With an "ERP for the CIO" product, uGovernIT challenges the "startups only pursue the consumer market" stereotype

A lot of the glamor in the technology world shines on the fabled Silicon Valley startups. You know, brilliant young people, huddling over their laptops coding night and day, and coming up with Snapchat. Or Instagram. Or Angry Birds. What is the common denominator for that startup world? It's directed at the consumer market, and most likely, to the goal of being acquired by a bigger company for a LOT of money.

What do they have in common with the enterprise CIO, and the needs he or she faces every day? And why does it seems as though most of that precocious startup talent is focused on the consumer space?

That is a story in itself, and I'll tell it through the example of an exception to the "startups are only interested in consumers" idea.

 uGovernIT is an ingenious startup, based in greater Los Angeles.  It challenges that conventional startup thinking by aiming directly at the pain points faced by C-level executives in the enterprise. Even more specifically, they are going after the midmarket segment of the SMB space.

uGovernIT is "ERP for the CIO," an integrated suite of IT management functions delivered through a web browser. Founder Subbu Murthy sees an opportunity to bring the same kind of disruption to enterprise applications that consumerization of the enterprise has brought to the workplace.

uGovernIT founder Subbu Murthy

Although uGovernIT works with larger enterprise deployments, the focus is on the mid-market--a standalone product that is completely functional in a smaller enterprise even without back-end systems in place for functions like project management, portfolio management, and resource allocation.  In common with consumerization of the enterprise products, uGovernIT is quick to deploy and does not require extensive configuration or infrastructure investment.  Another powerful lesson uGovernIT takes from consumerization: you can drive quicker time-to-value in business IT by simplifying and standardizing processes while allowing some customization at the user level.

I can bring personal experience to bear on this commentary, too. As I've written in previous posts, since moving to the bay area in 2013, I have worked in the retail space at both a national chain of about 100 stores and at a much smaller lifestyle operation with a website, a couple of retail locations, and 2 restaurants. In my stealth retail analyst role in each of them, I was astonished to see the difference in the IT approach compared with a Fortune 500 company. Specific expertise is rare, ability to innovate is almost nil because so many resources are devoted to keeping legacy tech going, and purchase decisions are made by people with almost no knowledge of the bigger technology world.

If any marketplace is ripe for disruption, it's the midmarket and its beleaguered CIO. Surely a web-delivered app that gives smaller companies low-cost access to enterprise-grade services like workflow, analytics, and project/resource management would be a huge draw.  But it's not as simple as "build it and they will come." 

I was introduced to Murthy by a colleague at a major research firm; the uGovernIT startup is not itself large enough, or the recipient of enough analyst coverage, to warrant coverage yet by IDC, Gartner, or Forrester. But my analyst colleague still saw the value in Murthy's work, and suggested that he and I talk.  I've spent several hours in conversation with with Murthy and his CIO John Grunzweig.  uGovernIT is a fine offering with a clearly defined market.  It's definitely a sound business model.  And as detailed in part 2 of this report, it reflects some important emerging technology ideas you've read about on Infrics.com for several years.

In e-mail exchanges, I had the following conversation with Murthy:

Infrics: Tell me about your decision to develop uGovernIT. Why this product? Why this market?

"As a CIO, I felt that CIOs did not walk the talk. On one hand, they would be recommending analytics and business intelligence, but they were not practicing it. The reason was not that they were not smart, but they did not have the tools that they could afford. The mid market could not afford the kind of tools their big brother could. So uGovernIT was formed to provide a one stop for all tools needed to manage IT."


--Your product is live and your team is dealing with sales and with clients in the field. What lessons have you learned about the decision to develop for SMBs instead of, say, a potentially lucrative mobile app for the consumer space?
"Perhaps, my motivation was driven by my experience as a CIO in mid-market firms. Money is a by-product and not a goal in itself. So when I saw a need and most product firms were only focused on the big companies, I decide to invest and develop a tool that was easy to use but with great utility."

--Are clients revealing new markets to you based on the way they respond to the uGovernIT "ERP for CIOs" concept?
"That is a starting to happen. Our entry into the construction vertical is derived from the need for dynamic resource management that connected the resource supply to demands."

--You mentioned to me once that it's not just developers who seem fixated on the consumer market, but that the venture capital community has been challenging for enterprise-directed startups. What message would you like the V.C. world to hear about enterprise products?
"Great question. My message to VCs is consumer products have pizzazz and the lure, but enterprise products are critical. The shift from just being an Analog enterprise to Digital is well on the way. The case study shared by CIO Magazine (November 1, 2015 Issue) provides insights into how IOT (Internet of Things), analytics and the mobile platform have enabled Michael Nilles to embark on a journey where technology and core business of Schindler (elevators) are inseparable. The existing enterprise systems need to be disrupted with totally different systems. For example, action centric systems will replace data centric ERP. I feel what we are doing to IT management, there will be disruptive technologies that will render SAP, Oracle expensive and irrelevant."


--After I spent a couple of hours in a product demo, it seemed to me that the sweet spot for you in the market is a firm big enough to need ERP-like functions, but not so large that they have already invested in spot solutions. As a former CIO yourself, will you talk a little about the integrated approach you've chosen? Do you see your offering as more of a "one integrated solution" or as an integrated front end for systems or business processes that companies may already have in place?
You are right on the money. While our tool is marketed as a one-stop complete solution, we can be the front end tying things together for firms that do not want to change transactional systems. For mid-market with a solution, the one integrated solution probably applies, but for larger firms they want to probably retain the point solutions, therefore, the integrated platform which can tie things together is a good metaphor.

--Talk to me about the architecture of uGovernIT. I'm specifically thinking about the use of a well-liked backend in Microsoft's SharePoint as a starting point. What are the implications for you as a startup, and for your customers as a "you already trust this program" sales point. 

While our platform supports multi-tenant models, we felt that most mid-market companies are tied into Office 365 and SharePoint. This is why decided on the SharePoint approach. That said, we only use SharePoint for content management and access, but we have our own workflow and analytics engine.

--I asked earlier about your message to V.C.s What insights do you have for those considering developing for the enterprise market?
My advice to entrepreneurs considering the Enterprise market is three fold:

1. Know your market. I was a CIO for several years before I could embark on this product.

2. Have a target customer. I had three adopters even before I wrote a single line of code.

3. Have good mentors. I had over 20 CIOs who guided me.

In part 2 of this report, we'll examine what uGovernIT does, and how it aligns with classic Infrics.com themes like stateless computing and complexity management.

IT management as a service: the disruptive offering from uGovernIT

In part 1 of this report, we looked at the startup world, and uGovernIT's role as an exception to the consumer-focused world of Silicon Valley


Startup uGovernIT makes an “ERP for the CIO” product of four interrelated modules for the management of IT. It is aimed at the SMB enterprise CIO, and specifically midmarket firms--not the Global 2000/Fortune 500 market world of SAP and Oracle. Described below, the modules interrelate strategy, resource planning and execution, the management of projects and service delivery.

 


There are several reasons for Infrics.com coverage of this company. In many ways the uGovernIT business model, sales, and service delivery approach mirrors trends you’ve seen in Infrics reports since 2011.

• Stateless
  There is no local app installation of uGovernIT. It is all delivered through a web browser. That means that out of the box, it’s enabled for virtually any enterprise laptop, desktop, tablet, or mobile device. The heart of the stateless computing idea is that the processing power lives in the cloud, while the result is consumed by a device that provides connectivity, display, and user interface, nothing more. This can be incredibly attractive for the enterprise CIO: quick, low cost deployment with predictable lifetime TCO.
• Simplicity as a design choice
  One of the main characteristics of enterprise software that inhibits innovation is complexity. While each of uGovernIT’s functionality modules can be customized, the workflows, forms, charts, and interfaces are streamlined versions of their very expensive big enterprise counterparts, and can be used by a small or midsize company to begin adding value from day one. By design, one of the disruptive ideas this company puts forth is “good to go” without months of IT division customization and planning.
  
  This graphic illustrates the range of prebuilt services in uGovernIT:

• Consumer software-modeled cost structure
  Founder Subbu Murthy believes uGovernIT is disruptive. With a cloud delivery model and per-seat pricing, it’s IT as an expense item, not a capitalized cost. And as Murthy points out, the pricing model is “like Quickbooks.”

The company sells a service, not a product. On the one hand, they defy the expectation that a tech startup is staffed by fresh-out-of-college high achievers with designs on the consumer space. On the other, they challenge the legacy of the big software and hardware companies that rely on pre-digital (and fading) models of the enterprise IT department.

Now that’s disruptive.

 

How Android apps and the Play Store will come to Chromebooks

Google: Skype, Photoshop, Office and every Android app on Chrome OS.

In the second month after Infrics.com went live in 2011, I switched my primary computing platform to Google's Chrome OS.  As I've written, I believe it is the best expression of the major trend I've labeled "the stateless future."

Time has proven the accuracy of that prediction.  Chrome OS devices now outsell all others combined in the education market; in Q1 2016, IDC Research reported that Chrome OS has now overtaken Mac to become the second most popular PC operating system.  Enterprise penetration of Chrome OS is accelerating, and for good reason: incredibly simple deployment and management, excellent built-in security, plus dramatically lower cost of acquisition and TCO.

At the recently-concluded annual I/O developers conference, Google announced that, beginning with the next developer environment of Chrome OS and soon to be released in the stable channel, the Google App Store and its apps will run on Chrome OS.  Here is their announcement and a product demo:

The entire presentation is about 24 minutes, I've started the clip almost 5 minutes in.  Among the important takeaways:

• Every Android app will work offline, eliminating one of the last excuses not to deploy Chrome OS.
• This includes movies, music, photos, and the entire range of business applications in addition to games.
• The architecture runs a version of Android in a container within the existing Chrome OS shell, and it is fully integrated into Chrome OS standard features like notifications.
• This is "the other shoe dropping" after the organizational change at Google that brought the Android and Chrome OS teams together.  Chrome OS is not going anywhere: Android's next release will adopt the seamless behind-the-scenes update system that Chrome OS has always had, and Chrome OS will add almost all of the Android app and feature set to the laptop and desktop. 

What's an important trend? What's clickbait junk? 3 tips to help analyze emerging technology

Part II of "The future? I've got this."

Analysis

Business and technology are now partners; the future of each has a profound influence on the other.  In the enterprise, that means that futurism's importance is magnified.  It's no longer some abstraction that can be casually passed over because it's too nebulous.  Thinking realistically about the future should be in your arsenal for both strategy and tactics.

You can do it, and do it well, but like any business function, you need tools and methods to give structure to the effort.  That's what this series is about.  In part one, I tackled one of the most difficult concepts, cultivating the ability to imagine the future.  Close behind imagination in difficulty is the skill to pick out important information, to analyze information and figure out what is really important.

Humans have always been a technological race, but rarely have we been faced with so much technological change, such a rapid pace, and such a downpour of news and opinions.  The challenge? Seek out the right information streams, analyze them to figure out what is important, and imagine what that knowledge means for the future of your enterprise.  The result: actionable insight.

I'm writing these articles as thought pieces, and as planning chapters for a workshop on enterprise futurism.  As the ideas take shape on the screen, one thing I've quickly seen is that the structured exercise of futurism extends beyond just a few blog articles.  So let's stay within the bigger Venn diagram of the futurist's toolset, and lay out the first series of ideas about information importance triage: analysis.

1. Get away from your professional peer group and ask them to think about the same ideas.  Oftentimes, someone who is totally uninformed about the realities of say, supply chain, will not have preconceived ideas about the possible, and will be more free to think without limits.  Try asking yourself, "am I far enough away from this to see it clearly?"  Oftentimes, this 3rd party approach adds a degree of clarity: the forest, rather than the trees.
   
   Action item: don't just think about this concept horizontally, from your own position as an IT executive or manager.  Go vertical, and seek ideas from your front line in retail, sales, and manufacturing. Go to other internal horizontal constituencies.
   
2. Look for patterns that are in play.  Will they continue at the same pace, or will they accelerate or decline?
   
   --In the 50s and right up about until the first moon landing, a lot of "the future" was about getting places faster: interstate highways, jet planes, rocket ships.  But all of a sudden, the laws of physics and economics caught up with the tech advances, so we've been almost stagnant in transport speed since 1970.  
   
   --The real tech revolution since then has been about communication and social connection.  Did either show up in the era in which everyone was preoccupied with "faster, faster?" Not very often, because they were asking questions about the status quo future.  What big change pattern are we missing now, and what of the "now" will continue to change rapidly?
   
   Action item: It's easy to get trapped in the idea that current rapid changes will keep up that pace, but emerging changes in other areas that can be meaningful--a major opportunity source.  Does the tech news you're seeing really reflect a change in an area that is still accelerating, or something that is nearing the end of its fast rate-of-change cycle?
   
3. Related, but separate, is the idea of democratization.  We may not be flying or driving faster, but aspects of transportation that were once the reserve of the wealthy are now cheap and widespread: "jet set" doesn't mean much when families in sweats are boarding on cheap flights, packed like sardines, and paying for bad prepackaged sandwiches.  "Long distance phone calls," which once were something an executive used for big business deals due to the cost, have become an irrelevant concept when global voice communication is essentially free for everyone.  Those are not technological changes, but technology was an important trigger.
   
   Action item: what does it mean to be wealthy today? What does money buy you that has not yet been impacted by technology democratization?  What is now the province of the rich that may be democratized as artificial intelligence becomes more sophisticated and widespread?  

These analysis tools are not themselves about technology at all, one more reason that your examination of the future of technology will be more successful if the participants are from all lines (and all levels) of your business.  Think of each as a lens through which to evaluate technology news; discussion of the emergence of clickbait and the never ending news cycle is the subject for another post in our "The future? I've got this" series. 

Want to predict what new technologies mean for your enterprise? Tell stories about the future

part 1 of "The future? I've got this."

The future. It looms out there, like a fog, hiding business opportunity and threat in equal measure.  When you're in the enterprise, some days it seems the fog is even thicker for all the vendors, analysts, and news sources predicting what will happen.  How do you sort out what is important in ways that can help you make smarter decisions for business?

Although my tech career began at a help desk, and later moved into a pretty technical system analyst role, I've spent the last 15 years helping business leaders find the right information to make good choices.  I've learned something important:

Making smart predictions is a learned skill.  Anyone can make better predictions.  You can catch disruptions earlier than you do now, or you can identify trends in time to be disruptive yourself.  

But to do it, you need a toolset. That's what this article is about: the first of an Infrics series offering practical tools and exercises to give you confidence to arrive at your own understanding of things to come.  The primary output of future thinking is insight, a holistic view of emerging technology and business that a)makes sense, and b)will help guide your way forward.  For the purposes of our futurism toolset, I propose that we look at insight as the result of:

• Information 
• Analysis 
• and Imagination 

Let's call these "futurism KPIs."  You need to know what's going on (information.) You need to be able to view aggregate information through lenses that let you see what is genuinely important (analysis.)  And here's the key differentiator: you need to be able to use that knowledge to create an idea that didn't exist before (imagination.)

I want to start with imagination; it's not only rarely used in business, few seem to believe it's something you can learn. "You either have it or you don't," is common to that discussion.

No. Business imagination is also a learned skill. In this post I plan to demonstrate that the very act of adding structure--learning methods to improve imagination--can free your mind to explore in imaginative ways. "the creative imagination works best when faced with explicitly understood constraints," say Michelle and Robert Root-Bernstein, in their 2009 article in Psychology Today.  With that idea, we can let go of the crystal ball concept of futurism, and move to familiar-territory business.   

To fire your imagination, start with these constraints :

• Start small. Don't try to imagine future scenarios at the big picture level, especially when you are mastering the art of rule-assisted imagination.  Later on, any number of these small-scale exercises will form building blocks of that big picture, but for now, chose one idea at a time.
• Pick a specific idea.  Here's an example. Take something about emerging technology that seems to be true, in this case "wireless connections will likely be more reliable in more places, with higher bandwidth, at lower cost."  Now, pick just one aspect of business, and imagine possible impacts of that statement.  How about supply chain? Now you can ask a "what if" question and begin imagining possible outcomes. Tease out that future; try thinking from the standpoint of manufacturing, distribution, and retail.
  
  See what's happened?  Imagination has gone from the nebulous to a structured what-if situation.  One of the huge drivers of the personal computer revolution was the Visicalc spreadsheet, which transformed cumbersome financial what-if questions to something that could be done every day.  Once it's easier to ask such questions, you're free to imagine any number of futures.
  
• Work alone at first, and be fearless. With few exceptions, group-think kills imagination.  It's killed by fear of appearing foolish, need to seek consensus, and the tendency of more outgoing individuals to dominate the conversation.  Later on, you will get together to talk about imaginative ideas, but in order to work the imagination plan, you want to start just in your own head.
  
  
  
  
  
• Fantasize.  This can be one of the hardest steps.  To really use imagination, we've first set some constraints; now, within those limits, that scenario, imagine that which seems impossible.  Staying within the story started above, here's an example of one future: wireless, available at previously impossible speeds, universally available anywhere in the world, and so cheap as to be free for all practical purposes.  It overlaps into the current excitement about the internet of things.  What if every person, object and process in your business had access to this connectivity?
  
  Not only is this likely within the near future, we already have a parallel in long-distance telephony.  Free long distance, anywhere in the world? Never happen.  Oh, wait.
  
  So here's a future to imagine: connect with anyone or anything in your business world at any time, any place, and exchange unlimited information for free...where can you go with that in your company's supply chain? Run with it.
  
• Tell stories about the future. Then share them.  By now, there's a good chance some excellent and imaginative ideas have begun to appear.  In order to bring the still-nebulous concepts into focus, make up stories in which that reality is a central figure.
   "A Day in the Life of a Distribution Center," "Carol in Manufacturing Saves the Day," and so on.  Storytelling gives imagination a structure upon which to build, to feel real.  Here is an example of a way I used storytelling to describe a future with artificial intelligence-minded Personal Digital Assistants.
  
  Although I encouraged you to work solo when you're setting your imagination free, it's in the sharing of stories where excitement begins, you get some really cool synergies, and the first sense that some imaginative ideas will get traction.  Just don't let those sparkly personalities on your team (and every meeting has them) take the limelight from more introverted members.  Everyone here has something useful to contribute.  If it's hard to be fearless when you're alone, it's even more so in a business meeting.  It's the leader's responsibility to nurture a place where everything is open to discussion.

The important thing here is to fire imagination, not to be right.  In business, it's really, really tough to let go of the idea that "I have to get this right."  In fact, it's in the getting it all wrong--totally different--that imaginative genius flourishes.

Really, we're going about this out of order; imagination actually follows information gathering and analysis, but it's important to enter the futurism process with these imagination concepts in mind.  They will help you do a better job of information and a better job analyzing what you find.  

And there are structures for those as well.  That's in the next installment. 

That bad data in the C-suite? It's all Maslow's fault

Few would ever argue that data is a critical part of business.  "If you can't measure it, you can't manage it" is one of the most common refrains.

But if that is true, why is there such a high rate of failed and abandoned projects? Why do seemingly well-run businesses get caught unaware when the believed-to-be-good numbers fall away to reveal corporate crisis?

There was a time when I hoped to change the world by working in university student services.  The central idea of that profession is that students learn much more in college than what is taught in the classroom--that schools have a duty to maximize learning through the student's experience in housing, activities, recreation, campus health care, and career planning.  I came within a few course hours of completing a master's degree in Student Personnel, the formal name for the field. The academic study includes a lot of human development theory, especially the ideas of American psychologist Abraham Maslow.

Maslow's hierarchy of needs. (Source: Wikipedia)

Put simply, Maslow said that humans have a hierarchy of needs; if basic needs like food, shelter, and safety are not met, people are unlikely to seek out higher needs like achievement and self-actualization.  The ordered list looks like a pyramid.

We can also look at Maslow in other contexts.  In that sense, his theories quickly begin to reflect our worklives, and the dynamics of organizations.  Basic employment is a foundation need.  But one level from the top are self-esteem, sense of achievement, and respect--by and for others.  Those are critical elements of a high-achieving business, but much of what people experience at work is different.  The same dynamics that lead to all the internal corporate fiefdoms, to the proliferation of administrative levels, and the big change management issues are firmly rooted in Maslow.

The Maslow pyramid for many corporations looks more like this:

Back to the headline of this story: I contend that a good part of your inability to get good data is that your culture operates at the bottom levels of the business pyramid far more often than it does at the top.  Because reporting data with other than good news represents a risk--taking a chance--there is a built-in bias toward data giving you a false positive on good news.

In "American Icon," his excellent 2012 book on Alan Mulally and the turnaround of Ford Motor Company, Bryce Hoffman tells the story of one of Mulally's first breakthroughs, getting his executives to report bad news.

The entire exec team met weekly to look at company performance.  Mulally's system used a simple green-yellow-red color coding on each VP's report slides, but week after week, nothing but green appeared.

Hoffman continues: "By October 26 (of 2006,) Mulally had seen enough. He stopped the meeting halfway through.
'We're going to lose billions of dollars this year,' he said, eyeing each executive in turn. 'Is there anything that's not going well here?'
Nobody answered.
That was because nobody believed Mulally when he promised that honesty would not be penalized.  In the past, high-level meetings were arenas for mortal combat at Ford. Executives entered the room with keen eyes, searching for flaws in one another's plans. They examined their own presentations beforehand like generals surveying their lines for weak points. They were sure Mullaly was trying to set them up, and none of them was foolish enough to fall for such an obvious trap."

I'll skip to the conclusion, someone had to take a chance.  It turned out to be Mark Fields, the VP in charge of North America.  The new Ford Edge had experienced a potential problem, just days before it was supposed to ship to dealers as a brand new model.  Fields reluctantly decided to hold the new model launch. And he decided to honestly report a red dot on his report for the upcoming executive meeting.

Hoffman describes how that played out: "As his turn approached the next day, Fields figured he had a fifty-fifty chance of walking out of the room with his job. By now, he assumed there was a good chance he was going to lose it anyway.
Somebody has to figure out if this guy is for real, he thought as he studied Mulally, trying to divine his mood. If I go out, it might as well be in a blaze of glory.
Fields began his overview of the business environment in the Americas. He called for the slide showing the region's financials. Then there it was--the product program slide.  Fields tried to be nonchalant.
'And on the Edge launch, we're red. You can see it there,' he said, pointing at the screen. 'We're holding the launch.'
There was dead silence. Everyone turned toward Fields. So did Mulally, who was sitting next to him.
Dead man walking, thought one of his peers.
I wonder who will get the Americas, another mused.
Suddenly, someone started clapping.  It was Mulally"

Ford went on to survive the economic crash of 2008 without declaring bankruptcy, and without a government loan. They went from a $12.7B loss in 2006 to break even in 2009; in 2015, Ford reported a record $10.8B profit.  Mark Fields succeeded Mulally and is now the CEO of Ford.

I think there are several good lessons here.  First, even if you are measuring the right things, there is a chance that the Maslow effect is giving you incomplete or inaccurate data.  Second, your enterprise success may depend on Maslow and others in areas not usually thought of as business drivers .

It's difficult to overstate the importance of executive leadership in creating a safe place for bad news, because the issues you don't see are the issues you can't address.  Whether you lead a department, a division, or an entire company, that culture flourishes top-down.  "Garbage in, garbage out" is a metrics maxim.  And it applies to leadership as well.

Change that culture, and Maslow will know you have risen to the top of the pyramid.

The value of subjective data, and how Google used it to build successful teams: NYT story and comment

I've argued before that subjective information is among the most important measurements of the success of emerging technology research, and that you can add subjective data into a metrics stream by assigning number values to subjective ideas.  It's a great concept, one that is not often given much weight in enterprise metrics.

I recently hurt my back at the gym, and got a referral to see an orthopedist.  Among the very first things in our discussion was the question, "how much does it hurt on a scale from one to ten?"  "Well, it's an 8 when I have a back spasm, but just sitting here right now talking with you, I'd say it's a 2 or 3," was my answer. That discussion is a practical demonstration of applying hard numbers to subjective feelings as a way to benchmark them.  It's not touchy-feely at all, and it's surprisingly practical.

image from the NYT article

And in that conversation, we have an important lesson about the way we measure performance within our enterprises, and how Google applied numeric values to subjective data to find out why some teams succeed and others don't.

After exhaustive number crunching about teams that worked really well, one of the main findings was that all team members need to have a sense of what they call "psychological safety" within the team.  In successful, high-performing teams, all members feel safe to offer any contribution without fear of ridicule or reprisal.

Here is the article:

NYT: Google research on subjective metrics and successful teams

Here is a brief excerpt:  ‘‘ By adopting the data-driven approach of Silicon Valley, Project Aristotle has encouraged emotional conversations and discussions of norms among people who might otherwise be uncomfortable talking about how they feel.  "Googlers love data,’’  (Google manager, Matt) Sakaguchi told me. But it’s not only Google that loves numbers, or Silicon Valley that shies away from emotional conversations. Most work­places do. ‘‘By putting things like empathy and sensitivity into charts and data reports, it makes them easier to talk about,’’ Sakaguchi told me. ‘‘It’s easier to talk about our feelings when we can point to a number.’

"The data helped me feel safe enough to do what I thought was right,’’  is the concluding quote in the NYT story.

Let's take this away from the idea of just talking about feelings.  As Google's research bears out, feelings turn out to have measurable value for enterprise success.  But the goal to get value-add from subjective data goes much farther.  When it comes to perceiving nuance and big picture--as opposed to big data--there is still no more powerful computer on earth than the human brain, and you have them in your organization in abundance.  Unfortunately, because it's tougher to report nuance as a hard number, it's relegated to the "subjective, hence unimportant" bin.

We already have historical evidence of subjective input outperforming choices based upon pure datasets: crowdsourced stock predictions.

Here is a practical example of measuring subjective data in business.  At each stagegate of your projects, ask participants to report their sense of the project: "on a scale of one to ten, how do you feel about this project's likelihood of success?"  A caveat, though: unless you have made giving an opinion openly a safe thing to do*, the data you receive is likely to be highly biased.  Anonymity through a third-party survey site might be in order.  Average the results, chart it over time against your other KPIs for the project, and I don't think it will take very long to get a very useful Project Health Index that you can benchmark against variables within the project management, and against other projects.  That is an early warning system, a business metric you can take to the bank.

By the way, my back is doing better.  Occasional incidents of a 5 or so, but the trend is good.



*The whole topic of "safety in reporting" is profoundly important to business metrics. I'm at work on a subsequent article on the idea, and will report steps former Ford CEO Alan Mulally took to change the fear culture that used to permeate Ford.

Why is CRM a failure?

When I first started getting paid to look at the future of technology, the very first conference I attended was about the glowing promise of Customer Relationship Management (CRM.)

It was in the spring of 2001.

Back then, CRM was as full of hype as Big Data is today.  CRM was going to give us that mythological end-to-end view of everything we knew or had done with our customers.  We would have purchase history, customer inquiries, account history and information, and all their preferences and favorite products--you name it.  If we had touched the customer or they had touched us, the CRM system would know, and would have our backs.  We would all be happy customers, enterprises would rejoice along with their newly empowered sales and customer service staff. There would be endless marketing and product information.

Put simply, it didn't happen.  It's 15 years later, and for the most part, CRM sucks.  We are a long way from "delighting the customer."

Here are some of the worst examples:

• The dreaded customer experience of trying to get help by phone.  It starts with "listen closely as options have changed," and may hit its peak when you are required to enter an account number by phone, only to finally reach a live human, who starts the conversation with "may I have your account number?"  That same human has a computer screen which rarely knows that you've bought the product you're calling about, has no clue if you've called about this issue before, or any knowledge whether you have spent $100 with them, or $10,000.
• There is a gaping disconnect between e-commerce and bricks and mortar customer knowledge.  As a customer, when have you ever experienced a company that knew your online purchase history when you walked into one of their physical locations? Or vice versa?
   
• The inability of sales staff to access useful information about the customers they are trying to serve at the point of decision.  I learned this horror story firsthand.  During my time in retail, I worked for a national upscale retailer.  They wanted--really badly--to market by e-mail to the prime existing customer base. To make that more likely, all sales staff were encouraged every day to link the customer to an e-mail address.  And since that same system was so limited in its customer search function (only by name and zip code,) the most usual result was  "I can't find you, let's just create you in the system right now."  Any associate at any POS terminal could create an entirely new customer record to add their e-mail address.
  
  The data was so littered with duplicates that it was essentially useless.  If I did succeed in finding you, it would only be one of the many versions of you. Customers' purchase histories might be under any one of a dozen versions of their name.  If they ever shopped online or at another bricks and mortar location, too bad. Each store only accessed records for the one store where we both stood, frustrated at our inability to find information that had to be in there, somewhere.
• Medical records, which are rigidly bound by rules and systems to make sure data is accurate, are astoundingly siloed and useless beyond the context in which they were created.  Your primary care physician may have a great end-to-end history of your office encounters, but if you go to a new specialist, or get admitted to an emergency room, how is that shared?  The patient hand-writes what he or she can remember.  For every single new place or practice.  

These are just the tip of the iceberg, I'm sure you have your own list based on your experience as a customer, and maybe upon your frustration at CRM efforts within your enterprise.  It's my opinion that the realization of CRM has missed the promise by such a margin that it is reasonable to say the idea has failed.  I think there are some systematic problems that make good CRM really, really hard.

• For CRM to work, you have to overcome a big problem; CRM is a genuinely vertical process, spanning almost every function of a corporation. But CRM's success depends on it working well across a range of processes, most of which are themselves internal vertical domains.  See this graphic I originally posted in 2011: most functions that form the core of a good CRM program live on the right--vertical--side. But some of the most CRM-critical are strategic horizontal processes, like marketing.
   
• Master Data Management (MDM) is excruciatingly difficult.  Talk to the data people at any enterprise and ask if they think they have it mastered.  MDM is not sexy, and it's not trendy.  The only thing is, it's just absolutely vital as a foundational element of CRM.  Circling back around to the hype on Big Data, we come to another idea: why are you worrying about big data when small data is still so underutilized, and still adding so little value?
  
• CRM succeeds or fails depending on the completeness and accuracy of information coming in as the customer does business with you.  That's not so hard during e-commerce, but in a face-to-face situation, customers have become highly averse to sharing information.  Until we find a seamless way to link the customer to their own records, and until we earn enough trust from customers for them to share willingly, CRM will remain a tough uphill slog.
• Even if you get data definitions and structure right, it is still bound to specific programs, hence badly isolated from all the necessary use cases.  If ever there was an argument that data should be offered as a service to be used in real time by different programs, CRM is it.  But that runs smack up against proprietary interests, and is not likely to change soon.  When systems for manufacturing, distribution, marketing, and point of sale are not drawing from the same data store, is it any wonder that so many enterprises have thrown up their hands and given up?
   
• There's another silo issue that is external to your business. As it stands, CRM is not personal, it is bound to specific companies.  So if it would be useful to me to know that a coffee blend at the Peet's I'm visiting is similar to one I've bought at Starbucks, that purchase history is not one Starbucks is likely to share.  If I happen to book one day with United Airlines, it would be useful to me and to United if they knew that I've flown almost a million miles with American, and am a potential high-value customer.  But AA would definitely rather my flight history remain within the confines of their own systems.
  
  
  This suggests a big business opportunity for a digital personal assistant to keep my own records of my customer history to use for my own benefit, independently of all the siloes where my purchasing life now resides.  There is a huge need for consumer-centered CRM.  Stated another way, if my customer history is going to be bound to anything, it should be attached to me.   Startup, anyone?

Along with the fact that the CRM idea of 15 years ago is so badly implemented, newer technology adds the chance for a new generation of CRM that overcomes some of these obstacles, and adds real time integration with customer activities that happen outside your enterprise--social media mentions of your product, product reviews, store check-ins, and the like.  So I still have hope, and still believe that the CRM idea is worth fighting to get right.  Could this be a need where artificial intelligence (AI) could help solve the data integration and multiple-versions-of-the-same-customer challenges?

Share your ideas here in the comments, or drop me an e-mail.  Do you know examples of companies that are getting CRM right?  Do you see other issues or opportunities I should look at in a future post?  I'm looking forward to hearing your thoughts.

HP's Cooltown: 2000 looks at the future, and predicts the Internet of Things

Infrics is going to be a little more conversational these days, so this post starts with a short story.

I became Wrigley IT's advanced technology analyst on the first work day of 2001.  In the first few years of my time there, we were deeply involved in a global single-instance deployment of SAP--at that time, the largest use of one instance of the ERP platform anywhere.  We were doing so much business with Hewlett Packard that we had a dedicated enterprise sales rep, Pete McGeehan.

Pete opened doors for me at HP to leverage the strategic relationship between the tech giant and Wrigley.  We shared information about our strategic intent, they shared information about research and product development.  I started the first of many visits to the HP Corporate Briefing center on Wolfe Road in Cupertino (the facility was torn down recently, it is the site of the new Apple spaceship building.)

It was there, probably in late 2001 or early 2002, that they showed me the Cooltown video, their look ahead at a world where "everybody and everything is connected wirelessly through the World Wide Web."  Sound familiar? It's the Internet of Things (IoT,) and here is the way they envisioned it 15 years ago:

A physical web beacon

Part of what triggered my look-back-to-a-look-forward was today's announcement from Google that Chrome for Android will now support recognition of such "web beacons."  Google calls it the "physical web." 

HP's briefing center had another feature that's come to pass.  The projectors in the conference rooms were connected to a central server, so a presenter could save a Powerpoint presentation to the server, show it from any of the conference rooms, and control it with their laptop.  It didn't have to be stored on a device that was physically plugged in to the projector, and seemed both revolutionary and sensible.

Today, I can use a Chromecast to access a presentation from my phone--either stored locally or streamed from the cloud--and display it on any monitor with an HDMI port via WiFi.  It's almost identical to the woman in Cooltown giving her sales presentation.

More of the video is now real: heads up display in cars, real-time translation of languages, personal medical monitors.  Thankfully, vending machines don't (yet) offer encouraging messages from our employers.

Finally, one more personal note.  I can't leave this post without thanking Susie Tse, who ran guest services at the HP briefing center, has become a friend on Facebook, and now works at VMWare.  And a sad note to the demolition of the center itself; it was a gorgeous modern building of white and glass, with furniture and fabrics throughout by Charles and Ray Eames, the great midcentury modern designers.  I hope Apple's new monument to itself does half as well as a beacon of style.

Embedded in retail: finding hidden value in the lowly SKU

To pay the bills while searching for my return to professional life, I did what a lot of displaced professionals have done.  I worked retail, as a sales associate.

Since this is a blog about technology and business, here is an important thing about that experience:  while I was in retail, I was also a stealth business analyst embedded in the front lines, with completely candid access to what the front line really thinks, and what they experience.


That experience led to this report.  In this case, it starts with the lowly SKU, the Stock Keeping Unit, the number next to the bar code that uniquely identifies each item you sell.

Funny thing about SKUs.  They are actually a really powerful part of the entire retail environment.  In much the same way that URLs are a window into the entire internet, the SKU is shorthand for everything you can know about the things you sell at retail.  But could it be that SKUs are really underappreciated?  As I found by working at a big national retailer, if you look at them with the right background, you might find hidden value.

I'll write more about the SKU's role in a modern retail system in another post, but here's one of the most glaring examples I found of SKU-sourced value in retail that is not being exploited:

It's the listing of SKUs in the store matched to the location of the item.  

Why does this even matter?

• People who work on the sales floor eventually learn where most SKUs are stocked, but there's a learning curve.  Experienced workers and managers spend non-value-added time showing new employees where to find things. 
• The store "map" changes every time there's a new floor set or changes in vendor-managed inventory. 
• Replenishment of stock, and restocking go-backs, can be a game of reverse scavenger hunt for retail staff, who have an item in their hand and must search for its shelf location.  
• To make it worse, the logic of stock location is often based on differing criteria. Some things are grouped by type or function, some by manufacturer, some by associated marketing campaign, some even by color.  To the restocking person on the floor, a logical placement of items with others of its same type would be a sensible thing to do. But what if "same type" is not the underlying plan, and there's no key to the intended location? 
• Staff can inadvertently tell customers items are out of stock, when in fact, they are in stock but were misplaced within your store, or have moved to a different location because of a floor set change.  



This is where your supply chain ends.
Image used under Creative Commons license

• A conservative estimate of time wasted as a result of this report's absence is not huge, but it is significant, perhaps worth $2000 a year per store. And this retailer has over 100 stores. If you could add $200K in value to your annual budget, would you think it's worth the investment of a few hours work by an IT staff member?  This does not include the lost opportunity cost of sales lost due to false stockouts or customer frustration. 

You already have this information in your marketing and inventory systems.  At one retailer where I worked, managers received new floor sets from corporate as photos of displays-to-be, with a nice tabular listing of the SKUs by shelf alongside.  So SKU location was in the system. What was not available was reverse lookup: I have the SKU, where does it belong?  This would be a really simple report to generate along with the floor set.  At its simplest, it would live as a sequential-SKU printout in a ring binder at the registers, each discrete SKU linked to its location in the current planogram and floor set mix.

Even better would be integration into the point of sale (POS) system.  Sales staff at this retailer could already scan a barcode, and the POS system would display stock information for any SKU, whether more were in the upcoming shipment from the distribution center, and even what stock was available at other stores and in the warehouse.  This is pretty basic supply chain.  But it failed to combine SKU with display location.  

To leverage the power of the SKU/location report, it could also easily be extended to the SKUs location in backstock, and for stock replenishment shipments, which one of dozens of incoming boxes contained the SKU in question.  

This latter piece of information personally cost me many sales, because there was a built in issue with the inventory report.  The store received merchandise once a week from the distribution center, in pallet after pallet of boxes containing multiple SKUs. The moment the shipment arrived on the loading dock, it was checked into inventory, but it could take days for the staff to unpack every box.  In the meantime, a SKU would show as in stock. To make a successful sale, i would have to interrupt a manager doing useful work to access a report (only accessible to managers) that linked the SKUs to the shipment box, then dig through many dozens of SKUs within the warehouse box to find the item the customer was willing to buy.  It was cumbersome, time consuming, and wasteful--so much so, that cash-in-hand sales often walked out the door from impatience.  

If you are in retail management, you know full well how much work it took to select a product, market it, get it made and shipped to your store, get a customer in the door, and help them decide to do business with you.  All of it wasted because of a SKU hiding in plain sight that lost you the sale.

There are a couple of lessons in this story.  First, I learned that there is untapped value in something as simple--yet as powerful--as a SKU.  Second, I think it's common, especially at the level of the C-suite and their direct reports, to think in terms of new solutions, rather than exploring ways to get more value out of what is already in place.  If you're a senior manager of a retail organization, you already have the resources in place to help you find that value: your own front line staff.

The front line alone deals with stock management at a granular enough level to appreciate opportunities like the SKU/location report.  But without any insight into inventory system design, or any perception that their information is valued, the value capture opportunity is lost.

Cloud Sherpas: The future of retail hinges on worker empowerment

I'm at work on the first of my reports relating lessons learned from my time as a sales associate in retail.

In the meantime, Cloud Sherpas just published this article, which has a good overview of the challenges (and opportunities!) ahead in retail.

--from cloudsherpas.com

The Future of Retail Hinges on Worker Empowerment 

Let's talk more about this soon.  For now, here are some bullet points to consider:

• The extreme personalization trend I've written about before is finding an exciting expression: the growing realization of the coming power of artificial intelligence (AI.)  Especially for lower value transactions, the day will soon arrive where an AI interface with the customer will be more satisfying to customers than one with a low-motivation, low-authority frontline staff member.  
• But...you will still have real live, look-customers-in-the-eye frontline staff. A huge opportunity awaits to empower your live front line to delight customers: with more authority to make customer service decisions, more information with which to satisfy customers, and a commensurate higher wage, reflecting the high value of interpersonal sales skills.
• In the meantime, as the Cloud Sherpas article explains, there are a lot of ways to help your current staff add more to the bottom line.  This means real time access to inventory information, a genuine full-view-of-the-customer-no-I-really-mean-it-this-time CRM system, and tight integration of your social media, marketing, and e-commerce presence with your bricks and mortar stores. In fact, these will build the foundation you need to welcome the future.

Remember, all this discussion is only about technology as a matter of peripheral interest.  The real heart of the matter is this:

Going forward, retailers, even very large ones, have the technological power to make every visitor feel as if they have stepped into a small neighborhood shop, where they're known as an individual, valued as a friend, and treated like the most important thing in that retailer's existence.   In a world of everpresent mobile access and online shopping opportunities like Amazon, that's the mandate.  What will you do to take advantage of that power, and when?

By the way, the article I'm working on will present a simple report your IT department can add to your POS system and put in sales associates' hands. It won't change your life, but I estimate it will save each of your retail locations several thousand dollars a year in lost staff time and lost sales. I know this, because I was one of those associates who ranted when I spent hours of extra work because this report didn't exist.

Coming soon.

The Enterprise IT Adoption Cycle: warning, graphic content

I lay no claim to this illustration at all, although I wish I had thought of it myself.

Illustration by Simon Wardley, 2012

For all the talk about competitive advantage and agility, enterprise IT departments tend to be inherently conservative beasts.  A classic case in point comes from this quote by silicon valley startup guru and former SAP strategist Ryan Nichols (originally published here in 2011:)

"You know, the reality is that enterprise IT is going to be looking to different vendors for different things, and I think one of my learnings from the time I spent at SAP is that SAP’s enterprise customers want SAP to be the system that doesn’t change, be the system that they don’t need to touch more than once every five years. That’s what they want SAP to stay, which is why it’s so tough for SAP to innovate and change because at the end of the day, their customers don’t really want them to."

I am a huge fan of Geoffrey Moore's work.  In this 2010 Slideshare presentation, he describes his concepts of Systems of Record and Systems of Engagement, and ties them to the challenges of moving enterprise IT departments beyond the last panel of Wardley's graph.

Back on track

This my blogging Mea Culpa

Why has Infrics been fallow for so long?  Well, the short answer is that I let my depression at not finding a professional job convince me that I really didn't have that much talent, not that much useful to say.

And THAT, I promise, is the very end of my whining. Time has renewed my appreciation that I have a lot left to contribute, and moving into my 60s has helped me realize that time is valuable.  At 20, there was a horizon WAY out there, and there was always time to go a different direction.  The horizon is a little closer now--time to get busy!

This is a listing of the main topics areas I want to approach with my return to active writing and posting, and some of the specific titles/subjects.

• Embedded in Retail: observations of an industry analyst who has spent 2 years on the front line.

Management lessons from the emerging future:

• The hidden value of your front line, and the enterprise failure to apply social network techniques to capture that value. 
• The “reverse Maslow pyramid” effect and why it's so hard for useful information to make it up chains of management. 
• Why personalization is both more important and easier than ever, and why it matters as an incentive to change your management approach. 
• Personalization granularities, and why they matter to supply chain and marketing (the “no lawn furniture at Home Depot in FL when the weather gets nice” effect)

Other topics

• The failure of HR, and how talent is going to waste. 
• Updates on the business of research. 
• How the 24 hour news cycle and SEO are poisoning the way we research and use information. 
• Continuing the discussion of separation of digital ownership and rights management, and the house of cards implied by content ecosystems. 
• A return look at Google: Chrome OS update, Google’s ongoing mess with digital content (the Photos debacle) and the evident failure of one hand at Google to know what the other is doing. 
• A new hands-on strategic planning idea: using the concepts implied in technology trigger graphs as a way to make enterprise planning more effective. 
• The horrible mess we've created by measuring the wrong things in business, and then acting as if those metrics are a useful tool.

So I am back, and I'd like your help.  If any of these ideas resonate, let me know so I can work on them sooner.  And please hold my feet to the fire; if I don't post at least once a week, drop me a line and say, "Hey! Where the hell are you and why haven't we heard from you?"