What the CEO wants you to know

I recently read this book, "What the CEO wants you to know", which is authored by Prof Ramcharan. The sub-title of this book is "Using Business Acumen to understand how your company really works". IMHO, the sub-title is what correctly describes the content of the book though the title is the one which is more catchy!

In less than 150 pages, the author has provided time-tested advice to each one operating in the business. What I liked the most about this book is a list of eight questions that one should ask about a company to understand its total business. These eight questions are as follows:

1. What were your company's sales during the last year?
2. Is the company growing? Or is growth flat or declining? Is this growth picture good enough?
3. What is your company's profit margin? Is it growing, declining or flat?
4. How does your margin compare with your competitors? How does it compare wit those of other industries?
5. Do you know your company's inventory velocity? its asset velocity?
6. What is your company's return on assets? (ROA = After-tax margin * Asset Velocity)
7. Is your company's cash generation increasing or decreasing? Why is it going one or the other?
8. Is your company gaining or losing against the competition?

First Pardhi to clear UPSC (India) exam

It was heartening to read a news story about Sajjansingh Chavan, who is first in his pardhi community to clear Union Public Service Commission (UPSC) exam in India. The Pardhi community is (wrongly!) considered to be a criminal tribe though the Criminal Tribe Act was repealed in year 1949. Born in Mumbai's Aarey Milk Colony slum, Sajjansingh is son of Ramsingh who worked hard to make his son earn MTech from IIT Delhi.

My heartiest congratulation to Sajjansingh! And salute to his father, Ramsingh!!

open source software guide for SMEs

Today I came across very good reading on open source software. FLOSSMETRICS/OpenTTT free/libre open source software guide for SMEs has following TOC:

1. What's Free/Libre/Open Source Software?
2. Ten myths about free/libre open source software
3. Basic FLOSS adoption models
4. Finding and selecting software
5. Best practices for FLOSS adoption
6. FLOSS-based business models

You may like to read it too!

Competing with the Best

I just finished reading this book named, Competing with the Best. It is authored by Dr Rajnish Karki. Since he had taught us strategic transformation course in SJM School of Management of IIT Bombay, I found myself familiar with most of the contents of this book.

This book is quite well-written though it is definitely not a light reading. It provides both theoretical discussion as well as case studies. The students of strategic management in Indian context will find this book quite useful.

The Art of the start

After reading the sample chapter of this book in January, in the month of April, I got to read this book entirely. I needed to wait so long because a copy was not available in India. We imported it from USA, which took fairly long time. But it was worthwhile to wait!

While Guy Kawasaki has covered the essence of the book in its first chapter, he has provided more details in subsequent chapters. Some of my takeaways are as follows:

• Positioning boils down to the answer for a simple question, "what do you do?".
• 10/20/30 rule for pitch: 10 slides, 20 minutes and 30-point font.
• Sales prospect pitch should contain following ten slides: title, problem, solution, sales model, technology, demo, competitive analysis, management team and next steps.
• A bootstrappable business model is characterized by low up-front capital requirements, short (<>
• Start as a service business.
• Hire "infected" people.
• A chart showing what you and your competition can and cannot do is useful to show how you are superior to the competition.
• Define deliverables and objectives for partnerships. Put an "out" clause in the deal.
• Top five lead generation methods include: conducting small-scale seminars, giving speeches, getting published, networking in a proactive way and participating in industry organizations.
  

Requesting your contribution in my research work

I am working on a research project with my friend who is a PhD Student at IIT Bombay. This research project aims to evolve a methodology for selection of web services during development of composite applications. As part of this research work, we are conducting a survey to seek opinions from software architect community for identifying the most important parameters in selection of semantic web services. This survey consists of 29 multiple-choice questions grouped into eight categories. Our initial respondents reported that it took them less than 15 minutes to complete this survey.

I have two requests to you:

1. If you work as a software architect then please respond to the survey at http://www.ikenstudio.com/Demoapplications/WebServices/Questionnaire.htm

2. Please pass on this request to your friends, who are also software architects.

By spending at most 15 minutes of your time, you will help us collect the quantitative input required for our research work. We will be more than happy to share the findings of this survey with you, if you wish.

Thanks!!!

Book Review: The Case of the Bonsai Manager

This book written by R Gopalakrishnan is a must-read for any middle-level manager. What I liked the most about this book is that it made me think whether I am slowly becoming a stunted manager! The advise given by the book is quite valuable and convincing.

HBS Case on Wikipedia

Today I came across a Harvard Business School (HBS) case on Wikipedia. The case begins with a story of addition of the "Enterprise 2.0" entry in Wikipedia. It then gives some history of encyclopedias and that of Wikipedia. It explains the transition from Nupedia to Wikipedia before getting into detailed account of Wikipedia in 2006. There are quite a few exhibits that provide background data. Finally it describes some debates and controversies regarding accuracy, expertise, authority, anti-elitism and bureaucracy with a mention of philosophical differences between inclusioninsts and deletionists camps.

This is a well-researched case, worth reading to get a good perspective on Wikipedia.

Trends underlying Enterprise 2.0

I came across this very impressive blog on trends underlying Enterprise 2.0. Prof Andrew McAfee has explained following three trends in quite convincing manner:

1. Simple, free platforms for self-expression
2. Emergent structures, rather than imposed ones
3. Order from chaos
   

Worth reading!

Andrew McAfee

The art of the start

Today I took a "test drive" of Guy Kawasaki's latest book, The art of the Start, by reading its first FREE chapter from his web site. It's interesting! And has prompted me to buy the book! The first chapter titled The Art of Starting, provides five important things that an entrepreneur must accomplish, a mini-chapter on the Art of Internal Entrepreneuring and FAQ.

The list of five important things is as follows:

1. Make meaning - Complete this sentence: If your organization never existed, the world would be worse off because _________________________.
   
2. Make Mantra: Mantra is something short and sweet such as Authentic athletic performance (Nike), Fun family entertainment (Disney), Rewarding everyday moments (Starbucks), Think (IBM), and Winning is everything (Vince Lombardi’s Green Bay Packers).
   
3. Get going: Follow these key principles: Think big, Find a few soulmates, Polarize people, Design different, Use prototypes as market research.
   
4. Define your business model: Here the advice is be specific, keep it simple and copy somebody!
   
5. Weave a MAT (Milestones, Assumptions and Tasks): Seven milestones viz., Prove your concept, Complete design specifications, Finish a prototype, Raise capital, Ship a testable version to customers, Ship the final version to customers and Achieve breakeven. Assumptions about product or service performance metrics, market size, gross margin, sales calls per salesperson, conversion rate of prospects to customers, length of sales cycle, return on investment for the customer, technical support calls per unit shipped, payment cycle for receivables and payables, compensation requirements, prices of parts and supplies and customer return on investment and finally tasks such as renting office space, finding key vendors, setting up accounting and payroll systems, filing legal documents and purchasing insurance policies.

The list of recommendations for internal entrepreneurs is as follows:

1. Put the company first
2. Kill the cash cows
3. Stay under the radar
4. Find a godfather
5. Get a separate building
6. Give hope to the hopeful
7. Anticipate, and then jump on, tectonic shifts
8. Build on what exists
9. Collect and share data
10. Let the vice presidents come to you
11. Dismantle when done
12. Reboot your brain
    

People and Performance

Today I started reading a book titled People and Performance. It is a collection of essays written by Peter F Drucker, on the topic of management. Published by Harvard Business School Press, this book consists of 26 essays , divided into six parts. Let me share some of the points that I noted from this book.

1. Alfred Marshall (1842-1924) added management to the factors of production, land, labor and capital.
2. J.B. Say (1767-1832) coined the word, entrepreneur, who he said, directs resources from less productive into more productive investments and who thereby creates wealth.
3. A Scottish industrialist, Robert Owen (1771-1858), actually became the first manager. In his textile mill in Lanark, Owen, in the 1820s, first tackled the problems of productivity and motivation, of the relationship of worker to work, or worker to enterprise and of worker to management.
4. The problems where the job is to restore or maintain the operation at a preset level, traditionally require decision. However, in reality they are not decisions as there is actually only one right answer. Then there are so-called managerial decisions for situations such as allocation of existing resources, especially people. Here there is no right answer but a range of optimal solutions, each with a definable risk or a balance of risks. Finally there are entrepreneurial decisions where there is no one right answer and not even a range of optima.
5. Management has to do following three tasks:

1. Fulfilling the specific purpose and mission of the institution, whether business enterprise, hospital, or university.
2. making work productive and the worker achieving.
3. managing social impacts and social responsibilities.

And all these tasks are to be done in a balance between the demands of today and the demands of tomorrow.

---------------
I hope to complete this book in next week.

Managing the Professional Service Firm

For last two days, I am reading this book by David Maister. Though I have not yet finished it, I found some of the points covered in this book, quite relevant to my work. Let me share them with you.
------------------------
Almost every professional services firm, has three goals to perform: deliver outstanding client service, provide fulfilling careers and professional satisfaction to its own people and achieve financial success.
------------------------
There are three types of client work: Brains, Grey Hair and Procedural. Brains type of work involves new solutions to new problems. Grey Hair type of work requires some prior experience while Procedural type of work requires efficient delivery of solution. The types of practices needed for these types of work could be termed as Expertise-based Practice, Experience-based Practice and Efficiency-based Practice respectively.
------------------------
The Dupont formula for profitability of industrial companies is as follows:
Profits/Equity = Profit/Sales * Sales/Assets * Assets/Equity = Margin * Productivity * Leverage
The author has similarly derived the profitability formula for professional firms:
Profits/partner = Profits/Fees * Fees/Staff * Staff/Partners = Margin * Productivity * Leverage
The author has further provided the formula for productivity as given below:
Productivity = Fees/Staff = Fees/Hours * Hours/Staff = Value * Utilization
------------------------
We can put all practice development activities in following five categories:

1. Broadcasting - generating leads and inquiries
   
2. Courting - selling and proposing
   
3. Superpleasing - ensuring client delight with current matter
   
4. Nurturing - marketing to existing clients
   
5. Listening - gathering market intelligence

------------------------
Following are the means of listening to clients

• User groups
• Reverse seminars
• Attending client industry meetings
• Market research
• Senior partner visits
• Engagement team debriefings
  
• Systematic client feedback

------------------------
The marketing tactics in descending order of effectiveness are as follows:

1. The first team
1. Seminar (small-scale)
2. Speeches at client industry meetings
3. Articles in client-oriented (trade) press
4. Proprietary research
2. The Second string
1. Community/civic activities
2. Networking with potential referral sources
3. Newsletters
3. Clutching at straws tactics
1. Publicity
2. Brochures
3. Seminars (ballroom scale)
4. Direct mail
5. Cold calls
6. Sponsorship of cultural/sports events
7. Advertising
8. Video brochures

------------------------

Quantifying Busing Agility

While talking about SOA, we routinely make a claim that agile business needs agile IT and SOA is required for having agile IT. But then sometimes the questions comes, how do you determine whether the business is agile or not? I have got one possible answer for this question from the book titled “Enterprise Architecture as Strategy”.

“While there can be many ways, one indicator of agility is a company’s percentage of revenue generated from new products. MIT research on 147 companies found that, from 1998 to 2002, on average, 24% of a company’s sales were from new products introduced in the prior three years. But this percentage varied greatly from company to company - even between those in the same industry. For example, in manufacturing the average was 24%. However, a third of companies achieved 50% of sales from new products. These more-agile companies also had a high percentage of their core business processes digitized.”

I am now SAP Certified Associate Enterprise Architect!

Yesterday I appeared for SAP Certification test for Associate Enterprise Architect and could pass it! The test covered topics such as SAP NetWeaver stack, SAP EAF and Enterprise SOA. There were 80 multiple-choice questions for 3 hours. I could complete the test in half the time. Many questions were tricky and needed careful reading. I found some questions where recommendation was asked for a given scenario while rest of them were more details-oriented.

It's a good feeling to know that I am now SAP Certified Associate Enterprise Architect!

Powered by ScribeFire.

Wikipedia on my laptop!

Want to know some details of something? No problem! I just go to Wikipedia and search for it. Rather in my Firefox browser, I have set up Wikipedia search engine so I can simply search an item on Wikipedia at a single click. During leisure time, I simply search a random term on Wikipedia and get into reading something interesting and useful stuff. However, the problem comes up when I am not connected to internet. But now I have got a solution to this problem too.

I have downloaded Webaroo software on my machine. It allows me to download many web packs, the logical collection of web pages, specially created by Webaroo team. One of these web packs, the largest one is the Wikipedia. Yes, they have seemingly packed whole of Wikipedia in less than 10GB, which can be downloaded on local disk (and mobile!). I have downloaded it on my hard disk and now I can search through it and read required articles, even when I am not connected to internet.

So do I get the same experience of Wikipedia browsing as I get online? Not really! Firstly, the images are not part of this web pack. So I miss on them. Secondly, only Wikipedia articles are downloaded so I can't surf out from Wikipedia to referred external sites. But then does it bother me? Not really! It's alway better to have something to read than not having anything of it! -:)

BTW the Webaroo also allows to download the web sites. One has to provide a link and the depth of web site to be downloaded in terms of number of links. This becomes a little dicey because a typical web site may have many links, in which I am not interested. Nevertheless, this facility also seems to be exciting. I have just downloaded the IASA IT Architect Skills Library. While it downloaded quite a few pages not required by me, I could get all pages needed by me. So now I will not have an excuse of not being connected to internet for not reading Wikipedia and IASA IT Architect Skills Library!

Interesting Videos at MIT World

Today I spent time in watching videos hosted by MIT World. The first one was an interview of Prof Henry Mintzberg by Ricardo Semler (President, Semco S/A). Prof Henry Mintzberg is Cleghorn Professor of Management Studies at McGill University and is considered to be one of the Gurus in the area of Strategy. This session was however related to Prof Mintzberg's latest book titled, Managers Not MBAs. In his interview, Prof Mintzberg made very strong point that MBAs don't make managers. Business schools such as Harvard do teach business skills such as marketing and financial analysis but do not make tomorrow's managers or leaders. He asserted that management is more of a craft and hence can be learn only by being on the job. He talked about the program he is running for practicing managers and how the approach is different there. It was quite interesting to listen to Prof Mintzberg's provocative opinions and also the thoughtful and relevant questions asked by Ricardo Semler.

Second video that I watched was a Q&A with Jack Welch in which questions were asked by Alex D’Arbeloff (Professor of Practice, MIT Sloan School of Management) and some time directly by audience. Jack Welch in his characteristic style answered all questions while offering his wisdom as shared in his book titled "Winning". His answers for questions related to firing of employees, work-life balance and telecommuting were quite interesting and provocative. While I have read Winning and knew most of what Jack Welch said in this session, watching him speaking was indeed a treat!

The third and last video that I saw was a speech of Tim Berners-Lee. He started with talking about emerging technologies and how standards are important for emerging technologies. Later he shared his vision about semantic web and talked about RDF. After his (fast-paced!) speech, Bob Metcalfe (Founder, 3Com) asked him very interesting questions. One of the interesting questions was which browser does Tim use!

There are few more interesting videos that I wish to watch now. But now it's time to go to bed!

MIT CISR Research on IT Portfolios, IT Savvy and Firm Performance

While waiting for my next flight to Houston at Atlanta airport, I read the Research Briefings published by MIT CISR on their research on IT portfolios, IT Savvy and Firm Performance. The points that I found useful for my work, are noted below.

The investment in IT by firms can be viewed using the portfolio concept. MIT CISR has identified four asset classes in which firms make their IT investments. Based on their research, they have also given the breakup of IT investment across these asset classes for an average firm as per data collected in year 2005. The first asset class is Infrastructure, which typically accounts for 46% of total IT investment. Infrastructure systems provide IT capability to support the applications. The second asset class is Transactional, which accounts for 26% of average IT investment. Transactional systems utilize the infrastructure and are used to cut cost or increase throughput for the same cost. The third asset class, Informational accounts for 17% of average IT investment. The Informational systems typically summarizes the transactional systems and provide information for any purpose including to account, control, report, communicate, collaborate or analyze. They make use of both infrastructure and transactional systems. The final asset class, Strategic, accounts for 11% of average IT investment. Like Informational systems, Strategic systems use both infrastructural and transactional systems and are used for gaining competitive advantage or position in market place.

Beyond providing overall average figures, the research briefing also provides the average figures for industries. So if we know these figures for a particular firm, we can compare them with the industry average to gain some useful insights. The research briefing also provides average figures for firms having different business strategies such as cost focused, agility focused and balancing cost and agility.

Another interesting finding from MIT CISR research is that firms with more firm-wide IT savvy have better pay-off associated with all their IT investments. The IT savvy is defined as a set of practices and competencies that add value to each IT dollar invested. The researchers have identified five characteristics of such firms. The first three characteristics are practices related to IT use while the last two are the competencies needed for high IT savvy.

1. More IT use for internal and external communication and work practices.
2. More business transactions digitized.
   
3. More use of Internet and open standards.
   
4. Higher IT skills of both business and IT employees.
5. More senior management and business unit involvement in IT decisions.
   

The research briefing provides one-page questionnaire for IT savvy self-assessment.

Obviously, this research briefing has many more interesting points to know and understand. But right now I am going to stop here because I am picking up only those points that are apparently useful for my work. On top of that, the departure time of my flight is coming nearer. -:) Anyway, if you wish to read the entire research briefing, then you can find it from the web site of MIT CISR.

The Art of Standards Wars

Today I enjoyed reading the article, titled "The Art of Standards Wars". This article was published in Winter 1999 issue of California Management Review. Unlike the famous book titled "The Art of War", this article is quite readable! It contains very pertinent advice to the technology companies, which are involved in the standards wars. It talks about strategies and tactics with quite a few examples from field.

The article begins with a discussion of the historic examples: North vs South in railroad gauges, Edison vs Westinghouse in electric power and RCA vs CBS in color television. Besides telling the stories, this section also draws the learnings from these examples. Then the authors go on describing the types of standards wars. They have identified three types: Rival Evolutions, Rival Revolutions and Revolution vs Evolution. The terms evolution and revolution refers to the backward compatibility (and lack of it, respectively) of new technologies.The authors have then identified seven key assets, ownership of which could indicate strength for waging in the standards war:

1. Control over an installed base of customers - can be used to block cooperative standard setting and also to block rivals from offering compatible products.
2. Intellectual Property Rights (IPR)
3. Ability to innovate
4. First-mover advantages
5. Manufacturing capabilities - cost advantage is important!
6. Strength in complements
7. Reputation and brand name

In next section, the authors have identified two crucial marketplace tactics: preemption and expectations management. There are multiple ways to preempt. One simple way is to be first to market. Secondly, you should aggressive early on to build an installed base of customers. Penetration pricing can be used to build such installed base of customers. For expectations management, vaporware is a classic way: announcing an upcoming product so as to freeze rival's sales. But perhaps the most direct way to manage expectations is by assembling allies and by making grand claims about product's current and future popularity.

Finally, the authors have given advice to both winners and losers. The advice for winners is as follows:

1. Stay on guards and let not rigidity due to early move constrain you for brining in improvements.
2. Offer customers a migration path so that newer versions of products can be brought out without worrying about supporting the older versions.
3. Commoditize complementary products so as to maintain a competitive market.
4. Competing against your own installed base
   
5. Protecting your position by offering ongoing attractive terms to important complementers and by taking steps to avoid being held up by others who claim that your product infringes their patents or copyrights.
   
6. Leveraging your installed base by carefully expanding in adjacent space and/or by expanding geographically.
   
7. Staying a leader by means such as developing proprietary extensions to otherwise open standards and by allowing complementers and even rivals to participating in developing standards under your terms (Thinking of Sun's JSRs!)

The advice for losers for recovery is as follows:

1. Add an adapter or somehow interconnect with a larger network.
2. Resist from offering survival pricing as it signal weakness.
   
3. If all else fails, sue!

Although written for technology companies engaged in standards wars, this article is a good read for anybody interested in knowing how standards get established and in knowing the political side of standards-setting.

To dream the possible dream

Some days back, Ram, my senior colleague at L&T Infotech, had emailed me the Turing Award Speech of Dr Raj Reddy, as published in May'96 issue of Communications of the ACM. It remained on my reading wish-list for these many days and finally today I got chance to read it. And I wondered why didn't I read it before!

The key message of Dr. Reddy's speech is that Artificial Intelligence (AI) is not only a possible dream but rather it has been a reality, which has been demonstrating results for last 40 years.

In this speech, what I liked the most is the answer given to the often-asked question, can AI equal human intelligence? The answer given is, AI can be both more and less than human intelligence. And this answer is illustrated well by two analogies. Firstly, it's just like an electronic book is more and less than a real book. While you can't do all those things such as reading it in a bed, electronic books allow you something that real books can't; e.g., search for words in text, open the right page, change the font size and so on. Similarly, visiting an electronic mall can't give you same experience as that of visiting a real mall, but can give you convenience that real malls can't. The bottom line is AI systems will enhance and not replicate the mental capabilities of human being.

The speech touches upon many points and is a good read for anybody who is generally interested in the area of AI.

Introducing Service Component Architecture (SCA)

David Chappell has written an excellent introduction to SCA in a whitepaper hosted on his site. Let me share my notes on this whitepaper in this blog.

SCA defines an approach for creating components and for describing how these components can work together to develop an application. There are three primary constructs in SCA: component, composite and domain. The components can be combined into a composite and a aggregation of composites makes a domain.

Components are the atoms from which an SCA application is created. It is an instance of an implementation, which is appropriately configured. The implementation may be in Java or in BPEL or in any other programming language. The configuration is expressed as XML in the language called as Service Component Description Language (SCDL).

Each component comes with a set of services, references, properties and sometimes bindings. It implements some business logic, which gets exposed as one or more services. To provide the necessary functionality, it invokes references, which are nothing but services of other components. Components can also make use of properties, the values it can read from SCDL configuration file when it gets instantiated. A binding needs to be specified for a component when it needs to communicate with a non-SCA application or with a component from another domain. the kinds of bindings include web services binding, JMS binding and EJB Session Bean binding.

Composites can be said to be molecules of SCA applications. The SCA Assembly Model specification defines how components can be wired to make up composites. While developers can use the GUI-based tools to wire together the components, ultimately these wirings get expressed as XML in SCDL configuration file.

SCA Policy Framework specification is used to define two categories of policies. Interaction policies can be defined by developers to modify how a component interacts with another components, in terms of security and reliability requirements. The Implementation policies are to be specified to modify how the component behaves locally.

While specifications provide a starting point, what is required for adoption are developer tools and runtime. While almost all vendors except Microsoft are gearing up for providing both developer tools and runtime, we will also have open source alternatives. While Apache Tuscany and Fabric3 from codehaus represent open-source options for runtime, Eclipse SOA Tools Platform (STP) Project is engaged in developing SCA tools for developers.

It's very unlikely that organizations can start using SCA now. I feel SCA will be considered by user organizations for adoption only after ratification of SCA specification by OASIS. Till then, we will need to watch its evolution as it indeed provides a latest state-of-the-art approach for software application development.

What are the business models of US Firms?

What are the business models of US Firms?

This is indeed an interesting question. And the answer has come from MIT. The Social and Economic Explorations of Information Technology (SeeIT) Project at MIT Sloan School of Management, has undertaken research to develop frameworks for analyzing and classifying
business models and to use these frameworks to empirically classify the business
models of substantial numbers of companies. Also the project aims to use the empirical data for formulating and testing hypotheses about the distribution,
performance and evolution of different business models.

So let's get back to the question. But before that let's see the definition given by the MIT researchers. At the broadest level, business model may be defined as how business appropriate value for the products or services they create. More specifically, the business model is defined as a description of the activities that a company performs to generate revenue or other benefits, and the relationships, information and product flows a company has with its customers, suppliers and complementers.

Now comes the taxonomy of business models. The classification scheme consists of four-by-four matrix, giving 16 types of business models. The two axes represent asset types and asset rights. The four asset types include financial, physical, intangible and human resources (HR) (actually the time and knowledge of human resources). The four types of asset rights include Creator, Distributor, Landlord and Broker. Now that gives 16 types though only some of them matter.

When the revenue data of publicly traded US firms over eight years (1997-2004) was analyzed, seven models were found to be common. They included Manufacturer (creator of physical assets), Wholesale/Retail (distributor of physical assets), Financial Landlord, Contractor (landlord of human resources), Physical Landlord, IP Landlord and Financial Broker.

Now while these findings answer the question, there are some more interesting findings from this research. Let me cover that at some later date. Now let me sleep. -:)

Business agility explored

While discussing SOA adoption, we believe that SOA is needed for achieving business agility. However, at the same time, we find our understanding of business agility is limited. We understand that business agility means the ability of business to respond quickly to the ever changing needs of environment in which it operates. It also means how quickly the business can launch new products, enter new markets or respond to new regulations. However, beyond this understanding of business agility, we stop to explore.

An article from the Research Briefing 2006 of MIT Sloan CISR would perhaps help us in understanding more about business agility. In this article, authors Jeanne W Ross and Cynthia M Beatch, have defined agility as the set of possible business initiatives a firm can readily implement leveraging pre-determined competencies with managed cost and risk. Based on their research, the authors have identified seven types of business agility, which they have grouped into three categories. These categories and the types are as given below:

• Business Efficiency: Continuous improvement and Scalability
• Market Responsiveness: Product innovation, Process re-engineering and New business model
• Boundary Spanning: Acquisitions and Partnerships

Business Efficiency agility attempts to identify repetitive processes and extract unnecessary cost and time. The continuous improvement agility is more found with commodity businesses such as consumer product manufacturers. Such organizations are required to implement continuous improvement initiatives for accelerating profitability while reducing business risks. Scalability agility is the ability to rapidly scale up and down in response to changing business volumes. This kind of agility is almost must for companies from the Property and Casualty (P&C) Insurance industry as they would experience extraordinary demand for claim processing after natural disasters. The key organizational characteristics that would help to achieve the Business Efficiency agility include the following:

• Standardized IT environment
• Standardized operations processes, systems and data
• Enterprise-wide process design
• Strong metrics and
  
• Shared services

The speed with which organizations are required to respond to new customer demands and competitive challenges have gained increased importance for market responsiveness agility. Unlike Business Efficiency agility, Market Responsiveness agility disrupts, builds and reuses core capabilities. Interestingly, even if processes must change, companies benefit from developing clearly defined, standard operations processes and related data. Standardized IT Environment also helps in providing the foundation for new processes and interactions. Most notably, matrixed management structure helps companies introducing new capabilities without discarding old capabilities.

Organizations with boundary spanning agility have competencies enabling profitable growth through their acquisitions and partnerships. The key organizational capabilities that enable Boundary Spanning agility include aligned incentives, strong metrics and individual heroics. Interestingly, the key organizational capability for other two categories of agility, the Standardized IT Environment is actually found to be negatively correlated with profitable acquisitions. On the other hand, while the heroic actions of individuals enable boundary spanning agility, it gets highly discouraged for achieving other two categories of agility.

While some organizational characteristics would help for more than one categories of agility, there would involve some trade-offs if an organization attempts to achieve agility in multiple categories.

This kind of understanding of business agility would definitely help in planning for SOA adoption. Let's hope to receive even more understanding about business agility from MIT CISR. We will then be more wise while discussing the need of SOA for achieving business agility.

Checklist for developing a strategy for web services

In his book titled Loosely Coupled, Doug Kaye has offered a checklist for developing a strategy for web services. After going through it, I found it useful as a starting point for making road-map for SOA adoption. This checklist has got more than 80 items grouped into into four categories: Inventory, Project Requirements, Planning and Evangelism. You can find this checklist as a free chapter download (without giving out email address!) from the book web site.

Operatinal Excellence, Product Leadership or Customer Intimacy?

One of my favorite management concepts is the one from a book titled, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market, by Michael Treacy and Fred Wisrsema. This book describes three types of "value discipline":

• Operational Excellence
• Product Leadership
• Customer Intimacy

The Operational Excellence is an approach to the market, dedicated to providing the lowest cost goods and services, while at the same time minimizing problems for the customer. The basic philosophy is about the low or lowest price and hassle-free service. The examples of companies following this value discipline could be Walmart and McDonalds.

The Product Leadership is an approach to the market, dedicated to providing the best possible products from the perspective of the features and benefits offered to the customer. The basic philosophy is about the products that push performance boundaries. The examples could be Intel, Nike and 3M.

Finally, the Customer Intimacy is an approach to the market that involves the selection of one or few high-value customer niches, followed by an obsessive effort at getting to know these customers in detail. The basic philosophy is about delivering what specific customers want. The examples could be Airborne Express and Nordstrom.

It is typically said that a company can excel in at the most two value disciplines but not all. Actually it is advised to focus only on one value discipline. I agree that focus on only one of these value disciplines would help it achieve market leadership.

MIT case study on Air Deccan

Today it was a pleasant surprise for me to see a case study on Air Deccan coming from MIT Sloan Center for Information Systems Research (CISR). Available as a working paper on the web site of CISR, this case study primarily focuses on how Information Technology (IT) has been playing an important role in the business of Air Deccan. Written by Jeffrey L Sampler in Nov 2006, it helps in understanding the big picture of aviation industry, the business model of Air Deccan and the role of IT at Air Deccan.