Issue 3 : The Digitalisation of Business

How digital technologies found their place in the enterprise

Good Morning to all and a particular welcome to all my new subscribers. Thank you!

Something for the weekend sir? Hopefully this, rather dense, article will give you something to chew on over the weekend. As promised, it is heavily research-based and is a follow on from Issue 2 — go read it if you haven’t already.

Have a great weekend. On to this issue…


The first apparitions of digital technology in business happened in the 1960’s, when IBM launched and sold specialised calculating computers — in fact the term computer was actually used to describe a person who calculates — in the research and commerce domains. The IBM System 360 was one of the world’s most popular. But its physical size and its equally gigantic proved too costly and prevented it from being sold to and used anywhere other than the biggest of Institutions like NASA and well-off universities.

Then in August 1981, IBM launched the IBM Personal Computer, or the IBM PC as it became more widely known. In less than 10 years the IBM PC entered into a large number of companies, not only because of its attractive price at the time ($1565 equivalent to around $4000 in today’s money), but its near miraculous flexibility and simplicity as compared to previous systems.

IBM also made available help and development tools for application production. This allowed other organisations outside IBM to create, distribute and sell accessory programs such as VisiCalc (the first spreadsheet which became the basis for all subsequent applications of the same nature like Excel, Numbers etc.), text manipulation programs (think something like Microsoft Word) or more specialised applications that businesses needed to be competitive for example ERP (Enterprise Resource Planning) applications and HR (Human Resources) Management Systems.

The common element in digitalisation is the optimisation and subsequent automation of manual processes, with the overall aim to become faster, more efficient, if you will, better. Enterprises jumped at the chance and made the IBM PC the most popular computer ever after a short period of time on the market. Time being money, to steal a phrase, meant that businesses were always striving to save costs by reducing the time spent on internal processes.

Not only did the IBM PC become popular in business, but a parallel revolution took hold. Many startups — often from the Bay Area — created computers that could be bought for the home (the IBM PC was initially too onerous for a modest family). Despite these computers not being “compatible” with the IBM PC, they had a sizeable impact on people, getting their users and fans used to working with computing devices. Examples during this era were computers like the Sinclair ZX80/81, the Commodore PET — side note, Commodore’s chief Jack Tramiel had a saying “Computers for the masses, not the classes" — and later the Atari ST. 

The end result is that it is now rare to find someone in employment who has not used a computer at all, at one time in their life. By having this basic computer culture generation after generation was indirectly trained for the future, ensuring that Digital Transformation became an inevitability and not some pipe dream of a far off distant future.

The first talk of Digital Transformation

In contrast to digitalisation, which so far had been an evolution of parts to producing increasing efficiencies for business, digital transformation is a radical change that profoundly touches upon all aspects of a business from production to the finished product in sales and marketing. It is Strategy, it is the new Business Models, it is Operations, all the way through to customer touch points and the final relationship with the end user of its products and services.

Some of the earliest developments in digital transformation happened in the 1980’s with the arrival of EDIs (Electronic Data Interchange) systems and the aforementioned ERP systems. Developed by transport and logistics firms, a realisation that a standardisation of data models was necessary to allow communication between all actors in the supply chain and the lifecycle of a product designed, manufactured and ultimately transported from one country to another, sometimes multiple times.

This innovation laid the foundations of the transportation of data between Information Systems and inspired the development of specialised applications with more and more sophisticated features.

In 1994, N. Venkatraman et al., developed a theoretical model of transformation for business using Information Systems. Their model highlighted 5 levels of transformation ; Localized Exploitation, Internal Exploitation, Business Process Redesign, Business Network Redesign and Business Scope Redefinition.

In the next issue, I’ll dig into these in more detail to show how Digital Transformation is very different from simply buying a computer and some software.


Aggregator Watch

The digital economy lends itself to the creation of what are called Aggregators. Ben Thompson coined the term and has written a number of articles on the subject. In future issues I’ll be delving in to just what an Aggregator is.

However, I thought it would be interesting to create a short column about Aggregators and Potential Aggregators from the Caribbean. They could be international players entering the local market or home-grown like the example in this issue, who are looking to expand internationally.

Montserrat launches New Music Networking App : Caricom

Bodio Inc. has launched (in beta) an app called bodio, that hopes to become an aggregator of entertainment services in the Caribbean. Artists, Bands and DJ’s can list in an easy to use platform that hopes to match venues, events to entertainers. Bodio Inc. was formed in 2019 and is currently in Montserrat (its home), Antigua & Barbuda and Barbados, with plans to extend further in the future.

Thankfully this is not another iTunes Ping — Apple’s attempt at music social networking that was shutdown on the 30th September 2012 after only two years of service — despite accumulating more than 1 million users, 48 hours after its initial launch.

Bodio Inc. is hoping to become an aggregator as it is providing a simple and enjoyable route for the supply and demand to match up. Much in the same way dating platforms work, Bodio should attract artists which in turn attracts more promoters and venues, thus creating more incentive for artists to sign up, ad infinitum. Aggregators solve the problem of discovery remember, and this is the aim of Bodio, to ease discovery.

What’s interesting here though, is that unlike traditional matching systems that are 2-sided business models — match the supplier on one side to the buyer on the other and take a cut of the transaction — concerts are multi-sided. The supplier, the artists in this case, lists their services in the hope of being selected for a venue or event by the buyer, the Promotor, who selects based on reviews, reputation, etc., to produce an integrated package for the general public who are, in fact, an indirect buyer a third leg if you will, having arguably the most influence on the chosen supplier.

Bodio hopes to match all these together for the public to find artists and venues, venues to find artists and the public, and artists to find both venues and the public. If done well, and what I mean by that is, respecting artists remuneration, venues remuneration and respecting the private data of its users, it could have a really important impact on the entertainment scene in the Caribbean. If marketed well, tourism could be ‘the’ most important revenue generator and aggregating a potential market of around 30 Million tourists who visit the region not to mention the 16 Million population of the Caribbean not shy of a good night out.

Tourism accounts for 10.4% of GDP in the Caribbean and 1 in 4 jobs are either directly or indirectly attributed to tourism, according to the World Travel & Tourism Council in its 2018 report on the economic impact of tourism in the Caribbean.

What is Bodio’s Business Model?

Looking at the app, I would say that revenue is either gained, or planned in the future, from several sources : advertising, membership fees, listings fees and bookings fees.

Advertising — Bodio clearly states in its FAQ that potential advertisers can publicise their product/service to be featured on the “front of our homepage”. My question is: Does the app have enough advertising space to generate meaningful revenue? To wit, too much advertising may drive users away from the application thus weakening the attractiveness of the platform. Advertising needs to be subtlety integrated in the mobile so as not to turn off users. Additionally, what data-usage policies are to be implemented for the advertising. We’ve all seen the corrosive fallout from the likes of Facebook that play too fast and too loose with personal data. Again, that is not to say that advertising isn’t a good business model, it is, if done tastefully and intelligently.

Membership — Bodio haven’t, to my knowledge, communicated anything about membership fees. But clearly if the platform gains in popularity, membership fees would likely be a suggestion of the CFO. Remember, the digital economy is obsessed with growth and not profit. I would suspect that membership fees for venues would be first on the list, followed by artists and finally the general public. Done sensibly a subscription model could generate an important source of revenue and one that could stay reasonably priced because of the quantities involved. I’d be interested to know if there are any statistics on the number of artists and venues in the Caribbean.

Listings/Bookings Fees — To my mind, these are the most obvious and easiest to monetise off the bat. It’s a road well-trodden and something that all parties currently deal with. The opportunity for Bodio is to be able to do it better, cleaner, cheaper and for Bodio to enable more bookings and more crowds. That’s easier said than done.

Having said all this, there is a potential spanner in the works looming.

Enterprise Certificates and the potential for revocation

Recently Apple suspended the Enterprise Certificate — afforded to developers in order for them to internally test beta products — of companies as big as Google and Facebook. They were quickly restored but not without significant disruption. This distribution of applications using an Enterprise Certificate is formally prohibited for external distribution. Apple’s terms and conditions for developers clearly state this, and distribution is restricted for internal purposes only with an exception for contractors. This process is known as side-loading and is widely used to skirt around App Store restrictions. 

It was subsequently revealed that unscrupulous and unsavoury elements were also exploiting the loophole to distribute gambling and pornographic content to users with no age checks or controls in place. I’m not here to comment on the merits or the morals of such a system, only that if you sign up for a contract you should abide by it or desist or lobby to change the rules if you think they are unfair or otherwise too restrictive. 

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Screenshot taken 13 February 2019 but still active as of 21/02/2019

Bodio has developed the app using the AppyPie App Maker platform, which is a sensible move in that it reduces development costs and reduces time-to-market for a working prototype or version 1.0 of the mobile app. Sadly, for Bodio and certainly of no fault of theirs, AppyPie has gone for the side-loading option, in violation of the terms of the contract with Apple. Give that there is enormous pressure on Apple to crack down on this shadow distribution, I doubt it’ll be long before the app no longer works, as I understand Apple are systematically looking through apps to identify violators and have their certificate revoked.

In a statement to Reuters, Apple said,

“Developers that abuse our enterprise certificates are in violation of the Apple Developer Enterprise Program Agreement and will have their certificates terminated, and if appropriate, they will be removed from our Developer Program completely,” an Apple spokesperson told Reuters. “We are continuously evaluating the cases of misuse and are prepared to take immediate action.”

Bodio needs to find a way to use the official channel for beta testing in public as fast as it can for it not to fall victim to an uncontrolled shutdown. This channel is called Test Flight. Test Flight was originally developed in 2010, getting acquired by Burstly in 2012 and finally ending up in Cupertino in 2014 during an acquisition of Burstly by Apple. Test Flight allows for 10000 users outside the organisation beta test software and up to 100 apps per person in beta.

A quick word about Android. Side-loading is commonplace in the Android world with Alphabet (Google) turning a blind eye for the time being, so as long as the rules and enforcement remain unchanged — unlikely, as pressure is mounting on Google too —, there is still time and a chance to develop quickly. According to IDC, the global market share split is 86.8% Android to 13.2% iOS. Extrapolating, it’s safe to assume that much of the Caribbean is on Android and not on iOS, so I may overstating the risk a little here, in that because on Android its tolerated a potential shutdown from Apple would only affect a small population. But I think it remiss of me not to mention it and expose the possibility of a similar fate on Android should this story really blows up, given that it has real potential to do so.

I wish Bodio well and I look forward to the service being available throughout the region including us in the French West Indies. 


Reading List

Paris seeks $14 million from Airbnb for illegal adverts : Reuters

Paris City is suing Airbnb for illegal listings after a new law was passed in 2018 restricting home owners from renting properties for more than 120 days per year. Additionally listings are required to provide the registration number for control purposes. It is these factors that Pairs accuses Airbnb of failing to enforce, with over 1000 properties advertised, the fine of 12,500€ per posting quickly rises to over 12 Million € ($14 Million).

With a Memorandum of Understanding being signed between Airbnb and several Caribbean destinations including Martinique — which is an overseas department of France and in the EU —, it would appear that various states have started to grasp the realities of the digital economy and implemented laws and agreements to better police, and of course tax, these aggregators.

Latest ExxonMobil Oil Finds Push Guyana Above Industry Standards : OECS Business Focus

As the world needs more and more renewable energies brought online, an American giant, ExxonMobil, extends its plans for pumping more fossil fuels offshore of Guyana. Apart from the obvious wishes for major benefits to the Guyanese economy, I hope there are previsions for the simultaneous development of renewable energy sources. The oil won’t last forever, and it’ll get more and more expensive as we wind over the coming decade, Guyana should profit from this short-term bonus to build out a more sustainable energy plan and use digital technologies for the benefit of its citizens.


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