What ae the triggers for innovation?
1. Unmet customer need/unfullfilled demand
2. Supply Side Scarcity (resources, capabilities, etc.)
3. Survival instincts!
Any more that can be added to this list!...
Sunday, August 31, 2008
Tuesday, August 26, 2008
The innovation cost of information assymetry..
Is information assymmetry one of the biggest Innovation impediment?
My hypothesis is Information assymmetry can inhibit:
1. Innovating new product/service
2. Taking innovation to the market for economic benefit
It is often the case that innovative ideas do not come to the fore not coz' it is not potent to produce economic benefit, but more so coz the innovator does not have a method to its madness to tap it for econmic profit.
Some case in point:
a. Toyota did not invent innovative cars when they started off.
b. Dell did not invent innovative personal computers.
All they did was copied a FORD/GM or cloned IBMs innovative thoughts and exploited them to economic profit through ingenious process innovations. They did that as they knew that some of the methods when cross-pollinated in their industry can aid them in reaching far-fetched profits (which other wise would not be feasible). They exploited the information assymmetry of the existing companies in uncovering customers unmet need and applying these techniques/methods to economic profit.
Another way of looking at information assymmetry, I've seen countless number of cases where an innovative idea never reaches the light of the day due to several reasons:
1. Inability of a technologist to understand markets/customers well (case of Palm PC)
2. Inability of a marketer to understand a technology and its capabilities (cant get a case right-away bit can get back to this later...)
3. Inability of an innovator to understand legalities leading to loosing a patent and hence commercial benefit....
The cases could be innumerable. Whenever one understands and plugs these information assymmetries we have often seen successfull enterprises generating great economic benefit not only to its stakeholders but to the society at large...
Do you agree/disagree? Any interesting insight of yours!
My hypothesis is Information assymmetry can inhibit:
1. Innovating new product/service
2. Taking innovation to the market for economic benefit
It is often the case that innovative ideas do not come to the fore not coz' it is not potent to produce economic benefit, but more so coz the innovator does not have a method to its madness to tap it for econmic profit.
Some case in point:
a. Toyota did not invent innovative cars when they started off.
b. Dell did not invent innovative personal computers.
All they did was copied a FORD/GM or cloned IBMs innovative thoughts and exploited them to economic profit through ingenious process innovations. They did that as they knew that some of the methods when cross-pollinated in their industry can aid them in reaching far-fetched profits (which other wise would not be feasible). They exploited the information assymmetry of the existing companies in uncovering customers unmet need and applying these techniques/methods to economic profit.
Another way of looking at information assymmetry, I've seen countless number of cases where an innovative idea never reaches the light of the day due to several reasons:
1. Inability of a technologist to understand markets/customers well (case of Palm PC)
2. Inability of a marketer to understand a technology and its capabilities (cant get a case right-away bit can get back to this later...)
3. Inability of an innovator to understand legalities leading to loosing a patent and hence commercial benefit....
The cases could be innumerable. Whenever one understands and plugs these information assymmetries we have often seen successfull enterprises generating great economic benefit not only to its stakeholders but to the society at large...
Do you agree/disagree? Any interesting insight of yours!
Brains As a Service (BAAS) - Brains on rent
Is there a scope to offer brains on rent?
There are so many interesting innovations we hear lately especially in the Business-to-business space where enterprise services can be rendered as a utility (like electiricity, water, etc) without assuming ownership of resources & capabilites (power plant, river, engineers, etc...) and their risks (issues in dealing with resource & capabilities).
Think about few such themes:
1. "Cloud computing" where IT processing power is rendered as a utility service. Imagine something similar to electricity. We dont care who produces it, how it is distributed and how it is transmitted. All I care is I plug into a electric socket when I need power for my laptop and I get it. I pay a fee for it. I like the baby steps of Amazon here with their EC2 (Elastic clound computing) platform.
2. "Software as Service": Amazing feature to offer software as a service to clients. The client does not have to bother about infrastructure, software license, supporting the application and so on. All he needs is the IT information service rendered to it on paying rental for such a service. Good examples www.salesforce.com, Sugar CRM, SAP Business By Design???
All the above have a viable business to be made on the "long tail" of clients who need simple service at utility rates, without having to bother about the INfrastructure, Software, people to support and so on. Lot of business to be made out there it seems.
In similar light, can we lend our brains to enterprises to solve their productive problems? A kind of Brain as a Service model. Ofcourse, some of us can make a living out of it and that too a prosperous one at it. I guess, this is what Consultants and IT engineers off late do it seems, but by being part of a consulting firm or a enterprise. Imagine if clients can lend the brains of just the individuals and not contract out with companies/firms/enterprises and put them to productive use. All this, without being encumbered with large companies/firms/enterprises out there...Why should I have to go to consulting companies (like Mckinsey, BCG, etc) or Service providers (Accenture, HP, IBM, etc.) to hire the people they have. If I know that all I want is specific talent from people and not the encumbrance of these companies....
Some contractors out there have already doing this like for e.g. teamlease...are there business more companies out there that work on similar model? I contract with individuals not with companies then....
Maybe my idea up there is quiet raw! on the edges of being incoherent or senseless :-)....
There are so many interesting innovations we hear lately especially in the Business-to-business space where enterprise services can be rendered as a utility (like electiricity, water, etc) without assuming ownership of resources & capabilites (power plant, river, engineers, etc...) and their risks (issues in dealing with resource & capabilities).
Think about few such themes:
1. "Cloud computing" where IT processing power is rendered as a utility service. Imagine something similar to electricity. We dont care who produces it, how it is distributed and how it is transmitted. All I care is I plug into a electric socket when I need power for my laptop and I get it. I pay a fee for it. I like the baby steps of Amazon here with their EC2 (Elastic clound computing) platform.
2. "Software as Service": Amazing feature to offer software as a service to clients. The client does not have to bother about infrastructure, software license, supporting the application and so on. All he needs is the IT information service rendered to it on paying rental for such a service. Good examples www.salesforce.com, Sugar CRM, SAP Business By Design???
All the above have a viable business to be made on the "long tail" of clients who need simple service at utility rates, without having to bother about the INfrastructure, Software, people to support and so on. Lot of business to be made out there it seems.
In similar light, can we lend our brains to enterprises to solve their productive problems? A kind of Brain as a Service model. Ofcourse, some of us can make a living out of it and that too a prosperous one at it. I guess, this is what Consultants and IT engineers off late do it seems, but by being part of a consulting firm or a enterprise. Imagine if clients can lend the brains of just the individuals and not contract out with companies/firms/enterprises and put them to productive use. All this, without being encumbered with large companies/firms/enterprises out there...Why should I have to go to consulting companies (like Mckinsey, BCG, etc) or Service providers (Accenture, HP, IBM, etc.) to hire the people they have. If I know that all I want is specific talent from people and not the encumbrance of these companies....
Some contractors out there have already doing this like for e.g. teamlease...are there business more companies out there that work on similar model? I contract with individuals not with companies then....
Maybe my idea up there is quiet raw! on the edges of being incoherent or senseless :-)....
Monday, August 11, 2008
Lean in ADM - Mckinsey Chauvinism
Sometimes I like criticizing Mckinsey and their superficial thoughts. Here it goes again on using Lean techniques for ADM engagement. How shallow and superficial they seem to be sometime! http://www.mckinseyquarterly.com/Information_Technology/Management/Applying_lean_to_application_development_and_maintenance_1979
I remember dealing with bunch of Mckinsey consultants donning a impeccable (Armani) suit and combing hairs in the rest room before a scheduled meet with CxO of my former organization - guess what they were pitching to get a consulting assignment to pioneer lean techniques in IT Services. Ironically they reviewed the work I was already doing for a large utilities companies, pretended to ask me questions and understanding what I've done (well ofcourse deep down I could sense they were thinking how to make their USD 25 Million money out of this client, and were giving me the "Rats-Ass"). They then repackaged whatever I told them into a nice document/ppt and pitched to the top mgmt. claiming to solve all the problems of the organization.
Guess what you can fool around with some people some time, but not all of them all the time!. They got mutiliated when their idea was presented to the leadership and lost the deal. On the contrary some good sense also prevailed among the leadership, to let us pioneer lean techniques ourselves by just reading books and applying it innovatively in our organization...the rest was taken over by the HBR case study on whether applying innovative techniques like Lean can help change course of my former organization over the other formidable competeitors in the IT services market....
The next I heard was 3000 miles away in Germany when an ex-Mckinsey partner messing up with a Communication giant telling them that vendors should apply lean techniques to cut-down ADM to accomodate + or - 30% variability after committing to the estimates....
Anyways happy reading Mckinseq quarterly....It is good sometimes to introspect!...
Now, I feel a lill good bitching about Mckinsey! I'm a mere mortal and this is my second nature!
I remember dealing with bunch of Mckinsey consultants donning a impeccable (Armani) suit and combing hairs in the rest room before a scheduled meet with CxO of my former organization - guess what they were pitching to get a consulting assignment to pioneer lean techniques in IT Services. Ironically they reviewed the work I was already doing for a large utilities companies, pretended to ask me questions and understanding what I've done (well ofcourse deep down I could sense they were thinking how to make their USD 25 Million money out of this client, and were giving me the "Rats-Ass"). They then repackaged whatever I told them into a nice document/ppt and pitched to the top mgmt. claiming to solve all the problems of the organization.
Guess what you can fool around with some people some time, but not all of them all the time!. They got mutiliated when their idea was presented to the leadership and lost the deal. On the contrary some good sense also prevailed among the leadership, to let us pioneer lean techniques ourselves by just reading books and applying it innovatively in our organization...the rest was taken over by the HBR case study on whether applying innovative techniques like Lean can help change course of my former organization over the other formidable competeitors in the IT services market....
The next I heard was 3000 miles away in Germany when an ex-Mckinsey partner messing up with a Communication giant telling them that vendors should apply lean techniques to cut-down ADM to accomodate + or - 30% variability after committing to the estimates....
Anyways happy reading Mckinseq quarterly....It is good sometimes to introspect!...
Now, I feel a lill good bitching about Mckinsey! I'm a mere mortal and this is my second nature!
Thursday, August 7, 2008
Can we have a People Exchange platform to trade resources?
Think about this! We always struggle to get resources with right skills and experiences for an IT engagement. Though, we get the resource sometimes, we are unable to gauge the salary expectation and price them for a client requirement for a profit. How do we manage the resource economics?
I look at the above situation akin to a stock market where instruments (shares, bonds, options..) are brought and sold for profit. The analogy I can draw between the instruments and resources are as below:
1. Instruments have a certain buy price similar to the payroll cost for resources
2. Instruments can be sold in the market for a price, whereas resource are in turn deployed in engagements with client for a price.
3. The differential in buy and sell price of instruments can lead to profit/loss similarly for resources
4. One can speculate on the prices (buy/sell) of instruments in the market, similar to the one we do for resources. All that without agreeing on the intrinsic value of the instrument/resource...
Now lets look at what Stock exchanges do:
1. Provide a platform for buying and selling instruments based on demand and supply
2. Aid in speculate/price discovery of instrument based on whatever rationality/irrationality
Can we then create an exchange for resources as well similar to stock exchanges then. The resource exchange can then provide this platform for buying and selling these resources based on the need and also aid one in price discovery. Now let us devise this model to face the resourcing challenges for IT Services engagement:
1. The Job portals (like Monsters of the world) become the brokers similar to the agents who fulfill the resource transaction obligation
2. The IT Service Provider can behave like companies that house these resources based on intrinsic value the resource with specific qualities come with a specified price to sell in the market...there can be a standard valuation that is agreed by all IT Service provider in the industry for a specific grouping of resources based on skills and experiences...
3. The clients who want resources to solve their issues then bid to buy the resources through the exchanges
4. Have a new stakeholder regulating agency that comes up with a standard/proprietary valuation model that all Service provider agree on....
The benefits this will bring to the IT industry are:
1. Clients can benefit by discovering the price through the resurce excchange platform
2. Resources get what they are worth by having a standard pricing based on valuation model, rather than having a bazaar type negotaitions on salaries
3. Service providers can value the resources based on a proprietary model
4. Job portals can get their commissions based on the value they add to the clients and service providers
Can we develop similar model? Let me know if your thoughts if this model is viable!
I look at the above situation akin to a stock market where instruments (shares, bonds, options..) are brought and sold for profit. The analogy I can draw between the instruments and resources are as below:
1. Instruments have a certain buy price similar to the payroll cost for resources
2. Instruments can be sold in the market for a price, whereas resource are in turn deployed in engagements with client for a price.
3. The differential in buy and sell price of instruments can lead to profit/loss similarly for resources
4. One can speculate on the prices (buy/sell) of instruments in the market, similar to the one we do for resources. All that without agreeing on the intrinsic value of the instrument/resource...
Now lets look at what Stock exchanges do:
1. Provide a platform for buying and selling instruments based on demand and supply
2. Aid in speculate/price discovery of instrument based on whatever rationality/irrationality
Can we then create an exchange for resources as well similar to stock exchanges then. The resource exchange can then provide this platform for buying and selling these resources based on the need and also aid one in price discovery. Now let us devise this model to face the resourcing challenges for IT Services engagement:
1. The Job portals (like Monsters of the world) become the brokers similar to the agents who fulfill the resource transaction obligation
2. The IT Service Provider can behave like companies that house these resources based on intrinsic value the resource with specific qualities come with a specified price to sell in the market...there can be a standard valuation that is agreed by all IT Service provider in the industry for a specific grouping of resources based on skills and experiences...
3. The clients who want resources to solve their issues then bid to buy the resources through the exchanges
4. Have a new stakeholder regulating agency that comes up with a standard/proprietary valuation model that all Service provider agree on....
The benefits this will bring to the IT industry are:
1. Clients can benefit by discovering the price through the resurce excchange platform
2. Resources get what they are worth by having a standard pricing based on valuation model, rather than having a bazaar type negotaitions on salaries
3. Service providers can value the resources based on a proprietary model
4. Job portals can get their commissions based on the value they add to the clients and service providers
Can we develop similar model? Let me know if your thoughts if this model is viable!
Graph Theory, Influence Diagrams, Morphological analysis - Which method is suitable for Offshore/Outsourcing Mix (OOM)?
I had this interesting conversation on using AHP, ANP and Graph theory to determine offshoring mix with my good friend Navneet over phone the other day. We had a healthy debate on futility of using graph theory to solve the problem, and some pointers to look at Influence Diagrams. I did a search up on the Web for Influence diagrams (ID) and hit upon a very interesting discussions on this and Morphological analysis (MA).
While debating about the merit Graph theory, I did realize that the challenges of applying it to solve the OOM problem. Think about it how am I going to get the strength of the edges connecting 2 nodes and the influence of the nodes itself on the OOM. Apparently, I do agree with Navneet that the OOM factors, its (inter/intra)influences and the objective function of OOM are not physical phenomena to be objectively used to reach the optimal OOM goal. But going back to using AHP for the same still does not convince me!
So the endeavor continues!!!!
I somewhat liked the idea of using the MA method. MA method is specifically meant to handle the challenge that I'm perplexed with i.e. the the complex nature of systems (OOM) and the unquantifiable nature of the factors (both nodes and edges) to determine the optimal OOM. The MA method has been used successfully in several fields: Zoology, Geology, Sociology and several other-logies. Now the challenge of MA itself is to define the problem very well, identify the influencing factors, establish the boundary conditions for each factors, Analysis-Synthesis loop to identify a consistent configuration (principles of contradiction and reduction) applying filters: logical contradictions, emprical constraints, and normative constraints.
Pretty interesting to think about the above. Now I'm more confused looking at above that the marrying of so many concepts: Exploratory analysis, Constraint theory, influence diagrams, etc. that can help in determining OOM. I'm not sure I can apply any of the above unless I get a broad set of principles based on which I can zero into a good principle.
Bloggers please help me, give me the direction.....
While debating about the merit Graph theory, I did realize that the challenges of applying it to solve the OOM problem. Think about it how am I going to get the strength of the edges connecting 2 nodes and the influence of the nodes itself on the OOM. Apparently, I do agree with Navneet that the OOM factors, its (inter/intra)influences and the objective function of OOM are not physical phenomena to be objectively used to reach the optimal OOM goal. But going back to using AHP for the same still does not convince me!
So the endeavor continues!!!!
I somewhat liked the idea of using the MA method. MA method is specifically meant to handle the challenge that I'm perplexed with i.e. the the complex nature of systems (OOM) and the unquantifiable nature of the factors (both nodes and edges) to determine the optimal OOM. The MA method has been used successfully in several fields: Zoology, Geology, Sociology and several other-logies. Now the challenge of MA itself is to define the problem very well, identify the influencing factors, establish the boundary conditions for each factors, Analysis-Synthesis loop to identify a consistent configuration (principles of contradiction and reduction) applying filters: logical contradictions, emprical constraints, and normative constraints.
Pretty interesting to think about the above. Now I'm more confused looking at above that the marrying of so many concepts: Exploratory analysis, Constraint theory, influence diagrams, etc. that can help in determining OOM. I'm not sure I can apply any of the above unless I get a broad set of principles based on which I can zero into a good principle.
Bloggers please help me, give me the direction.....
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