We built a house!

Ok, so it’s not a physical house but we have built a new business in Indonesia. I can tell you, having previously seen my first home being built, it feels very much the same.  In any construction there are a number of key factors to consider; managing the timelines for the project, ensuring contractors don’t blow out the budget (this is a biggie), adapting to the required changes as we learn what works best and above all ensuring the customer is happy with the outcome. In the case of my first home, my customer was my wife, and in the case of building this business, our customer was the Indonesian market.

When building this business or “digital house” as I call it, we learned there are a lot of great technologies in existence that can be leveraged to build a business’ operations and business systems. And for anyone that knows me, exploring these new technologies was like placing a kid in a candy store and giving them some money to fill a basket – don’t worry I was well behaved, for the most part.

Ironically though, I don’t believe it is the strength of our technology that will drive the right outcome for our digital house, but more so the less predictable elements that will define the successful build of our house - quirky people! Whilst quirky people are not necessarily sought to build a physical house  –in the event the bathroom may end up in the kitchen and a shower in the study – we were fortunate to have some amazing people on this project. It wasn’t just their knowledge that assisted us, but their ability to think outside of the box, and consider the unusual and unconventional ways to approach the deliverables for this unique program. Simply put, they needed to be quirky!

There were a lot of unknowns in the building of this house –  from how we could integrate into the local operator’s business and operating systems and avoiding significant upfront investment to ensuring we were compliant to local market regulatory policies. Importantly we also needed to ensure that whatever we built would support the business’ key goal in serving our customers in a new and differentiated way.

I can appreciate anyone who has worked in a start-up before will be thinking, ”well Nathan, as a start-up that’s pretty straight forward and common”. However, I would ask you to consider that this is a joint venture between two incumbents that were running successful businesses in a prescribed way for a long period of time with clear views on how they felt the business should be established. This isn’t in line with a common start-up model.

The approach we took therefore may have appeared normal for a tech start-up, but for two incumbents it was a leap of faith to change the approach in addressing these challenges, whist driving the outcome that would enable a new business to grow. It wasn’t possible to simply run through a check list – what we needed was people who would adapt to the changing landscape as we learned more about the market and business environment we were operating in, and challenge what was possible (or equally not viable) and what was needed to adapt to the needs of the local operator.

What was imperative in building this digital house was the need to change our way of thinking, focusing on quick outcomes in small steps, empowering our teams and accepting that failure could and would happen.  It is very easy to slip into an approach of “that’s what we have always done” as a reason as to why we shouldn’t try something different, I can’t count the number of people who were happy to tell us “that won’t work”, or “you can’t do it that way”.

This is where we get to the next critical factor - you need people that are committed, and almost stubborn, to ensure that they stay true to the journey that is being defined. You also need an understanding boss who will give you the flexibility to pull this together without losing faith in what we are able to achieve (thanks Boss!). There were times when we would question ourselves – “are we doing the right thing?”, and “should we back off and simply accept that near enough is good enough”. I am glad we didn’t as the outcomes we have started to realise are down to that commitment to the goal.

Equally, the team knew we would not make all the right bets to address both our current and future requirements. As such, we needed to make sure that we had some flexibility moving forward. By taking a cloud platform approach to all the technologies that we introduced offered us the flexibility to evaluate functionality, without feeling we were committed to the tools that we were using in the long term. Yes, there would be a revised integration effort if we changed out an element of our architecture. However, that was better than being stuck with a physical platform for five to seven years that we would have to keep customising to the point that it could no longer be changed out without a complete new build.

 The cloud approach has also meant that our costs for the platforms are directly correlated with the growth of the business. Yes, there is a case of initial capacity, however this is minor compared with the scale we can grow these platforms to as demand increases. Lastly, the hybrid nature of our cloud environment, which extends from Indonesia across international markets, ensures that we can be compliant to evolving regulatory requirements in Indonesia whilst leveraging the benefits of different cloud platforms.

Another key aspect has been the way that we have engaged our suppliers. Every conversation has started with, “how do you interface into other systems?”, “what use cases can you share about that integration”, and “what best practices have driven the development of your systems?” The reasons for these questions were because we knew that to maximise the value of the technology we were using, it was more important to have systems that would naturally talk to each other and had done so before, versus our own team having to build a system to translate between two systems – as if we were trying to help translate between two completely different languages.

To this end, it became clear to us we were building a “digital ecosystem” or a collection of technology partners that would need to interoperate to ensure we could serve our customers in a valued and differentiated way. This ecosystem may evolve over time as we find different technologies that will help us serve more effectively in the future. Fortunately, by remaining true to the approach the team has taken, will help to ensure all new members of the ecosystem understand the requirement for interoperability.

We have now established a Service Provider in Indonesia with no network assets, nor any voice infrastructure. Admittedly, we have had to build a private cloud to meet local market criteria, however the majority of our technology is cloud based. We are developing a culture where the teams succeed or fail together, and where we do fail, we fail fast, dust ourselves off, understand why we fail and then move forward again – but always as one team.

We are also now serving customers and gearing up to expand our portfolio, but the house is clearly built. To that end, in building our digital house; the operating license is our foundation, our walls are the tools, platforms and processes we have created, the roof is the governance we use to always make sure there are no leaks in what we have built, the windows our experience centre to show customers a view of what we can provide, and the interfaces connecting our systems together is the cabling. We can now see where we need to improve the house - where the walls need finishing and where the roof needs to be maintained, but none the less we now have a house!

However, our digital house is still just a shell. It’s the people who work in it that are making the digital house our digital home, and ultimately will be the ones who welcome our customers and partners in as we seek to change the customer experience and serve the Indonesian market with our version of kopi and thee.

This article is dedicated to the Implementation team from the past year that had the patience to work with us, the passion to drive us to complete our goals and never accept near enough as good enough. We recognized that this success will always be bigger than any one person and that we all should reflect on the role we played in realising the building of this house. I would especially like to thank the team for putting up with my crazy ideas, passionate discussions and occasional singing in the corridor!

Fail fast or suffer slow

Telstra recently released its Connecting Countries thought leadership report, which was based on a survey of some 4,100 executives across Asia capturing their views on best practices, challenges and overall business performance in the region. It was exciting to read that there were a number of management lessons that businesses can take with them as they seek to invest into Asia as well as an insight into the profile of an Asia Business Champion – one who doesn't only recognize best practices but also lives and breathes them.  While there were a number of takeaways from the report,  there was one which jumps out at me particularly as it relates to driving success in an Asia market place. One of the key management lessons for success in Asia was looking at the need to move forward with multiple growth strategies concurrently.

Now I have always believed that a person cannot multi-task (despite my numerous attempts to try!) hence this strategy could only ever exist for a large size business and not an individual or SMB. But the need to look at multiple strategies is important for international businesses to consider in order to balance the potential risk of one failing due to internal or market challenges. I must make clear though there are limits to running multiple strategies. A couple of years ago for example, one vendor shared with me their plans to run 25 new initiatives in parallel. Now I don’t care how big you think you are or how mature your strategy execution process is, but when you talk about multiple strategies to this degree it is simply a death warrant for the strategy itself and puts the business at risk of losing its way. I am glad to see that San Francisco based vendor has since realized this and re-evaluated how many initiatives it takes on at the one time.

Now when a business is looking at multiple strategies it needs to understand the levers it can use, for example how quickly a strategy decision can be moved into action and equally, how quickly it can be shut down. These days it is increasingly common place that a strategy is dependent on people, systems and communication. Now, we know we have the ability to redeploy people to other projects and – as hard as it can be at times – sometimes people choose or must move on , however for Systems and communication platforms we often have to make investments that tend to have a pay back only after 3-5 years,. This can cause a challenge as businesses then need to assess how they can mitigate risks to drive a strategy to a positive outcome. For this reason it is important for businesses to adopt what is increasingly being known as a “Fail Fast” principle. The Fail Fast principle looks at prioritizing initiatives that need an investment based on requiring limited capex and leveraging platforms that can be turned up quickly and equally turned off with very little delay post a decision, if it is not working.

Take for example the idea of replicating a solution into a new vertical, which  might require assigning people temporarily, adding  system capacity for marketing campaigns, tracking opportunities and managing customer deployed solutions. But what if all of this could be set up within weeks and taken down even quicker? Would that make you rethink your prioritization of business strategies and equally consider additional initiatives, knowing your investment risk is significantly reduced and not committing the business to years of investment? Well hopefully the answers to both are yes, if not then perhaps a multi path strategy is not for you (either that or you have money and resource to burn).

Historically this would have been a challenge; however the virtualization of IT and communications means that businesses are now more empowered than ever to introduce the Fail Fast principle into their strategy decisions. Now considering the feedback from the Connected Countries survey that businesses need to consider multiple strategies in order to achieve success – at the beginning of this article it would be perfectly normal to think this is only achievable by either very large businesses or for those who have learned through expensive or painful experiences of what strategies work and equally which don’t. However hopefully now you are thinking about how your business could introduce a multiple path strategy by leveraging the advancements of technology that exist today, combined with the key principle in defining which strategies to go after based on their ability to align to a fail fast approach.

We are not talking about transformation or changing the way your business operates. This is very much about understanding how a business can be successful in a market like Asia where the only constant is change. But there are clearly multiple market opportunities and with the right approach –  as demonstrated by the Asia Business Champions – combined with the right principles, businesses can create the environment needed to succeed by failing fast, which ultimately has to be a better approach than suffering slow and not reaping the rewards of a multi path strategy.

You can find the Connected Countries report at the attached link - http://www.telstraglobal.com/connectingcountries/?concountries=tgbanner

Look Mum - No Hands!

Look Mum – No hands!

Remember your first attempt at trying to ride a bike without holding the handlebars, how did that end? Well why is it that most businesses have a tendency to try and replicate this in the business world? Businesses seem to consider where they have had success and believe they then understand how to do business in a new market? Should we just move into another region and do what we’ve been doing because it’s worked in one part of the world?  I get the sense that they honestly believe they can continue doing “business as usual” while expanding.  Of course, they arrive at this belief having made several assumptions and comparisons between their home market and the new market. There is only one assumption that has consistently held true.  Within any market a business plans to enter, there are always new growth opportunities.   However, whether they can translate what they do today, into a new market, will determine how they benefit from those opportunities. 

Our global economy is a small place.  We are all increasingly aware of the successes and failures of any business as they move beyond their home market.  Why is it then that business’s fail to learn from those who go before them?  Whether into new geographies or in adjacent markets? Consider for a moment you are looking to build a plane. Would you really start from zero knowing the lessons learned over the decades? Of course you wouldn’t! So why should business plans targeted at entry into new markets be any different?

Yes, there are some unique cases where businesses have managed to replicate what they have done in their home market successfully into a new market usually due to the market demand being so high for a unique product they are willing to overlook any localization requirements, but these are and remain incredibly isolated instances. There are a larger and more significant number of companies that have failed. Why?  An organizations complete failure to interpret the dynamics of the real opportunity and the behaviour of the market they are seeking to enter. As such, they have either had to sink significant spending into the opportunity, just to stay afloat, or change their operating model significantly to achieve some form of success.   Both activities result in a depreciated or even possibly a negative outcome.

I have seen countless businesses state they have identified an opportunity and are best placed to address that opportunity due to their home market success and then fail. They usually base their analysis on a few common principles: size of population, spend in relevant segment, and growth of local competitors and if they are really sophisticated, access to their supply chain requirements in that market. At best, these criteria are only to identify if there “is an opportunity”, but nothing more. Even when looking at adjacent markets what are the requirements for the right to participate and how much change is required by your business to make that change? You don’t jump off a cliff without checking what is below. Do You – sorry I don’t know many cliff divers out there!

Looking at the Information, Communications and Technology (ICT) industry, which is becoming very crowded, there is a growing view that through their niche success they are best placed to expand into new markets.  This is not at all surprising given that everything these days is somehow connected to “mobile” or “in the cloud” and basically revolving “around networks”.  So, many businesses feel ICT organizations don’t just have an opportunity to compete in new or adjacent markets but, they have a right to, given their home market success. This is both lacking in logic and potentially dangerous for their business when their starting point is an operating model which is based upon their local market success.  

Leveraging partners as you enter unknown terrain provides your business with a set of “handlebars” and ultimately can result in a more stable and inherently positive outcome. They will enable you to adapt to whatever terrain you come across, or challenges placed in front of your business.  Adaption is really the key to understanding new markets – start by assuming you are going to adapt during the journey and then the only question you have to ask yourself is by how much?  Once you’ve made those determinations, you can then establish your plan for that market and then begin to understand how much of your existing capability can be leveraged. There is a growing wave of expectation for ICT firms to build their own ecosystems and to start offering services with best of breed partners that are complimentary.  This is being driven by an increasing demand for integrated solutions by customers - and as a result experiences.  Just like riding a bike through rocky terrain whilst holding the handlebars, support when entering non familiar territory is not a bad thing. If you fell of your bike riding over rough terrain without holding the handlebars would you really repeat the exercise or use a little more caution?

Doing the same thing again and again and expecting a different outcome will never deliver you the result you are looking for – I know surprising right? Therefore, don’t seek to blindly follow the path of your competitor, but learn from their journey both the good and the bad. Don’t simply do what you’ve successfully achieved in a different market, instead capitalize on your knowledge and capabilities! Leverage these capabilities in a relevant way, a way which is aligned to the market you are seeking to enter. Ultimately defining your concept for all markets is perfectly fine but the execution of that concept must be relevant to the market you are seeking to enter. Above all be ready to adapt to the dynamic nature of the market you are seeking to enter! Last but not least consider your partner ecosystem in the market you are trying to enter, because if you don’t get ready for a ride down the mountain as you enter the new market without being able to hold the handlebars for control – because they simply won’t be there!  I am sure similar to many of you that when I was starting out on my bicycle heading down that hill without holding on that first time… the idea of shouting out to Mum saying “Look Mum no hands!” was great in concept however the outcome was simply not a pretty sight!

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Nothing to Fear but Fear itself

On my way back from a Telecom conference – in Hawaii of all places! – I read an interesting article stating that CEO’s are nervous about how they will succeed in 2013. I hope they are not feeling inhibited by the technology that their businesses use, because if they are, then clearly I am not getting my blog out to enough people!
It was very interesting to read the concerns regarding “too many unknowns” that need to be managed during this year: market stability; changes in governments; regulatory changes; the risk of economies slowing down further; and managing supply chains. Now, I know I am often regarded as being “ultra positive” when looking at business challenges and I am probably too often looking for the silver lining in any challenge, but seriously…we have been managing thus far, are we really saying we haven’t yet learned to adapt?
Businesses now have access to the tools to help them adapt their businesses to the ongoing market dynamics, whether they are localized or global. Most successful companies have the necessary tools right at their finger tips. If you don’t, I am not suggesting a complete rip and replace of your existing systems and communications platforms … those assets, are, or are in the process of being depreciated. What I am suggesting is to look around and ask yourself this question – Can I make business decisions first and foremost knowing my IT & Comm’s will adapt to those needs? Will my infrastructure be able to adapt to necessary business changes and challenges? I am hopeful (yes I know Mister Positive) that there are a few of you out there who are thinking that yes, we have started to progress towards a business which can adapt to change.
This past year has been exciting! Business processes are being virtualized, meaning we only need to pay software providers, for the number of active sessions, which is ultimately dependent on the success and customer demand. Communications services are now accessible through a network, rather than taking up expensive office space and, security is increasingly being embedded in internet gateways, which has resulted in reducing the need for higher capex. All of these items are helping businesses to manage more effectively, its assets, which are directly impacting people, processes and place.
With all of that said above why then is there still this drive to spend capex? How can it be, that in a market where we are concerned about whether a business will survive, that people still want to buy assets that will sit on their books for the next 5-7 years. I understand the emotional aspect, this is what people have done for years and they are given a budget and hence think it is better to spend it upfront in case they don’t get another one. Think about it though, what if you could have a meeting between your CEO, CFO and CIO and define a new way of working, one in which the costs of IT & Comm’s would be directly associated to the growth or decline of a business?
Of course this is not just relevant to local market businesses but also international ones, in fact this approach is possibly even more important to international businesses that have to deal with both growth and decline, in parallel, yet coming from different markets. Well again, what if you were able to redeploy IT & Comm’s resources to countries where there is growth or increased demand and then shift those again if the wave of growth should start to decline? I have seen businesses do this with people, but then get caught up with increased cost as they seek to buy incremental equipment and services to temporarily support this staff. This can be expensive if after those temporary resources have gone and you haven’t reallocated them and they simply gather dust.
In Asia. we have become increasingly aware of the regulatory limitations in terms of security, voice and in some markets the quality of the internet access. These are increasingly manageable as vendors seek to create new offerings to be regulatory compliant whilst driving new service creation. Take the example of being able to redirect local calls in Indonesia, yes these calls do need to remain in-country and as such need to be connected to a local operator, but separate the regulatory needs vs. the driver for efficiency. The Actual telephony server for the Indonesia office doesn’t need to be IN Indonesia, it can easily be in Singapore, but a small device located in the Indonesia office simply helps to separate local from international and office to office calls. It is small examples like this that can rapidly help to empower a business to decide what they want to do, provide them the ability to effectively manage and/or adapt to changes around them, and then help to minimize the immediate concern of how much is it going to cost.
I challenge the CEO’s out there to pull together their leadership team and ask the question, how elastic is your IT & Comm’s environment? Can IT & Comm’s be an enabler for business change or will it be an inhibitor? If the latter, then you have some work to do, as businesses who are already on this journey will start to move past you in their goals to maximize growth, mitigate risk and manage change, without the concern of significant ICT change management overheads.
Hence don’t fear change, embrace it, and use it to enable your business to become more robust, in a market which currently requires you to adapt, in order to remain relevant, and create the opportunity to drive sustainable growth.

Business Augmentation – Back to Basic

I was asked a couple of weeks ago what is this augmentation I keep talking about, and why does it apply to businesses? Augmentation is not new, if you think about augmented reality, augment glasses, augmented amusement park rides – yes they exist!

The reason I apply it to businesses today is simply that like the other examples above they are seeking to maximize existing components and add additional capability and or scale to it that can adapt to their current market environment. Anyone familiar with augmented reality knows this is a powerful tool which can understand the current context of what you see and add additional information to it such as where a bus is headed to, availability of properties and reviews of your favourite restaurants. Now in the context of these examples you would say well of course it has to use the current capability we would be blind otherwise (literally!), fair enough, but why not use the same concepts for business? The current platforms work, it is not a case of them being no longer fit for purpose, more likely they are functionally or scale limited by the platforms they were built on and if a business knew that by adding to their existing capability they could actually extend the life of their assets and as such turn a depreciating item into a value creation item they might change their views on them.

Woah … what? Ok let’s go through an example. A business has an existing telephony system they would look to replace it or upgrade to a new platform when it is either end of life (financially), has reached maximum capacity or last but not least is no longer able to meet the functionality needs of the business. In any of these circumstances you might think a business needs to request quotations for new platforms, and previously this is most likely what a business would do. Consider equally businesses looking to grow through acquisition in a market where just about everyone has some form of video conferencing, yet there is always that concern on integration cost of communication platforms. In both of these examples any vendor would love you to rip and replace the old assets and convert to a new platform, but this only adds cost to your business which would be better spent on systems and tools upgrades/integration which tend to be more customized. Hence having access to a virtual “bridge” that allows you to leverage the assets of the existing business that can be integrated whilst using cloud based IP Telephony or video for new or temporary users/sites provides an alternative avenue and drives a philosophy of business led outcomes. i.e. decide what your business needs to do first and assume the technology is there to make it viable second.

Equally the current economic environment with its rapid changes of growth and decline across multiple markets at different times has resulted in concerns on making the right decision and timing of business decisions. Particularly when it relates to ICT investments where businesses are struggling to understand how they can find a balance between driving business improvement or growth goals against managing cost and mitigating risk. The Business Augmentation approach here creates a fundamental shift in defining the business outcome first, knowing that technology will adapt to your requirements rather than being limited by your current ICT capabilities both in terms of functionality and cost.  Think about it for a moment – how often have you considered that accelerating the growth of your business through expanded ICT and other resources could derive your next wave of growth, yet at the same time being concerns on managing risk. What if the market changes? What if competitors flood the market? What if my supply chain can’t keep up? Business Augmentation is about removing this risk, leveraging existing assets, adding new functionality – preferably through the cloud – with the confidence to unwind that functionality at a moment’s notice should market dynamics require it.

I am a big advocate of Business Augmentation mainly because it directs the discussion between people and technology where it belongs – Technology as an enabler to business and consumers and that through reducing (or even better, removing!) the risk businesses can create, innovate and drive growth with greater confidence. Technology change is increasingly regarded as a disabler as “rip and replace” or full transformation of platforms offers little or highly complex roll back to legacy platform options. Imagine for moment that your ICT architecture was linked to cloud based platforms which were used to facilitate your growth, and as you continued to grow you realized your business had established a new baseline, this could then justify longer term investment and encourage the business to stretch further with the confidence that it was suddenly in a stronger position to adapt to change.

Now this is all great in principle but we need to be able to realize these ideas, the great news is these platforms are out there today, whether it be around Collaboration, Cloud Computing, Networking and Security, we simply need to drive Service Providers, vendors and SI’s to be more disruptive and challenge the norms of upfront payments linked to capex towards a more sustainable and elastic business model which will deliver self fulfilling growth as risks become more manageable and businesses in turn take increasingly creative steps forward.

Challenge yourself, your business and your ICT relationships to change the way we work by leveraging Augment capabilities and you will quickly find there are a growing number of opportunities to create, innovate and grow your business! Hence get back to basics define your need and challenge your ecosystem to deliver!

Transform, Transition and Augmentation – Bingo

The other day I was cleaning out some of my old presentations which I have delivered through the years and something occurred to me, our business models have truly evolved! Yes I know, that is such a surprise and like welcome back to reality Nathan! However stay with me for a little longer, historically people would talk about transformation in order to achieve the results the business was looking for so as to adapt to long term business or market changes. Then we saw a growing trend to look at transition as businesses realized that transformation could lead to either greater costs or significant business disruption especially during increasing periods of change. Now we have entered into a new era as businesses seek to maximize their existing assets and avoid expensive rip and replace strategies in the current market environment where the only constant seems to be change, an era which I have defined as “Augmentation”.

When we talked about Transformation we would traditionally jump to outsourcing as a means of execution, I mean transforming your business on your own seemed near impossible, but by outsourcing key functions that were not core to your business allowed you to focus on managing the change with the outsourcing partner providing the people and systems support. outsourcing is still an option that people consider but increasingly less as they look to alternative options providing greater controls on costs.

Over time though we realized that transformation became more complicated and less likely to succeed due to rapid globalization, market changes and increasingly complex supply chain and customer engagements. As such it seemed a “partner” providing managed services was best suited, providing a degree of flexibility to increase predictability in your operational cost and target certain synergies in IT and communications platforms. Managed services saw a rapid growth in demand and similar to outsourcing, managed services continue to be in demand albeit reduced as businesses again look to new options for supporting fluctuating business change.

The current era of augmentation has been driven by the advent of cloud computing an opportunity for businesses to find services which are more flexible with their business needs but equally helps to maximize their existing investments.  cloud computing has not realized its full potential as yet, but new providers are helping business to realize the benefits of cloud computing through services which augment with existing platforms providing greater flexibility and scalability than previously seen.

What makes this whole evolution exciting is the waves of change are shortening, to clarify the window of opportunity for outsourcing companies has clearly passed, as has the peak of opportunity for managed service providers and now the question is how long will cloud based service providers last for. I am not saying that outsourcing and managed services will cease to exist, however they are no longer the only solution(s), but merely a part of, or provide a supporting role to the challenge businesses are looking for a solution to.

So we are no longer looking to transform, nor transition, but today it is about augmentation to maximize existing assets - which in the current environment no major surprises there. However before you nod your head feeling comfortable you are on the right track, we are awaiting the next wave which will be focused on Business Process Evolution or BPE. This will be achieved through the traditional two pillars of IT and communications finally merging through the common element of virtualization. Hence the title ... Bingo! Although this sounds like a technology puzzle game there is so much change that the key is to be able to adapt to change, anticipate it and recognize that traditional ways of working will no longer suffice. The resulting change however, will provide businesses an opportunity to redefine their business objectives first and foremost with a choice of partners to deliver on the ICT execution of those objectives.

I know many managers will read this and consider this a visionary story … however consider for a moment the diversity of software and next gen providers leveraging standard interfaces to bridge these two pillars of IT and Comm’s together. Their lack of legacy is allowing the acceleration of these types of solutions which will result in businesses focusing on business outcomes with an integrated IT and Comm’s platform that will scale with their changing business needs, no outsourcing or long term managed service required.

So what should you take away from this article? This is a message to all those feeling comfortable bobbing on those legacy waves, now is the time to start thinking about what is required to adapt to the next set of waves, because these waves of change are coming faster and if you don’t anticipate the coming changes someone else may end up deciding the future of your business for you. With that get your bingo cards ready because the next 12 months you are going to hear a lot about these accelerating waves of change and you will need to have the right attitude to survive and hopefully even succeed.

Are We Ready for Cloud?

I can appreciate that anyone reading this title will ask – what do you mean are we ready for Cloud, it’s in the market already, the market has been speaking about it for years, even in your own blog Nathan you have been talking about this? No I haven’t had memory loss – yet -  but this blog will look at a broader context of Cloud Computing.

Many businesses are already experimenting with Cloud solutions either for testing, extending data storage or generally preparing for cloud migration. However are we really ready for this change and what are the impacts it will have on our way of working? I hear many businesses talking about preparing to move their ICT into the cloud, but what does this truly mean? That their IT department has validated the systems they are choosing to use in a virtual environment or does it mean that an organization has understood that moving ICT into the cloud is as serious and potentially disruptive as any business transformation?

There seems to be a growing view that Cloud Computing will deliver cost savings to a business’s ICT spend and based on many industry reviews this seems to be accurate, at least at first. From a starting position when migrating to cloud computing businesses will most likely see an improvement in their IT and Communications spend through increased scalability; however the challenges occur when businesses are seeking to leverage the benefits of virtualization across their supply chain and their internal processes which tend to take longer to materialize in any type of transformation project.

Anyone who has undergone an internal transformation will know there are three key aspects to any business change, these are – People, Process and Systems. It is interesting to note that when considering a shift to cloud computing, businesses seem increasingly comfortable and aware of the “Systems” implications. However during a cloud migration businesses are not paying the same level of attention to People and Process, these two areas are of particular importance in an era of globalization and connected business environments. Through globalization many businesses today have staff/resources distributed around the world, either through driving efficiencies, optimizing costs or to ensure close engagement with the end customer. The People aspect of change brought about by Cloud computing needs to capture not only the impact of latency tolerance for people to access systems, but also ease of use, language, local vs. central support and managing legal and regulatory changes where people are located. Equally, a business’s processes increasingly tend to include other organizations as they no longer tend to manage from design to implementation to in life support without input from other partner’s, suppliers or even customers. These developments require greater governance and adaptability to change, something which businesses may not have had to consider in a static ICT environment where changing a vendor or system had a more limited impact to the business.

This is not meant to be a warning against the benefits of virtualisation - aka Cloud Computing, but to make sure that as a business community we look at the transition to Cloud Computing as being as broad and potentially impactful as any business transformation we have undergone or are considering. Whilst many are looking at the short term gains that cloud computing can offer, it is actually the longer term benefits of cloud computing which are more exciting as these can lead to greater business agility, a shift in aligning business performance with supplier cost and creating a working environment for business led innovation.

I am sure many out there who will read this and think I am over complicating something which is simply a managed service, yet the goal for any business must be how to drive sustainable growth, in a market where the only constant is change. It is therefore important to ensure any project is providing a path to sustainable growth, there must be a longer term set of measures for success, such as identifying efficiency benefits through unit utilization (staff or resources), or being able to demonstrate increased alignment between the pull of business requirement and the push of ICT costs, resulting in reduced bench cost and greater business agility.

Are we ready for Cloud Computing, the answer remains yes - surprised right? -, although it might sound odd with what I have just outlined, but as businesses we do have the means with which to ensure a successful migration to cloud based working environments, we need only make sure we treat this as a business change not only a technology shift. All businesses have been through some form of transformation in their business, whether that is to adapt to the market, seek out new opportunities or drive business optimization we need to refresh our learning’s from these projects to ensure a path to the outcome we are looking for in the longer term with Cloud Computing. As with any Transformation we must keep in mind the three factors of people, process and system whilst maintaining a forward looking view on the benefits to a sustainable growth outlook all the while keeping in mind the age old saying – Preparation Prevents Poor Performance!

No Big Bang, Just a Passing in the Night

In this ever changing world of technology we are seeing a very interesting trend. Previously I wrote about the Next Big bang which I thought would involve the merging of IT and Communication Providers; it would seem however that it was more a passing in the night of two large forces than an actual collision to create a new wave of services.

In today’s market we have Hardware vendors now being driven to sell software in order to sell more hardware and software providers now selling more hardware in order to sell more software – still with me? I had expected or rather hoped that the Big Bang theory would create new partnerships between Hardware and Software vendors to leverage the shared strengths of both as opposed to vendors trying to over extend. We talk about the need for Businesses to adapt to the market around them to survive this could not be more relevant to technology companies but that shouldn’t mean these technology companies try to manage beyond their core strengths.

Okay that might sound vague but we only have to look at the wonderful new world of cloud computing to see how Hardware Vendors and Software Providers are trying to gain new market share or for many of those providers already in the hosting space trying to protect their existing business. It is this attempt to try and conquer all which is creating a new market dynamic. Cloud Computing is on the verge of significant divergence with so many different models offered by a vast array of providers both hardware and software alike.

The implications of these differing Cloud Computing models are that technologies moving into the cloud are increasingly becoming tied into specific cloud platforms. That is to say instead of being able to choose your own combination of a cloud computing platform and then your choice of Communications and IT services, business will now need to identify which services work with which platforms without the need for customization.  I am worried that although cloud computing was supposed to mean less customization and greater ease of use we are going end up with the exact opposite. The result being extensive ongoing customization and complex systems requiring intensive resource support diverting crucial resources away from businesses focus because of the increased hands on requirement.

This is because Hardware Vendors and Software providers alike feel the need to fulfil each other’s role rather than look at partnerships. This to me is a missed opportunity and one which businesses will end up having to managing. There is hope however I have seen a new wave of communications and IT service technology businesses that are working to remove the complexity of customization by taking on the integration requirements themselves embedded within their service offerings. This is intriguing to me as I had predicted these new providers/innovators to come about through the seamless integration of Hardware and Software, but it has been the gap which has developed between Software and Hardware vendors instead which has created an opportunity.

I am excited to see these new providers offering hope to businesses to leverage the benefits of new technologies whilst avoiding the worry of managing change. Augmentation helps businesses avoid rip and replace, and let’s face it in the current market environment no one wants to replace their existing systems. At the same time though businesses realise it is important to continue to drive towards sustainable growth leveraging the ongoing evolution of technology albeit based on the outcomes of their business goals rather than technology limiting those goals. Did you get all of that?

Best of Breed should always be about the choice of the customer, I am hopeful that these new technology companies will keep alive that opportunity for businesses to look at the blending of cloud computing with Communication and IT services as an opportunity to reduce customization and improve ease of use. So I would ask Hardware and Software providers to take a look in the mirror, stay true to their business focus and leverage these new providers in maximizing their own strengths and ultimately retaining their focus in meeting the needs of their customers.