Why Spend So Much?

I'm helping out with a strategy for an enterprise. They've got less than 10 thousand people, but they've grown through mergers and acquisitions. Which means they've got about 100 different organizations that are scattered around the globe who are driving the 10 billion or so in revenue they earn. With all the fragmentation and overhead redundancy they are spending a ludicrous amount on IT infrastructure. My question is "Why?"

Being a Microsoft veteran and deeply wedded to their stack on many levels doesn't stop me from wondering, why on earth anyone is doing anything in-house, on-premise. More than 10 years ago, I was helping companies move to virtual IT infrastructure management with British Telecom and MCI. Have we learned nothing?

Here are some anecdotes about how obvious it should be to pick better options but how much waste there is in the enterprise.

Cloud Storage
Why is anyone paying for box.net? These guys are parasites taking advantage of the fact that companies are stupid. A typical seat for an enterprise runs about $200/year. For a small user base of around 2k people you'll kick them $500,000. For disk space. When that same company gets a similar amount of per/user storage through their enterprise agreement from Microsoft as part of SkyDrive for free. If this company woke up and moved to Google they would get even bigger storage packed into an enterprise agreement that costs less, and the storage would still be free!  The big boys get that storage is the table stakes so you will buy their apps like email. Just being willing to properly leverage tools they already have would save this company hundreds of thousands of dollars a year for this one thing.

Cloud Print
Moving to cloud printing from Richoh, Xerox, or (gasp?!) Google means a typical company would get printer management basically for free. If you are leasing hundreds of printers, then managing and printing through the cloud is just table stakes. If you are small company, just buy or lease cloud-print enabled printers and you can ditch the local print server completely. One company I advised just ditched a $2 million a year contract. Additionally, by upgrading to cloud-printers they now have 30% more printers for half of what they were spending to capitalize old hardware.

Identity
To keep this example going, the next thing to get off-premise would be identity management. Again, I have to go with Google on this one who has an end-to-end offering that works with all their other products with virtually no configuration. Or get some hosted Microsoft Exchange and you'll get an AD for free just like Google. Again, table stakes to pay for the real products that are going to pay for anyway.

And this list goes on with servers, scanning, accounting, web content, etc. A really interesting and recent example is with hardware like phones. A company I work with spends more than 10 million a year on communication hardware. Everyone gets a mobile phone, laptop, desk phone, and there are projectors, cameras and speaker phones in every conference room. Compare that to a similarly sized company I just advised who lets employees bring their own phones, leases laptops, and has Chromebooks with Chromecast in the conference rooms. They use Office Communicator and Google Hangouts with integrated AD. Everyone is available through managed Google Voice numbers that route dynamically to laptops, conference rooms, and mobile phones. They video conference using the built-in hardware in Chromebooks and anyone can use the big LCDs in the conference rooms via Chromecast. Want to collaborate with someone? Sit at their desk and pull up your desktop on their laptop or just send your desktop to their display virtually. They have more ways to get in touch, easier video conferencing, and most importantly save almost 10 million dollars a year in hardware, cabling, and other infrastructure. (Note to self: I really should look into getting paid a percentage of what I can save a company.)

There are tons of other examples of how using the right tool for the job saves you money. Don't let the niche players sucker you into spending more than you need. If you are an enterprise, you probably have what you need and don't realize it. Need help, just ask.

Enterprise Indexing

Recently I was asked for my opinion on the subject of enterprise indexing. This is usually lumped in as part of the enterprise search space but there are quite good reasons that indexing is being treated more as a first class citizen these days. Since I made time to write some thoughts down, however crudely, I figured I might share it here.

Summary
Enterprise indexing is an aspirational goal but has generally found to not be practical for enterprises of significant size. Focusing on isolated but consistent patterns for indexing individual organizations within the enterprise will generally unlock more value and gain substantively more adoption. I have found the generally accepted approach is to begin with this isolated indexing of individual organizations. This is seen as a first step on the journey to enterprise indexing. We just don't mention it's a never-ending road.

Opinion

Using a search index to surface data and make it widely and easily accessible is an imperative for any business. However, “enterprise indexing” as we typically understand it, proves to be mostly impractical. There are three primary reasons for this impractically.

The first is because the vast majority of corporate data is sensitive by nature. Consider how many business systems actually allow open access across the enterprise. There are many reasons for this information containment, most of which are immovable.

Moving beyond the sensitivity concerns to the second point, it is also understood that the vast majority of corporate data is useless without significant context. Consider how many acronyms, slang words, abbreviations, and specialized definitions exist in the typical organizational vocabulary. Even given the relatively new technical ability for tools to automatically discern the presence of this context does not address the massive effort to create correlations and harmonize these contexts between organizations. For example, an organization 1 that serves the public and is served by another organization 2. They both refer to clients/customers but one means the public and one means employees. This is just a simple example, what if sometimes organization 1 served employees and public? These are real issues that compound the problem of context.

Lastly, organizations operate in silos for practical reasons as well as sensitivity (ie. the need to govern the flow of information). For example, consider how many forecasts and versions of forecasts roll up in the typical capital planning process. Without the ability to understand what data is correct or accurate when the volume is hierarchical and broad, the reliability of the index for answers goes way down and therefore the relevance to users and therefore adoption.

Having expounded on the challenges of doing it for an enterprise doesn't excuse the necessity to do within organizations inside the enterprise. Every organization across an enterprise should utilize consist toolsets and processes for indexing and searching as a first step. Only when this is happening will an enterprise index have the context to provide relevance and security to the information being indexed.  As the patterns to publish and consume matures, information quality can begin to mature which may ultimately allow for these isolated indexes to be aggregated and provide a wider scope.

Because of the complexities, the typical consultative answer is to start by rolling out these "enterprise" index and search tools to one organization at a time and then to bring others on incrementally. While an idea of merit and suitable for smallish enterprises or when the desire for information transparency is actually quite shallow, this typically hits a few harmonizing and integration snags and the effort stalls. For example, failure to provide necessary context makes results unusable to users so adoption stagnates. Or a sensitivity issue is uncovered and the whole thing is scrapped for being too risky. And so on and so forth. If it were a consistent and ongoing part of your enterprise strategy and operational initiatives for information management it can easily thrive. This requires that it be treated as an on-going operational concern that requires sustained investment and effort. Enterprises that don't acknowledge this and embark with their eyes open and clear expectations will inevitably give up. Which is pretty much the current state for most of them. With a little digging you find this is true even for those who say they do it well. The true user adoption and penetration numbers, the actual productivity metrics rarely tell this same story.

Seriously... One Third

There has been much hubbub and ado about the announcement that Ballmer is stepping down from Microsoft. Although I don't understand why it should be a surprise to anyone that a successful giant nearing the age of sixty with billions of dollars would want to stop working and relax on a beach somewhere. But I digress.

The funny thing to me was not all the "Is this the end?" or "Microsoft failed" commentary. That type of silliness will always persist because people are adversarial, petty, and generally not very bright. Instead I laughed every time it became clear that these *ahem* journalists or editors didn't really have a very clear picture or had skipped the non-obvious research.

For example, on TechCrunch there was a call to shakeup the Microsoft board. Which I fully understand and quite frankly agree with. But reasons were just silly. In one case the mention was made that even with the failure of the latest hardware releases, Microsoft should still be okay because they have 1 or two other businesses that produce some revenue. That's funny.

• One third of the worlds telephone traffic is driven by Skype. 
• One half of all server revenue is driven by Windows Server.

Don't get me started on XBox, the game console that sold more units this holiday than any other manufacturer.

Has Microsoft been sitting back pushing out products at a sluggish pace? Certainly. Are they behind on the innovation curve? Absolutely. But just because revenue for consumer devices in the midst of bubble has outstripped corporate spending, don't discount the ability of corporate spending to catch up. Don't for a minute ignore that holding those patents that bring in big bucks every time an Android sells is negligible. If you want to make a case of demise, it has to be more than top-line revenue. It's about explaining motivations, potential and positioning.

Does Microsoft have this? Who knows. I'm hardly a proponent and ardently a critic of their bloated, boorish, and bland offerings these days. I just get agitated when I see one-sided conversations, and shallow analysis masquerading as some deep insight.

Data About Food

I've just spent the last many days reviewing, testing, quantifying, validating, and otherwise taking the measure of the various data sources that exist for and about...food.

The USDA gives great nutrition data and a sampling of volume-metric data for a pretty wide swath. But then you have manufacturers and brands and alternative nutritional information. And you have categorization and ingredient discrepancies, all manner of portioning, form, and packaging options. And so on, and so on.

Not surprising some of the best food data comes from the online shopping hubs and support establishments who want to make it easy for you to buy through their channels. After all, who shops online without looking at pictures, even if it is just for a bottle of ketchup or can of soup?

As typically arises in these scenarios, the categorization schemes they each favor isn't particularly overlapping or supportive. They certainly aren't designed to co-exist as they have a vested interest in keeping you in their garden of data. So you go with Option A with 10k foods or Option B with a partially overlapping 50k of foods. Maybe Option A is better organized with better data and easier access. Option B might be much more expensive or just have no reliable categorization scheme. Choices, choices.

In an enterprise we would call this a Master Data Management problem. In the real-world, it's just business. Good thing I know a little about addressing these MDM issues in really big enterprises. How to rationalize 10's of thousands of foods ain't no thing if you've got the right patterns and the discipline to do a little wrangling.  I just needed to wrestle this foundation to the bedrock so that now I can take on much more interesting concerns. Like merging some hardcore analytics, massive datasets, and some truly sick algorithms all towards helping people get and stay healthy.

Let me finish this glass of scotch and I'll tell you more about the coolest new stuff we are working on in connected health...

Change and Data

It takes me a little by surprise how often I talk with people who are trying to make a change but who have no idea how to go about accomplishing it. Invariably, they aren't nearly as successful as they would like and I blame it squarely on their lack of deliberation.

If you want to improve something, you first need to know what the current situation is like. Let's say you make tires and you think you'd like to make 5 more tires per week. If you are only making 10 tires a week, then expecting to make 5 more might be totally unrealistic. Similarly, if you are making 5000 per week, why would adding 5 be such a challenge? Figuring out the current situation requires some kind of measurement. You have to count something; you have to quantify some aspect of what you want to change.

Believe it or not, figuring out what to measure is the hardest part of the whole improvement process. If you serve meals in a restaurant, it is useful to know how many people you served. But it is more helpful for efficiency to know how long it took you to serve them. If it is satisfaction you are after, measuring how long people had to wait for a table is more influential than just knowing how many people waited.

Similarly, it isn't always just about measuring one thing. It is about measuring the relationship between the many things that make up the process or behavior you are trying to change. If you don't start to beak out why the measurements are turning out the way they are, you won't necessarily be able to extrapolate what any particular change might do to the measurements in the future.

If you want to change something, start by measuring. Once you know what to measure, ask why the measurements have turned out that way. Only then can you start to theorize about the impact of a potential change. Often it is while figuring out the why that you come across new ideas for how to change the what as well. As you propose and then implement changes, having a process in place to measure will give you the feedback you need to see if your changes are having the desired effect. This feedback loop is how change become more than just a one-time event. Adding this consistent loop of measuring, analyzing, hypothesizing, changing, and then repeating is what drives effective change. Without the measuring you don't know where you are starting from and therefore you'll probably not realize when you will arrive or recognize that you'll never arrive. You'll be one of those people always busy with activity but not making any progress.

Embrace The Pain

There are some situations you find yourself in that simply have no good resolution. Circumstances sometimes make it that you are choosing the lesser of two evils. Yes, this is a common cliche but what isn't common is how you can sometimes use these situations to your ultimate advantage.  Let me explain.

Getting to pain as quickly as possible is a motivator for success.

Driving adoption or gaining mind-share is always a challenge. This is because we aren't always aware of our baggage and assumptions. We get complacent and just accept that things are going to continue forward in whatever way they have been in the past. This stops your contributors, decision-makers or constituents from taking action or seeing a way forward. They see the unknowns in the future as risky and uncomfortable compared to the situation they have come to know, regardless of the discomfort or short-comings of that circumstance.

To drive activity or reaction, you need a pain to shock the system. You need people to be internally motivated to confront their fear head-on. Embracing the need for true change must come from within. While you can try and force behavior, you can't force someone to accept your perspective. You can, however, influence them to evaluate their own perspectives which can have the similar result of allowing someone to embrace the need for change.

We can leverage this need to make up our own minds as a key to influence. Allowing others to feel the true weight of their own choices is often enough to help them see that a change is necessary. If you realize your people are in this situation, you can help them make up their minds quicker by allowing the short-comings and discomfort of their situation come to light. Which is why we see that getting to pain quickly is a great motivator. This is a corollary to the tenet that if it is possible to fail, fail as fast as possible.

Some ways you can help people get to pain is by defining metrics you actively track, making people write down issues instead of just verbally complain, and keeping your mouth shut when they take risks or make bad decisions against your advice.

Some things to keep in mind are not saying I told you so when things fall apart, staying ambiguously neutral when they try and drag you into their mess, and make sure the lines of accountability and expectations for communication are very clear.

Amazon

In case you weren't paying attention:

• Amazon went from 3 categories of items it sold in 1997 to 16 categories in 2010.
• Amazon's market share represents one-third of US e-commerce sales.
• It only took 120 days for Amazon to go from no presence to the largest online seller of music.

You're welcome.