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Library of Congress Cataloging-in-Publication Data:
Simon, Phil.
The next wave of technologies : opportunities in chaos / Phil Simon. p. cm.
Includes bibliographical references and index.
eISBN : 978-0-470-61308-5
1. Information technology-Management. 2. Technological innovation-Management. 3. Computer systems-Management. 4. Cloud computing. I. Title.
HD30.2.S577 2010
004.068-dc22
2009046294
A primary lesson of history is that periodically, and often at the most inconvenient times, society needs to make a sharp break with old habits and deliberately learn new ways of behaving.
Nicholas Imparato and Oren Harari, Jumping the Curve
In his May 2003 Harvard Business Review article, “Why IT Doesn't Matter,” editor-at-large Nicholas Carr proclaimed that information systems had become a commodity. You could almost hear the teeth of chief information officers (CIOs) grinding en masse as they read Carr's assertion that “the most lavish spenders on IT rarely post the best results.” Carr went on to quote Oracle founder Larry Ellison, who in a rare moment of circumspection admitted that “most companies spend too much [on information technology] and get very little return.”
That same year Nucleus Research, a small Massachusetts market research firm, contacted 66 reference customers of Siebel Systems to discover the true business benefits of Customer Relationship Management (CRM) software. These customers had been quoted in various Siebel marketing testimonials as satisfied reference customers. But when Nucleus contacted them, 61 percent admitted that they had yet to realize any significant return on investment from CRM.
Fast forward to 2009, and you would think that the glory days of information technology would be a distant memory. But think again. Corporate boards continue to pressure executive teams to drive revenues and contain costs. Executives are up at night dreaming of new ways to innovate. Business people are being asked to do more with less. And IT people know in their gut that there are better ways of working and that there are emerging technologies that can help.
In my work as a management consultant for Global 2000 firms, I listen to business and IT executives wring their hands and bemoan shrinking budgets and increased expectations. Here are some examples that might sound familiar:
Each of these is a true story. And each story reflects the desperation for time and knowledge that's confronting managers across geographies, industries, and corporate cultures. We not only have to do more with less. We have to find the time to innovate new ways of doing more with less. The paradox is almost palpable.
It turns out that rumors of IT's demise might have been greatly exaggerated. Nicholas Carr's argument, with its focus on commodity hardware and keep-the-lights-on infrastructure, was that IT was just table stakes. As soon as one company adopted a new technology, its competitors would follow suit, in effect continuing an environment of functional parity. Cynical? By half. Subversive? Perhaps. Accurate? It depends.
In the preface to his subsequent book, Does IT Matter? Carr does nod his head to the fact that how technology is actually used does make a difference. “Indeed,” he says, “as the strategic value of the technology fades, the skill with which it is used on a day-to-day basis may well become even more important to a company's success.” Carr is in fact making what should have been his central point: that while IT in a vacuum is indeed inconsequential, it's the application of the technology that provides the edge.
True, sometimes the best CRM is a friendly greeting when the shopper enters the store. But sometimes it's the fact that the coupons she carries in her recyclable tote are the result of her propensity to buy a certain set of high-margin products and fill her basket with profitable merchandise mix. Maybe we sent her a link to download those coupons via social media, and maybe we keep information about her preferences and purchase behaviors as part of our business intelligence program. The essence of our customer retention strategy is to get the customer back into the store (or to the casino, the branch, the hotel, the airplane, the web site, the catalog, or the agent's office). We don't need technology to greet our customer with a warm hello. But we do need it to beat our competitors to the punch.
Indeed, any strategic value from IT will blossom as it's used to enable unique and innovative business initiatives. In a rebuttal to Carr's article in the Harvard Business Review, authors John Seely Brown and John Hagel III wrote, “In short, many executives have started to view IT as a commodity because they have not thought aggressively enough about how IT can bring about new business practices. The differentiation is not in IT itself but in the new practices it enables.”
To that end, Phil Simon and his contributors have written a timely and important book. The Next Wave in Technologies: Opportunities in Chaos is a veritable toolbox of the solutions our companies will be using to enable the next set of competitive and strategic business practices.
The voices in these pages are no less authoritative than their messages. Indeed, Phil has assembled a virtual panel of the best experts on the hottest IT topics, and they weigh in with practical, real-world advice about adoption and execution. Experts like Dalton Cervo (Chapter 12), established in my field of data integration and business intelligence, is an old friend. And I'm a recent convert to Michael Krigsman's blog and a fan of his writing on project failures (Chapter 19). Because of Phil, though, there are now some fresh points of view in my field of vision, like Heather Meeker's trenchant take on open source (Chapter 5) and Jay Miletsky's fresh perspective on the piping-hot topic of social media (Chapter 10).
They'll take your hand and guide you toward a fuller understanding their technical specialties, often with a refreshing and eminently readable irreverence. (Phil's own sections are ripe with fun references, and I love the title of one Amy Wohl section, “A Cloud of One's Own.”) Ultimately, Phil and his contributors will help you make the pitch, secure the commitment, and move forward with a solution that's not only useful but transcends the buzzwords, the noise, and yes, the chaos to drive business value.
As with local branch banking, insurance agents, the family farm, and doctors who make house calls (aka home health care), IT is being taken seriously once again. Maybe, just maybe, it matters after all.
Jill Dyche
October 2009
Any sufficiently advanced technology is indistinguishable from magic.
Arthur C. Clarke (1917-2008), Profiles of the Future, 1961 (Clarke's third law)
In February 2009, I published my first book, Why New Systems Fail. For a variety of reasons, I felt that the time was right for the book. Having worked on so many poorly conceived and terribly run projects in my career, it was painfully clear to me that there was something fundamentally wrong with most organizations' attempts to implement enterprise systems. My 11 years working on different information technology (IT) projects in different countries and industries almost invariably resulted in the same outcome each time: some type of failure.
However, in a way the title was a bit of a misnomer. The book referenced systems that were, for the most part, actually very mature; they were only new to the organizations implementing them. Why New Systems Fail addressed systems, software vendors, consultancies, and implementation methodologies that have, in large part, been in existence for over 20 years. Indeed, nascent Enterprise Resource Planning (ERP) organizations such as SAP and PeopleSoft were founded in 1972 and 1987, respectively, although Gartner Research is credited with introducing the term ERP in 1990.
Twenty years is an eternity in the world of technology. Still, many enterprise system implementations failed. I found this vexing. There are many attributes conducive to success: generous IT budgets, relatively mature applications, consulting firms with significant expertise, and thousands of previous projects to serve as examples and cautionary tales.
Against this backdrop, I could no longer claim that I just had a string of bad luck as a consultant. Something was broken, and I wanted to see if I could write a jargon-free, generally well-received book demystifying a process plagued by a 60 percent failure rate. While the first edition of the book was certainly not perfect, I believe that I succeeded in that regard.
Reviews for the book were largely positive. On his well-regarded Deal Architect blog,1 Vinnie Mirchandani agreed with the general tenets of the book but asked a number of completely valid questions: “Where are the newer issues with mobile interfaces? Where are RSS feeds? How will clouds affect ERP infrastructure planning?”
Admittedly, Why New Systems Fail largely ignored these newer technologies. Without being defensive, the book focused for the most part on enterprise systems. I told Vinnie that it is hard to imagine a book of any reasonable length that addresses every conceivable type of technology.
I started thinking about why organizations have been so reluctant to embrace these technologies. (I had a decent amount of time, as consulting work in 2009 had dropped off.) Yes, many organizations had reduced their IT budgets and head counts as a result of the Great Recession. Still, I suspected that something else was going on. I didn't see the economy as the major factor in explaining why so many organizations have dragged their feet on clearly beneficial technologies. Many of these technologies were readily available and relatively mature well before the meltdown.
While exceptions abound, the answer was that the burnt hand teaches best. In other words, many organizations' attempts to implement and utilize new technologies have failed—and spectacularly at that. As a result, they are hesitant to adopt new ones—even when the benefits of these new technologies are so significant.
Technologies such as software as a service (SaaS), social networking, open source (OS), and cloud computing are relatively recent phenomena. Most suffer from a dearth of implementation methodologies and (successful) examples from which to learn. A high failure rate on these types of projects can be understood, if not expected, at least for the near future. Against this backdrop, what does this say about the ability of most organizations to successfully implement newer, much less understood technologies? In many ways, these technologies are the antitheses of the ones discussed in Why New Systems Fail. It shouldn't be surprising that many organizations aren't exactly waiting in line to fall on their faces.
I started thinking about the need for a book that would address the essentials, best practices, and pitfalls of these exciting new technologies. Wouldn't a book like this be beneficial to C-level executives unsure about what to do and how to do it? A busy chief information officer (CIO) could read this book and walk away with a much deeper, practical understanding of these new concepts. That same CIO might walk into work the next day and ask, “Why aren't we doing this?”
It sounded great, but I could not write such a book alone—and I consider myself a pretty smart guy. (With age comes wisdom, I suppose.) It would take me at least a solid year to research each one of these topics and write a succinct and penetrating chapter on each. Writing for C-level executives, this wouldn't be an easy task. Technology changes so quickly these days that what I wrote one day would, in all likelihood, be very different in a few years.
Time wasn't the only factor, though. I put myself in the shoes of a CIO hesitant about using OS applications, for instance. It was entirely reasonable for that CIO to want to know my OS credentials before reading what I had to write, much less trusting my recommendations and making key business decisions based on them. If I were going to do this book the right way, I would need help and lots of it. Why not surround myself with really smart people?
I started contacting friends who had expertise in these very technologies. Not all of my friends work in the technology world, so I started networking online. God bless LinkedIn. Most people thought that I had a good idea for a book and signed on, some within a few minutes. More than a few were willing to contribute, but they had other commitments and my time frame was a deal breaker. By June 2009, though, I realized that this book was going to become a reality.
My primary challenge on this book would be much different than that of its predecessor—mainly writing thousands of words and organizing them in a logical fashion. Prolific author Bob Charette (who wrote Chapter 15 on enterprise risk management) told me that survey books like this tended to suffer from a number of problems. (Always stubborn, I was convinced that I could avoid or at least minimize them.) First, the messages and writing styles of each contributor are usually very different. I have taken great pains to ensure that there is a good deal of flow and consistency throughout the book, even though the contributors' backgrounds, native languages, and areas of expertise are hardly identical.
Second, many compilation books lack integration. Make no mistake here: Because many of the book's technologies are completely independent of one other, each chapter certainly does not overlap with all of the others. By the same token, however, themes such as IT management, data integrity, enterprise architecture, and the like are not confined to any one chapter; they permeate the book. As such, the book's chapters are anything but islands.
More than content overlap, however, I felt the need to ensure a generally consistent message throughout the book. In selecting the contributors for this project, I ensured that everyone was on the same page with regard to the book's overall philosophy. Everyone understood that this is a management book first and an IT book second. Cool technology is fine and dandy, but I did not want chapters rife with unrealistic, pie-in-the-sky recommendations. The material had to be rooted in the day-to-day realities of the current business world. This book is a practitioner's guide, not an academic text.
Third, many survey books leave readers wondering, “Now what do I do?” In that vein, the end of each chapter provides “next steps.” These are key points and questions designed to help the reader ask the right questions within the organization.
Finally, this book knows its limitations. It does not aim to be a how-to guide for implementing any specific technology, much less every one. Rather, because each subject is written by a very knowledgeable practitioner, the book distills the best practices and identifies the pitfalls and land mines of each topic. Those looking for more detail can pick up more comprehensive texts, often written by the very same people who wrote that chapter.
The goal of the book is to help organizations understand the intersection of people, business, and these new technologies in a concise manner. It collates a number of independent points of view on emerging technologies from prominent senior executives, authors, IT practitioners, journalists, thought leaders, and pundits. Specific technologies and topics include:
The book endeavors to provide extensive insights, advice, and best practices regarding promising technologies that have yet to be fully understood—much less utilized—in most organizations. More than a theoretical text, it examines how organizations can and should introduce these new technologies, with specific emphases on lessons learned and people and management issues.
The chapters in this book are grouped into five parts.
The first few chapters lay the foundation for the rest of the book, providing a background against which these massive changes can be viewed. This part provides a framework in which organizations can assess the threats and opportunities created by these disruptive technologies.
The second part of the book deals with the vast changes taking place in the way in which organizations develop, run, and integrate their core applications. This is hardly the first tectonic shift in technology, nor will it be the last.
Twenty years ago, client-server applications gradually began to replace bulky mainframes, allowing for distributing computing. In the late 1990s, the Internet and virtual private networks (VPNs) allowed end users to access corporate information from a browser, whether they were in the office or not. Now seismic shifts in system architecture and application developments are taking place with the advent and increasing adoption of SOA, cloud computing, mobile computing, SaaS, and the like.
Corporate applications, databases, and systems have always existed—in large part—to create, store, and retrieve data information. While this raison d'être has not changed in recent years, there have been sea changes in the past five years with regard to the information stored in these systems.
The types of information generated today no longer exclusively fit neatly into orderly databases (if they ever did). The massive growth of the Internet, mobile phones and applications, blogs, social networks, wikis, mashups, videocentric sites such as YouTube, and email have led to a vast increase in the amount of unstructured data. In fact, an estimated 80 percent of all business data is unstructured.2 These new types of data (along with cheap storage) have resulted in an absolute explosion in the sheer quantity of data available.
Structured data is much easier to store, interpret, and retrieve than unstructured data. Think about the following two questions:
The first question typically can be answered with a simple report or database query. The second is a much different story. Surveys are helpful, but insightful comments and feedback are typically difficult to analyze. Adding social media and blogging to the mix only complicates matters further.
To the extent that web services create massive amounts of unstructured data, organizations need to employ powerful tools to turn raw data—structured and unstructured—first into information and then, ideally, into knowledge.3 Unfortunately, few companies have deployed effective tools to organize, interpret, and act upon this surfeit of data. This part of the book addresses the challenges, best practices, and tools available with respect to managing enterprise data.
Faced with new, powerful, and malleable technologies and a seemingly insurmountable array of data, what is an organization to do? The fourth part of the book focuses on organizations' efforts to make these immense technological changes operational, on seizing opportunity in chaos. While “moving the rock” is important, this part also addresses avoiding undesirable yet common outcomes on IT projects. Insights and best practices are provided for averting IT project failures, minimizing enterprise risk, adopting agile and green IT methods, and overcoming the challenges associated with implementing different types of Enterprise 2.0 technologies.
The final part briefly summarizes the major themes of the book with an eye on successful adoption of these new technologies. It does not provide all of the answers to any one technology, but summarizes the questions that readers should be asking themselves.
I have yet to read an IT management book that can be everything to everybody (and I read quite a bit). This book certainly is no exception. While this book has no one intended audience, I have written it with three in mind.
First, this is a book aimed at IT professionals of all levels. CIOs and chief technology officers (CTOs) thinking about utilizing an Enterprise 2.0 technology would be wise to read the corresponding chapter before making the commitment and investment. Below the C-level, IT directors, project managers, and analysts would benefit from the material. Organizations cannot efficiently utilize these technologies without IT staff members effectuating executive decisions.
Second, this is a book many types of students. Specifically, those in MBA and MIS programs will learn a great deal about emerging technologies that they will soon need to learn and use in the workplace.
Finally, management consulting firms and systems integrators can use the insights in this book to assist their clients in optimizing Enterprise 2.0 technologies.
I expect and even encourage readers to read what they like, to use the New York Times's motto. Readers not interested in a particular topic can skip or skim a chapter without fear of missing out. I wrote this book specifically to allow the busy reader to jump around as needed.
—Phil Simon
Caldwell, New Jersey
November 2009
This book could not have become a reality without the dedicated efforts of the contributors. Not only did I learn a great deal writing this book, I am pleased to have made new friends as well. In particular, Amy Wohl, Bob Charette, and Heather Meeker served as mentors during the project, saving me a great deal of money on psychiatrists. Tim Burgard, Dexter Gasque, and Stacey Rivera at John Wiley & Sons provided essential guidance. Kim Leonard, David Riccardi and Mitzi Koontz, and David Fugate helped me formulate the book’s proposal and navigate the publishing waters.
I also would like to thank my longtime Carnegie Mellon friends Scott Berkun, David Sandberg, Michael Viola, Joe Mirza, and Chris McGee. A tip of the hat to Brian Morgan, Craig Heyrman, Scott Erichsen, Greg Dolecki, Thor Sandell, Michael West, Michael DeAngelo, Jason Horowitz, Andrew Botwin Rob Metting, Rosalinda Cifuentes, MJ Stabinski-Heckman, Jeremy Rothschild, Ellen French, Alex Saint-Victor, Marc Paolella, Jenifer Simon, Naynish Jhaveri, Tom Bardzell, Steve Katz, Mark Hayes, John Henley, Shiri Amram, Ben Lewis, Teri Watkins, Wayne McDermott, Bruce F. Webster, Rose Aulik, Jim Harris, Phil Brown, David Cotter, David Clinart, and Jake Wyant.
My heroes from Dream Theater (Jordan, John, John, Mike, and James) and Rush (Geddy, Alex, and Neil) have given me many years of creative inspiration through their music. Keep on keeping on.
Special thanks go to my parents, Linda and Sandy Simon.
Finally, I would like to thank you, the reader, for buying this book. I’m an independent author and consultant without a marketing team getting my name out there. I rely on people like you to make a living. If you enjoy the book, please recommend it to a friend, post your thoughts on Facebook, LinkedIn, Digg, or Twitter, or contact me at www.philsimonsystems.com/contact.