Noodle on this for me

What is the difference between “innovation” and “invention”?

I asked everyone I met after attending a presentation in Philadelphia this last week. And the answers were fascinating but the best answer by far was …

Invention turns cash into ideas.
Innovation turns ideas into cash.

At BizCampBelfast this is going to be my theme for my presentation. I’d welcome any thoughts you have so that I can incorporate them into my talk and I encourage you to bring your ideas to the session to share with everyone there.

Days to go! I’m excited.

November 1, 2010 at 4:45 pm | Business and Technology | No comment

What is your I2Q

When I was in college there was a systems thinking exercise designed to reduce the number of complaints that were being made about how slow the lifts were in a local office building. We were put into teams to come up with strategies. We were not to be bound by available technology and we could spend as much time as we wanted studying the behavior of the people in the building. On the day the teams presented their solutions they were really very varied. Many were quite were elaborate and took into account everything from tracking how many people were on each floor on any day, tracking traffic patterns, detecting people as they walked near the lifts and so on.

How would you solve this problem?

The point here is that there is an awful lot of preparation, planning, research and design that goes into solving any business problem. Time that has to be spent but not time involved in building the solution.

Time-to-market is the strongest driver in business today. Many of my clients are the largest banks and insurance companies in the world. When a competitor comes out with a new product or service many of my clients have days at best, and weeks at worst, to come up with a competitive response fully supported with a technological solution.

The problem with traditional IT projects is that they require a minimum of set up time before anything gets done. And there is a lot of post-development activity too. All of this fixed overhead delays getting the solution into the hands of the business. I call this minimum overhead a business’s I2Q. Let’s look at this picture.

Everything we have done over the past 3 decades has been about reducing the time from the Idea (“I1″) to the Implementation (“I2″). If we think about some of the things we’ve done they include:

• Off-shoring – 5 developers in India for the price of one at home giving 5-times the productivity … or so the theory goes
• Packages – every possible piece of functionality you could possibly ever want – just turn off the parts you don’t use … a task that is nearly as long and expensive as writing from scratch
• CASE (Computer Aided Software Engineering) tools – paint your application and let the “smarts” write the code … great for simple order entry systems but anything more is just as complicated to write as cutting custom code and you have to learn a new language and environment and the final implementation is not very efficient
• SOA (Service Oriented Architectures) – write the basic building blocks of code that represent the business functionality and allow them to be combined and re-combined over time as the business problem changes … except that the reuse promise is not being delivered and these services often end up being one-use custom code

So what is your I2Q? How can you calculate it? There is a formula:

• Q = 100 / (1 + It + Iw)

Where:

• Q is the quotient
• It is the AVERAGE implementation time a project takes – what is the goal time length of ICT projects
• Iw is the AVERAGE waiting time before a project can be started – you can calculate this by taking the length of the backlog in years and divide by 2.

So a company with an average project time of 6 months and an average project waiting time of 18 months would have:

• Q = 100 / (1 + .5 + 1.5) = 100 / 3 = 33.3%

And a company with an average project time of 4 weeks and an average wait time of 4 weeks would have:

• Q = 100 / (1 + .08 + .08) = 100 / 1.16 = 86%

So the drive towards 100% is the goal. What can we do to get there?

5 Strategies for improving your I2Q?

Clearly we can either shorten the project time-frames and/or the time projects languish in the queue. But how can we do this without adding significantly to the cost structure?

1. Make projects smaller – smaller projects are less complex, require little or no setup time, can be tracked more accurately, add less retraining overhead and can get solutions in the hands of the business quicker
2. Let Pareto rule: 80% of what you need in 20% of the time – focus on the main theme of the requirement, do not worry about corner cases, use this as an opportunity to eliminate exception processes, put the effort into the most likely path through the process
3. Develop solutions with co-located teams – communication from desk-to-desk not email, chat and conference calls: close proximity accelerates projects – empower the team to solve the problem the way they see fit – just hold their feet to the fire on delivering
4. Empower business to develop their own solutions – train the business to use modern technologies for rapid application development that require no programming like the new category of BPM (Business Process Management) tools that are as easy to use as MS Excel and MS Visio
5. Don’t use technology when process, organizational or cultural solutions might solve the problem just as well – software is not always the answer

And which solution solved the problem with the slow lifts? The last team to present had the cheapest, quickest to implement and most foolproof solution. They put mirrors on the lift doors. When you’re looking at yourself time passes quickly. Sometimes technology is not the answer.

The Empowering Change that comes from thinking about the overheads in delivering software is that we learn to treat ourselves as we treat the business: as a place where we can eliminate waste from our processes.

August 31, 2010 at 2:21 pm | Business and Technology | No comment

Working in the margin

For more than six decades now we have been using technology, specifically computer-based technology, to drive costs out of the business. Quaint hardly describes those now sepia pictures of serried hoards of clerks, stamping, signing and sorting multi-part documents in vast open-plan offices. Typewriters on every desk but phones only on the manager’s. And over the last 60 years we have slowly replaced those jobs with technology solutions and those people have moved their skills into different fields. Maybe you are one of them.

Today there is not much automation that is left to be done. Indeed most people in the computer business spend their time trying to replace the systems they put in 10 or 20 years ago  and we are even replacing systems we put in only one or two years ago. And we are doing this now because we are desperately trying to drive cost out of IT.

With the way the economy has been for the past 10 years everyone is completely focused on cost containment.

But that is not the only way to keep increasing the margins in your business. Mr. Micawber once reflected; “Annual income £20, annual expenditure £19 19s 6d, result happiness. Annual income £20, annual expenditure £20 0s 6d, result misery.” Profit is the difference between income and expenditure. We have already driven out all the significant and unnecessary expenditure we can: the pips are squeaking, there is no more juice in the lemon!

Businesses that can turn technology to their commercial advantage will be the Glaxo’s, the BP’s, the British Airways, the Sainsbury’s of the future. It used to be, in 1935, that if you made it to the Fortune list of top companies you’d be on that list for 90 years. Today companies on the list last only 15 years there on average.

Look at FaceBook, Microsoft bought by a 1.5% stake for $250mn, or Amazon, worth over $50bn, these are companies that could not exist without technology to create markets,  create products and deliver revenues.

So what does this mean for your business? Look to turn technology into a way of creating new revenue.

Maybe you can deliver your product and services to your customers through technology that gets it there faster, cheaper, safer. Do kids want to go shopping in the High Street? No, they want to surf the web, from their iPhone and get a package on their doorstep the next day. And kids have a lot of money these days.

Can technology help you understand your customers better? Help you with detecting trends, buying behavior? Can technology help you discover why customers don’t buy from you? Or why they start to buy and then stop.

Is the customer experience with your company better because of technology or worse? What can you do to make your customers become your best sales team because your technology makes them love doing business with you? What can you do to make your competitors look un-cool, out of date, not in tune with the customer?

If you have an idea for changing your business model does your technology allow you make those changes? Or does it hold back and force you to do things the old way? Can you model what effect your ideas might have if you implement them? Or do you have jump and hope?

How do you know that you are being successful? Does your technology tell you, give you feedback on how you are running your business? Does your technology monitor your competitors?

There are as many ways of turning technology into a competitive advantage as there are business people with ideas.

In this series of postings I want to explore ideas on how we start to use technology to drive sales, how we enable business owners to run their businesses proactively and how we Empower Change that increases the margins in your business.

Tell me how you turn technology into a competitive advantage.

July 9, 2010 at 11:47 pm | Business and Technology | 5 comments