In The Business of Technology

Davos 2012 Highlights

2012-02-01T15:35:00.000-08:00

In keeping with the tradition of opening blog posts of the year with reports from Davos, listing highlights from Davos 2012...

Digital Norms

The digital age brings transparency but also increasing threats to confidentiality.
Greater and more coherent regulation is needed, but there is a vacuum of regulatory bodies.
Corporations seeking to enter the Chinese market may be required to compromise their privacy values.

Growth and Employment Models

The development of a human capital index can help close the gap between the skills that are available and what business requires.
Education is the key piece in growth and employment.
Entrepreneurship should be actively encouraged.
Governments should rethink policies that impede the global mobility of talent.
Social protection and collective bargaining rights promote growth.

Leadership and Innovation Models

Accelerated communications and public demand for immediate information complicate the tasks of modern leaders.
The new brand of leader needs to respond both to his/her domestic constituency and to a global one as well.
Trust is the key issue and establishing trust depends on integrity, openness and commitment.
Social change is being driven by technology, and while leaders might not understand all aspects, success depends on picking subordinates who do.

Social and Technological Models

New technologies offer many benefits, but also raise serious social, political, legal and ethical issues.
Developments in brain science promise help for people suffering from Parkinson’s Disease, depression and other disorders.
People can now customize technology to meet their individual needs and desires.
The gap between scientific and technological progress and the understanding of the general public is growing. New media can provide platforms for education, discussion and debate on the issues raised by advances in science and technology.

The Future Enterprise Model

If managers want to influence behaviour, they should start by building a favourable working environment.
Three new major elements have emerged in the operating environments of enterprises in the last decade: greater demands from stakeholders, greater connectivity and faster change.
Old management values remain important but must be re-emphasized.
Decisions can often be implemented provisionally and tweaked along the way.

Sustainability and Resource Models

Modelling and future analyses have the potential to help governments understand complexity.
Technology is making possible the production of biofuels and polymers by various bacteria.
China can be looked to as a role model in the energy sector.
Food security is interlinked with other sectors: land, energy and water; managing this nexus is critical.
Moving forward to meet today’s challenges – and seizing the opportunities presented by new technologies – will require political leadership.

Innovation Ecosystems 2.0

The focus of innovation is moving from the enterprise to national and transnational levels.
Some 50 countries have national innovation agencies and chief innovation officers responsible for driving innovation strategies.
Innovation is more than a process; it is an ecosystem with multiple stakeholders.
The global agenda on innovation needs to address global challenges.

Shaping New Models with Technology Pioneers

Advances in educational technology will rapidly quadruple the number of people with access to full-time learning, causing a new revolution in education.
The ability to monitor and analyse a body’s biomarkers using advanced molecular techniques will lead to a fundamental change in how we discover, approve and pay for drugs.
The Internet was built to have a maximum of 3 billion devices connected to it. Capacity is running out and security is not robust.

Source - World Economic Forum

New Book - out now on Amazon

2011-12-20T14:41:00.000-08:00

Latest publication by BCS features couple of my articles. The title of the book is “Management Skills in IT” and it is now available onAmazon.

Enterprise Frameworks: In Perfect Harmony Together…

2011-12-14T15:48:00.001-08:00

If you are not a practicing Enterprise Architect, words such as COBIT, TOGAF, ITIL and ZACHMAN will either mean nothing to you or will more often than not confuse you. Most IT professionals will relate these terms with concepts such as architecture framework, technology framework, standards, modelling, analysis etc. which may or may not correct depending on referring context. However, thanks to greater awareness of Enterprise Architecture in the last decade or so, it should still be easy for keen Enterprise Architecture enthusiast to find out more about the above and other similar Enterprise Frameworks. Most of above listed frameworks are available free to download for limited-time review or even free to practice if you are undertaking non-commercial internal enterprise purposes (see useful links and references below). The real question however which seldom gets asked it how do these frameworks relate with each other, if at all? How can they interact and collaborate with each other? What are considerations of such engagement across frameworks? And more importantly is it worth it from business value and relevance perspective? Such questions would ideally demand a decent whitepaper which analyses such interactions. Given time constraints however, I am trying to present my thoughts in this blog post as an executive summary.

Before discussing a few frameworks and their potential linkage with each other, I would like to present business and IT context of such interaction. Based on my practical experience, I would propose a simple map as presented in below figure. Business goals and objectives demand strategic IT response in terms of strategic and tactical IT programs, investments and activities. They need to be governed to ensure compliance of deliverables with the business objectives. Strategy needs planning and architecture disciplines to ensure that strategic intents are given shape of tangible constructs. This is where enterprise architects convert abstract into specific plans and architectures. This is where artefacts such as business architecture, application architecture, infrastructure architecture get conceived. Such plans and architectures need to be further developed in detailed designs, transition plans and activities. More importantly, resultant IT systems and solutions are required to be operational ready and feasible. I am aware that this presents an overly simplistic picture of often much complex and complicated technology implementation reality. But the purpose here is to give a broad and high-level overview of chain of actions which need to take place in the journey of business goals to business processes, applications, solutions to their eventual technology implementations and operations.

Why and Where do Framework Matter?

Going back to set of initial questions which I raised in this post earlier, let us now tray and map a few leading frameworks to the above outlined concept and journey. I have picked up three leading frameworks for this purpose; COBIT, TOGAF and ITIL. COBIT framework in this map provides the overarching Strategy and Governance mechanism. It takes business goals and governance drivers as inputs and then provides a seamless mechanism to link IT Resources with planning, implementation, delivery and monitoring of delivered systems. I would like to propose that, COBIT however needs a more thorough framework such as TOGAF to further elaborate and develop the Planning and Architecture activities in the journey. TOGAF ADM provides a very good and comprehensive process discipline to take requirements through various steps such as vision, architecture, solution definition, planning and change management. At this point however, I would like to suggest that, to take the architecture to the next level of detailed design and transition planning, a framework such as ITIL will be extremely useful. ITIL takes a service view of the world in definition of systems and not a mere technology view. ITIL practitioners will put operability ahead of technology or architecture purity, and rightfully so. ITIL sees through the design through transition and operations of the service.

COBIT TOGAF and ITIL in Prefect Harmony

I have to clarify that, above is simply one way of arranging these very useful frameworks to work with each other. It can be argued that, TOGAF in certain instances can provide overarching umbrella for such journey from requirements to delivery. Or indeed ITIL on it’s own can be adequate to see the system design through to implementation. There is no right or wrong with Enterprise Architecture and that is the strength and weakness of the practice I would like to argue. The purpose of this post as I stated earlier was simply to showcase benefits and effectiveness of such Enterprise Frameworks work together in perfect harmony!

Now to the real question....what is the business benefit of this? Is it worth the investment and hassle? The answer is that it depends....depends on the business context. It may be worth the more complicated, complex and distributed your business requirements and resultant technology response. It may be an overkill if your requirements and responsive systems are not so complicated. In the long run however, Enterprise Architecture is about entire business and technology estate and not just one program or project and hence often you will find that medium to large size organisations will use more than one framework. In most cases, such framework do not interact well...and this is where my draft proposal above may be useful.

References and relevant links for further reading..

TOGAF – The Open Group Architecture Framework
ITIL – Information Technology Information Library
COBIT – Control Objectives for Information and related Technology
ZACHMAN – named after inventor John Zachman

Multi-Channel Retailing Takes a new Meaning with Retail Apps

2011-11-20T15:24:00.000-08:00

Retail Reference Architecture, it's evolution and real-life pragmatic implementations happens to be one of my key interest area. So far on this blog I have discussed the concept of Retail Reference Architecture, proposed a concise yet complete Simplified Retail Reference Architecture and also shared some of the innovations from real-life implementations of Retailers such as ASOS. As a matter of fact I do follow fortunes of ASOS with great interest. To me this is a bold, new take on the science of retailing (...some might call is an Art of Retailing) which combines best practices from innovator's such as Amazon.com and presents a unique and deceptively simple business model. This post shares some of my further observations about ASOS and more importantly how they continue to lead the innovative use of Information Technology in the retail space.

Since summer ASOS has launched its App for the Apple range of mobile devices. The new service has been designed for iPhone, iPad and iPod Touch users, and along with the function to ‘save for later’ any item of interest sold by the trader, the app also includes a locator for local drop-off points for customers looking to return unwanted purchases.
Free to download, the new app lets you browse and shop directly from fashion editorials, very similar to Net-à-Porter's. The app comes with trend reports and also contains content originally produced for the online version of the Asos magazine as well as exclusive footage and features such as video and 360-degree views of clothing items. The iPad app is available for free from the App Store since August this year with both Android and iPhone versions scheduled to launch by the close of 2011.

As the App design James Davie says, "this App design provided a series of new challenges. Most importantly striking the perfect balance between giving the user the familiar ASOS shopping experience, and the equally familiar iPad navigation experience. The final result is a balance of both which should give the user a quick, painless and enjoyable shopping experience." Having personally used this App now I can confirm that this is one of the best fashion retailing App available out there with intuitive navigation, fresh content, catalogue, bold designs and just tons of "coolness"! Above the cosmetics, what stands out for me is the fact that, customer accounts are totally synchronised across all of the retailer’s platforms so whether they are using the new apps, the standard website or the mobile site all of their details will remain consistent.

This App and iPad appear to be made for each other and not just a lift-off from ecommerce site made to fit with iPad format. Just to clarify I am not a regular ASOS shopper but as a keen Retail Technology practitioner and follower...this company and it's innovation are worth watching!

25 Top Companies for Leaders - Is your Company Managing Talent Well?

2011-11-04T03:13:00.000-07:00

Just came across a great piece of research on the topic of "How Great Companies Groom Talent". This is a Fortune Magazine article which states that, " IBM (No. 1) sends leadership SWAT teams around the world. Hindustan Unilever (No. 6) ships young executives out to live in Indian villages so that they can understand the needs of impoverished rural consumers. At farming equipment manufacturer Deere (No. 14), rising managers receive coaching from distinguished board members like Gen. Richard B. Myers, the former chairman of the Joint Chiefs of Staff who coordinated the U.S. military response to the 9/11 attacks. And at consulting giant McKinsey (No. 17), junior consultants are showered with attention from senior partners, whose performance evaluations depend in part on their mentoring skills."

IBM is recognised as a top talent manager

Another related article ranks such 25 top companies

1) IBM,
2) General Mills,
3) Procter & Gamble,
4) Aditya Birla,
5) Colgate-Palmolive,
6) Hindustan Unilever,
7) ICICI Bank,
8) McDonalds,
9) Whirlpool,
10) Pepsico

At this moment in time there are a number of companies either going through transition or planning transformation, these thoughts are very useful. It is your people and teams who make you successful. A great product or Service is essential but people behind it makes is work for the business. Wish and hope organisations get this priority right in the transition process.

Gartner: Top 10 Strategic Technologies for 2012

2011-10-21T15:53:00.001-07:00

Gartner recently published the top 10 technologies and trends that will be strategic for most organizations in 2012. Gartner defines a strategic technology as one with the potential for significant impact on the enterprise in the next three years. It may be an existing technology that has matured and/or become suitable for a wider range of uses. It may also be an emerging technology that offers an opportunity for strategic business advantage for early adopters or with potential for significant market disruption in the next five years. These technologies impact the organization's long-term plans, programs and initiatives. They are as following;

Media Tablets and Beyond. Users can choose between various form factors when it comes to mobile computing. No single platform, form factor or technology will dominate and companies should expect to manage a diverse environment with two to four intelligent clients through 2015.

Mobile-Centric Applications and Interfaces. The user interface (IU) paradigm in place for more than 20 years is changing. UIs with windows, icons, menus, and pointers will be replaced by mobile-centric interfaces emphasizing touch, gesture, search, voice and video.

Contextual and Social User Experience. Context-aware computing uses information about an end-user or objects environment, activities, connections and preferences to improve the quality of interaction with that end-user or object.

Internet of Things. The Internet of Things (IoT) is a concept that describes how the Internet will expand as sensors and intelligence are added to physical items such as consumer devices or physical assets and these objects are connected to the Internet.

App Stores and Marketplaces. Application stores by Apple and Android provide marketplaces where hundreds of thousands of applications are available to mobile users. Gartner forecasts that by 2014, there will be more than 70 billion mobile application downloads from app stores every year.

Next-Generation Analytics. Analytics is growing along three key dimensions:

From traditional offline analytics to in-line embedded analytics.
From analyzing historical data to explain what happened to analyzing historical and real-time data from multiple systems to simulate and predict the future.
from structured and simple data analyzed by individuals to analysis of complex information of many types (text, video, etc…) from many systems

Big Data. The size, complexity of formats and speed of delivery exceeds the capabilities of traditional data management technologies; it requires the use of new or exotic technologies simply to manage the volume alone.

In-Memory Computing. Gartner sees huge use of flash memory in consumer devices, entertainment equipment and other embedded IT systems. In addition, it offers a new layer of the memory hierarchy in servers that has key advantages — space, heat, performance and ruggedness among them.

Extreme Low-Energy Servers. The adoption of low-energy servers potentially delivering 30 times or more processors in a particular server unit with lower power consumption vs. current server approaches.

Cloud Computing. Cloud is a disruptive force and has the potential for broad long-term impact in most industries. While the market remains in its early stages in 2011 and 2012, it will see the full range of large enterprise providers fully engaged in delivering a range of offerings to build cloud environments and deliver cloud services.

“These top 10 technologies will be strategic for most organizations, and IT leaders should use this list in their strategic planning process by reviewing the technologies and how they fit into their expected needs,” said David Cearley, vice president and Gartner fellow.

The complete related Gartner press release can be accessed here.

6 out of Top 10 Global Brands are IT Companies……is IT COOL Again?

2011-10-07T14:34:00.001-07:00

Is Information Technology a COOL Industry to be in? Has “IT” - the silent back-office contributor to the business success finally found it’s rightful place in the Industrial Hierarchy? Well don’t know about that but for consecutive years now a select few IT companies are dominating Top 100 table of Global Brands. In fact according to Interbrand in 2011, 6 out of the top 10 Global Brands are Information Technology companies, up from 5 out of 10 in 2010.

Interbrand should know a thing or two about branding since they are the world’s largest brand consultancy. Here is the top 10 Global Brand table along with Interbrand estimated value of each brand.

#	Brand	Value ($B)	Comment
1		71.86	Not an IT company but we love it anyway!
2		69.90	The Big Blue is truly alive and well. The grand old guardian of IT industry has cemented it’s position as the leader by virtue of innovation, R&D, focus on business software.
3		59.08	Surprised to see MS on number three? Well you should not be MS Office, Windows, Explorer still hold near monopoly position in PC market.
4		55.31	Need we say more? Search, Android, Apps, Phone, Business software, Ecommerce, News…Expect to give IBM run for money in future rankings.
5		42.80	Not an IT company but a true pioneer in industrialising science and technology in many ways. Well-deserved position.
6		35.59	Not an IT company but part of staple for our teams for many decades past and I am sure future decades to come.
7		35.21	Another true pioneer of the PC era, well-deserved position no doubt. However need to innovate and fast to catch tablet and smarphone bandwagon.
8		33.49	Innovator’s Innovator. Jumped from 17th position in 2010 to 8th in 2011. Mac, iPod, iPad, iPhone – changed our world, our media and content consumption patterns and re-shaped entire ecosystem. The Ultimate Cool!
9		29.01	Catch them young….and in what a beautiful way! We love this brand and from early years if I may add…
10		28.47	Let recent upheavals not fool you….along with IBM a true cornerstone for the IT industry for many decades. Does need a new identity in fast evolving industry though to make top 10 in next years.

The New CIO Leader's Top Priorities

2011-09-20T15:53:00.000-07:00

“The New CIO Leader: setting the agenda and delivering results” (Harvard Business Press, 2005) by Marianne Broadbent (Associate Dean, Melbourne Business School & Gartner Fellow) and Ellen Kitzis (Group Vice President, Gartner Executive Programs) remains one of my favourite modern IT management books. This was one of the early books to challenge conventional IT management wisdom and proposes principles, maxim and rules of modern CIO engagement with business.

Ever a ready reference in my library, I was browsing through this over the weekend and could not resist listing “Ten New Priorities for the new CIO Leader”, here in my blog. Hopefully serves the purpose of ready reference for people in my network and my blog readers.

Lead, don’t just manage – Leadership and management are not the same; they are complementary. A modern CIO needs to both manage and lead with personal vision and a point of view about how information and IT can make your enterprise more effective.

Understand the fundamentals of your environment – The new CIO leader knows the industry and competitive environment.

Create a vision for how IT will build your organisation’s success – Ability to envision how to better IT-enable the business.

Shape and inform expectations for an IT-enabled enterprise – Heart of the modern CIO role; work closely with business colleagues to identify key business needs, strategies, and drivers then articulate the IT guidelines.

Create clear and appropriate IT governance – Effective governance enables the modern CIO to weave together business and IT strategies.

Weave business and IT strategy together – IT strategy means developing and actively managing IT portfolio to deliver success as measured by business colleagues.

Build a new IS organisation, one that is leaner and more focussed than its more traditional predecessor.

Develop and nurture a high-performing team in your IS organisation - Know the competencies required for the new IS organisation, one that relies much more on internal and external relationships and to recruit and train for effectiveness.

Manage the new enterprise and IT risks – A modern CIO is expected to proactively address and lead efforts to tackle ever-evolving threats such as cyber-terrorism, data privacy, and information security

Communicate IS performance in business-relevant language – The new CIO leader must know and communicate how IT is contributing to shareholder value and the IT value indicators that are directly linked to business value measures.

I will certainly recommend securing a copy and reading through chapters relevant to your area of priority, focus, responsibility or interest in strategic IT management. You won’t be disappointed unlike some other similar work.

Yes, your Organisation will need a CIO by 2020… but with a different set of Capabilities and Competencies

2011-09-11T15:24:00.001-07:00

A few days back I posted an article on my blog with a title of “Will your organisation need a CIO by 2020?”. The title was meant to be provocative and the subject matter explored top 5 disruptive themes which today’s CIO practice are facing. As many of the forums and individual reviewers have since then remarked, the real question which needs to be explored is how will the role of CIO evolve? This post summarises the approaches and options for such an evolution.

Over a period of next few years should the role of CIO evolve to become a “CPO” or even a “CPPO”? (ref. John Clarke). The purpose of technology and information is to enhance the People in the Organisation, and there respective Productivity. So CIO may be less 'I' and more 'P' Productivity and People. IT will continue to play a key role in organisations. What will change, is the way that IT is packaged, used and managed. While the roles (and titles) may change, organisations will continue to need highly trained, experienced and competent professionals to plan and execute their technology mandates. These changes will also drive firms to think more on how to use IT in their business and less about how to develop and maintain it. This will mean a rethinking of core competencies for some companies - both the service users and providers. (ref. Ryan Jones)

There seems to be a myth that, CIO role is about technology rather than information, confusing, as so many do, the respective roles of CIO and CTO. The CIO role is about information, not technology. Information is not going to go out of fashion, nor is valuable information going to be commoditised. In many cases the CIO role has devolved to technology management from its true purpose of Information, in part due to aspirational IT managers and CTOs who think that being a CIO is about managing IT, instead of performing their corporate duty of supporting strategy through information (ref. Steve Burrows).

The CIO role will remain crucial, and remain at board level if his/her brief is to maximise the amount of knowledge available to the business at the right place, distilled from the "income of information" the company is generating. This knowledge is in effect part of the company's balance sheet. The CTO is less likely to be a board member and may be superfluous in situations where the IT provided by outsourced services. If so then the CIO is effectively the solution architect. (ref. Stephen Clothier)

However there still remains a strong school of thought which proposed that, the CIO role will not evolve; it will revert to simpler times and will eventually disappear. CIOs such as Jem Eskenazi argue that, SOA, web services, SaaS, the Cloud, are abstracting information management from the underlying technology. At the same time, a new generation of executive management has a much better understanding of how IT can help their companies. The convergence of these two means that soon non-IT management will be able to specify and procure IT services without the help of a C-level expert.

In conclusion then the role of CIO is intrinsically linked with the state of IT industry and even more so with the business environment which surrounds it. Technology trends may come or go but the importance of information is paramount for modern business. As Paul Coby summarised his thoughts from a recent industry event, “IT matters even more than before, because it is leveraging social and economic change much more than ever before. The role of the CIO or IT Director is to make sense of all this change and of all these possibilities. IT providers are central to businesses in new ways. Yes, of course, for Operations; yes, of course, for Selling and for Servicing; but now IT is central to the whole Customer Experience. That is new and that is the landmark change.”

Responding to my own challenges then, yes those five trends which I listed in my original post; Rise of Business Services, Maturing Cloud Computing, Business Analytics coming of Age, Popularity of Application Services and Technology Consumerisation are very much real. Yes they are disruptive to the CIO practice. But the best CIO will interpret them into an advantage position for their respective business. They will understand that Information matters Technology which drives that is probably not. In effect what would matter more is IT benefits realisation.

Would a CIO manage that process or CIO evolves to some other role such as COO or CPO or CITO may not really matter. So the definitive answer then, Yes your organisation will need a CIO by 2020 but he / she will have different set of competencies and capabilities. They may be more oriented towards an Operations function or a Market function or even Sales function. This orientation will depend on business value of IT for respective organisation. But Information Management backed up by effective and cost-efficient technology will be crucial for most modern organisations.

Image courtesy - Freedigitalphotos.net

Evolution of the CIO Role: Is Your Organisation Ready?

2011-08-23T13:11:00.000-07:00

Even as the initial feedback loop on my previous post "Will your organisation need CIO by 2020" is getting completed, I came across this very topical post by Jessica Twentyman, titled "Do CIOs need to shout louder?". She quotes a provocative piece of research from management consulting firm Oliver Wyman and the US-based National Association of Corporate Directors (NACD) suggests that their voices simply aren’t being heard in the boardroom. While almost all of the 204 company directors surveyed acknowledge that IT will have a significant impact on their company over the next five years, it appears that many boards do not have the skills or information they need to manage IT risk effectively.

This topic is linked to the question of how will the role of CIO evolve in coming years? I had written another post a few months back on CIO evolving to become a Chief Innovation Officer for instance. To refer some relevant extracts....

“Comparing the typical role of CIO (information) with that of CIO (innovation) - I do see some natural extensions of abilities which a competent CIO should possess. A good CIO should understand the language of the organisation as he / she serves a cross-section of business unit customers. Prototyping should be one of the core abilities for a CIO. And cross-delivery functions of modern IT dependent organisations should help him / her to unlock the creativity. So on the face of it a good competent and credible CIO should be easily double up as CIO (innovation).”

The tricky question to be tacked though is will an organisation allow it's CIO to branch out? For instance I had written.....“The question however is will organisations trust or want their technology functions to lead path to innovation. Or would they rather drive this from commercial, functional or marketing perspective? It can also be argued that, CIOs are already one or two steps ahead in the game of innovation given their leadership in automation, optimisation aspects. Either way the CIO (information) should play a major role in enabling and making the innovation plans successful.”

And Oliver Wyman and NACD is not the only recent study to suggest that CIOs’ skills and input are not sufficiently valued at board level. When research company Gartner recently conducted a survey with the Financial Executives Research Foundation, it found that “the chief financial officer is increasingly becoming the top technology investment decision-maker in many organizations.” The survey reports,"In 41 percent of organizations, the senior financial executives (mostly CFOs) who responded to the survey viewed themselves as being the main decision maker for IT investments. This response occurred in most situations where IT reports to the CFO, but it also occurred in other reporting models"

So even if the CIOs are ready for evolution of their role will the organisation have enough trust for them to take charge of matter beyond IT?

Image credit - digital art

Will Your Organisation Need a CIO by 2020?

2011-08-12T16:28:00.001-07:00

The title of my new blog post is provocative. Why would I ask such a question, especially after covering number of CIO surveys, trends, leading CIO thought leaders and underlining the strategic importance of IT in this very blog? I am asking this question because the IT Landscape as you and I know it, is changing and very fast. Even by IT industry standards the pace of recent developments is remarkable. The business technology is undergoing rapid evolution. And the central argument which I am presenting here is that the conventional role of CIO or CIO function as it stands today will either be ineffective, redundant or out-dated and hence not required by end of this decade. Let me explain…

There are a number of reasons and drivers for the rapid evolution of business technology. However according to me there are five major forces which are influencing this evolution. They are Business Services, Application Services, Business Analytics, Consumerisation of IT and Cloud Computing. I will try to explain them briefly

Rise of Business Services – Awareness of the fact that, “Organisations purchase technology to fulfil business needs” is growing like never before. Given economic challenges very few organisations can now justify technology investment for pure technology advantages. Your CEO, COO, CXO and CFO will be demanding “Return on Investment” (ROI) and “Value for Money” (VFM) from each technology $ invested and they will be demanding that most likely in year one. Days of five or even three year technology pay-back are certainly behind us. And this is where purchasing business services independent of large technology investment is becoming so attractive. There are a number of examples of this trend ranging from payment processing to HR processing. Google is taking business services to new dimensions.

A test question for you – If you are CEO of a mid-size organisation would you invest $5 Million in back office processing software, hardware, network, back-up, security etc.? Or would you sign up for business outcome based contract with niche business services supplier? I know your answer and mine is the same!

Maturing Cloud Computing Industry – Enough is written about benefits of Cloud Computing (including this blog) so I won’t repeat it. However it is safe to conclude that Cloud is more than hype. It is real and there is an entire industry being built around Cloud propositions by all major IT vendors as well as rising number of niche players. Cloud computing if adopted in right manner frees your organisation from capital intensive infrastructure and operations investments. The business justification will not be far different than arguments which I have listed above. Cloud computing however gives organisations added flexibility of building solutions to suit their requirements yet allows them to offload its capital and resource intensive aspects to infrastructure specialists. It can be easily argued that business services are a variant of cloud computing.

Another test question for you – You are a CFO of retail chain and you have a legacy retail management application. Your peak business transactions are expected only in the months of March, September and December but for all other months you operate at half the transactions of peak. Would you like to scale up and down the capacity and hence the cost of your retail application operations? I know your answer and mine is the same!

Business Analytics Coming of Age – A large number of small niche companies and even large companies like IBM and Oracle are investing millions of $ in developing and enhancing business analytics products and services and they are doing this for a very good reason. People like you and me (and multiply that number by millions of Indians and Chinese) are adapting to self-service shopping lifestyle. When was the last time you went into your bank branch? Or when was the last time you bought a book in a book shop? When was the last time you called your airline or visited its city booking office to purchase your airline tickets? I know your answer….we are more and more relying on smart, intuitive ecommerce sites, price comparison sites, shopping portals, kiosks, ATMs, etc. to buy everyday and occasional things of need and desire. The merchants are looking for smarter ways to know you, your preferences, your wish lists and keep your loyalty. This is true for brick and mortar businesses too by the way. And smart merchants are turning to business analytics to make more sense of their business transactions, shopping patterns, supplier dependencies, seasonality and thousands of other trends which affect their business.

Another test question for you – if you are a mid-size or small company COO running a brick and mortar plus an ecommerce portal for your business would you rely on your in-house MI experts to keep up with 1000s of changing patterns, equations, behaviours and trends? Or would you secure an external niche business analytics company to analyse tons of your business transactions, do the number crunching and present predictions for next quarter along with benchmarks? I know your answer and mine is not too different!

Popularity of Application Services – This may be very specific development but worth making a note of. You may recollect my earlier blog on ASOS and how smartly they are leveraging open access to their applications of catalogues. Apple App Store is another example of this model. These smart technology and business models are making middleware software, hardware and tools almost redundant by giving core access to application tier of your business systems. You suppliers and partners deliver direct to your application and data tier, why bother with message brokering? See my proposed revised retail reference architecture and you will know what I mean.

Let me not ask you a question but pass you my verdict on this one – No I don’t need an internal IT department to develop interface to launch my catalogue on Apple App Store. I will go to a niche small firm who will do it for me at fraction of cost to much better response times than internal development and test department.

Spread of Technology Consumerisation – Again enough is said about Apple ipad, Amazon Kindle, and Android smart-phones. The fact is if you are reading this you have either all of minimum one of them. And I know that you will prefer to carry your own ipad to work and do your office email, documents as well look for best place for Thurs after-work drinks on Google map on one of those boring conference calls. And if you organisation is not funding your smart-phone then you do not mind getting on an attractive tariff to join swelling ranks of smart mobile workers of next generation. I am not even mentioning Google Docs, Microsoft Office 365 and other similar offerings which liberate corporate IT.

You know where I am going next – If your data privacy and security concerns were addressed would you mind if your employees brought their own IT equipment to work? I would not if I am a CFO of a business which made loss of double digit last year and who do not understand why I pay three times for a desk top compared to retail cost of ipad!

To summarise my argument – given these very influential forces which are shaping the world of business technology and the fact that they are here and will be growing in their influence….and their strong commercial as well as functional advantages; how long before your conventional CIO function turns into out-dated, ineffective and irrelevant cost centre? If the trajectory of this evolution continues like this, will your organisation need a CIO by 2020? I know your answer and mine is very similar!

How Innovative Retail Architecture is Boosting Profits at ASOS

2011-07-19T16:01:00.001-07:00

Outstanding and outperforming businesses often challenge conventional industry architectures. Such organisations innovate and develop new business models on their way to above-average profits. The online fashion giant ASOS (as seen on screen) has exactly done this. In one of firsts of the industry, ASOS intends to make free global shipping a “permanent” part of its business model after international sales growth fuelled a 63 per cent jump in sales in the first quarter to £107m. International sales grew 160 per cent to £59.6m in the three months to June 30, and now make up 57 per cent of overall sales. Singapore, Russia and Australia are among the fastest-growing markets. This is impressive compared to UK high street bellwether Marks & Spencer which narrowly beat City expectations recently by declaring a 13% increase in profits in its last financial year. But ASOS business performance looks blockbuster when it is compared to other retail results. For instance the gravity of the high street downturn is spelled out in new research which shows UK retail chains have been closing stores this year at a rate of about 20 a day. The latest figures from accountancy firm PricewaterhouseCoopers show 375 retailers went bust in the second quarter of 2011, a 9% increase on the same period last year.

So what makes ASOS special? ASOS targets internet-savvy 16 to 34-year-old women looking to emulate the designer looks of celebrities such as Kate Moss, Sienna Miller and Alexa Chung, but at a fraction of the price. While many retailers have struggled against tough macro headwinds, ASOS has prospered, benefiting from a young core customer base and the migration of spending from the high street to the Internet. The firm has a Facebook store and mobile applications. "This is about the shopping experience coming to you. That could be via apps, on your mobile, on Facebook," said the CEO. "This is the next shift in terms of how we perceive shopping online. Rather than websites that you go to I think it becomes much more part of your personalised web experience." Compare and contrast this with the fact that, despite huge outlays in the past, the new Marks & Spencer boss is to spend an extra £600m on its UK chain.

But the unsung hero behind ASOS flight according to me is the innovation which ASOS IT department is bringing to the business. ASOS has crashed the conventional retail reference architecture and brought innovation leveraging the technology advances such as Cloud Computing, Social Media and Consumer Devices. For instance ASOS is assessing how Microsoft's Azure cloud service could be used to expose mobile data application programming interfaces, which would enable it to extend its reach through mash-ups. Daniel West, IT director, ASOS, has established an IT strategy to build for the cloud first, rather than on-premise. "We look at the cloud first and build if nothing is available." Daniel West said: "My technology design is to support our international growth. So we need to look at delivery through the cloud."

Innovative Retail Reference Architecture (Revised V2)

See my revised Retail Reference Architecture above which reflects ASOS innovation. (Ref: The original Retail Reference Architecture). The ASOS APIs which power the mash-ups empowers young ASOS customers to bypass traditional Retail Touch Points and Work-flows and access the ASOS catalogue directly. It has merged social networking and shopping by launching the first European fully integrated Facebook Store. ASOS customers are able to buy, save, share and comment on items without needing to leave the social networking site to obtain full e-commerce functionality.

ASOS successfully demonstrate that Industry Reference Architectures are a sound and solid foundation but they are not sacred and should be chopped, changed and innovated to bring dynamic benefits to the business. I am not claiming that innovative Retail Architecture is the only reason behind ASOS success. Smart branding, clear customer segmentation, effective supply-chain and visionary leadership have clearly contributed to ASOS success. However, the contributions from ASOS IT team can not be underestimated in the analysis of ASOS success.

Evolving Business Models: Microsoft moves to Cloud while Google goes Social Networking

2011-06-30T16:26:00.000-07:00

This has been a week of announcements of evolving new business models from major technology players. The pace of technology change is gaining momentum over past few years but more importantly the technology consumption models are changing are greater pace. Social Media / Networking, Cloud Computing and Mobile / Tablet devices are leading the charge in the consumerisation of IT. And the major technology players are either taking leadership role or busy planning catch-up game.

Image Copyrights - Microsoft

Microsoft with dwindling revenues and under increasing pressure from Cloud leaders such as Amazon (EC2) and Google (mail and docs in cloud) has finally launched it's much awaited MS Office Cloud offering titled Office 365. As Reuters reports, The world's largest software company is heaving its two-decade old set of applications including Outlook email, Excel spreadsheets and SharePoint collaboration tools into an online format so that customers can use them on a variety of devices from wherever they can get an Internet connection. Is it a direct response to popular Google docs? Probably yes. Will it work? There is a good chance in my opinion. After all this is the world's most successful and most widely used office software by a long distance. However the key question which will have to answered is why would Office 365 be attractive to those who already have MS Office licences, and there are a very large majority of us who fall in this category.

Image copyrights - Google

The other evolutionary business model which is worth taking note of is Google's (yet another) attempt to break the Facebook Social Network monopoly. Despite of its huge success in search, docs, email, android etc. Google still remains fascinated by the ultimate prize in emerging online collaborate over Social Media, offcourse the domain where Facebook is a clear and undisputed leader. Is it an attempt to tempt away generation Y away from Facebook? Well whatever the objectives may be they seem to be succeeding at the moment with oversubscribed early trials and beta.

So why do these moves matter? What is evolutionary about them? The answer is that the above two developments demonstrate that even well-known and highly successful brands such as Microsoft and Google are not hesitating in making fundamental shift to their business models and operating models. For Microsoft to move away from cash cow licencing model to PAYG Cloud based Office, it is a significant shift in their strategy. But they are almost pushed to this position by Amazon EC2 success and Google Docs adoption. And they are responding with credible, real and innovative offering.

As for Google, Social Networking remains a rare failure in its otherwise very successful forays in search, docs, android etc. Google makes its revenue and profits from advertising. Irrespective of runaway success of Android, it is clear that Google will remain focused on Search driven Advert revenues. And this very traffic / revenue sweet spot is under threat from Facebook as more of us replace product or service search from Google to recommendations from friends on Facebook. Google had to ensure that it kept hold of its loyal search users and offered them comparable social platform on the lines of Facebook. It remains to be tested but my guess is that Google wants to evolve from its Search driven model to Network based recommendation model. It will not change overnight, it may take months and years but Google understands that it has to evolve even if it means to shift focus away from its runaway successful Search product.

Microsoft and Google are doing what all proactive, successful companies do. Sense, Adopt and Evolve, even if its means breaking away from successful existing models.

Vertical Business Services are Not Always Successful

2011-06-27T01:57:00.000-07:00

I have been writing about the promise of Vertical focussed Business Services and subsequent rise of offerings such as Google + ITA. But the latest news from Google proves that such vertical adventures are not always successful. Google said on Friday that it plans to shut down two services that proved unpopular: Google Health and Google PowerMeter. This demonstrates that, sometimes strategic calls go false but smart organisations do acknowledge this and close the loss making investments which may not bring strategic growth.

Cloud Computing "Silver Lining" - Business Value Matters. Technology Not!

2011-06-22T16:33:00.000-07:00

Microsoft and The Telegraph hosted the "Cloud Computing" Silver Lining event earlier this evening in London. It was a good mix of panel discussions, round-table and networking event. It was hosted at one of the City’s most prestigious landmarks - The Gherkin which with its magnificent views from the 40th floor across the London skyline, was the perfect location to discuss the matters of "Cloud" computing. I was one of the fortunate 50 people who received the invite to listen and engage with a panel of Microsoft, Telegraph and other Industry speakers. I am trying to summarise some of the key thoughts from the evening in this blog post. The headline message which I would like to give here is that, "In Cloud Computing, Business Value Matters, Technology Does Not"

Cloud Computing is about Business Innovation - John Jester of Microsoft noted that, Cloud Computing is turning a new corner in 2011. CIOs, CTOs are no longer adopting Cloud Computing purely for cost savings purposes. Increasing number of organisations are now turning to Cloud Computing to gain new capabilities to make business successful. Cloud Computing is leading to new customer engagement models externally while also boosting new ways of employee engagement internally. He cited example of Global Microsoft CIO Summit to drive home the point. While in 2008 most CIOs reported CEO mandate of Cost Reduction, in 2010 most CIOs reported that, now their CEOs are demanding IT to play an Innovation Role. CEOs are now demanding CIOs and CTOs to drive revenue generation and maximisation opportunities. And Cloud Computing is a leading enabler of these innovative business models.

Cloud Computing Liberates IT Consumers - Dr James Bellini, Author and Futurologist commented on how the Cloud Computing paradigm is working on end user computing levels. He likened the Cloud Computing phenomenon as an enabler to free employees to become individuals again and approach and use IT as tool which which liberated not locked them in. He predicted that, "Work prisons of 20th century will disappear by 2020 thanks to the Cloud Computing phenomenon". But Cloud Computing is not something entirely new. IT industry has seen a number of variations and forms of this over past decades. Close to my heart, the Airline industry has been a pioneer of Cloud Computing for a number of decades when it started to consume the Airline Booking processes per transaction model. Large mainframe operators such as IBM and Unisys served the airlines per Mips based on their consumption. On consumer level, Microsoft Hotmail Service has been in place since 1996 which is prime example of email and collaboration service in cloud. This was one of the question which I posed to the panel.

So What is New about Cloud Computing Now? - Probably nothing is new in terms of concept. As I outlined in few examples above, the paradigm is around for decades. The major difference driving the adoption (and to some extent Hype) is that Industry has finally caught up with Technology, Tools and Instrumentation required to make Cloud Computing work at mass scale. We agreed at the round-table as well as during networking session that two factors have contributed in a major way to drive the Cloud uptake and popularity.

As John Jester of Microsoft noted, "Anyone is now Connected Anywhere". The power of network makes cloud consumption easy for large end user computing as well as B2C markets

Secondly, as I theorise, the Mobile and Tablet devices have finally crossed the threshold of affordability, intuitiveness, usability and desirability which has enabled business models which demand mass consumption of IT services of various forms on the go

Thirdly as Phill Robinson, CEO, IRIS and Alan Lee-Bourke, CIO, The Wise Group noted the Cloud Computing is a better economic model for enterprises. It allows CIOs and CTOs to pass on the worry of say Server Management, Patching, Wiring, Cabling, Backing up etc to the likes of Microsoft and Fujitsu while they focus on tasks of higher business value for their organisations. Alan for instance noted emphasis on Data Modeling, Reuse and Effective Churn of Information to help business move forward.

Major Cloud Computing Adoption Challenges - Matt Warman of The Telegraph noted and the panel and round-table acknowledged that, Security and Data Integrity are some of the biggest blockers for free-flowing Cloud adoption. Access and Control of Information is a major source of wealth creation of 21'st century hence it is little surprise that data and information assets are targeted by hackers and groups with not so noble intent. But we believe that collectively as industry and individually as responsible organisations these aspects will be sorted with priority. Some of the message from Microsoft Cloud Forum demanded Industry players to work closer together on security standards. While there are now also demands for Government to work a lot closer with Industry on boosting Public Sector Cloud Adoption.

The other notable issue raised was difference between commercial models for applications in cloud computing environment vs the collaboration services in cloud. For instance operational, governance and commercial model for making Microsoft Azure and Amazon web services work are of different complexity than say making Office 365 work for enterprise. Both present respective set of challenges but operating model for Cloud in these instances are different.

To summarise, momentum seems to be gathering around the fact that Cloud is now seen to enable business rather than just technology development. A great debate at a great location. Many thanks to Matt Warman of the Telegraph and John Jester of Microsoft for hosting a fantastic event!

The State of CIO: Evolution of the CIO Mandate and Role

2011-06-11T16:30:00.000-07:00

These days I am presenting the analysis of the State of CIO in this blog. So far I have summarised insights from a successful CIO in my 50 Things to Know Becoming CIO post, followed by analysis of the Priorities and Focus for 2012 and beyond based on the Harvey Nash CIO Survey. In this post I will be analysing and summarising another influential industry survey from IBM.

The 2011 Global CIO Study - Essential CIO is a comprehensive survey of 3000+ CIOs across Public and Private sector enterprises. More importantly is spans 70+ countries and 18 industries. So this is well rounded view of the CIO function in its true sense and any regional, industry biases and variations are essentially balanced by sheer volume of variety of insights in this influential piece of data collection and data analysis.

The key question which this survey is focusing on is, "How are technology leaders helping their organizations adapt to the accelerating change and complexity that mark today’s competitive and economic landscape?" The headline finding of this survey is "CIOs increasingly help their public and private sector organizations cope with complexity by simplifying operations, business processes, products and services. To increase competitiveness, 83 percent of CIOs have visionary plans that include business intelligence and analytics, followed by mobility solutions (74 percent) and virtualization (68 percent)."

Lonely Tree by Evgeni Dinev

The key takeaway for me from this insight is that the CIO and the IT function is no longer isolated or lonely in the evolving business and operational world. Rather the IT function and CIO role is stepping up to the challenge and evolving at similar or greater pace. The study classifies all the responses it has received in four distinct patterns called as "CIO Mandates", namely Expand, Leverage, Transform and Pioneer. The editors of the report state, "These mandates were derived from iterative analysis, including state-of-the-art statistical and textual analysis of the thousands of CIO responses. It revealed typical response patterns associated with each mandate. Each pattern indicated a distinct approach to IT leadership derived from specific organizational needs."

The Leverage Mandate is about demand from organisations for high-performance IT which needs CIOs to focus on managing essential IT activities and getting information to decision makers faster and more accurately. 52% of the focus of CIOs with this mandate is to provide fundamental services while 28% is to manage and boost the organisational process efficiency.

The Expand Mandate asks CIOs to focus on cross-enterprise growth while continuously tune business processes and internal collaboration to gain tighter integration. An overwhelming 98 percent of those CIOs said they would lead or support efforts to simplify internal key processes. A full 95 percent said they would lead or support efforts to drive better real-time decisions and take advantage of analytics.

The CIOs with Transform Mandate look beyond the boundaries of the enterprise to simplify business processes and generate real-time insights up and down the value chain. Organizations that operate with a Transform mandate expect IT, more than anything else, to be a provider of industry-wide solutions to support business. The survey reports that CIOs with this mandate are expected to spend more than 33% of their time and budget on this focus.

With a Pioneer Mandate, CIOs are seen as critical enablers of the organization’s vision and typically spend less than one-quarter of their time or budget on delivering fundamental IT services or business process efficiency. This group of CIOs ranked product/service profitability analysis and product/service utilization analysis as their top two priorities for turning data into usable intelligence.

The report concludes by stating that, "Whether an organization requires an emphasis on delivery of essential IT services or challenges the CIO to pioneer new opportunities, CIOs need to innovate. With ongoing technological shifts, the seemingly endless onslaught of data and the increasingly frenetic pace of change, making incremental improvements to operations may no longer be sufficient."

The message is loud and clear, The Role of CIO is Evolving. Innovative approaches to advance the business forward is IN. Efficiency improvements and "keep the lights on" are expected as "Business As Usual" and no longer enough to secure the seat at the Board. Modern CIO needs to be a true business leader who owns and manages to Technology to deliver true business value and advance the business forward.

CIO Insights is part of IBM Executive Exchange which can be accessed here.

If you liked this blog post, you may also like;

Image courtesy Evgeni Dinev / freedigitalphots.net

The State of CIO: Priorities & Focus for 2012 and Beyond

2011-06-06T03:51:00.000-07:00

Over the past few weeks some fascinating CIO survey results have been published by leading Industry players. They approach the subject matter of unlocking the State of CIO in different ways. The results are in a way do not come as much of a surprise. However, they are still very relevant, insightful and shed light on CIO priorities, focus areas as the businesses start the planning and investment cycle for 2012 and beyond. Over the period of next few days, I will attempt to summarise key highlights from these surveys with an objective of analysing and projecting the strategic CIO intent for 2012 and beyond in the concluding piece. In this post, I am trying to summarise the Harvey Nash 2011 CIO Survey.

The Harvey Nash CIO survey which is based on 2000 responses from CIOs and global IT leaders highlights that innovation is back on the agenda big way. The survey quotes, "CEOs are looking to their CIO and the technology team to deliver both internal and externally focused technology innovation to help their organisation outmanoeuvre the competition and win the future." According to the survey most CIOs believe that to achieve the business objectives set by the CEO, technology innovation isn't simply an option, it's a must have. Almost three-quarters (74%) of the global CIO community believe that if they don't innovate and embrace new technology their company will lose market share.

In terms of overall priorities, driving revenue growth is now a priority for 37% of CIOs while enabling business change is a focus for 44%. A renewed focus by many organisations on market share growth, profit and new product development is providing a greater commercial role for some CIOs after the recession. In 2010 almost three quarters of global CIOs (74%) listed cost saving as a top priority, today only 67% recognise it as their top issue. These results suggest the CIO is being asked to fulfil a more complex dual role where they have to maintain the tight cost control and departmental fitness achieved during the recession years while also ensuring sufficient technology capacity and flexibility exists to enable the organisation to pursue growth.

The survey highlights that outsourcing remains a strong theme as almost one third of global CIOs (28%) will spend up to a quarter of their entire IT budget this year on outsourced activity, up 5% on last year. More than one in ten global CIOs will devote more than 50% of their IT budget to outsourcing. Investment on outsourcing in the next twelve months is also due to increase for 45% of global CIOs, up 9% on 2010, while an additional 43% will maintain spending at current levels. CIOs are increasingly partnering with a wide range of suppliers with 39% expecting to increase their dependence on multi-sourcing in the next twelve months. This multi-sourcing trend is having an impact on the demand for skills and flexible labour. For the CIO, the importance of managing strategic relationships with third party suppliers, often from overseas, has emerged as a key skill in 2011 with 36% of respondents identifying it as an essential ability, up 12% from 24% last year.

In the next post, I will attempt to summarise the IBM 2011 CIO Survey.

The State of CIO: 50 Things to Know Before Becoming CIO

2011-05-26T16:33:00.000-07:00

Paul Coby is one of the most successful and admired CIO of our times. He was instrumental in launching a number of innovative passenger friendly technologies at British Airways. Paul has been credited with launching a number of "Airline industry first" applications such as Online Booking, Online Check-in and recently mobile boarding pass for British Airways. And this while reducing the cost of IT Operations by 60% over a period of 10 years.

So when the invite of La Fosse Event featuring him arrived, I was keen to attend. It was a high quality event as previous La Fosse events have been. Paul's presentation revolved around key concepts from his book, "50 Things I Wish I Would Have Known Before Becoming a CIO". Essentially it was a "Lessons Learnt" from the practiotioner on the essentials of being a CIO. The session was interactive, complete with anecdotes based on his rich experience and was followed by valuable Q&A session. Some of the key concepts which Paul shared were;

How to Approach the CIO Role?

Enjoy being a CIO
Plan time strategically
Don’t be afraid of technology
Operational performance matters so focus on it
There are no IT projects only business projects
Understand your industry and love itAppoint IT business partner who will champion business
Communicate Communicate - Project IT performance across business
Benchmark your performance
Become non-executive director in other business to understand board expectations

How to Keep the IT function Running Smoothly

· Keep IT simple

· Be visible as IT function and celebrate success

· Enter business transformation space

· Eliminate shadow it dept in business

· Become champion of business simplification

· Innovate

· Really be part of your company

How to Push Boundaries of the Role

· Know where IT should be: Leading edge, Fast follower and Commodity

· Use your authority and power as a CIO

· Understand your CEO’s business strategy and support it

· Develop supportive relations with fellow directors

· Spend time with board members

· Reduce cost of IT year on year

· Work closely with HR, Finance

How to Manage Teams Effectively

· Develop direct reports

· Ensure you have genuine technology experts in your team

· Value PA and core team

· Grow project and program management skills

· Recognise importance of Operations team and people

· Get IT organisation structure right

How to Ensure Success in Execution

· Personally review projects

· Subdivide team into subgroups

· Have clear objectives

· Look after pennies

· Monitor audit reports

· Reward who delivers

· Suppliers mater

· Enforce technology standards – They will reduce complexity, hence cost and improve speed to delivery

· Develop win-win

In addition to this Paul also talked about a few evolving aspects of the job such as;

Future Trends to watch out for a CIO

· Computerisation - Everything is an APP and easier to use

· Connectivity - Everyone connected: Things, People, Processes

· Convergence - Above plus location and things awareness

· Collaborate - Tools for us to connect work and pay and in between things

· Cloud - Commodatisation of IT

What will see a CIO through in 2011?

· Focus on real customers

· Getting onto business strategic agenda

· Loving the technology

· Cutting he cost

· Managing suppliers

· Leading your people

Many thanks and well done to La Fosse team for pulling together another high quality event. Simon if I may suggest, no harm in starting events management company in addition to core recruitment business! :-) Already looking forward to next event!

The Simplified Retail Reference Architecture (version 1.0)

2011-05-19T15:23:00.001-07:00

I have been writing about the concept of Reference Architecture, it’s purpose, benefits on this blog. I have also posted illustrative examples of how leading IT industry vendors are shaping their portfolio based on this construct. Specifically I shared the Microsoft, IBM and Cisco Retail Reference Architectures in my previous blog post. In this blog post, I will propose the concept of Simplified Retail Reference Architecture.

The purpose of this Reference Architecture Model (illustrated below) is to classify various technology constructs required to run the Retail business. More importantly, this model proposes touch points between underlying technology and the originating Retail Consumer Business Processes. While this model focuses on key technology constructs, it is important to note that key driving factors which influence it’s behaviour are the Retail Business Processes, Retail Consumer Touch-points and related Business Rules.

Simplified Retail Reference Architecture

The core model comprises of four primary domains; Retail Touch Points, Retail Business Processes and Work Flows, Retail Business and Application Services and Technology Systems, Platforms and Interfaces. They are briefly described below;

Retail Touch Points – In this domain the consumption touch point from B2B and B2C consumers are modelled. This contains a good mix of conventional and modern technology constructs ranging from traditional retail outlets to modern mobile computing touch points. This can also be termed as the”Multi-Channel” access for the core Retail Business Processes. The key concept to understand here is that while access touch points may vary the Customer Experience needs to be consistent and seamless across these channels.

Retail Business Processes and Work Flows – The purpose of Retail Technology and Tools are to enable Retail Business Process and Work Flows to run smoothly. The business processes should drive the technology selection though in some instances technology innovation can influence business process changes e.g. Self Service Tools. This domain contains key business processes and will be highly specific to particular business models and organisations. It can be claimed that real differentiator between competitors are efficiency, effectiveness and success of business processes.

Retail Business and Application Services – The Retail Business Applications (known popularly as Apps these days) essentially connect the Retail Business Processes with underlying Technology platforms. In true sense this is the face of technology which System users and in some instances customers see. This domain contains both custom built as well as COTS Retail Applications which will be expected to be agnostic of underlying technology platforms.

Technology Systems, Platforms and Interfaces – This domain models all aspects of technology systems such as software, hardware, network, Point of Sale systems which drive the Retail Applications and Business processes. Given the increasingly integrated nature of modern Retail systems I also recommend to include the integration interfaces for connecting internal systems as well as partner and supplier systems. Example of such interfaces are Web Services interfaces or APIs which enable functions such as Shopping Basket sharing / integration and Reference Data exchange.

Application and Benefits of this Reference Architecture Model – A tip which I would like to share with Enterprise Architects, CTOs and CIOs who will use above model is to extend and internalise this framework to suit your respective businesses and enterprises. Also it is important to derive practical implications of this model and use it to develop your strategic technology roadmap. This model can also be used to map and develop the investment portfolio as it can easily show the business processes and associated revenue / profit aspects of business expansion resulting from strategic IT investments.

It is easy to fall in the trap of academic and theoretical exercise of “modelling till cows come home” but the real value of such modelling is to help your strategic planning and strategy development activities. It can also be used as effective Business-IT alignment tool to showcase business relevance of IT.

Happy Modelling!

Microsoft’s $8.5bn Catch-up Gamble

2011-05-10T15:33:00.000-07:00

Microsoft today announced that it will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. Skype has 663 million people across the world registered to use its voice-over-internet-protocol (VoIP) communications, is available on personal computers and mobile phones with exception of Microsoft's Windows Phone operating system. Though it is set to change quickly as Skype post-acquisition is expected to support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices. Microsoft already has three other VoIP offerings, via MSN Messenger, Xbox Live and Lync, used in its Office division. Microsoft promised to connect Skype users with Lync, Outlook, Xbox Live and other communities while also continuing to invest in and support Skype clients on non-Microsoft platforms.

Ballmer and Bates

This is Microsoft’s biggest ever acquisition at staggering price tag of $8.5bn. The price appears further bloated when you consider that Skype has never made a profit: in 2010 it recorded a loss of $7m on revenues of $860m. But it is one of popular brands for people on the move with 663 million people as registered users. Skype off course has been here before. In October 2005 it was bought by eBay for $2.5bn, but was 70% sold in October 2009 to a consortium of private equity and venture capitalists. So though a popular consumer brand which Skype is why would Microsoft buy it at such a staggering price and when it already had not one but three similar products in it’s portfolio?

The answer lies in the question – “Consumer Brand”. If you put this acquisition in the context of recent business and revenue trends at Microsoft it may not appear that strange. Google, Facebook and Apple have clearly taken the lead over Microsoft in last few years in terms of consumer popularity. Each of the three companies have carved a niche for themselves; Google in Search, Facebook in Social Media and Apple in intuitive mobile devices. They have taken a commanding position based on high quality offerings which are translating into dynamically increasing revenue, profits and admiration from technology consumers. This is hurting Microsoft as combination of Social Media, Smart Mobile Devices, Intuitive User Interfaces are driving next generation (and current if I may add) to move away from comparable Microsoft offerings. Microsoft Bing Search, Zune media device and Windows Mobile devices are clearly lagging behind Google Search, Apple iPhone, Google Android. The MSN is far behind Facebook in popularity and adoption. Investors fear that new gadgets, led by Apple's iPad, are the thin end of the wedge that will one day separate Microsoft from its core customers. Apple's iPad, along with a handful of tablets running Google's Android system, are starting to eat at the edges of Microsoft's domination of personal computers. Read more on latest Microsoft financial results.

So with above context it should not come as a surprise that Microsoft clearly is looking for some new strategies, new winning horses, new breakthrough in it’s portfolio. Skype though is loss-making belongs to similar popular consumer brands such as Google and Facebook. More importantly, Microsoft can now start embedding Skype in its Windows mobile devices to boost it’s popularity. However this may upset Microsoft Network partners such as AT&T, Verizon as they may perceive this as threat to carriers voice and data revenue. And Microsoft does need carriers on it’s side if it were to push more Windows Mobile devices in the Marketplace. So the success of this acquisition lies in how well Microsoft integrates Skype into it’s portfolio and how quickly. And can it take it’s newly formed partners such as Nokia and carriers along this journey. The vision is good and action is bold. But it will take some serious integration efforts and branding expertise and master class to make this $8.5bn investment work for Microsoft. It is a gamble to catch up on it's smart social media, devices competition but if anyone can pull it off it will be Microsoft. It has already succeeded in preventing Facebook or Google from buying Skype so this is good start! Stay tuned for more...

How to Love your Outsourcing Partner

2011-04-28T16:57:00.001-07:00

In the latest sign of an economic recovery and a pickup in government spending, Hewlett-Packard has been awarded a multi-year contract worth up to $2.5 billion to provide technology services to NASA. In another strategic outsourcing deal Nokia will outsource its Symbian software activities to Accenture, transferring 3,000 employees to the company in the process, as it moves its focus to making phones running on Microsoft's Windows Phone operating system. It seems that the tough economic climate has revived the technology outsourcing activity as businesses reduce costs and focus on their core operations. But how do you approach outsourcing if you are a CIO, CTO leading the Technology function of your organisation? What are the best practices? And what basics do you focus on? What lessons have we learnt from first and second generation of outsourcers?

A few days ago I attended a CIOnet event in London (with title similar to this post) where three CIOs shared their insights, lessons-learnt and views based on their outsourcing experiences coming from a range of industries. They were, Kevin Baker of Jardine Lloyd Thompson Group, James De Watteville of RSA Insurance Group plc and Stephen Hand, ex Lloyd’s Register. It was a fascinating listen. I am sharing synopsis of this session along my analysis in this blog post. This is essentially representing the CIO view of the world coming from the Information Technology buyer or purchaser perspective, hence certainly useful if you are in similar role or position. However I felt there were some good insights in their observations for Information Technology outsourcing vendors as well.

Establish the objectives, drivers and need for Outsourcing - Before jumping into an outsourcing relationship Know what you are looking for from outsourcing engagement. Define the strategic plan and objectives for outsourcing with business buy-in. Define a Sourcing model backed up by business plan and what each partner will do to make this real. Above all there needs to be clarity of purpose to understand why outsourcing contract is needed and what needs to be achieved.

Image credit - Danilo Rizzuti

Knowing the Organisation, its strengths and weaknesses before Outsourcing - Take time to understand your organisation. Why do you want to outsource? What will you lose? Make sure your internal and external customers understand what it means to outsource. Also understand your organisation’s maturity level. There are various industry benchmarks which will help you in assessing this maturity level, for instance Six Sigma for assessing BPO, CMMi for assessing applications, ITIL for assessing infrastructure and so on. Can your organisation work with off-shore providers? Or work with multi-location work flow? Experience of staff to undertake this transition and Governance model requirements are also crucial to take into consideration.

Transfer / Transition / Transformation – Irrespective of the size, shape and above considerations of outsourcing, it will a challenge to successfully hand over and run the outsourced operations. It is important not to expect too much too soon. Transfer the as-is state initially instead of rolling transition and transformation in one go. Expecting immediate improvement in operations is unrealistic. Allow relationships to build and process to stabilise first and transition to new processes against transition plan. However transformation is important as the contract progresses to avoid complacency. Conducting regular reviews of performance against objectives and assessing risks to check if the business plan changed is essential to keep outsourcing relevant as time passes by.

Evolving role of the CIO and IS/IT Department – The CIO and IS department should be responsible for relationship management with outsourcing partner. Partner is a keyword here used in place of supplier. Showing trust and sharing risk with your outsourcing partner helps so CIO should share business plan and strategies as much as possible. More importantly, shared goals such as positive references, project successes, on time deliverable, etc. help achieve success together. CIO should understand the governance and delivery process of the outsourcing partner to make the most of relationship. Going a step further a key question to answer together is what can parties do to make each other successful? CIO should manage internal marketing and communications of such success stories as he / she owns this relationship. In more ways than one outsourcing can be compared with M&A. it can be argued that, compared to M&A outsourcing gets less management visibility and support and CIO can help in this case. In multi-vendor scenario facilitating a collaborative environment is important. For example, getting all vendors together once a month to share challenges, common goals and resolution items may proactively nip a number of issues in bud.

In summary Outsourcing offers a good compelling alternative over in-house operations – It allows business to focus on core capabilities and business operation while allowing technology companies and vendors to focus on what they do best i.e. technology delivery. Often the decision is to be made between internal investments vs. outside investments. CIO should not be turned into HR partner instead he / she should turn into an effective broker and relationship manager to get best value of technology for the organisation. Contract is a good tool in this process which should be used effectively to keep all involved parties honest and focused. Business is dynamic and keeps on changing its objectives, shape and direction. Hence it is important to reassess the outsourcing requirements. As required they should be reviewed, re-base ined and benchmarked on regular basis to ensure right fit for the organisation.

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It's Official - Google now is part of the Travel Ecosystem

2011-04-11T03:50:00.000-07:00

Image courtesy and copyright ITA

It is now official! Google is now set to become an integral part of the Travel Ecosystem! The Department of Justice on Friday, 8 April cleared the Google acquisition of ITA Software. I have been writing about Google's strategic intentions on this blog. ITA Software is a Cambridge, Mass. USA based travel technology company which specialises in product portfolio comprised of "Pricing and Shopping", "Passenger Services" and "Data Aggregation". It serves a number of major Airline Travel customers including American Airlines, Southwest Airlines, United Airlines, Continental Airlines, Bing, Kayak, and Orbitz. Combining Google's Search, Email, Collaboration, Location and Map services with the smart travel algorithms from ITA may lead to a number of exciting opportunities for Google and Travellers. Equally this may translate to challenges to other travel technology companies. Hence this approval does not come without DoJ preconditions, checks and balances. In order for Google to proceed with this acquisition, the department will require Google to develop and license travel software, to establish internal firewall procedures and to continue software research and development.

The department said that the acquisition, as originally proposed, would have substantially lessened competition among providers of comparative flight search websites in the United States, resulting in reduced choice and less innovation for consumers. Even before this development Google search engines is already collecting revenue from airlines and other travel suppliers for online advertising. In an interesting development usual fierce competitors such as online travel sites, like Expedia, Hotwire, Kayak, Travelocity and TripAdvisor have formed a coalition, called "Fair Search" (fairsearch.org/), to combat the perceived threat posed by a Google-ITA combination. The DoJ has addressed it to great extent while approving this deal. The department said that the proposed settlement will protect competition for airfare comparison and booking websites and ensure those websites using ITA’s software will be able to power their websites to compete against any airfare website Google may introduce.

Image courtesy and copyright - Google

Google's vision behind the acquisition is progressive. Google Blog outlines this as, "How cool would it be if you could type "flights to somewhere sunny for under $500 in May" into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily". It has committed to let ITA’s customers extend their contracts into 2016. It has also agreed to let both current and new customers license ITA’s QPX software on “fair, reasonable and non-discriminatory terms” into 2016 along with related commitments aimed at making ITA’s technology available to other travel sites.

As I have been writing before on this blog, this is an exciting development in the travel technology space. It opens up the ecosystem which is currently dominated by the GDS players. How exactly it will benefit the travelling passengers or new entrepreneurs to launch new innovative travel solutions is not yet known. The nirvana state from my perspective is the emergence of "Travel Apps Store" which will make creation and consumption of new Travel business and technology applications much more easy and interesting. Is Google - ITA a right step in that direction? Absolutely yes. Will Travel Tech players such as Amadeus, Expedia, Sabre respond with their own version of innovation and partnership. Most likely. The most anticipated development will be how Google's young and bold competitors such as Facebook and Amazon respond to this. Airlines and technology players such as SITA are already using Facebook in innovative fashion. But the Google ITA deal just takes the Travel Technology Ecosystem in different dimension and is certainly a game changer!

Cloud Technology is now Music to Our Ears - New Cloud Media Service from Amazon

2011-04-03T18:20:00.000-07:00

Image Courtesy - Amazon.com

Earlier this week Amazon launched new cloud based consumer service called the “Cloud Drive” accompanied by media player titled “Cloud Player”. Together they offer consumers an ability to store, upload, listen and download music (which they may pre-own or buy on Amazon) from most devices. Amazon is the first major internet or Media Company to make such a commercial offer as both Apple and Google are rumoured to be working on similar offering in near future.

Amazon promises to enable customers to store music in the cloud and play it on any Android phone, Android tablet, Mac or PC, wherever they are. Customers can upload their music library to Amazon Cloud Drive and can save any new Amazon MP3 purchases directly to their Amazon Cloud Drive for free. It can be argued that this offer should be extendable to other media type such as ebooks, documents etc. though Amazon does not seem to market it specifically.

"We're excited to take this leap forward in the digital experience," said Bill Carr, vice president of Movies and Music at Amazon. "The launch of Cloud Drive, Cloud Player for Web and Cloud Player for Android eliminates the need for constant software updates as well as the use of thumb drives and cables to move and manage music."

"Our customers have told us they don't want to download music to their work computers or phones because they find it hard to move music around to different devices," Carr said. "Now, whether at work, home, or on the go, customers can buy music from Amazon MP3, store it in the cloud and play it anywhere."

As we would expect from Amazon, the consumption model is well-defined and attractive. Customers automatically start with 5 GB of Cloud Drive storage to upload their digital music library, and those who purchase an Amazon MP3 album will be upgraded to 20 GB of Cloud Drive space. New Amazon MP3 purchases saved directly to Cloud Drive are stored for free and do not count against a customer's storage quota.

Please do not discount this as a simplistic cloud storage story. This is a fascinating development which weaves themes of cloud computing, mobile devices, commoditisation of technology, ecommerce, media licensing agreements for the eventual supremacy of the lucrative billions of dollars worth digital media and ecommerce distribution ecosystem. As James Naughton of the Guardian / Observer writes quoting David Bowie who in 2002 had predicted that music would, one day, "become like running water or electricity".

Image Courtesy - Amazon.com

Offering Cloud Computing at commodity level to mass market and developers is nothing new to Amazon. Its Elastic Compute Cloud (Amazon EC2) is a popular web service product that provides resizable compute capacity in the cloud. It is designed to make web-scale computing easier for developers. However this latest offering is the step change in maturity it can be argued as it makes consuming the Cloud based services very easy, affordable, attractive to end-user consumers, in this case music. So is this strategy designed to gain market share in the digital music market for Amazon? David Porter CEO and founder of 8tracks certainly seem to think so. He says,

Since Cloud Drive could well generate less than half the revenues as Amazon Web Services (AWS) for the same offering, it seems Amazon is offering the storage as a loss leader to gain digital music market share. Amazon undoubtedly hopes to wrestle away some market share from Apple’s iTunes, particularly in view of the growing base of Android users not yet served by a Google download store.

On the face of it this seems to be a good development from Google’s perspective. Cloud Player which support’s its Android system is now bundled into the new version of the Amazon MP3 App; it includes the full Amazon MP3 Store and the mobile version of Cloud Player. Customers can use the app to play music stored on their Cloud Drive and music stored locally on their device. However as Porter notes,

Amazon’s bold “first move” without licensing deals from the music labels could complicate and delay negotiations at Apple and Google. Early adopters of Cloud Drive especially Android users might then consider the switching costs and choose to stick around even once Google and Apple launch their own competing services.

This is still a developing story I think. How the licensing aspects of the music will be addressed is not yet clearly answered. Though early indications are that large studios may not see this as a threat rather a boon to ignite customer interest in Cloud. How the close rivals such as Apple and Goole will respond yet remains to be seen. Though as James Naughton observes, Amazon’s size, reach, dominance in online retailing, cloud computing command, access to large market of Android phones will mean that neither they nor the record companies will find it easy to challenge Amazon’s early charge in the field of Cloud-centric media consumption offering model.

The Shrinking Book Ecosystem - The Cost of iPad and Kindle Success

2011-03-27T17:46:00.000-07:00

With ever increasing popularity and acceptance of tablets, ebook readers etc. it is little surprise that the traditional form of paper books and it's ecosystem is coming under immense pressure to survive and remain profitable. How long will the paper book and related industries, merchants, suppliers and consumers can resist the onslaught of electronic media alternatives? Or though it will shrink it will manage to survive by sticking to its core characteristics?

There was news here in the UK a couple days back about HMV considering selling off Waterstone's, the popular book chain. HMV struggling in it's traditional media market is not a new story. The way we consume media, music, movies and news has been changing for the past several years. The businesses which adopt have a chance to succeed. The ones who don't will struggle. Analysts have been writing about the truth is that the music industry is in a near-death spiral. According to Forrester Research, U.S. music sales and licensing revenues plummeted from $14.6 billion in 1999 to less than half that figure - just $6.3 billion - a decade later. The print industry is struggling equally spectacularly. In the US alone the newspaper industry is losing billions of dollars through loss of advert revenue, a large extent to online, electronic and social media channels.

Leon Neal, AFP /Getty Images

I can go on .....the point is consumption model of media, news and related item is changing dynamically. And it is reminder of the times that we generally are accepting the dramatic demise of our reliable sources of entertainment and information with a sense of inevitability. But the Waterstone’s story just brought to surface an issue in my mind which we probably should take a bit more seriously. UK book industry is not alone to face this situation. The Border's bankruptcy in the US last month is another sad event in the chain.

As the TIME magazine reports, Two years? Three years? Five years? It's a parlor game in publishing circles to speculate how long it will take before e-books constitute a majority of the industry's sales in the U.S. But the tipping point aside, no one doubts that that is where the market is headed. Amazon, the industry leader, already sells three times as many Kindle e-books as hardcovers. Other book sellers aren't far behind. Last week, the Association of American Publishers announced that in January, for the first time, monthly e-book sales had overtaken hardcovers. Paperbacks remain in the lead, for now. E-books are by far the fastest-growing segment of the otherwise sluggish, recession-plagued publishing business. In 2010 e-book sales jumped 164%, to $441 million.

One blog post is probably not enough to analyse and debate whether the ebooks are about to change everything in the long-form media world? But why am I sounding a bit alarmed at this obvious development in the lifecycle of an industry? The reason is books are different and special and play a vital role in shaping the growth, thinking and progress of not one but a number of generations. I personally am a progressive adopter of social media, online and electronic channels. It definitely has advantages in a number of areas in terms of speed, accuracy, mass-transmission and access. However books serve a different purpose. Books are intrinsically linked to how we learn, form perceptions, opinions, exchange and grow ideas from an early age. And it grows with us in maturity and complexity of ideas which we consume and express as human beings. It can very well be argued that the next generation will learn to achieve similar results by electronic media. However I feel that there is something unique about human interaction with paper, the ink, and the pictures which take the communication between an individual and the subject matter to next level of effectiveness. And I find it indeed sad that this unique interaction is becoming rare with every passing development listed above.

However this evolution is an irrevocable process and is part of the industry life cycle in some sense. It does have its advantages too in terms of accessibility, cost reduction, speed of distribution. It can also be argued that the very phenomenon which challenges its survival is helping book industry to conserve and revitalise aging, old, rare scripts. I guess what I am arguing here is some sort of balance. I do most of my reading online these days but yet I do take pride and pleasure in visiting book shops and investing in good books as and when I can. The article in TIME magazine, describing how Barnes and Noble avoided Border’s fate may hold the key to this delicate balance. I do not have an answer; in fact I feel there may not be a single answer to the issue I am discussing here. We are talking about fusing two different and unique consumption models, which is not a simple challenge. However addressing this will not just help book ecosystem, it will also help the consumption of other media types such as music, news, etc.

Why IBM is Right about HP Strategy

2011-03-23T03:24:00.000-07:00

HP Chief Executive Officer Léo Apotheker recently outlined new corporate strategy which fundamentally changes the roadmap for HP as we have known it. Some analysts are calling it a “seismic shift”. I am not sure I will use those words in light of recent events. However I do agree that this seems to be a bold departure from HP’s recent and current market strategies. Hence I think it is important to understand and analyse this shift if you are a CIO or CTO from consumer perspective. Equally important to analyse this if you are ICT provider from a competition or “cooptition” perspective.

HP seems to backing this shift on its Cloud strategy with a good measure of focus on Connectivity and Software. The official press release for instance states, “The convergence of cloud computing and connectivity is fundamentally changing how IT is delivered and how information is consumed.” There also seems to be an acknowledgement that, customers and enterprises are not going to be shifting overnight to Cloud Computing Model and Mr Apotheker hence is also focussing on a Hybrid Model which in HP’s view, “is a hybrid environment that combines the best of traditional environments with private and public clouds will be the prevailing model for many large enterprises for a long time.” One of the highlight for me is what Mr Apotheker calls an “Open Applications Marketplace” that integrates consumer, enterprise and developer services.

In summary Apotheker outlined a four-point strategy for HP as follows;

· Continue to manage and optimizing today’s traditional environments;

· Build and manage next-generation cloud-based architectures;

· Enable (read consulting and integration) transition to hybrid computing models;

· Delivering the connected world from the consumer to the enterprise.

As a standalone piece of strategic intent nothing much wrong with it. It seems to be ticking all the boxes of current market and consumer trends. However the only problem as I see it is that this is not and cannot be a standalone strategy for the company of the size of HP. It needs to be integrated with what the current investments, assets, legacy and strengths stands for. And this is where the “Catch 22” lies for the HP Board, CEO and strategists. They have to “keep the winning strategy”. But they also have to respond to growing the Software as a Service (SaaS) threat from it’s competitors both current and emerging. And more importantly they have to also play to their credibility and relationships in the marketplace. And while doing this balancing act the risk which many analysts are seeing is “will HP cloudwash same old stack it has been trying to sell?”

Another set of questions is about how does HP plan to realise this strategy? Has HP taken into account the cost and risks of such transformation? HP investors haven't been impressed recently. The quick departure of Apotheker's predecessor Mark Hurd last year weighed heavily on the company's stock, which is down more than 20% over the last 12 months. Alternative view from major competitors is also interesting to analyse. In an interview with The Financial Times, Mike Daniels, SVP of IBM’s Global Technology Services and a potential successor to CEO Sam Palmisano, took a few shots at HP–particularly its approach to integrated software and services. “It’s not like we have a company that has a software strategy and then a services strategy or a hardware strategy,” Daniels said. “I think it would take a long time for anybody to accumulate the kind of capability that we have.

In summary is I think the issue which IBM is raising is the most important for HP strategist to consider. Credit to them for outlining a bold departure to Cloud and Connectivity Model however, to realise this strategy it will take significant investments, time and development of capabilities which will genuinely offer an integrated offering to the marketplace. In its absence this will simply be another “cloudwash”. The question is will investor’s be patient and willing to support this strategic but expensive move?

References:

· HP Press Release

· HP to keep winning strategy

· HP’s strategy: a credibility check

· HP’s new strategy: the jury is still out

· IBM lays down challenge to rival