The business world is being disrupted by the combined effects of growing emerging economies, shifts in global demographics, ubiquity of technology and accountability regulation. Infosys believes that to compete in the flat world, businesses must shift their operational priorities.

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May 28, 2007

Network Based Business Models: Another Step Further

Kris Gopalakrishnan, CEO Designate of Infosys, recently observed: "The computing horse-power within the largest of firms has been outpaced by what is today available collectively at the fingertips of individuals." A testimony to true democratization of technology! In Kris' view, it is going to be a challenge for firms to catch-up; further, given security and confidentiality concerns, it may be a while before Web 2.0 applications (Read my previous blog here) are adapted to an "Enterprise 2.0" framework.

An ex-CIO Client of mine who is now examining independent business ventures told me that the Software-as-a-Service (SaaS) business model could accelerate adoption of Web 2.0 by Companies. SaaS is about hosting business critical IT applications off-premise, outside the firewall of a Company and charge based on usage or transaction. SaaS can bring all the latest and innovative Web based applications developed for individual use, into the enterprise mainstream by distributing (and thereby reducing) adoption and ownership risks.

Service Oriented Architectures (SoA – those cool programs that seek out information from distributed systems or applications and ensure seamless updates to maintain a single version of truth!) which are under the hood of any SaaS model, can be Web 2.0 accelerators too.

And here is the kicker – last week’s news about a potential tie up between Google and Salesforce.com is a harbinger of Enterprise 2.0 which promises to flatten Companies through the marriage of utility computing and thin client, non-proprietary technologies. Salesforce.com ushered in an era of CRM services in the SaaS, transaction pricing model. Pioneers like Google will probably make the hard disk on my PC redundant, allowing me to drawdown computing power and a menu of application services from the Web.

So what happens when you put these together? Salesforce.com gets to draw upon Google’s strengths in democratizing computing power, allowing employees within firms who are end users of its software, access to Web 2.0 innovations. Google will get a ready platform to enter the Enterprise space and offer its popular, individual tools today like gmail, online word processing, spreadsheets, Google Reader and may be even You-Tube like interactive features to corporate users! And think about the seamless link that Salesforce.com’s CRM application can have with a Company’s advertising strategy, through Google’s online advertising juggernaut! As they say, the possibilities are infinite!

Such emerging partnerships in the Web 2.0 context will encourage Companies with transaction intensive businesses to gravitate towards a network model sooner than later.

Consider another interesting development in the peer-to-peer lending space last week. UK’s Virgin Group has acquired a majority stake in Circle Lending Inc., a US based peer-to-peer lending firm. Circle Lending is planning a bigger play in the student loans, home mortgage and debt consolidation segments, which is where I believe the future of peer-to-peer lending is (Read my older blog on this). In their press release, Circle Lending’s CEO, Asheesh Advani says "We've just scratched the surface on understanding the power of family and friend transactions and how they can change the financial services landscape." And a large brand like Virgin (which provides credit cards and other financial services in the UK) entering this space underlines the emerging significance of network based business models.

So, I am personally convinced that Web 2.0 will have an Enterprise 2.0 avatar pretty soon. How soon and what genre of industries or companies will be at the leading edge of the adoption curve are interesting questions that I hope to hear from you on.

 

 

May 25, 2007

Shrinking the expanding supply chain

By Badri Devalla, Sr. Principal, High-Tech and Discrete Manufacturing

Supply chains are lengthening as everyone knows - we are connecting far removed markets and suppliers, moving far more information (buying a car at a dealer in your zip code vs viewing models and building a personalized car online), and moving a lot more inventory over larger distances (So much so that there’s a Think Local movement gaining root in the left coast of the U.S.)

Suppliers and Consumers mask the “distances” between them through fast movement of inventory (think air, rail, road and even water with massive and fast container ships), structures to exchange information easily (think internet-based tools) and moving money across continents – these three – the movement of information, money and inventory being the classic dimensions of the supply chain – a responsive supply chain is masking the “distance”. The dimension that has changed due to flattening of the world is of course "information" - its creation, exchange and consumption.

When we talk to Manufacturers and Distributors in the supply chain, we hear 2 initiatives – “Supplier Collaboration” looking out to the supply and “Partner Relationship” looking out to markets – the issues we hear are about, “We don’t want to just communicate over EDI or present products on a portal but we want online communities where we can collaborate or have a dialog” – be it swapping greater dimensions of information around demand/supply on the “supplier side” or tell us what your longer term needs are (beyond that one transaction) and we’ll personalize our solution for you on the “partner” side.

Enterprises and players in the supply chain are acting much like individuals in a social network – when we know we are “farther” apart, we want to “talk” more.

The onus therefore for Enterprises is to focus on making money (or reducing costs) in not just moving information but from encouraging a richer dialog.

So the question is, how do you enable a richer dialog? How do you profit from the conversation? 1

Analytics and Supply Chains

Badri Devalla, from our high-tech business unit, was recently discussing how the use of information in supply chains is changing. So I've asked him to share his thoughts on this blog.  

Badri is a Senior Principal for Infosys solutions for the High-Tech and Discrete Manufacturing industries.  He holds a Ph.D. in Computer Science from Texas A&M.  He is particularly interested in how companies use consumer information for better product, supply chain and customer operations.

May 24, 2007

Intuition vs. Analytics

Sandeep Dadlani's previous blog generated quite a bit of discussion (some on the blog and some 'offline') about relying on inuition vs. analytics to make decisions. In business, as in life, you never have perfect information (by that I mean complete and accurate information about everything you need to know to make a particular decision).

Whether you're trying to figure out your way through unfamiliar streets or trying to trade-off new product features, you are forced to make do with imperfect information. It could be that the needed information simply does not exist (or more accurately, it is not captured anywhere), or you don't have the resources to collect/analyze the information or you don't have the time to do it.

What if I were to restate Sandeep point: when does it make sense to seek (and invest in) better information and when does it not? IT professionals are adept at putting together 'business cases' for IT investments. What about business cases for information analytics? And how do those business cases change if the cost and management attention required for analytics becomes a fraction of the original estimate through the use of global resources and advanced technology?

May 17, 2007

Do Not Blink!

Many of us have read the Malcolm Gladwell best-seller “Blink” recently and loved it. The book describes several situations in business and life where we take important decisions intuitively and instinctively rather than by deep analysis. It also then goes onto argue that intuitive gut-based decisions are more effective than decisions based on deep analysis. Gladwell is also the author of other best-sellers like “The Tipping Point”, “Wisdom of Crowds”, “Undercover Economist”.

Now lets read leading professor and author Tom Davenport’s blog “The Next Big Thing” - simply a must-read : http://discussionleader.hbsp.com/davenport/. Davenport bets big on Analytics in decision-making and trashes Gladwell like a blogger has never done before. He believes that in a business environment, there is no alternative or substitute to solid analytics based decision-making and winning companies will be those that make data-driven and information-driven decisions

So who is right? Gladwell or Davenport?

To understand this, lets use our favorite reference framework – The CIO in a Flat-World Company and see how he/she takes these decisions.

Example 1: At a large retailer, my team is studying the potential root causes of severe out-of-stocks at the 2000+ stores across the US. Is it wrong forecasts? Is it tardy replenishment by the vendors? Is it that the buyers are not cutting purchase orders well? Is it lack of visibility into inventory at the store?... Senior leaders who have spent over 15 years in the retail business have all provide answers on gut-feel and they are all contradictory to each other since they are from different departments. My team is hence carrying out a grounds-up study based on hard data. The data-driven analysis is revealing new insights and producing very believable action plans. This exercise is personally sponsored by the CIO

Example 2: At another retailer, one of our recent solutions – Mediacart – an intelligent shopping cart tagged with RFID readers that allows advertising and promotion at the point of purchase and tracks sales,etc. very effectively – is being pursued without a business case or without any due diligence just because a VP of Marketing loves the solution and based on years of experience knows intuitively that the solution will succeed. He is probably right. The CIO loves it too but is determined to track pilot results and use data to prove a business case before jumping into a full-blown rollout. We agree with the CIO.

So in a business environment, Intuitive decision-making or analytics-based decision making is subject to the nature of the problem, the availability of the right data and the business environment, culture…. But the truly successful CIOs, lets call them Flat-World CIOs, across all our experiences subscribe to the Davenport mode of thinking. “In God we trust, for the rest please provide data”…these are famous lines inscribed in several CIO offices. The CIO, lest we all forget, is the Chief Information Officer so has to necessarily drive an information and analytics based culture and reduce any intuitive gut-feel based decision making to the minimum. Investments in sophisticated analytics across industries is touching new highs. Data-warehousing, Data extraction, Business Intelligence and Reporting are the hottest and most pursued initiatives across industries.

So based on my gut-feel, I am going to say that Davenport wins hands-down in the new Flat-World. Sorry Mr Gladwell but our flat-world CIOs know that to stay competitive one must never blink.

 

 

May 15, 2007

Web 2.0 and The Network Based Organization

My previous blog on Customer Relationship (CRM) and Customer Data Integration (CDI) generated some interesting comments. While many industry insiders did agree on the importance of CDI and “putting the cart before the (CRM) horse”, there was healthy skepticism around the effort and investments involved in a potential CDI implementation – is it again one of those big, hairy, audacious monsters which puts organizations at risk during implementation?

Well, to answer that question simply, no, it is not. But let me not get into a spiel on CDI implementation; instead, let us take a detour and touch upon technological developments in the flattening world around us, which if leveraged in an organizational context, can significantly bring down the implementation efforts, costs and risks for complex technology programs.

My long time friend and colleague, Sandeep Dadlani wrote a blog recently, right on these pages, extolling the virtues of 'Linked In' and how it can jump start networking and collaboration even within a large and rapidly growing organization. Think about it, networking and collaboration tools on the Internet have figured out the art and science of connecting and integrating public data across a mass of individuals. These tools seamlessly and silently update, in real time, any changes in people's professional or personal lives, based on individual preferences. And here, we struggle to link silos of customer, employee or any other business critical information, when everything is right under our noses, within the firewalls of the organization!

 

Why is it that open source, easy-to-use, interaction-rich, "service oriented" technologies and collaboration tools like "wikis",  which have collectively come to be known as Web 2.0, always make their debut on "non-business" or informal 'leisure time' applications? Is it because traditional organizations are too strait jacketed to encourage any creativity? Is the corporate world slower to adopt newer technologies?

Well the answer to all these questions lies in the simple fact that innovation on the Internet is driven by the collective wisdom of an army of volunteers, who are largely unlinked professionally or personally. They target, traditionally underserved segments – e.g., students for facebook, teens for myspace or casual knowledge seekers for wikipedia - to test out concepts. The power of the network exponentially improves the initial concept while steadily bringing down the risk of failure for progressive releases. Remember, much before the Internet evolved to what it is today, Linux was a 'geeky' volunteer pastime which snowballed into a formidable force in the programming world!

Another, admittedly controversial reason I can attribute to Web 2.0 explosion "outside the firewall" of traditional organizations: Internet driven innovations thrive in democratic fraternities (and sororities!) – Organizations (at least the for-profit, corporate bodies), by definition, cannot operate as democracies!        

So coming back to my original point: How do Organizations leverage emerging technologies and embrace innovation to reduce complexities in deploying customer facing applications? One option - Organizations morph themselves into loosely networked band of volunteer-professionals, operating by democratic principles rather than "facilitated consensus" by leaders and managers! Well not entirely impossible – like e-Bay or craigslist.org today comprise a loosely aligned network of willing buyers and sellers, adhering to a set of ground rules and committed to making transactions work. But not all Organizations can emulate e-Bay or craigslist, as there is something specific to their business model (creating more liquidity in traditional illiquid products or commodities) that encourages network building and rapid innovation.

Option 2 is to abstract the core principles of network based innovation – Organizations provide a 'platform' for employees and customers to innovate. Such a platform is typically a combination of flexible, non proprietary technologies, rapidly configurable product offerings and open access to all, with appropriate built in security features of course! There are open forums to share product and service information, test newer concepts and receive instant feedback, convert such information into keener customer insight and ultimately impact the top and bottom line. Further, the platform needs to run frictionless on existing silos and extract legacy information seamlessly. I hear the term "Enterprise 2.0" a lot now-a-days, which is purveyed as the Organizational avatar of Web 2.0. I am not sure I understand that concept very well but hopefully it is something similar to what I have espoused above!

Such platforms can also be creatively configured to operate globally – Analytics out of India, Technology architecture and plumbing out of China and multiple language portal support out of Eastern Europe! Parts of the platform could even be outsourced in a managed services model, without necessarily outsourcing the distinct strategies built on top of the platform! 

Maybe the day is not far when a Consumer Products Company or a Retail Bank equips all its customers with a Linked In genre of portal to constantly update as well as synchronize information back and forth!

May 7, 2007

LinkedIn across the Extended Flat-World Enterprise!

 

“What if we had LinkedIn within the enterprise?” – asked the CIO of a large CPG company. Three different Fortune 500 company CIOs in the past two weeks have approached my team for help in the area of employee productivity, internal communications, company-wide collaboration,etc…. Coincidence? Lets look at similarities in these companies. These are large, high growth, successful companies who continue to add employees by the thousands every year, in different parts of the globe, organically and through acquisitions….The nature of their business (Retail / CPG) is such that the employees are operating in distributed locations. All three companies are known to be very employee-friendly.

So why did these companies simultaneously have the same problem to solve? Why the CIO?

 

   As we engaged these companies further, it became clear that these companies were adapting to a new flat world where successful teams had to necessarily be in far-flung geographical locations, in different time zones, in different business units, and sometimes: in different companies itself! Team-members needed to find other team-members with specific skillsets and collaborate. They needed to see the pictures of those team-members so that the personal touch in those interactions remains intact. They need to arm the project teams with collaboration tools. They need to communicate key messages from corporate headquarters to different divisions and individuals effectively.

In summary : they needed to leverage the latest in technology to become a better flat-world company so the CIO seemed to be the best person to champion this initiative.

 The interesting aspect also lies in the fact that these companies looked at Infosys as a leader in this space since we manage an ever-increasing young employee base that is geographically disparate and necessarily needs to collaborate and receive consistent communication. The resultant conversation is a plethora of strategies and tools that are being discussed that includes advanced tools like blogs, wikis, facebooks, externally hosted knowledge portals, collaboration engines,etc. to more mundane intranets, audio-enabled emails/voicemails, department portals, bulletin boards all of which will be powerful if implemented with the right objectives and strategy in mind. Conversations range from the tactical : “what will it take to implement an employee directory with skillsets?” to the strategic “What will it take to harness the true power of the collaborative enterprise” to the imaginative “What if my suppliers, customers and partners were all part of this collaborative ecosystem?”

Regardless of the tool or the conversation, one thing is clear. These companies are some of the first to realize the new flat-world mindset. They already have some of these tools in place but creating a communication and collaboration strategy with strategic intent is the key difference. I suspect you will see many companies follow the trend. Watch this space for more.