Niall Halpenny's Blog

Seeing is believing - Why no BI strategy is complete without Visualisation

“Those who triumph, compute at their headquarters, a great number of factors, prior to a challenge. Those who are defeated, compute at their headquarters, a small number of factors, prior to a challenge. Much computation brings triumph, little computation brings defeat. How much more so with no computation at all. By observing only this, I can see triumph or defeat”. Sun Tzu (544-496BC)

Globalisation has driven the need to run business more efficiently. The culture of management by gut instinct is no longer good enough as the basis for operational business decisions. Businesses are relying more on data reports for decision making. Enterprises are using data and KPI reporting to manage the performance of the organisation and to make informed business decisions. They have invested heavily in data-warehouses, CRM, ERP and Business Intelligence, all of which pump valuable information to the screens across the organisation. These investments are under-pinning cost competitiveness, efficiency and automation. However, many managers complain of information overload and struggle with the challenge of using these multiple information systems most effectively to gain business value. The key Business Intelligence challenge has shifted from tapping into the underlying data to interpreting and acting upon the information.

 

While enterprises grapple with this growth in information, the world of the consumer has already evolved an effective solution to tackling the problem of dealing with vast amounts of discrete tasks. Modern consumers are armed with iPads and Smartphones. Many individuals run their virtual life from a screen that fits in their hand.

 

So with so much invested in existing systems, where should Enterprises turn to achieve the next level of higher efficiency and competitive edge? Having witnessed the power that can be unleashed across the organisation by distilling vast amounts of data down into an easy to interpret view, I believe that Advanced Visualisation is a simple but powerful tool that makes a real business difference across the organisation.

 

 

So what is Data Visualisation?

According to Wikipedia - Data visualization is the study of the visual representation of data, meaning "information which has been abstracted in some schematic form, including attributes or variables for the units of information".

 

So why Visualisation?

 

I have a visual sensory preference that means basically I love pictures. But it appears that I'm not that unusual. According to a recent research sponsored by HP, Verbal + Visual Information Retained is as follows:

Studies show that people remember:

• 10% of what they hear
• 20% of what they read
• 80% of what they see and do

 

So if information is displayed in a manner that the user interacts, they will digest it faster and retain the learning for longer. This really matters for the modern Enterprise as they try to increase productivity and delegate decision making.

 

 

 

According to the Register (http://www.theregister.co.uk/2011/02/21/visualisation_say_with_pictures/)

Research confirms that visualisation tools aid learning and communication. For example, a 2009 study by Bresciani and Eppler compared groups discussing business strategy using visual collaboration tools with control groups using handwritten bullet point lists on flipcharts.

The study found that visualisation software fosters knowledge sharing, improves productivity, fosters more ideas, creates better ones and increases recall. But there was no perceived benefit to people in any of the groups using visuals. This suggests that such tools are not seen by most as giving better results even when they do – a worrying finding for any vendor.

Dr Richard Picking of the School of Computing and Communications Technology at Glyndwr University says the aims of visualisation tools fall into three categories: number crunching, visualisation of real world elements, for example an operating theatre, and decision making

So how can this be put into real action?

 

The Telecoms vertical has been at the forefront of using Visualisation tools since the early days of mobile and for good reason. With over 5 billion mobile subscribers using real-time services over a distributed global network, the Telecoms vertical has been pushed into becoming a leading vertical in solving these challenges of running global enterprise and reporting. DANU have been active in the Business Intelligence area for over a decade and have grown up in the Telecoms vertical.

 

Therefore we recommend that to have a BI visualisation strategy with value that can be measured and quantified, the 5 most important steps to be taken in order are:

 

1) Good Data - Ensure that the data supporting key KPI’s can be mapped and audited

2) Timely - Ensure that the data is collected and processed in a timely fashion

3) Continuous Evolution - Ensure that as the business changes the KPI’s keep pace

4) Wikipedia effect - Ensure that the BI strategy is mapped across all stakeholder groups this allows the organisation to tap into the wisdom of the crowds and that this is a 2-way read/write process. Everybody must input and read from a single source of truth.

5) Visually intuitive - That the presentation (or visualization) for each stakeholder, be this via Smart Device, an interactive Google map based system or some classic trending lines is fit for purpose.

There are many companies and good examples out there so be sure to research on the latest best practice before you end up importing CSV files to Excel to generate "pretty Bar charts". Get creative here, look at Gaming, Google maps and App stores.

Once this is in-place Enterprises can really reach what Gartner describe as Level 5 where BI is Pervasive, "At this level, BI & PM are pervasive across the business and across the entire corporate culture. Users at multiple levels within the company have access to the information and analysis needed to drive business value and impact".

 

 

 

Smartdevices, time to grow up and get a real job

Since the first iPhone was launched in June 2007, the take-up of Smart phones has transformed the landscape for Mobile Services. Apps and App stores are now universally recognised. With the number of mobile subscribers globally approaching 5 billion and Smartphone penetration increasing at a rate of nearly 50% in 2010 (according to Gartner), it is clear that the overall market for new services will continue to enjoy strong growth and evolution. It is expected that this growth will exceed the growth levels achieved by GSM phones with SMS and the internet in the mid 1990's.

Just as the Internet began as a mass market consumer play before Enterprises learned to harness this new medium, the Smartphone is on a similar path. The original App stores have proven the success of Apps and have driven user community awareness and familiarity. Now Enterprises are beginning to recognise the value of the Smartphone, or more correctly Smartdevices, as the tool of choice for mobile workforces.

What shape will this take?

Nobody can be sure, but there certainly seems to be a nice fit for Super Smart "Cloud" access

By enriching the access with contextual information, such as location, traffic information, real-time order status, outstanding trouble tickets, a mobile user becomes much more efficient by modifying their plans to take account the real situation. This is golddust for the Enterprise.

Tool of choice

The Smartdevice is becoming the tool of choice for Enterprises to equip their mobile forces with the latest technology. Smartdevices are perfectly positioned to become the entry point for Cloud based Enterprise services such as CRM tools like Salesforce.com.

From an Enterprise perspective the benefits of using Smartdevices to mobilise a workforce include:

Low cost – Everything an employee needs can be provided by a standard Smartdevices available as part of a standard corporate offering, this is far cheaper than the laptop equivalent.

Ease of use – Smartdevices are designed around ease of use and already meet the needs of everybody from Teenagers to the Eldery

Security – Smartphones don’t have large hard-disks full of sensitive data. Therefore by configuring the access, sensitive data made to be viewed but not easily copied . If a Smartphone is lost or stolen it can be rendered useless by a simple phone call or through remote management tools. This reduces the risk of sensitive data leaks.

Governance – Smartdevices can be easily configured to only give access and can be easily tracked via location software meaning that corporate governance policies can be easily applied and reported upon.

If you'd like to know more about how a Smartdevice Framework can help your business, drop us a line on info@danutech.com and we'll glad take you through a customized analysis based upon your key needs.

 

What does the future hold 10 years after the dotcom bubble?

Been there done that.......

If I roll back to the coffee conversations with my techie colleagues this day 10 years ago, the common theme would have been the stock-market or more precisely the NASDAQ. This is odd because when most people entered the industry they wouldn’t even have had the basic dictionary of stock-broking terms. By early 2000 we were all stock picking guru’s talking about our imminent retirement. By late 2000 the prospect of retirement came alright, but not as expected.

Phrases such as “I lost the price of a family home on my shares in the last 2 weeks” were common place. We’ll things go full circle and that family home is now probably as worthless as the shares you purchased back in 1999.

Now technology is back centre stage where many of the original ideas such as eCommerce and High-speed mobile broadband have become reality.

The industry has matured but more importantly the world has changed dramatically. If Technology was the Golden Child, full of hope and promise in the late 1990’s, it transformed into one hell of an ugly teenager in the early 2000’s. Roll on 2010, maturity has come to all sides and the darling daughter of property and finance has just hit the teenage years and shades everything the elder child ever did wrong.

At the moment

Cloud computing is delivering a super-computer into every home in the world.
Mobile Broadband is making it possible to bring your super-computer with you wherever you go.
On-line communities give you access to limitless experts willing to contribute

So what about the next 10 years...........

Even if you have been making agricultural ploughs for 150 years, unless you’re hooking into applications that predict weather patterns for the next 10 years chances are that somebody else will be better serving your market before you can do anything about it.

Technology will be pervasive across the entire business cycle driving efficiencies and re-shaping industries everywhere.

• Build it and they will come approaches will be no more, the size of the market, the price points will be known before any resources are committed
• From concept to delivery every event will be monitored, tracked and improved
• Survival will depend upon your organisations speed and ability to learn and evolve.
• Risk will become a bad word, information will used more and more to eliminate risks and establish more accurate predictions and feedback for corrective actions

Businesses will become leaner, more specialised, evolve faster and the key driver will be technology turned into Applied Business Intelligence

The businesses that’ll be around in 10 years time will be those that have switched from “Lean and Mean” to “Solved and Evolved”.

6 simple steps to actioning a strategy that can actually deliver better broadband customer experience

"When all is said and done, a lot more will have been said than have been done".

That pretty much echo's my thoughts on the current thinking around what's the best "practical" way to deliver on the customers expectations for new applications and services.

To me, it's quite simple if we walk through 6 simple steps that can help make things happen rather than pointing out what can't be done:

These 6 steps are looking at:

1. What does the customer want
2. What's happening now
3. How can we meet the challenge
4. Look at the Utopia soluiton
5. Ignore the unlikely solution
6. Actually set about delivering using a practical approach

What the Customer wants:
Better experience – primarily around two areas, devices and delivery.With a ubiquitous market of over 4 billion devices are pretty much taking care of themselves. The real game is now the network.

What’s happening now:

Anyone following technology whether the progress in eHealth, Cloud computing or consumer devices will know that  the demand for pure base bandwidth is growing exponentially according to the much quoted Nielsen’s law. The other side of this equation is that once average bandwidths increase in some markets new applications designed in these markets suck up any spare bandwidth capacity. With situations where most websites now have a multi-media content or if we look at the clear trend of backing-up data using some remote hosted facility the overall trend points no end to the accelerating appetite to comsume more bandwidth where available.

What the Customer wants:
The last three years saw Broadband suffering from a pretty similar syndrome to the early days of the .COM phenomenon. The 80:20 rule has been reversed, those using 80% of the bandwidth were generating the lowest 20%  of revenues. Unfortunately this problem was never solved and there was a blind push via devices like the iPhone to make this level of bandwidth consumption the norm, but neither the revenue model nor the delivery model were tailored to meet these needs. So now it's time to see what the cusotmer really wants and is prepared to pay for.  I came across a great piece of analysis on the economics of trying to provide this increased level of broadband under the current model written by Niall Murphy from the Cloud, see http://www.kubuventures.com/Kubu_Ventures/Kubu_Ventures/beingconnected_blog/Entries/2009/10/8_Report_-_The_Mobile_Internet___Risk_of_Meltdown.html.

Meeting the challenge:
Whether you agree with Niall Murphy’s base assumptions used in his calculations or not, there’s enough in-depth material out there from independent consultants like AnalysysMason that would point to the same general conclusion, the current model is at breaking point. In fact, from the work I’m involved in there’s plenty of anecdotal evidence that shows not only are operators hitting revenue ceilings but that the costs associated with in-life service of these products is rising due to the mismatch of customer expectations and customer experience.

The Uthopia Solution:
Fibre near everybody

An unlikely Solution:
Fibre near everybodyanytime soon. Given the level of debate on who’ll pay for the fibre, it’s clear that ubiquitous national fibre networks to every  home and base station are still some distance away. At with estimates of Fibre to the home for a country like Ireland ranging from €1,538 - €2,378 per home (see http://www.tif.ie/Sectors/TIF/TIF.nsf/vPages/Broadband~Publications~building-a-next-generation-access-network-for-ireland-16-04-2010/$file/TIF%20Report%20'Building%20a%20Next%20Generation%20Access%20Network%20for%20Ireland'%20Final.pdf) it’s hard to see how costs like that can be recouped directly from the consumer so therefore it’s not likely that any private enterprise will be giving charitable donations of this magnitude.

A practical approach:
If you can’t build extra lanes on the high, then you better start managing the traffic better. Without the rollout of fibre, evolution will have to take place in other areas. While it might not have the sexy appeal of a mass fibre rollout, a rethink of how OSS systems can be used for better traffic management are the key. This will mean advances will have to be made in areas such as traffic offload, better understanding of customers needs allowing select targeting of infrastructure rollouts. In short OSS systems will have to start becoming more closely linked to CRM and ERP systems. To put this in perspective, you could spend €10m trying to fibre up 10,000 homes or you could spend €5m and save more that €5m while still successfully evolving more targeted offerings to 100,000 customers. This change of focus is really a no brainer. The key is to starting thinking of small incremental ways to advance, it’s in solving these small  challenges that big changes will come about. It much easier to start solving the bandwidth issue, if we can realistically answer who REALLY needs the bandwidth and when and where can this be best delivered.

So it's time to let the debate conclude and the acitons begin.

The 1 minute MBA - Find customers with the perfect problem and it's hard to avoid success

If you have customers telling you what they want, how they want it and at a price they want it and you can supply it, what can get in the way of success?

Most people agree that when all those elements are in place and you can feasibly deliver the service you should make a sale.

QED, MBA successfully completed, cash the cheque, go home and start surfing the web for your dream sports car.

So if it’s so simple why don’t we all do this?

The answer I believe lies buried in two distinct factors:
• Institutionalised inertia
• Individual self-interest

These two factors have long since been institutionalised in the form of ARPU. It's high time we broke this connection forever and moved on. For as far back as I can remember, ARPU (Average Revenue Per User) has been the measure of currency for Mobile operators:

It was simple No. of subs * APRU = Total revenue

But we now live in a New World with:
• Several services
• Multiple devices
• Funky applications

So what’s wrong with Average Revenue Per User?

The issue with this is that ARPU is great for analysts but gives a sense of pseudo entitlement for a given revenue target without doing anything for it. It’s as if the customer owes us this amount of revenue. It hides what we're supposed to be doing, i.e. coming up with new services that customers actually want rathan wheeling out re-polished versions of the old chestnuts of Voice, SMS.

In a recent article that I read from Paul O'Dea and Emer O'Donnell , entitled "The investment paradox, why less is more", Paul & Emer describe how start-ups will little or no cash are more likely to be successful in fulfilling customer needs because it's their only source of finance.

I suggest that you give a read, it's short and makes a very good clear point:

http://archive.constantcontact.com/fs062/1102534231828/archive/1103383042599.html

What Paul and Emer describe needs to be in the life blood of any technology solutions providers. Whether you're a start-up selling into large operators or an established Tier-1 vendor the law hold true. We need an absolute obsession with coming up with products and services that customers validate as the bare minimum that's required to survive in the global market. 

But all too often I come across people that are still looking for technologies that will be “all things to all people”. Folks that’s what the Access networks and IP networks and Google are for. These are top of their value chains and probably represent 0.001% of all companies. With those odds I suggest you buy a lottery ticket, it’s a lot less painful than building up teams of clever developers that end up building shelf-ware in the vain effort to rule the world.

By shifting the focus subtly to average revenue per service we start asking the necessary questions about what the customers really want. We re-align our systems to monitor, trend and report the individual services. This is now critical, but for proof to see this in action take a quick look at Vodafone's results to March 2010. Non-voice and Messaging revenues that are now powering the revenue growth in Europe.

See: http://www.vodafone.com/start/investor_relations.html

This means we start looking at what the end customers are really doing. This is also driving three fundamental changes:

• Each service now stands or falls on its own merits
• Thinking outside the box – it's all about building a complex value chain and we need to look at partners
• Co-operation – By breaking the old mould it’s forcing the simplicity and cross business co-operation that Vodafone talk about in their presentation.

Therefore it’s time to confine the ARPU measurement to history and look at the Average Revenue Per Service across distinct SFP's “Service Finger Prints”. Looking at the distinct service touch points allows operators utilise the potential of their large investment in carrier grade Access and IP transport networks to target specific services for small subscriber groups. It askes the question, how and where does our customer want to interact with this service? Then it builds services that actually match these requirements.

So let's replace the "long tale" with real life “long tail” fulfilment.

Building value by moving beyond the bean-counters

If the iPhone were a product, it’d be a pretty poor one. Quite simply an iPhone is not the best phone of the market. What makes it special is that it delivers a unique customer experience by combining the bare phone with a slick App platform.  This is a full solution, where many partners work towards a solution that meets customer needs.

You’d think that this message would be well understood in the telecoms market place, but in many cases the penny has yet to drop. For Telco’s to deliver solutions at the level of the iPhone solution, they must engage their whole organisation around this concept. To implmentent this would be relatively low cost, in fact it'd probably even greatly reduce costs in the medium term. While the rewards are vast it requires a mindset change and that's hard. The most obvious place to do this where the greatest wins can be achieved is within their own supply chain organisation. If they get this right they’ll be able to unlock the vast pent up creativity within their supplier base.

To explain the benefits of a solution concept by looking back at technology history from the introduction of the mainframe.

Initially large companies bought products like IBM mainframes. To harness the value of this big investment they skilled up large teams, e.g. for Digital VAX systems most companies had an army of programmers who know their business processes. The key was that this internal knowledge bank was a driving force in pushing each firms competitiveness in the market.

Since the Dotcom bubble business have shyed away from products and there has been a major shift towards moving everything to “Services”. Nowhere is this more visible that with the whole SAAS arena. But no sooner has a service been described within the organsiation than some smart accountant immediately does what they believe to be absolutely clever and ground breaking, they try to recuce OPEX by outsourcing or preferably off-shoring to gain great cost reductions.

However, as this market has very much matured most of the real gains are long since gone. Very often further outsourcing or off-shoring of key services becomes detrimental and actually quickly turns to a draw on the organisation becoming more expensive than a high-value partner model equivalent. Modern procurement want to compare coffee beans with coffee beans, which doesn't give any value to the contextual value.

The nature of most present day Business-to-Business technology solutions is that they:

• Have a multi-year life with regular upgrades and and new funcaitonality
• Consist of multiple "products" from several vendors contributing and inter-acting to deliver the end-solution
• The mapping of the unique business processes is highly contextually dependent and is in a constant state of continuous change

Therefore to be successful both client and partner should be absolutely focused on meeting the end-customer needs. This attitude has to be the over-riding basis of the relationship where both parties show real flexibility in meeting these objectives.

Hence there's no surpise that there fundamental 4 reasons why outsourced services typically fall apart:

• There are clear incentives set to cut down and fix the number of days/hours/rate by the client. This pushes the outsource partner to look for extensions and change requests to cover off risks.
• In fixed price contracts there are clear incentives to cut corners and point to areas out of scope 
• There is an inherent tendency within the supplier to look for at under utilised resources and then try to fit these to the service, i.e. square pegs to round holes
• It's impossible to map even the major impacts of future change across the business caused by other 3rd parties products and business needs, so from the outset the outsource service desciption is inaccurate and out of date

The end result is the contracts are set-up that don’t align to the real value of the organisation, in fact they’re often set-up to work against the company’s strategic interests.

Hence there has now been a growth in solution selling done in real partnership.

True value based partnership that focus on clear end solutions have distinct advantages over typcial service/product type relationships, primiarly they:

• Focus on the end result of creating real value for the customer
• Tend to have a repeat element so there's an in-built incentive to get this right and improve
• Allow both customer and provider to grow and learn together

This is nothing new, the Japanese manufacturing cracked this in the 1980’s which lead to just-in-time. This was successfully adopted by key technologies players like Intel and Dell, where they came together to deliver a far better solution that had clear mutual benefit.

It's clear that not all suppliers are ready for this mindset change either. To be considered by a potential client the partner must demonstrate that they have:

• Key knowledge of a technology domain
• Have solutions that will grow and evolve
• Are in the business for the long haul
• Not obsessed with instant quarterly numbers, this is a slow burn not a quick-win

If both parties share this mindset, then this can lay the foundation for a long term relationship that delivers real value and creative solutions on an ongoing basis. Otherwise, it's best that the client makes it clear that they're looking for the business equivalent of a one-night stand and everybody treats the relationship as such.

 

Cost-cutting or creativity, the destination of the Mobile operators is in their own hands

Think back over the past  3 years at the biggest splashes in Telecoms.

What comes to mind?

 

In my mind, the iPhone, Android, and the promised arrival of LTE would be high on my agenda.

But if you look back at where effort was focused cost-cutting would have to be No 1 by a long shot.

To my mind that’s a big statement on the future of one of the world’s largest industries. Looking back 5 years ago, Telecoms companies were crying foul at the thought of becoming “bit-pipes”. They protested to the world that they were life-style players and not utilities like power and water companies.

However, back 5 years ago the large mobile companies virtually controlled the handset market via dictating functionality in return for handset subsidies. All we have to do is look at the example of how Nokia fell afoul of players like Vodafone on this issue to see where power balance lay. Roll-on 2010 and clearly Apple have shown the way on where the balance of power has shifted. Indeed the MWC in Barcelona this year seems to be dominated by user device handset battles, with all the heavy weights like Microsoft, Google, Nokia, INTEL all wading in without a mention of a single operator in the fray.

So what has happened? In my opinion the earth has moved in terms of the value chain. Operators looked internally and decided which handset suited them and forgot the customer. It's no surprise that today they are off-loading huge elements of the value chain to outsourcing, partnering and plain old retreat to the high ground of customer satisfaction management. Having exhausted all the fresh pools of new subscribers for voice and then pretty much hovering up huge number of broadband subs the new era became clear, the customer had evolved. The new customer wants a fantastic user experience, hence enter Apple with the iEverything.

This also implies that the competitive battle that operators must now fight has moved from the user interface to the user experience. I read with interest Dave Pringle’s on how Operator capital spending has returned with vengeance see article http://www.mobileinnovation.org/content/capital-spending-is-back-in-fashion.

While this big level of investment is required to bring LTE to market, the truly innovative operators are looking at local partnering strategies to give them cutting edge user experience solutions. This is not the same as using a big outsourcer to develope your internal Apps. By their nature big outsourcers need defined specs, time and generally deliver a very mediocre product. It’s the smaller lean network of small software companies where the ideas jump up. These companies can meet new market demands in weeks through Agile developments working alongside the business owners within the large telco. Before a large outsourcer has reviewed the first 100 pages of the legal agreement they're presenting, the small player will have a live product in the network.

So if the Billions being spent on LTE are to be truly harnessed, it’ll be the mini-wannabe Apples that are working alongside the large telecos that’ll make this happen and not the overly zealous accountants want to prioritise conserving cash rather than meeting customer needs.

The difference of outcome is clear, utility selling commodity network connectivity for others to create value off, or a highly valued service provider that the customer is willing to give their thrust and cash to! Operators must decide, because Google certainly have made their position clear.

Is the tail wagging an old lazy dog when it comes to launching new products and services?

It’s absolutely no news that Telecoms Operators and ISP’s across the world are all facing similar challenges. These are growing & maintaining revenue in maturing markets. 

The key issues with any mature market is well known and are not unique to telecoms.

The pricing of your product or service drops and it getting much harder to attract “new” customers, in this case customers that are new to this product or service.

Therefore to simply thread water organisations have to:

• Relying on keeping existing customers,
• Try and picking up new customers via churn
• Try to Sell new Products and Services to existing customers

While that all sounds tough enough, seeing as your opposition is also doing this you have to become much better at execution. In the telco & ISP world this translates to:

Cost cutting

They need to deliver services with:

• Smaller organisations
• Smarter technology choices
• Use Outsourcing & Managed Services to make up for the smaller organisations

So with this in mind I recently asked a few specific questions in various Linkedin groups and interview key decision makers within a variety of organisations on this topic to see how they were handling it.
To my great surprise there was a great deal of commonality and agreement in both what they though would be done and what they were:

On the front end (the feet on the street bringing in sales), the need to automate the workforce via tools like Salesforce.com was a clear part of the strategy.

The downside of this is, that despite the promises of Salesforce.com of being "all things to all people" they really can't integrate with the backend systems. While that might sounds like a minor inconvenience for the Telecoms and ISP world that a serious drawback. The backend is where you deliver your actual service, is the foundation of customer care and quality of service. In addition, it’s how you understand actual customer behaviour versus what was sold.

The nub of the issue appears to be that Salesforce.com and other SAAS based solutions might be good for specific areas such as Sales, but they simply don’t integrate well into the backend systems which can be both legacy and proprietary. Also, packages like Salesforce.com work very well for instances with many “seats” (IT sales jargon for a lot of users pulling of the same data doing the same thing), however backend systems tend to have a very small number of users, often less than a dozen, analysing very specialised data and processes.

From my polls, this wasn’t a small issue. Operators and ISP’s are struggling with surging bandwidth demands, falling prices and all new products based upon new technologies, such as iPhones, IPTV, etc. But the disconnection between the front and backend was either constraining product launches or resulting in over sold products which are falling short of customer expectations.

So what’s the answer?

There certainly doesn’t seem to be any quick wins. There’s clearly a need for a complete re-think around the systems architectures surrounding all the business processes, including how people work and interact between the front and backend.

What came through that was most surprising is that there seems to be a clear market need for hybrid solutions. Here a clear line in the sand was drawn as to where systems such as Salesforce.com would stop and where the back-end systems would take up the challenge. The front-end lightweight and nimbleness allow great flexibility in getting new products out to the market quickly but lack the pull through with any depth to really deliver the all-round 360 view of the customer, service and network that’s required.

So, it appears that just as the mainframe systems still exist today about 30 years after the first PC’s came on stream, the impact of SAAS type applications.

The twin fault-lines to watch out for in 2010 in telecoms

Is there a sure fire way to be able to see the wood for the trees in terms of what’s going to be the “next big thing” in telecoms?

I don’t believe so, and reading something like (“James Surowiecki’s”) Wisdom of the Crowds, helped show me that those who believe they can pick tomorrow’s winners are nothing but plain old fashioned snake oil vendors. But, for 2010 I do believe there are two major “fault lines” which will force decisions and underline strategies. The good thing about fault-lines is that you can’t ignore them, not making a decision simply isn’t an option without coming out worst of all. So therefore Telecom Operators around the world are making decisions for 2010 based around the following two fault lines:

1) Mobile Devices
2) Off-shoring versus Outsourcing

While the choices around Mobile devices are pretty straight forward to explain. The iPhone was a great hit across the globe and in Europe it was a major source of inbound churn for those operators like O2 that had exclusivity deals. I ran a few LinkedIn questions and discussions lately on this topic to test my theory and I’m satisfied by the reaction that this will be a seriously hot topic for 2010. I am no nearer knowing whether the iPhone will reign supreme in 2010 or whether the arrival of many of the Droid’s offspring will relegate the iPhone to the “fad” pages of history.  But what I do know is that there is a genuine belief that we have made a step change in terms of what the market expects. In many respects today’s collective “Apps” are fulfilling many of the original prophecies of the “3G” killer App, i.e. the ability to browse and download Apps is driving a completely new behaviour not seen since the arrival of SMS. So with the iPhone exclusivity deals expiring in many markets and the arrival of the Droids, Operators will have to place their bets.

Off-shoring versus Outsourcing: This other fault-line is less obvious. But is potentially the more important of the two. This decision will have a long shelf life and will constrain or enable Operators to compete in the “foggy future” of the App driven business model.  Nobody in the developed world believes that all development should be done in-house, there is a clear consensus that this is best left to those who specialise in that particular niche or area. But the fault-line comes in the decision to “off-shore” the back-office and localisation or not.

Clearly up to last year off-shoring had the major attraction of a low unit cost per hour/day. Finance directors and procurement bean counters had a field day beating up local suppliers. Many of these suppliers were pushed out of the market by the large Tier-1 outsourcing deals that were predicated upon a high degree of off-shore development delivering a high-margin local customisation service. This has certainly driven the base cost of Product development down dramatically, but just like the “soft-landing” that was predicted for the normalisation of the property market, the number of “off-shoring” arrangements appearing to be dramatically crashing seems to be on the increase. With the maturing of Cloud based systems, the real competitive advantage moves away from  the low cost of development of the bulky backend to the ability to modify the front end systems to meet market niches. Hence the competition has moved back locally again, which does not favour the off-shore model. With localised services, undocumentable knowledge of the market, organisation culture, etc. make all the difference. Imagine trying to write and offshore the requirements to deliver the aspect of “funkiness” that was to define the iPhone as a game changer?. These adaptations tend to be relatively small and require continuity of teams, think scrum or agile. There will never be lengthy signed off requirements in these situations. The power and comfort for the operator comes from the close co-operation with the supplier together pushing the bounds of technology in a true esprit de corp.

So that leaves operators on a fault line. Do they continue to look at pure bottom line off shoring with all the promises (but very little delivery) of flexibility? In my experience off shoring is a pure bottom line exercise.  It certainly does deliver far better “day rates” but more often than not it ends up in a very adversarial and conflict laden environment. The basic issue is that the off shoring partner is constantly squeezed in trying to make their margin and the operator feels that the offshore partner is deliberately cutting corners and cherry-picking the easy and profitable projects rather than focusing on what they really need to compete, than last 5% of creativity and motivation.

On the other hand by risking drawing a line and deciding on doing a specific level of localised development, operators run the risk of incurring additional costs for services that the customer were not prepared to pay for.

To finish, I think a key balancing act will be needed between the inter-dependencies of both fault lines, if you go for the “everything” offshore model, it pretty much limits you to looking to pick something like the right exclusivity deal with the next iPhone. Whereas going down the “niche” market segment road will favour small and agile local development. I certainly don’t claim to have a crystal ball, but these are the decisions that will create the winners and loosers of 2011 and 2012, the real problem will be the length of time before it becomes obvious where the fine balance lies between quality and cost.

4 Simple steps to making your 2010 strategy more robust

Across most of Europe at the moment, people are preparing for the Year End and the Christmas holidays. Typically in the New Year the strategy sessions with everybody envigorated after the break the strategy sessions will kick-off. 

 

Let me lay my cards on the table, I do believe in Strategy. I believe that Strategy provides a clear “compass” for guiding actions and decisions. 

 

The issue I have is that Strategy is done internally and there’s a tendency to substitute Hallucinations for Visions, it tends not to be grounded.  To quote the great military strategist “Helmuth von Moltke the Elder”, No plan of operations extends with certainty beyond the first encounter with the enemy's main strength (no plan survives contact with the enemy).

So while strategies are formed and revisited the true test of the organization's strategy comes in keeping progress towards the original vision intact at the first sign of trouble. This is “live and die” for technology companies.  For example compare the iPhone and Android. The iPhone was an instant hit but Android didn’t deliver the instant splash everybody had expected and it certainly hasn’t dis-intermediated the operator as was forecast. However, the Android platform seems to be gathering real traction and there are questions surrounding how much more pervasive the iPhone will become. 

So if we step back to business school basis and begin by look at Mr Porter’s famous 5 forces:

For anybody in technology, trying to answer the question of what's the likelihood of a substitute product having an impact on your product? Pretty much you can take it that if you have a product or service somebody out there is trying to create a disruptive version, be it via an offshore low cost model, a hosted model, etc.

Similarly we see a feast of moving parts all across the telecoms and technology arenas, these include:
• Fixed Line issues like how much fibre will be in the ground in 5 years time?
• Will WiMAX carve out a niche somewhere beyond the reach of LTE?
• How much traction will Cloud computing get in the next 3 years?
• Will operator App stores rise to challenge Apple?
• How low will prices go?

 

Therefore it’s easy to see the danger in getting too wedded to any single strategy. So where can you begin? This all gets pretty head wrecking for me pretty quickly.

 

Hence talking as a very small niche telecoms software vendor in chaotic times where money is tight, our starting point has to be along the following lines:

 

Assumption: 95% of the solutions that we will deliver next year will look very similar to those delivered this year.

 

That gives a bit of solid ground. It's a pretty safe assumption that there’ll be very few “big bets” placed in 2010, unless you know somebody with lots of cash that hasn't been affect by the financial chaos of the past two years. The key point is, unless your back is to the wall, don’t ignore the bread and butter that got you where you are.

 

It’s from this foundation that I believe most successful strategies for 2010 will be formed. Next I would then take a 4 step look through some of the likely key movements within the business environment based upon Porter’s Model, see below for:

 

By looking at your specific environment e.g.: 

• Most likely Market Demands: Lower Prices, faster speeds, more functionality, who’s likely to spend money?
• Most likely Market Trends: Offshoring, Outsourcing, Consolidation, etc.?
• Most likely Technology Trends: LTE, Higher higher bandwidths, more Android based devices, what Google will do, what Microsoft might do, etc.

 

A clear more grounded picture tends to emerge from the fog.

 

And then if you look at the likely impact on your business at the end of these 4 questions and ask yourself:

• How can easily can you react and adapt?
• Are you over reliant on a small number of key customers?
• What happens if a number of things you forecast don’t happen, happen later, happen quicker, or are of a different scale?
• How can you change your business in an incremental fashion to reflect the above?

By forming a "plan B" approach based on those 4 simple questions you're not only looking at 2010 but you're positioning your business to be quick out of the traps in terms of chasing any upswing in your business. Importantly you're not exposing yourself to unnecessary timing or technology gambles.

 

I’m placing my bets that 2010 will see a clear trend of customers trying to squeeze more out of what they’ve got rather than embarking on large 5 year spends. But the key point will be to ensure that you can revisit this strategy constantly over and adjust for the changes in the

environment and ensure your chasing likely long term winners rather than over investing in shinking opportunites.

The 4 Key fundamentals that are driving the 2010 strategies for the Telco's

As we look back at 2009, the year when the technology sector proved it had learned key lessons from the dotcom bust of 2001, the telco industry is clearly uniting on 4 key fundamental tenants unpon which 2010 strategies will be modelled, these are

• Cost cutting
• Simplicity
• Third Party partnerships
• Devices

Cost Cutting:

In the same week it’s probably no accident that in the UK, both Vodafone and BT announced mammoth sized targets of an order of additional £1bn off their costs bases. While the headline figure reads well in print, achieving this will be no easy matter. To achieve this is size savings means targeting two old favourites, with many functions such as IT already outsources this seems to point at their access networks and headcount being the key targets. It also means that those supplying into the large telco’s will be asked to shoulder even further rate cuts.

The net result: Lower permanent staff in operators, more contract/temporary staff with far less Capital intensive projects such as access network rollouts.

Simplicity:

The reason that Telco’s are having to cut costs is that their margins continue to be eroded, and for Vittoria Colao a key worry is the pressure coming from the developing markets such as India. So across their markets operators are having to give away more minutes, texts and data for less. Therefore it doesn’t take a genius to figure out that all those back-office systems such as billing systems that evolved to manage the countless complex products offerings are out of sync with the market offerings. To compete, operators need to simplify the backend and reduce the cost of customer management.

Net Result: Very simple products made up of huge bundles of combined voice/data and text

Third Party Partnerships:

This is clearly the growth area for Telco’s, the iPhone has shown the way and now the “me too’s” are jumping on the app store bandwagon. While Apple shown the way forward, it also showed the cul-de-sac, it marginalized operators to bit-pipes and high street shops. This has united previous opponents such as Microsoft and Nokia to look at a variant of the App Store that uses the operator’s billing system, a gesture very close to the operators hearts.

Net result: Third party partnerships will be a growth area and Apple can look forward to fierce competition in this arena in 2010.

Devices:

Again Apple showed the way, get a cool device and that’s half the battle. This then gave the impetus for again the previous foes such as Nokia, Microsoft and Google to crystalise around the operators needs. With companies like Motorola adopting Android and talk of Android bypassing the network gone quite, the arrival of the netbook and other Smart phones, 2010 look set to reshape the fundamentals of the Mobile market away from the original GSM 2G phones that were designed around Voice and SMS to finally bring  to life many of the concepts that were touted pre-2000 as on the horizon with 3G. So a decade late, there’s little doubt that it’ll be data driven applications and associated devices that are set to drive a tidal wave of change and finally usher in the world of data.

Net result: The bedding in of a new era of mobile devices where voice is not the main objective

So 2010 is set to see lean operators, simplifying their own portfolios, pushing growth through enabling third party products and delivered through a new generation of devices.