Enterprise Games: Business in the Real-Time Economy

1© 2013, Michael Hugos Center for Systems Innovation [c4si]

www.SCMGlobe.comwww.MichaelHugos.com

Michael HugosCENTER FOR SYSTEMS INNOVATION

[c4si]

Enterprise Games: Business in the Real-Time Economy



The Real-Time Economy



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

http://earthobservatory.nasa.gov/

http://ebusiness.mit.edu/research/Briefs/Brynjolfsson_McAfee_Race_Against_the_Machine.pdf



Companies Connect with Global Networks

Big Data

Cloud Computing

Smart Mobile Devices

Social Media

Data Center

Orchestration

Layer

APIs

APIs (application program interfaces) make connections easier and more secure



Evolving Balance between Two Needs

•

• 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!

Efficiency Agility



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

http://www.thersa.org/__data/assets/pdf_file/0019/282160/J-Rifkin-RSA-presentation-text-150310.pdf



Games and Business have Common Traits

ENTHUSIASTIC PARTICIPATION

RULES

GOALSFEEDBACK SYSTEMS

Social Media, Smart Mobile Devices, Big Data

GAMES are engagement engines that attract players

COMPANIES are engagement engines that attract customers, employees and partners

“Games have four traits”Jane McGonigal, Reality is Broken

http://rtietz.com/fronteiras/aula_12/mc_go nigal.pdf

http://rtietz.com/fronteiras/aula_12/mc_gonigal.pdf

http://rtietz.com/fronteiras/aula_12/mc_gonigal.pdf



Feedback Drives Games and Business

1.Real-Time Visibility

OBSERVE ( TECHNOLOGY )

Use game mechanics to OBSERVE – ACT – WIN in unpredictable environments (Agility).Companies NEED game mechanics to succeed in the real-time economy.

2.Authority to Act

ACT ( PROCESS )

3.Stake in the Outcome

WIN ( PEOPLE )

THREE GAME MECHANICS

CREATE POWERFUL FEEDBACK



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

• Continually improve skills & technology based on experience – EVOLVE

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

Freestyle Chess Example



The Great Game of Business



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



Improving Supply Chain Operations

1.Real-Time Visibility

OBSERVE ( TECHNOLOGY )

2.Authority to Act

ACT ( PROCESS )

3.Stake in the Outcome

WIN ( PEOPLE )

40 Manufacturers and 26 Distribution Centers

4,500 Stores and Daily Deliveries

STORE

STORE

STORE

STOREDC

DC

DC

How to improve performance in 90 days?

Hint: Combine strengths of people and computers



Apply Game Mechanics for Better Feedback

Electronic Invoice

Electronic ASN

Electronic PO

Customer

Distributor

Supplier

KPI Score Card

Plan vsActual

Wk 1 Wk 2 Wk 3 Wk 4Sales Forecasts

Plan vsActual

Wk 1 Wk 2 Wk 3 Wk 4Order Fill Rate

%

A B C D ESupplier On Time Delivery Rate

Perfect Order Rate60%

70% 90%

100%

80%

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” http://www.cio.com.au/article/17941/tao_supply _chains/

Game Mechanics:• Real-Time Visibility• Authority to Act • Stake in the Outcome

Every day all parties transmit simple data sets to update common database showing relevant performance levels

http://www.cio.com.au/article/17941/tao_supply_chains/

http://www.cio.com.au/article/17941/tao_supply_chains/



Think Big – Start Small – Deliver Quickly!

Cloud, APIs

SaaS Apps

Agile development platform for real-time economy

• Use cloud, apps, smart devices

• Pay-as-you-go, Learn-as-you-go

• Agility means simple things done well, not complex things done fast

• 30 – 60 – 90 day cycles

• Try many things, follow success, abandon failure

AGILE DEVELOPMENT

“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



Massively Multiplayer Online Games

Could we apply same techniques - 3D worlds and HUDs - to operation of global supply chains…???

• Thousands of players to work together on complex projects

• 3D virtual worlds and Heads-up- displays (HUDs) show real-time big data – agile response to change

Courtesy of EVE Online (www.eveonline.com)

http://www.eveonline.com/



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

Enable new forms of communication and collaboration – create new jobs, new companies, new products

Courtesy of SCM Globe (www.scmglobe.com)

http://www.scmglobe.com/



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



Learn More…

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/

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]

http://www.amazon.com/Enterprise-Games-Mechanics-Better-Business-ebook/dp/B00E1SIWZM/

http://www.michaelhugos.com/

Enterprise Games: Business in the Real-Time Economy

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