それ作戦情報技術のビジネスのための比較優位を作成し、支えるために利用のRaj Sheelvantのブログ

つかの間の比較優位

写真の@ flickr Franz Liszt 

コロンビアのビジネススクール教授 Rita McGrath タイトルを付けられる記事に比較優位のつかの間の性質で範例の転移の記事を書いた 「比較優位はつかの間である(およびそれを是認するOkay)」。  すばらしい作戦の目的は「達成することである支持できる比較優位」 -教えられるものが戦略的な管理でである。  しかしMcGrath教授の挑戦は概念とHypercompetitionのこの時代で言い、-利点は競争の記入項目のずっと前に非常にのために持続しない、端を腐食させれば模造および一致して、利点が関係がなくなるように顧客は、または環境の変更進む。  つまり経営策がもし成長がS字型カーブに常に続くので、Emmanuel Matucoが(ポストへの彼のコメントで)雄弁に指摘すると同時にそう。  Matucoは成長の作戦にほとんどの作戦の本の住所入口点、およびそれの繁栄を書くが、避けられない停滞(S字型カーブの上)への解決は存在していない古いものの上に別のS字型カーブを始めることである。  過去の戦略的な経営理論は`のつかの間の」比較優位の性質に比較優位は外的な影響のためにいつの日か腐食できることを示すことができる十分なデータがなかったので焦点を合わせなかった。  今度は、全体的な後退は`の支持できる」比較優位があると考慮されたall the会社に(それら)影響を与え、戦略管理の既存の確信の欠陥にスポットライトを置いた。

私は1つの例について構成がはさみ金の成長として経営策を見たこと強調すると考えてもいい(S字型カーブに対して)。 一例として取得GM… それらは大きいSUVsおよびトラックの方の米国の消費者そして彼らの類縁の立上がる富裕にだけ焦点を合わせた。  前のCEOリックWagnerは2003年に上限の高く大きい車を造り、販売するために作戦を完成した。  私は造る`のガスのguzzlerの比較優位が」支持できること考えられるGMの皆を信じる。  彼らは競争にだけ焦点を合わせたが、変更の景色を見なかった。   これらの外面の変更は上昇のガス代を好む、消費者および沈滞の富裕環境影響の高められた焦点はGMおよび自動車産業の皆に挑戦する完全な嵐として機能した。  この観察はGMに特定ではないが、結局は支持できるようにall the他の会社は比較優位を見る。

McGrathどんな教授を見通しを変えることがあるおよびか見なさい比較優位をように「 厄介、野蛮短い”.   She says that this enables organizations to begin to develop skill of getting out of things that are losing competitive advantage and re-focusing the organization to take advantage of spotting new opportunities and moving to capture them.  This also impacts talent management.  If an employee knew that a declining advantage for a firm could mean their skills were no longer interesting or relevant, that would pique their interest in continuously improving on talents that would be relevant. It would be more attractive for firms to be able to avoid the trauma of mass layoffs and the uncertainty of being able to find the skills they need on the open market.  I think more research and analysis needs to be done to authenticate this finding, but this holds lot of promise to relook at business strategy in a new light due to hypercompetition and accelerated creative destruction.

Popularity: 2% [?]

SAPs SaaS Strategy

SAP unveiled their new strategy for delivering software over the internet, as the German software group struggles to respond to a market that poses a significant long-term threat to its business according to the FT.com article “SAP reshapes strategy for online software”.  Also read WSJ article “SAP to make Online Software Push”.

SaaS (Software as a Service) has revolutionized the software delivery model.  Businesses typically pay a hefty upfront fee to buy and operate Enterprise Applications themselves.  They also for an ongoing product support.  But online software (or SaaS delivery model) is accessed over the Internet through a Web browser. It’s run on servers operated by the vendor, which charges a monthly subscription fee for customers to access their software over the internet.  This global recession has accelerated the push towards cost cutting by all organizations and SaaS is an excellent way to minimize the software overhead costs.

On demand software delivery (other name for SaaS) has been championed by Salesforce.com and for the long time large Enterprise Application developers like SAP, Oracle and Microsoft have downplayed the impact of this disruptive delivery model.   In fact all of them have resisted providing SaaS option to their customers because it challenges existing revenue model.  But now that concerns around the security and availability issues are put to rest, customers are asking for online delivery model from the large Enterprise Application Vendors.  Slower growth and increased competition is forcing all the large software vendors to look into SaaS Delivery model.  Microsoft has Software + Service model.  Oracle is developing its own SaaS strategy (Read more about it in WSJ article titled “In Shift, Oracle plans more Online Software”.

All these moves have legitimized the SaaS delivery model.  SAP, a behemoth in the Enterprise Application software, finally embracing online delivery model indicates that SaaS delivery model is the new ‘reality’ for software delivery model.  Organizations that automate routine and mundane business process will be able to avail the facility of an ‘outsourced’ technology solution.

Popularity: 3% [?]

Business System and Business Strategy

McKinsey Quarterly presents Enduring Ideas: Business Systems.  This article makes a compelling presentation that by alignment of Business System is the cornerstone in creating a truly integrated business strategy.

So what is a Business System? According to the article “the business system” charts all the steps involved in creating and delivering a company’s product. At each link in the chain, from product development to sales and service, managers have a choice of how to conduct the business. From a strategic point of view, the most important assessment is how the choices made at each step reinforces the company’s overall value proposition and, hence, its competitive advantage. The word system in business system emphasizes the importance of aligning conduct at every step with the value proposition.

The article categorically states that the business strategy involves an integrated set of actions designed to help companies gain sustainable advantage over competitors. The business system is a framework that allows a company to formulate the set of actions most likely to achieve this advantage. In 1985, Harvard’s Michael Porter introduced a similar framework―the value chain―and cited the business system concept in the book Competitive Advantage.

See the interactive presentation here.

From an IT Strategy standpoint, once the business system is mapped and set of actions that achieve competitive advantage is determined, then the CIO needs to see if those steps can be automated so as to improve efficiency.  IT department needs to understand the business system so that they can apply their expertise in software automation to widen the competitive advantage. That way, IT or internal software development organization can play a key role in enabling the Business Strategy.  Obviously some steps cannot be automated because the ROI of automation is small and human glue can work better with training.

Popularity: 4% [?]

IT Project Manager with Leadership skills

When it comes time to manage key projects in the IT portfolio, CIOs need successful IT project managers who exhibit the qualities of a good leader, including the ability to motivate people according to Search CIO article titled “For a successful project manager, look for qualities of a good leader”.

According to the article at least 50% of the project’s success rate can be attributed to how the project is managed.  Following are the three leadership traits needed by the IT Project Manager

• Solid people skills: It’s important for a project manager to have a good sense of the people he or she will be working with and for. They need to be able to motivate and understand what gets their team excited.
• Excellent administrative skills: Oftentimes, projects have limited funds, limited resources and limited time to completion, and the project manager should be able to move the team members in the right direction without overlooking other matters such as legal issues, regulatory issues and multiple agendas – quite similar to running a small business.
• Communication skills: A good project manager spends time informally meeting with individuals in the group to get a feel for what’s going on from within the team.  In a world of Twitter, wikis and other social networking collaboration tools, new generations of project managers need to utilize these technologies to stay connected, regardless of where their team members are.  Hearing from the team, even on issues he or she may have no control over, gives the project manager a mental gauge of how the project is progressing day-to-day and how team members are holding up.

I am glad finally there is some focus on what the IT Project Manager ought to be.

Popularity: 4% [?]

Coca Cola’s Business Intelligence Strategy

When a company like Coca Cola, which has several flavored drinks wants to know what its customers prefer, what does it do?  Well, it intends to use IT to monitor the pulse of its customers.   According to Information Week article titled “Coke’s RFID-Based Dispensers Redefine Business Intelligence”, Coke plans to roll out the Freestyle drink dispenser nationwide which is taking the concept of customer choice to new heights, the most interesting aspect is the technology it’s built on. Freestyle will become Coke’s front-line robotic army for business intelligence, sending massive amounts of consumption data back to the beverage company’s Atlanta headquarters. The dispensers collect data on what customers are drinking and how much, and transmit that information each night over a private Verizon wireless network to Coke’s SAP data warehouse system in Atlanta.

Unique byproduct of this BI enabled dispenser is that Coke can try out new flavors and get back almost real time feedback on the viability of its success.  It will no longer have to ensemble Customer focus group and try it out in a ‘lab’.  The real world becomes the lab and the marketing department at Coke can watch consumers vote yea or nay on the viability of new product instantaneously.  This not only improves the speed of feedback but also makes the entire test marketing process cheaper.  The Information Week article notes that besides collecting data on what customers are drinking, Freestyle also lets Coke know what flavor cartridges each dispenser holds, so the company can advise outlets on when to order more. Coke also will use the wireless network to send out new drink formulas to the beverage machines with instructions on how to mix them up. And should the soda company ever need to recall a flavor cartridge, the network also lets it instantly disable dispensers across the nation.  Coke research, product development, and marketing personnel worldwide can use that system to share information on successful regional product rollouts and marketing programs, so they can apply them in other regions. Globally, Coke offers about 3,000 beverages, and what works in one place is often tried in another with similar demographics.

Kudos to IT team at Coke setting this complex infrastructure so that marketing decisions can be based on analytical and statistical data.  Not only that, this application streamlines distribution by automatically recognizing when to expect orders from the outlets.  On top of that, global marketing departments can collaborate on their findings. This is a great example of how IT can recognize the company’s competitive advantage and automate the process to broaden the economic moat.  Article also notes that Coke came up with the design themselves and are closely guarding the engineering details of the RFID based dispenser.   With a competitive advantage like this, I think its a good idea Coke store its IT architecture details along with its recipe formula!

Also check out my other blog on Coke titled Emerging Role of IT in the Marketing Strategy of Coka Cola

Popularity: 9% [?]

CIO Role Redefined

At the sixth annual MIT Sloan CIO Symposium, the current role of CIO in an organization was challenged according to Linda Tucci in CIO.com article titled “Experts: CIO moving more into business, process optimization”.  She writes that what companies really need is a Chief Simplicity Officer, someone who can commoditize IT services that offer no competitive advantage and free up IT staff for business projects. Indeed, as utility computing moves to the cloud, CIOs will spend less time running IT and focus instead on figuring out how IT can run the business.  It’s very important for the CIO to identify and quarantine ‘commodity’ IT within an organization and either outsource it or move it the cloud.  At the same time, CIO also needs to identify those IT services and software applications that automate, simplify and standardize business processes that provide competitive advantage to the company.

The common thread at the symposium according to Linda was that CIOs must figure out how to optimize the business through IT.  As IT becomes embedded in the businesses, the question CIO needs to ask is how IT affects the organization, where does it widen the moat of competitive advantage.   Take Google for example.  It has now become an advertisement auctioning company. Google had complex algorithm that simplifies and automates the auctioning process.  That is their secret sauce.  Other commodity type IT applications can be outsourced or pushed to cloud.  Software and IT team at Google need to focus only on streamlining; simplifying the algorithm because auctioning advertisement is the main source of revenue generation for the company.

In the 1990s the role of the CIO was to install and build IT infrastructure.  In the early part of 2000 after the dot com bust, the role of the CIO was to reduce IT overhead costs.  Now, in this new recession, CIOs are asked to reduce total overhead costs.  But very few organizations are looking at how IT can improve competitive advantage for the company to keep it profitable in this relentless race to the bottom.  As reported, the CIO symposium’s goal was to encourage organizations and CIOs to start focusing on how IT can add value to the businesses.  I wonder how many CIOs will take it on to them to learn the company strategy and the role of IT to augment strategy.  Those that do will be setting their organization to  be competitive in the long run.

Popularity: 9% [?]

Role of IT Infrastructure in Virtual Collaboration

The combination of expense cuts and increased productivity is driving a push towards a growing use of remote collaboration software and equipments according to FT.com article ‘Virtual conference victory for Cisco Systems’. The article states that companies are accelerating their deployments of high-definition video conferencing gear made by the likes of Cisco and Hewlett-Packard.

Rapid acceptance of virtual collaboration will drive two important trends:
•    Organizations will accelerate search for talent globally.
•    Enable individuals to work remotely.
Both these trend will change the way people work for the companies.  This will in turn change companies’ responsibility towards its employees.  These virtual collaboration trends will encourage organization to radically change the management of Talent.  The individuals will get more options in term of where, how and what they want to work on.  But they will have less and less incentives to grow within the company.

Remote working although popular in technology companies is still an outlier in traditional organizations.  But, with the focus on cost cutting due to this global recession, more and more organizations will make virtual conferences and collaborations mainstream.  New way of communications and collaboration become necessary in this new remote work environment. The companies that are willing to invest in their IT infrastructure to enable virtual collaboration will win in this hypercompetitive global environment. The economic downturn has been a blessing in disguise and force organization in the US to be more globally competitive.

Popularity: 8% [?]

Wall Street Journal’s Emerging Online Strategy

Creative Destruction as defined by Joseph Schumpeter, the noted economist, is a “process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”  Read more about Creative Destruction in my blog titled “Creative Destruction at the Speed of Thought”.

Creative Destruction is in full display in print media industry. Because of Internet, print delivery model is getting obsolete.  Blog and Webzines are challenging the old traditional media companies. More people now go to web sites to read news.  Newspaper, in its current ‘avatar’ is getting irrelevant. Warren Buffet, the world famous investor has a dim view on newspaper business.

Classic Newspaper delivery model is ‘push’ model, i.e Media Company owns the process of delivering to the customers. But today the customers, especially younger generation, want a ‘pull’ delivery model.  They want to be in charge as to how and when they are going to pull the news from the source.  Either the newspaper has to reinvent itself taking advantage of emerging business model, or risk going bust. I think News Corp that owns Wall Street Journal (WSJ) understands the changing environment. Even though WSJ has a strong brand presence in print media world, it has been slowly losing its customers to online media.

So, News Corp is planning to introduce micro-payments for individual articles and premium subscriptions to the Wall Street Journal’s website this year according to Financial Times article titled Micro-payments considered for WSJ website.  I think this is an interesting way for WSJ to monetize their content.  It not this only allows WSJ to tackle eroding revenue, but WSJ using Internet can now achieve First Degree Price Discrimination.

First Degree Price Discrimination or Perfect Price Discrimination is when consumer are charged the maximum amount they are willing to pay for each unit of a good. It achieves mass customization in Market Segmentation. Internet now can help WSJ fine tune its pricing structure to maximize its profit. It remains to be seen if WSJ can regain its revenue share.  But, I think it’s a milestone in the news industry’s race to find better online business models.

Popularity: 9% [?]

IT can create ‘Intelligent Urbanization’

The technology has immense potential for ‘intelligent urbanization’ for India according to Susheela Venkataraman, managing director, Internet Business Solution Group at Cisco Systems.  Read complete article here.

Because of faster development in future years; 500 million people would be urbanized within the next five years. There would be emergence of new cities and 60 per cent of population would start living in the cities.  Intelligent urbanization in these areas would help in fostering improved citizen services with a better transformed and managed world.

But to achieve this model for future, there is requirement of public-private partnership. Intelligent urbanization needs a holistic approach from partners, advisory services, government etc.  Most of these projects have to leverage the efficiencies of the private sector with the regulatory authority of the government thereby making these projects sustainable and can mean a return on investment for IT companies for a long time to come.

It is interesting to note that Cisco and IBM next wave of globalization strategy is anchored the need by people, government and nongovernmental organization to create a sustainable global growth to ‘smartly’ utilize resources with minimal waste.  These strategy also exploit ’sustainability’ and ‘Green’ wave the world is witnessing.

Also read my blog on IBM’s ‘Smarter’ Growth Strategy - From Big Blue to Big Green

Popularity: 9% [?]

McKinsey Framework for IT Strategy

Survey by McKinsey Quarterly as published in May 2007, suggests that most of the CIOs believe that they are successfully aligning IT strategy with the needs of the businesses they serve.  This means CIOs are collaborating with the business in ways that add significant value, rather than just reacting to the demands of the business.

I know this is an old survey, but the important item from this article is the McKinsey framework for IT Strategy (see below)

IT organizations that have mastered the art of business collaboration may be poised to move to a more advanced form of strategic planning, a level at which they can truly show the business how, where, and when to use IT as a competitive weapon according to the survey.
Survey also finds that IT strategy in most companies has not yet reached its full potential which involves exploiting innovation to drive constant improvement in the operations of a business and to give it a real advantage over competitors with new products and capabilities.

This shift to the next level of IT strategy will require changes in management and budget priorities, as well as multiyear planning, which less than two-thirds of our survey respondents acknowledge doing. To use IT as a competitive weapon, a company must look beyond the annual planning cycle and take an integrated, midrange view of technology, competitive developments, and the strategic actions required to address them.   I think these findings are critical and I think even after 2 years since survey, most of the IT department have not made significant progress in this area.

Popularity: 13% [?]