هو إستراتيجية

2 Comments »

Companies around the world face a workforce that is getting older. This will make attracting and retaining talent a top priority as mentioned in my previous blog Business Skills for IT Workers. This trend will catapult into the role of HR department right into the middle of formulating a people centric business strategy, especially in Knowledge Industry. As the global war on talent continues, it will become increasingly difficult for large organizations to hire, motivate and retain talent. With the technological advances and globalization, organizations will be subjected to intense competition. Thus, utilizing the right human capital will be of paramount importance. Intense competition will also lead to growing attrition. This is where HR can play an important role in ‘Talent Management’. Rather than doing only administrative work and ‘reactive’ hiring/firing employees, the HR professional need to ‘proactively’ start solving people issues. IT executives will not be able to address this on their own. Like it or not, they will have to collaborate with HR department in producing solutions to strategic ‘people’ issues facing the organization. With the advances in Business Intelligence (BI) tools, HR department can utilize all the data related to their existing employees to analyze their human capital and provide decisions around staffing and retention. Business intelligence can also help HR Department to mine out information regarding:

• How to motivate individuals and departments within organizations?
• Do our incentives and benefits reward smart contribution?
• How to flush out innovation from individuals and departments?
• Will the individuals work their best in collaborative environment?
• What is the best technique to train employees?
• How to incorporate feedback from individuals?
• Why do employees leave the company? Where do they go?
• What does the individual employee think of work environment?

Currently HR is not empowered to answer these questions in a systematic way. With the BI tools, the HR can tailor the benefits and incentives to custom fit every employee. The era of providing generic benefits is over. ‘Mass Customization’ of benefits to suite individual employee is where the future is. BI tools will help HR get there. This will be very critical to be competitive in attracting and retaining talent.

Popularity: 68% [?]

1 Comment »

“A Different Kind of Culture War” by Edward Cone is an article that states that the outcome of US Presidential Election in 2008 could come down to the way each campaign uses technology.

Both sides have access to same technology, but like business entities cultural differences between each party will indicate how they will be able to leverage technology.  In my view their IT Strategy should be in alignment with their core beliefs.  No doubt they should keep a close watch on how the opponents are using technology, but it will be a mistake if they try to copy each other’s IT strategy.   Democratic Philosophy is more collaborative “Let us all share the wealth”.  Republican Philosophy is more competitive “Let us create a Competitive Environment by rewarding the Best”.  Forgive my simplistic view of each party’s philosophy but from an economic standpoint this makes sense - Socialism v/s Free Market. 

The Democratic Party which is socialistic will be more comfortable with the Social aspect of Web 2.0 technology.  They will be able to leverage Social Networking to gain access to new voters.  Democratic Party will also be successful with micro communication and viral marketing which matches well with their “Collaborative” philosophy and Republican Party may have difficulty replicating it. 

Republican Party which is free market oriented will be able to successfully use Business Intelligence tools to ‘sub segment’ the voters.  They can successfully use technology to identify and woo the right voter (no pun intended).  This ability to ferret out the right voter is in synergy with their “Competitive” philosophy.  Democratic Party might appear hypocrite if they try to copy this and ‘reward’ some voter over the rest.

It will be interesting to watch and see if both the parties will follow a sound IT strategy.   

Popularity: 75% [?]

No Comments yet »

Wall Street Journal tech blog, How to Do IT on the Cheap is about the IT strategy at Virgin America. If you have paid access to Wall Street Journal’s Web Site then you can also read about Virgin America flies new IT path. Both these articles discuss how Virgin America is breaking new ground when it comes to IT infrastructure. They are planning on reducing their IT related costs by mainly outsourcing everything including customer support. Instead of mainframes that is used by the other airlines, they are using Linux based servers. Both the articles talk positively about the Virgin America’s IT initiatives.

Before we applaud this move as ‘out of the box’ thinking, let’s evaluate this from the company’s strategic perspective. According to Micheal Porter there are 2 types of competitive advantage which a company can utilize to build ‘economic moat’.

1. Cost Advantage

2. Differentiation Advantage

If Virgin America is planning on using Cost Advantage strategy then they are setting themselves to fail. Guess what; in the overcrowded airline industry especially in the US there is cutthroat competition for being the low cost carrier. Southwest has a proven successful model and it is difficult to beat them on the merits of cost advantage by itself. Many airlines have tried in the past and have failed. Jet blue might be the only exception. I will write more about Jet Blue’s IT strategy in my later blog.

But based on other Virgin products, personally I would like bet that Virgin America is planning on using Differentiation strategy. To start off they have a well known brand ‘Virgin’ that is widely recognized in US. They also intend on using ‘plush’ features on their airplane (like leather seats, entertain system etc.) to make the in-flight experience comfortable. I believe providing superior ‘flying experience’ is the only way they are going to survive this airline industry.

Crowded airports/ runway and long lines at security is making travelers long for a comfortable flying experience and may be willing to pay higher for that experience. Who are these customers? This is where gathering customer related information becomes very vital. Ferreting out intelligence from that information is equally critical. In my opinion Virgin America needs to start investing in CRM, Data Warehousing and BI tools to identify the right customers. They can get away by outsourcing initially. But as the data grows, depending on an outsourced company to provide the infrastructure to gather the intelligence from information is extremely risky proposition. Never outsource your core competency!

Buried in the WSJ blog they do talk about Virgin America’s homemade software (no details available). If that homemade software is specific to Virgin America’s business strategy, they are doing everything right. If the customized software is only about cost savings and nothing to do with understanding ‘customer life time value’, then sorry to say, in a few years they will be Southwest look alike.

Update: Nov 30, 2007

Finally, today I got motivated to blog about Jet Blue’s IT Strategy.

 

Popularity: 97% [?]

1 Comment »

SaaS or On-Demand application delivery as a disruptive delivery model is challenging traditional

Enterprise applications. Adoption rate is the fastest in the SME (Small and Medium Enterprises) space. But, large multinational organizations are slow to embrace the on-demand delivery model.

SaaS has both pros and cons as explained in my previous blog. But, its not the cons of the On-Demand delivery model that is holding back the CIO’s of the large organization from joining the SaaS bandwagon. But, believe it or not, its one of the advantages of SaaS that is stirring up a political problem for the CIO. The main advantage of the SaaS delivery model is that it needs a smaller IT team. No need for large IT resource to integrate and sustain the traditional

Enterprise application. Smaller IT department is great for reducing IT costs, but it creates the illusion of loss of power for the CIO. Typically, larger the department the more perceived power the executive possesses.

CIOs pretend that they need complex application, so that they can justify bigger budget and larger IT resource. If the enterprise application is outsourced (SaaS is a unique way of outsourcing) then suddenly there is no justification of a large organization. This development, in the tribal world of executives, leads to diminished power for the CIO (because he now has a smaller army).

In my view CIO should not fear the reduction of size of IT department. If the software systems that support tactical and non core businesses is outsourced then it frees up the resource to focus on the strategic aspect of the business. Identifying and implementing software systems that enables core competency of the organization will make the role of CIO more relevant to corporation.

Making a major impact on the business strategy the CIO can thus showcase real power in the boardroom even with a small organization.

Popularity: 73% [?]

1 Comment »

After 15 years being IT Organizations’ central focus, Enterprise applications are getting old and decrepit and desperately needs a facelift. Like it or not these applications can now be classified as Legacy system (Read Koch’s IT Strategy Blog Riding the ERP Bus Forever for more on ‘Legacy’ Enterprise systems). Implementation and Integration of Enterprise application has become more and more complex (instead of getting simpler) after several versions of upgrade. From a customer’s perspective Enterprise application calls for a large IT department to implement and sustain this behemoth (which adds to thier cost). Hence, companies are now looking for other ways to handle Enterprise applications.

It appears that On-Demand delivery model or SaaS (Software as a Service) model has emerged as a preferred choice that makes lot of economic sense to the companies. It’s being adopted at a rapid rate. This is a model where vendors own the enterprise system. The organization /customers pay for using the system but not for owning the system. This disruptive delivery model is bound to shake up the current leaders in ‘legacy’ enterprise applications. This unique delivery model will make Enterprise applications more agile and relevant to the company’s strategy.

Some of the advantages of SaaS

1. Smaller IT resources.

2. Quicker implementation and faster training for the employees and thus reducing TCO (total cost of ownership).

3. Faster ROI due to lower up-front cost.

4. Lower hardware/software cost due to reduced investment in installing, upgrading and sustaining of enterprise system.

SaaS has some challenges that vendors have been successfully trying to address –

1. Loss of control: Because of Reliability/Uptime

2. Data security: This is a tough pill to swallow for the corporate executives. Can they trust third party vendors with the data?

3. Privacy of data: Who owns the data now?

4. Different integration need: How will the SaaS application integrate with the existing systems?

In my view, advantages of SaaS delivery model far outweigh the shortcomings and it’s only matter of time SaaS will be the “preferred” delivery choice for Enterprise applications. Small and Medium Enterprises have already embraced the SaaS delivery model. Larger organizations are slowly opening up to this disruptive delivery model. When I was in Melbourne Australia last month I read an interesting article about SaaS in Australian Post related to explosive growth and adoption by large organizations of SaaS

There are some political implications for the CIO’s of large organizations to fully accept SaaS model, which I will address in my next blog.

Popularity: 56% [?]

1 Comment »

Great blog by Mike Vizard called IT Needs to Be About Intelligence Not Information on the need for IT executives to ferret out intelligence from information.

Evolution of Information Age: In the early years of Information Age, the person with the access to exclusive information had the power. As information started to become more democratized with the Internet, the person who was able to organize the information was in demand. Now, with accelerated Democratization with the advent of Web 2.0 (bloging, social network etc.) there has been an information overload. Today, multiple sources of readily available information can lead one to conflicting conclusions. The source of some information can be dubious and some sources have their own agenda to market/sell their opinions. In today’s environment the person who has the ability to decipher the information and translate it into intelligence will be in demand.

Thus, this new breed of IT executives will not only have to keep the pulse on all sources of information (print, TV, internet, blogs) but also will need to have an ability to effectively articulate an intelligent solution. In my opinion IT executives need to execute an IT Systems Strategy that can align with Business Strategy based on that intelligence. If the focus is on information only and not on intelligence, then the same overwhelming information will render that information useless, since its humanly impossible to consume all that information. The IT systems will become more reactive to the changes in business needs. Thus, confirming Nicholas Carr’s view that ‘IT Doesn’t Matter’ as mentioned in my blog post IT Does Matter.

IT executives need to recognize that if they wish to make IT Department ”add value” then the focus has to be about intelligence that comes out of information, NOT on information itself.

Popularity: 29% [?]

No Comments yet »