The eWorld Radar

Tech Sector Review - March 2012

** Prepare youself for the digital revolution **

gRim reality

Blackberry maker RIM has recently had a boardroom cleanout, including their co-CEOs, COO and CTO. They will now conduct a strategic review which could see the business dismantled, refocused or reengineered. Trying to be something to everybody and trying to do it all on their own does not appear to be a recipe for success.

 

Offshore news

Corporate fraud specialists (until they were caught) Satyam and BT part-owned Tech Mahindra are merging to form what is expected to be India’s fifth largest IT service company. The combined group will be heavily dependent on telecoms business. The fact that this is not a growing market suggests the newly merged company will have to overhaul its strategy.               

 

Hactivism doesn’t pay

According to US telco Verizon, over half of electronic data record thefts were perpetrated by hacktivists. Thus ideology trumps financial gain. Anonymous and its associates were responsible for many of the high profile attacks including the CIA, Sony and Nintendo. Is the trend emerging because the people that perpetrate financial cyber crime ultimately get more personal satisfaction by, in their own minds at least, standing up for civil liberties?

 

Oracle up

Oracle dismissed its last quarter disappointment as an aberration. The latest quarter results are the first step in proving this hypothesis, with profits exceeding analyst expectations. Oracle is quite bullish about its Cloud offering with plans to give Salesforce and Sap a run for their money in the online applications arena.

 

Apple fans continue to take the tablets

Apple sold a record 3 million iPads in the first 4 days of its release. Whether this reflects the continuing ascendancy of the tablet or Apple’s ability to rev up the market and get its supply chain act together is unclear. My gut feeling is the latter, given that the most notable difference from the ‘old’ iPad is that the iPad3 is heavier.

 

Google – Play is a serious business

Google wants to take Apple’s iTunes head on by integrating Google Music and eBookstore into its Android Market offering and renaming it Google Play. Google is hot on Apple’s heels with almost as many apps as the iStore and almost as many Android platforms in circulation as the combined number of iPods, iPhones and iPads.

 

Intel - Autotrader

The automotive industry is a huge consumer of processor chips. Intel wants to fuel that demand by setting up a $100 million fund to invest in companies developing car-based technologies. It will be interesting to see whether car buyers mimic the behaviour of impressionable PC buyers and look for the Intel Inside sticker before making a purchase.

Ade McCormack

** Prepare youself for the digital revolution **

So you think you think you have a digital business?

Most organisations have embraced digital technologies to the extent that some aspects of the business are now reliant on IT. Some organisations in recognition of emerging trends have put the mobile ‘app’ at the centre of their business strategy.

But most of these organisations are still running industrial business models, using new technologies to do old things in new ways.

Digital businesses on the other hand look to do new things in new ways.

Such businesses also have the following characteristics:

• They don’t recruit using job specifications. They build the business around the strengths of the people they have access to.
• Their senior management team are not fantasists imagining that once they have created a strategic plan nature and the market will simply get out of the way.
• They fail fast and thus learn and evolve fast.
• They operate more like a swarm of bees in that they embrace situational awareness, collaboration and real-time decision making as part of their daily activities.
• The boundary between the organisation and the market is blurred.
• They major in information management and minor in information technology management.
• Their people are more akin to artists than compliant organic business cogs.

So be aware that just because your organisation has embraced IT and your staff are e-skilled, this does not guarantee that you are well positioned for the digital economy.

At best you have a hi-tech factory.

Ade McCormack

Are you amplifying the IT Value Chain?

There is a chain that runs from technology and people suppliers through the Procurement and HR functions respectively. It continues into the IT department and via the users to your organisation’s market.

Thus there are a number of actors involved in this IT value chain. They include:

• External recruiters.
• Business development staff of the IT service companies.
• HR staff.
• Procurement staff.
• Technologists.
• Users.

I would also add the IT function leadership and the senior executives associated with the organisation.

But value amplification means more than just sending the HR function a number of resumes that have the same buzzwords as those on the job specification. It means more than beating up suppliers to get the best price. It means more that having users who barely use the IT tools they are provided with because they have no real interest in ‘sweating’ them.

When this happens or worse, amplification turns into dampening. The CIO might be an easy target to blame when the investment in IT seems to deliver headaches more than anything else. And the CIO may be partially responsible but I would argue that anyone involved in the value chain has to take responsibility for this situation.

In many cases it is a lack of trust between adjoining parties in the chain. And this lack of trust in part is because many people along the chain lack both an ability to cultivate trust and a sufficiently mature understanding of IT to really add value.

With this in mind I have developed the eWorld Academy.

Take the test - Click here to see if you or your people need some game raising support.

Ade McCormack

The Inverse Peter Principle

You may be aware of the Peter Principle (more accurately a hypothesis) which suggests that people will continue to be promoted until they reach a position where they are in effect incompetent and thus do not rise further up the organisational hierarchy.

In the digital economy, this is unlikely to hold true because there will be no hierarchy. There will be experts and there will be those that align this expertise with what the market needs. The latter being an emerging 21^st century expertise domain.

This poses a problem if you are not an expert. In other words this is a problem for most of us.

Leaders who are used to setting the vision will be replaced by leaders who can infer the vision based on environmental factors including their access to expertise.

Managers who are paid to goad, charm and bully the workers into doing what is best for the company will no longer have a role where the workers are more motivated and passionate about what they do than any administrator.

Workers who operate in the traditional factory mode of doing the same stuff day in day out and whose thinking extends no further than lunch options will simply not be required. Unless they occupy niches in which there are no economies of scale on which to base the necessary investment in automation.

Thus career job number one is to reinvent ourselves as a genuine expert through acquiring the necessary skills and experiences. And to then alert the world to the new you. This may give rise to the digital economy Inverse Peter Principle, ie a race to genuine competence.

Ade McCormack

Industrial recruitment

It is a tenet of the industrial era that a focus on process and automation will improve output and maximise profits. The natural high cost of entry enabled the big to get bigger and dominate their markets as we have seen in mature sectors such as finance, retail and energy.

Recruitment is a little behind the curve as it is a very young industry. However the industry does have its giants and these are well represented on most high streets. What I find disturbing is their industrial approach to recruitment. Process seems to trump service.

The model may well work for McDonalds but not so for recruitment agencies. A transactional approach when dealing in a person’s career is insensitive at the very least.

My bigger concern is that these transaction-recruiters are seeping into the ‘less evolved’ agencies and thus blunting their service proposition.

Perhaps there is an element of natural selection taking place. Those recruitment companies that adopt transactional practices will gravitate to the high street where they will be eaten by the big boys. Those players that shun this approach and focus on a more personalised service will out manoeuvre the dinosaurs and thus enjoy higher margins.

So a low value approach will attract low grade candidates and low margins, which is okay if you can get the volume and stay in play despite the globalisation-induced margin tailspin. And similarly the personalised recruiters will attract the best candidates and the highest margins and will not be exposed
to commodity pressure.

Thus only one approach lends itself to the digital economy. For some its time to rethink recruitment.

Ade McCormack

Black digital gold

When it comes to IT leadership, the job title is pointedly not Chief Data Officer or Chief IT Manager Officer.

Data is like crude oil. It only has real value once refined. A pile of CVs has no value. But ‘how many candidates based in New York have Java skills?’ is valuable (to someone). So the pile is data and the answer to the query is information.

Being a Chief Data Officer would imply that the focus should be data management – storing the data securely and efficiently. If this was the oil industry the crude would never ever reach the refinery.

Being the Chief IT Manager Officer would be an improvement as the focus would be on storage as well as the processing of the data. At best we would have an efficient set of processes and technologies to extract and refine the oil.

I would like to suggest that the CIO does not focus on these activities, though they are important, but focuses on new ways of extracting value from the crude oil so to speak. That goes one step beyond the mindset of ‘this is what the organisation asked for’ (reactive) to ‘what other value-enhancing (innovative) things can we do with the crude oil’ (proactive).

In this respect data becomes an asset to the organisation and it becomes the CIO’s job to sweat that asset. So the CIO becomes the CFO of information.

In a digital economy, I believe this would propel the CIO from operational supplier to fully fledged c-suite player. CIOs that don’t get this need to be sent back to the oil rig.

Ade McCormack

Tech Sector Review - February 2012

Highlights

• Oracle to acquire talent management cloud player Taleo.
• Apple’s market capitalisation jumps into the exclusive $500bn club.
• HP quarterly revenues down 7% year on year.
• Cisco to challenge Microsoft-Skype deal in the EU courts.
• Google – Motorola deal approved by US regulators.
• Cisco back on the acquisition trail.

Taleo Oracle!

Serial acquisitor Oracle planes to acquire talent management cloud player Taleo for $1.9bn. Given that Sap made a similar purchase recently with Success Factors it would appear that human resources is the new battleground for the big players. It will be interesting to see what this does to the talent supply chain, in particular recruiters.

Apple joins $500bn club

Apple has joined an exclusive club of which only Microsoft, GE and Exxon Mobil have been members. The recent surge in market capitalisation is likely fuelled by the rumour mill getting to fever pitch in respect of the likely launch of the iPad3. A simple grasp of arithmetic progressions would enable most people to predict that the latest iPad is due around now (iPad1 in April 2010. iPad2 March 2011).

HP quarterly revenues down

These are tough times for enterprise and consumer technology giant HP with quarterly revenues down 7 per cent year on year.  It has under performed in 4 out of 5 of its key market segments. Only software was up. The organisation has been through a prolonged troubled patch (boardroom pantomime) culminating in former eBay CEO Meg Whitman taking the helm. She has a difficult transformation job ahead, particularly as it is not clear what HP can transform into.

Cisco unhappy

Cisco has committed itself to video and unified communications. So Microsoft’s acquisition of Skype is more than a nuisance. Both Microsoft and Cisco are powerhouses in respect of unified communications. Whilst Cisco owns the hardware end, Microsoft owns the business end. Integrating Skype into the Office suite would be a natural progression into an established high volume market. Whereas Cisco with its superior video conferencing capability, it has yet to penetrate the mainstream. Its primary offerings are perceived as ‘one per room’ or ‘one per building’ purchases despite the fact it does have a video phone offering. Cisco has to fight this if only to clip Microsoft’s wings otherwise the battle for pervasive desktop video conferencing will be over.

Microsoft unhappy

Google’s plans to buy Motorola Mobility got the go ahead this month. However Microsoft has expressed concerns about how the acquisition will make it more difficult to compete in the mobile market, particularly as Google has also acquired a large batch of mobile related patents from Nortel. The future seems to be at the convergence of social media, the Cloud and mobile (SoMoClo) and this will take Google even further towards the epicentre. Microsoft still has a lot of work to do on all three fronts and so clearly needs to slow Google down.

Cisco on the acquisition trail

Cisco had a tough year in 2011, including a slump in investor confidence and the subsequent evacuation of 11,000 staff. Writing off its Flip investment at $590m must have been painful too. Consequently its acquisition activities were put on ice. However CEO John Chambers has put his hunting gear back on and is on the look out for more jigsaw pieces for his new strategy. Thus it is likely that any organisation serving the enterprise marketplace that offers anything to do with unified communications or collaboration will feel the heat of his cross wires.

 

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CIO Screw up Log

Some might say that this is the unofficial name for the help desk ticketing system. And to some extent they are right.

But screw up is an unkind phrase for a failure. But failure is a key element in self development. As mentioned in an earlier post, failure is crucial, mistakes are unacceptable.

I encourage CIOs to keep a log of anything that takes place during the day that doesn’t conclude in a positive manner. These might include:

• The mis-launch of a new IT service.
• The strained meeting with the CFO.
• The heated exchange with the key supplier.
• The new innovation budget allocated to the CMO, which includes a substantial allocation for technology spend (that is not under the CIO’s control).

All of these came about because of something the CIO didn’t do correctly. So rather than go on to make the same mistakes day after day, they need to be logged. Assigning severity scores to the log entries will provide the information needed to prioritise the CIO’s personal development.

If the CIO is unwilling to do this, then HR might take on this responsibility. The log can then be used as either a development tool or exhibit A in the firing process.

Ade McCormack

Performance – Perceived Emotional Cost

Most sales people know that the value they deliver is proportional to the perceived benefits. In most cases a bigger price has a value dampening effect. But most importantly, the greater the perceived emotional cost the less associated value the customer will perceive.

To be a successful worker in the industrial economy, you need to be compliant / low maintenance from a management perspective.

However in the digital economy, creativity trumps compliancy.

So it is expected that workers will be a management nightmare. This in turn means that the perceived benefits associated with you must shoot through the roof to offset this.

Mastery of your skills will of course help, but brand management is more important.

Ade McCormack

CIO – A different carrot

What would happen if CIO compensation packages were based on business-relevant information output rather than size of technology estate / user community?

It is likely that CIOs would:

• Push as much technology out of the door / into the Cloud as possible.
• Engage with users as if their career depended on it.
• Help the organisation streamline processes.
• Become acutely aware of what the business leaders were focused on

It strikes me that many of the issues organisations face in relation to their IT leadership could easily be resolved by simply changing the carrot.

Ade McCormack