deal architect

The Nokia-Microsoft “Third Ecosystem”

A quote from Chapter 1 of my book

“Steve Jobs is explaining one major reason for the iPhone ’ s success —Apple ’ s ability to integrate hardware and software engineering: “ We realized that almost all — maybe all — of future consumer electronics, the primary technology was going to be software. And we were pretty good at software.. . . None of the handset manufacturers really are strong in software. ” 4
That is a modern polymath at work — integrating multiple modern disciplines. An AND versus an OR mind - set.”

So, with that backdrop I am a bit puzzled with the Nokia-Microsoft announcement today. I thought Steve Elop had been brought in to beef up Nokia’s internal software capabilities and compete better with Apple’s intensity and product elegance. Let’s be honest - Apple would never have delivered the spate of products last decade if it had been shackled by dependence on a third party for the guts of its products.  Don’t get me wrong – our household is not filled with Apple fanboys. We have Android and Blackberry phones, and PCs and Kindles and the occasional iPod and iPad, and in the past have had several Nokia phones and GPS devices.

Maybe Steve has decided it is too late for Nokia to try it by itself. From a consumer standpoint it is good to have what Nokia calls “the third ecosystem”. But with HP/Palm also in mix, and other device makers salivating at the exploding smartphone and tablet markets, it is not likely to stay at just 3 ecosystems. And it would be foolish to rule out a Japanese threat (Japan has spectacularly missed out on the smart device market to date)  or a price competitive Chinese one.

One area Nokia could really differentiate is in relationship with carriers. In the US, Apple is hobbled by 3G carriers and Android with the unimaginative 2 year contracts telcos are so addicted to. Could Nokia work a 4G, SLA based deal with a carrier which guarantees network deployment at its pace, not another decade long rollout most carriers will likely deliver on their own? On a global basis, Nokia has a huge base of carrier relationships. Could it craft a creative roaming plan to sell to global executives?  Could it break the unfriendly contracting model carriers have in so many markets?

While he will get complimented and crucified for the Microsoft decision, longer term how he leverages Nokia’s global assets and relationships will be interesting to watch.

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The Real Deal: Steven Skinner on Moving towards an Intelligent Store

This continues a series of columns from practitioners I respect. The category "Real Deal" describes them well.

This time it is Steven Skinner who is VP of Cognizant’s Retail and CPG Practice.  Previously, Steven served as a Strategy Partner in Accenture’s Retail practice, VP at Home Depot, and GM for Microsoft’s Global Industry Strategy Practice – so an entire career in the retail industry. Here he writes about how the physical shopping experience needs to evolve.

“We’ve seen it coming. We’ve known its coming. It is now here…so why are we so surprised and unprepared inside of the Retail Store by the rise of the new-age, smart, technology-driven shopping?

This wasn’t one of those trends like social media that came out of left field and hit retailers. We have seen the step-by-step progress of mobile technology in Retail, which began in the late 20^th century and accelerated in the last decade (see Microsoft’s Smarter Retailing strategy circa 2004). Now we have seen full bore the rampant “consumerization” of IT at the shopper/consumer level. We have seen the power shift from store associate to shopper in terms of product knowledge, usage, substitutes and price points. Research tells us how “Generation Y” is influencing all other generations in the mass adoption of mobile technology, social media, and Internet-based commerce, along with the continued erosion of the mass media’s ability to influence shopper decisions. In other words, online/mobile/social shopping is no longer an emerging trend and the impact of this on physical shopping experience is increasing as you read this. Technology is changing the way consumers shop and the expectations of the new-age intelligent shopper will lead to make-or-break moments at the store. What now? Here are five ideas we have to extend the experience outside the store to within:

1. Retail must expand the concept of the store. The store must become “without boundaries.” We call it “Taking the store to the shopper, regardless of location”. Why is the shopper in aisle three treated worse than a shopper in a check-out lane or sitting at home? Think about that. The shopper making a purchase decision, but at the point of decision-making is given less information by retailers than any other channel. Why can’t the shopper receive store navigation maps with shelf assortments on his/her mobile so the shopper is guided through the browsing process while at the store? Better yet, why can’t the shopper have his “shopping recommendations” integrated with his online account and delivered to his mobile device or have access to time-based or location-based offers?

2. To enable number one, IT must embrace the shopper’s IT environment within its own retail store architecture. This “shopper architecture” must leverage cloud-based services to augment basic mobile device services to provide a rich and contextual shopping experience. Our shopper in the previous point would need the store’s Wi-Fi network and IT ecosystem to support the technology on his/her mobile device.

3. Retailers must embrace the mantra of “death to all fixed POS devices” (well, perhaps not all of them as they will have their appropriate place). But to the extent we can get more associates out from behind the POS and into “aisle three” to provide an improved shopping experience, we all know the positive impact on basket size and conversion rate with a shopper-assisted sell.

4. Why must coupon redemption (the third highest source of shopper irritation in the store according to our research) be manual? Wouldn’t it be great if the shopper showed up at the check-out counter (which, by the way, should be a mobile one) and the coupons from different manufacturers were applied automatically; and processed all the way through settlement? Retail should Automate and digitize everything. Similarly, why must return processes be so manual? Make it easy (they’ll love you for it. Sometimes your best customers are the ones who return the most!). Have the shopper log into a account on a returns ecommerce site, schedule a return , choose a credit or refund option and have them ship it to you from their nearest UPS or FedEx center.

5.  Think of how Generation Y consumes technology with friends via social media and then how they consume it as a POS associate Monday morning (POS doesn’t mean “Point of Service,” by the way). We have seen evidence that high associate attrition is driven by this technology environment dichotomy. Retail needs to Embrace the Sunday evening experience on Monday morning. A cash register with a big-screen PC isn’t half as exciting as the cool gadget that fits into the palm of their hands and it doesn’t keep them behind the POS (and it helps manage attrition through a better work environment also). Generation X and older shoppers are also fast embracing what technology has to offer. After all, who wouldn’t like a faster, better and easier way to do the weekly grocery shopping or hunt for that elusive perfect gift for a special occasion?

Like other channels (social, mobile and the Internet), the new “Intelligent Store” is equipped to fulfill the expectations of more empowered consumers. Getting there requires at the very least the CIO, the Chief Marketing Officer , the SVP of Store Operations and the SVP of Ecommerce to determine how to best treat increasingly techno-savvy, data-driven shoppers. Most importantly, it allows for the CFO to keep the store as an asset on the balance sheet, not a liability. We think that is a good thing.”

Steven can be reached at St[email protected]

Nasscom and outsourcing innovation

The Nasscom Leadership Forum, an annual fixture in Mumbai is on this week. It exudes a bullish tone after a subdued one the last couple of years. But while there is plenty of talk of innovation at the event, the reality is an “old faithful” benefactor through the two decades the event has been held, the financial services industry is back spending again.

Barry Wiegler, who used to run the Sourcing Interest Group and is now Managing Director of Outsourcing Angels recently interviewed me about outsourcing innovation and a couple of comments I made to him are particularly relevant as Nasscom looks ahead to the next two decades

“The big challenge for a number of outsourcers (and their investors) is they keep wanting to sell services that were innovative a decade ago. Many are centered around ERP vendors, Cold-war era data centers and waterfall implementation methodologies in a world increasingly moving to social CRM, cloud computing and agile methods.”

“…newer players like Salesforce.com and Amazon. They are not “traditional outsourcers” but they are giving customers alternatives as they look at application management and IT infrastructure services. They emphasize automation more than labor in their services, and represent a major threat to the current outsourcing model which is pretty labor intensive.”

““If you look at the last couple of decades, most outsourcing has focused on infotech – software, data centers etc. There are similar new opportunities opening up as companies implement cleantech, nanotech etc.”

The Living Room won big!

Cowboys Stadium which hosted the SuperBowl puts most data centers to shame with its slew of HP servers and Cisco routers. Its giant screens and luxury suites make even the most elaborate home theaters look pedestrian. This is the future of the NFL – the response to the concern the NY Times highlighted last year:

“That has forced sports officials to rethink the game experience
and desperately attempt to bring the living room to the game, not the other way around.”

And yet after hearing plenty of slip-sliding stories as folks tried to make it to the stadium in Arlington, TX or to parties around the country, I thought the living room won big last night.

Four themes converged last night

• TV Commercials extended into social platforms so having a laptop or mobile device nearby was handy

As Douglas Idgugboe writes “Nearly 22 percent of Americans were active on Facebook during the game, and 44 percent of young adults sent phone texts while watching the Green Bay Packers and Pittsburgh Steelers battle for the NFL championship.

While the advertisements themselves lasted 30-60 seconds, most advertisers have leveraged social media to keep viewer interest alive after the event ended. Events such as Super Bowl present a welcome break for advertisers to look beyond the standard Facebook fan page and Twitter account in their efforts to reach consumers through the sites.”

• A disproportionate number of products advertised during the show had a technology angle

By my estimate almost a third of the ads had some technology product or theme. The list was long – from the ubiquitous eTrade baby to the salesforce.com placement around the Black Eyed Peas half-time show, and GoDaddy, Groupon, Motorola and many others causing their own waves.

By the way, while the half-time show had its share of glitches, the LED costumes and other gizmos showed the NFL will increasingly make the show more high-tech. The Beijing Olympics opening ceremony showed what is technically feasible, and technology has evolved quite a bit in the 2.5 years since.

Of course, if the technology content continues to grow, even more techies will watch games at home (and God forbid even watch the Grammies and Oscars as they target that technology sponsorship base!)

• The Twitter stream provided a parallel, more interesting perspective on the game and the commercials

Live Tweeting has become routine at various industry conferences. Honestly, though the Tweets tend to be polite and mostly parrot what is being shown on the main stage. Twitter last night was irreverent and brought together folks around the world – Ray Wang of Constellation from a bar in Mumbai, India, Merv Adrian of Gartner from a bar in Dublin, Ireland. Narinder Singh of appirio was going to watch it on a Virgin flight then found out it does not carry Fox, so ended up watching it from his home.

It was also nice to have tech executives tweet. Padmasree Warrior of Cisco proudly tweeted about the large number of the company’s gear at the stadium. I politely tweeted back there was also plenty of HP Gear. Later when the tweets lamented the audio quality during the half time show, I tweeted “Hear Jerry Jones (owner of the Cowboys) ran over budget with so many on-premise HP servers and Cisco routers - should have gone cloud!”

Marc Benioff of salesforce.com tweeted about the effort it took for his team and for Black Eyed Peas to put its two Chatter commercials together. And I am sure he read plenty of feedback on the ads.    

• Oh, and by the way, as the NYTimes pointed out, watching at home with HD, surround sound etc does make the game more fun.

Of course it is fun to go to a Super Bowl party and hang out with friends, but I have a feeling more of us will be watching future versions in our living rooms with our virtual friends.

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SuiteWorld – an event over a decade in the making

I am fortunate to be invited to a wide range of industry events. But as in farming, have found “crop rotation” is important. This week I went to Lotusphere – I was last there almost 20 years ago while at PriceWaterhouse which was an early adopter of Lotus Notes. In the last couple of years I have been to FASTforward (Analytics), HIMSS (healthcare), Voicecon (Unified Communications), WES (Blackberry and mobile apps), CFO Technology Summit,  HR Tech, Cognizant Community among others.  That gives me fodder for the wide range of topics my New Florence innovation blog covers.

One new event I am looking forward to this year is SuiteWorld.  It is NetSuite’s first global customer event. You have to admire their discipline – many vendors have one even before their first year in business. NetSuite has been in business 13 years. With everyone starting to hype cloud computing it will be good to hear from pioneering executives like Evan Goldberg and Zach Nelson. They have forgotten many of the things most other vendor executives are just starting to learn.

And talk to some customers on what they have been able to do with the savings from not being on an on-premise infrastructure for years now. I am also looking forward to meeting some of their partners. NetSuite is pioneering relationships with a new set of partners like Baker Tilly. The systems integrator/outsourcing market is ready for its own version of fresh blood.   

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IBM’s “Social Business” in a world of Grand Challenges

I spent a little over a day at IBM”s Lotusphere event in Orlando this week and the most interesting session for me was a one-on-one with Doug Heintzman, Director of Lotus Strategy. He painted several “what if” scenarios. Imagine if Toyota had been able to identify patterns from various customer calls and other events months before it hit the crisis around the “sudden acceleration” problem. Imagine if Airbus had been able to early detect product design spec inconsistencies between its French and German teams around the much-delayed A380.

As he was talking about signals from so many sources waiting to be grabbed and used astutely my mind drifted to a discussion of “Grand Challenges” in my book

“The tradition of grand challenges dates back to David Hilbert, the mathematician. Preparing for a conference in 1900, he asked a colleague what a compelling presentation topic would be and was recommended the following: “Most alluring would be the attempt to look into the future and compile a list of problems on which mathematicians should test themselves during the coming century.” The end result was Hilbert’s list of 23 (he dropped 1 from an original list of 24 in his final paper) problems that continue to challenge us, even into the twenty - first century. Hilbert’s challenges have led to many lists of grand challenges over the last few years across many disciplines. One of the better - known lists is one developed by the National Academy of Engineering in 2008 which challenges (among other things) to manage the nitrogen cycle and reverse engineer the brain ”

The UN Millennium Development Goals, the Melinda and Bill Gates Foundation challenges for global health are other examples in the book.

Doug did not use the word “Grand Challenges”  but he might as well have because in IBM’s vision a “social business” rethinks traditional CRM, HRM, PLM, SCM – almost every area of business where in Doug’s view you can “optimize workforce efficiency”. Indeed, IBM in another session identified it as its “$100B social business marketplace” opportunity. It calls it the “fifth shift in business technology”  - from the Mainframe to Departmental computing to the PC to the Internet and now to Social Business.

If the vision was Grand, the event seemed too tactical for it. In the Monday keynote, the audience increasingly grew restless with the concepts, and wanted to see product demos. During a customer panel, someone from the audience tweeted.

“Wish the panellists were being asked how IBM/Lotus software was helping them, rather than vague #socbiz questions”

The reality is the Lotus software family has till a couple of years been mostly been starved for investments and innovations (with exceptions like Connections and there were a flurry of mobile and cloud announcements at this event)  Several customers I talked to in the hallways mentioned “strategy sessions”with IBM (polite term for “we are looking at options”). Others talked about sunk investments in Lotus and likely cost of migrations away from it as the reason to stay put. Market share data shows Microsoft and Google successes in Lotus shops. Indeed, IBM at several times during the conference talked about an Exchange co-existence strategy.

But even if Lotus had been vibrant, the move to social CRM, HRM, SCM, PLM etc will need substantially more extensions, new types of services and partnerships. Paul Greenberg, who knows a thing or two about SCRM, told me at lunch and later tweeted

“They are still weak in #scrm. Haven't figured that out & though its right in front of them w/their entry points.”

Ditto for social HRM, PLM, SCM.

One thing IBM was eager to showcase was its own transformation to a social business. Jon Iwata, SVP, Marketing and Communications, described IBM’s transformation from early days of employee blogging to the point where “50,000 IBMers can use social media strategically”

But what does that mean for its customers? Doug described the initial cynical response of a manufacturing CIO and his staff when he described IBM”s social journey “But we are not IBM. We live in a very different industry with a very different set of employees”.

And therein lie IBM’s Grand Challenges. Talk to customers about impact on their industries and their processes. And don’t just talk “vision” – bring the solutions to facilitate their becoming Social Businesses. And probably the biggest challenge – overcome the image of the old IBM earned over the last decade with old software like Tivoli and DB2, old partners like SAP and old bunkers called data centers. 

As IBM gets ready to celebrate its 100th birthday, I did see a healthy sense of pride in its employees at the conference – good to see as it tackles the “Fifth Shift” as it has the previous industry shifts.