Wednesday, April 26, 2006

Oracle Applications Unlimited

From ZDNet news:

“Oracle unveiled its Applications Unlimited program on Tuesday, removing a 2013 deadline for halting development of new releases of its PeopleSoft, J.D. Edwards and Siebel Systems software.
Under the program, Oracle will continue issuing new versions of PeopleSoft, J.D. Edwards and Siebel applications in the foreseeable future. It had previously said it would discontinue support for those companies' programs after 2013.

Right now, Oracle is melding their technologies into its next-generation architecture, Oracle Fusion. But the change means it will keep putting out updates beyond the anticipated debut of Oracle Fusion applications in 2008.

"This is a little added insurance for our customers and something they've been asking for," said Jesper Andersen, senior vice president of Oracle's application strategy. He added that some large PeopleSoft customers, for example, may need more time to roll out their applications across several continents.

In addition to removing the deadline, Oracle is dedicating development teams and assigning general managers to each of the three lines of applications, Andersen said. Customers of PeopleSoft, J.D. Edwards and Siebel will also provide input on the product plans for the software they use.”

IMHO: Analysts say that Oracle is feeling increasing heat from SAP, and that has precipitated this decision. But more than that, I think, it is just Oracle keeping options open and not killing off the cash cows it has. It has in fact pledged additional investment. The decision also reflects the will to reassure the existing customer base, and of course, to halt the SAP charge, or at least slow it down. Kudos to Larry Ellison for listening to his customers. When these new versions get delivered and what functional enhancements are provided is still not clear though, but with Larry at the helm you can always expect a surprising move or two from Oracle.

Tuesday, April 25, 2006

Industry Concerns-Attrition Part 1

As a part of the Indian IT Services industry, I am naturally concerned with the high rates of attrition and the dearth of real talent here. The latest results highlight the issue, wherein all the Indian IT players reported attrition from 13-20%. That means that every 1 in 5 people that the organization invests in is leaving. That is an alarming number, but one that we have lived with over the past few years of rapid growth. More alarming though is that the middle management level is seeing high churn rates (If you have the numbers on this, kindly give me a pointer) and is stretched wafer thin.

The way the industry has traditionally tackled this issue is to hike salaries. The salaries offshore are set to grow 15-25% in the next fiscal, so the trend is continuing. I believe that this is the incorrect, very short term solution and will create problems going forward. We have to do much more if we are really sincere about arresting attrition, especially within the performers and key executives.

To even begin to address this issue, first there has to be a commitment to changing the mindset of looking at employees as statistics, as a number, and treating them like we would our customers—with transparent & consistent policies, quick issue resolution, no red tape, consistent & concise communication, and delivery on promises. Here are the things I would focus on from a long term perspective:

TEAMING: I haven’t seen, or heard of, any organization which has effective teaming practices. As humans, we tend to stick to our networks, preserve our connections. Here is what I propose we should do to promote teaming
  1. Give people a clear goal. All good, cohesive teams are characterized by their striving towards a definite, clear objective which takes precedence on their own agendas. The goal should be finite, unambiguous and measurable. Choose the measures carefully. I will discuss this more fully in another post. This is half your job done.

  2. Promote constructive dialog amongst people, providing a platform for free expression and positive conflict. Rather than artificial harmony, I would rather have honest conflict and difference of opinion. It is easier said than done, though, and the challenge is to encourage people to participate, to have an opinion, to share honest views rather than saying what they think their managers want them to say.

  3. Inculcate trust among team members. Have frequent team meetings, where all members are encouraged to share good news, but particularly concerns and apprehensions. Demonstrate action on alleviating those concerns.

  4. Encourage honest criticism and feedback. This will promote issue based actions rather than people based. This is much tougher than it sounds; people are sensitive to criticism and tend not to appreciate it. But to focus solely on the above stated goals without getting sidelined by personal issues, it is imperative that this be tackled.

  5. Have clear, transparent accountability.

This is just one of the things that organizations need to focus on in order to arrest attrition. This is preceded though by recruitment, often the root of most, if not all, evils, which I will talk about in another post.

If you are interested in this topic, you might also find interesting this post by David Kirkpatrick on HCL’s innovative pratices on this front, this interview with Wipro’s Azim Premji and the Idea Market at Rite-Solutions. I have also written about this earlier.

Thursday, April 20, 2006

Talk by Google's Eric Schmidt

Rajesh Jain points to a VC Confidential post on a talk by Eric Schmidt. The key points:
  • “We live in a world of continuous distraction and multi-tasking. It will only get worse.

  • People's attention is the most important asset for marketers

  • The key to getting people's attention is targeted advertising instead of untargeted.

  • Society is trying to block untargeted ads with TiVo, spam filters, Do Not call lists and such.

  • Social communities will become more and more core to interactions and marketing on the web

  • Group dynamics, such as predictive markets (future blog), are fascinating

  • Study after study shows that groups collectively predicting/assessing dramatically outperform individual experts. He said that all decisions at Google are made consensually through groups. New ideas are broken out into three person teams

  • Predators, Phishers and other such elements are greatest threat and will always be there

  • Google is working on auto-translation products. This will allow content, trapped within a language such as Japanese, to be freed for consumption world wide by all

  • Not only is the world opening up as never before, but data is unbounded as well, with handhelds having access to all content in the world.

  • Furthermore, handhelds will truly be digital assistants. They will know location & preferences in order to deliver what you want, when you want and now where you want

  • We are at the early stages here. Over 1 billion people are online, but 5 billion are not (of course 2.6 billion people get by on less than $2/day)”
IMHO: Attention scarcity and domination of communities online are a direct effect of too many channels bombarding information (similar and dissimilar) at the consumer. Assimilation and search costs for information keep increasing due to this proliferation. Online communities keep this in check. Going forward, two things should happen: consolidation in channels (through consumer choice or economic selection) and reduction in casual information consumption (headlines & summaries as opposed to detail). Some of this is already happening. Look around you and how much information is there for you to digest. How long since you read the newspaper from cover to cover?

Wednesday, April 19, 2006

Google Enterprise Advances

Came across this scoop on Google Enterprise on Business2Blog:

“You don't tend to hear much about Google Enterprise, which consists mostly of Google's search appliance that companies can install in their own data centers and use to index their corporate data. But you are about to hear a lot more. And it is because Google is starting to focus more on software than on its ill-suited hardware strategy.

Google is set to announce tomorrow a broad set of partnerships with enterprise software companies, including Cognos, Oracle,, and SAS. The partnerships basically amount to Google and these enterprise software companies sharing APIs so that data from the various software systems can more easily be searched for through Google's OneBox corporate homepage. Instead of Google Maps, now you will have mashups with Oracle databases, Cognos business intelligence software, and customer info.

So for instance, if an executive starts searching for "April sales" in his Google OneBox, it will automatically suck in data from along with appropriate charts (assuming he is already a customer), and display that Salesforce data along with other enterprise data and general Web search results. Think of it as the consumerization of enterprise software. As vice president of developer marketing Adam Gross says:

“It is becoming more broadly recognized that the business market is not as impenetrable or IBMish as it was in the past. The search box is the new UI [user interface].”

But why would the enterprise software folks want to cede their own custom UI's (along with the customer) to Google? The answer is the same reason why any company would want consumers to find it's information on the public version of Google. The enterprise software companies hope to be able to pull more users and more usage into their proprietary software worlds through Google. If search is indeed the new UI, and your data does not appear in search results, then you might as well be invisible.”

IMHO: Very interesting indeed. Google hasn’t made much of a push for the Enterprise market till now. But if this is true, and Google gets a toehold, will we start seeing the same kind of innovation with internal data search as we have been on the web? Only time will tell, but if past record is anything to go by the move is well thought out and will be logically extended with time. Google Ahoy!!!

Tuesday, April 18, 2006

Interview with Azim Premji

Knowledge@Wharton has an interesting interview with Azim Premji. Some excerpts:

“Aron: What demands do these new businesses make on your senior management? And what are you going to do to make sure that they are ready to meet those challenges?
Premji: Our managers need to have a strong integration of managerial skills and technical understanding. One cannot substitute for the other. That is not an easy combination to get, especially if you want to sustain growth. Technical people tend to be more "techie" and management people are more "managerial." To have strongly integrated managers who have a deep understanding of technology is a rare and difficult combination to build. You have to invest a lot in selecting and training these people.

Aron: You made an interesting observation about the difficulty of having technical folks do managerial work, and how it makes growth a challenge. This brings me to a question that is often asked about Indian companies. Today, Microsoft's revenues are more than 20 times Wipro's revenues. In your mind, do you see Wipro growing to the size of Microsoft or IBM?
Premji: It would be reasonable to assume that Indian services exports in IT and in BPO will grow cumulatively for the next five years at about 35%. They are now growing between 23% and 25% a year. I do not see any reason why leading companies like ours cannot grow faster than the growth of exports from India. After that, it is a matter of interpolation and desire. Do you keep scaling the organization? Do you use high-leverage models? Do you use productivity tools so that your headcount doesn't increase as fast as your revenues do? That is what we are trying to achieve, and it is not an easy challenge. How do you build maybe 8% productivity growth a year in your business model? To do that, you have to grow 8% a year in terms of revenues with the same headcount, or to grow 16% in revenues a year but with just an 8% increase in headcount.

Knowledge@Wharton: What leadership qualities do you look for in executives you hire at Wipro?
Premji: We have defined seven or eight leadership qualities. We have defined those because we needed some consistency in terms of what we measure against when we recruit; what we measure against when we promote; and what we want our training to be oriented towards in terms of the skills and competencies we want to build into people. Pratik, could you add more about the leadership qualities?

Pratik Kumar: We look for people who can work effectively in an unstructured environment, who have great adaptability and who can be reasonably comfortable in situations that are not crystal clear and where there is a level of ambiguity. We also recruit people who have a lot of self-initiative because these are qualities that will lead them to succeed in our kind of environment.

In addition, we have a clearly crafted list of leadership qualities with which we measure our own managerial talent and I will touch on those very quickly. One is customer orientation, because we believe that for an organization to be successful, this is a particularly important rule. Strategic thinking is becoming more and more important; we need people who can balance short-term and long-term goals, and who are ready to sprint and run a marathon at the same time.

Self-confidence is another quality that I think is becoming increasingly important. Many people have spent their whole lifetime working in environments which have been predominantly Indian. When they have to deal with people from different cultures and with different styles, it is important to see how well they are able to hold their own. Self-confidence also means your ability to take good news as well as bad news. How well are you able to do that? That is another important element. Other important leadership qualities we look for are commitment to excellence, willingness to groom other leaders in the organization, and the ability to work in teams. All these qualities are interwoven in everything we do in the organization.”

IMHO: Premji talks on a broad range of topics, from Wipro’s differentiation to the effect of & reason behind their recent restructuring. To me, two things stood out—one, his focus on correct recruitment & growing leaders from within, and improving productivity AND innovation. I have talked about how productivity will become a critical factor earlier. It is no longer an either-or situation between innovation and productivity; organizations need to manage to do well on both counts to thrive. Teamwork is another key challenge facing the Indian IT companies. More about this later.

Monday, April 17, 2006

Oracle acquires Portal Software

Sadagopan says:

“…..Portal, the billing and Revenue Management solution provider for telecommunications and media markets is being acquired by oracle. The acquisition price is set at $220 million. On the face of it Oracle eBiz suite, Siebel CRM & Portal billing and revenue management nicely supplement each other. Telecom billing is not part of core offering for any standard enterprise player. Billing solutions are seen as a critical infrastructure for telco service providers and this is a fast growing high yielding market. Portal covers the entire gamut of billing creation, mediation and rating functionality with support for wireline, wireless, broadband, cable, voice over IP, IPTV, music, and video. The telecom industry itself is in the midst of massive transition. Besides heightened M&A activities, the dynamics and metrics of operator offerings towards end consumers are changing with numerous cross selling, up selling package options. With the increasingly felt trend of convergence of publishing, media, and entertainment services converge, a unified /homogeneous solution for billing, customer interaction, and management of digital services and content is indeed an attractive proposition.”

Here is the SAP view of the deal:

“Portal is an SAP partner and indeed there is a joint product offering to provide telco billing functionality. Portal covers the billing creation, mediation and rating functionality that SAP doesn't have in the core product. Other partners provide this functionality as well, but this is the only joint offering that I'm aware of.

With this acquisition, Oracle is able to offer a pretty complete billing solution to telco service providers. In addition, Siebel and Portal have a joint offering. Siebel has a strong presence in Telecom CRM market. The acquisition increases the Oracle CRM/billing advantage. SAP will likely need to concentrate on working more closely with other partners as its unclear what Oracle will do with the joint offering. (They may sunset it as it doesn't behoove them necessarily to have a product which expands SAP's functionality in telco).”

IMHO: Portal will certainly help Oracle on the way to realize the stated vision of verticalized offerings. These acquisitions of smaller, niche industry players will probably continue till Oracle is able to offer the whole technology stack—databases, middleware, and vertical-specific applications—to various industries.

Friday, April 07, 2006

TidBits- SAP, NetSuite

Some relevant news:

SAP: Just bought Virsa Systems Inc., a maker of the regulatory compliance product suite Continuous Compliance. This shows SAPs willingness to grow through acquisitions, as well as expands its partnership with Virsa (they were reselling one part of the suite, the Compliance Calibrator) and adds important, proven capability in an area which is taking up a lot of mindspace with executives lately.

NetSuite: Another of Larry Ellision's pets, they are taking on SalesForce head on. Netsuite announced the launch of SuiteScript, what they call the "First SaaS platform for Business Process Customization." There has been a lot of talk of the lack of ability to customize OnDemand applications, specially with reference to I am sure we'll hear more and more about this as we go on. A very interesting move.

Fusion Thoughts

Double dubs has an interesting post up on Oracle Fusion:

“When Oracle purchased PeopleSoft and thus the JD Edwards application as well, and then announced project Fusion, it didn’t take much thinking to assume that Fusion would fuse the best functionality for all the application suites and create a single super ERP.

Fusion is not only an attempt at releasing an integrated suite of applications from the Oracle, PS, JDE, and Siebel lines. In fact, that’s the least of what Fusion represents. The real goal of Fusion is to present a process integration layer that spans across all your organization’s applications, regardless if they are Oracle apps or not. Fusion middleware has already been released, and some Oracle applications have already been certified on the Fusion platform.

The core of Fusion is not more functionality in an integrated suite of products. The core of Fusion is actually an integration of processes throughout applications that are integrated only in the fact that they use the Fusion middleware. Obviously it’s much more than just bringing together functionality from PS, Oracle and JDE.”

IMHO: Double Dubs is right, but not complete. Oracle (as well as SAP) are trying to provide the underlying platform to developers which would let them create their own applications. I had written about this earlier here. You can also catch the original post by Niel Robertson here.

Tuesday, April 04, 2006

Offshore Product Development

Sadagopan pens a brief note of Offshore Product Development:

“Today in an increasingly shrinking market, software product companies are reeling under pressure. The big gets bigger, the brutal market forces are punishing most of the players with reduced profitability, where it can be counted. While this happens, there is a concurrent pull effect that calls for widening the range of offerings, with reduced resource commitments. We now find that increasingly, in reality, gaining such an advantage through global product development takes a high rank in the order of important things.

Product development is normally seen as an expensive process for software companies. The ballpark estimates suggest that in respect of established vendors, anywhere from 5% to 8% of revenues may get ploughed back into software product development. While the cost structure of the various players may vary, it is generally seen that this would cover amongst other cost elements, personnel cost working across the spectrum of operations. Needless to say, with varying nature of operations & owing to multitude of factors, there would be potentially a wide range of value additions that can be measured relating to various types of operations. In such a scenario, the productivity equation becomes an important operational parameter for review. Like in all competitive industries, companies that can develop great products with defined /lesser budgets compared to peers gain a huge competitive advantage. “

IMHO: I had written earlier (here) that productivity will become a more & more contentious issue as we go along in the services industry, at least. But another problem that offshore, at least India-based companies (experience is limited in this regard, so bear with me) suffer from is the thinness of their competencies. All these companies offer a broad range of services, but there is no real expertise in the resources. The belief is to learn on-the-job-when-it-comes-along. Lack of specialization, high turnover amongst experienced specialists and the jack-of-all-trades attitude plague the industry. Productivity, and specialization, are positively correlated in the context of product development. This is a challenge that both the global big players and the smaller, but increasingly global in outlook, offshore players will have to deal with sooner rather than later.

Monday, April 03, 2006

Idea Market

Rajesh Jain quotes an interesting NYT piece:

"At Rite-Solutions, the architecture of participation is both businesslike and playful. Fifty-five stocks are listed on the company's internal market, which is called Mutual Fun. Each stock comes with a detailed description - called an expect-us, as opposed to a prospectus - and begins trading at a price of $10. Every employee gets $10,000 in "opinion money" to allocate among the offerings, and employees signal their enthusiasm by investing in a stock and, better yet, volunteering to work on the project. Volunteers share in the proceeds, in the form of real money, if the stock becomes a product or delivers savings. Mr. Marino, 57, president of Rite-Solutions, says the market, which began in January 2005, has already paid big dividends. One of the earliest stocks (ticker symbol: VIEW) was a proposal to apply three-dimensional visualization technology, akin to video games, to help sailors and domestic-security personnel practice making decisions in emergency situations. Initially, Mr. Marino was unenthusiastic about the idea - "I'm not a joystick jockey" - but support among employees was overwhelming. Today, that product line, called Rite-View, accounts for 30 percent of total sales. "

IMHO: A very interesting way to proliferate ideas, very democratic--just that it seems to work in this case. Started me wondering whether this idea is scalable to large companies. A start could be to have a market for internal projects, mostly hated by employees and, from personal experience, where the returns are mostly eyewash for the organization. Can we incentivize internal teams, can we attract more talented people to interesting internal projects, can we to some extent dilute the subjectivity inherent in measuring the success (or lack, thereof) of internal projects? Would be an interesting experiment. Anybody listening?