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Cloud Computing

Dunes, Oceano (Edward Weston, 1936)

Leading by Example: Technology Companies Help Save Scarce Water Resources

By | Cloud Computing, Internet of Things | One Comment

This cup of steamy coffee you are sipping from right now while reading this article—how much water do you think was used to make it? You probably guessed it took a more than just 8 ounces of water, but I doubt you got even close to the actual number.  According to Trucost, a company that provides sustainability data, it takes some 135 liters of water to make one cup of coffee (since we just switched to metric units, one 8-oz cup is 0.25 of a liter).  Most of this water was used to grow the coffee beans and soak them during processing.

And it’s not only food processing that uses vast quantities of water. By Trucost’s calculations, about 3,900 liters of water are consumed during the manufacturing of a single t-shirt. And nearly 13 tons of water are required to manufacture a single smartphone, with nearly half of it due to pollution and cleanup during manufacturing and assembly. Read More

The persistence of memory

The Return of the Real-Time Enterprise

By | Cloud Computing, Internet of Things | No Comments

Real Time?

The term real time was originally used to imply a predictable and guaranteed response time to computer-generated or observed events. For example, a real-time process control system is architected to respond to readings from sensors and switches within a predefined latency in order to keep a process going, respond to alarms, and so forth. In other words, real time doesn’t necessarily mean “extremely fast”; it merely means “fast enough” for the purpose of the process it controls. Of course, in industrial applications that may mean within a few milliseconds, but the point is that real-time systems are optimized for timing predictability, whether measured in milliseconds or minutes.

Somehow, over the last couple of decades, real time became to mean “very fast.” Until recently, we didn’t think of Internet connectivity and cloud-based apps as being capable of very fast response time. We certainly know from everyday experience that response time isn’t consistent and definitely not predictable.

But the improved throughput of wired and wireless IP networks and abundance of Internet resources is improving both speed and response-time predictability of cloud-based applications.

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Product Innovation Congress

By | Cloud Computing, IT Strategy, M2M, PLM, Strategy | No Comments

Product Innovation Congress 2014, San Diego

Another very successful Product Innovation (PI) Congress was held last week in San Diego. Don’t let the very slow trickle of tweets from the event mislead you: the organizers put together a very full agenda that kept the delegates engaged throughout the two-day conference. Plus, I don’t think that engineers are very much into twitting anyway.

Instead of a detailed chronology of the event, which you can get from reviewing the agenda, I chose to highlight some key points and use them to offer commentary and observations about the state of our industry.

PLM Market Activity

There appears to be much activity in selecting, replacing and upgrading PLM software. Some were first time PLM buyers, but there were a surprising number of companies expressing dissatisfaction with the exiting solution and seeking a “better” PLM system. I did not conduct a structured survey, but anecdotally it appears that a good number of those in search of a PLM replacement are users of ENOVIA SmarTeam and ENOVIA MatrixOne.

My observations:

The quest search for a “better” PLM system will continue to drive activity and put pressure on PLM vendors to deliver greater value in enhanced functionality, lower cost, faster deployment, and new delivery and ownership models. The move of reluctant PLM vendors such as Oracle Agile to offer a cloud delivery model is but one recent example and I except other PLM vendors are in the process of following suit. This dynamic keeps the door open for vendors such as Aras PLM that continues to challenge the hegemony of the incumbents.

That being said, buyers should realize that the PLM software itself isn’t a substitute or remedy for flawed and suboptimal product development processes. For each dissatisfied PLM user company you will find many others who are highly successful and are able reap the full potential of the very same PLM software. It isn’t the software. It’s you. Don’t blame the vendor.

PLM Implementation

Most of the conference presentations made by PLM practitioners from product companies were interesting, but more often than not the insight and recommendations offered by the speakers were what one might consider General Project Management 101; not even PLM 101.

My observations:

The growing complexity of product development processes and the commensurate expectations from PLM software are challenging product organizations. The recent interest in incorporating the embedded control software development process under the PLM umbrella further complicates the issue.

We need to elevate our view of PLM from a product data management (PDM) and business process automation software to a portfolio of processes, best practices and tools that rich create context for optimizing complex multidisciplinary product related decisions.

Data Migration

PLM and CAD data migration is typically an unpleasant part of engineering software replacement and major upgrades. Judging by the number of delegates interested in the topic, the issue of data interoperability and backward compatibility continues to plague the space.

My observations:

The ability to retain and access product data is critical. However, product organizations are challenged to maintain data compatibility and interoperability across engineering and business tools with negative consequences in many business critical activities, from data retention for compliance to design reuse.

Application Lifecycle Management (ALM)

Chairing the Application Lifecycle Management (ALM) track, I spent much time in ALM discussions. While the density of embedded software in a broad range of products in most industries continues to increase, software development tools and practices have not kept up with the need to handle with increasingly stringent time, budget and quality goals.

A panel discussion with Ford, Hologic, BigLever and IBM (Rational) seemed to gravitate towards the realization that engineering methods and practices, coupled with organizational culture, keep ALM as a separate engineering discipline with its dedicated task specific tools. The panelists also explored, albeit briefly, the notion of a federated software development process environment and ALM functionality delivered as a collection of services.

My observations:

We are likely to continue the PLM vs. ALM debate, partly because of the highly visible position PTC is taking with its Integrity software. But I do not expect to see any significant change in the way organizations use contemporary ALM tools to coordinate and synchronize the software, hardware and mechanical development cycles.

My current research interest is in using product line engineering (PLE) as an alternate way to decompose product architecture and realize a federated software development process environment that maximizes the utility of  task-specific software development tools.

Internet of Things (IoT)

As in many conferences today there was the obligatory Internet of Things (IoT) keynote address. I suspect I am in the minority here, but I found the “The Silent Intelligence: The Internet of Things” presentation to be plagued by the all-too-common trivial use cases, generalizations and inaccuracies, and insufficient real-world reality checks.

On the other hand, the review of the Masdar City project: “Smart Cities in Advancing Global Renewable Developments” was fascinating.

 

See you next year in Boston.

 

Boards Not Thrilled With CIOs

By | Cloud Computing, IT Strategy, Mobile Technology, Social, Strategy | No Comments

According to a survey conducted by the National Association of Corporate Directors (NACD) and reported by CIO Magazine, many board members are dissatisfied with quality of information they get from their CIOs. Directors want the CIO to give them more and better information, especially about IT risk.

According to the report, only 13% of board directors are satisfied with IT briefings. About 35% said they were unsatisfied with the quality of technical information and 27% were unsatisfied with its quality.

This survey highlights that despite so many surveys, discussions and articles, there is often a discrepancy between the business perspective of the board and the role it sees IT is serving in the organization. IT management needs to demonstrate deep understanding of the business and define its role in terms that go beyond keeping the servers humming and provisioning software and mobile devices. As enterprises explore new technologies and business opportunities in cloud computing, social media and big data analytics, IT leadership has an excellent opportunity to deliver significant new business value.

The burden does not lie exclusively on the shoulders of the CIO. Corporate boards must include the CIO in devising a robust strategy and implementation roadmap of these new technologies. The potential complexity and the nascent nature of many of the new overly-hyped technologies require that the CIO organization is involved throughout in order to reduce both technology and business risks.

As the report shows, the main chasm between the board and the CIO is exactly in these areas: technology and risk. It’s time the two organizations start working together.

 

How To Win Without Differentiation

By | Cloud Computing, IT Strategy, Mobile Technology, Strategy | No Comments

All companies are trying to differentiate their products and services from those of the competition. They believe that strong differentiation is a necessary part of the business strategy to create and grow a market, because, the logic goes, if their products or services are just like the competitors’, why would the customer buy from them? How will they attract and retain buyers?

I am frequently asked to provide market assessments, conduct SWOT analyses and help companies formulate a go-to-market strategy that would differentiate their product or service offering from the competitors and tell it in a credible and compelling way. The problem is that many companies do more or less the same thing, the same way, in the same market, and that they are unable to credibly differentiate their offerings from other companies.

In an HBR article titled You Can Win Without Differentiation, Freek Vermeulen discusses the question of differentiation. Vermeulen argues that when companies are unable to differentiate their offerings effectively, the only option they have is to drop prices and hope to make up some of the loss by increased sales volume, a tactic that is easy for the competition to match. While both consumers and suppliers are very sensitive to pricing, a differentiation and competitiveness strategy based on price alone is fragile, especially when there is ample supply of competitors and substitutes. In this kind of zero-sum competitive game, the ultimate winner of price wars is the consumer.

I believe there are other options for product companies to consider before lowering prices and engage in fierce price competition. For instance, product companies should certainly compete on quality, warranty coverage, delivery terms and service levels. In this type of differentiation, the buyer can make a reasonable comparison between features, functionality, warranty terms and pricing.

However, if you sell services rather than products, this is not as straightforward. Vermeulen uses the example of management consulting firms, such as McKinsey and Accenture, where there is no simple and obvious way to articulate and differentiate their capabilities and make a succinct, credible and reliable connection between capabilities and business outcome. Furthermore, the skills, capabilities and services these firms sell are common commodities across the industry and therefore do not form an effective barrier to entry.

DifferentiationWhen value differentiation is too vague and difficult to demonstrate, price competitiveness does not work. Potential buyers seek other ways to drive their decisions, and, as Vermeulen points out, they rely on other factors, such as the seller’s brand, status in industry, and prior relationships. In other words, the buyer switches from assessing and comparing features and costs to differentiating based on the brand’s credibility and trustworthiness.

This is where I see many companies, especially software and professional services vendors, struggle. It appears to be especially painful for companies transitioning from providing a general set of enterprise IT tools and services and wanting to ride the momentum of new technologies such as cloud computing, big data and mobility, and apply them task-specific functions in vertical industries.

Establishing credibility in vertical markets can be difficult. The buyer’s functional leadership and the employees need to have trust in the vendor to have deep understanding of their process and appreciation of the subtleties of day to day operation.

So here are some suggestions:
Don’t

  • Don’t assume that your experience and tools can be easily transformed from one business segment to another. Some do; most don’t. Take the time to develop a detailed credible business case that you can deliver.
  • Don’t oversell technical wizardry. Buyers of enterprise software and services consider your product roadmap and long-term commitment to the space as much as they do to your product features and engineering skills.
  • Don’t try to prove industry knowledge and demonstrate empathy by highlighting the industry’s poor performance which you are going to turn around over night. Your audience already knows this all too well. Focus on the solutions.

Do

  • Develop deep expertise and position in your target industries and business functions. Not through “desk research” and generic stories, but rather by demonstrating successful implementations, publicizing customer case studies that are real, specific and credible, and becoming an industry insider.
  • Focus on establishing and nurturing long-term strategic relationships with your key customers.
  • Seek partnerships with systems integrators and service providers, especially in industries that are complex and narrowly focused, as these often have a culture that is difficult for outsiders to penetrate.

One last parting thought. The strategy you use to define and demonstrate your company’s differentiation to potential buyers is not necessarily the one you discuss with Wall Street and industry analysts.  This is a subject for a future blog post. In the interim, you can review another HBR article by Todd Zenger: Strategy: The Uniqueness Challenge.

Further Reading: