deal architect

Burning Question: What should Ginni Rometty do?

As she enters her second quarter as IBM’s CEO, Ginni faces a tricky scenario which frankly could qualify her for Veep consideration this summer.

What to do about Augusta?

Readers?

Burning Question: Do you measure negatives around your Brand?

During the Super Bowl I saw a couple of tweets which lamented that few of the ads “called for action” on part of the customer. Probably part of the brand nurturing investment I thought. Sometime in the near future, in competitive decisions, customers will likely reward their brands.

Brands can bring enormous customer loyalty. What is less studied is they also bring negative associations. Two recent examples from a TV session:

a) I saw a news item on Redbox and Verizon’s planned physical and streaming video service. As Blockbuster fades and NetFlix stumbles, it will be good to have other providers. But Verizon? All my negatives for that brand earned over decades of experience – creative fees, data throttling, slow technology rollout, poor customer service etc – jumped out.  I actually felt sorry for Redbox.

b) Saw an ad for Quicken Loans where they promised a “rate drop” feature where they would absorb the “majority” of closing costs of any refinance. Quicken Loans is an entity separate from Intuit, but the negatives for Intuit from my past experiences with QuickBooks and other products came to mind. Frequent and expensive upgrades, irritating pop-ups for countless Intuit products like checks….Still curious I went to their web page. The rates were a full percent higher than what my current mortgage bank offers, and we have a similar rate drop feature for a defined fee of $ 495.  Given my already wary state of mind why would I sign up for a rather vague “we will cover a majority of refinancing fees”?

Readers, is your company like Domino’s which used brutally honest customer feedback to engineer a “pizza turnaround”?  Or does it ignore them or even fight negative customer vibes?

Burning Question: Should more events be virtual?

I knew I had a conflict and could not be at the SAP Influencer Summit. So, I was pleased when Mike Prosceno of SAP emailed “its all being recorded so you can watch on demand at your leisure.” Then I see Vishal Sikka, CTO of SAP did his presentation by video.

And I wondered what if most – the presenters and the attendees – were virtual? Could it be effective?

I ask the question because for the first time earlier this year I watched the SuperBowl at home with a laptop and smartphone nearby. My family was in and out several times during the game. Usually if I watch the game, it is with friends. The tweets and FB posts and web access to drill into trivia about a player or a team or a standout commercial made for an unusually enjoyable experience.  The fact that Dallas, where the game was being played, had miserable weather made it even more enjoyable to be where I was.

But that was roughly 4 hours. Would it work for a 2 day event? Could you replace the hospitality of Mike and Stacey Fish? Could you provide salty commentary from the likes of Dennis Howlett and his video guests? Could you replace the snarkiness of bloggers like Brian Sommer and James Governor? Could you replace the hospitality of an airline during holiday season? :)

Readers what do you think? If nothing else, it will help my planning for February 5. Yes, the next Super Bowl! 

Burning Question: Is there a truly balanced IT scorecard?

A relatively new CIO asked me what top metricsI would recommend  he measure his IT organization against. I remembered what Maynard Webb, recounting his experience as CIO of eBay had written when he reviewed my book  “ “CIOs have to be masters of many disciplines—they are technology strategists, business partners, project managers, operations gurus and budget analysts."

So, I rattled off a few metrics focused on economics, service levels, customer satisfaction, innovation etc.

Then I reached out to Chris Curran who in his usually wonderful sharing attitude not only responded but shared with the world this blog post.

I also got feedback from other IT executives. Most of them cautioned – focus on a few key metrics.

But then each emphasized their own IT experiences. One I respect as very innovative highlighted IT innovation and alignment with business and customer/revenue goals. Another who is a damn good fiscal manager had SOX deficiencies as one of his key metrics. Yet another who comes from a lean manufacturing background emphasized IT process metrics. Another who works in a global, very decentralized company emphasized internal relationships and  customer satisfaction metrics. I know of a CIO whose users expect high-touch local IT support. So, his staff has a heavy component of desktop management since his customer satisfaction scores are heavily influenced by that.

Great, really thoughtful input from all.

Except…when you add them all together, you end up with 40-50 metrics and this would violate the caution each of them had about a scorecard with too many metrics .

Besides exposing me to key metrics I could not have dreamed off, the big aha from this exercise was maybe a single “balanced scorecard” that will work for very CIO is a bit too much to expect.  Better to give them a Chinese menu of key metrics and let the executive team, not just the CIO, decide on the top few areas they want to measure  the CIO and IT against. And repeat the exercise every so often as scenarios change. The key metrics would vary by culture of the company, the competitive landscape, the financial shape of the company, the regulatory environment etc.

Talk about a painful, but so critical, business/IT alignment process..and think of the even more painful SLA conversations with suppliers who want 5-7 year legally binding contracts and who are ready to draft change orders for everything.  That’s an even more critical alignment of IT and supplier goals and incentives.

And then again using the Polymath AND not OR theme of my book where may be, just may be the 40-50 metrics may soon be the reality CIOs will have to live with.

Readers?

Burning Questions: Do telcos understand variable cost economics?

Somewhere from my fuzzy recollection of economics classes, I seem to remember that as products evolved in their lifecycles, you moved from “charge what market will bear” to “variable cost pricing “ – i.e. make sure price covers your variable costs and there is some left over to cover residual fixed costs. If anything, I would have thought this would apply in spades in the telecom sector, with its significant fixed cost network capacity investments.

In the last month, I have been reminded by three instances of why the industry seems to not apply variable cost pricing

• I lost my wallet in Paris couple of weeks ago, so I had to call my card companies. All of them say “call collect” from overseas so the hotel patiently connected me to the AT&T operators (multiple times - most of the AT&T operators are too impatient to navigate the card company IVR and would hang up if they did not get a human voice to accept the toll charge - as we know a human takes a few minutes to find in most card companies). But that experience was a good reminder of the calling card charges we all loved from AT&T in the 90s. Massive charges for minutes persisted even as local stores in various markets were selling prepaid cards for a fraction, and we all steadily quit carrying the AT&T calling card in our wallets.
• I recently wrote about the GoGo wi-fly network on the New Florence blog. What was interesting to read was Aircell was leveraging its experience in airphones we had in most seatbacks in the 90s. It was also a reminder that in spite of a significant investment in infrastructure on the planes and the ground, Verizon and other carriers did not move to variable pricing. They stubbornly kept pricing at almost $ 3 a minute till most CFOs banished them from expense reports. Surely their variable cost pricing could have come down to 25 to 50c a minute. At those rates, many of us would have checked our voice mail boxes 1-2 times a flight and many would have called families for a quick goodnight call.  Too simple - it was a lot easier to strip those phones off planes and take a writeoff.
• While in Europe, Pat Phalan kindly gave me a phone with his MAXroam SIM card which allowed me to stay in touch across the 5 countries I was in and make calls back to the US. My total cost was about 1/5th it would have been if I had used my AT&T mobile service (especially for the intra-European charges they expect with the add-on of a US relay element).  In the meantime, every newspaper was reporting a further decline in mobile roaming rates across the Continent starting July 1. Indeed according to this article, roaming charges have fallen by an average of 73 percent in the EU since 2005. But nobody seems to have told AT&T that. I suspect they will persist with their “charge what market will bear” pricing till their roaming market share drops to nothing.

Readers – should variable cost pricing not apply in that industry?

Burning Question: What will be Killer Enterprise Mobile Applications in 24 months?

RIM's Director of Alliances, Tyler Lessard presented at WES 2008 last week what he called "The Latest, the Greatest, the Coolest Applications for BlackBerry Smartphone.". This interview summarizes what he presented. RIM has TV commercials like this one and exciting new consumer products partners like Unify4Life which could make the device the ultimate remote control - not just for managing home stereos and theaters but also in future home security, power management and more.

Of course, still boring compared to what Michael Mace describes in the Nokia ecosystem

"It features, swear to God, a guy who created a self-hypnosis application for the N95, someone who created a bad breath detector, a man in the Witness Protection Program who created a location-aware app to track the hit men chasing him, a ditzy woman who uses the phone to track fertilizer schedules for her plants..."

But as I walked the Solutions Expo at WES 2008 I was struck at how few business applications there were. Let me clarify. Few categories of applications. Plenty of Sales Force automation applications (SAP, Sage, salesforce.com among others were present), Location/Mapping applications (Garmin, Google, TeleNav and several others), traditional applications which help manage email (Blackberry's traditional killer app for business). Oh, there were some POS extensions, some scanners, some voice recognition applications, but overall relatively sparse.

So, my question for readers - as Google and Apple and Nokia expand the ecosystem for mobile apps, what will the enterprise (as against consumer) mobile apps look like in 24 months? Will accountants have journal entry capability so they can work even when they are at a baseball game? Will fields like healthcare and logistics continue to pioneer with vertical apps? And will corporate users care?

Burning Question: Is SAP walking a mile in customer shoes?

So, at Sapphire SAP presented reasons for delay around its BBD SaaS offering. Most explanations centered around SAP "learning and optimizing what our customers have been doing" with hosting, applying SAP fixes, Basis support, upgrades, user support - various aspects of application management.And SAP automating many of these expensive, manual tasks. 

Privately, some SAP employees have told me the BBD journey has been a revelation how much its SI and outsourcing partners charge its clients, and now SAP is driven not just to improve economics for future SaaS customers but also for existing on-premise customers.

To which I go - Yeah! Why has it taken so long?

Then the other part of me goes - in bits and pieces SAP has offered services like this for years. Its consulting, systems integration, help desk and outsourcing groups know the effort and economics around SAP implementations and support and those in its large services ecosystem.

What do readers think? Has SAP embraced a new religion or is it just spin to explain away BBD delays?

Burning Question: What will enterprise software look like in 2017?

Forrester lays out 3 scenarios for CIOs:

Scenario 1 forecasts increased consolidation, diminished innovation, and high prices.

In Scenario 2 a new, large vendor enters to challenge IBM, Microsoft, Oracle, and SAP; stimulate innovation; and keep price increases at bay.

In Scenario 3 it forecasts the upheaval of today's largest vendors, rapid innovation, and steep price declines.

What do Deal Architect readers think?

BTW - Forrester inspired this question - so no wimpy Gartner probabilities allowed -)

Burning Question: What do YOU do with unlimited phone time?

So, as mobile companies rush to offer unlimited call plans, I wanted to ask my readers what creative and zany things they have done or seen others do when they are invited to a buffet by the Duke of Decibels...

My 3 stories:

a) Back when we had airphones in planes, GTE (now Verizon) ran a $ 20 promotion - one rate per call, no time limit. Usually it cost around $ 4 a minute. This fellow spoke non-stop for 3 hours. He switched between English and his native tongue (I think Nigerian). He screamed into the phone, then would sing in to it. All of us around laughed, cringed with his cadence...all the way.

b) In the UK when they had a similar unlimited mobile minutes promotion a few years ago, a man told me he used his and his wife's cell phones as a baby monitor - all night and every time the baby had a nap.

c) I heard about a gentleman who on the road calls his wife on Skype and they keep the call on all night long (Skype to Skype calls are free). It's comforting to both, apparently.

Readers, other stories?

Burning Question - How does software M&A help buyers, not just investors

Between CA and IBM and Oracle and HP and Microsoft and Infor and Sage we now have a database of over 200 software industry acquisitions over the last 15 years.

I hear from my investor friends all the time how healthy M&A is for the software industry.

What I would love to see is academic or Gartner or other research which shows how buyers have benefited from volume discounts as contracts get consolidated, from lowered SG&A, product rationalization, from better product integration, from streamlined customer service...the promises that industry M&A makes to a CIO.

Love reader input..on studies which show tangible payback, not just promises...