Moving from Transaction to Engagement

Moving from Transaction to Engagement

HBR Blog Network.
R “Ray” Wang
Thursday October 20, 2011
by R “Ray” Wang

Mobile enterprise, social business, cloud computing, advanced analytics, and unified communications are converging. Armed with the art of the possible, innovators are seeking to apply disruptive consumer technologies to enterprise class uses — call it the consumerization of IT in the enterprise. The likely results include new methods of furthering relationships, crafting longer term engagement, and creating transformational business models. It's part of a shift from transactional systems to engagement systems.

These transactional systems have been around since the 1950s. You know them as ERP, finance and accounting systems, or even payroll. These systems are designed for massive computational scale; users find them rigid and techie. Meanwhile, we've moved to new engagement systems such as Facebook and Twitter in the consumer world. The rich usability and intuitive design reflect how users want to work — and now users are coming to expect the same paradigms and designs in their enterprise world.

Engagement systems share nine common traits
A few thought leaders have helped drive the thinking on systems of engagement. Geoffrey Moore has discussed how systems of engagement will drive knowledge worker effectiveness and productivity. Dion Hinchcliffe of Dachis group details the transition from systems of record to systems of engagement in how the social web and open internet are changing business. As with the shift to the Internet, organizations that miss this shift from transactional systems to engagement systems will face dire consequences.

Our initial research identifies nine characteristics of engagement systems that differ from the transactional systems of yesteryear (see the table below for a historical view):

1. Design for sense and response. Engagement systems "listen" to assess status, sentiment, and context. For example, detection of negative sentiment could lead to a discount on your next purchase or a proactive phone call to address an issue. These systems go beyond transactional systems that focus on reliability, stability, and continuous improvement.

2. Address massive social scale. Engagement systems seek to master social networks. Social scale requires constant feedback from networks of people and objects. LinkedIn is an example of how we connect, collaborate, and share with each other in a career aligned social network. Transactional systems focus on addressing massive computing scale.

3. Foster conversation. Engagement systems support two-way conversations. Chat, video, and sharing features enable conversations among individuals, teams, and even machines. Transactional systems push one-way communications in a dictatorial approach

4. Utilize a multitude of media styles for user experience. Engagement systems embrace the multi-media, social-led user experience. Media channels include Twitter, video, text, and "likes." Transactional systems limit themselves to machine based interfaces.

5. Deliver speed in real time. Engagement systems focus on real-time speed. Users can see activity streams, real-time alerts, and notifications on all their devices. Transactional systems aim for just-in-time delivery.

6. Reach to multi-channel networks. Engagement systems touch corporate, personal, and machine based networks. A Skype call or instant message reaches out to both the corporate directory and your own personal network. Transactional systems narrowly focus on departmental and corporate networks.

7. Factor in new types of information management. Engagement systems embrace loosely structured knowledge flows. Comments, audio files, videos, and chats don't fit neatly into corporate relational tables. Transactional systems ensure reliability of highly structured records and data.

8. Apply a richer social orientation. Engagement systems by nature rely on heavy social orientation. The design natively incorporates social media tools such as RSS feeds, LinkedIn, Facebook, and Twitter. Transactional systems express a tangential or just plain awkward social orientation.

9. Rely on smarter intelligence. Engagement systems are powered by business rules and complex event processing engines. Users can change the flow of a task using visual tools. Transactional systems remain in a hard coded, rigid structured approach.

Experiential and personal fulfillment systems will power the next waves of innovation
The evolution to engagement systems from transactional systems will usher in an era of experiential systems which apply context to deliver agility and flexibility. Early categories in this space include gamification platforms, context aware services, and decision support systems.

As we envision the future, we see personal fulfillment systems playing a key role in breaking down the corporate and consumer walls. These people-to-people networks embrace an intention-driven design point to meet the challenge of delivering on a massive individual scale. Pattern-based models will drive the intelligence of these systems. Early examples include the work that Doc Searls began in 2006 on what he's dubbed vendor relationship management. VRM provides customers with the means to bear their side of the relationship burden. Organizations that fail to make the leap to engagement systems will fall behind. Those that seek to drive innovation will move to experiential systems and push the envelope to build out personal fulfillment systems.