Earlier this afternoon Google Buzz went live after a comprehensive launch event streamed live over YouTube. Buzz is a brand-new social tool that helps users to share updates, links, photos, videos, and more with the online world at large.

Google founder Sergey Brin has been quoted as saying that Buzz gives us the ability to post a message to the Web without a ‘to’ line. The service is location-aware and works on the Web via Gmail or using a mobile interface on the iPhone or Android.

Available as of today for consumers, Google has already announced that it plans for an enterprise version of Buzz as well. Given the popularity of enterprise microblogging applications like Yammer, it makes sense and as we’ll see in my upcoming analysis of social computing for 2010, Google has been wise to tie it closely to an already widely used service and not force it to succeed on its own.

Given the huge amount of coverage already of this announcement, I’m not going to review the features of Google Buzz in detail, you can find that from the live coverage captured by ZDNet’s Sam Diaz or the just-posted screenshot gallery. Below are my first impressions of Google Buzz from a strategic point of view, which I was able to use for a short while before writing this post.

An analysis of Google Buzz

One of the few places that Google doesn’t dominate the Web today is in the social arena. It’s a world where Facebook has a large lead and where Google isn’t even #2 or #3. Consequently any entries that Google makes in this space are going to be very closely watched indeed. This happened with Google Wave last year and there’s likely to be a virtual mountain of analysis and dissection before it’s all done with this service.

My take: Google Buzz is well-designed and useful but it’s going to be seriously challenged because the very people most likely to be interested in Buzz will already have places to carry out their online social activities. This means Google Buzz may end up being more useful in places where there’s a lot less dominance by the consumer Social Web, such as in the enterprise.

In no particular order, here’s why Google Buzz is significant nonetheless, for as much for how it tells us how Google looks at the world of social computing as for the way these capabilities will almost certainly migrate and blur into a common social feature set in other Google products such as iGoogle, YouTube, and Picasa.

• Buzz is an intelligent personal activity stream that’s designed to scale. Buzz is not just a FriendFeed-like aggregator of everyone you know; it uses analysis to try to sort out what makes the most sense to you at the moment. A few minutes using Buzz convinced me that this is going to be essential if the service isn’t going to be overwhelming. It’s already fairly addictive with just a few followers, I can only imagine when you have hundreds. A few commentators, such as Jeff Jarvis, have already (rightly) pegged this a major attempt to address what Clay Shirky calls filter failure to cope with the information explosion challenge of social media and Enterprise 2.0. As Google pointed out in their introduction, dealing with this problem effectively in scale has significant business benefits. In particular, it’ll be very good for Google’s advertising model while making social computing potentially much for compelling and efficient for an important audience that’s very valuable indeed: large enterprises.
• Google believes that good data and computational analysis are the key to success with hyperlocal and hyperpersonal. And in this, they are probably not wrong. Geolocation abilities are built directly into Buzz as a primary dimension of its social experience (which was even described as ‘beautiful’, an adjective used more often by Apple for its products than by Google). As for hyperpersonal, in Buzz this is driven by underlying algorithms that filter and guide the user experience. Google’s VP of Engineering, Vic Gundotra, noted that Google’s insight into the early Web with the famous Page Rank algorithm drove their initial success. He went on to hint that they believe the same algorithmic insight into the Social Web will succeed with Buzz. Either way, Google has clearly used its competency in data and computation to attempt to one-up today’s online social networking services. The stakes for this bet are high: The success (or any lack thereof) of the end result will in no small part be due to the real-world effectiveness of these features.I do think they’re generally on the right track here but the left brain approach to the Web that dominates Google’s product strategy tends to obscure the notion that social systems are also highly self-organizing and emergent. Capitalizing on this and encouraging bottom-up network effects has been the key to incredible success for those that have figured out how (i.e. Facebook and Twitter). Thus Buzz at times makes you feel like a rat in someone else’s maze. Time will tell if this ultimately produces better outcomes or not…

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Well, there has been plenty of speculation that SAP will be acquired, and even that the departure of Leo Apotheker increases the probability of this happening.  With that in mind, and obviously in a completely unscientific sampling, here are two polls: the first on who (if anyone) might acquire SAP, and the second on when …

You can come back here to see results periodically, and I plan to blog the results in a week or so.

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Photo credit: Steve Jurvetson

One of the topics which I responded to on the recent IBM Eco Jam was “IT’s Central Role In Managing Energy & Carbon”.

This topic was raised by another analyst (again IBM has asked me not to mention participants by name but if the analyst in question sees this and wants me to name him/her, I have no problem so doing) when s/he posted the following:

Forrester’s research on energy & carbon management systems predicts that IT organizations will take on a central role in choosing, owning, and operating these systems. The challenge of managing energy & carbon emissions will increasingly be information-related, and it’s enterprise IT organizations that have the expertise to install and operate software systems of record across the entire company. Just like systems for managing customers (CRM), money, materials (ERP), and employees, carbon & energy management systems will collect, integrate, analyze, and report on the newest set of assets/liabilities that will be used by internal and external stakeholders to judge corporate performance.

Now, I have no issues whatsoever with IT organisations having a role in choosing Energy Management systems. IT’s function would involve installing and supporting the software so naturally they’d have a say in its purchase. They’d also have a role in crafting requirements documents and reviewing responses but “owning and operating” these systems? I don’t think so.

I realise part of this has to do with empire building ambitions by IT but really, since when was energy management a core competence of IT?

I absolutely realise that sustainability is all about information and data, and certainly IT has a role in ensuring that this information is always available but asking IT to own and operate energy management systems is, frankly, ludicrous. You might as well ask IT to own and operate the financial management systems.

So if not IT, who then should run these systems? I foresee the rise of a new role – the Energy manager, in companies. The Energy manager will likely report to the CFO, the COO or the CSO (Chief Sustainability Officer). The energy manager’s role will be to minimise the company’s energy (& probably water) footprint and to report savings in monetary, kWh and tons CO2.

With the increasing regulatory landscape around carbon emissions (i.e. the Carbon Reduction Commitment in the UK), carbon measurement and reporting will become mandatory for most companies. In that environment having someone specialised in energy management, responsible for this function will start to seem like a very good idea.

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(Cross-posted @ GreenMonk: the blog)

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Over the weekend, my wife shared with me that one of her high-school friends was interviewing for a category/vendor-management position focused on professional services and IT spend. The job would report up to the CPO of the organization (rather than to IT, as such roles often have in the past, at least indirectly). I did a quick check of our market-segmentation database. It turns out that the company, a supplier in the automobile and truck manufacturing industry, is in the top 10% of organizations we track in this market from a procurement, supply chain, and IT-sophistication standpoint (in Geoffrey Moore terms, they’re a classic “early adopter”). The fact that such an organization plans to invest in a senior category manager in this area should not be surprising, but far too few organizations assign senior supplier/vendor-management resources to these categories today.

I’d argue that there are a few tips that procurement organizations less sophisticated than this one can take with regard to this area. In addition…

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I started my career as a programmer writing payroll applications in machine language to run in 4K memory.  Over more years than most women would admit, I’ve focused my career on the application of information technology to HRM in order to achieve breakthroughs in business outcomes.  Rather than being satisfied with cheaper payroll operations or faster resume processing or even getting everyone’s performance reviews done on time, I’ve focused on total compensation plans that achieve more productivity for the dollars spent, collaborative and competency-centric staffing processes that achieve fastest possible time to effective performance for new and redeploying workers, and guided performance management processes that actually improve rather than just report on performance.

Along the way, I’ve encouraged (some would say beaten on) HR executives to understand what technology could do for their business, to build the end-user’s business case for that technology on the basis of improved business outcomes as well as (and much less easily over the years) direct cost savings, and to educate themselves and their staffs on how to select and deploy (including via outsourcing) that technology to maximum effect.  I have also encouraged (here too, there are those who say I have beaten on) my valued colleagues at the HRM software and outsourcing vendors to build better domain models and architectures, use the best available technology, and focus on the total cost of achieving HRM’s business outcomes and the total cost of HRM service delivery rather than on just the total cost of technology ownership.  And I’ve added my voice to that of many others in pumping for breakthroughs in the underlying technologies on which great HRM depends, from real-time, actionable analytics, to standard HR-XML schemas, to making application architectures systemically effective-dated and using Web 2.0 technologies appropriately.

The good news is the we’ve made tremendous progress in HR technology.  Anyone who has checked out the latest releases from some of the best HRM software vendors will tell you that the user experience, degree of embedded intelligence, useful application of collaboration technologies, breadth of needed functionality, etc. are stunning when compared to what was available even a release or two ago, and even more stunning when compared to what is operational in most organizations today.  And much of that newer functionality, because it’s coming from vendors with truly multi-tenant SaaS architectures and business models, is available immediately to all clients — although available does not mean usefully implemented, but that’s another story.  Add to this the explosion in personal communications, social networking and productivity technology, which we hope/believe will improve information sharing, increase workforce collaboration, and reduce cycle times, and there’s really very little that we’re missing from anyone’s vision of HR technology nirvana.

But amid all the advances in and availability of technology and technology-enabled business communication and collaboration, I believe that something important has been lost.  Are we still doing careful analysis and reflection when we’re twittering away?  Are we taking the time to think about and then craft eloquent discussions of how best to address our most important HRM and HR/IT issues?  Do we sit quietly, alone, to contemplate what issues may be around the corner and to propose solutions before those issues turn into problems?  Can HR, IT, or HRO professionals execute effectively against today’s to do list when we’re all caught up in constant interrupt processing and information overload?  And is there the slightest chance that all of this contemplation and discussion will ever benefit from having a precise and agreed vocabulary for the relevant concepts and topics?

I’m one of the lucky ones whose job it is to think, to contemplate, to connect the dots, to read, review, comment, take apart and generally make a nuisance of myself so as to help my clients avoid making expensive and painful mistakes in their business or software strategy/design/execution.  And especially over the last few months, as I’ve been recovering from really nasty shoulder surgery, thinking has been about all I could do on some days.

So where has all this thinking taken me, at least as regards this blog?  First, I’ve decided to publish my entire methodology for strategic HRM delivery systems planning (which really does look something like the diagram above until it’s decoded for you), including many of the related “starter kits.”  These are really valuable and useful consulting aids, and I’d like to offer them to the industry via my blog in hopes that end-users will embrace and employ better techniques for deciding how best to technology-enable HRM in a way that really does move the needle on business results.  Second, I’ve also decided to publish a good bit more of the consulting tools that I use with HRM software and services vendors to help them produce better platforms.  While the best of today’s HRM software is very good, it’s far from perfect, and the best is by no means ubiquitous, so there’s still work to be done in trying to raise the barre for all HRM software vendors and platform-based BPO providers.  Third, and probably because this old English major just can’t tolerate the complete lack of language precision in our industry, I plan to publish a lot more boring, definition-filled posts.  Or maybe all of these planned posts will be boring.  Perhaps getting all of this material published won’t change a thing, but it will make me feel better for having had my say.

And finally, throwing away all my few remaining inhibitions, I’m planning to comment on just about anything and anyone that strikes me as relevant to our collective quest for improved business outcomes via great HRM.  After all, why have a blog in the first place if you don’t use it to speak your mind.  So give me a few more days to get my left arm a little stronger, then we’re off and running.

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(Cross-posted @ In Full Bloom)

There has been much chatter in the market of late about the eventual migration away from Frictionless (also described internally at SAP and with partners as the “bridge” platform). I recently had the chance to catch up with Marko Navala, who not long ago took ownership of the solution for SAP, and Paige Leidig, a long-time product and marketing veteran of the SAP procurement suite. They told me that “there are no plans to re-platform the e-sourcing” solution set. A few weeks ago, David Marchand, who used to focus on SAP’s e-Sourcing product before changing his role within the company, also suggested the same thing. Moreover, the current SAP party line appears to be that there are “no plans to force e-sourcing [customers] to another platform.” Moreover, while the age of the Frictionless design (over ten years) implies an eventual migration to a more modern SaaS platform at some point in the coming years, according to SAP, “re-platforming” will “not happen in 2010 or 2011.”

In the meantime, SAP is maintaining its vision of being “the On-Demand provider of choice for SAP large enterprise customers,” by continuing to focus on a subscription business model, delivering e-sourcing, contract management, supplier management, and related capabilities hosted by itself and BPO partners (e.g., Hubwoo, IBX/Capgemeni, Quadrem, etc.). In other words, the strategy SAP recently articulated is identical to the one it’s been pushing for years with the Frictionless model.

Still, even though SAP is stalwart in its claims that the “e-sourcing product will be built on Frictionless for the [foreseeable] future,” I suspect that we’ll begin to see SAP release e-sourcing and contract management capability in the coming years (perhaps 2012, perhaps later) on an additional, new, SaaS platform, even if it keeps Frictionless around for some time. There are a number of reasons for this. For one, the Frictionless platform does not take advantage of the latest functional and architectural capabilities that SAP will build into its next-generation solutions. For example: an in-memory database model (like Workday) that allows significantly greater flexibility in how users access and interact with information, while also limiting any potential for Oracle to gain DB license revenue from SAP application deals.

Moreover, even though Frictionless now offers tight integration into back-end SAP systems, it is built off of a different data model entirely. Competitors, including Emptoris, have been successful at penetrating SAP accounts with an essential message of “we integrate more tightly into SAP than SAP’s own products” in the sourcing and contract realm. Granted, SAP has new integration capabilities that it has built into the most recent e-sourcing release, but I suspect that a perception will remain in the market (perhaps true, perhaps not, depending on the integration scenario) that third-party sourcing and contracting solutions can integrate more tightly into SAP than SAP’s own On-Demand offerings.

Perhaps the largest indictment of Frictionless as a company standard is not entirely fair, owing to company politics, but in SAP’s home market of Germany, the product is rarely sold. SAP instead positions the limited capabilities of SRM sourcing in the German market…

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Lots of little things go into building a great company over the long term.  Rally Software is one that I’m proud to have been involved in from the beginning.  I remember when Ryan Martens, the founder, would sit for entire days in a small conference room near my office covering the white boards on the walls with his scribblings.

Today Rally is a 150 person company that plans to add another 75 people in 2010 on the heels of Rally’s $16 million financing led by Greylock.  And – since their birth in 2002, Rally has had 17 babies (well – people that work for Rally have had the babies, but you probably figured that out.)  Recently, Rally’s leadership team decided to do something about this.

Nicely done Tim, Ryan, and everyone else at Rally.  Now you’ve just got to get these kids using software from Kerpoof at an early age.  I wonder how Agile Parenthood works?

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(Cross-posted @ Feld Thoughts)

Back in my college days, I worked with a fellow at an auto parts warehouse. He asked me “Man, how many books do you read in a year?” I gave a number in the dozens. That produced a scoff from my co-worker and the following comment “I haven’t read a book since I left high school!” He was, incidentally, a man in his 40’s and he was dead serious.

I kept thinking about that comment as I read my daily dose of fawning comments about the iPad. Everyone out there seems to unquestionably think this device is a great thing. If they have any criticism it’s usually the name of the product.

I think everyone’s giving Apple too much of a blanket attaboy on this. I may be wrong but I wish more people were looking at this device with a more dispassionate eye.

Let’s consider that:

1) There’s a finite market for tablet format e-book reading devices.

2) That market is smaller than the market for PCs, laptops, netbooks and PDAs. How do I know this? I see very young kids with cell phones. I see all kinds of families, children, etc. using home PCs and notebooks. I don’t ever think I’ll see casual readers plunk down big bucks for this device. Will trendy, early adopters get one? Sure! Will most folks? I don’t think so. If there are 300 million US citizens, how many will buy an iPad? Not that many I’m afraid.

3) There are already millions of Amazon Kindles already out there according to Jeff Bezos. How many people will abandon a Kindle to buy an iPad? Sure, some people will but the high switching cost will mean that Kindle switches may take years to materialize. And don’t forget the Sony Reader. By December of 2008, Sony reported they had sold 300,000 units of their device. That number has most certainly gone up since then. That prior install base of Sony and Amazon products may have already snagged a lot of the early adopter market. The real question is how many more buyers are left?

4) At $499, one could buy a lot of books. Seriously, how many people do you know that spend anywhere that much on books in a year? In two years? In five years? Ever? The fellow I used to work with wouldn’t spend that in a lifetime. I looked up the size of the book industry. The current market estimates fall between $26 -40 billion annually depending on whose stats you review. That works out to a maximum of $133/US citizen. I think the iPad would have to price out at something like $99 to get really competitive with books.

5) The iPad is a discretionary purchase. It is not a business requirement…

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Bleeding chair - by the British Dental Association

Over the weekend I met a fellow in a local hardware who was looking for some very unusual screws. We got to talking and I found out that he supplements his retirement pension by re-conditioning dental chairs, of all things. Evidently it’s a decent money maker for him and he enjoys the hobby.

The conversation started me thinking about the current states of software and how this might actually reflect the state of the economy overall, not just in this downturn but in long term fundamental changes in the economy.

Software is in harvest mode, just about everywhere you look. What is harvest mode? When products reach the end of the life cycle they are kept around because they still have some value and market cache. We don’t continue to invest in them because the investment will no longer pay off. So we simply harvest whatever revenues we can while keeping a very close eye on costs.

In the software world, there are actually companies that buy older products and continue to harvest maintenance fees for years, especially true in the software for busines verticals. A friend of mine who works in a local steel service center owns one of these. The company purchased the software 20 years ago to help them manage inventory, processing and scrap. Then about 8 years ago the company that wrote the software sold off to a harvester. They now have a single person who supports the code base, but the product is no longer actively sold. There are after all only so many steel service centers in the world.

But what we are seeing today is something completely different. We have non-vertical, on-premise ERP/CRM software that is being harvested by the company that orginally wrote it, in the case of SAP, or by the companies that purchased it, in the case of Oracle or Sage. One way or the other, it seems that all 3 companies have come to the conclusion that it is useless to invest money in their now graying software products.

SAP’s steady decline went by another hurdle this past weekend when the current CEO left unexpectedly and two guys were promoted into the top spot. You can read extensive apologies here. Oracle has almost 100 acquisitions under it’s belt, making it a software harvester extraordinaire. Sage also has a host of harvest products. In fact in the on-premise space if you aren’t being harvested, you are a harvester.

On the plus side, harvesting means that your on-premise system will continue to run and be supported, more or less, by someone for the foreseeable future. On the down side, this means that you will continue to pay a lot of maintenance fees for the foreseeable future with little if any new features/functions. You have software on life support, basically, and that is both costly and a sorry state of affairs.

Why this is happening is difficult to say because the reasons are nearly as numerous as the underlying products. Sage for example still has some products that are not real time, but instead rely on batch processing. You would think it makes sense for companies using something like this to look around for something new, more useful and modern. There must be two reasons that they are not interested in changing: The newer software does not offer enough value to pay for the investment and trouble to change; the company is no longer making the income it once did and therefore has little to spend and little faith in the future. There’s some truth in both of these, but taken together they really pack a punch.

Think about a company that wholesales/distributes dental supplies, a b2b business. There was a time when the population in their area was surging and dental offices popped up like flowers. They became a strong regional player with a one or a few competitors, and all of them did well. But over the past few years business has changed substantially. First there are fewer new practices opening in their region, and the ones that are there have begun finding better values online. They can deliver next day, but it actually costs them more to hire a driver, a cost that he must pass through to customers, than it costs an internet distributor to send next day air. Huge efficiencies have happened in their market, and all have squeezed their margins.

What does a company in this space do to compete? They could also sell online, but they don’t have the expertise in materials management nor the capital to bring to bear to run an enormous, national brand warehouse. So, like the software companies, they go into lockdown, or harvest mode. They continue to service their region, keeping a very close  eye on costs, but they are unable to afford huge new investments in the business. Including software. So they keep on with their old system and eventually they will run out of reasons to exist altogether. Meanwhile, dentists squeezed by better oral care buy used, re-conditioned chairs instead of new ones. These are also available on the Internet.

In short, the Internet has thrown a wrench into the works of many mainline companies and as a result they have turned off new investments in technology. When I go over my NetSuite client list I can see a lot of companies that we implemented the software service for but only 2 of the more than 90 companies are mainline wholesales/distributors . Interestingly, one of my first clients was an Arizona company called Lifestyle and Leisure Creations, a wholesaler of massage equipment and supplies who sold out to a larger competitor.

That’s probably a strategy that  a lot of businesses need to be looking at. Purchasing competitors, especially at current discounted prices, can be a useful way to expand your customer list and restore some pricing strength. But you still need to gain greater efficiencies and the best way to do that is to think about investing in better technology. If you have a growing company across a large geography, you need to see where you are everyday and at every location. It’s not good enough to just throw together results manually at the end of the month. This is how on-demand software as a service can really help. Your entire company can work off a single account of the software, giving you real time results from all branches, warehouses, etc. And you don’t have to add the very expensive computing infrastructure that used to be necessary.

Again, looking over our client list, I see a dozen brand owners. These are wholesale/distributors who have gone an extra step and now are also manufacturing the products they distribute, using third parties in most cases. Brand ownership is one way of averting the steady decline of growth death spiral.

If your margins are getting hit hard and you’re thinking growth through aquisition or  brand ownership is the only way to continue the company, then you have to consider on-demand software. Like you, it operates unbounded by geography. And while on-premise software continues to struggle, NetSuite’s SaaS ERP/CRM grows and takes their customers.

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(Cross-posted @ Sightings in SaaS)

Over the past few years, roughly, the discussion of software development has been stuck on the back-bench in favor of the swirl of virtualization, cloud computing, and then iStuff. As I pointed out in my presentation on Agile development and cloud computing to the Agile Austin meeting last week, cloud computing is largely an operations story. Public and private cloud technologies and practices have tended to focus themselves on optimizing data centers, not so much software development. And with virtualization, the story is all about operations, long ago having left the “virtual labs management” angle in the comfortable dust of past year’s portfolio positioning.

(There’s a notable exception here by a cluster of startups who’re focusing on the tools needed to do cloud application delivery, folks like Reductive Labs, dto solutions, OpsCode, and others.)

Just recently, I’ve noticed more attention to how application delivery is effected by cloud computing. Much of it is simply getting back to the job of delivering SaaS instead of only on-premise offerings. This cheers me up to no end as I think much of the cloud (and mobile) focus has distracted from moving the business software vendors to SaaS-models, an evolution that should widely benefit the customers and users of that software.

Questions to start asking…

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Recent headlines about Toyota have no doubt been music to the ears of its major rivals — especially Ford and GM. From a giant recall for gas pedals that stick (making the Audi 5000’s sudden-acceleration PR woes look tame by comparison) to botched hybrid braking systems, Toyota’s image has slid downhill faster than just about any automaker in history. Which is precisely why, if you’re a contrarian, it might make sense to go out and buy a Toyota. Stay with me for a minute here. In fact, the strategy of contrarian buying is one that we should all consider more often in our procurement careers. First, let’s consider the case for plunking down your hard-earned dollars on an automotive brand that can’t seem to get either acceleration or braking right.

Over on a CBS.com blog, Jill Schlesinger recently opined that “the Toyota recall will be a great buying opportunity…

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This weekend, it was announced that Leo Apotheker was leaving SAP immediately. Leo had been SAP’s CEO. Replacing Leo would be co-CEO’s Jim Snabe (focusing on technology) and Bill McDermott (focusing on sales). Also announced was the elevation of Vishal Sikka, the company’s CTO, to SAP’s Executive Board (the management board).

Recently, it had been widely rumored that Leo’s contract would not be renewed, and that a new CEO (or co-CEOs) would be brought in to replace him. Names bandied about for his replacement included:

• Wendelin Wiedeking, a former CEO of Porsche, currently being investigated for insider trading,
• Jim Hagemann Snabe, head of products at SAP, and a member of the executive board there,
• William (Bill) McDermott, head of the field (sales and services) at SAP, and a member of the executive board there, and
  
• John Schwartz, former CEO of business objects, and a member of the executive board of SAP.

Apparently, the rumor mill was fairly efficient this time.

This morning, SAP had a conference call led by Hasso Plattner, and including the SAP executive team. While I couldn’t participate, thanks to the magic of twitter, I was able to follow along. Below are some of the key tweets that came out during the call – definitely gives a good flavor of what happened, although not quite a transcript:

twailgum #leogone I said it last night, and I’ll say it again: “SAP, Who Are You?” Hasso offered direction this a.m. We’ll see where this all goes.
rwang0 #leogone gives #SAP a chance to start a new. Focus needs to be on products http://bit.ly/9mEuQ0
rwang0 Not sure why Plattner references Oracle’s best years with Ellison and Ray Lane #sap #leogone
monkchips “we made legal and political mistakes. we made a mistake, now we need to work to regain the trust of customers” #sap #leogone bout time!!!
hschepp Hasso: Customers have to maintain and innovate. SAP will help them to achieve both! #sap #leogone
sig With Hasso at the helm I expect to hear a lot about “massive..” this and that technology from #sap until further notice #leogone
yojibee Hasso: It would be wonderful to be a startup company without a history #leogone <<>
hschepp Hasso predicts “significant changes” in enterprise computing #sap #leogone
yojibee Hasso’s answers to why Léo left: “I decided I will only make forward looking statements.” #leogone
yojibee Bill and Jim will keep their responsibilities, but increase the scope of their roles. They won’t be just CEOs #leogone
amitsharma1382 Is anyone thr, is anybody out there who still feels #SAP is not a cmpny which respects employees, #leogone is your answer .salute 2 candid
paulhamerman #SAP #leogone co-CEOs have been used before at SAP, usually as part of a transition of power. Seems to be a bit different this time.
yojibee Hasso: I am responsible for making the change. #leogone
yojibee Co-CEO was never a short-term strategy. One is focusing externally on customers/sales and one is focusing internally on development #leogone
hschepp Hasso: In order to be profitable you have to be a happy company #sap #leogone
paulhamerman #SAP #leogone Kudos to Hasso for his candor about the trust issue.
MichaelKroker Plattner: “Have to re-establish trust between differenz parts of #SAP, ie. Management, Supervisory board, Employees & Customers” #leogone
yojibee Hasso: Thank you customers. To endusers: please trust us, we haven’t forgotten about you #leogone
monkchips to end users: “please trust SAP, we have not forgotten you”. is Plattner reading from Renault’s script? #leogone
paulhamerman #SAP #leogone New in memory DB will be showcased at Sapphire Orlando.
hschepp Hasso: Now talking about ByD. “Looks good now. Optimistic this year will be very good for ByD.” #leogone #sap
yojibee The lack of success of ByD was not a reason why the contract with Léo wasn’t extended #leogone #sap
yojibee Hasso: We have strengthened our focus on on-demand solutions. (mentions @12sprints) #sap #leogone
hschepp Hasso: No disagreements about strategy with Leo. #leogone #sap
yojibee Hasso: Focus is on growth, margin and innovation #sap #leogone
hschepp Hasso: All areas of SAP has to accept the strategy of change. #sap #leogone
paulhamerman #SAP #leogone Ernie Gunst, COO of SAP, has left for health reasons.
monkchips so Hasso runs SAP. tell us something we didn’t know. #leogone
yojibee Hasso: We will have changes in management style. For instance: Agile project teams #sap #leogone
hschepp Hasso: Radical changes have to take place in development where necessary. #sap #leogone
MichaelKroker Hasso Plattner: “No difference in opinion between Léo and me on Strategy”, “No Problems with Business By Design” > Wonder why #leogone then?
paulhamerman #SAP #leogone Hasso: SAP must reestablish trust among all parties, must change this quickly.

Blogs sprung up over the weekend, speculating on the changes and what they mean. Some of the key posts were:

• SAP’s CEO Léo Apotheker Resigns
• SAP changes leaders: Time for innovation

Of course, now that the conference call has happened, I’m sure there will be a new set of analyses popping up, and the Enterprise Irregulars blog site is where you’ll be sure to find the best analysis.

So, what is behind all these changes? My opinion, for what it’s worth: Hasso Plattner wants to drive a great deal of technological innovation at SAP, and did not believe it could happen under Leo’s leadership, and without Hasso’s very direct involvement. Hasso has a great deal of confidence in Vishal Sikka’s technology perspective, and Vishal was appointed to the Executive Board as part of this change, pointing to Hasso’s desire to unleash a new wave of innovation at SAP. Jim Snabe will be given the opportunity to bring all of SAP’s products under one head (both development and product (“solution”) management). Bill McDermott has certainly already proven that he can run SAP’s field, so there is not much risk in this change. Perhaps the biggest risk is on the product side. The product organization is full of conflicting technologies, conflicting interests, and conflicting agendas. Driving change in this kind of climate will be very challenging for Jim and Vishal.

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(Cross-posted @ Next Gen Enterprise)

When I first tweeted that Jack Trout’s new book “In Search of the Obvious” had arrived from Amazon, my mate @euan suggested his (excellent) blog is actually easy to find. He called it “The Obvious” because when he started writing about the application of new technology and social media in organizations, he felt that, actually, he was saying pretty obvious things – even though they are important, and often missed by the many. Jack Trout’s book has a similar theme around today’s complex marketing mess and era of killer competition that we now live in. A good marketing strategy should be founded on an obvious idea that makes common sense, when too much of today’s marketing messages try to be clever, and complex, with advertising that is more like entertainment.

If you haven’t read Jack Trout, you have been missing something. Jack Trout and Al Ries have written some of the best and most influential marketing books of the last 25 years. They wrote Positioning, and Marketing Warfare, and the 22 Immutable Laws of Marketing. Al went off to write some excellent books with his daughter Laura, and Jack carried on with things like Differentiate or Die. A lot of the key themes and case studies here in The Obvious come from, or are an extension of what Jack wrote in the earlier books. If you haven’t read them, then this book would be a good place to start and get a refresher on the laws of practical marketing. If you have read some of the others, this is still an excellent and entertaining read. He has related the messages of focus, leadership, resources, category divergence, and differentiation to the main theme – your strategy should be obvious and full of common sense. He quotes Robert R. Updegraff writing in 1916 to set the scene in the first chapter:

“The trouble is, the obvious is apt to be so simple and commonplace that it has no appeal to the imagination. We all like clever ideas and ingenious plans that make good lunch-table talk at the club. There is something about the obvious that is – well so very obvious!”

The book expands on Updegraff’s straightforward messages from all those years ago, and Jack’s earlier ideas contrasting the clever and entertaining ads that might be very memorable (but do you remember the product?), with the boring or even irritating ads which definitely leave you with the product in mind. He shows same great examples of confusing and wordy mission statements that are so generic, they could be any company doing anything. I wrote earlier about one section on the law of the ear – does a picture paint a thousand words? The book is full of good case studies, and spot on analysis of the current state of Wal-Mart, Coke, newspapers or the beer business. It has some great guidance on how you should be thinking about getting back to basics, and constructing sensible and obvious strategies. I think it is a great antidote to some of the current muddled thinking that you see from some marketing departments – an entertaining read that is well worth tracking down.

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(Cross-posted @ Business Two Zero)

When I wrote my post titled An Angel Investor Group Move That Makes Me Vomit I expected to write my little rant and be done with it.  A month or so later Jason Calacanis picked up the mantle and started a Jihad against the idea of angel groups charging entrepreneurs to pitch to them.

The result is the Open Angel Forum.  I participated in the second event last week in Boulder.  I thought it was spectacular and the twitter stream from #OAFCO reflected this sentiment.  About 20 active (at least four investments in the past year) early stage investors (angels and seed stage VCs) attended.  Six entrepreneurs presented their companies in short seven minute pitches.  Five sponsors underwrote the food and drink at the event.  There was plenty of networking before and after.  That was it – small, intimate, and highly relevant to all.

Most of the presenters wrote blog posts about the event which will give you a great feel for what they experienced.

• Odojo – My Experience presenting at The Open Angel Forum
• FaceFile – Open Angel Forum Colorado
• Grogger – OAF: Things Getting Better for Entrepreneurs
• TeamSnap – TeamSnap presents at Open Angel Forum
• Kijubi – Kijubi @ Open Angel Forum in Boulder Colorado

The events continue with Open Angel Forum San Francisco on March 4th and Open Angel Forum New York City on April 8th.  If you are an entrepreneur or an angel investor in either city, check them out.

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(Cross-posted @ Feld Thoughts)

Bloggers and Twitters alike are buzzing today with news that enterprise giant, SAP, announced a leadership change today.

The official press release itself is terse:

[T]he SAP Supervisory Board has reached a mutual agreement with CEO Léo Apotheker not to extend his contract as a member of the SAP Executive Board. Léo Apotheker has resigned as CEO and member of the SAP Executive Board effective immediately.

The SAP Executive Board, in agreement with the SAP Supervisory Board, has appointed two Co-CEOs: Bill McDermott, head of field organization and Jim Hagemann Snabe, head of product development, both already members of the SAP Executive Board.

In addition, Vishal Sikka, Chief Technology Officer, has been appointed to the SAP Executive Board. At the request of the SAP Supervisory Board, Hasso Plattner, Co-Founder of SAP and Chairman of the SAP Supervisory Board, will continue to play a strong role in advising the new leaders on technology and product development.

“The new setup of the SAP Executive Board will allow SAP to better align product innovation with customer needs. The new leadership team will continue to drive forward SAP’s strategy and focus on profitable growth, and will deliver its innovations in 2010 to expand SAP’s leadership of the business software market,” said Hasso Plattner.

The SAP Supervisory Board thanks Léo Apotheker for his enormous contribution to the success of SAP, which he joined more than 20 years ago, and wishes him all the best for the future.

SAP has suffered in recent years from a combination of strategic missteps and the bad economy. As a result, the company has experienced weak financial performance and lost several public relations battles.

Jim Hagemann Snabe is a product guy while Bill McDermott represents sales. In theory, this combination could work to SAP’s benefit, but, of course the devil is in the details.

My take. SAP needs a clearer, stronger sense of leadership and direction at this critical point in its history. The company face large competitor, Oracle, on one side and a host of smaller software as a service (SaaS) competitors on the other.

It is now up to Snabe and McDermott to enact customer-friendly SAP legislation and bring product innovation to the market.

[Photo of Léo Apotheker by Michael Krigsman.]

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(Cross-posted @ IT Project Failures)

Photo credit: Dan Farber

I was in a session last year with Dave Girouard of Google, when I asked him if he still believed in the statement he made 3 years prior about enterprise software. Without batting an eyelid, he asked me “Are you from SAP?”

Leo Apotheker is gone as CEO of SAP. Let’s take a moment to compliment the man for the juggernaut he built in the sales field. As he pointed to me in a heated exchange last year “I’ve been in the field all my life. That monster out there (the field) is my creature. Loyalty is to the customer. The obligation is to the customer”

But the reality is the customer has been forgotten in enterprise software, not just at SAP. It’s about squeezing as much out of old technology as possible. As I wrote earlier in the week…

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Read the complete post @ deal architect

That was the fun part.  After all, it’s Sunday.  Now read the story here:

• News Analysis: SAP’s CEO Léo Apotheker Resigns
• SAP: Apotheker gone, co-CEO’s appointed

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(Cross-posted @ CloudAve)

(Source: Michael Krigsman http://blogs.zdnet.com/projectfailures/)

Rumors began circulating early this weekend that Léo Apotehker’s contract would not be renewed.  The highest level sources had confirmed this early in the morning and the afternoon press release provided confirmation of the details.  A few key facts:

• SAP moves back to Co-CEO management structure. Bill McDermott, head of field organization and Jim Hagemann Snabe, head of product development become Co-CEO’s. Point of View (POV): For undisclosed reasons, Leo’s contract was not renewed. Both Bill and Jim have extensive experience at SAP and have been hard at work revitalizing the organization from both the sales and product sides.  Many observers may be surprised not to see former Business Objects CEO John Schwarz in the running.
  
  
• Executive Board elevates role of products and technology. Vishal Sika, chief technology officer (CTO) now appointed to the SAP Executive Board. POV: Vishal has the trust and ear of Hasso Platner and Jim Snabe.  The net result may be more unified road maps, better prioritization of R&D assets, and less issues with product development.

The Bottom Line – Timing Is Everything, But SAP’s Inflection Point Is Good News For Customers

Though a seasoned executive with over 20 years with SAP, Leo was in the wrong time wrong place.  He was responsible for doing a bang up job in sales when Henning Kagermann (i.e. the former CEO) was around.   In fact, he made Henning look good despite the difficulties in launching mySAP ERP 2007, SAP ByD, and a host of other failed projects.  Unfortunately, he entered a down market while in charge of a sinking ship.  Low morale among the Walldorf engineering team, the issue with Enterprise Support and maintenance, and uncontrollable poor quarterly performance proved to be factors beyond his control.  Customers over the past 2 to 3 years began to wonder how to tap SAP’s innovation.  A clear need emerged for having more technologists at the helm.

Putting McDermott as Co-CEO makes sense.  He is an excellent sales guys but the issues is not sales.  It’s products.  Snabe and Vishal will need strong product vision to right SAP and point it in a forward direction.   Engineering and products need more attention to bring out trapped innovation at SAP.

Your POV

Are you an SAP customer?   How do you feel about the transition?  Would you like to learn more about:

• Building a next gen SAP roadmap?
• Improving your SAP apps strategy?
• Augmenting SAP with SaaS?
• Putting third party maintenance and optimization to work?

Please post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Related Links And Resources

Here’s a list of resources.  They will be added on an ongoing basis and updated as appropriate.

Official SAP Press Release

• 20100208 Wall Street Journal – Vanessa Furhmans ” SAP Chief Quits; Co-CEOs step in”
• 20100208 Associated Press – Matt Moore “Shares slip on CEO’s ouster; questions”
• 20100208 Computerworld UK – Elizabeth Heichler and Mike Simons “SAP CEO Leaves”
• 20100208 LeMag IT – Reynald Fléchaux “SAP : Apotheker évincé, Plattner place la jeune garde sous surveillance”
• 20100208 Wall Street Journal: All things digital – John Paczkowski “SAP Board to CEO: Auf Wiedersehen, Sweetheart”
• 20100208 IDG News Service -  Joab Jackson and Chris Kanaracus “SAP Hits Reset Button With CEO Change”
• 20100208 ComputerWeekly – Warwick Ashford “SAP moves to restore customer and employee trust”
• 20100208 Information Age – Pete Swabey “SAP CEO Steps Down”
• 20100207 Wall Street Journal – Archibald Preuschat “SAP Returns to Co-Ceo Leadership, Apotheker resigns”
• 20100207 Information Week – Doug Henschen “SAP CEO Apotheker Resigns; Co-CEO’s Named”
• 20100207 Managing Automation – David Brossell “SAP CEO Resigns Suddenly”
• 20100207 ZDNet Irregular Enterprise – Dennis Howlett “SAP: Apotheker gone, Co-CEO’s in place”

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

(Cross posted from A Software Insider’s Point of View)

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After we heard from Gurbaksh Chahal, the rest of DemoCamp proceeded as usual. We were in the Ted Rogers School of Management, part of Ryerson University, in a really great lecture hall space that seats a few hundred people; it seemed like most of the seats were filled that night.

First up was Albert Lai of Kontagent. Albert demoed at the first DemoCamp and has appeared at at least one other. He seems to get a bit of a pass from the organizers: this time, as with the last time that I saw him, he had no actual demo – which is typically a requirement – but a lot of slides talking about social games.

After that, it was mostly Facebook night at DemoCamp: four of the five demos that followed were Facebook applications.

Next up was Mark Zohar of Scenecaster, showing the My 3D Cards application on Facebook. It uses the 3D foundation that they’ve built for enterprise projects, and used it to to take Facebook content and other rich content (video, photos, external links) to create a 3D rich media greeting card, displayed in a 3D application running in the browser using a custom Flash viewer. The idea was to show an immersive, engaging presentation of content for a specific purpose. The second app that he showed was Causes, which creates 3D content posted to your Facebook wall related to charitable causes. For causes such as Red Cross and WWF, it shows an “I donated” card with your picture, links to video about the cause, and a link to the donation site. They’re also working on an app for virtual gifts, using animated 3D, supporting multimedia and user-triggered animation; in the future, they’ll be looking at branded virtual gifts, too. In addition to their own apps, they’re syndicating their apps to other developers for other vertical applications; the first of these being developed is a 3D yearbook. These will be premium offerings, directly monetized within Facebook. They have a team of 5-6 dedicated people, using AWS, EC2 and S3 cloud-based content, composited at the client.

The demo that gave me this post’s title was by Greg Thomson of Tall Tree Games, showing their Fish World Facebook app: you can buy, raise and feed fish in a tank. (The friend I was there with turned to me and said “hey, my son plays with that!”) The focus of the demo was on monetization, a key subject for Facebook app developers: in this case, tanks are monetized through a variety of purchases, including fish, themes (including seasonal and holiday themes), plants, music and food. It uses two currencies: Facebook internal “coins” and fishbucks, which are actual purchased currency, at 5 fishbucks per $1. They find that they need to release new content a couple of times per week in order to maximize consumption; this is often done by creating a need (e.g., tank gathers algae, friends can steal fish), then selling a solution (e.g., algae-eater, security fish). They’re using analytics for targeting specific audiences, and in spite of my friend’s comment about how her son (who is under 10) plays with this, Thomson said that their primary demographic (75%) is women 20-35 years old. Huh?

Greg Balajewicz of Realm of Empires was up next, showing their massively multiplayer online strategy game on Facebook: you start with a village, build it up, recruit troops and so on. Everyone in the game is an actual person, with the game ongoing 24×7, and you can collaborate with others to plan battles and other campaigns. They have about 80k monthly active people in the game, 20k active daily, and although the game is free, they monetize with premium features that save you time in the game (e.g., a larger map view), but don’t explicitly advance your position in the game. They also have a standalone app, currently not monetized although they might offer a premium feature like this within the game, that allows any player to get a world view of all villages. They’ve done this with a small team and the three founders, with most people working remotely from each other and communicating using Skype. The game is targeted at men aged 25+; it can be played effectively in as little as 15 minutes per day. About 60% of their current players are in the US, 30% in other western countries, and a significant southeast Asia population at 7%.

Oz Solomon of Social Gaming Studios showed us their two seasonal apps: My Year in Status, and My Year in Photos. My Year in Status allows you to capture your year through your status: select a style, add a caption, and it generates a (text) collage of your status updates from 2009; you can customize and publish it to your news feed. My Year in Photos picks 16 photos from your 2009  photos (you can choose others if desired), then generates a photo collage for your news feed and photo album. Unlike the other apps, which are looking for steadier, constant growth, the seasonal apps had to spring into action for only a short period over the year end. They had 11M people use the app in a three-week period, with over 45 collages generated every second; it was the 3rd fastest-growing Facebook app for the week of Dec 21st after being covered by the mainstream media. About 80% of the users are women. They started work on the app on November 13th, launched it four weeks later, then had to do three server upgrades in a week to keep it up and running: they are using their own dedicated servers rather than cloud infrastructure. They found that seasonal apps are good for capturing viral streaks, but it’s best to build them on frameworks and code that you’ve developed for stable apps (such as their existing Status Shuffle app) in order to allow for fast development. Also, you can typically reuse these apps the following year, with some minimal-cost tweaking to keep them fresh. One interesting thing that he pointed out is that for the My Year in Status app, they fixed their #1 complaint, which was the lack of ability to choose which statuses were used, and found that although it reduced complaints by 80%, it only increased conversion rates by 2%: keep in mind that your most vocal detractors may not be that important to your bottom line.

Last up was Roy Pereira of ShinyAds.com, with the only non-Facebook app of the night. ShinyAds is a self-service advertising platform for web publishers that passes through more of the ad revenue to the publisher than other ad platforms such as Google AdSense. It’s not an ad network, but a tool for the web publishers to interact directly with advertisers. Advertisers can create their own advertising banner using a wizard-like interface: add or create a banner image, set the ad budget, set the click-through destination URL, set start and end dates, and target by geography. Once the ad is approved by the publisher, it’s inserted into the publisher’s ad server, or can use the ShinyAds ad server. Payments are made automatically to the publisher based on actual metrics, with the publisher interface includes a view of metrics and analytics.

All in all, a great DemoCamp, and the venue was excellent. I had stopped attending after a few disastrous nights in too-small venues (usually pubs) with crappy AV and wifi, but this has me back as a convert.

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(Cross-posted @ Column 2)

Are SaaS products starting to hurt On-Premise vendor revenues?

Thursday, NetSuite announced its fourth quarter earnings. In recent weeks, we’ve seen Oracle and SAP do likewise. What we all should be watching are:

- signs that traditional on-premise ERP revenues are softening or declining
- signs that SaaS (software as a service) ERP providers are gaining
- customer defections from on-premise to SaaS

Here’s what I’ve observed.

- Three things caught my attention re: NetSuite. First, total revenue for the year and for Q4 were up. Annual revenue was up 9% (approx. $167 million) and Q4 revenues were at a record $43 million. Second, the company posted increased sales in spite of the downward sales trend of some on-premise vendors. Third, they announced that RedBuilt, a SAP R/3 user, has dropped SAP to run on NetSuite’s application software.

- SAP’s 2009 numbers are interesting, to say the least. Software revenues are down 27% year over year. These are down about 1 billion Euros. Support revenue, the largest source of SAP revenue, is up about 11% (or approx. 500 million Euros). Subscription revenues, the kind one gets from SaaS or leased applications were also up but on small base. These were up 16% (approx. 48 million Euros). See slide seven of this SAP earnings presentation for more.

- Oracle’s numbers fall somewhere in between. Oracle breaks out new sales from in-fill sales. The former revenue numbers are down while the latter are up (see graphic below – data provided by Oracle).

On-premise vendors may see some growth in sales but shouldn’t we ask why? SAP admits that sales of Business Object products are doing very well today. Oracle’s in-fill sales are doing alright, too. Does this mean that real revenue growth is coming from cross-selling acquired products or that existing customers only need a couple of add-on products?

The affect of acquisitions is something that makes ERP market forecasts tough. Oracle, SAP and even NetSuite have made acquisitions. Oracle is far and away the leader in the sheer number of deals done (e.g., Sun MicroSystems, Hyperion, IRI, Datalogix, PeopleSoft and many more). SAP has made fewer, usually smaller, deals. NetSuite has acquired both OpenAir and QuickArrow.

Real growth of the core ERP applications (e.g., Accounting, HR) does appear to be in decline for the on-premise vendors and replacement SaaS revenues in these firms do not appear to be making up the slack. Yes, SAP saw new product sales increase in its last quarter but maybe all of the prior sales declines may not be solely the fault of the economy.

In research I’ve been doing the last few weeks, I’ve spoken with CIOs and key executives at many large firms. These people are buying SaaS applications from firms like Workday and Salesforce.com . They’re not buying on-premise products. One executive told me how he even had a license for an on-premise application from SAP but Workday’s SaaS application had a far less expensive five-year TCO. SaaS vendors need more complete offerings to really hurt the on-premise providers but they are using their platform technologies to create all new apps quite quickly.

This market appears to be moving and we’ll need to watch more earnings results and sales announcements to see the trends unfold.

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Read the complete article @ Software & Services Safari

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Read the complete post @ deal architect

I read the Financial Times most days. Over the last 18 months or so the news has been mostly bad, so I have to say today’s tech digest made for very pleasant reading. You don’t need a sophisticated sentiment analysis engine to see a trend here….

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(Cross-posted @ James Governor's Monkchips)

With its latest quarterly earnings announcement from last week, Ariba appears to be on a roll. While I plan to examine some of the details from the call and the earnings report in more detail next week along with the yearly and quarterly performance of other providers (the Capgemini/IBX news from this week took priority on Spend Matters), I thought I’d put on my contrarian hat this Friday and offer up a few thoughts on what could still hold Ariba back from building additional momentum. Now, don’t get me wrong; Ariba put on a good show with its numbers, and much of the trending was headed in the right direction. But any time I see the general market latch on to a binary (i.e., good/bad) view of a provider, I feel it’s worth taking the subject off the pedestal and offering a more balanced viewpoint. So just as I defended Ariba’s strengths when its earnings reports and forecasts did not delight investors, I’ll offer for consideration a few points on areas in which Ariba still needs to focus to take its performance to the next level.

First, Ariba still needs to fully nail the SaaS P2P integration story for larger customers with complex, heterogeneous environments. If Ariba won’t eventually punt all of its P2P business in in the $7.5+ billion customer range to Oracle and SAP, it’s got to nail enterprise SaaS, including, most important, complicated systems and process integration. CD upgrades for legacy customers are a good interim step, but there will be no reason for large customers to stay on Ariba P2P relative to SAP and Oracle if Ariba doesn’t develop a proven core competence and market reputation around enterprise SaaS. The network and associated services may prove essential as part of the value proposition for enterprise SaaS — especially since Ariba has been largely unsuccessfully at selling its network and connectivity services into ERP P2P environments — but the most critical element for this will clearly stem from integration and configuration proof points that companies can run a large, highly complicated, global purchasing environment with an even nastier looking back-end in a SaaS model.

Second, Ariba’s pricing needs to remain as competitive as it has been over the past twelve months (and especially the past few quarters)…

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Read the complete article @ SpendMatters

Phil Pavitt, CIO for Her Majesty’s Revenue and Customs (HMRC), the UK tax department, recently spoke out against huge IT projects. Some of his comments are extraordinary.

Pavitt had choice words to describe the UK tax authority’s £9.75bn ($15.3 billion) ASPIRE project being run by Capgemini. Here are his comments, as reported in Silicon.com:

There have been cases of HMRC’s internal IT team taking on work that should have been carried out by the outsourcer, resulting in the department “paying twice” to get the job done, the HMRC CIO said.

“We have a complication where the role of who does what after a number of years of being outsourced is complex and it does blur,” Pavitt told the GovNet Government IT 2010 conference last week.

“It’s time as an industry, and with my partners it is time as an outsourcer, that we began to reduce dramatically those programmes to sizes that can be understood, swallowed and delivered,” he added.

Pavitt subscribes to the belief that no IT outsourcing contract should be larger than £100m.

“£100m is never £100m – in an £100m programme people forget why they started and the people responsible at the outset are rarely there at the end,” he said.

Pavitt goes on to describe the bizarre incentives that push toward higher, and likely wasteful, IT spending (emphasis added):

However, cost-cutting does not always bring rewards for a CIO: according to Pavitt, Whitehall doctrine specifies it is the IT chiefs who spend the most in Westminster that set IT policy for the whole of government.

“In my first few weeks of the job I was visited by leading members of the Cabinet Office,” he said.

“In that conversation with me they mentioned I am in the top purchasing club… That means you have tremendous influence on buying power, buying ideas and management and so on.

“I said ‘If I reduce costs by 50 per cent what happens?’, ‘Well, you leave the club,’ I was told.

“So here I am relieved of my ability to influence government’s ability to purchase if I am clever and do my job. It’s one of the most perverse things that I’ve heard.

“We don’t have a ‘demonstrable reduction of cost club’, we have a ’sheer size of spend club’. Surely this is the wrong way round.

When Redmonk analyst, James Governor, alerted me to this story, he said, “I think you’ll find your post for today just wrote itself.” Well, James was right.

What do you think about huge projects and the impact on IT services?

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(Cross-posted @ IT Project Failures)

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Read the complete article @ Dion Hinchcliffe's Next-Generation Enterprises

Great post by one of my favorite economists, Uwe Reinhardt, in the New York Times’ Economix blog:

They would be stunned not only by the sheer length of the invoice and the total amount billed, but also because so many line items would be expressed in either Latin or Greek and thus be completely incomprehensible to most parents. Upon requesting a fee schedule from the dean of the college, the latter would patiently explain that different prices had been negotiated with different parents and that all of those fees are proprietary information.

Read the whole thing. So true.

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(Cross-posted @ The 40-Year-Old Freshman)

I’m an IT guy. I love my (Mac) computer. Most other IT people I know love their computers too, be they Mac, Windows or *nix based. Of course you would when you are typically working on them 8+ hours per day.

We take pride in our computers – how fast they are, the latest software/widget we installed, etc.

One boast I hear regularly, is how long it is since their last re-start. This can be a measure of just how stable the operating system is – if it hasn’t crashed or needed a re-start in weeks/months then it must be really stable! This is an way-of-thinking which needs to change, quickly.

The problem with this, of course, is that it means people are not shutting down their computers and are therefore needlessly consuming electricity (using more energy and emitting more CO2).

Power strip with switch

Modern browsers remember all the windows/tabs you have open when you quit them so there can be no reason for not shutting down your computer every evening.

Shutting down, mind you, not simply putting it to sleep.

And not just the computer either, the monitor (if you have an external one), the printer, external drive, etc. – all the peripherals.

Having all your devices plugged into a power strip with a switch allows the power to be cut to all of them in one easy go.

The badge of pride now should be how long it has been since you left the computer on overnight – obviously longer = better!

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(Cross-posted @ GreenMonk: the blog)

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