Archive for the 'The Mikan Group Blog Archive' Category

22
Feb
08

Thoughts on The Big Switch by Nicholas Carr (The Mikan Group Blog Archive)

By topalovich 0 Comments
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The Big Switch begins by drawing a parallel between the effects of the rapid proliferation of electricity services and the impending state of ubiquity that the Internet-fueled IT world is reaching. The first half of the book makes a powerful case for the inevitability of a utility computing paradigm that is being driven by a perfect storm of technological and societal convergence; the effect that cheap connectivity to the global network and exponential gains in computing capacity is having on people, corporations, and governments is following a strikingly similar path to what we saw in the late 19th and early 20th centuries with the development and standardization of the electrical grid.

Unfortunately, the second half of the book focuses on the potential impact of the “World Wide Computer” on global society and politics, and while it is a fascinating read unto itself, I felt like the tremendous momentum that had been made in the first half of the book was prematurely abandoned and the leap to the second half created a gap that was never quite filled. If the first half of the book had been more fully developed and taken to a logical conclusion that was contextually relevant to the ideas introduced in his previous book, Does IT Matter?, Carr’s place as a top thought leader in the IT world would have been cemented. The Big Switch just misses the mark, and I would like to see the first half and the second half further developed before being reconnected as a more cohesive roadmap.

That being said, there are some critical ideas in The Big Switch that need to be explored because they are highly relevant to the evolution of the IT delivery model:

  • In the developing stages of the industrial economy, manufacturing operations were required to generate their own electricity and maintain the infrastructure required to distribute electricity to machinery throughout their facilities. The proliferation of the electricity grid, which is a network not dissimilar to today’s data network, rendered localized power generation and distribution obsolete. As Carr observes, “It became a competitive necessity for manufacturers to hook their plants up to the new electric grid” (11).
  • We are in the middle of an Information Technology transformation that bears striking similarities to the transformation enabled by electricity. Carr argues successfully that the current corporate IT model, where organizations build and operate large scale private computing operations, is being threatened by the availability of standardized services provided over the Internet – a global “grid” for distributing data.
  • The thesis of Carr’s previous book, Does IT Matter?, was that the availability of standardized technologies diminished the strategic advantage that Information Technology could provide. Whereas companies at one time could compete based on the adoption of power generation and distribution systems, that advantage was supplanted by the availability of cheap power from centralized utilities; likewise, the early development or adoption of technology provided some companies with strategic competitive advantage prior to the rapid maturation of the Information Technology industry, but that advantage has also given way to the ubiquity of services that have been enabled by the global explosion of bandwidth and computing resources.
  • The traditional technology vendor model is being threatened by the emergence of centralized technology services that have taken on models resembling those of public utilities. There is a lingering tendency in traditional IT organizations to resist the progression towards models that focus on delivering the best available services regardless of where or how they are sourced; that tendency will be exploited by hardware and software vendors indefinitely, as it is in their best interest to ensure that their market remains buoyed by the highly inefficient management of private, decentralized computing infrastructures. Why would Microsoft or Dell want to embrace a future where their products are no longer needed on such large scales, because the services that rely on such software and hardware are being consolidated and distributed over a network and on standardized platforms that the entire world has access to?
  • With the standardization and general availability of Information Technology services that until recently were required to be managed within the walls of an organization, the ‘keep the business’ running aspect of IT is being pushed out to the “grid.” This will allow companies to refocus their IT strategies and apply the analytical and systematic capabilities of the IT organization to providing services core to driving business performance, thus providing IT with an opportunity to demonstrate tremendous value to the business rather than being a mere operational necessity.

 

This entry first appeared in The Mikan Group Blog on February 22, 2008. It is being published on SaaSkatoon in an effort to archive selected content acquired by Delivered Innovation in 2008.

18
Feb
08

Doing Even More With Even Less (The Mikan Group Blog Archive)

By topalovich 0 Comments
Categories: The Mikan Group Blog Archive

Whether we are actually entering a cycle of economic recession or not may be up for debate, but what is certain is that we always need to be ready for any type of downturn in the business environment. From an IT perspective, periods of uncertainty present an opportunity to focus on becoming leaner and more effective. While Information Technology organizations have been “doing more with less” for a number of years, you can rest assured that the term is only going to be heard more if we are in fact encountering a prolonged slowdown in the world economy.

Let’s assume that since just about every media outlet in the United States is throwing around the “R” word these days when they’re not incessantly covering primary election results, it’s somewhat likely that we will see some level of contraction in our economy (because the media is always right, of course). Let’s also assume that this period of contraction will last about a year, which is slightly longer than the average for recessionary periods over the past 50-or-so years. What this means is that if all of the stars are in alignment and we hit a rough patch in the economy, there will likely be less people buying what your company is selling; and with less dollars hitting the top line, your business will have to do a little belt tightening to maintain the bottom line for the rest of this year and part of next year.

With the corporate Information Technology function facing a critical inflection point that will determine nothing less than its survival as an entity, there is no better way to show how much IT matters to than to step up and demonstrate vision and leadership in a time of uncertainty and fear. When times are rough, budgets get cut, hiring activity gets put on ice, and business units across the board are expected to maintain or improve performance despite such resource handicaps. Deal with it. Times like these are not an excuse to go on autopilot and simply survive – those who play to win will come out of this stronger than before, and those who play to not lose will be left behind.

This entry first appeared in The Mikan Group Blog on February 18, 2008.  It is being published on SaaSkatoon in an effort to archive selected content acquired by Delivered Innovation in 2008.

18
Jan
08

Platform as a Service and the Implications for IT (The Mikan Group Blog Archive)

By topalovich 1 Comment
Categories: The Mikan Group Blog Archive
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After attending the Salesforce.com “Tour de Force” launch event for the Force.com platform in San Francisco yesterday, it became overwhelmingly clear that the entire concept of the Information Technology function is transforming faster than I had envisioned. The interesting part about the acceleration of the proverbial “paradigm shift” that is occurring is that its epicenter is the one IT stronghold that seemed to be the most untouchable – infrastructure.

It took some time to get my head around the implications of the “Platform as a Service” message that Salesforce was promoting, but Ben Pring from Gartner did a masterful job of painting a picture of the future over the near term and the long term with his presentation to drive home what looms on the horizon for the corporate IT function as we know it today. We have already seen a decline in IT’s influence since the first wave of Internet euphoria waned in the early part of the decade, but what is staring us in the face right now is nothing less than an inflection point that will determine the long term survival of IT departments.

The first cracks in the IT foundation began to appear after, ironically, the capabilities of the Internet that were enabled by IT began to erode the informational advantage that IT had held during the heyday of the 1990’s. With the “man behind the curtain” all but revealed, and with post-dot com IT budgets slashed, IT was forced into the “Do More With Less” era of digesting the purchases from the gluttonous 90’s and keeping the business running on a relative shoestring. Hamstrung by ongoing operational requirements, IT then encountered the slippery slope of having to meet increasing business demands for technology that were precipitated by the maturation of IT as a business enabler, but with little or no increase in IT capital investment. To pile on, the recent “consumerization” of technologies that were once the exclusive domain of IT, and the exponentially increasing savvy of corporate IT consumers is exacerbating IT’s plight. Unfortunately, Salesforce.com’s introduction of the Force platform looks like it will all but sound the death knell for the traditional IT delivery and management model that has been developing for the past 20 years.

The paradox of this entire situation is that IT has the potential to be more important now than it ever has been in the history of the function within a business context. This is the inflection point – the capabilities of IT are reaching a level where the potential to transform and drive business performance is staggering, but the capabilities of the IT function need to shift dramatically to embrace and harness the power of this new wave of technological innovation. Salesforce.com’s delivery of “Platform as a Service” as the logical evolution to “Software as a Service” has changed the game forever; if IT organizations choose to accept the new rules of the game, the business value of IT is beyond what we saw when the Internet was first introduced as a business enabler. If IT chooses to vigorously defend traditional territory such as infrastructure that is now moving beyond the walls of the organization and becoming a commodity service, then business will have no choice but to leave the legacy models behind and embrace a new way to mange the business of IT.

 

This entry first appeared in The Mikan Group Blog on January 18, 2008. It is being published on SaaSkatoon in an effort to archive selected content acquired by Delivered Innovation in 2008.

26
Dec
07

Looking Back to Look Ahead (The Mikan Group Blog Archive)

By topalovich 0 Comments
Categories: The Mikan Group Blog Archive

While the end of the year presents an opportunity to reflect on the previous twelve months, such reflection is for naught if it is not applied to the vision and strategy for the year ahead. The key is to identify the lessons learned throughout the year, and to contextualize them into categories that are tied to specific actions; placing experiences and lessons into three action “buckets” helps to not only create a clear understanding of what happened, but to create a framework for strategic thinking for planning activities in the New Year. The action “buckets” look something like this:

  • Keep – The items that are placed in this category provide the answer to the question, “What worked?” Decisions, plans, and actions that led to successful outcomes are noted and analyzed to determine the “Why?” behind such events. It just as important to analyze the root cause of success as it is to analyze the root cause of failure, so tackle the good with the same analytical rigor
    as the bad to determine why something was successful.
  • Change – This will likely end up being the biggest bucket when all is said and done. The question that the items in this category answer is not necessarily black and white; the question is more
    along the lines of, “What was good that we can make great with the appropriate adjustments?” What initiatives showed the greatest potential, but didn’t get the attention required to succeed? What could provide substantial return with a revised strategy and focused execution? What opportunities were not fully seized but still have significant upside potential? It is important to approach the “Change” category with objectivity and pragmatism, because overly optimistic analysis can lead to resuscitating items that should be left for dead, and overly pessimistic analysis can prematurely relegate items to the next category…
  • Abandon – There are many explanations as to why this category seems to get ignored during analysis and planning exercises, but the bottom line is that not everything is going to work out despite high hopes and best intentions. The decision to abandon something needs to be made objectively and with limited emotional influence, which is easier said than done when an item has a significant amount of the organization’s sweat, blood, and tears invested in it. This is the type of decision that requires resolve and strong leadership, as the emotional ties to the items
    that face the chopping block have a tendency to lead to compromise at times when the realities of limited time, energy, and resources make it impossible to keep every initiative on life support.

Once the reflection exercise is completed, it is highly likely that not every lesson, initiative, or event that has been identified and analyzed fits neatly into one of the three buckets above. It is also highly likely that the strategy and objectives for the upcoming year will require some additional shuffling of initiatives and priorities. This is where reflection and projection come together: New requirements for the coming year will influence the categorization and prioritization of ongoing efforts; “Keep” and “Change” items will create requirements in and of themselves; and in the end, the old and the new need to be aligned to create a single, cohesive vision and strategy to govern the efforts of the organization for the next twelve months – when the process starts all over again.

 

This entry first appeared in The Mikan Group Blog on December 26, 2007. It is being published on SaaSkatoon in an effort to archive selected content acquired by Delivered Innovation in 2008.

13
Nov
07

Southwest Airlines and the Boeing 737 (The Mikan Group Blog Archive)

By topalovich 0 Comments
Categories: The Mikan Group Blog Archive

As I was flying home on a Southwest Airlines flight following a long weekend in the San Francisco Bay Area, I found myself preoccupied with analyzing all of the little things that go into making Southwest a great company that stands apart from the rest of the U.S. airline industry.  Although I live less than five minutes from Chicago O’Hare International Airport, I tend to go out of my way to fly Southwest from Chicago Midway despite the 45-minute drive to the south side of Chicago.  Much of this stems from the fact that Southwest is consistently cheaper than the “major” domestic carriers, but for the most part I fly SWA because I know that I can expect a consistent and high quality traveling experience.  From the call center operators to the gate agents to the flight attendants, when I engage with Southwest Airlines I know that I will receive high quality service just about every time; I haven’t been able to say the same about other airlines in…well…forever.

There are several reasons for Southwest’s success, from great corporate and functional management, to loyal and high quality employees, to continuous innovation, to operational effectiveness.  It was the latter that created a very interesting connection to effective Information Technology / Information Systems management in my mind; specifically, the way Southwest has standardized on the Boeing 737 creates a strong analogy to IT/IS consolidation and complexity management.

To provide context for this brief case study, it is important to bear in mind that Southwest Airlines is not simply a niche player that is afforded the luxury of agility because of its relative size to the ”major” U.S. airlines; to the contrary, Southwest operates 3,200 flights each day and carries more passengers each year than any other domestic airline.  In fact, Southwest is the second largest airline in the world in terms of the number of passengers it carries on an annual basis.  Most importantly to its shareholders, however, is the fact that Southwest has been profitable for 34 consecutive years…this is not serendipity or blind luck at work – this is the result of visionary leadership and highly effective management.

Back to the Boeing 737.  As of November of this year, the Southwest fleet consisted of over 500 Boeing 737 planes – the most of any carrier in the world.  More important than the sheer volume of planes is that the 737 is the only type of plane that Southwest flies.  Granted the fleet currently consists of 737-300, 737-500, and 737-700 models, but the fact remains that Southwest uses the same type of aircraft for every one of its 3,200 daily flights.  While the quantitative measurement of such streamlining is beyond the scope of this blog entry, one has to imagine the magnitude of such operational efficiency on the bottom line.  The significance of this level of standardization is evident when broken down and viewed from a functional and business process standpoint:

  • Complexity management – Southwest has one type of aircraft, in three different flavors.  With production on the 737-300 and 737-500 ending, the already simple equation becomes even less complex.  Airport gates, baggage trucks, catering equipment, and other supporting equipment are configured to support the Boeing 737, which creates efficiencies throughout the infrastructure.
  • Standardized parts inventory - Every one of Southwest’s maintenance facilities is stocked with Boeing 737 parts.  Having only one type of aircraft to service reduces inventory requirements and increases velocity substantially; equally important, the probability of having parts available for unscheduled maintenance increases significantly because even if a specific airport does not have a part in stock, chances are high that the part is available at an adjacent airport where a subsequent Southwest flight can deliver the part within hours.
  • Standardized knowledge management - Every Southwest pilot knows how to fly the Boeing 737; every Southwest mechanic knows how to service the Boeing 737; every Southwest flight attendant knows the Boeing 737 inside and out.  Imagine how simple it is to create training curricula when there’s only one type of aircraft for each function to learn; imagine the depth of Boeing 737 knowledge that exists within the Southwest organization.  Sound like a strategic advantage?
  • Economies of scale – Everything from leather seats, Canyon Blue paint, and toilet seats get cheaper and easier to come by when they are purchased in bulk and in standard configurations.
  • Strategic sourcing relationships - Do you think Boeing and Southwest have a strong, collaborative relationship after 500+ deliveries of the 737 aircraft?  Not to mention, one has to assume that Southwest has to leverage the relationship for significant pricing concessions from its primary vendor.
  • Lifecycle planning – While the useful life of an airplane is significantly greater than that of most Information Technology infrastructure components, the concept of predictable, non-disruptive lifecycle management afforded by disciplined standardization is directly applicable to the IT world.
  • Organizational design – Life tends to be a little easier when the workforce is aligned around unambiguous core operating principles and the overhead of managing specialized functional organizations is consolidated thanks to a single, standardized platform that the entire business emanates from.
  • Process effectiveness – By standardizing on the Boeing 737, Southwest Airlines necessarily streamlines its value chain and eliminates non-value-adding activities associated with managing business complexity.  This allows Southwest to focus on operational excellence, continuous innovation, and providing the highest levels of customer service.  The best example of operational process innovation is Southwest’s open seating concept – since every 737-700 seats 137 passengers, the cycle time of the boarding process can be quantitatively measured and continuously optimized to create system-wide efficiencies, and as I discovered on my way to San Francisco this past weekend, the process has once again been updated to make the boarding process faster than it had been previously.

Sources:

http://www.boeing.com/commercial/news/feature/profit.html

http://www.boeing.com/commercial/737family/background.html

http://www.southwest.com/about_swa/airborne.html

http://en.wikipedia.org/wiki/Southwest_Airlines

 

This entry first appeared in The Mikan Group Blog on November 13, 2007. It is being published on SaaSkatoon in an effort to archive selected content acquired by Delivered Innovation in 2008.

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