Whilst there’s plenty of excitement around emerging trends disrupting traditional business models, sometimes it’s easy to overlook simple improvements that technology can enable
The following presentation is a condensed version modified for display on Slideshare. It is based on a workshop I run for organisations to help define a digital strategy, by understanding and aligning with current business priorities. I’m considering expanding it out into a book format to include templates and exercises from the workshop. The content is based on a range of materials I’ve gathered over the years from studies into achieving business value from IT. This version has been recently updated to include statistics from IBM’s 2011 Global CIO Study.
One of the most hotly debated exercises is to take the business benefits diagram and apply it to an industry to identify the differences between market leaders, those struggling to survive and a sample in between. Or alternatively, plot how a company has changed its position over time.
An easy example is Apple. At the start of the century, the company was not in the greatest shape. There was little focus on customers, products were expensive to buy partly because they were expensive to produce, and the quality had deteriorated from being an early market leader. In the following 12 years, they moved all three axis into dominant positions
- The opening of the Apple retail stores, staffed by ‘geniuses’ changed the customer relationship for consumers. iTunes provides a treasure trove of data about purchasing decisions. One are that remains weak is the customer relationship in the enterprise space.
- Operations were completely transformed under Tim Cook, enabling products to be manufactured far more efficiently and at lower costs. Whilst the Macbook range is still more expensive than the average personal computer, the gap has reduced significantly when comparing like-for-like specifications. And Apple makes much higher profit margins compared competitors, making it harder for others to compete on price.
- Product quality has returned to a strong position, with most other manufacturers seeking to imitate many of the design concepts introduced in Apple products over the past 6 years since the launch of the iPhone
- …and the fourth axis – redefining the market. In barely 6 years, Apple’s revenues and profits from mobile devices surpassed their computer sales and turned them into the most valuable company in the world. Nobody expected the oil companies to be toppled just yet.
If you were a competitor to Apple, which axis do you focus on to improve performance? The fourth is always still there – Apple has yet to dominate the enterprise market outside of a focus on education…
IDC has a report out showing the increase in IT costs for managing older hardware and software, covered by a recent Computerworld article. It’s sponsored by Microsoft so yes the numbers are unsurprising. But they are also quite believable.
- The magic milestone is after the three-year mark, when “costs begin to accelerate” because of additional IT and help desk time, and increased user downtime due to more security woes and time spent rebooting
- IT labor costs jump 25% during year four of a PC’s lifespan, and another 29% in year five,, while user productivity costs climb 23% in year four and jump 40% during year five. Total year five costs are a whopping 73% higher than support costs of a two-year-old client
- Organizations reported that they spent 82% less time managing patches on Windows 7 systems than they did on Windows XP, 90% less time mitigating malware, and 84% less help desk time
- Windows 7 users wasted 94% less time rebooting their computers and lost 90% less time due to malware attacks.
It’s part of Microsoft’s campaign to get computers running Windows XP replaced. And so they should be. You rarely see a company car over the age of 3 years old, let alone in service for over a decade. This is another area that in time will benefit from the transition to cloud computing and apps that work across multiple devices. One of the issues for replacing old desktops in large companies has been a dependency on bespoke applications that prove hard to migrate. That’s one trend to be glad to see the back of.
An associate who runs an IT support company for small businesses has recently introduced a new service plan for his clients. The support costs now increase for all equipment over 5 years old. For many customers, it has spurred them into action. IT systems can become like a pair of comfy old slippers – we hang on to them for far too long after they outlive their usefulness. The comparison to managing cars and their servicing/MOT costs has encouraged many to now look at a more regular cycle to keep technology current and useful to business activities instead of just sticking with what they are used to regardless of the wear and tear. Not all good news for Microsoft, some are now looking at a possible switch to Apple and others…
Earlier this week, Social Media B2B posted The benefits of social media in the B2B workplace. The article has been re-tweeted 75 times at the last check suggesting it has proven useful to quite a few people. But the advice is incomplete. Here are a couple of examples of the benefits outlined.
Increased Channels of Communication
Simply having more channels through which to communicate is not a benefit unless you use them effectively. Respond to one customer via Twitter or Facebook and you will set an expectation for all customers. Do you have the resources to meet that expectation? If not, your reputation for failure will spread faster and wider than any positive feedback. Before you start increasing those communication channels, make sure you plan and budget for the resources required to manage them effectively.
More Collaboration = Better Outcome
No it does not. It might lead to a better outcome but increasing collaboration does not guarantee any benefits whatsoever. A simple example: How many people attend meetings that achieve nothing? That’s collaboration without an outcome. There is an excellent book on collaboration called… drum roll… Collaboration, written by Morten T. Hansen. The book argues, in great detail and with plenty of research, that bad collaboration is worse than no collaboration at all. And then goes on to outline the steps you need to take to ensure that more collaboration does lead to better outcomes.
To benefit from Social Media requires more than simply adopting the tools and techniques of Social Media. It requires discipline. And that includes knowing when not to participate. From the book Collaboration, most failures boiled down to two mistakes: Overestimating the potential value from collaboration and underestimating the costs.
So back to the two examples and what to do:
Increased Channels of Communication
Every organisation should look into what channels of communication its audience use and ask the simple question. If your customers are using that channel, are you? And if not, why not? If you decide to participate, think carefully about what resources you are prepared to invest in to make the participation work. If your resources are limited, be transparent about it. The more human the response, the better the reaction.
Read the book! 🙂 But, in short. Take a disciplined approach to collaboration. Identify where better collaboration can improve outcomes. Identify what barriers are currently preventing that collaboration from taking place. Identify what investment is required to enable better collaboration and overcome the barriers. Decide if the investment is worth the potential outcomes and, if it is, do it! Equally, identify where collaboration isn’t leading to better outcomes and stop it. Reduce those unnecessary meetings…
- The benefits of Social Media in the B2B Workplace – Social Media B2B
- Collaboration by Morten T. Hansen, published 2009 by Harvard Business Press
Related blog posts:
There is an outstanding presentation on Slideshare explaining why all web-based businesses need to be evolving their business models to leverage APIs more than their own web sites. Found via Twitter but I can’t find who originally shared as Tweetville is amok with a ‘0 followers’ discussion at the moment. And this presentation is too good to get lost in the stream.
To summarise the presentation:
- Darwin identified that finches lived in a very remote location meaning the variations had to compete with each other to survive. The finches you see today are the winners
- At the start of the 20th Century, retail business was primarily local within villages, towns and cities, selling direct to people. With the evolution of suburbia, we saw the shift from the corner shop to the shopping mall with each mall containing mostly the same retail brands – business went from direct to indirect. The big brands at the end of the 20th Century were the winners
- At the start of the 21st Century, web-based business was ‘local’ to the web site, selling direct to visitors. With the evolution of social networks and mobile devices, we are seeing a shift from visiting the corner-shop equivalent web site to the mall equivalent – lots of businesses hosted on the same web platform, be it micro-applications on your mobile phone or applications in widgets on a social networking site. To be one of those applications means using APIs (application programming interfaces). How important is it?:
80% of web-based traffic will be coming from beyond the browser…
If you are doing business online, you need developers who understand APIs
This is a post about Twitter. If you’ve never used or heard about Twitter, the Wikipedia page for Twitter will give you a brief introduction. Come back when you’ve read it. 🙂
I love Twitter. Twitter has introduced me to some great people and really demonstrates the value in weak connections. Strong connections inevitably create an echo chamber – if you are talking to the same people sharing the same interests and opinions, deja vu becomes familiar 🙂 I remember reading a Japanese quote once, went along the lines: “If more than two people are in agreement, at least one is not required.” Kind of makes sense. (I’ve got a feeling it was as harsh as: If two people are in agreement…) Weak ties broaden your horizons and connect you to a whole new group of people. Diversity thrives on weak connections. And diversity is great for challenging assumptions and generating new ideas.
People often ask if Twitter is just a simplified version of Instant Messaging. Nope. With Instant Messaging (IM), you have a list of contacts you can chat to. But to chat means to specifically start a conversation, to interrupt. With Twitter, you can talk at will, regardless of whether or not anyone is listening (simple tip: Tweet rubbish and nobody will). If people don’t want to be interrupted, they simply ignore Tweetsville. They don’t have to set their status to Busy or pretend to be Offline to avoid a conversation. To Tweet or not (and to follow or not) is entirely optional, for all sides of the conversation.
Instant Messaging (IM) is about strongly-connected networks. You start a conversation with someone who is on your contacts list or if you know their IM address. You can’t see other conversations unless you are specifically invited into them. There is no serendipity in IM. Twitter is about loosely-coupled networks. You can view every Tweet from every person with an open account (you can have a hidden one if you want). By default, you get see Tweets from people you choose to follow. It’s up to you if you want to respond. And up to others if they want to reply.
Whilst some users stick to the ‘What are you doing’ theme (and offer ‘too much information’ about their dietary habits – you know who you are, Marmite sandwich lamb), it can offer so much more – great for sharing links, one-liners, ad-hoc conversations and making announcements. And Twitter has one IM feature that is brilliant – the ability to send a direct message (but only to someone who is following you). Direct messages are also sent out as emails and text messages to mobile phones. Fantastic if you don’t have the mobile phone number and want to get in touch.
Not convinced? Here are some examples:
- I spotted Guy Kawasaki‘s tweet and was able to review a draft copy of his upcoming book, sent comments via email and he gave me some start-up advice in return. Happy days.
- Comcast spotted Mike Arrington‘s rants about his broken Internet connection and got in touch to sort it out. His rants turned into praise of equal volume. (He has 20,000 followers on Twitter. Most churches would dream of such participation.)
- I muttered and moaned about Zoho in a Tweet. They responded on Twitter and Email within the hour.
- Steve Clayton was asked a question he didn’t know the answer to (amazing, but true), a tweet for help and the answers flocked in
- I saw Euan Semple tweeting to some chap called Sleepydog. I met said Sleepydog, aka Toby Moore, at a conference last week. We even Tweeted where we were sitting to organise a meet-up.
- Loic Le Meur announced an early bird special for his LeWeb conference in December on Twitter… and then tweeted with updates about how many tickets were left. Would they have sold so quickly without Twitter?
- I saw Euan Semple tweeting to some chap called Stephen Dale. Started following him. He saw me tweeting with Rob Gray whom he had also met. Rob introduced me to Stephen in London two weeks ago.
- When a blogger was arrested in Egypt, he managed to send a quick SOS on Twitter (no time for anything else) and people who saw it helped get him released. His interpreter has not been so lucky
- I hear about important news first on Twitter. Stuff that matters inevitably gets talked about by someone in the network. Even the BBC seems to Tweet about news before it appears on their 24-hour TV channel
By the way, all the above links lead to Twitter pages. If you’ve never visited Tweetsville before, you’ll need to create an account and login to view what they say. What’s the worst thing that could happen? Waste 5 minutes of time.
Just about any business could gain benefits from using Twitter. It taps into what seems to be an innate animal trait – the desire to communicate, instantly. To synchronise. (I had never looked at it this way until Ken Thompson’s brilliant session at the NLabs Social Networks conference). Anything that connects with our genetic make-up has value. And, alas, the potential to be exploited. Although that has yet to happen on Twitter (service is to damn unreliable!)
The challenge for Twitter is that I would never pay for the service. It’s a feature, not a platform. A lot of people have asked how can Twitter monetise it’s product. Getting users to pay for it is never going to be an option. (More so, whilst the service is still unreliable and prone to unexpected downtime.) Twitter is a messaging tool. People are no longer used to paying for messaging tools, whether it’s IM or email. The current forms of online advertising work in information-seeking environments, not human-seeking ones like communication tools and social networking sites. But Twitter has some serious value tied up in its rather clever feature. Analytics could discover patterns between conversations, links and networks…
Next stop: FriendFeed. And it’s a platform, not a feature…
- Journalist saved by Twitter aims to start a Twitter-driven emergency network
- Small pieces loosely joined, by David Weinberger (book web site – buy it, read it!)
Back in January, I wrote a blog post about using Twitter for Sales.
Interestingly, when talking to my parents about Twitter, they bought into it immediately. Their immediate thought was Twitter for Families – why didn’t everyone get on Twitter so that we can each send out updates to everyone when stuff is going on. Twitter hit a nerve that blogging, Facebook and friends all missed. I now use Twitter pretty much daily when appropriate. Often to simply post simple quotes that make a point. I’ve got a Twitter feed on my site home page which, given I can Tweet from my mobile phone, is the easiest method for dynamic updates I’ve ever implemented…
And now Michael Arrington over at TechCrunch has a great example of a company using Twitter to improve customer service – Comcast, Twitter and a Chicken. Fed up with getting nowhere with Comcast when his Internet connection died, he used Twitter to start criticising Comcast for being, well, not that great. 🙂 It turns out that one wise exec at Comcast monitors Twitters and other sources. He saw the criticism and debate that kicked off, contacted Michael and a support team turned up to fix his problem. That’s real-time customer service.
These are the sorts of benefits too many companies miss out when sticking their heads in the sand about new technology.