Will Amazon's Deep Pockets Strangle Netflix?

IronMan2Amazon’s recent distribution agreement with Epix is a big threat to the dominance of Netflix in the movie streaming market.

Last year Netflix attempted to shift its business strategy to focus mainly on streaming video. Although I wasn’t present in the boardroom discussions, it’s a reasonable bet that Reed Hastings and his team had decided the future was online streaming and that physical discs were a dinosaur. Since the war for content would be fought over streaming, Netflix would focus on adding value to its streaming customers and spin off the disc customers. On the surface this seemed to many a reasonable strategy, especially since Netflix reported that its digital streaming customers and the disc-in-the-mail customers were mostly not one and the same. So Netflix execs crunched the numbers and decided this was the right move for them. Perhaps they had hoped to spin off the disc side of the business to raise some capital. Whatever their thinking, their strategy choices left some gaping unanswered questions for observers like me:

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Do Enterprise Architects Have Value?

I love nothing more than a good debate, so when I read George Colony’s recent blog post “Enterprise Architects For Dummies (CEOs)” and then read the comments from infuriated architects I just had to chime in and post a comment. My EA colleagues were the first to enter the fray, with Brian Hopkins posting a reply to many comments on his own post “It Doesn't Matter Where EA Lives - So Let's Stop Arguing About It.”

What’s interesting is that the most comments centered not on whether George was right in highlighting the importance of the EA role, but on whether EA should be seen as an IT role at all. And what is fascinating to me is that some folks believe EA should report to the CEO. The thinking goes that the CIO is too techie, and the EA role is much broader than IT because it involves business process and even org design. This seems to ignore the fact that George actually wrote, “Techies invariably screw up the business; business guys screw up the tech. For years (actually, decades) we've looked for someone to span both -- and that's what Enterprise Architects do.

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BT Strategic Planning: Upcoming Events

For many traditional IT organizations, BT Strategic Planning is a new approach to developing technology strategy. As such, it often raises more questions than answers. If you’d like to know how to get more answers then this blog post is for you (if not you can skip the rest).

To help you get stuck in and apply the strat planning framework in your environment, we’re scheduling a couple of webinars and a two-day workshop for this September. In the first webinar on Sept. 11, we’ll go into the best practices CIOs put in place in order to set up their teams for success in developing business technology strategy. In the second webinar on Sept. 14, we’ll explore the levers of BT value and how to successfully communicate BT value. While both webinars are connected, you don’t need to attend the first to get value from attending the second.  

And if you are interested in rolling up your sleeves some more, I’m facilitating a two-day workshop on BT Strategic Planning on Sept 25th and 26th in San Francisco. This open workshop builds upon the successful custom workshops we deliver for clients looking to apply Forrester’s planning framework. Over the course of two full, mind-bending days, you will go through the entire strategy planning framework and learn how to apply it in your organization.

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Failure Is Not An Option

Failure or success, which do you choose?As regular readers of my blog will know, I’ve been talking about moving beyond alignment for a number of years now. The fact is, too many CIOs have been able to get by on the basis of managing the technology black box — and CEOs and CFOs have been complicit in allowing these same CIOs the freedom to do what they want within tightly controlled budgets, not wanting to sully their hands with “all that technology stuff.” But those days are rapidly coming to an end. The technology genie is out of the bottle; today’s business-unit leaders are more dependent on technology than ever before, and they are also much more tech-savvy. CIOs can no longer hide behind the technology black box — it’s time to change the IT game forever. It’s time for IT to drive business results and connect all technology investments to business outcomes.

Today’s new CEOs are looking to CIOs and IT to make a direct impact on business goals from investments in technology. While every business must make technology investments to sustain operations, IT must move beyond simply keeping the lights on and connect the dots between effective growth strategies and new technology investments. This requires a different set of technology and business skills: different people, process, and technology in the IT organization. In fact, the organization is so different we now call it the business technology organization, or BT. The distinction between IT and BT is subtle but important. BT represents the fusion of the IT organization into the rest of the business. In a BT organization, the lines between IT and business units are blurred. What is important is a focus on the roles needed for effective business technology strategy execution. What’s not important are reporting lines.

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What Business Are You In?

After wrapping up our CIO Forum in Paris last week, I can definitely say CIOs and IT leaders care about strategy. The theme of this year's conference was "Collaboration To Co-Creation," and we included a number of sessions directed at helping IT leaders step up and influence business strategy.

A highlight of the forum was Peter Hinssen's talk on The New Normal — you can see a sample of Peter delivering an earlier version of his presentation on YouTube (http://youtu.be/s_w04xb4MqM?hd=1). And Peter's talk perfectly framed the strategic themes of the conference.

Through a number of keynote and track sessions, CIOs discussed transforming IT to have an even greater impact on business outcomes. Central to this theme was the exploration of Forrester's new BT Strategic Planning Playbook, including a workshop-style session where CIOs got to exchange experiences on moving their organizations away from being order-takers and toward strategic partners with lines of business.

It's clear from the discussions I had with many of the CIOs attending that IT leaders sense new opportunities to partner in developing effective business strategy and moving toward co-creation. But there are challenges ahead; here are a few I shared in Paris in a short session on co-creation:

Language is important. What we say and how we say it are critical. Even speaking plain English is challenging. For example, in England one might say "put the money in the boot" (probably only likely if you are a bank robber but I like the imagery so bear with me). What we might imagine is something like this

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The Ultimate Question

As fans of The Hitchhiker’s Guide to the Galaxy will recall, the answer to the ultimate question of life universe and everything is something a group of hyper-intelligent pan-dimensional beings demand to learn by building the ultimate computer — Deep Thought. It takes the computer 7.5 million years to compute and check the answer.

Of late I’ve been considering a more mundane version of the ultimate question — what is the ideal metric to use when evaluating business technology strategies? The challenge is that we already have a diverse set of investment metrics from which to choose. There’s Return On Investment (ROI), Net Present Value (NPV), Internal Rate Of return (IRR) and Payback period to name a few of the most common. Yet I can’t help feeling they all lack a little something — the ability to connect the project with the desired business outcome, which for a strategy is the attainment of the goal.

Recently I’ve been working with clients to apply a different measure — the T2BI ratio:

BI/T2BI*CRC

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It's Time To Kill Your IT Strategy

Yes, that’s right — I’m suggesting CIOs should stop working on IT strategy. The days of developing a technology strategy that aligns to business strategy need to be behind us. Today’s CIOs must focus on business strategy.

Lemonade StandLet’s face it: Does sound business strategy even exist today without technology? Most CEOs would likely agree that, unless you are running a lemonade stand, any successful business strategy must have solid technology at its core. The challenge for today’s CEOs is that, while planning business strategy in isolation from technology is sub-optimal, it remains the most common way business leaders develop strategy. And while there have been many great books about strategy, the specific challenges facing the CIO are largely absent.

That’s why Forrester has researched the ways in which companies develop technology strategy and also why we have developed the Business Technology Strategic Planning (BTSP) Framework. Our new BTSP playbook distills Forrester’s current research into an easy-to-follow guide that has at its heart the understanding that there should be no IT strategy, just business strategy with a technology component, or BT strategy.

Now you might think we’re crazy — after all, many firms, including Forrester, earn substantial revenue from advising CIOs on IT strategy. But as I see it, IT strategic plans belong in a museum.

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What’s A Facebook “Like” Worth?

Facebook LikeIt seems everyone’s obsessed with Facebook’s IPO right now. And while CMOs are beginning to understand the possibilities of Facebook, and other social technologies, to connect and engage with customers, many CIOs remain unclear on the value of Facebook.

A question many business executives ask is this: “What’s the value of having someone like your page?”

On its own, maybe not much. But the true potential lies in the ability to collect insights about the people who like brands, products or services – be it your own or someone else’s.

For example, the chart below shows the percentage of consumers by age group who have “liked” Pepsi or Coca-Cola. These data suggest Coca-Cola is significantly more popular with 17-28 year olds than Pepsi, while Pepsi appears more popular with the 36-70 crowd. I pulled these data points directly from the Facebook likes of each of the brand pages using a free consumer tool from MicroStrategy called Wisdom. Using this tool I can even tell that Coca-Cola fans are likely to also enjoy the odd Oreo cookie and bag of Pringles.

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How I Turned My iPad2 Into A MacBook … Well Almost!

As my regular readers know, I try to provide something thought-provoking for most of my blog posts. But every so often something comes along that makes me go “wow, I really need to share this.” This is one of those times.

Like many analysts here at Forrester, I have an iPad (my own, not the company’s) which I often use for work — especially when travelling (which we do a lot). And like many people, I’ve grown used to the tactile feel of a real keyboard — so every now and then I’d yearn for a real keyboard to use with my iPad.

Apple Wireless KeyboardBeing an Apple fan, I first bought the Apple Bluetooth keyboard. While this is a good keyboard, it has a couple of major flaws for my use. Firstly, it doesn’t actually hold the iPad, so you have to position your iPad somewhere you can see it while typing. For this reason you can’t easily use it anywhere there isn’t a good flat surface near you on which to stand your iPad. And secondly, it’s not very convenient to travel with as it’s so long — who wants to walk around with a sleek iPad and a huge keyboard? I needed something more compact.

Then while building my Amazon wish list for the holidays I came across a nifty little keyboard that seemed too good to be true. On Amazon it’s called an "Apple iPad 2 Aluminum Bluetooth Keyboard Case Cover Stand" supplied by MiniSuit. I couldn’t resist adding it to my wish list.

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Does BT Need A New Report Card?

It's time to re-think the report card used by CIOs to report on BT performance – tomorrow’s BT CIOs must look beyond the traditional IT Balanced Scorecard (BSC). 

I realize this is sacred ground for many people in IT (and some of my colleagues here at Forrester), so let me explain myself before I receive a barrage of complaints. The philosophy behind Business Technology (BT) recognizes technology as integral to every facet of every organization – as such, IT is very much an integral part of the business; we can no longer talk about “business” and “IT” as if referring to two distinct things. I’m suggesting that in the age of BT, we need a new scorecard that better reflects the impact of BT on the business.

A great deal has been written and published on the Balanced Scorecard, including many great pieces of research  by my colleague Craig Symons, such as his recent report "The IT Balanced Scorecard: Customer/Partner Metrics Revisited." I'm not suggesting we throw this out by any means – CIOs absolutely need to use a balanced scorecard to run an efficient and effective BT operation (see fig 1).

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