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
2© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
The Real-Time Economy
3© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
4© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
5© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
6© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
7© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
8© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
9© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
10© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
The Great Game of Business
11© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
12© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
13© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
14© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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
15© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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)
16© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.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)
17© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.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
18© 2013, Michael Hugos Center for Systems Innovation [c4si]
www.SCMGlobe.comwww.MichaelHugos.com
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]
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