Cloud Inefficiency - Bad Habits Are Hard To Break

We all have habits we would like to (and should) break such as leaving the lights on in rooms we are no longer in and good habits we want to encourage such as recycling plastic bottles and driving our cars more efficiently. We often don't because habits are hard to change and often the impact isn't immediate or all that meaningful to us. The same has long been true in IT. But keep up these bad habits in the cloud, and it will cost you - sometimes a lot.

As developers, we often ask for more resources from the infrastructure & operations (I&O) teams than we really need so we don't have to go back later and ask for more - too painful and time consuming. We also often don't know how many resources our code might need, so we might as well take as much as we can get. But do we ever give it back when we learn it is more than we need? 

On the other hand, I&O often isn't any better. The first rule we learned about capacity planning was that it's more expensive to underestimate resource needs and be wrong than to overestimate, and we always seem to consume more resources eventually. 

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Groupthink And The Problems Of Silos

I think we would all agree that BPM and business architecture set out to overcome the issues associated with silos. And I think we would also agree that the problems associated with silos derive from functional decomposition.

While strategy development usually takes a broad, organizationwide view, so many change programs still cater to the suboptimization perspectives of individual silos. Usually, these individual change programs consist of projects that deal with the latest problem to rise to the top of the political agenda — effectively applying a band-aid to fix a broken customer-facing process or put out a fire associated with some burning platform.

Silo-based thinking is endemic to Western culture — it’s everywhere. This approach to management is very much a command-and-control mentality injected into our culture by folks like Smith, Taylor, Newton, and Descartes. Let’s face it: The world has moved on, and the network is now far more important than the hierarchy.

But guess what technique about 99.9% of us use to fix the problems associated with functional decomposition? You guessed it:  yet more functional decomposition . I think Einstein had something to say about using the same techniques and expecting different results. This is a serious groupthink problem!

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Avoid The Headlines, Focus On Corporate Culture

Guest post from Researcher Nick Hayes.

Chris and I recently published a report describing how to build risk and compliance principles into your company’s corporate culture. As we worked to finalize, edit, and publish the report, a flurry of new corporate scandals emerged, all related to this topic.

Here are just a few of them:

  • Wal-Mart executives accused of trying to hush up bribery cases in Mexico (article here).
  • A whistleblower accuses Infosys of engaging in a systematic practice of visa fraud (article here).
  • A former Goldman Sachs employee writes an op-ed for the New York Times blasting the company’s ethics (article here).
  • JP Morgan suffers a $2 billion trading loss due to “poorly monitored” trades (article here).
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SAP Buys Ariba – Huh?

The big news in the ePurchasing software market yesterday was SAP’s acquisition of Ariba. This blockbuster deal will extend SAP’s position as the largest software vendor in the ePurchasing market. It also brings into the SAP fold one of the most innovative companies in this market – a company that has a fair claim to having begun the whole market in the late 1990s.

Still, as my title suggests, I’m not convinced that this acquisition makes strategic sense. I think there’s a real risk that this turns out to be a deal where one plus one equals 1.75, not two, let alone a multiple of two. Reason one: the tremendous duplication of products between the two firms, and thus the problems of product rationalization and internal competition. Reason two: the Ariba Network, which is the main rationale for the acquisition, is based on an idiosyncratic pricing model that in my view is unsustainable at current rates and thus will not generate the kinds of revenues that SAP is expecting.

Let me first state the case for why this could be a good deal:

  • SAP has a goal of significantly increasing the portion of its revenues that come from SaaS subscriptions, so adding a projected $342 million in subscriptions revenues in 2012 (on an annual basis – SAP’s share for the year will be about half that) helps SAP reach its target of $2 billion in SaaS revenues.
  • Ariba has correctly recognized the economic value in operating a supplier network that stands between corporate buyers and suppliers and facilitates their transactions. SAP’s acquisition of Ariba now gives it control of and revenues from the largest of these supplier networks.
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Digital Customer Experiences: The Next Frontier For AD&D Pros

 

Forrester analysts Stephen Powers, Ron Rogowski, and I collaborated on this research.

Digital customer experience has become a key business differentiator, and application development and delivery (AD&D) leaders of front-office, web, mobile, and digital development must step up to support their firm's initiatives. A broad focus on digital customer experiences carries great risks for your firm: too much experimentation for not enough return; too much duplication and waste; and too little use of data to drive and measure business results. To overcome these risks, marketing, eBusiness, and AD&D pros must collaborate on a comprehensive strategy. Today, AD&D pros rarely help lead their firms' digital experience efforts; interactive marketing pros call the shots. Worse, interactive marketing pros see AD&D pros as obstacles to great results. To partner with marketing and business leaders in digital customer experience strategy, AD&D pros must transform their organizations, platforms, and processes. This research describes this opportunity for AD&D — and how to create an AD&D digital customer experience strategy that supports marketing and business counterparts, from vision to implementation to ongoing optimization.

Most firms still don't treat the design, creation, and execution of digital customer experiences as strategic but rather as a special category of marketing-led projects. Digital customer experience practices require a set of competencies that take tactical projects to the next level — requiring leaders of software development, web development and architecture, solution architecture, front-office applications, and project management offices (PMOs) to take on new obligations.

Even leading-edge consumer-brand companies struggle to get the full measure of benefits that a focus on the quality of digital experiences can provide:

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Application Development In The Cloud: Let’s Go Deep

 

Developers are driving cloud computing in new directions and toward deeper enterprise adoption. We see a new pragmatism in our research: Developers favoring collections of cloud-based application services rather than the comprehensive platforms labeled “PaaS.” Growing use of development services attached to SaaS offerings to speed delivery. And developers using cloud environments to respond to the opportunity of mobile apps.

We also see contradictions in our research. Why, for instance, do so many developers demand control of thread and memory management when cloud platforms can shield them from those details?

If we understand where developers are taking cloud computing, we’ll be able to plot better strategies to use cloud for the flexible and efficient application delivery business leaders expect. We talk with many hundreds of developers working in cloud computing environments every year, and so we’ve got a great view of the market. But it is time for us all to gain an even deeper understanding because things are changing.

So we’re reaching out to developers for the industry’s most comprehensive survey on cloud application development. We’ve put together a set of questions that will yield a clear picture of application development in the cloud today – the good, the bad, the ugly, the elegant. Which cloud environments developers use, and why. What kinds of applications they are delivering using cloud, and why. Which languages and application services they prefer, and why. How much code and which kinds of data they host in clouds, and why.

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A Killer Disease? IT’s Unhealthy Obsession With Itself

While sitting at a hotel desk at “silly o’clock” this morning preparing for the Forrester I&O Forum in Las Vegas, I saw a Tweet from Ian Aitchison of LANDesk that was an obvious but little realized truth:

“Is the IT industry unique in its obsession with its own possible future demise? The sky is always falling in. #ITRapture”

IMO the average IT organization does appear to be somewhat Chicken Little-like and my response of “I think it is because IT is obsessed with itself :)” started me off …

While we have not necessarily fallen in love with our own reflection, it is difficult to argue that we are not overly obsessed with what WE are doing rather than what the business is doing – as per yesterday’s blog  “Why Is IT Operations Like Pizza Delivery?”

Consider this exaggerated story

You meet two people at a soiree (that’s a posh cocktail party BTW). The first introduces themselves: “Hi, I’m Ian. I work for LANDesk. I do all sorts of product marketing nonsense.” The second does the same. Well, I say the same; there’s a big difference – “Hi, I’m Stephen. I work in IT.”

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Evaluating Cisco's Collaboration Strategy

Through a combination of analyst briefings and customer events, Cisco has ramped up outbound communication and marketing of its collaboration strategy in Asia Pacific over the past several months. The foundation remains video (TelePresence), webconferencing (WebEx), and IP telephony, areas where Cisco is a leader. But Cisco understands that to drive growth and expand its customer footprint within enterprise accounts, it must move further up the stack and increasingly compete with both traditional collaboration vendors like Microsoft and IBM and cloud-based alternatives like Google and salesforce.com.

While the strategy still plays to the company’s core networking strength, I question whether Cisco can position itself as a “go-to” vendor in the traditional collaboration space. As our research shows, senior IT and business decision-makers in Asia Pacific don’t currently equate Cisco with collaboration.

To address this challenge, Cisco is pursuing multiple initiatives/approaches:

  • Leveraging its core strengths. Cisco is focused on expanding from existing unified communications (UC) initiatives within customer accounts by leveraging the combination of networking and video to drive value. Cisco is pushing “control” via intelligent networking capabilities (e.g., security, identity management, authentication, access), all delivered through Cisco networking hardware. Simultaneously, Cisco is pushing “flexibility” via device- and platform-independent collaboration capabilities like content, video, instant messaging, and social computing.
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The Eight Questions To Ask Before You Buy A CRM Solution

During the last five years, the customer relationship management (CRM) solutions market has experienced considerable growth and turmoil. Quickly evolving technologies like multichannel digital customer engagement, real-time decisioning, social computing, business process management (BPM), and mobility are creating new ways for organizations to deliver differentiated customer experiences. There has been a rapid rise in the popularity of solutions deployed through the cloud, and vendors have acquired direct competitors or snapped up companies in adjacent spaces to broaden their customer management offerings. As a result, business and IT leaders are often confused about which solution to choose.

I have just finished Forrester’s Wave™ evaluation of the leading CRM solutions. We evaluated 18 solutions against 411 criteria and will publish our findings in June. While every CRM solution has its strengths and weaknesses, here are the key questions you need to ask to pin down the right solution:

1. Will the solution help us deliver great customer experiences? More organizations are moving beyond empty goals like “becoming customer-obsessed” to define clear and actionable customer experience strategies. Look for solutions that will help you to break down organizational silos and support the full customer journey that traces how buyers interact with your organization.

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Innovation Is Risky – But What’s The Risk Of The Same Old Supplier Relationships?

Sourcing and Vendor Management professionals aren’t known for their high risk tolerance. In fact, most focus a significant portion of their time reducing risks in their supplier base, protecting the business from supplier-related risk.

That’s admirable and necessary. Of course the business shouldn’t be subjected to predictable and preventable risk events. But let’s think for a minute about what risks we’re really avoiding: Are we avoiding the unnecessary risks that we could see coming? Or are we so focused on reducing any risk that we’re not able to take advantage of new opportunities that could transform our businesses?

Innovation has once again become a business imperative — because of the shaky economy, not in spite of it. Many SVM professionals tell me that being innovative in both what you buy AND how you buy it is what will make sure their businesses stay viable regardless of the economic situation. Innovation requires us to think about new technologies, and most likely new suppliers. It also requires us to think differently about how we manage those supplier relationships.

So what are the new supplier-related risks we face in this innovation-focused environment? We asked Jason Busch, Azul Partners, one of our keynote speakers at the SVM Forum this week, this question. He recorded his answer for us here:

And if his response leads you to have follow-on questions, don’t forget to tweet them with the hashtag #SVM12. We’ll ask him for you during the forum.