should have an easy—and complete—way to stop sharing information.

iii. Show me how you know me: When data is properly managed, it can be used to create highly personalised moments of engagement. It’s how Netflix knows just the right film for your Sunday evening. You should give customers a sense of how your meaning-making process works ('because of A, B, and C we are able to conclude D').

iv. Shine a light on your 'Give-to-Get' equation: You give Pandora a list of your favorite artists or songs, and you get music tuned to you. The 'give' was free, took only a few seconds, and is not a huge secret. However, what if the 'give' is personal financial information or health records? These gives are riskier, and require more significant 'gets' (value in return). Companies must be transparent—internally and externally—about Give-to-Get interaction with customers.

v. Strengthen organisational self-control. It’s imperative to establish the processes, technologies, best practices, and culture norms to do the right thing with customer privacy and security. You should proactively answer such questions as: 'What will we do with our conclusions?', 'What are we responsible for if we know?', and 'What is the right thing to do if we know?'"

To get started, Roehrig offers four tips: 

Recognise the value of signal

"Competing on insight now stands as a potentially large value-creation lever for most organisations. We surveyed business decision makers in 300 firms globally, and they told us they achieved a total economic benefit of roughly US$766 billion over the past year through their use of business analytics. Among those firms that participated in our research, investment in business analytics yielded an average 8.4% increase in revenues—primarily due to better customer engagement—and an average 8.1% improvement in cost reduction in the previous fiscal year. Companies that generated the most value from business analytics expect to grow revenue faster and reduce costs more aggressively," Roehrig noted.

Make design central to your value proposition

"In many—OK, most—organisations, design is often ignored or thought of as simply, 'make it pretty'. This is misguided, and the perception needs to change—fast. This is not just about making beautiful applications and Web sites. That’s still vital, but beauty needs to be embedded into the end-to-end customer engagement process and user experience. This is business, not just aesthetics," Roehrig commented. 

"The iPod triumphed over the Zune because of its superior design and user experience. (Car insurance firm) Progressive’s web site isn’t just good looking; it drives business. Disney’s MagicBand experience is intended to grow revenue. Companies that put design at the centre of their strategy are making the right move."

Compete on trust

"In our world of unprecedented information and insight, how can companies deliver personalised goods and services while they avoid being evil (and creepy)? Companies should allow customers to opt in (or out) from sharing code. Google and others are already starting to do this," Roehrig said. 

"Others—Allstate and Progressive, for example—are doing a great job demonstrating a clear connection between value and information—the Give-to-Get ratio. If you share your driving information with them, you can get a better insurance deal. Organisations that ultimately win will be those that generate, maintain, and ultimately compete on trust in this new digital economy."

Make IT Your Halo heroes

"Over the past few years, enterprise IT has often become a collection of unloved plumbers, often unnoticed unless the email system breaks or we can’t access Facebook during breaks. That’s about to change. We’ll still need the foundational wiring of the business, but in a world where value is increasingly extracted from code, artfully managing technology and information will be essential to the brand promise of almost every company. 

"IT will still be responsible for basic technology operations, but will add design, behavioural science, and even sociology to shape how technology is used. Organisations that win the Code Halo race will have no barriers between IT and the business, and leaders who navigate this shift will become true Halo heroes."

The first chapter of the book can be downloaded here.

*Internet of Things devices could include mobile phones, tablets, telematics devices, 'magic' bands, IP-enabled appliances, the powered pill, wearable computing devices, and game consoles.