Enterprise Games: Business in the Real-Time Economy


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For the last 100 years the assembly line has been the dominant model for organizing business operations. But now high rates of change and the unpredictable nature of our real-time global economy calls for something more flexible and responsive. Games offer field-tested methods and models for people to organize and focus their actions and continuously learn and succeed in fast-paced and unpredictable environments. See pragmatic examples of how to use game mechanics to improve business operations from sales to supply chain management. Get ideas you can use in your own company. It's not a game, it's the future of work!

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Enterprise Games: Business in the Real-Time Economy

  1. 1. Enterprise Games: Business in the Real-Time Economy Michael Hugos CENTER FOR SYSTEMS INNOVATION [c4si] © 2013, Michael Hugos Center for Systems Innovation [c4si] 1 www.SCMGlobe.com www.MichaelHugos.com
  2. 2. The Real-Time Economy © 2013, Michael Hugos Center for Systems Innovation [c4si] 2 www.SCMGlobe.com www.MichaelHugos.com
  3. 3. Business Now Happens on Global Networks Courtesy NASA Earth Observatory http://earthobservatory.nasa.gov/ Real-Time Economy is powered by computers and global networks (cloud computing) Race Against the Machine - http://ebusiness.mit.edu/research/Briefs/Brynjolfsson_McAfee_Race_Against_the_Machine.pdf © 2013, Michael Hugos Center for Systems Innovation [c4si] 3 www.SCMGlobe.com www.MichaelHugos.com
  4. 4. Companies Connect with Global Networks Smart Mobile Devices APIs Orchestration Cloud Computing Big Data Data Center Layer Social Media APIs (application program interfaces) make connections easier and more secure © 2013, Michael Hugos Center for Systems Innovation [c4si] 4 www.SCMGlobe.com www.MichaelHugos.com
  5. 5. Evolving Balance between Two Needs • Agility Efficiency • Efficiency requires predictability and stability – often absent in real-time economy • Agility can differentiate products and avoid “race to the bottom” price wars • Consider example of evolving mobile phone… Efficiency vs. Agility • Is it a really a phone any more, or an evolving ecosystem of agile apps? • Efficiency alone will kill your company! © 2013, Michael Hugos Center for Systems Innovation [c4si] 5 www.SCMGlobe.com www.MichaelHugos.com
  6. 6. New Way to Organize Work “One time purchase transactions are replaced by ongoing commercial relationships between parties over time.” Jeremy Rifkin, Wharton School, The Empathic Civilization http://www.thersa.org/__data/assets/pdf_file/0019/282160/J-Rifkin-RSA-presentation-text-150310.pdf This means: Know your customers! Know what they want! Now consider this: Games are as powerful for organizing knowledge work as assembly lines are for organizing manufacturing work © 2013, Michael Hugos Center for Systems Innovation [c4si] 6 www.SCMGlobe.com www.MichaelHugos.com
  7. 7. Games and Business have Common Traits “Games have four traits” GAMES are engagement engines that attract players RULES FEEDBACK SYSTEMS GOALS COMPANIES are engagement engines ENTHUSIASTIC PARTICIPATION Social Media, Smart Mobile Devices, Big Data that attract customers, employees and partners © 2013, Michael Hugos Center for Systems Innovation [c4si] Jane McGonigal, Reality is Broken http://rtietz.com/fronteiras/aula_12/mc_go nigal.pdf 7 www.SCMGlobe.com www.MichaelHugos.com
  8. 8. Feedback Drives Games and Business THREE GAME MECHANICS CREATE POWERFUL FEEDBACK Real-Time Visibility 1. OBSERVE ( TECHNOLOGY ) 2. 3. Authority to Act ACT Stake in the Outcome WIN ( PROCESS ) ( PEOPLE ) Use game mechanics to OBSERVE – ACT – WIN in unpredictable environments (Agility). Companies NEED game mechanics to succeed in the real-time economy. © 2013, Michael Hugos Center for Systems Innovation [c4si] 8 www.SCMGlobe.com www.MichaelHugos.com
  9. 9. Combine Strengths of People and Computers • Game mechanics provide field-tested models to effectively combine people and computers • Let computers do routine tasks – EFFECIENCY • Empower people to be creative – AGILITY • “Combine the swelling numbers of mid-skilled workers with ever-cheaper technology to create value.” Erik Brynjolfsson and Andrew McAfee, Race Against the Machine Freestyle Chess Example  Amateur players using simple computers to explore options  Beat chess grandmasters and other players with more powerful computers  “Human strategic guidance combined with the tactical acuity of a computer was overwhelming.” Gary Kasparov • Continually improve skills & technology based on experience – EVOLVE © 2013, Michael Hugos Center for Systems Innovation [c4si] 9 www.SCMGlobe.com www.MichaelHugos.com
  10. 10. The Great Game of Business © 2013, Michael Hugos Center for Systems Innovation [c4si] 10 www.SCMGlobe.com www.MichaelHugos.com
  11. 11. Supply Chains and Game Mechanics • Every company is part of one or more supply chains - supply chains span multiple companies from manufacturers to distributors and retailers and customers • Every company in a supply chain has its own interests, yet all must cooperate to reach common goals in order to succeed • Much like a category of online games known as “Massively Multiplayer Online Role Playing Games” or MMOs for short • Can techniques from MMO games be applied to improve operation of supply chains? • YES – following case study is example from my own experience • As chief information officer of a national distribution company I employed game mechanics to improve a large retail supply chain • Created applications to provide real-time visibility of supply chain operations; companies already had authority to act and a stake in the outcome – resulting feedback enabled higher levels of performance © 2013, Michael Hugos Center for Systems Innovation [c4si] 11 www.SCMGlobe.com www.MichaelHugos.com
  12. 12. Improving Supply Chain Operations 40 Manufacturers and 26 Distribution Centers 1. Real-Time Visibility OBSERVE ( TECHNOLOGY ) DC 4,500 Stores and Daily Deliveries STORE STORE DC STORE DC STORE 2. 3. Authority to Act ACT Stake in the Outcome WIN ( PROCESS ) How to improve performance in 90 days? ( PEOPLE ) Hint: Combine strengths of people and computers © 2013, Michael Hugos Center for Systems Innovation [c4si] 12 www.SCMGlobe.com www.MichaelHugos.com
  13. 13. Apply Game Mechanics for Better Feedback Supplier Game Mechanics: • Real-Time Visibility • Authority to Act • Stake in the Outcome Electronic Invoice Distributor Electronic ASN Every day all parties transmit simple data sets to update common database showing relevant performance levels People collaborate on conference calls, look at common database, make decisions Cut excess inventory by 60% and $400,000 in first 90 days! “Tao of Supply Chains” Electronic PO KPI Score Card % Plan vs Actual A B C D E Wk 1 Wk 2 Wk 3 Wk 4 Order Fill Rate Supplier On Time Delivery Rate 80% Plan vs Actual 70% Wk 1 Wk 2 Wk 3 Sales Forecasts http://www.cio.com.au/article/17941/tao_supply _chains/ © 2013, Michael Hugos Center for Systems Innovation [c4si] Customer 13 90% Wk 4 60% Perfect Order Rate 100% www.SCMGlobe.com www.MichaelHugos.com
  14. 14. Think Big – Start Small – Deliver Quickly! “New creation often happens on borders of combining sectors and industries.” President Park Geun-hye, South Korea “Do what you can, with what you have, where you are.” President Teddy Roosevelt, United States AGILE DEVELOPMENT • Use cloud, apps, smart devices • Pay-as-you-go, Learn-as-you-go Cloud, • Agility means simple things done well, not complex things done fast APIs • 30 – 60 – 90 day cycles • Try many things, follow success, abandon failure SaaS Apps Agile development platform for real-time economy © 2013, Michael Hugos Center for Systems Innovation [c4si] 14 www.SCMGlobe.com www.MichaelHugos.com
  15. 15. Massively Multiplayer Online Games • Thousands of players to work together on complex projects • 3D virtual worlds and Heads-updisplays (HUDs) show real-time big data – agile response to change Courtesy of EVE Online (www.eveonline.com) Could we apply same techniques 3D worlds and HUDs - to operation of global supply chains…??? © 2013, Michael Hugos Center for Systems Innovation [c4si] 15 www.SCMGlobe.com www.MichaelHugos.com
  16. 16. Massively Multiplayer Online Businesses • Google Earth and Google Maps provide 3D virtual worlds • HUD app displays real-time data from supply chain operations • Combines people and computers Courtesy of SCM Globe (www.scmglobe.com) Enable new forms of communication and collaboration – create new jobs, new companies, new products © 2013, Michael Hugos Center for Systems Innovation [c4si] 16 www.SCMGlobe.com www.MichaelHugos.com
  17. 17. Example of Real-Time Economy Startup -- Entrepreneur renting capacity at bottling plant to make herbal tea energy drink -- Hiring local drivers to deliver products and expand routes -- Using SCM Globe to monitor and manage supply chain with game mechanics -- Engage customers with social media and gaming app running on smart devices -- Agile Business: Try many things, follow success, abandon failure © 2013, Michael Hugos Center for Systems Innovation [c4si] 17 www.SCMGlobe.com www.MichaelHugos.com
  18. 18. Learn More… Presentation excerpted from my book: “Read this book, it’s not a game it’s the future of work!” Mark P. McDonald, Group VP, Gartner “Throughout his crisp and lively narrative, Hugos makes skillful use of several reader-friendly devices… that graphically illustrate key concepts and relationships as well as checklists and clusters of bullet points that will facilitate, indeed expedite frequent review later.” Robert Morris, Amazon VINE VOICE Top 100 Reviewer Using game mechanics to redesign and reinvigorate business operations for the real-time economy www.MichaelHugos.com Center for Systems Innovation [c4si] Enterprise Games: Using Game Mechanics to Build a Better Business, 2013 ebook and paperback – http://www.amazon.com/Enterprise-Games-Mechanics-Better-Business-ebook/dp/B00E1SIWZM/ © 2013, Michael Hugos Center for Systems Innovation [c4si] 18 www.SCMGlobe.com www.MichaelHugos.com