The 3rd Generation Cloud Apps

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The 3rd Generation Cloud Apps

Why do we need 3rd Generation of Cloud Apps?

For those of you who read the article '2nd Generation Cloud Apps' you may be asking yourself what 3rd Generation Cloud Apps might look like. If we think about the current range of 380+ Xero add-on applications as '1st Generation'. Where for the first time a business is able to enter and retrieve business information from anywhere in the world at any time of day and still have the minimum expectation that it is live and accurate. And if we consider then that a 2nd Generation would add relevance, personalisation and identity to this; what does a 3rd Generation of cloud application look like?

We believe that a 3rd Generation cloud app would add artificial intelligence and flavour to our business information needs. There are two types of AI: the first type from the 1940's is top-down where you define a decision-tree of if-this-then-that type rules ultimately leading to an end decision devoid of life and emotion. This is the way we built computers and robots until the 1970's. After that we recognised the value of bottom-up AI where computers make decisions based on the information they receive and learn from the result ad infinitum. This is exactly what Google does to decide what results to show you and what appears in your Facebook newsfeed.

How does a 3rd Generation Cloud App behave?

If we take the example of a retailer. At the moment a 1st Generation cloud application might have a retailer asking it: 'What should I order for my store?'. A 2nd Generation cloud app would go to the retailer in a timely, and relevant way to say something like: 'You should make an order for products {D, F and W} tomorrow' where the products prompted meet some pre-defined 'top-down' criteria. A 3rd Generation cloud app would go that step further and prepare the order for you, learning each time from the adjustments you make (demand, weather state, google analytics search results).

A product like this would learn to anticipate what you need suggest actions and options to you based on your identity (user role, personality) and communicate that to you in a digestible format.

Products like Narrative Science are pioneering in the area of information communication and are learning to take business information and tell a story. Humans have been learning through story for 40,000 years and our brains are pre-disposition to remember and act on stories.

1st Generation Example

To give you an example of what we mean: a retailer using a 1st Generation cloud app can go and get timely accurate information like this for any given date or period:

Product Quantity Amount
X 12 $400.00
Y 14 $500.00
Total 26 $900.00

They can also get that information by customer, range, store etc and cut it any given number of ways. That's a good start.

2nd Generation Example

A 2nd Generation could app user would see something like this:

"New Record! You sold more of Product X last week than you ever have!"

[click here] to read more

Where top-down AI determines the alert type [New Record!], message content and product featured [Product X]. That's an improvement.

These feed-type alerts go beyond email notifications, static dashboards or links to a list of tasks or problems. Business owners and managers get a lot of those. These 'news articles' have three features that make them different:

  1. They are so compelling, so relevant, so timely and so human that we can't help but want to read them. In fact, if a manager or owner were to stop reading them they'd feel anxious, uninformed and impotent.
  2. They're smart. Relevant content uses the right medium for the right measure and delivers it to the right consumer. Mike might be a production manager which might also be one of his user roles. A 2 nd generation app will recognise this and tailor its content to his role. That's nice. A 3 rd generation app would apply Spotify-like AI to 'learn' from the type of business information Mike likes to consume and the format he likes to consume it in. If he's a visual person – he should be getting more visual information. If he's never opened a desktop article – don't send them. If he likes to drill-in to cost articles but skims over output reports – give him more detail on the former and less on the latter.
  3. They are each individually actionable. 2nd Generation cloud apps are no longer in the business of 'FYI' and just-so-you're-aware. They're in the business of business which is about taking timely action with an informed decision. When Chris the manager while browsing his business feed each item as an implied to-do or action. When Sales Manager Susan reads that Tim has sold more of product X in the last 30 days than anyone ever before she can walk out of her office and say: 'Tim you're doing a bloody good job. Did you know…

3rd Generation Example

A 3rd Generation cloud app would give you something like this:

Hi Hamish,

Last week your Mt Eden store sold 12 units of product X which is more than you've ever sold in any one week. Well done! This contributed $3,000.00 to your gross margin. Most of these sales occurred while Sarah was working. Customer feedback during this week was overwhelmingly positive, your search results tripled that of your nearest competitor. You should consider having Sarah work two shifts with Jim next Wednesday and Thursday so that he might improve his knowledge of Product X also. If that okay with you, [click here] and we'll let them know.

Warm Regards,

Cindy, your POS

The difference between a 2 nd and 3rd Generation cloud app is huge. You are much more likely to remember and act on a message above than that of 1st and 2nd Generation apps. This is because there is implied causation in the story you've been presented. Do you like the way the 3rd Generation cloud app not only presented you relevant, timely financial and non-financial business information in a digestible format; but it also suggested to you some actions you might take to better your business? That's the kind of future you can expect.

Save yourself hours of app research by calling us on 0800 159 672 or emailing

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Posted by Link Solutions

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