Google disrupts the tech industry life cycle

Google is renowned for disrupting established standards. In the book Googled,  Ken Auletta discusses several times where Google’s engineering approach disrupted previously long-established business models. I wonder whether Google isn’t doing it again in another area.

A few years ago, an MIT Sloan Review article ‘Shifting Cultural Gears in Technology-Driven Industries‘ asserted that:

In technology-driven industries, as core technologies mature and mainstream customers proliferate, the primary source of customer value inevitably shifts from product innovation to business innovation, which focuses on processes (product development, procurement, manufacturing, sales, distribution or services) and marketing (partnering, segmenting, positioning, packaging or branding). To meet the changing needs of customers, technology-driven companies must effect a corresponding shift in their own competencies. However, attempts to accomplish that through changes in strategy, structure, processes or rewards without changing the company’s underlying cultural assumptions are almost always doomed to failure because culture strongly shapes both the competencies and rigidities of a company.

Then along comes Larry Page, reinstalled as CEO of Google, and starts changing his company is a way that seems to do the opposite of the MIT article.

The main theme that seems to be emerging: An elimination of Google’s more centralized functional structure–where Rosenberg was one of several manager kingpins–to one in which the individual business units and their engineers, such as its most independent Android division, rule more autonomously.

Reimagined like this, Google would become an ambidextrous organization with more powerful unit line execs, mostly engineers, doing what needs to be done to succeed

So is Google moving in the opposite direction to that suggested in the MIT Sloan article?

On brand loyalty too far

Michael Schrage has written a provoking piece on whether firms will push employees to live brand values into their private, non-work lives. He elaborates in one of the comments:

… if a walmart employee and supplier won’t live the brand commitment by using cfd’s and being a ‘good citizen,’ is walmart entitled to ‘discriminate’ by not offering promotions, bonuses, good reviews, etc….?

… if an employee of an ‘equal rights/diversity’ championing firm is a member of a private club that excludes women and minorities, can the firm choose not to promote that employee – or even fire him?

The issue that such a  practice could be an invasion of privacy, or unconstitutional, is raised in the article comments but coming from the US, and the commenters being apparently US-based, I would submit that the view of the workplace as being unregulated is very much a US concept. In more regulated work conditions, such as those in South Africa and several European countries, employment conditions and terms would prevent an employer from forcing its values into areas outside the workplace.

On a different note, the kind of work environment that Schrage envisages sounds more like a ‘Stepford Wives’ community, one which values conformity above everything. The problem with conformity in today’s world is that it does not encourage originality, and it is difference and originality that provides the opportunity for innovation.

Is Schrage’s article really serious, or just a clever argument designed to ridicule the possibility of someone actually coming up with such a proposition?

The need for IT project management

The Herdings Cats blog had an article:

CEO/COO/CIO’s not confident in IT Project Managers, really?

In a number of companies, particularly in small- and medium-sized busineses, CxOs do not like project management (PM). On the PMForum there is a report that while CxO’s see PM as critical, they have little confidence in project managers.

PM guru Glen Alleman makes the observation that in many commercial IT organizations:

Project Management is an afterthought … [with] none of the oversight and progress reporting, no wonder the CXO’s have no confidence. They get what they deserve. PM costs money, don’t spend the money? Then as Dr. Phil say "how’s that work’in for ya?"

Management ideas of the first decade

On 1st January 2010, the people at the Harvard Business Review published The Decade in Management Ideas – their list of what they considered the significant management philosophies, or maybe fads, of the first decade of the millennium.

Here’s the summarised list:

  1. Shareholder Value as a Strategy
  2. IT as a Utility
  3. The Customer Chorus
  4. Enterprise Risk Management
  5. The Creative Organization
  6. Open Source
  7. Going Private
  8. Behavioural Economics
  9. High Potentials
  10. Competing on Analytics
  11. Reverse Innovation
  12. Sustainability

I would also add:

  • Software-as-a-Service
  • Web 2.0

Would you add anything, or remove something?

Big moves by international business into South Africa

In the past two months there has been news about international businesses making big moves into South Africa.

The first news was in July when the Japanese telco conglomerate NTT made an offer to buy Dimension Data; the take-over was recently given regulatory approval.

The next story was banking giant HSBC’s offer to buy Old Mutual’s controlling stake in Nedbank.

The last story, which came out yesterday, was the US retailer Wallmart announcing it was looking at buying Massmart.

This seems to be a sign that Africa’s economic growth and potential is at last being recognised by more than just mining companies.

On the down side, there are some concerns about international companies buying local ones that are listed on the Johannesburg Stock Exchange (JSE), as this reduces the size of the local stock market, especially as the companies being bought are major entities on the JSE. On the plus side, it’s a sign of the recognised excellence of the SA companies and that their experience is critical to strategies that involve entering the larger African market.

Feel free to make your comments about these acquisitions here. I wonder if this might start big international software companies from thinking that a territory called EMEA (Europe, Middle East and Africa) is appropriate, but instead have Europe, Middle East and Africa as separate divisions.

What business hates about IT

I would recommend that anyone involved in ERP projects or support read Susan Cramm’s insights into why business gets frustrated with IT – Eight Things Executives Hate About IT. In summary, here they are:

  1. IT limits managers’ authority
  2. Consists of condescending techies who don’t listen
  3. Doesn’t understand the true needs of the business
  4. Proposes “deluxe” when “good enough” will do
  5. IT projects never end
  6. Is reactive rather than proactive
  7. Doesn’t support innovation
  8. IT never has good news

One of the concluding comments is:

… companies can no longer afford to waste precious resources on IT “investments” sponsored by business leaders who believe IT is not their job – or wish it weren’t.

What’s your experience in IT working with business, or vice versa?

More on the new decade – Facebookisation

After my previous blog, I re-discovered JP Rangaswami’s Confused of Calcutta blog (although he should consider using the newer name, Kolkata). What got my interest was the series of blogs on the ‘Facebookisation of the enterprise’.

In the first part – The Facebookisation of the enterprise – he describes how a business

“needs to look a bit like Facebook. Responsible for identifying, authenticating and permissioning people, making sure that appropriate controls are in place from a privacy and confidentiality perspective. Responsible for providing an environment, a platform, for people to congregate electronically. A marketplace, a bazaar. A place where people converse with each other, share their interests, identify inventories, discover prices, negotiate, trade. A place where the things that need to be recorded get recorded, as in everyday life.

This is reflects the world that Generation M, or Millennials experience through technology and social interaction (read this to learn about generational theory). As they move into the enterprise, how will they change the world of work to match their attitudes and expectations?

In the new world, the worker would have the choice of device, platform, and applications. It would also mean that IT and HR would lose their traditional control over the employee.

In the second part – More on the Facebookisation of the enterprise – he discusses how IT would need to operate to support this work environment by providing:

  • simple self-service signup
  • a set of directories and tools to classify and filter them
  • a range of communication and scheduling tools
  • a platform for development

I think something else should be added – access to a library of in-house and external applications which the worker could use to do get their job done.

While the Facebook analogy is a bit far-fetched, if not revolutionary, it’s a good place to start thinking about the direction in which IT should be moving.

Dynamic process management – dream or reality?

I was helping an NGO as they did a food hand-out to hundreds of poor children in Alexandra, Johannesburg. As we were doing the hand-out, the original plan for the hand-out process had to be adjusted on-the-fly as we discovered there were problems with the process. We didn’t stop to review the process in detail, then present a proposal to change it. Someone had an idea how to re-organise some tasks, and we adjusted to it, and continued on.

That experience made me wonder if organisations could ever get to that stage of dynamic process management. In the past, processes had to be defined, documented and agreed, and neither the levels of technology nor communication enabled that to be done quickly in the first place, or when processes needed to change.

However, with the rise of social networking and collaboration in the organisation (the Enterprise 2.0 phenomenon), the speed and channels for communication have increased such that rapid communication across and between groups should not be so difficult. That means that if a problem is found in a process, there should be no reason why the situation cannot be immediately communicated to the people in the organisation who can review and change it.

On the technology side, process management software now allows organisations to graphically create and manipulate processes that will be performed. Software like SYSPRO Process Management connects directly to the enterprise software applications that the business runs, so that as a process is configured, the underlying ERP system is also configured. That means that if a process is found to be problematic, the process management software could be used to re-configure the process and the ERP system more quickly than has been possible before.

There are obviously other issues that need to be considered when changing processes, it’s obviously not as simple as I am describing; for example, there might be performance and testing considerations. But I am starting to wonder whether dynamic process management could become a reality in business, in other words almost real-time process management and change. Or is that just a dream?

Safra Katz’s false analogy

Use of an analogy is one way of trying to get people to understand your proposition. Joint President of Oracle, Safra Katz, is reported by Michael Krigsman -  Oracle’s integration strategy: Customer trade-offs – to have used the analogy of buying a car vs buying technology to explain Oracle’s acquisition strategy.

… we would go online to buy thousands of disconnected parts from many vendors, which our children would assemble into a completed car because the parts would not come with instructions. Just as we finished assembling the car … a light would go on indicating that an upgrade or patch is required. Katz said, “We would then do it all again.”

Katz used this car assembly story as a metaphor for product complexity in the enterprise … Oracle reduces this complexity by bringing together under one roof infrastructure, hardware, and database products that are “engineered to work together.”

The problem is that analogy is false – its trying to make out that purchase decisions by consumers and businesses are the same. As a marketing colleague has pointed out about information, there a significant differences between the consumer and business market.

B2C vs B2B

When you buy a car, you don’t have to consider whether the wrong car choice will change your personal or family life (unless you can’t pay or buy an old, unsafe car). Business decisions on enterprise software are far more complex and have a different set of considerations.

As Michael points out:

Even though integration can reduce implementation complexity on customer projects, large vendors may introduce another set of risks.

While a large end-to-end vendor can offer greater simplicity, the trade-off involves the customer transferring power to that vendor. In a single-vendor world, customers who invest in large systems can become beholden to the large vendor, which gains greater control over pricing, product features, maintenance costs, and future development.

Update: See Vinnie’s comment on SAP’s perspective of integration strategy

When do acquisitions make a company too big?

There seems to be a belief in some quarters that when it comes to IT companies, the larger the better; for example, Acquire Me! Oracle’s and SAP’s Next Likely Targets which quotes:

"A move by Big Blue, say on a midmarket ERP partner like Lawson or Infor, could presage further consolidation in that arena by Oracle and SAP." (The 451 Group report – Where Might Old Foes Oracle and SAP Each Look Next to Stave Off Apps Hunger Pangs?)

However, from a customer (and a partner) point-of-view, dealing with some larger ERP vendors means going through the bureaucracy to get even small things done. Also, large software vendors seem to go for a centralised control model. It might be old news, but at a conference in 2008, I was told by a senior local representative that Oracle’s process for confirming quotes for SA companies could only be done by Head Office in the US, this required a wait of several weeks before a quote could be approved.

Waiting that long for a quote might be OK in some countries, but South African business people are not typically enamoured by long decision cycles.