Wednesday, June 28, 2006

The Case of Edge Technologies...

In order to commercialize innovations there is a growing interest in the concept of edge technologies. “Edge technologies” that help the organization connect with customers and drives innovations in the organization (see Mui, C. (2006). “‘Edge’ Technologies Go Mainstream,” Optimize, April, 54. Website: ttp:// For example, General Motors (GM) sends a monthly report to its customers via OnStar system, which allows GM to monitor performance, status, and locations of vehicles via censors on the vehicles and cellular connections. The monthly reports contain information such as conditions of vehicles, possible troubles, and reminder of maintenance checks. The report is generated based on the analysis of more than 1,000 trouble records. The application of IT to customer relationship management significantly changed the way GM to interact with customers. Traditionally GM only interacted with customers before purchase via mass advertisement and at purchase. Now GM keeps the relationship with customers even after purchase by providing information that helps customers.

The edge technologies bring tremendous benefits to GM. First, it improved GM’s customer relationships. OnStar system received 15,000 emergency service calls, 23,000 roadside-assistance, 29,000 diagnostic calls, 380,000 directions, etc. Second, the real-time observations of vehicles in various conditions provide knowledge to GM to improve vehicle designs. Third, it provides GM new income sources. For example, GMAC insurances offer different services for customers based on the car’s mileage. Customers who have lower mileage vehicles can get lower premium.

Edge technologies promise the above benefits to an organization, however, there are drawbacks too. First, it may increase the problem of information overload. Nowadays organizations have more data than they can analyze. Appropriately analyzing data and applying it to the right situations is important for the successful implementations of edge technologies.

There are organizations that have been successful in edge technologies. has a platform that records all transactions and product-evaluation history of active customers. Amazon analyzes the data and improves customer’s shopping experiences through sophisticated data mining technologies. As a result, Amazon keeps a high customer satisfaction evaluation. The Hartford Financial Service also has a platform that records all telephone calls between customers and service representatives. The details of conversations such as talk time, hold time, and outcome, snapshots, etc. are recorded and are available for learning practices by service representatives and supervisors.

Implementing edge technologies requires an organization a big change. For example, platform that supports edge technologies is a must. An organization’s information systems architecture needs to be flexible for a change. CIOs must design information systems architecture that can appreciate emergent knowledge. The change must occur in an organization level, not in an application or a department/function level. Implementing edge technologies in an application level may contribute to disasters such as inconsistent data, incompatibility of the different systems, etc. To use IT as edge technologies, CIOs must be aware of the following five trends. First, organizations must connect themselves with their external entities such as customers, business partners, competitors, suppliers, etc. Second, the connectivity must be established not only by infrastructure such as networks, but also in terms of software such as Web services. Third, to reach its customers, pervasive devices such as PDAs, mobile technologies, cameras, handsets, wallets, etc. are important. Forth, data mining capabilities need to be further developed in terms of cheaper storage and intelligence analysis. Fifth, knowledge from the collected data is important, since it was not available before in decision making. Such knowledge includes identity, location, preference, health, and quality of service, etc. However, these knowledge need to be treated carefully, since they involve the issues of privacy and security.

[Summary Prepared by: Yukika]

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