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Risk Takers & Naysayers! or Industry Leaders & Followers!



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June 29, 2010 5:01 pm

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Technology as a Commodity Utility Keeping the Lights on OR
Technology as Innovation Driving Business Growth

Two articles from last week have caught my attention as well as the continued pressure in corporate objectives to use technology to drive business growth and be an enabler, differentiator in the market and not just a utility running the business like electricity as a commodity. It catches my attention both from a marketing perspective and the role of technology to drive business growth.

The first article came from InformationWeek, “Why IT Must Get Back Into Growth Mode” (http://bit.ly/avHbr1) and the second one from PCMag.com, “Update: Intuit Sites Outage Strands Thousands of SMBs” (http://bit.ly/dsxnQR).

The first is interesting to think about from a marketing perspective as a maketeer, Royal Caribbean needs to use technology to run analytics against it’s customers to encourage spending while on holiday cruising and must do that every seven days with brand new customers in seven day cycles. Definitely not possible to perform manually. The second article illustrates another interesting marketing perspective in driving to be an innovator in embracing new technology in 2008 and being an early market technology adopter recognizing time to market is key in enjoying the spoils that come in driving and growing business with technology. However, there are risks to be taken and what is acceptable risk?

Businesses are at a tipping point with their use of technology and IT is part of that business. It’s not IT AND Business, it’s the business and how it grows and how it chooses to use technology to be a competitive differentiator faster than the market. These articles point out key success and risk factors.

Market Driven
Those who are In Tune with your customers and market dynamics with the agility to act upon that knowledge are leaders in their industry. Leveraging technology to put that knowledge to use knowing how to interact with them is a key to quality of service and customer loyalty. Both businesses created a personal level of service, one used analytics and the other embraced an open, connected delivery platform for services from any device creating an enjoyable customer experience.

Time to Market
The spoils of victory go to he who is first to market. Leveraging new technology in a new way leads to true innovation that changes how markets function. Access to vast amounts of data for analytical processing, the Cloud and as-a-Service models are new technology platforms that alter the customer experience and how a customer does business altering the expectations of those industries. Those who are agile enough to be first to market, lead their industries while the others “keep up” as more of a utility just running the business.

Risk
Being first to market also means taking some risks. Calculated risks continue to be rewarded, short-cuts end in bubble bursts (dot com bust). It’s not that you failed to deliver service, it’s how you respond, what you learn and put into place after a service failure that counts.

As I conclude this entry, I read a lot of commentary from the “cloud naysayers” and lots of threats from customers to leave Intuit. Shame on them, threats are not action. In the end it is still their responsibility to define the level of service they expect driving the management and calculated risk organizations like Intuit take in being agile enough to leverage a new technology to change how business is transacted and leading their industry.

Neither the Cloud or Intuit failed. Technology will fail, it’s how you react that determines failure. That reaction carries over to the customers who made the threats to leave and may now over react with cost prohibitive service level expectations. Technology brings both risk and opportunity, those who best balance control and agility lead their industries.

Technology powered Business –> Business driven Technology

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2 Comments

  1. By:FlyingGuy

    and so does the credibility of the vendor.

    I believe you are categorizing me as a nay-sayer and re loosely referring to some of my other posts. If you read my post, “Cloud’s and your business data” then you ignored what I said and if you didn’t and you really want to know my position on things then I suggest you read it.

    The wholly grail of 5 nines will never be achieved by cloud vendors and that is not their fault, it is the nature of the beast. A cloud vendors customer goes through many layers before the first data request hits their systems and failure can occur at any of those points and the fast majority of those layers is out of their control as well as their customers.

    That being said there are a lot of things in their control and those are the things that they need to have their feet held to the fire about. Now one can require an SLA that promises the moon AND get it but can the vendor fallow through on that SLA or even come close and how would you go about proving that? Can a customer small or large tell the vendor, “Ok lets see your disaster recovery plan and your backup plan, schedule and method. “?

    The problem with ALL time rental systems is that your core data is elsewhere and so is the application that makes sense of that data. The problem is further compounded because it is not like they are aggregating data for presentation from other sources like companies that provide reporting on investment portfolios that gather data from your various brokerages and then present it to you in a manner that makes sense.

    People who say “Gosh, I don’t know, this cloud thing…” are simply ignorant and need to be educated and told how to make informed choices about that they do and do not give to an outside vendor be it Sales Force or any other company.

    What the vendors that sell this service need to do is provide real information and agreements that let businesses know exactly what they can’t and more importantly what they don’t get and those are SLA’s, TOS’s etc.

    Just make sure that you look for the catch all those that say in words to the effect, “We reserve the right to change this agreement at anytime.”

    Remember “Unlimited” means something very different to marketing guys and gals then it does to the great unwashed masses.

    • By:mhudnall

      In my previous post referencing the same article regarding the Intuit failure, http://bit.ly/bp9YUy regarding SLAs, I absolutely agree it is the SLA that governs the service. When you move something to an outside service provider, you are still responsible for the service and need to govern that with the SLA.

      In my post that followed this one, Risky Business in the Cloud, http://bit.ly/9Va0b9 , I further discuss the management of the service provider.

      The net of it is that the Cloud and Virtualization technologies bring great opportunity to change a service or how a business delivers goods to market if the technologists apply a little imagination in developing clever applications. Both can aid in making the organization more efficient, but more importantly can drive business growth when applied correctly. Whenever you extend your organization and leverage outside parties, you must govern that supply chain with the appropriate expectations so as not to create a cost prohibitive service, but one that insures delivery.

      There will always be a technology failure, define the response and set the expectation in alignment with the criticality of the service. Those who write contracts that they cannot deliver upon will eventually bust and disappear ala the 2000 dotcom bust of the Cloud predecessor.

      Thanks for the dialog! michele

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