Two Speed IT - Article Series

 My collection of articles on Two Speed IT 

Article 1 

Article 2 on Innovation

Article 3 

Article 4 on Why Buyers are Disrupting the Sales Process

Article 5 on Master Service Agreement

Article 6 on Recommendations for CIOs and CFOs

Retail and Wesfarmer - 2015

Retail POV on Wesfarmer - 2015

Two Speed IT - Confronting C Level Executives

Why Digital Transformation is not an IT Transformation

Why Digital Transformation is not an IT Transformation

More on Digital Transformation is here 

I would like to mention that this POV is widely used globally and is referenced by a very popular blog run by Rick.  More details here  

The Future of Digital

How would banks make money if banking products or services were free?

My response to this discussion is

Banks are going through what Telco's have gone through in last decade. That is, that their core product voice (analogue) is digitised and hence voice based service is free in competitive markets. In case of banks money is still not fully digital, but its not that far either, it will be digitised in few years. In that case then banks or telcos become digital platform for transaction enablement, like Google is for search. And so downstream consumers get free services and upstream consumers pay for interacting/engaging with downstream consumers using the digital platform and in that case it will be banking's core platform. Not only banks but any industry where core offering can be digitised as a multisided platform will have to be adopted else the business will go belly up. Media is evolving on those same lines.  In case of Australia its bit hard because markets across verticals are either monopoly or duopoly, its not a competitive market as compared to US/Europe. Having said that internet and internet of things will force it and banking will have to adopt that model else they risk of losing out to others.  That means services on downstream might not be totally free but some will be for sure. If Australia was more competitive and less regulation then downstream services will be totally free. Other thing about digital based model is that Marginal Cost (MC) is nearly negligible when it has to expand the business, where as in a brick and mortar/non digital based business Profits become maximum when MC = Marginal Rev. Digital business doesn't suffer from this economics. 

IT Strategy Framework - Linking Corporate Strategy to IT Strategy

Linkage of Corporate Strategy to IT Strategy via IT-CMF

Why IT - CMF For IT Strategy - It differs from other IT frameworks in several fundamental respects:
• It is comprehensive. While other frameworks focus on one dimension of IT management—for example, ITIL (Information Technology Infrastructure Library) concentrates on infrastructure and operations, while CMMI (Capability Maturity Model Integration) focuses on application development—the IT-CMF examines the full spectrum of dimensions.

• It is holistic and value-focused. Other frameworks tend to focus solely on IT process maturity, which by itself does not create business value. The IT-CMF, however, focuses on the business value delivered by IT and how a combination of process, skills, culture, and tools can maximize that value.

• The IT-CMF is also action oriented. An IT-CMF assessment not only confirms the IT organization’s current maturity for a given capability or set of capabilities, it also defines both short- (that is, 12-month) and medium-term (that is, two- to three-year) target maturities and the results the IT organization could expect to achieve by hitting those targets. Further, it identifies the specific steps necessary to achieve those targets, as well as appropriate metrics to use to track progress—and can provide case study examples of companies that have taken similar measures.

• Finally, the IT-CMF is not disruptive. Assessments for some frameworks require armies of consultants with clipboards and can be highly disruptive to day-to-day operations. IT-CMF assessments, in contrast, can gather the necessary information and achieve a credible degree of rigor without being obtrusive.

Overview on IT - CMF can be found here.

Source : BCG  and IVI

Weekend Reading

• 10 Lessons from Cloud Offerings
• Don't Stop Talking about Your Ideas
• IT Economics for Business
• BCG Consultants Love Life
• Strategic Selling 

A Consultants Life

Private Cloud Solutions

Hype Curve Emerging Technologies - 2013

 

 Source: Gartner

IT Economics for Business - II

Real Options Valuation (ROV):
A complex technique than TCO, ROI and EVA. It is based on the financial estimation techniques used in stock options theory. ROV is used to modify the ROI calculation by considering the value that the current project could contribute to future projects. This approach typically enhances the ROI of projects such as IT infrastructure. The cost of implementing a whole new infrastructure for just one project for one business unit’s needs is so burdensome that no one business unit could ever justify starting the new infrastructure. However, the overall value of the new infrastructure to all the business units in the organization could be huge. ROV provides a technique for justifying that first project based on the future derived value.

Return on Assets (ROA):
A popular measure for the performance of companies, ROA can also be applied specifically to IT assets.ROA for IT assets can be calculated by isolating the IT-specific assets from the organisational assets and the net income due to IT assets from the overall net income. This can be hard to do, and the accounting systems need to be set up appropriately to provide any chance of achieving this on a repeatable basis. ROA approach has deeper implications than might be immediately obvious.

 Return on Infrastructure Employed (ROIE):
 ROIE is similar to ROA, but it focuses on IT services rather than IT assets. With ROIE, IT service cost (including depreciation) is the basis for computing a return. While ROIE can be used for a single project, it works best when calculated for aggregations of projects. For example, it might be used to compare the performance of different in-house or outsourced IT Providers. ROIE might be improved by providing the same IT service at a lower cost or by containing the cost growth of providing a particular IT service to less than the rate at which the organisation’s net income is growing.

Part 1 is here

Source/Credit: The Business Value of IT

IT Economics For Business - I

Total Cost of Ownership (TCO): It seeks to capture the full cost of an IT asset from initial purchase through implementation and operation to maintenance and “end of life” costs. This is a cost-based approach that does not equate to value. It is useful for measuring IT value because it allows comparison of alternative implementations that will meet the same business need and, presumably, have very similar values to the business. If the TCO of one alternative is significantly less than the others, it represents better value for money. It includes consideration like training costs, security costs, scalability costs, and the costs of reliability deficiencies. TCO incorporates perspectives that are not purely financial.

Limitation: It involves predicting future costs. This limitation can be minimised over time by tracking actual costs but, by then, the investment decision has been made.

Return on Investment (ROI):
It means calculating the revenue that the business generates or the costs that it saves in return for the investment that it is making. For an IT investment to be approved by the business, the IT Providers and the business must work together to demonstrate that the business will get its money back with a nice profit in an acceptable period of time (the payback period). In reality, ROI is typically expressed as a percentage of the investment, either annually or over the duration of the project, with the cash flows rendered as net present values. Typically, the assumed discounting rate is called the internal rate of return (IRR). It is linked to the cost of capital of the business or the amount of interest the business will pay to borrow the money to make the investment. Acceptable IRRs and payback periods vary immensely from business to business. Still, an IRR of at least 20% and a payback period of one to three years are the reasonable starting point for a discussion. It is very widely used to justify IT investments, particularly for new projects. Having said that, there is still the problem of predicting the future; ROI provides a good way to compare the financial value of very different projects and provides hurdles, through the payback period and IRR, that quickly cut off further, costly consideration of some projects.

Limitation: Organisations often have good systems established for making their investment decisions using ROI. Still, they may have weak systems for monitoring the actual ROI achieved and using historical data on project ROI results to inform their current and future investment decisions. Another limitation with ROI is that cost savings must be in real money rather than theoretical “efficiencies.” For example, a projection that an IT investment will save the business 12% of staff time is only a real cash flow if it results in 12% less staff employment. It is fair to note that the staff may not necessarily be terminated but may deploy their efforts to other productive work; however, this is rarely monitored or measured carefully.

Economic Value Added (EVA):

This approach starts with the assumption that the organisation exists to provide economically value to its shareholders. This may not be entirely true for not-for-profit organisations, but the approach still has value. The calculation and comparison of Economic Value Added is very similar to ROI except that the benchmark used for making investment decisions is not the IRR but the opportunity cost of using the money to make other business investments (e.g., leaving the money in the bank rather than funding projects).

Source/Credit: The Business Value of IT

10 Learnings From Cloud Offerings

IT Capability Frameworks

Buyer Process Maps

Buyer Process Maps captures the Buyer's Journey

Weekend Reading

• Why Management Consulting Will Be Disrupted: Part 2
• Why  Do So Many Incompetent Men Become Leaders
• How US Department of Veteran Affairs Transformed IT
• 7 Paradoxical Sales Principles
• How India Got Its Funk
• Stop Judging and Start Learning

Business Performance Framework

Credit: Gartner

My popular post on Digital Transformation 

Weekend Reading

• Easy Credit Dries Up, Choking Growth in China - NYTimes.com
• IT Doesn't Matter (to CEOs)
• iOS vs. Android: What App Platform Should I Choose?
• Sales Manager or Sales Leader: Which are You?
• Why Management Consulting Will Be Disrupted: Part 1
• The Key to Happy Relationships? It’s Not All About Communication

Running IT as a Business

A great slide on Benchmarking  IT spend averages across the industry

Source : Gartner.com

 Source : Forrester.com

What is Value Management

Australian Mining Boom Impacts And Prospects

Is Your Business Ready for Big Data

IT Services Model - Cloud Enablement

Australian IT Industry Growth and Competitive Snapshot 2013-2014

Aussie banks to start rolling out real-time payments by next year

With the Australian Payments Clearing Association (APCA), the banks - including ANZ, Bendigo and Adelaide Bank, Citi, CBA, Cuscal, NAB, and Westpac - submitted this attached to make this happen in February. KPMG has won a competitive tender to become programme manager, the plan now is to put out a request for tender next year, and selection of the key elements of the operating system.

What happens when Coles keeps prices down

A fantastic speech By - Ian McLeod, Coles Managing Director, "What happens when Coles keeps prices down?”. Transcript below, its a good read.

Digital Transformation - Update

Digital Transformation - Sweet Spot

 Different organisation require different approach for leveraging benefits from digital transformation in their evolution.

• Pure Digitisation leads to expansion of core business to digital platforms.
• Pure Transformation leads to change in traditional business model to a new type of business model.
• Combination of executing Digitisation (services and platforms) and Business Transformation (transforming culture and business model) in parallel is less agile and is a challenging task to achieve. However this is the best option, executing either option individually or sequentially will not give the desired outcome.

Post NBN Industries in Australia

Why Telcos are Endangered Species - 2012

 

Interview with Brad Howarth - Australian Innovation and Startups Landscape

As part of our ongoing interviews with CEO's, Media Personalities, Philanthropists, and VC’s, to gauge the innovation and startups landscape in Australia, today we showcase our interview with Freelance Journalist, Public Speaker Mr Brad Howarth, who writes on Australia’s startup industry, digital marketing, dangers of climate change and other relevant topics in this domain.

This is what Brad has to say in a detailed interview with me. Read it here

Digital Transformation - Redefining Industries

In the ongoing pursuit of exploring how our world is becoming Digitally Transformed and how this is going to impact every industry, I have outlined the following agenda for a view point and a book that is still in the exploration stage.

The following agenda outlines the scope for me to explore, write and share my rumblings. I'm keen to get some thoughts and feedback. So please don't hesitate to reach out to me.

Update: Updated work on this topic is here

Mobile Megatrends 2012

 

10 Myths about the Mobile Economy

10+1 myths about the mobile economy

Troubled Telco's

When 7 out of top 12 Telco's are in zone of trouble, then its easy to make out that industry has some challenges to tackle.

GFC - 2 In Making..

This is what forthcoming GFC - II is about in a single snapshot.

Internet Trends 2011 by Mary Meeker, Partner at KPCB

KPCB Internet Trends 2011

View more presentations from Kleiner Perkins Caufield & Byers

How to Qualify Sales Lead and forecast Sales Target

Sharing my thoughts on how to qualify leads and forecast target.

Over the years, I have successfully used the BANT framework across the Waterfall Model of Funnel.



Let's look at the stages of

• Stage 0 (Demand Generation)
• Inquiry  - via a demand generation campaign like email/social media/webinar etc. or a sales rep. driven
• I'm not sure how you have got these 22 leads.
• From here, 22 prospects needs to be qualified along with 3 existing qualified leads to be sure.

• Stage 1 (Lead Management)
• Awareness - customer says do I have a problem, root problem /or a symptom of a problem
• Exit criteria - Marketing Captured Lead (MCL) which is data requests like  decisions makers, address, email, employees and other details of an organisation
  
• Stage 2 (Lead Management)
• Consideration - mean buyers say I have a problem and a need
• Exit criteria - Marketing Qualified Lead (MQL) -  BANT 1 can be used to exit to the next stage 
• Stage 3  (Lead Management)
  
• Engagement  - mapping buyers journey to engage and see if my solution can solve your problem and shall I try it
• Exit criteria  - Sales Accepted Lead (SAL) - Tactical exit criteria are BANT 2
• Stage 4 (Opportunity Management)
• Intent - Customer is ready to learn more about it
• Exit criteria - Sales Qualified Lead (SQL) - BANT 3 or 4
• Stage 5
• Sales Opportunity is qualified and identified
• It's at this stage, sales rep starts his/her efforts

This process can take some time depending upon how much info (like personas and 360 deg  profile of customer) we have, but if we have most of it then, it's a 1-2 day exercise only.

By Stage 5, it will be interesting to see how leads/prospects qualify as an Opportunity. Also, funnel mix needs to be considered esp; how many opportunities are cross/up-sells and how many are new opportunities. 

This will also give a good indication at this stage whether forecasted numbers can be achieved or not.  This process will help to invalidate. Both bottom-up and top-down approach must be used for validation of forecast.

Since I don't know

• how many leads qualify for Stage 5
  
• what is  a typical size ($TCV) of a deal
• an average time of conversion from Stage 5 onwards  to close
• Conversion ratio (say 25%)

But if we know these 4 parameters, then the sales number can be forecasted with certainty.

Strategic Analysis - Facebook

Facebook Strategy Analysis - (2004 - 2011)

Thoughts For Nike Strategy - 2010

Cloud Computing For Enterprise IT

Cloud Computing  

Sydney in race to develop first bionic eye

Bionic eye is very close to my heart. I would definitely love to see something in this space. In future I also intend to set up a wiki/website where I will try to put as much information about where people can learn about the developments in this space. More on the developments here [Via Slattery Watch]

A Centre for Implantable Bionics is to be established at the University of New South Wales in Sydney and one its first aims is to commercialise a functioning bionic eye. UNSW's Advanced Vision Prosthesis Group has been working on a bionic eye since 1997, and has produced over 70 peer-reviewed scientific publications and filed multiple patents. Other research efforts of the Centre will include trefined bionic hearing devices and artificial heart technologies, and development of electronic stimulation technology. A new leading research chair, the Paul M Trainor Chair in Biomedical Engineering, will be affiliated with the centre and an international search is currently underway for the inaugural holder of the position.

Report - Sensis and the Australian Search and Directories Market

I have undertaken this report to explore, learn and analyse the local online search and directories market to understand the developments that are taking place in this area. More than 18 players, from small and medium enterprises (SMEs) to large corporations trying to get some share of this market.

The main focus of this report is on Sensis and its competitors and how it can reinvent itself in a rapidly changing local market.

I would like to thank Mark Rimmer from Rave About It and Meg Tsiamis from dLook for providing a lot of invaluable information, insights and help while preparing this report. Read it here or download it from here.

Top 4 Probable Digg Buyers

Rumours are hot again about Google/Microsoft planning to buy Digg. When I wrote about Top5 probable Digg buyers in 2006 it was a rumor, but this time reports coming out suggest that this time Kevin Rose might sell it, esp when the stock market is going down and the US is technically in recession. The only difference between now and then is, that one of the suggested 5 players, Yahoo itself is in trouble. So only 4 players remain in the race and these are :
1. News Corp
2. Time Warner
3. Microsoft
4. Google

I'm quoting from my previous post here with some modifications on why these 4 players are after Digg:

News Corporation - Newscorp would love to have this esp; after their acquisition myspace has lost traffic/users and momentum to Facebook. And as a media company it makes sense to have the most popular portal for news/technology/current affairs to be in their armour.

Microsoft - Microsoft will be the obvious choice because Microsoft is lagging in this Web 2.0 phenomenon. There hasn't been any decent/buzzing service offering by Microsoft in this space. If this comes on board, it will provide them a kick-start, which they are hoping for a while. Microsoft has got all the ingredients the to make this happen. Only problem i see is they are offering less money than what Google is offering and they are tied with Yahoo acquisition.

Time Warner - Time warner group which own Netscape will be other contender. Netscape has launched their portal on digg style but is not popular as digg is. Netscape previously asked top digg contributors to join and get paid for their contribution. Netscape would definitely like to acquire this.

Google - If nobody can buy digg than Google will definitely try. It will be more of a strategic move, to not to allow, Microsoft or News corp to buy this. Google can pull this off. Also Kevin Rose would love to be part of Google rather than Microsoft.

I can think of only these 4 contenders, what do you think? is there any other company (media) that might be interested in?

Agile Consulting to Product Offerings - ThoughtWorks has come a long way

ThoughtWorks has come a long way from being an Agile practising and consulting company to a product offerings company. Founded by Neville Roy Singham, as a Management Consulting Firm under the name of Singham Business Services in 1992, it relaunched itself as ThoughtWorks after three years of its inception to focus on building software.

ThoughtWorks is now a leading global company when it comes to Agile Development and Practices. It is helping businesses across the globe with their consulting practices which include, Agile coaching and mentoring, S/W Development and Delivery and now products suite under the initiative of Thougtworks Studio

People who are in consulting business can learn few things from them:
1. Be Agile to market forces, prefer people to process.
2. Strategic Resourcing and Innovation - it follows a different model for hiring its workforce, people who already have a good profile in an open-source project are most likely to be hired and will be allowed to continue their participation in ongoing projects. This not only leads to expertise and new opportunities but also allows employees to be engaged with what they are passionate about; its intentions are similar to the famous 4:1 Google Model.
3. Hire bright guys only!
4. Tech due-diligence - is the best way of getting the foot into the door. I don’t think ThoughtWorks has many business partners or third party vendor relationships or product based relationships, pure technical consulting has to drive more business. This is in contrast to other models/practices for growth.
5. Better Movement of People - Probably one of few companies, which has achieved better results with offshore development and delivery. Its offices are located in the UK, US, India, Australia. It is probably the only company, which runs its induction session for new employees from various countries across the globe for 2 weeks in Bangalore (helps in breaking the cultural differences, if you have an offshore delivery model).

Going forward to capture more market share and to expand the relationship/engagement with current and new customers, it has started rolling out its product offering around its consulting practices, for example, Mingle - Agile project management and team collaboration tool.
Surprisingly the product suite is not on RedHat Model. It’s closely developed by ThoughtWorks and is licensed based, with no community participation in development. This model is similar to Atlassian, where an open-source community or non-profit organisation can get a free license.

Whats’ Next - to me it is a well-placed niche market in which ThoughtWorks is operating and will be safe to say are the leaders or trendsetters in their domain. I think sooner or later it will be a target of acquisition from a big consulting company like Accenture, Deloitte or maybe 3 Indian Giants Wipro/Satyam/Infosys. As Steve Jobs said with its launch of Mac Book Air. “It is in the Air”, BEA bought by Oracle, EDS by HP, Microsoft Trying... Yahoo. I will not be surprised if cash-rich Indian consulting firms, which have fewer consulting offerings in this domain, might go for it.

It will be interesting to see how ThoughtWorks go forward. What do you think? Any thoughts?

Catchup at Cebit

I will be heading to Sydney on May 22 to attend CeBIT's Transaction 2.0 conference. For those who are interested in catching up with me, please feel free to come and chat with me. Our Australian Startups Carnival 2008 winner Scouta has got a pod for exhibition in TechRamp Pavilion, so will be there for some time as well.

It's going to be exciting and a little bit hectic, but it's worth it. I'm looking forward to catching up with new friends.

My Thoughts on HP + EDS Acquisition

I have penned down my thoughts on the recent acquisition of EDS by HP, which is about 3 C’s - Consulting, Cloud and computing. Read it here.

Microblogging with Twitter

Guest Post Written by Ujjwal Grower and edited by Vishal

Vishal's intro: Twitter is a free social networking and micro-blogging service that allows users to send updates (text-based posts, up to 140 characters long) to the Twitter website, via short message service, instant messaging, email, or an application such as Twitterrific. Twitter was founded in March 2006 by San Francisco start-up company Obvious Corp.

The restriction to 140 characters has resulted in Twitter being labelled as “micro-blogging”. A traditional blog is a log of what somebody is up to but in a richer, more detailed format. One of the key aspects of Twitter is to send and receive updates (also called tweets) via your browser, email, instant messaging clients and SMS so you can keep in touch no matter where you are.

How it works :
When you send in a mobile text (SMS), Twitter sends it out to your group of friends and posts it to your Twitter page. Your friends might not have phone alerts turned on so they may check your web page instead. Likewise, you receive your friend's mobile updates on your phone.

Enough from my side. Let's jump into Ujj's post on Twitter for Microblogging.

Twitter is the newest baby in the blogosphere. If I try explaining what you can do with Twitter, you will most certainly feel it's useless, but once you 'twit' for a while, you will get addicted in no time. Twitter is a mix of social networking and internet messaging, we call it microblogging. It is a way to tell your friends what you are doing. To get started you
create an account, start following some people already on Twitter and you are good to go. People who start following you will receive your updates on their Twitter page. So if I am following Amit,

I will receive his latest update - > Amit: skipped breakfast to crunch pointers in the office :(
and he will receive mine -> Ujj: new caterer serving awesome food.. life is good again :)
and so on.
Amit can also reply to Ujj directly -> Amit:@ujj kewl ..enjoy :)

Interested enough. Let me tell you the real power of Twitter. Twitting's most fun when you sync up your Twitter account with your Gtalk and Cell phone. Once you do that you will receive updates as messages from Twitter id from your friend. You can also directly send updates on Gtalk and even via text messages on a cell phone (but that is a little expensive).

Twitter is being used extensively by pro bloggers like Techcrunch, and Tech2 who need to inform their followers about their latest posts. Surprisingly even Bollywood has not ignored Twitter's presence on the web. An account of the recently released Bollywood movie Saawariya was spamming Twitter accounts extensively during the release of the film.

The other huge plus with Twitter is its API which can be used by anyone very easily to create web mashups and write their Twitter bots. One such bot was written by Taggy, men in Blue which would automatically update the Twitter account. You can develop Twitter bots using PHP and Java. More about it here. A detailed tutorial next time.