Monday, June 27, 2011

Do you have one big message ?

Earlier this month, I was in a conference of retailers discussing how IT can contribute to growth within their business and to the industry at large. The event had its usual bevy of IT vendors who had availed of speaking slots as well as many deciding to exhibit their products/solutions to target potential customers with their offerings. Attendance being large with representation across retailers, it was a great opportunity for the sponsors to engage.

Now this was one conference that was crafted together by a panel of CIOs and vendor representatives in conjunction with an industry body. The panel engaged with the sponsors through the planning process defining expectations and providing the suggested format of their participation in the event. Vendors presenting the traditional way using slides were expected to send their presentation to the Committee of CIOs to validate the context aligned to the theme and to ensure that it made sense to the participants. Thus, the agenda, content headlines and topics (de-jargonized by the CIOs with some catchy titles) were fairly relevant to the audience comprising of a mix of business and IT representatives across the layers of management.

Every marketing executive when provided with the opportunity to deliver an address to a captive audience attempts to put in everything that the company does whether it makes sense to the target audience. The result is that anyone listening is more confused than s/he was prior to sitting through the presentation. Charts and multiple boxes with bullet points are the norm. Animations and pictures add to the already crowded slides.

With a few exceptions, the changes to the pitch comprised of slashing the number of slides to fewer than 20 and making them readable even to people sitting in the back of the room. The clear message to everyone was what is the one big message you want to leave with the audience in your allotted 30 minutes ? Can you engage and provoke thought rather than outline the menu of options your company has to offer ? Given the task of reviewing 3 presentations each and ensuring that the changes are in line with expectations, the CIOs were a harried lot by the time they got into the conference. Few still escaped censorship by either citing unavailability of global speaker slides or by simply not responding.

The end result ? Few chose the case study route to deliver the benefits of their product or services; the compliant presentations created a wow for almost everyone, visible from the crowd outside their stalls. Vendors who did their own thing found the audience twiddling with their smartphones, chatting to their neighbours, dozing off, or simply walking out midway. If I was the speaker, it would be totally demoralizing for me.

In the day end debrief with one such vendor, he insisted that there is no other way to inform the audience of what his company has to offer. If the customer is not aware of the entire spectrum of offerings, how and why will s/he think about his company ? According to him, when he puts across 10 points, a few will be remembered. He refused to believe that his speech was delivered but not received.

Sigh ! some people don’t learn.

Monday, June 20, 2011

Do Clouds really save money ?

The beginning of the monsoon season in Mumbai inspired me to push the boundaries again in quest of the silver lining in the Cloud. Recent events around outages and security across multiple global Cloud pioneers poses doubts on the movement of even non-mission critical applications outside of the corporate data centres. We are not just talking about Infrastructure or Platform as a service, but everything that is the manifestation of the Public Cloud.

Over the last couple of years every offering saw two shifts, first it had to have a Cloud flavour and second around social networking (that is another story); some termed this new euphoria as bubble 2.0 tinted by valuations achieved in recent IPOs. So everyone justified how this time it is different and why it is sustainable. Many large and small enterprise found efficiencies (at least short term), in moving field functions like sales and service, and collaboration on the move, to the Cloud.

Leaving aside the debate between public, hybrid and private clouds, the real issue is about the promise of the Cloud irrespective of the vendor, type of cloud offering, or engagement model. The big benefit that every type of Cloud offered was savings, real quantifiable savings or better Total Cost of Ownership. CFOs would agree that TCO is always a good measure for any financial model if all other dimensions remain unchanged.

Cloud service providers financial models are contingent on multiple customers adopting their base solutions which give them the efficiency of scale and repeatability. As the number increased, beyond a threshold they start making money. Non-concurrency improves yields, but prices remain the same for customers. So the financial models attempted to capture some efficiency based gains making them look attractive to the prospects.

Most discussions got off to a good start with worksheets providing easy decisions. The newness of the paradigm left some questions unanswered, but during the slowdown, these were brushed aside. Some of these were 
  1. What happens if the SLA is not met ?
  2. Is my data as secure as it is in my current state ?
  3. Can I move off to another Cloud if I don’t like something ? How easy is the transition going to be ?
  4. As I upgrade internal systems, how do I ensure integration with the external systems does not break ?
  5. What recourse do I have if the Cloud Service Provider goes bust ? ...
I will stop here, the list is a bit longer, but you get the point.

Business impact due to recent outages and security breaches for some of the smaller customers was significant. Some of them just had to wait and watch with no option. A few had spread the risk across and thus the impact was limited. The big enterprise shrugged and moved on. How does one balance the adverse business impact against the cost savings ? To me this is a bad compromise as everything is subservient to business interest.


Monday, June 13, 2011

Do CIOs really take real vacations ?

Last month I was confronted by a peculiar but innocent question from a young professional, “Do CIOs take real vacations ? I mean real long vacations with friends and family free from all the worries of workplace and fighting fires that keep them at work beyond the normal hours ?”. I began to wonder about the question and the more I thought about it, the more it troubled me. I mean, vacations without my email, phone, laptop, no connectivity; that was eons ago.
Today every executive irrespective of hierarchy is consumed by the need to stay connected to the workplace. Downloaded information and alerts keep the buzz going 24X7. Approvals via phone, business intelligence on the fly are the norm; one cannot ever claim that I was not informed or I did not have access to information. To add to the clutter, friends and partners want to stay connected using various social networks.

So what is the vacation about ? Working on the road with interruptions on the phone, balancing the laptop in between site seeing trips, late night responses to emails with long attachments, talking to a vendor while soaking into the natural beauty staring in the face ? For most of us who travel across time zones, the first reflex is to reach out to the phone to see what came through while we caught up with the forty winks.

What does it take to sell the Ferrari and become a monk who has no links to what we call “work”, while immersing into “life”. Is that a possibility in the hyper-connected fast paced activity conundrum ? We CIOs created this paradigm for our enterprises to which every corporate employee is a slave.

Imagine if we did not answer the phone (makes us appear rude), stopped responding to emails and had an active “Out of Office” message, let team fight the fires that make up a regular day at work; would it make a stress free day ? 9 out of 10 times people would say yes, but 9 out of 10 times they will suffer higher stress levels’ wondering about what is indeed happening.

So is there a way out ? I would hazard to say yes and it requires excruciating will power to execute; go at it one hour at a time. That is like taking baby steps and setting a realistic target because stating that I will not look at that device called the phone, laptop, or tablet; for a week is unlikely to happen. Feeling awkward, I called many CIO friends who took vacations recently and asked them if they did what I have outlined above. No prizes for the result of the survey.

I think Bob Dylan had seen the future when he wrote in the year I was born “The answer my friend, is blowing in the wind, …”.

Guess what, next vacation I am going to try it. (it’s always the next, isn’t it ?)

Monday, June 06, 2011

Is Outsourcing cheaper in the long run ?

Once upon a time many moons back, the IT industry discovered multi-shore sourcing, I use this term to encompass all types of (out)sourcing initiatives, and with that came long-term contracts, 10 years was normal, 5 was seen as short-term. A lot of these that termed themselves as Strategic Sourcing also built in innovation, new technology, business process linked contracts with broad intent on changing market and business dynamics.

The fever spread across the globe and no markets or sectors remained untouched. Big or small, almost every company was expected to embrace this new wave. The euphoria within the enterprise as well as IT companies was such that companies that did not enter into such arrangements were seen as stakeholder unfriendly or just plain dumb for not acquiring the obvious value.

As the years passed by many companies reported rumblings of discomfort and missed expectations. Analysis appeared to indicate specific issues with companies and individuals for not putting in their best effort, safeguarding the model with zeal lest the industry collapse with an unsustainable framework if there were indeed cracks in the carefully crafted Contracts, Service Level Agreements and Reference Architecture that represented the blueprint for the future. Business, profitability, political and other pressures forced reviews and scale down.

Prudent and rigorous reviews also exposed that long-term contracts had advantages of consistency and predictability, but lost on taking advantage of swings in the IT industry as well as did not bring in the level of efficiency or capitalization of quick market trends requiring agility that was possible with short-term relationships or with the ability to review and recast the terms of engagement say every alternate year. This was reflected in the drying up of the decade long deeds and most engagements focused on a 3-5 year term. Maybe “familiarity breeds complacence” also took root with in most cases both parties working hard to keep the marriage going.

There is no implication that these did not deliver to promise; some of them did and continue to do extremely well; some required significant investments in governance. Leaving aside labour arbitrage, the value captured did stretch the boundaries of discussion and measurement models.

New models now seem to be emerging with focus on outcome based payment schedules, collaborative investments in new technology exploration, but the basic framework has survived the troughs and waves of the economy and resultant impact. The challenge of growth (manpower retention) has mutated the needs and solutions into new forms with service providers hungry to get back to growth of the past, but discarding the learning of unsustainable linear growth assumptions.

Outsourced contracts or strategic sourcing contracts will thus become expensive and non-tenable with linear growth not aligned to market/business or the (in)ability to manage sudden shocks or black swans that keen coming back to surprise us. Periodic review of terms of engagement even if they imply disruption is the need of the hour; the IT industry however is not very excited.