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 29, 2008

An Inexorable March Towards Simplicity

Technology makers continue to work hard to make their products easy to use

Humankind's innovative prowess, particularly in the technology space, has seen a peak in the current decade that is perhaps unprecedented in history. Whether corporate technology buyer or inveterate gadget freak, we have happily been inundated by a cornucopia of ever newer and more sophisticated products, delivered by the rich pipelines of technological innovation.

Much of this innovation is powered by the advances in electronic circuitry engendered by Moore's Law, which allows ever more functionality to be stuffed into ever more compact packages. This phenomenon is evident in just about every technology product, from cell phones to cameras to computers.

However, the above recipe does not automatically translate into ease of use. In fact, it may be argued that rising complexity and sophistication militate against simplicity. Wrapping ever-growing complexity in an envelope that is simple and easy to use is indeed a task of daunting proportions. The world has changed dramatically since the early 20th century playwright Bertholdt Brecht wrote, "..it is simplicity that is difficult to make", but those words echo as true as ever.

Yet, it is plain that simplicity and ease of use are values that every maker of technology products must diligently strive for. And there is good reason to believe that in a flattening world, the move towards simplicity is gathering steam.

As we have seen earlier, products that are truly born in the flat world are designed to fit in organically with the user's need. These products tend to be created via unplugged approaches to innovation such as co-creation, and are thus more intuitive and easy to use. The flattening world also brings in a large number of new users who are likely to be less sophisticated, and to demand simplicity and ease of use.

The speed of information flow in the flattening world too has a role to play here. Early users of a product quickly share experiences using blogs and other social technologies, and a few bad reports on any aspect (including usability) can sound the death knell for a new product. The channels thru which consumers hear about new products are faster, and those consumers are less willing to devote time to learning how to use a product.

Prompted by these realities, I had written elsewhere in January 2007 that the defining technology trend of 2007 would be simplicity. Let's look at a few developments in the technology world since then, and whether technology did indeed get simpler.

Google, already considered nonpareil by many in the field of simplicity, made further inroads in that direction. A February 2007 interview had Google's new director of user experience talking of the need for the company to get more user-centered, and to begin thinking of themselves as designing not products but user experiences. Google also announced its Android platform in late 2007, with the avowed goal of allowing the creation of easier-to-use interfaces for mobile devices. A November 2007 release  from the Open Handset Alliance states that its objective is "giving consumers a far better user experience than much of what is available on today's mobile platforms".

Products embodying simplicity and ease of use found those virtues translating into market success. The iPhone continued to win hearts and market share, growing to cross a quarter of the North American smartphone market. Wrote Business Week in October 07: "In the wake of the iPhone launch, many (smartphone makers) are taking pains to ... eliminate the often arduous or non-intuitive task of gaining access to even the most basic information". The Firefox browser, widely lauded for its simplicity, gained 5% market share during the year to reach 28% market share in Europe*. The market share crossed 40% in some countries.

A large milestone in the journey towards simplifying the experience of working with computers was the introduction of Surface Computing by Microsoft in May 2007. This novel initiative seeks to make interacting with technology effortless and intuitive. While this is a laudable initiative in an area where improvement is badly needed, we will know how successful it is only when actual products reach the market**.


Clear skies ahead for Cloud computing
The term cloud computing gained traction in 2007, to refer to large-scale distributed computing that frees up the end-user from having to worry about maintenance, storage, scaling, OS and application upgrades et al....in other words, cloud computing promises great strides in achieving simplicity for the user. IBM and Google launched high-strength cloud computing initiatives, joining Amazon's Elastic Compute Cloud (EC2) web service.

And the singular trend towards simplicity has continued well into 2008.

Extending its Google Apps suite, Google launched its wiki, Google sites in Februrary 2008, with the goal of making "creating a team site as easy as editing a document". Cisco's director of user experience, who had earlier talked of "reinventing the telephone user experience", said he is driven by a simple mission: "Making things simple".  Microsoft hired a veteran design expert from Adobe to lead its team working on improving the Windows user experience.

And speaking at CES 2008 on January 6th 2008, Bill Gates predicted that over the next five years, more intuitive and natural technologies for interacting with computers would emerge.

Simple, natural and intuitive. Quite simply, that's the way technology products are headed.
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* there is considerable murkiness around the issue of browser market share, thus proving that the browser wars of the early 21st century are not quite fought out yet - only some of the players have changed!

** Microsoft has promised some functionality of the surface computing technology in Windows 7, but that isn't due until next year. However, the company has partnered with a number of companies to bring out products based on this technology.

May 21, 2008

Collaborating with Competitors

The next decade is going to be tough for the auto industry, companies have to innovate fast and look at lowering their cost structures to remain competitive/profitable. Automobile companies will have to look at increasing collaboration and co-creating, not only with customers and vendors but also with Competitors.  

Currently its tough time for the auto industry, with markets shifting to east where demand is for small/ fuel efficient cars, and the ever increasing crude prices are forcing companies to invest heavily on hybrids / alternative fuel technology.

Companies are faced with the challenge to optimize cost to remain profitable and same time invest heavily in research and development. Auto majors have been sourcing globally or setting up plants in lower cost countries to reduce cost structures, but this alone would not be sufficient, they would have to look at 'scale' more seriously to bring down the cost structures.Companies have been using modular design techniques and standardizing components across models within their portfolio to achieve scales, what companies need to additionally look for is - how can they collaborate with competitors to standardize components and achieve scales ?.

Companies have come together and set up joint R&D teams to develop engine platforms that can be shared and have seen success. GM, Daimler and BMW have come together to develop hybrids  and there are similar examples like Smart collaborating with Mitsubishi for engine development and more... What companies need to explore is options beyond the power train and look at all components - this needs a change in mindset and discussion between Daimler and BMW shows that mindset is changing.  

Companies need to analyze and make an assessment as to which components contribute to creating a differentiation (both Brand and Performance) - the rest can be standardized across their portfolio and even competitor’s portfolio, thus bringing down the cost structure. 

Collaboration is the way to go and collaborating with competitors could be a WIN-WIN for all. This can be seen in other industries too for e.g.  JVC and Kenwood.

 

May 13, 2008

Cost as a Fuel for Growth replaces China Price

Posts under the category 'China Price' can now be found under 'Cost as a Fuel for Growth'.