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Interviewer: Paul Lee
Interviewee: Jim Sloane

PL - Hello, my name is Paul Lee, a director at Deloitte and a lead author of the predictions series. Predictions is an annual series of views on the global technology, media and telecoms sectors which Deloitte has published for the last eight years.

In this podcast, I'm talking to Jim Sloane, leader of the technology practice for Deloitte UK

PL - Jim in the previous two years of predictions, we've had quite a focus on green IT. You would, in some respects, expect that a focus on the environment maybe conditional upon economic conditions and as soon as things get tight people start thinking less about the environment and more about the bottom line. Is it possible to be both green and lean?

JS - I think people are trying to deal with both in the same go and you see people like BT who are one of the largest consumers of electricity in this country investing in wind farms to create their own energy so to speak while at the same time being very focussed upon looking at their whole use of IT, their distributor networks, their data centres, things like that and trying to drive further efficiencies through that process. So you're getting a double whammy in effect, whereas in the past people have tried to drive efficiency and achieved something but now with a lower energy cost and the benefits of lower energy technology, they're getting that added benefit they've never had before.

PL - Okay, moving on to quite a different topic, moving on to social networks. We've heard of social networks within consumer for some time. I think the really interesting issue about social networks and the enterprise is how you use them and for many years there's been talk about collaborative commerce and collaborative supply chain and collaborative innovation. But they've never been realised and I think the concept of a social network which has started in the consumer world or in one's private life, the lessons that are taken into the enterprise is really, really interesting. I think it can create greater collaboration within the organisation as well as beyond the organisation.

You are again seeing companies starting to put out social networking products, collaborative tools based on social networking products, as well as the social networking site of the organisation.

PL - And so we'll see social networks within enterprises as well as them already established with consumers and I think you're also alluding to the fact that you can also span the two and use social networks as a means for enterprise to communicate with their consumers, for example in the form of recommendation.

JS - Absolutely, I mean, the social network is all about passing information between people, would be the simplest way of describing it and what I find intriguing is the amount of consumer generated content that there is on top brand websites, so something like 26% of all content on a top brand website is consumer generated. Peer to peer recommendations are 25% more effective than television. So I think this whole area of people wanting to inform each other, sites like Tripadvisor and others - they might not be social networking as such but they are about networking individuals and sharing information and I think that is the big change we've seen in the internet in the last 18 months. But it is affecting the way people view top brands and how they buy and use those brands to I think it's very interesting.

PL - And finally, obviously we're in a challenged state within the global economy and within the digital economy in general there are of course their own challenges there. Privacy has been an issue which has been flagged, certainly we flagged that last year. We envisaged a flight to privacy which is likely to happen around the browser and also around search engines. How significant could privacy become in terms of its impact on the digital economy?

JS - Well I would say it's the one issue that everybody worries about with the digital economy, I mean every time you enter your credit card, you worry about where that's going to end up. So I believe it to be a big issue, an emotional issue at that level. I think there is definitely an issue about the ownership of data, so in the digital economy, somebody owns the data, now what happens to that data? Where is it used? Is it distributed to another party? What are the ownership rights in different countries. So I think it is the one thing that, and I believe many of the people in this space have put a lot of effort into this, but it is the one thing that I think remains as an issue. And you've only seen that, certainly in the UK in the last year, the number of instances seems to be an almost weekly occurrence of loss of data and stuff like that and the digital world just makes that more complex.

PL - So in a sense the loss of data is almost a feature of any growing part of the economy and the digital economy is growing but that has to be sorted or improved, made more watertight in order for digital to be used more widely within the economy?

JS -I think it is quite an emotional concern, but yes, companies have to be seen to be doing the right things and many of them have been and you can never do enough around this. I think the real challenge is that having put in all of these controls and checks and balances and everything else to make the consumer more comfortable about the digital economy, the questions is as a CEO of a large company which has a lot of digital type of activity going on are people following the rules and guidelines that have been set forward? Can you be assured that people are following the rules that have been determined and in many of these instances where data has been mislaid or whatever it may be, it's not that the rule or procedure wasn't there, people weren't compliant. And so you've got this very diss... you know, you're a large brand, a large consumer company you've got a massively distributed network all round the world, you've got people accessing data onto local hubs and don't, certain third parties, third countries for them to get to the main hub, the main distribution centre, whatever it may be. You know that's a long distribution chain. There are a number of regimes and legislations in place there, can you be assured that right down the end of a chain everyone's following the rules and processes?

PL - So it's not only the technology but the way in which it's deployed, the implementation, the controls around there?

JS - As it is always with technology. I think it is how you effectively use this and I think a lot of people have thrown good technology into a poor environment and that technology has failed. It's typically not the technology, it's typically the environment in which it's been asked to operate. Or the lack of controls that have put around it, or the lack of thought about how to implement it, that cause's the challenge. And I think you know, that is an area you would expect technology companies to have much more say going forward. It's not just about I'm going to sell you a box that you can do a piece of digital transaction processing on but I'm going to sell you a box that is secure and fits into the environment in which we believe it has to operate.

PL - And just finally, if we look ahead towards 2009, it's not a particularly optimistic view that we have at the moment for 2009 but in terms of technology's role within the wider economy, would you argue there's still plenty of roles that technology has to play?

JS - I think there are plenty of roles, I think technology companies have to wake up and realise that. What is the role of technology in a declining economy? What is the role of technology in a declining economy that is essentially service based - and has also off-shored many, many roles in to cheaper economies? How can technology deal with growth and unemployment and issues like that? I think technology companies have a big role to play, I think the industry as a whole needs to wake up to that, to start having a view about that, because I think that will make a difference.

PL - And a typical reaction when you're in a difficult situation within an economy is to shut off all the taps, which could include R&D innovation. How feasible is that to do for a technology company?

JS - It's very feasible to do, is it sensible to do that? Absolutely not, it's very feasible and easy to switch off the taps. I think the technology companies that will come through this recession are the ones that will continue innovating. You only have to go back to the last two recessions to look at the companies that came out stronger than they were at the start of the recession and they were those companies that continued to invest in innovation, in talent, in new product, in new services, in new and brand. Those sorts of things, if you keep investing in that, it's more or less guaranteed you will come out of this recession much stronger than you went into it. This is a huge opportunity for those determined companies who want to go after it

PL - Okay, well thank you very much Jim

JS - Pleasure