Craig’s List

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Finding the new white spaces

2010/02/02 in Business-Technology, Posterous by peg | Comments

There’s a quite a bit of noise in the blogsphere about the coming entrepreneurship boom, generating yet another pointless debate about the distinction between generations. What is really going to drive this new boom is the ability to find new white spaces, not access resources or connections (people forget that Sergy & Larry had a good idea and connections into the VC network in the Bay Area).

Twitpic is a case in point. Started on a spare server to scratch an itch, Twitpic is a poster child on how to build something new with little or no resources or connections.

  • In terms of traffic, Alexa says Twitpic is a top 100 site.
  • In 2009, the site did over $1.5 million in ad sales.
  • For every million in sales, the company keeps $700,000.
  • The site has about 6.5 million registered users.
  • Noah, the founder, was recently offered 8 figures for the business.
  • There are only 4 people working on the site (including Noah’s parents).

The common point with services like Twitpic and Craig’s List is that this new generation of businesses are creating new white spaces, and that the cost and accessibility of attacking these white spaces is now very very low.

Posted via web from Business-Technology

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We can be our own worst enemy

2009/11/23 in Business-Technology, Mailing List by peg | Comments

The only certainties in life are death and taxes, or so we’ve been told on numerous occasions. I’d like to add “change” to the list. Change, be it business change or change in our personal lives, has accelerated to the point that we can expect the environment we inhabit to change significantly in the immediate future, let along over the length of our careers. If we want our business to remain competitive in this ever evolving landscape, then overcoming our (and our team’s) own resistance to change is our biggest challenge.

The rules we have built our careers on, rules forged back in the industrial revolution, are starting to come apart. Most folk—from the Baby Boomers through to Gen Y—expect the skills they acquired in their formative years to support them well through to retirement. How we conduct business might change radically, driven by technological and societal change, but what we did in business could be assumed to change at a slower than generational pace. We might order over the internet rather than via a physical catalogue, or call a person via a mobile rather than call a place via a landline, but skills we learnt in our formative years would still serve us well. For example, project managers manage ever increasingly complex projects over the length of their career, even though how they manage projects has migrated from paper GANTT charts to MS Project, and now onto BaseCamp.

Which is interesting, as it is this what, the doctrine, which most people use to define themselves. A project manager manages projects, and has (most likely) built their career by managing increasingly larger projects and, eventually, programs. Enterprise architects work their way toward managing ever larger transformation programs. Consultants work to become stream leads, team leaders, finally running large teams across entire sectors or geographies. An so on. The length of someones career sees them narrowing their focus to specialise in a particular doctrine, while expanding their management responsibilities. It is this doctrine which most people define themselves by, and their career is an constant investment in doctrine to enhance their skills, increasing their value with respect to the doctrine they chose to focus on.

This is fine in a world when the doctrines a business needs to operate change slower than the duration of a typical career. But what happens if the pace of change accelerates? When the length of the average career becomes significantly longer than the useful life of the doctrines the business requires.

We’ve reached an interesting technological inflection point. Information technology to date could be characterized as the race for automation. The vast bulk of enterprise applications have been focused on automating a previously manual task. This might be data management (general ledger, CRM, et al) or transforming data (SAP APO). The applications we developed were designed as bolt-ons to existing business models. Much like adding an after-market turbo charger to your faithful steed. Most (if not all) of the doctrines in the technology profession have grown to support this model: the development and deployment of large IT assets to support an existing business.

However, the role of technology in business is changing. The market of enterprise applications has matured to the point where a range of vendors can supply you with applications to automate any area of the business you care to name, making these applications ubiquitous and commoditized.The new, emerging, model has us looking beyond business technology alignment, trying and identify new business models which can exploit synergies between the two. A trend Forrester has termed, Business-Technology.

The focus has shifted from asset to outcome, changing the rules we built our careers on. Our tendency to define ourselves by the doctrine we learnt/developed yesterday has become a liability. We focus on how we do something, not why we do it, making it hard to change our habits when the assumptions they are founded on no longer apply. With our old doctrines founded on the development and management of large IT assets, we’re ill-equipped to adapt to the new engagement models Business-Technology requires.

The shift to an outcome focus is part of the acceleration of the pace of business. The winners in this environment are constantly inventing new doctrine as they look for better ways to achieve the same outcome. How we conduct business is changing so rapidly that we can’t expect to be doing the same thing in five years time, let alone for the rest of our career. What we learnt to do in our mid 20’s is no longer (entirely) relevant, and doesn’t deliver the same outcome as it used to. Isn’t the definition of insanity continuing to do something the we know doesn’t work? So why, then, do we continue to launch major transformation programmes when we know they have a low chance of success in the current business and social environment? Doctrine has become dogma.

We need to (re)define ourselves along the lines of “I solve problems”: identifying with the outcomes we deliver, at both personal and departmental levels. This allows us to consider a range of doctrines/options/alternatives and look for the best path forward. If we adopt “I am an TOGAF enterprise architect” (or SixSigma black belt, or Prince2, or …) then they will just crank the handle as the process has become more important than the goal. If we adopt “how can I effectively evolve this IT estate the with tools I have”, then we’ll be more successful.

Rolls-Royce and Craig’s List are good examples of organisations using a focus on outcomes to driver their businesses forward. Bruce Lee might even be the poster child of this problem solving mentality. He studies a wide range of fighting doctrines, and designed some of his own, in an attempt to break his habits and find a better way.

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The Value of Enterprise Architecture

2009/05/07 in Business-Technology, IT Strategy, Presentations by peg | Comments

Is Enterprise Architecture in danger of becoming irrelevant? And if so, what can we do about it?

Presented as part of RMIT’s Master of Technology (Enterprise Architecture) course.

The Value of Enterprise Architecture  

The Value of Enterprise Architecture

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Managing technology, not applications

2008/10/13 in Business-Technology, IT Strategy, Mailing List by peg | Comments

For some time we’ve been focused on the quest of slaying the business-technology alignment dragon. We don’t seem to have succeeded—at least not very often. Worse still, the rules of the game seem to be changing as we speak. Rather than manage IT as a large capital expense and asset, aligning business and IT by aligning investment, some companies are working to find and exploit the synergies between the two. Craig’s List is taking a significant chunk of the global classified advertisement market with a staff of 20 people, while Threadless is a case study of applying similar ideas to the old world business of designing, manufacturing and selling t-shirts. These organizations are so lean that they are virtually impossible to compete against.

How do they do it? What are the insights they are finding? Where are they finding them? And, most importantly, what can we learn from them? We’ve started this email as a platform to share some of our thinking. Hopefully this will provide inspiration for applying some ideas from these new school players thinking to our old school organizations.

Manage technology, not applications

We’re getting it all wrong—we focused on managing the technology delivery process rather than the technology itself. Where do business process outsourcing (BPO), software as a service (SaaS), Web 2.0 and partner organisations sit in our IT strategy? All too often we focus on the delivery of large IT assets into our enterprise, missing the opportunity to leverage leaner disruptive solutions that could provide a significantly better outcome for the business.

IT departments are, by tradition, inward looking asset management functions. Initially this was a response to the huge investment and effort required to operate early mainframe computers, while more recently it has been driven by the effort required to develop and maintain increasingly complex enterprise applications. We’ve organised our IT departments around the activities we see as key to being a successful asset manager: business analysis, software development & integration, infrastructure & facilities, and project or programme management. The result is a generation of IT departments closely aligned with the enterprise application development value-chain, as we focus on managing the delivery of large IT assets into the enterprise.

Building our IT departments as enterprise application factories has been very successful, but the maturation of applications over the last decade and recent emergence of approaches like SaaS means that it has some distinct limitations today. An IT department that defines itself in terms of managing the delivery of large technology assets tends to see a large technology asset as the solution to every problem. Want to support a new pricing strategy? Need to improve cross-sell and up-sell? Looking for ways to support the sales force while in the field? Upgrade to the latest and greatest CRM solution from your vendor of choice. The investment required is grossly out of proportion with the business benefit it will bring, making it difficult to engage with the rest of the business who view IT as a cost centre rather than an enabler.



Figure 1

Unfortunately the structure of many of our IT departments—optimised to create large IT assets—actively prohibits any other approach. More incremental or organic approaches to meeting business needs are stopped before they even get started, killed by an organisation structure and processes that impose more overhead than they can tolerate.

Applications were rare and expensive during most of enterprise IT’s history, but today they are plentiful and (comparativly) cheap. Software as a Service (SaaS) is also emerging to provide best of breed functionality but with a utillity delivery model; leveraging an externally managed service and paying per use, rather requiring capital investment in an IT asset to provide the service internally. Our focus is increasingly turned to ensuring that business processes and activities are supported with an appropriate level of technology, leveraging solutions from traditional enterprise applications through to SaaS, outsourced solutions or even bespoke elements where we see fit. We need to be focused on managing technology enablement, rather than IT assets, and many IT departments are responding to this by reorganising their operations to explore new strategies for managing IT.

Central to this new generation of IT departments is a sound understanding of how the business needs to operate—what it wants to be famous for. The old technology centric departmental roles are being deprecated, replaced with business centric roles. One strategy is to focus on Operational Excellence, Technology Enablement and Contract Management. A number of Chief Process Officer (CPO) roles are created as part of the Operational Excellence team, each focusing on optimising one or more end-to-end processes. The role is defined and measured by the business outcomes it will deliver rather than by the technology delivery process. CPOs are also integrating themselves with organisation wide business improvement and operational excellence initiatives, taking a proactive stance with the business instead of reactively waiting for the business to identify a need.



Figure 2

The Technology Enablement team works with Operational Excellence to deliver the right level of technology required to support the business. Where Operational Excellence looks out into the business to gain a better understanding of how the business functions, Technology Enablement looks out into the technology community to understand what technologies and approaches can be leveraged to create the most suitable solution. (As opposed to traditional, inward focused IT department concerned with developing and managing IT assets.) These solutions can range from SaaS through to BPO, AM (application management), custom development or traditional on-premises applications. However, the mix of solutions used will change over time as we move from today’s application centric enterprise IT to new process driven approaches. Solutions today are dominated by enterprise applications (most likely via BPO or AM), but increasingly shifting to utility models such as SaaS as these offerings mature.

Finally a contract management team is responsible for managing the contractual & financial obligations, and service level agreements between the organisation and suppliers.

One pronounced effect of a strongly business focused IT organisation is the externalisation of many asset management activities. Rather than trying to be good at everything needed to deliver a world class IT estate, and ending up beginning good at nothing, the department focuses its energies on only those activities that will have the greatest impact on the business. Other activities are supported by a broad partner ecosystem: systems integrators to install applications, outsourcers for application management and business process outsourcing, and so on. Rather than ramping up for a once-in-four-year application renewal—an infrequent task for which the department has trouble retaining expertise—the partner ecosystem ensures that the IT department has access to organisations whose core focus is installing and running applications, and have been solving this problem every year for the last four years.

This approach allows the IT department to concentrate on what really matters for the business to succeed. Its focus and expertise is firmly on the activities that will have the greatest impact on the business, while a broad partner ecosystem provides world class support for the activities that it cannot afford to develop world class expertise in. Rather than representing a cost centre in the business, the IT department can be seen as an enabler, working with other business to leverage new ideas and capabilities and drive the enterprise forward.

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