deal architect

Grand Challenges

I love interviewing senior corporate executives for my books. The conversations are always about large problems they are trying to solve. 

So, for this book, an executive talked to me about how they define Big Data. 15 gb of data for every flight. Half a terabyte of data from a turbine. Similar from other equipment. Now multiply that by thousands and thousands of units. Major consideration – how do we minimize cost of managing a terabyte of data and how to dramatically reduce data ingestion time? How do we deliver orders of magnitude improvements in each?

A oil executive told me how 3D visualization, sensory analytics and massive computing power, now enable a geologist to perform sub-surface analysis of a formation remotely and empower the corrosion planner to virtually create plans in hours versus walking around facilities or in the field for days. Much safer to humans and much, much better decisions.

A manufacturing executive told me they move 25% of their plant capacity across borders in a year so they can produce closer to emerging market demand as middle classes blossom around the world.  Think of the logistical implications of such constant moves.

None of these challenges have off the shelf tech solutions. They require integration of multiple tools and lots of customizations. 

That frustrates many analysts because they do not neatly fall into market categories. Consultants lose interest when they don’t recognize the vendors that provide the solutions.  My books have no such constraints. The grander the challenge, the more ink they get.

Calling for alternative endings to SAP book

I formally invited SAP to provide a 10 page, unedited column to include at end of the book I am writing  - how things will be different with its new management team.

The book model shows customer spend at a run rate of over $ 200 billion a year – $ 1 trillion (yes!) since the recession while SAP’s own sales/deliverables have leveled off. That includes cost of SAP licenses and maintenance, systems integrators, hosting/infrastructure, consultant travel,  application management providers, BPO firms, MPLS circuits, upgrades, SAP staff at customers etc.

The book does a root cause analysis based on 20+ years of archive data and based on interviews with SAP customers, partners and market watchers.

I thought it would give a somewhat positive ending to book to let SAP provide an optimistic (and unedited) future after all the failures and inefficiencies cataloged in the previous chapters. My model shows SAP itself accounts for only about 10% of the total cost of the economy around it. So, this would have been their chance to discuss how the ecosystem, cloud delivery model etc would be different going forward.

They thought about for a month and have declined.  Not exactly surprised – I see how SAP has reacted to a recent ASUG survey on (slow) HANA adoption. This is their customers talking and yet SAP defensively brushes it off.

I have similarly interviewed plenty of customers about their SAP investment strategies and I could move one of those sections to the end, but I would like to invite alternate ending suggestions from my readers to fill at least a few of the 10 pages I had blocked off.

Please comment below or send me an email at vmirchan AT gmail DOT com.

I will contribute $ 250 to the charity of choice of the entrant with the best suggestion by August 27.  Or buy them a nice dinner. Their choice.

Thanks for participating.

Why I write books

Last week, at the grocery store checkout I overhead a man congratulate another about his new book. Curious I asked the author what his book was about. Hugh Sullivan has written about his 40 year career as a Navy Corpsman. He was awfully proud of his book Doc! as he should be. We shared publishing stories and I went home and downloaded the Kindle version.

My son home for the summer break told me last week he enjoyed his visit to the public library. How quaint I thought. On the same day, the Wall Street Journal had a story about how libraries are surviving, and in fact thriving in an age of eBooks.

Books are not dead – not by a long shot

I am finishing my 4th book so clearly I am into that channel of communication. I love to meet and encourage fellow authors.

But my blogger friends often ask me why I write books – so old-fashioned is their tone. Of course, heavy tweeters ask bloggers the same question

And when they do,  I am reminded of my former Gartner colleague, Erik Keller who is now a master gardener. He had a nice quote when I interviewed him for The New Polymath

The term “ legacy ” is considered a negative in technology whereas in farming it is a positive. Because the nature of technology is not to preserve the past, it often functions in a circular, self - destructive mode.

Here’s my experience

1) A book is a very disciplining mechanism. Somebody once said “Vinnie, you can make a brown bag sound interesting”. Thanks,  but I am actually picky around topics I write books about. Most times they are ahas which smack me with a 2x4. They are my ice bucket challenges that wake me up.

The New Polymath came about because I started to notice from my blogging “complex products” where companies were learning to blend infotech with biotech, cleantech, healthtech. The Digital Enterprise was Karl-Heinz Streibich’s aha – I helped him flesh it out.  The SAP book came about from some modeling I did which estimates its customers have spent post-recession over a $ trillion even as SAP’sales/deliverables have leveled off.

I spend 2-3 months doing research, talk to 75-100 executives and analysts for each book. The 360 degree view challenges my original position, polishes it, nuances it. And as I cook and reduce and reduce some more, end up with 10 to 15 case studies which form the backbone of each of my books. The early weeks of research and interviews are the most enjoyable part – the back end editing, publishing chores are not much fun, but with each book, the publishing industry has evolved and they are less and less painful.

2) My audience – executives – do not have much time for much reading. Books, magazines, analyst research, blogs all fight for their attention. I don’t expect each reader to scan my books cover to cover.  But I go back and periodically review an Amazon feature called Popular Highlights. It tallies sections that multiple readers have marked up on their Kindle apps. These mark ups tend to be all over my books. Same with readers I encounter on my travels. They will cite back sections they enjoyed (or some they disagreed with) that appear random. They may not have read the whole book, but I would be hard pressed to predict which 10, 30,50 pages they do read. If I did I would write 30 page eBooks. But they would be boring without case studies, and interesting anecdotes. Which means I would likely not write them.

3) The book itself is only one channel. My book research feeds my blogs, my speaking, my consulting.   My books in turn benefit from my blogs, my speaking, my consulting.  They make each richer as a result. If books were my sole focus I would likely be writing about Lady Gaga or iPhone 6 rumors not boring  old SAP

4) Books broaden my vocabulary and personal “Wikipedia” . As part of this book I learned the term “coal-face” – not the Mary Poppins kind, but front facing – term apparently very commonly used in the UK. During the Digital Enterprise I learned all kinds of details about the German economy. From the New Polymath, I learned much about the Italian Renaissance. It’s continuing education.

This weekend I read about Rodrick Markus who travels the world seeking out exotic teas, truffles, oils and other delicacies. I hope I can continue to similarly find ahas to keep writing about for a long long time.

The Impact of Automation on Jobs: The Missing Dimensions

Pew Research has a thought provoking study on the impact of algorithms and robotics on jobs. Half the experts polled are very pessimistic, the other half just pessimistic. Definitely worth a read.

What I find fascinating about these discussions is how IT centric – as in IT and impact on white collar jobs, shop floor, logistics – the focus is. That is the world many of us live in, so it is understandable.

I like to periodically go back and read the Grand Challenges that the National Academy of Engineering has laid out

• Make solar energy economical
• Provide energy from fusion
• Develop carbon sequestration methods
• Manage the nitrogen cycle
• Provide access to clean water
• Restore and improve urban infrastructure
• Advance health informatics
• Engineer better medicines
• Reverse-engineer the brain
• Prevent nuclear terror
• Secure cyberspace
• Enhance virtual reality
• Advance personalized learning
• Engineer the tools of scientific discovery

Sure many of these will need software, sensor, satellite support and other IT centric skills, but think how many chemists, mathematicians, engineers of all stripes, and biologists and other STEM skilled workers we will need to solve these challenges. And how many more we will need to deploy the solutions. And keep maintaining and improving them. And this is just the tip of the challenge iceberg. There are hundreds less pressing challenges our world faces which need talent to focus on.

The other thing we forget is old jobs never completely disappear. Did you know there are still over 50,000 dairy farms just in the US.? Most are family owned and continue to provide good livelihood to the family members. Sure automation has reduced the human element, but even after decades not eliminated all the jobs.

Finally, hardly anyone talks about the positive impact for consumers. Automation keeps prices affordable and quality consistent and production improvements quicker. 

Way too many of us are quick to beat up on Amazon for not paying enough attention to Wall Street, or for buying up Kiva the robot maker or thinking of drone based deliveries. But Jeff Bezos has made famous “the empty chair” in meetings to remind his executives to be ever cognizant of the customer. Most automation discussions ignore the customer point of view 

 

 

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Gartner, the lightning rod

Once again Gartner is in the news. Its is being sued and a whole slew of blogs and articles have piled on.

My summer project researching and writing about the SAP economy has allowed me a chance to go back and review 20+ years of market research, articles, blogs and presentations.

Part of me wonders why Gartner did not break so many stories or lead challenging positions when I review

• how many times DSAG has challenged the value of SAP maintenance and price increases especially on behalf of the German Mittelstand – mid sized customers who do not strain SAP support or development much
• how many SAP failure stories Chris Kanaracus of IDG has broken through persistent mining of court filings and SEC and other sites
• how Phil Fersht and his small firm HfS first brought to my attention how massive the SAP economy had become
• how a Mentor like Jim Spath questions why SAP has broken a long established tradition of sharing – what he calls “classic” – SD benchmarks when it comes to HANA performance  

But does that mean Gartner is not independent as it used to be or has become a “pay for play” firm?

Three perspectives – again from the lens of my summer research

a) The average Gartner analyst tries hard to be independent

From 1995 to 1999, I was one of the lead analysts on the SAP (and broader ERP) consultant marketplace and I repeatedly warned the market

While acknowledging that R/3 is merely an enabling tool and that their end goal is to help clients develop world-class business environments, few consulting firms have adequately documented process improvements around R/3 projects. Similarly, few could show examples of business cases or return-on-investment (ROI) analysis to justify the large investments their clients are making around R/3. Finally, a number of firms, afraid of being viewed as negative on SAP, are not objective enough when advising their clients in the evaluation, contract negotiation, and "gap analysis" phases of the projects.”

and

It is time to revisit the impact of consultant travel on implementation projects. Through limitations and incentives in SI contracts, creative use of telecommunication technologies and changes in attitudes, users should actively manage project team travel. Once accepted as a necessary evil, it is becoming clearer that the large amount of travel in today's consulting market is significantly impacting project economics and productivity

and and and

My alma mater, PwC asked Gartner I should not be allowed to cover them, because I knew them “too well”. And this was 3 years after I had been gone! A partner at another firm sarcastically told me “I thought you were gone from PwC” suggesting I was too nice to PwC. Needless to say, such complaints would lead to detailed reviews and audits of my research. And earned me badges of honor from my analyst colleagues.

I have a hard time believing the average Gartner analyst of today does not try just as hard to be as independent.  I meet them at industry events and they remind me of younger me . Passionate, smart, may be a bit more diplomatic than I was, certainly with fuller head of hair

b) the average Gartner analyst has so much more to cover

When we first issued a detailed review of SAP SIs in 1996, we had profiles of 20 vendors. Now with the SAP services market ten times as large, Gartner still only profiles in detail 20 of the biggest firms (IDC and Forrester profile even smaller numbers). 

Why?

The marketplace has changed dramatically. There are hosting firms, offshore application management firms, telcos, regional firms around world that did not have an SAP practice when I was covering the market. Many did not even exist. In turn, many of these firms have digital agencies, BPO offerings, mobile development and countless other practices.

The matrix of coverage at Gartner has grown exponentially. Gartner looks at SAP in many different “Magic Quadrants” – ERP, Sales Force Automation, Strategic Sourcing, Horizontal Portals, Master Data Management, Mobile Application Development Platform, Implementation Service Providers, Data Warehouse and many others. They cover some segments well, others not so well.

c) The average Gartner analyst is just one small market watcher

I will have a section in the book on SAP Market Watchers. It looks at how regulators, media, analysts, bloggers, user groups and academics have watched over the SAP economy.  My model shows it is at a run rate of $ 220 billion a year, larger than the GDP of Ireland so clearly deserves a fair amount of attention

My conclusion

Such a massive SAP economy and yet, such fragmented coverage. Way too much coverage goes to SAP itself, and there much to the gossipy executive revolving door and to nationalistic stereotypes. In the meantime, gross inefficiencies in the data centers, networks, armies of talent running SAP get little attention.  It reminds you of the fable of the blind men around the elephant – one who touched a leg thought it was a pillar, the one who touched the tail called it a rope and so on.

So, yes Gartner deserves scrutiny because it is the biggest analyst firm. But it is just a small and often misunderstood element of the marketwatcher community.