Category Archives: Technology

Nothing for Nothing

After reading this recent article over on Chief Executive on how 66% of CEOs Plan to Freeze or Downsize Workforce Size which also pointed out how the majority of CEOs expect capital expenditures to remain flat, as per Chief Executive’s monthly survey of CEOs’ perception of overall business conditions (that garnered 247 responses), I can’t help but think of No Sale, No Store by the Arrogant Worms:

…
This week!
This week only!
We pay the GST!
We pay the PST!
We pay for delivery!
We pay for everything!
How do we do it?
How do we offer these fabulous deals?
Volume!
We got the most!
The best!
The worst!
We've got it all!
We’ve got everything!
Except one thing...
What’s that?
We've got no store!
No products!
So come on down!
This week!
…
Every week!
Every year!
No money down!
No payment ever!
That’s nothing for nothing!

Simply put, no new investments into new technology to increase productivity to give current staff time to create new products and services and no new staff to create new products and services creates an innovation free company. An innovation free company has nothing to offer. And you get nothing for nothing. It’s a lose-lose all the way around (as new technologies sit on the shelf and talent sits on the couch.) There’s no sale, as there’s no store.

The Cloud is Full of Sweet Fluffy Dreams

If you want to win favour with the doctor, this is a good way to start. Over in the recent edition of the SIG newsletter, Kent Parker, COO of Ariba, wrote an article on how the Cloud represents a more scalable, efficient way to do business on a global basis because it requires no software, hardware or resources to deploy and time to value is near immediate. However, he noted that these rewards can only be reaped if the organizations providing these networked community capabilities transform in ways that enable them to deliver products and services that meet a completely new set of business challenges and customer needs. Otherwise, the benefit of the Cloud will remain nothing more than sweet, fluffy dreams.

In the article, Kent presented six new rules that companies need to follow if they are to transform in a way that will enable them to deliver the products and services that are required in today’s knowledge-based network economy. The first four were quite obvious:

  • break down application silos
    the goal is to connect all of your applications and let data flow through the lifecycle
  • make innovation a constant
    customers expect improvements on a rapid timeline
  • focus on quality
    because, simply put, no one wants cr@p
  • stay agile
    or you will be outmaneuvered by your competition

However, the last two were not and keys to success in today’s economy:

  • overhaul customer support
    In an always-on community, customers demand immediate, proactive response to their issues, particularly as they impact business commerce continuity. But if you’ve outsourced most of the function of internal IT to an external provider, then you need to make sure the provider is not only offering the service level guarantees, but that it has the competency to provide the necessary support. In the IT world, system restoration sometime between 8 am and 5 pm on the next business day is NOT acceptable.
  • redefine customer relationships
    Go-live is the beginning, not the end, of a customer relationship. In a network-driven cloud community, customers and other participants require more continuous, ongoing assistance with enabling and institutionalizing business commerce capabilities. A company that offers a cloud-based solution has to be willing to continuously work and support the customer on that solution. Or the customer will go elsewhere.

It’s Time for a Digital Strategy Audit

And it should be part of your annual planning process. Why do you need a digital strategy audit? Here are five compelling reasons from a recent Chief Executive article that presented what it thought were 11 Reasons Why It’s Time for a Digital Strategy Audit.

  • Digital Mistakes are for the World to See
    Most companies’ topline digital strategies are transparent to an experienced analyst, and readily available for analysis and scrutiny. As a result, mistakes are impossible to conceal and any attempt to do so will cause a media pile-on that makes the torch-bearning lynch mobs of old look like a Sunday picnic.
  • Digital is Cross-Function
    Even a simple e-mail marketing campaign involves sales, marketing, operations, and IT. Only supply chain is as far reaching, and if the digital supply chain strategy doesn’t complement the physical supply chain strategy, you have a disaster waiting to happen.
  • Numbers Tell a Story
    An organization’s spending on R&D tells a lot about its viability in the long term. Plus, digital strategy performance benchmarks can identify competitor strategies and threats and allow a company to make a proactive, rather than a reactive, response.
  • Digital Investments are Probably Higher Than You Think
    And probably generating less of a return than you think. In some enterprises, digital investments account for 5% of operating costs and 20% of marketing spend, and run in the eight digits in Fortunate 1000 companies. But without a coherent strategy, the returns in digital investments are often dismal to none. Consider the emerging mobile market with average click through rates on ads of 0.1%, for example.
  • Digital Affects Everything
    As the article says, no industry is unaffected by digital trends. But, few companies have formal, well-defined digital strategies that articulate the vision and govern investments and behavior. Typically, it’s an afterthought and pushed down to IT to figure out. But if IT is only a support organization in the company …

And, more importantly, unless you do a digital audit:

  • You Still Don’t Know How Unprepared You Are for the Digital Age
    Unless you are an IT company, chances are your infrastructure doesn’t have the scalablity, reliability, falut-tolerance, and, more importantly, the security to go all-out with a digital strategy. If even the Sony Playstation Network can be hacked and taken down for a week, and Sony has a very strong IT division operating a very large on-line service, how long do you think it would take a hacker or organized underground hacking group to your network down if you got in their cross-hairs. Assuming you could even scale up to support a superbowl size response. Online service leaders have experienced network overloads for years. AOL in its heyday had scalability problems and had to offer customers refunds to keep them in late 1996, Toys “R” Us was hit with a class action lawsuit in 2000 for taking orders for Christmas it could not deliver, Nintendo could not keep up with Wii orders in 2006 and Sony could not keep up with Playstation 3 orders in 2006, and the Playstation Network has hacked earlier this year.

Before you launch a digital initiative, you need to make sure that IT is ready to support it, and if you are selling something, that the supply chain is ready to supply any expected spikes in demand. Forget the meaningful opportunities for cost-savings, new revenue channels, and/or competitor vulnerabilities the Chief Executive author promotes. Chances are that you’re not even ready for that.

Headline from the Land of D’oh: Technology is Closing — and Widening — the Gap

A recent issue of Apparel leads with the headline that Technology is Closing — and Widening — the Gap. Needless to say, this is a headline that I had to read twice to believe I was reading it. It then goes on to say that mobile can be viewed as both a great threat and a great opportunity. Really? Smartphones create interaction much more dynamic than it was back in the days when customers were restricted to flipping through print catalogs. Who’d a thunk it? Mobile also poses a threat allowing customers to hop on Amazon.com or any number of other sites for a quick cost or brand comparison. A browser works on more than one site? Wow!

But seriously, this article is ridiculous. It’s common sense drivel for anyone with half a brain and a memory that remembers more than 10 years of history. (What am I saying? It’s only the last quarter that matters! Thank you Wall Street MBAs for ruining not only innovation but the importance of history. But that’s another rant.) First of all:

Mobile may be new, but it’s just another technology.
It’s going to go through the growing pains of every new technology that came before. There were growing pains with the Web. There were growing pains with television. There were growing pains with radio. And if you study your history (as one of my blogging counterparts will gladly point out as important), you’ll realize that each had the same growing pains, opportunities, and threats. The only difference is that with each generation of new technology, the time frames become more and more compressed. Right now, most minitrends last about five years. In the future, some may only last five months.

The difference between the rich and the poor is $$$.
How much $$$ you have in business depends on market share. It’s a knowledge economy, and how much knowledge you have depends on how fast you can distill it from information. How much information you have depends on how much data you have and how fast you can extract information from it. And both of these steps depend on technology. So, as a corollary, how much technology you have, or have access to, directly affects how rich or how poor you are.

Any change in your situation relative to someone else either narrows or widens the gap.
So if your technology changes, or your competitors’ technology changes, then the gap between you and your competition is going to change as well. D’oh!

Tell me something useful — like how to take advantage of this technology as a retailer. Otherwise, stop wasting my pixels and my time.

What’s the Big Idea?

Seriously, what it is? Inquiring (not enquiring) minds want to know. Because, as far as many of us can tell, there aren’t any big ideas any more. As Neal Gabler said in the New York Times article on the elusive big idea, we live in a society that no longer thinks big. And that’s bad. Why? In many fields of technology, there have been no big ideas for decades. Sure, we see new and better devices every year and sure the iPad just came out, but, let’s face it, the iPad is a netbook with a touchscreen. A netbook is just a miniaturized laptop, and a laptop is just a miniaturized portable computer, and portable computers have been around for over 30 years. (Yes, you read that right, over thirty years, with the first portable computer manufactured in 1979.) And touch-screens have been around almost as long (with the first commercial touchscreen computer released back in 1983). Apple just took the technology to the next generation, while making sure it was easier to use than all of its competitors products. But, contrary to their marketing, there is no new “big idea” in the iPad.

The cloud? Well, I hate to burst your bubble (actually, not true, I love to burst that bubble), but the cloud is just a return to the fundamental concept of mainframe computing with dumb terminals — one big shared computer that services a whole bunch of users who are remote and don’t want, or need, to know how the big computer works. Except this time the big computer is a whole bunch of smaller computers networked together and, since the network is very big (and, in fact, global), the computers can reside anywhere. I could go on, but, even in computing theory, almost everything traces back fifteen to thirty years (or more).

I’m almost ready to agree with the author of a recent Forbes opinion article on the New York Times article that asked why did big ideas die when he said that we live in a post-idea society where people don’t think at all. With exceptions fewer and further between by the day, most people don’t think [deep] anymore.

Why is this? As Gabler says, we are living in an increasingly post-idea world — a world in which big, thought-provoking ideas that can’t instantly be monetized are of so little intrinsic value that fewer people are generating them and fewer outlets are disseminating them.

Who’s to blame? Gabler blames the usual suspects — the web, Twitter, and everything else that, instead of facilitating a lively intellectual life, instead drowns us in information. And while some of these suspects, like Twitter, are indeed a problem, the reality is that they are a symptom and not the root cause.

The problem lies with Wall Street and VCs. They’ve convinced the business world that nothing matters beyond the current quarter and any idea that can’t be brought to market overnight isn’t worth it. We did not come further in the last 100 years than in all of human history by only focussing on products that could get to market quickly. (We have to remember that the first cross-Atlantic transmission did not occur until 1902. This transmission, and all major computational and communication advances since, did not happen in a quarter. Most of the advancements took years of research and decades to perfect.) If you’re trying to change a market — to go from a Model-T to a Jaguar — that takes years, but VCs won’t support anything that can’t be done in more than a few months. As a result all we get are small incremental improvements, with significantly diminishing returns as time goes on, as no one is investing to take the big leap forward.

And, despite claims to the contrary, we haven’t really reinvented the organization (as telecommuting and outsourcing have been common for at least a couple of decades), education, health care, or ownership. We’ve simply redefined management and, in some cases, who foots the bill. I’d like to see some fundamentally new big ideas, but these are looking more unlikely by the day.