CIO-Reinvented Blog - By Prashanth Rai

Webcast to check out - Eli Lilly + Amazon AWS

Saw this note on the AWS site,

Learn how Eli Lilly uses AWSto deliver cloud services to scientists in this WebCast hosted by InformationWeekEditor John Foley

Tags: aws - amazon - eli+lilly - webcast - cloud

Prashanth Rai

Some interesting reading...

Notes from blog posts read today:

• Ratios of new license to maintenance revenues shift from 1:2 to 1:4 and in some cases 1:5.  Enterprise software vendors now in a better position to convert perpetual business models to subscription business models.  Do they have the guts and board approval?
• Indian System Integrators competiting for market share in Europe, Middle East, and Africa as they shift away from the North American market.
• Japanese CIO’s finally realizing that they need to break free from their existing ERP software vendor relationships.  SaaS options now in consideration.  Recent advancements by NTT to host Zoho, Siemens’ 420K employee move to Success Factors, and Flextronics 240k employee deal with Workday have shifted perception that SaaS can’t solve large enterprise requirements.
• Cloud computing - Broad acceptance that enterprises are interested - There's absolutely no question that cloud computing has moved into the mainstream of enterprise technology. Everyone from Microsoft to Accenture to HP to IBM to SAP admitted as much. With the worsening economic conditions and the maturation of cloud computing services, enterprises are actively investigating cloud computing. The main differences of opinion between the legacy vendors and companies like Salesforce and Amazon lie in how quickly and broadly companies will adopt cloud computing.
• Too much discussion of clouds at the infrastructure rather than platform layers - The entire cloud conversation at Structure was very focused on infrastructure. As Daryl Plummer of Gartner has noted, Cloud computing is not about infrastructure. It's about a new delivery and consumption model for IT services that are elastic, metered and abstract away the SW stack. The conference was mostly focused on the lowest layer of the stack and didn't really talk about how the cloud enables transformation at the business process level.

Source: 1, 2

Tags: cloud - saas - maintenance - cio - maintenance+revenue

Prashanth Rai

Telecommuting a way of life

 
Photo Credit David Gartner Photography | www.versusgoliath.com

Cisco recently published the results of their Telecommuting survey, it had some interesting pieces of information, below are excerpts from the same. This is an important trend to track from a productivity, sustainability & technology points of view. Companies specifically in the ICT industry (IT Services companies)should take the lead in this particularly given the nature of work, industry model etc.

Results from the survey:

Productivity and Collaboration

• Approximately 69 percent of the employees surveyed cited higher productivity when working remote, and 75 percent of those surveyed said the timeliness of their work improved.
• By telecommuting, 83 percent of employees said their ability to communicate and collaborate with co-workers was the same as, if not better than, it was when working on-site.
• 67 percent of survey respondents said their overall work quality improved when telecommuting.
• An improved quality of life through telecommuting was cited by 80 percent of survey respondents.
• Telecommuting can also lead to a higher employee retention rate, as more than 91 percent of respondents say telecommuting is somewhat or very important to their overall satisfaction.

Going Green

• In 2008, Cisco teleworkers prevented approximately 47,320 metric tons of greenhouse gas emissions from being released into the environment due to avoided travel.
• The average distance for round-trip commutes varied among global regions: employees in U.S. and Canada reported on average a 30-mile round-trip commute; Asia Pacific employees cited a distance of about 14 miles; Japanese employees cited a 26-mile commute; employees in emerging markets commute an average of 16 miles; and European employees reported a 46-mile commute.
• Cisco employees report a fuel cost savings of $10.3 million per year due to telecommuting.

Cisco Workforce

• Cisco employees spend about 63 percent of their time communicating and collaborating.
• 40 percent of Cisco employees say they are not located in the same city as their manager.
• The average Cisco employee now telecommutes 2.0 days per week.
• 60 percent of the time saved by telecommuting is spent working and 40 percent is spent on personal time.

Source:1

Tags: Cisco - telecommuting - ict - sustainability - productivity

Prashanth Rai

State of the Economy

A few interesting charts about the current economic state or state of the recession :)

Global trade collapsed in the fourth quarter of 2008 and first quarter of 2009 in a way never seen in the postwar era.

The Institute for Supply Management survey offers a forward-looking indicator of industrial production.A number above 50 in the ISM survey implies manufacturing growth whereas a number below 50 implies contraction.

Link to full report

Hat Tip: Imagining India

Prashanth Rai

IDC's view of the BI Tools Market 2008

Was reading the recent report by IDC on the BI tools space, below are some interesting points / takeaways or excerpts from the same, The report can be accessed here:

1. Regardless of the specific BI technology, in the short term, the executive mandate for most organizations will be to do "more with less." Although we continue to see healthy demand for BI functionality from business end users, IT departments and business end users alike are being asked to curtail costs.
2. As a result, incremental, small purchases, and deployment of BI technology will dominate the market in the short term. This trend is also likely to push more organizations toward SaaS and outsourced BI and analytics solutions that have a pricing model, which enables better allocation of direct costs to current profitability.
3. IDC is beginning to see evidence of greater interest in outsourcing of advanced analytics processes.
4. Standardization and the expected eventual commoditization of core reporting, dashboard, and OLAP functionality. This core QRA (Query Reporting Analysis) technology, which still forms the bulk of the revenue for BI technology vendors, has been available for decades. Although substantial feature and functionality improvements have been
   made to this software over the years, the lack of differentiating features will continue to drive down the cost of this software.
5. The logical conclusion will be the broad availability of open source or very low-cost commercial reporting,
   dashboard, and OLAP technology with a shift in spending from licenses to support services.
6. QRA tools, there will be an intermediate-term opportunity for some vendors to differentiate their ad hoc query and multidimensional analysis tools based on features and functionality that put a premium on simplicity and performance. This may include use of in-memory deployment techniques, interactive visualization, or associative data management structures
7. The next wave of innovation in the BI market will come from the expansion of the overall business analytics solution to include functionality for supporting:
   • Unified access to and analysis of structured data and unstructured content
   • Collaboration during the process of decision making
   • Capture of knowledge learned in the context of decision making
   • Intelligent process automation, which combines BI functionality with that of business process management
8. In 2008, Oracle reaped the benefits of its investment in Oracle Business Intelligence Enterprise Edition (OBIEE) — the company's BI platform and its different modules for query, reporting, and analysis.
9. OBIEE has emerged as a growth driver in the overall Oracle portfolio.
10. Oracle's 2007 acquisition of Hyperion has only marginally contributed to the company's BI tools revenue.
11. Oracle is well positioned to continue to benefit from OBIEE by selling it to its existing vast applications and database customer base.
12. SAP derives all of its BI tools revenue from the QRA market segment.
13. In 2008, the company's SAP BusinessObjects portfolio benefited from the vastly enlarged sales force and was able to sell BI tools to SAP's applications customers.
14. The company (SAP) ran into some resistance from customers to its pricing structure but was able to overcome this challenge partly through improved communication about its BI tools portfolio road map.
15. Although SAP's rationalization of acquired BI tools has not been completed, the company is well positioned to fulfill the future needs of BI technology purchasers.
16. SAP is also on the forefront of redefining the functionality of a BI solution by integrating traditional QRA tools with those for content access and analysis, collaboration, and event monitoring.

Source: IDC

Tags: bi - sap - obiee - business+intelligence - QRA - oracle

Prashanth Rai

Its time SAP brought the bear (SAP BusinessByDesign) out of Hibernation

(These posts are long over due, but better late then never)

The title of this post is directly from the keynote of the Co-founder and Chairman of the SAP board Hasso Plattner at Sapphire US 2009. Hasso's keynote was for most part technical, talking about in-memory databases and how its going to transform the "Transaction processing system" space. It was geeky and pretty interesting, but during the later part of the keynote - looked like Hasso went off script and focused the keynote / presentation to his management team rather than the customers/partners/others out there. And one of the clear things that he did mention that it was time to bring the bear(Business By Design) out of hibernation.

Lets look at BBD from a customer point of view. A highlight session for me at Sapphire 2009 was the session with the Business By Design customers. This session had two customers one recent , one who had implemented it for a year make presentations and had other customers spread around different tables discussing with various bloggers, media, analyst resources.

Customers who were at the event:

• Bendpak, US
• Research Point, US
• IntelePeer, US
• Envelopments, US
• Nag, England
• Prognosys, India
• Sundolier, US
• Suh'dutsing Technologies
• Skull Candy
• TAM Ceramics
• One Vision Solutions

So as a part of this session I was able to collect data/experience points of 4 of the above highlighted customers.

Common Characteristics of these companies:

• No CIO or dedicated IT Team, It was run primarily by the CFO
• Turnover of around / less than 75 Million$ Companies
• Between 25-50 system Users

Each of these customers have had very positive things to say about their experience buying, implementing and using the product. Will summarize some of the points I heard during the discussion and other research about each of these customers.

1. Outgrew earlier / rudimentary systems like excel, quick books etc
   1. Brent Walters CFO One Vision - "We outgrew our systems"
   2. Beth Siron, the ERP implementation coordinator at Skullcandy - “We were running on QuickBooks and Excel spreadsheets, which is standard for a small company,” she said. “With our rapid growth, we’re not going to be able to continue with our current systems very much longer,” she said. The QuickBooks accounting system wasn’t designed to scale up and is hitting its limits. Additionally, the company needs to do product demand forecasting and manage multiple warehouses. Outdated manual processes worked well in the first couple of years, but that has changed. For instance, currently, e-mail is the method of coordinating the workflow's between manufacturing personnel and the offsite warehouse. Need for future stability. The company realized it needed a standard, stable ERP system that could scale out and would receive incremental future enhancements with new technologies. Siron said, “We want to keep growing rapidly and don’t want to be faced with another implementation in a few years. We needed to find a solution that wouldn’t just fit our needs now, but also four or five years into the future.
2. Need to minimize manual processes and the need for hardcopy files to be passed around & ultimately have a 360 degree view of the start to finish process
3. No need for IT Team / Landscape , Implementation executed by Business Owners.
4. Time from Initiating discussion with SAP to having BBD up and running ranged between two to five months
5. Embedded analytics a big advantage
6. Ability to do some customer specific configurations
7. Quick ROI due to rapid solution deployment
8. SAP - A Brand you can trust
9. One integrated functionality suite

High level cost comparison between ERP in a box and ERP via the Internet options done by OneVision

This also got me thinking in terms of how BBD is a good financial fit for these companies. So I just did a quick back of the envelope calculation - A typical IT budget for an organization is around 1%, so if the typical turnover of the organization leveraging BBD is around 75 million, their IT budget should be around 700K. And If you see the cost of SAP as an integrated suite with no cost on servers etc is 149$ * 30/50 = 50K / 80K, Which is between 7-15% of the overall IT budget. This does seem to make a lot of sense. Thoughts??

Looks like SAP needs to quickly figure out the financial model on how they will make money in this scenario assuming they have addressed the teething technical issues that they had. One question that I did have about BBD is how do they plan to address the customer concern of data lock into this platform.

More on BBD to follow.

Tags: business+by+design - bbd - sapphire09 - sap - ondemand - saas

Source: 1

Prashanth Rai

(Cross posted from CIO-Reinvented)

IT Spending 2009 / 10 - Gartner

Gartner says expenditure on IT is expected to decline 3.7% in 2009. Spending on IT hardware including client computing, servers, storage & printing systems will decline 14.9%. However, it forecasts overall IT spending to rebound with 2.4% growth in 2010 although IT hardware spending will continue to lag next year growing just 0.8%.

Source: Gartner

Prashanth Rai

Is the recession accelerating the adoption of "Cloud Computing"?

An IDC survey has some insights on the topic. The survey was of 332 IT and line-of-business executives, predominantly based in North America, and spread across large, medium and small enterprises. The results are:

Results Summary:

1. Almost half of the respondents claimed there would be no impact But over half of the executives stated that they are, indeed, adjusting their approach to market conditions.
2. Twenty-four percent are reacting to the recession by moving more aggressively in the cloud/SaaS direction: either doing more evaluation, beginning to adopt, or increasing their adoption of IT cloud services.
3. Fourteen percent are reducing their pace of cloud/SaaS adoption
4. The largest portion of customers leaning more aggressively toward the cloud model are in the “more evaluation” stage. This makes 2009 and 2010 a very important time for suppliers to be actively educating the marketplace about the cloud model and their cloud offerings

Source: IDC Blog

Prashanth Rai

Technorati Tags: saas - idc - cloud+computing

Leo's Key Note - Takeaways - Sapphire09

Central Theme - How SAP enables clarity?

Business Suite 7 provides the solid foundation. (Integrated processes - no fragmentation , SOA - Completed roadmap in 2007 - 2800 solutions) Thanks to Henning Kaggerman

Enables to build some of your custom process - Flexibility - SAP Business process management tools - Consume innovation in cheapest, fastest way possible.

Suite Support goes on till 2015

Enabling Clarity of decision making - Clarity anticipates risk

• Business suite + Business Objects portfolio, Closed loop - Strategy to Execution.
• Not limited to the large companies only, SAP Best practices for BI - Integrated with All in One.
• How this impacts Risk Management? - Takes a dig at banks who brought together mathematicians + technology, the problem was the lack of holistic view. One survivor managed relatively better - Goldman Sachs - Risk focus / Global Risk Committee - Right information, at the right time for the right people.
• Risk is part of every industry - it is our responsibility to manage risk.

Value of SAP enterprise support services - Comprehensive support to reduce the overall TCO. 2 Weeks ago along with SUGEN will provide KPI's - KPI index - Business Continuity, Business Process process performance, Protection of Investment & TCO. Committed to a 30% improvement by 2012

Ian Kimble - Insurance Company Example - Pretty neat mobile application used.

Sustainability - Perceived unlimited resources ended, Sustainability strategy - Economic, Social, Environmental risks management. Maximize your "Triple bottom line" - Don't have to wait for Better Place. IT industry cause 2% of the Global Green house gases. Industries first ever Comprehensive sustainability Map - every relevant business process sustainable. Talks a little bit about smart grids on the utility industry site. Sustainability Performance management -reporting / benchmarking - Acquisition - CLEAR STANDARDS.

Ian Kimble - Clear Standards Demo.

Fundamental Change in Customer expectation both from a user point of view and from a buyer POV. Paradigms shifts in Technology cost & Availability - Virtualization, Cloud (Private Clouds) - Coming to us. Flexible deployment models - On premise / On demand combination of the two. Another big trend - Mobile / Miniaturization of transactions. Moving to a digital enterprise from IT enable organization. So huger amount of data - In memory DB's and Real time analytics.

Launch of SAP Business Objects Explorer Software. - With explorer, executives could get answers in milliseconds...brand profitability, customer buying patterns...this could change the way decisions are made" Steve Merry, Sara Lee CIO.

Demo by Ian Kimble - Insurance Company
Natural language search - Polestar + BIA

One Demand Offerings is a key element of the over all SAP strategy - that is a welcome change
Currently Available:

1. CRM
2. Strategic sourcing
3. BI
4. Carbon management

Soon to be launched

1. HCM
2. Expense management

SME - BBD  Business By Design - Clear rumors - Is on display on the show - Live by Design system - Well that's it.

Back to the Timeless software theme - ready for the future. Demo of Timeless software - Collaborative decision making.

Key components of SAP's Clear Strategy

1. Stable Core
2. Best foundation for intelligence platform
3. business process management
4. on premise on demand
5. web20
6. timeless software
7. sustainable ways

Tags: sapphire09 - sap - leo+apotheker - keynote - Orlando

Prashanth Rai

Weekend Reading

Crunch IT – The Role of IT in a Recession

the overall message was that there is no real indication of if / when we might expect to see an end to this current recession, therefore IT and related industries must learn to adapt and cope with an increasingly challenging landscape, whilst delivering critical benefits to their internal and external clients. It makes me wonder if a protracted global recession will also bring about a fundamental change in the engagement models used by existing (or surviving) technology advisory and consulting organizations. For example, are we likely to see an increase in joint ventures, and risk-reward-partnerships, between advisors and client, as opposed to the relatively more straightforward fees-on-delivery type models that currently dominate our business?

Software's Billion-Dollar Question

Yes, there will be many more billion-dollar software companies - but they won’t look like the ISVs of today.

As the next-generation software leaders reach maturity, they’ll look more like a services and solutions company. Sure, they’ll have a software backbone and a technology platform to enable the services they provide. But to customers, the next software companies will seem more like services companies.

The debate has already begun. Is Google a software company? What about Amazon.com? How about ADP? These companies offer a technology platform, software, services – some automated and some human-powered – all rolled into a solution. Witness the growth of business process outsourcing and knowledge process outsourcing solution providers. At their hearts, these firms are software companies but they are packaged and marketed as services providers.

CollabNet, Spiceworks and many other emerging software leaders could arguably be called services companies already. They deliver software, communities and services all rolled into their solutions.

How about Free?

There's an old joke about a businessman who gives away his products. A customer asks: "How do you make money doing that?" He answers: "I make it up on volume."

It's nonsensical, yes. But a funny thing has happened: Giving away the product has become a legitimate business model on the Internet and even beyond. And it's been getting increased attention. Author Chris Anderson will publish a new book in July titled, Free: The Past and Future of a Radical Price. It's a follow-up to his Wired magazine cover story last year, "Free! Why $0.00 is the Future of Business." Anderson

Indeed, the appeal of "free" has been shown to be so extraordinary that it bends the demand curve. "The demand you get at a price of zero is many times higher than the demand you get at a very low price," says Kartik Hosanagar, a Wharton professor of operations and information management who studies pricing and technology. "Suddenly demand shoots up in a nonlinear fashion." Josh Kopelman, a venture investor and entrepreneur who founded Half.com, has written about what he dubbed "the penny gap." Even charging one cent for something dramatically lessens the demand [generated at] zero cents.

Charlie Rose - A conversation with Nandan Nilekani and Tom Friedman

A conversation with Nandan Nilekani and Tom Friedman

The Rhythms of My Life

When I think of rhythms in my life, they break down into daily, weekly, monthly, quarterly, annually, and decadal.  Here are some examples of how I think about it.

Daily (M-F): Get up at 5am every day.  Spend the first two hours of the morning in front of my computer (a) consuming info and (b) catching up on any email.  Exercise (usually a run.)  From 9am on, follow my calendar until the day is over (which my assistant Kelly manages – it’s very dynamic – and I try to schedule every phone call and meeting.)  When I fly somewhere, I try to do it either first thing in the morning or at the end of the day and I try to sleep on the plane from take off to landing.

Weekly (S-Su): Sleep until I wake up.  Hang out with Amy. Go for a long run.  Catch up on email.  Stay off the phone.  Go to a movie.  Read a book.  Relax and rest.

Monthly: Life dinner with Amy (on the night of the first day of every month) – exchange gifts, review the previous month, and talk about goals for the next month.

Quarterly: One week vacation completely off the grid (no phone, no email) with Amy.  36 hour offsite with my Foundry partners (both backward and forward review as well as 2x / year facilitated performance reviews of each other).  Deep review of all financials (personal and for every company I’m involved in.)

Annually: Once a year three day weekend trip with my dad.  Once a year “Feld Men’s Trip” with my dad, his brother, my brother, and my two cousins. 

Decadal: Personal review of my life (usually happens over a few months.)  I’ve done this at age 30 and age 40 and expect to keep doing it.

Prashanth Rai