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Filed Under:
business, recessions


Closed: 16 Sep 2009, 11:59PM PT

Earn up to $200 for Insights on this case.



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Navigating The New Business World After This Recession

The usual economic indicators suggest things aren't getting worse as fast as before, and the more cautious forecasters are offering some less-than-optimistic predictions of a long road ahead for recovery. Several analysts (in reports from McKinsey Quarterly, Harvard Business Review and the like) point out that business has fundamentally changed and that the current downturn is not simply part of a regular business cycle. On the upside, though, the preceding decades have developed an incredible collection of enabling technologies that businesses may have only scratched the surface of -- which have laid the foundations for future long-term economic growth.

In this environment, employees look for real leadership and direction from their corporate executives. So this case sponsor, HP, is looking to inspire forward-looking discussions with essays aimed at executive level managers. We're looking for insightful articles that may help guide executives towards success during uncertain times. What does an executive need to do or need to know to be more effective nowadays? What does the future of business look like? How can an organization thrive under pressure? What innovative technologies or services will help companies stay competitive? What techniques can be used to motivate and promote innovation? How can workflows be optimized to be smarter, more efficient and productive? These are just some example starting topics to give you a general sense of what we're looking for -- we're not expecting point-by-point answers. We encourage unique (and even entertaining) submissions on related topics.

The best insights will be used as posts on an HP website that will be announced later. Please submit essays that are at least 500 words in length.

UPDATE: The sponsor is more accurately "HP Enterprise" -- so the target audience is specifically executives and decision makers (CEOs, CFOs, COOs, etc) at large companies.

13 Insights

 


All I can say to CEO/COO/CIO's is understand the technology and understand really, understand what is happening with your IT dollars. IT should be past the day where it costs your company money. It should be well on the way to adding to your bottom line.

28 Years of IT experience.

 

 

This is the age of IT savvy business executives. they have a keen insight into the benefits and pitfalls of IT.

 

This crop of Business executives constantly challenge the IT departments/CIO's  on both merit and value of implemented technologies.

 

The recent downturn has further increased the scrutiny in to the exact spend and benefits of IT investments.

 

This resulted in a significant reduction of spend on Big ticket/Big Toys(Large SMP servers, Storage and Network Overhauls) and Growth oriented Buzzword deployments(BI/CRM etc).

 

The New Mantra for CIO's is to plan and execute growth oriented projects with S.A.M.E (Simple, Agile, Mobile, Efficient) and Greener IT :

 

Simple – CIO's are looking for simpler more transparent closed ended deployments of software and hardware infrastructure at a predictable cost. This driving the adoption XaaS - (X as a Service -SaaS-Software, PaaS-Platform, IaaS - Infrastructure etc) in the Enterprise

 

Agile- The Projects generating unique Intellectual Property are increasingly being orchaestrated from a mashup of cloud based services, Proprietery and open-source software .

 

The Projects are typically of short time frame preferably using SOA (Services Oriented Architecture) With Agile development techniques

 

Mobile- Mobile Devices like Iphone, Blackberry and Android and Netbooks have grown into full fledged compute/access devices with ability to view and edit data from standard office applications. The new class of Rich Internet applications are increasingly mobile aware.

 

CIO's are complelled to provide not just email but richer workflow functionality along with related documents on the Mobile devices.

 

Efficient- Efficiency is the new buzzword for both technology providers and the CIO's. Apart from Classic VMWARE based Efficiency mantras, There are efficiency bounties from storage technology providers like Netapp and Symantec using concepts like thin provisioning, de-duplication and archiving techniques.

 

The Network Virtualization from Cisco (Nexus 1000v and VN-link) and New players like Xsigo are banking 10 GigE and Converged ethernet standards to tout the benefits against classic Fibre channel and Gigabit Ethernet networks

 

Greener IT – The early adoption of power, cooling and space efficiency were driven by eco conscious CIO's.

 

The Technology trends due to the physical barriers have ended the Ghz race for processor design and resulted in power efficient scale out multi-core processor designs.

 

Small Form factor SAS/SATA Hard drives and Flash based storage are helping the power efficiency of storage subsystems

 

Server vendors are touting Blade technologies and skinless servers to drive extreme scalability and Private cloud/grid like deployments in the enterprise space.

 

Network and Security Technology Providers like Juniper, Fortinet and Cisco are Providing Multi-tenancy for  Both Core, Edge and Application Network services. this helps to drive the power, space and cooling efficiencies of networking devices.

 

The introduction newer more efficient remote desktop access protocols with multimedia capabilites, security benefits and power efficiency are increasing the relevance of Virtual Desktop Infrastructure from Task work environments into mainstream enterprise workplace.

 

The Innovations in software like Application Servers and Federated/Grid based  database technologies based on Multi-threading and Paralellization approaches are reducing the need for powerful scale-up requirements for the servers. This in turn contributes to  greener IT.

 

In conclusion, In the post recession new world, The  Greener IT has become maistream requirement and the Focus on growth oriented projects for the CIO's is the SAME.

 

Historically, technology has followed the science-fiction genre. Disregarding the "geek" branding associated with it, the sci-fi community can show the way to the next "big thing".

The writers and producers of science fiction have always thought about "what could be"; the best keep their ideas based in reality, simply showing the possible evolution of current technology. But even some of the most far-out ideas, e.g. faster-than-light travel, are starting to find some basis for fact by theoretical physisicts.

Science fiction has encouraged people to try new things, whether to recreate what was read or simply bucking conventional wisdom. Not everything is going to work, whether because technology isn't at the level required to make an idea pan out or because physical limitations develop. The drive to see what can be done is what makes innovations occur. Many revolutionary ideas developed simply from daydreaming, doodling, or simply happy accidents.

A popular trend in science fiction is the cyberpunk genre. Though the normal view of a dystopian future is common, the more important feature of cyberpunk (in this article) is the development of technology. Characterised by authors such as William Gibson and movies such as Johnny Mnemonic or Bladerunner, technology becomes so much a part of society that people hardly even notice it anymore. People interact with computers and other electronics on a daily basis, barely realizing that they are; using gadgets is as natural as wearing clothes, often because they are clothing.

The Shadowrun role-playing game is another great view of what the future can hold. Having been in production for nearly 20 years, the game has evolved over time, incorporating current trends in technology and taking it just a littler further to show how the future may be. Cybertechnology is available, allowing people to implant devices into their bodies, such as retinal displays, radios, or even computers. The wireless Internet is everywhere; personal communications devices allow people to use the Internet regardless of where they are. Augmented reality (AR) is common, letting people see enhanced metadata about nearly anything via special viewing devices. RFIDs are used for everything and on everything; AR shows the embedded data an RFID holds. People can create an entire AR persona, much like an Internet avatar, and interact electronically with the world just as easily as physically.

In many cyberpunk worlds, corporations have become megacorporations. As a real-world example, look to the Japanese. Some Japanese companies have multiple product lines, sometimes not even remotely related to each other. For example, the Mistubishi group sells cars, heaters, beverages, and even insurance. Though the autonomous companies within the conglomerate are separate, they form a loose entity sharing the same name and legacy. No longer is a company able to stay in one sector or market; branching out may be one way of finding new, lucrative markets while minimizing the risks of a recession or other crisis hurting the overall gestalt entity. A minor example of this is Microsoft creating the Xbox; it's not really related to their core software products but it helped MS move into a different field, opening up new opportunities.

Another feature of science fiction is the impact it has on the public. Because of what they see in movies or read in books, people are excited about technology and can't wait for the latest and greatest "toys" to come out. Some people are gadget freaks, having to have the newest electronics on the market. Some are fanatic about certain sci-fi shows, buying anything related their shows, especially if it's consumer electronics. For the most part, though, people are simply craving the technology they see possible. Multi-touch interfaces really came to the fore-front of people's minds when Minority Report came out; web sites are always talking about the latest rumours of iPods and computers will have touch screen capabilities, regardless of whether or not it is the most appropriate interface to have. It's simply cool to do it because you saw it in a movie.

Ecology is another staple in sci-fi, mostly in the line of "the world is a festing pit of pollution, often caused by corporations looking out only for their bottom line". That may be a little harsh but it plays on several angles. Consumers often have a bad view of companies, seeing them as faceless entities that only care about how much money they make and don't care how they get it. Conversely, companies have the money and ability to make significant changes, good or bad, to the environment and people will watch that. Even something as "minor" as disposing of unwanted chickens can cause significant backlash.

Taking an eco-friendly posture is good for the environment and good for the company. Many "green" technologies, though somewhat expensive upfront, ultimately save money through less power consumption, better efficiency, or lower maintenance. Sometimes, whole new areas of money making can be found by looking for someone to buy a company's waste. Public perception of a "green" company can lead to more sales from people who are "earth-friendly" or simply want to support companies that are making an effort to not plunder the land.

Finally, sponsorship by companies can lead to general goodwill and increased sales by consumers. Though simple billboards at sporting events are common, nowadays corporate sponsorship can cover nearly anything. Google regularly sponsors the Summer of Code project, providing stipends to student developers to work on open-source projects. Intel sponsors an annual science fair for junior and senior high school students. A company could sponsor a sci-fi convention; a more perfect target market would be hard to find. Or a company could create an event based on a sci-fi book, movie, or game; a dedicated fan base is already established.

Sponsorship not only gets a corporation's name into the public mindset but can also pay back the company several ways. Future employees can be found, products can be tested, children can be encouraged to consider technology careers, and people can be "weaned" on products (think of Microsoft in the classroom). Immediate payback may not be apparent, but the future benefits can be immeasurable.

AS in Electromechanical Technology, BS in Computer Engineering, MS in IT Management, working on Ph.D. in Information Systems
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Joseph Hunkins
Wed Sep 16 3:22pm
Cody are you saying that executives should apply futuristic Sci-Fi sensibilities to their business strategies? Interesting idea but seems like that could get very expensive very fast.

The recession is over, and it is time to plan the projects and budget for 2010. So what should you prioritize?

There are some obvious things which any company needs to do, if it wants to be more recession-proof (there is no guarantee of bailouts in a milder recession, after all) is to keep a larger buffer at hand, and make sure cost-cutting and tightening on decision making continues. Those things have to be executed top down, and it is something which is common for everyone.

But the effects of the belt-tightening, the cost-cutting, and the day to day stashing away of any money you may have earned should be alleviated now. When the recession ends, customers - especially private persons - will start spending again, and then companies will need better ways than ever to capture their money. That will not happen if the people in the company feel there is a crisis. Making sure the cost conciousness continues, but encouraging employees to make their own decisions, to speed up the business, and to be creative, that is going to be a great test of how good a manager you are (unfortunately, most of those who fail will not be demoted, since the crisis is over and they will muddle along anyway). Most importantly, it is time that employees feel they can have some fun in their jobs. Otherwise, there will be an exodus when the job market starts to work again.

How do you help people feel empowered, capture their creativity, and at the same time keep costs down and make sure they (you) do not spend overly much? Well, conferences in exotic locations are out for the next few years. It has to be something to do with IT.

But most of the stuff that you immediately think of looks pretty stale. Even if you could give everyone an iPhone or Blackberry, most companies who could motivate it already did so. Mobile broadband for everyone would certainly be something which could work, it is good enough a business driver that you could motivate the cost even with the software you have, as computers are being replaced. But what if you wanted to do something new? It would have to be a system that helps people capture and develop their ideas.

There are lots of those, and it is not particularly hard to build one on your own, actually. You can start with a decent blogging software, add some forums, and you are almost there. This kind of experimentation is precisely what Open Source is good for. It is a really interesting project for your developers. Make sure they start interviewing everyone now, so they get it right when you implement it - about Christmas at the earliest, but more likely around Easter (March-April timeframe) will be appropriate.

You will need the time to prepare, not they. Because once you launch comes the hardest part: Empowering the idea makers. How do you make people submit their ideas - and how do you make sure they do not feel turned off, when nothing happens? Make something happen, is how. Encourage people. If a someone posts a lot, give them an award - and try to steer them gently in a direction where their ideas lead to business. If someone posts something which is connected to business, use their ideas, and make it visible. Share the glory as much as you can, and take all the blame yourself. If managed well, there will be no blame to share. But there will be plenty of glory.

The trick is execution, not idea generation, but it is the idea generation that makes people feel good. Execution remains as hard as ever. But if you are lucky, some of the idea makers can be taught to become idea drivers as well, if they are burning for their idea and can stand bending it to fit the marketplace. Make sure they blog their ideas and make the learning process visible, because that will encourage others as well. Remember, when things are moving upwards, you can afford to take a few falls, it is less likely either to hurt or be hard. You will benefit from having build creative staff who can execute ideas when the next downturn comes.

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Joseph Hunkins
Wed Sep 16 3:23pm
Nice point that it's the execution of the "good" idea that really matters.

The modern business operates with a minimal set of the best employees.  The modern business grows its workforce slowly but deliberately, retaining the top staff and making sure that each new employee is a valuable addition to the team.  How do you get from where you are to a workforce that looks like this?

First, identify the employees who are a hindrance to work.  This is easy enough; among any set of employees, practically all of them will have a problem with a small set of employees whom the larger group perceives to be a hindrance to work.

Even the most annoying employees are probably slightly productive, and a large layoff will result in extra work for the good employees.  Therefore, after a layoff, the good employees generally become overworked and you run the risk of losing them and your business.

So let's assume you want to cut costs, but not at the expense of value.  You have done your layoffs, but getting rid of anyone causes a costly dip in morale and productivity.  You don't want your company to suffer and fold, so how do you retain the good people when their schedules get overloaded with menial work after you've fired all the slackers? 

Retaining the good folks is easy, you just find out what they need/want and provide it to them.  However, this won't work to compensate for them being overworked -- providing the good folks what they want/need is required ALL the time to keep them from your competition.  Your competition WILL offer them whatever they want/need, because the competition understands the true long-term value of good employees... do you?

The options for fixing the situation of good employees being overworked after layoffs are as follows:

1. hire on cheap labor.  Unfortunately for this option, you get what you pay for. They won't pull their weight, and the good people you retained will get frustrated and quit, leaving you with an uneducated and low-value force. This option fails quick but a bit slower than option 2.  As the good people leave, you are very quickly back in a situation where you have to fire off the cheap non-contributors and start all over again.

2. don't hire anyone.  This will save money for a little while, and the good people won't get as frustrated as fast, but as the work piles up, and some good people leave, their work gets shunted to other good people, creating a cascade effect where more have to leave as more work piles up.  This option does buy you some time, but when this option starts failing, it fails big and fast.

3. slowly accumulate more good people.  This is the best long-term move.  Fight like crazy to keep your existing good people happy, and spend what is necessary to slowly bring on more good people.  If you are focused on only adding the best help, the good people you still have will be pleased and will want to stay around more.  Also, the good people you hire will be productive and help your bottom line in the short term. 

The added costs of retaining and hiring good folks is way worth it, just consider your other options.  The other options are a bit cheaper up front, but anything besides aggressively retaining the good people you have, plus slowly accumulating more good people, will come at the sacrifice of your business as a whole.

I am a Sr. Systems Engineer for a major telecommunications company, and I am producing game programming curriculum design for a local college. I have a long family history in the Computer Science field.

IT isn't a cost center anymore. Properly managed IT departments can actually help create new revenue, or at least lessen the amount of unnecessary cash flow. However, the IT workers have to be able to do their job effectively and efficiently.

Traditionally, the hierarchal nature of business has dictated how people will work. Someone at the top makes a decision and it trickles down to the workers, who rarely have a say in the matter. They may question why something is done the way it is, but that feedback never goes back up. Plus, there is rarely a reason attributed to the decision; it's just mandated and implemented.

In the IT world, this is often seen by the choice in computers purchased, which OS is used, which applications are installed, etc. The workers simply have to make do with the choices and adapt to what is at hand. They may be more adept in a particular program but they are prevented from using it.

Many years ago I read a comment on a website from a person who worked at a startup which encouraged and involved the IT workers. Some costs were more expensive upfront but ultimately leading to lower IT costs, a better work environment, and more agility in the business world.

The company had a simple test for prospective technical personnel, prior to actually being offered a job: build a computer and install an operating system. This test, as easy as it sounds, ensured a minimum level of computer knowledge from IT personnel while reducing training costs. It also meant that everyone in IT could be called upon to troubleshoot many computer problems, reducing the need for specialty fields.

The computer that an individual built became that person's workstation. People were encouraged to customize their systems, both hardware and software, though the purchases were with their own money. That way, each IT worker had a computer that was "their own", with whatever features they felt would best enable their performance, e.g. multiple monitors, status software, development programs, etc. For those who desired it, Macs were available instead of a "custom" system.

Each person could also choose which operating system to use, whether Windows, Linux, OS X (if the employee wanted a Mac), or something else. Not only did this help improve productivity, it also lessened the chances of a virus or other malware application from taking down the company; only a few systems could be infected, reducing down-time and costs to repair.

This "employee ownership" of their workstations carried over into network security. Each person was responsible for his actions on the Internet and the network. Everyone was expected to know how to operate safely on the Internet and not download viruses or other troublesome software. If a virus was found on the network, the person responsible for it was held accountable. Everyone had proven they knew something about computers and they were trusted because of that.

Internet use was not monitored. Productivity was what counted. If a person wanted to spend the day hanging out in Facebook, that was okay as long as their work was completed on time. Personal issues could be handled during business hours; many people would come in after work to complete their tasks. Again, productivity was higher than normally expected.

For non-IT personnel, the hiring criteria weren’t as high, i.e. no computer building test. However, steps were taken to ensure maximum productivity while minimizing IT costs. All people in a non-technical role, e.g. secretaries, received a Macintosh workstation. Not only did this reduce the chance of viruses to almost nil, but actual tech support was reduced. The Mac users simply didn't have as many problems as Windows users did and when problems did arise, support was easier and quicker to do.

Standard office applications everyone used, such as word processing, utilized open-source solutions when possible. Licenses didn't need to be kept track of and purchasing costs went away. Most support could be handled in-house or via the Internet.

Support costs were minimal for the whole company. Nearly every person was qualified to handle basic troubleshooting tasks and additional help could be quickly gathered as needed; most people could fix their own problems without having to submit a trouble ticket. Essentially, only the non-technical employees required "dedicated" IT support and even that was minimal because of the choice in hardware and software. Any customer hardware or software was the responsibility of the individual; only "stock" components were supported by the actual IT staff. Speaking of the IT staff, the size of the IT department was significantly smaller than other places because there were so many knowledgeable employees on hand who could help out.

Productivity and morale were much higher than other companies because employees could choose their own version of "best of breed". The heterogeneous nature of the network greatly minimized the risk of a virus knocking out the whole company. People weren't afraid to install new software that could help them work. Many times, people could dabble in another area, such as web design or software programming, not only learning a new skill but also helping out their coworkers and the company as a whole.

In summary, allowing workers to feel some ownership of their space and equipment can pay back huge dividends to the company. Many managers may not like the power loss to their "fiefdom" but maximizing value to the company's owner(s) is the point of business, not office politics. The workers are the ones who supply the services, make the products, and otherwise allow the company to make money. Taking care of them should be a top priority.

 

AS in Electromechanical Technology, BS in Computer Engineering, MS in IT Management, working on Ph.D. in Information Systems

The problem with recessions is the availability of money.  Product prices go down, but so too does disposable income.  In a recession like this, banks, investors, and leaders don't want to take financial risks because no one wants to lose any more money, and your customers want more than ever to save money.

I think that the future of business is in doing more with less, but on a larger, but also smaller scale.  The future of business, of workflow, of everything will be in making the "things" that make up businesses smaller.  Customers and investors will have less to spend, so the things you sell and the materials that go into them should cost less and be tailored to their needs.  No one wants to take risks because so much has already been lost, so the risks you take should be smaller as well.

Efficiency can only help a business so much.  Margins can only be narrowed so far.  Once all the fat is gone, the only thing left to trim could be bone.  At a certain point, doing more with less becomes doing less and less.    Businesses cannot grow by doing less, unless something fundamental changes.

Shrinking prices, investments, and risk, will make for small companies, small product lines, small workforces and small profits.  In order to pull out of this recession, something has to grow.  How can a company grow if it is shrinking everything?  The answer is in multiplication.  A company, an employee, even a consumer, can grow by doing more things.

Small prices mean that more units must be sold to make up the difference.  Small wages mean more work has to be done to maintain income.  Small investments mean being open to more investors to maintain cash reserves.  In short, when the numbers get too small, you have to add more numbers.

How does a business take on more?  How does an employee take on more?  How does an investor or a lender take on more?  It is happening right now in garages and basements all over the country.  There is a growing movement among Americans to do things.  People are using the internet to meet, share, discuss, and collaborate in new ways every day, and not always online.  People are meeting up and making things in the real world as well.  This is an international movement and it could be the future of business as well.

Websites like YouTube and Wikipedia have empowered people to do things online.  Publications like Make magazine and Craft magazine are empowering people to do things offline, and share the results online.  The result is iteration: people read about the things people are doing, they do things; things get shared inspiring more things to get done and shared.  If this is transforming people outside of business in their spare time, it can transform people inside of business as well.

If a business unit in New York does something and succeeds, and shares the results, it can inspire the people in Los Angeles to do more as well.  If a competitor hears about success in a given market, it will enter that market as well in hopes of obtaining similar success.  By empowering people to share tools, knowledge and resources, companies can empower their workforces to do more and more with less and less.

Employees are fearful of corporate instability and job elimination.  Investors are fearful as well.  Managers are fearful of downward trends that will lead to further cutbacks.  The cycle of fear, withholding, and recession has to be replaced with inspiration, investment, sharing, and growth, not just within the company, but in the market as well.

Workers are also consumers.  Consumers will not buy if they fear for their jobs.  The people who buy your products need jobs so they can afford your products.  Things have to be done to create effective jobs for workers, so they can resume the pattern of consumption.  Workers are uncertain about their jobs because companies are uncertain about their financial outlooks.  The cycle repeats until investors, executives, managers, workers, vendors, and consumers all fear uncertainty and pull their money out of circulation.  This cycle needs to be broken.  Everyone has to invest to halt the decline.  Workers need to invest time and effort into their work, companies need to invest in employees, research and market/product development.  Investors need to invest in companies to fund development.  How does a company inspire so much investment in such uncertain times?

Risk is the basic building block of uncertainty.  When an individual invests in something, the outcome is unknown.  When an individual invests a small amount, there is less risk, but there is also less reward.  Small investments and small rewards are fine for small, sustained growth, but won't be enough to halt a downward trend like a global recession.  Investment needs to increase without adding risk.   

Diversification is a great way to reduce risk.  Investing small amounts into several different investments means that poor performance in one area may not affect the performance of other areas, leading to steady sustainable growth rather than radical highs and lows.  By distributing risk over a series of projects, individuals, companies, and investors can make collectively larger investments while taking individually smaller risks.

Diversification works great when investing, but how can employees and companies diversify?  The key to enabling diversification is miniaturization: making the parts that make up a business unit, a position, or a product as small and reproducible as possible.  When a product or service is broken down into reusable parts, those parts can be re-tasked to other products and services that may not correspond directly to the company’s core businesses.  When a job title is broken down into specialized and standardized services, employees can provide those services to other business units or other companies.  When a product or service is eliminated, the parts can be re-used or sold; then a business unit is eliminated, the labor that it required can be re-used or sold in a similar manner by turning it over to new product lines, or offering the service to other companies.

New products and services can be risky.  Bringing a product to market can involve significant investments and can be quite time sensitive.  There are many ways to decrease the time it takes to bring a product to market, but a better approach would be to reduce or eliminate the financial risks associated with the development process.  Making use of existing parts/services/employees is one way to reduce risks.  Another is to release products and services early in the process and solicit feedback from customers as soon as possible.  The sooner buyer feedback can be incorporated into back into the product, the sooner the product will improve in quality and attract more buyers.  Also, the sooner internal feedback from employees and managers can be incorporated into the production process, the sooner the process will improve, making the process more efficient.  This means sharing more of the product development process with the customer and releasing products sooner, rather than later.  This also means working with frontline workers and managers to improve processes sooner, rather than later.  The netbook is a great example of a product that came out suddenly, and improved drastically in a short amount of time.

Employees fear being eliminated.  By providing specialized services to multiple business units or product lines, employees can diversify the work they do so that the elimination of a product or service doesn't mean elimination of the employee, but simply a reduction in the services they are tasked with.  Additional work can be taken on if it is available within the company, and highly specialized or demanding work can be provided to other companies if necessary for a fee that benefits both the company and the employee.  By changing from static workflow to dynamic, on-demand workforce, employees need not fear elimination and will compete to produce the best results.  Amazon is a good example of a company that will leverage every part of its infrastructure for a profit.

By diversifying the portfolio of products, services and by leveraging all parts of the business for returns on investment, small cycles of production, feedback, and improvement can iterate quickly.  Also, the smaller faster cycle means that product and service lines can move in multiple directions based on customer and employee feedback.

Small diverse products, services and business units which are supported by on demand infrastructure and labor mean fewer upfront costs for new businesses.  Lower costs mean that businesses don't have to sell as many units to turn a profit, making it easier for individual business units to succeed.  Smaller initial investments mean that failed or unprofitable businesses will do less to affect the overall profitability of the parent company.

To re-iterate the formula for growth in recession: make things smaller and cheaper, sell more and different things, engage customers and employees for feedback, incorporate that feedback into the product or service and into the production process, and do it many more times than you are doing now.  This is doing more with less on both a larger and a smaller scale.

How does a business prosper make miniaturization, multiplication, and diversification work?

Obviously flexibility is key.  Workers need to be mobile enough to provide services when and where they need to be provided.  Technologies that enable mobility and remote work will be more and more imporatant and job functions change on a monthly, weekly, or even daily basis.  Whether as a vendor or consumer, companies need to invest in flexible technologies.  Flexibility on the part of the business is also important and so infrastructure should be flexible enough to accommodate change.

Another key is training.  Investing in workers not only benefits the company in the short run, it demonstrates to workers and customers alike a commitment to the product or service.  The cycle of fear and withholding needs to be broken, and investing in people is a great first step.  Companies of the future, like Amazon and Google invest in their people as well as in their technologies.

The final key is sustainability.  The cycle of fear is based on the perception that a company, a job or an investment won't be around.  Companies need to focus on sustainability from a finaincial, eccological, and social perspective.  People won't invest and will not commit to something that is not sustainable.  Demonstrating your focus on sustainability will go a long way to breaking the cycle of fear and withholding.

12 year veteran of the information technology industry, including work for a long ago defunct dotcom era start up company and Y2k. Aspiring hacker, maker, and activist and co-founder and member of hive13.org, a Cincinnati, Ohio based hackerspace.

Nobody can manage what they cannot understand.  It is a common principle, enshrined in many business aphorisms.  "Stick to the knitting". "You get what you measure".  "Keep it simple, stupid".  The list goes on, but the underlying idea is the same.  At the same time, the world grows more complex.  Supply chains are ever more international, and so is finance.  New layers of technology sit upon older layers of technology, creating pyramids that nobody understands from top to bottom.  Training and education can deliver staff with increasingly niche and specialist skillsets.  In the midst of this, businesses still pursue universal goals, whether delivering profits to owners, pleasing products and services to customers, or motivation and satisfaction to workers.  The trick to handling complexity, in order to keep businesses understandable and hence manageable, is to break businesses down into units, and to understand how these units fit together and affect each other.  This is the essence of modularity.

Modularity may seem so straightforward that it is obvious, but it is rarely obvious in practice.  Employees may only know about their department, and know little of what the rest of the business does.  They may be completely divorced from the customer’s experience.  Managers may have an idea of how things fit together, but are rewarded for fighting their individual corner, not for doing what best helps the whole organization.  An outsourced function is not part of your company, but it may be just as integral to business success as any function performed in-house.  Suppliers may be separate companies, but their failure may cause the failure of your business.  Long-term business success will often depend on relationships within the company, and between the company and others.  These relationships may change over time, but will greatly influence the health of the business.

Teaching managers to think of business in modular terms is not simple.  The biggest obstacle is the time and effort spent working out what each part of the business does and all the interactions between the modules, including those that sit in other companies.  Working out the model for an individual business is time-consuming, and the benefits are all indirect, so it would be hard to spend the time and resources needed to do it well.  In contrast, generic industry models are abstract.  They need to be tailored to the relevant circumstances of individual businesses.  There is also the challenge of getting rival businesses to pool efforts and devise a common model; some may prefer not to contribute but merely to wait and see if they can use the finished work.  Despite the obstacles, there have been successes.  In software development, frameworks like the Software Engineering Institute’s Capability Maturity Model Integration have gained popularity.  For telecommunications providers, the TM Forum's Solution Frameworks are the de facto standard for planning major business-wide transformation.  One difficulty with frameworks is that they can end up seeming just as complicated as the businesses they try to describe.  However, they do help management in several important ways, which are briefly described below.

 

Distinguish the success of a part with the success of the whole

Poorly chosen targets, corporate politics and poor data can all conspire to encourage the business to reward units that act 'selfishly'.  A selfish approach may seem natural, because businesses compete with each other.  But your IT department should not be competing with your Sales team or the people who work in Customer Service.  Targets and performance criteria for every module should be based on the benefits to the business as a whole.  That means understanding how the modules connect and complement each other.

 

Measure the performance of a module based on what it controls

You would not blame your customer-facing staff for spending a lot of time on refunds, if products are faulty because of poor quality control on the production line.  Even so, it is sometimes difficult to link measures back to root causes.  Modularity encourages a better understanding of what each module controls and does not control.  This in turn encourages performance to be linked back to root causes, so improvement is focused where really needed.  Measure the performance of each module based on the value it adds, and set targets accordingly.  Where the failure of one part of the business causes issues downstream, ensure that there is accountability and the resolution is taken right back to the source.  Understand the performance of each module, and relate this to the products and services supplied, so you can identify those activities that drive profits, and where there is the potential to cut costs.

 

Standards help you and your suppliers too

Standards are an aspect of modularity.  To define how modules interact, you must set standards.  Standards can be limiting, but in large businesses the loss of freedom is offset by the vital improvement in the consistency of how the business works.  Adopting broad standards in the performance of work is a good way to train people and make them feel part of a team.  It is common to adopt technical standards, but many other activities can be standardized.  Discourage idiosyncrasy in how people work by encouraging staff to change around and do different jobs, at least on an occasional basis.  Giving everyone an overview of what the business does will help to instil a sense of team spirit that reaches beyond departmental boundaries.  If tasks are performed in a standard way, it is easier to cope with staff turnover.  If staff have some familiarity with performing a variety of jobs, they will be better able to cope with new requirements at short notice.

The more standardized your business, at every level, the easier it is for suppliers to meet your needs.  Standardization also makes it easier to shop around and find alternate suppliers.  A modular approach works for services just like manufactured goods.  The ease of swapping in new parts for old parts makes your business more flexible.  Bringing in temporary staff or a new source of components may be vital for handling a surge in demand.  The same kind of flexibility also helps with managing reductions in capacity when sales are poor.  Think of suppliers as an extension of the business, performing modular roles per expectations defined in a contract.  Monitor service levels just as you would monitor performance within your business.

 

Do what you are best at, and give fair rewards to those who do the rest

The driving force behind outsourcing is that some tasks can be more efficiently handled by letting an outside, specialist business perform them.  The best known examples are inherently modular.  For example, the payroll of a manufacturer has a lot in common with the payroll of a bank.  In contrast, managing payroll has very little in common with the core business of a manufacturer or of a bank.  Common and regularly recurring tasks are obvious candidates for outsourcing.  However, there may be ways to incentivize and engage outside suppliers for more risky or creative challenges.  Take Apple's iPhone Apps Store.  Apple created an environment that ensures third parties get a transparent share of reward in exchange for the risk they take.  In doing so, they handed over the risky task of developing new content for the iPhone, whilst creating a new feature that attracts more customers for their product.  By giving a reasonable return to the modules outside of Apple's company - the third party apps developers - they both outsourced risk and reaped a greater reward for their own business.

 

Summary: Recognizing your own limits

For an intelligent, successful, and confident executive, the hardest challenge may be to recognize his or her own limits.  But the human mind has limits.  Even the versatile minds of a Benjamin Franklin or Leonardo da Vinci would be overwhelmed by trying to understand the intertwined complexities of money, machines, markets, laws and human behaviour that determine the success of a modern large corporation.  Failures of big businesses show that risks can be underestimated and circumstances can outrun the company's ability to change.  To solve a complex problem, first break it down into bits.  Appoint good managers to manage each part of the puzzle, and the top level of management to manage how the parts fit together to form the whole.  By being modular, you will make your business more adaptable.  By identifying the important relationships between each module, you will identify the key criteria for the success and profitability of the business.  By knowing your own limits, you will be able to acquire the data you need to make effective decisions and plan ahead, instead of just responding to short-term variations from expectations, without understanding what has caused them or if they represent more fundamental problems.  And by keeping the business intelligible, you really will be managing the business, and not simply responding to what it does.

Eric is a blogger, podcaster, business consultant, chartered accountant and has a masters degree in IS. Eric has been a consultant for over 10 years, giving advice on data and systems strategy to multinational telcos.

The recession hit businesses hard, and IT executives found themselves under a microscope. After decades of growth in both computing capabilities and budgets, the thinking went, surely some cuts could be made. In response, staffing levels were cut and spending was delayed. But many also found savings in the emerging cloud computing and storage capabilities now on the market.

Now, as the recession begins to fade, IT purse strings are loosening. But the old in-house infrastructure foundations have been shaken by as-a-service platforms, and we are unlikely ever to return. Non-core IT assets are rapidly moving to outside providers of managed services, with in-house resources focused on the most sensitive and critical information areas. In short, the "do more with less" demand of the recession is leading to a new focus on IT efficiency.

Differing Application Demands

Many have criticized cloud services for assumed deficits in the areas of control, security, and availability. Some of these criticisms are certainly correct, since data does indeed flow over the public internet and rest in the data centers of an outside party. But not all IT applications are created equal, and thus not all have the same requirements.

It would be difficult to run a relational database on a cloud storage platform and it would be irresponsible to run payment processing on a PCI non-compliant cloud compute service. But it is equally foolish to dismiss these systems out of hand for so many of the other applications found in modern IT shops. Why build out a massive compute infrastructure for occasional log file processing? Why buy and operate rack after rack of storage capacity to hold archival data? These applications and many others are easily moved to cloud services, and the money and time saved can quickly be re-applied to more-critical IT elements.

Cloud Non-Starters

The quickest way to select applications for public cloud services is to eliminate those that don't fit. Although there are workarounds that can make many of these work, the following attributes should be seen as warning signs that lower-hanging fruit resides elsewhere:

 

  • Mission-critical applications can be placed in the cloud, but it is wiser to start with less-sensitive systems. Startups and from-scratch applications can make use of cloud platforms, but conventional apps aren't the right choice.
  • High data throughput between local and remote locations can be difficult to achieve over the Internet. Some vendors do offer private connectivity for increased performance, however.
  • Compliance requirements, including certifications and assessments, are rarely met by cloud vendors. Some vendors do offer PCI, SAS-70, SOX, HIPAA, and European data privacy compliance, but most do not.
  • Conventional or legacy systems are not normally capable of running effectively on cloud infrastructure. Many older applications expect dedicated resources and will react unpredictably to network latency and virtualized servers.

Note that all of these "non-starter" qualifiers can be overcome by clever service providers. Indeed, it is possible to run just about any application or service on cloud infrastructure, and many cloud vendors differentiate themselves with answers to these objections. But, given the wide variety of applications to choose from, early cloud service adoption should focus on simpler-to-implement systems.

Cloud Slam Dunks

Although compliance and performance can limit which applications can be moved to the cloud, others just seem made for service providers. Consider the following common applications for a simple implementation and quick ROI:

  • Packaged applications like payroll, CRM, and analytics are a great fit for software-as-a-service; in fact, they really don't belong in-house anymore.
  • Data repositories, including email archiving and media vaults work well on cloud storage platforms. These were the first cloud storage applications, and all of the concerns about performance and security have long since been addressed.
  • Non-critical test systems can often make use of cloud servers, saving valuable data center real estate and operations resources for production use.
  • Collaboration systems can be difficult to implement inside the firewall so make perfect sense for the cloud. Cloud servers and storage is programmable using open Internet standards and simple APIs as well.

The recession forced many businesses to consider cloud services for financial reasons, but the post-recession recovery will see them stay with the cloud as other business benefits are realized. IT organizations that focus on their core mission and farm out non-core systems to service providers will thrive in this new business world.

 

 

Stephen Foskett has provided vendor-independent end user consulting on storage topics for over 10 years and now works for cloud storage vendor, Nirvanix. He has been a storage columnist and has authored numerous articles for industry publications.
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Ramkaran Rudravaram
Wed Sep 16 12:28pm
As More and More Organizations are realizing the potential of Cloud computing, varied workloads from sudden burst traffic on Public facing Websites to one off data crunching jobs are moving to the cloud.

Just as Virtualization was limited the worksets in the above article couple of years back, cloud computing is in its early adopter cycle.

Unless pricing models,security and service levels are well defined reaching the cloud is a distant dream for mainstream organizations.
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Arnie Mckinnis
Wed Oct 7 9:30am
Cloud Computing Services will represent about 10% of the total IT Spend within the next 10 years. Now that means going from basically 0% to 10% of a Multi-Trillion dollar industry. Not bad. But, the question is going to be - can the investment in the infrastructure be returned in an environment/business that is increasing in volume and decreasing in price [both at an accelerating pace]?

Let us understand our problem with a small story:

John and linda, are happily married since last 25 years. They have 2 grown up kids-a boy ricky and a girl simmy. John is having a small restaurant to sell Fast Foods.

Over last 25 years, John could manage his family through his business in good or bad times. Suddenly. Last year something happened which they could never thought of.

They were living in a small city, in the costal area of Arabian sea.

One fine night,  sea became violent, high tides came and it took almost all the homes in the locality.

John could save him and his family by staying in a watch tower. Everything got washed away in couple of hours, and they were left with absolutely nothing other that what they were wearing. Nobody anticipated this-even John himself.  Neighther they had insurance.

How did john managed to keep himself in these days?

 

John new that: tough times do come in life. They are to be faced and they should be your stairs to success.

He again started to do his business, but this time, not the same way he used to do earlier.

He now saves a lot of money and invests in insurance(Always maintain healthy cash reserve ratio and invest smartly). He takes calculated risks and emphasizes more on individual productivity(Redesign your organizational structure). Also he has stayed himself focused to Burgers only and not in all Junk food items(Understand what u  are best in and stay focused to ur core competency).

He has revised his pricing and worked backwards to get the more cost effective quality raw materials for burgers(Work on the pricing and costs). He has employed experienced people and incentivized them on performance(Innovate performance drivers).

Due to Global recession, we all are facing the same situation. None of us have real knowledge of what to do and how to really go about it.

So when you are at a situation, where you don’t know what to do- better use our brains more and more.

I suggest some points which management executives should think of:

  •  Is my product priced rightly in recession or should I offer heavy discounts to stay alive in short run? Let us assume recession will not go, then what?
  •  Is my organization trim enough to stay even my sales were at 40% drop YOY basis?
  •  Is my company’s cash reserves are well invested?
  •  Is my SCM is  efficient enough to maintain correct level of inventory?
  •  Is my collections are 100%?
  •  Is my R&D efficient enough to innovate cost effective products?
  •  Is my sales team is enough motivated to get sales?
  •  Is my finance is efficient to give me required CM?
  •  Is my BU efficient enough to look for consumer shift in recession?
  • Have we got access to right Global data?

 

All these are part of many questions that our Management executives should think of. They should always be in search of “ How to do it better?” or “Is there any other way to do it?”

Only brainstorming can give results.

And don’t be surprised to know that: If you were a Hardware selling company earlier, now u are a service provider, i.e know your strengths, your core competency and work hard on it, u will definitely succeed.

Sudip Chatterjee is a Regional manager is IT Hardware company. He is also a regular Blog writer in Global Topics of interest.

In what now appears to be a post-recession, recovering business climate, many executives are facing considerable challenges but also some remarkable opportunities.

We've seen many companies fail - some in spectacular fashion - over the past few years, but the silver lining on this cloud will be solid gold for companies where the leadership is smart, flexible and leverages cost-effective new technologies along with the savings from the belt-tightening that was forced on everybody by this recession.

Good news for many young executives is that the new business era relies less on legacy business paradigms and "old school" social patterns.  More and more executives are expected to rely on flexibility, cleverness, and the efficiency and effectiveness brought to the table by many new technologies and technological improvements.

These new technologies include the company's online expression in the form of websites, blogs, and other online media, cloud based documents and archiving, enterprise email applications, web search, and social networking to name only a few of the most important developments.   All of these technology expressions have a powerful and growing impact on corporate communications, production efficiencies, sales efforts, and the creation of the social relationships both inside the company and with the customers or clients, many of whom now expect 24/7 access to sales, company information, and help.

Thankfully the internet has created dozens of cost effective environments to provide your workers and customers with the information they need.   Now is a great time to take a "Technology Inventory" of your online business environments to make sure they are, at the very least, exceeding the needs of the company, and at best that your online efforts are breaking new innovative ground in the most cost-effective ways to manage your business.  

Here's a start on that inventory list:

Online Information:
Have you visited your company website lately?  Many companies outsource website development to the degree they are left with little understanding of anything but the basic appearance and functionality of the site, which can be a recipe for lower rankings, sales, or even an online meltdown.   Make sure your site functions well in all respects and establish ongoing measurement systems to make sure things are improving over time.   Sales, not "the look", or "the hits" are the key metric for most companies.   AVOID having your online contractor or team measuring their own effectiveness.   For many sites a simple implementation of the very robust Google Analytics (formerly "WebTrends")  will provide decision makers with a wealth of important information.  

Online Advertising:
Pay per click advertising is not rocket science but it always requires more supervision than simply writing a check to Google or Yahoo and picking a few choice product terms.  Thankfully both of these massive online advertising systems provide your team with extensive but simple tools to create and manage online accounts.  However use caution with any recommendations on your spends - it is almost always best to focus on sales ROI rather than vague concepts like "stickiness" or "hits" or "impressions", all of which may be used to distract executives from a failure to deliver customers.   In 15 minutes even the busiest executive can familiarize themselves with the key aspects of the PPC form of advertising which - if managed properly - can offer spectacular ROI, especially on high margin products or services.

Email systems:
Although email is hardly a 'sexy' company topic, it's important to review your existing system and work to improve it if necessary.   How much is email spam zapping the productivity of your workers?  Does it appear that employees honoring your policies with respect to handling personal emails at work?  Is email used effectively for communications across the enterprise?   Would alternative messaging systems work better for your team? 

Blogging / Social Networking:
What are people saying about your company online, and more importantly what are YOU saying? Blogging is a very easy way to project a company's presence and personality.  Blogging is still favored by search engines for some ranking purposes, so make sure you have an active, engaging blogging program for your company.   Contrary to "old school" business thinking it's generally better - even for large companies - to jump in and ask questions later rather than hesitate and let other online characters define your company for you.

One of the newest enabling technologies - Twitter - allows you to reach a potentially large audience in minutes and with a personalized touch.  This fairly new social networking tool can be leveraged to manage customer relationships in a very cost effective way and for many companies Twitter is supplementing their email and phone contact systems.  

Do not be distracted by the superficiality of many social network environments or you will underestimate how pleasing it will be to your customers and employees to have a simple and direct line of communication to your company.   For the executive Twitter allows you to manage literally thousands of relationships quickly and effectively, broadcasting information to your "followers" in seconds and responding quickly when needed.

 

Publisher of travel, history, and news at several regional and national websites and blogs including "Technology Report". Annual Technology conference coverage includes Consumer Electronics Show in Las Vegas and Search Engine Strategies San Jose.

The fundamental change in business noted is that there is none. The business is now a business of learning about, teaching or discussing business instead of doing business. The new business model is a model of what business used to be packaged up in seminars, trade shows and how to videos. This is to inspire the next generation of competitors to your business which have no business either. You can, however, make money as a business off of advertisers who are stealing your customers. Place the highest paying ones on the top right of the page and make sure you do what Sony does and put spyware in it so you can track where your customers go in case you want to advertise your own business to them later.

 

For the new business of business seminars, you need the latest technology. This technology is usually in the hands of entrepreneurs who need money from you for their business. The competitors for them are also your competitors, in Asia. The best result is to try and do business with the entrepreneurs, who have the technology needed for any new business. For this you need a legal team that knows how to secure the phone and data systems of your company. Finding legal teams who also understand the communications industry can be a real challenge. You can always send them to Asia for trade shows and seminars done by your competitors so they know what is going on with their business.

 

They will not be able to protect your business anyway because now it is illegal not to share your business with those who do not have any business reporting. Translation software of Asian languages is always a good bet.

 

If you are serious about wanting to compete in this lack of business environment, you need to find a way to bribe your legal team into doing business with entrepreneurs that involves your logo so you can make money off of advertisers who are interested in the entrepreneur and their technology. If you can find some poor ones without a legal team, your legal team can steal from them easily and sell their technology to Asia and eliminate some of your jobs. It is called downsizing and is necessary to please the shareholders.

 

This in turn creates the pressure atmosphere that is needed to force you to jump through hoops, spend no time with your family and work harder so they can decide which ones to eliminate in their own internal reality show. You could share your salary with unemployed open source programmer hackers as insurance for your computer system. It might be worth it in the end, data wise. Then you can say that you have data which has not been compromised by leaks and get fired.

 

The future of business, well, it looks…Asian. True leadership from Executives would be to welcome entrepreneurs with enablers into your business and treat them like movie stars with value added to borrow on for a US based manufacturing facility in future businesses. You could surround them with all the tools they need to be successful and help create the next Jobs, Gates, or other technology star. You might even end up with something to sell that people who have money will buy…in Asia. Meanwhile, Corporate Giving will keep you on the Silver Screen of the Internet and your workforce will be educated in trade shows and seminars by entrepreneurs.

 

Business of the Future could be based on points instead of money. Your logo will be worth more than unknown companies, unless they have Asian manufacturers and advertisers behind them. The enabling technologies are mostly gone already, either through data mining or information sharing. Your legal teams may be useful in getting those back for your new entrepreneurial JV partners. See you at the show!

Robin L. Ore is an HDTV Pioneer and Communications Industry Expert. She has a degree in the Health industry and is an Inventor, Scientific Researcher and Entrepreneur.

On June 15 the federal government started handing out $35,000 loans to small businesses for short-term relief. There's still money available. (Call the Small Business Association at 1-866-947-8081). But it's more important as  an example of the new economic reality. In a recession, consumers spend less, and it's government that's trying to fill the void.

Remember that it's not just a philosophic position - it's happening in the real world. Last October I spoke to the owner of a small sign-making shop in a blue-collar town who was considering closing his business after 10 years. ("We lose money every month we stay open!") He'd studied the economic news, and recognized the new reality - businesses were cutting expenses, and that meant fewer signs. But one year later, his business is thriving because of one simple adjustment. He landed a hefty contract for installing new signs in government buildings - and that job alone will be enough to keep him in business through 2011!

The "Cash for Clunkers" program is just the most-visible example of government stimulus, but there's many others just below the radar of the national news media. (For example, the Obama administration also allocated $8 billion in seed money for 10 high-speed rail corridors...) Do some research yourself, and tap advice from any trade associations available specifically tailored to your industry. 2009 is different than 2007, and with radically different policies in place, the market will present different opportunities.

But also: look for the ripples. If a rail corridor is being developed, then the surrounding real estate will become more valuable, and there's other business opportunities at the stops along the route. If the one thing people are buying is new cars (with government rebates), then there's an opportunity to sell them related products. It's because the marketplace is changing that new opportunities will present themselves. In a difficult and volatile environment, it's even more important to study your market carefully.

Here's the most important thing I've noticed: the recession hasn't been distributed evenly. High-end retailers are beating expectations, while the mass-market companies are struggling. Investigate the buyers who are best-positioned during this struggling economy - and adjust your strategies accordingly. After a massive shock to the economy,businesses may be facing a different set of consumers.

It's always easy to make money in a booming economy, but it's in tough times when you need to adhere to the sound principles of good business. I got a cheery reminder of this when I drove down a Bay Area highway.  A billboard announced that "Bill Gates started Microsoft in a recession." Doing some research, I discovered it was a public service campaign (funded by an anonymous donor) called Recession: 101, with a web site explaining their philosophy. "The recession has hurt one of America's greatest attributes - its unshakeable optimism."

Yes, it's important to streamline your business to keep costs low, and to always be looking for a good bargain.  But also watch for new opportunities, and be prepared to innovate. And most importantly, send that message to your employees.

 

 

 

David Cassel has written for the Wall Street Journal Interactive Edition and has appeared on CNN's Financial News channel.
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