Wednesday, May 10, 2006

Forrester Chief on Emerging Trends

George Colony, the founder & Chief executive of Forrester Research, on future trends:
  • SAP has a 10% advantage over Oracle, as it is not preoccupied with integrating PeopleSoft & Siebel

  • Companies offering software and services focused on technology that has not yet been developed for the commercial market (yet) will ride the next wave

  • The big players in the new wave will be the likes of Google, and a number of other small start-ups, by way of leveraging the “executable internet”, which refers to a new level of interactivity online involving websites that function more like software and less like pages to read.

  • In the future, much business software will be free and funded by advertising; Google will be leading the revolution

  • The "extended internet" will supplant today's internet experience, with 14 billion devices connected to the internet by 2012

  • Between 1996 and 2006 every company connected to the internet, but from 2006 to 2016 every company will be connected to every product; for example, he says, in the future a company like Coca-Cola will know where every can of Coke is in the world.
Well, Mr. Colony is certainly bold and good with jargon like “extended internet” and "executable internet”. Whether these prophecies come to life is yet to be seen, and all of us know that research firms miss the point oftener than not. There are quite a few challenges for the likes of Google, before they can achieve a significant presence in the enterprise. While Microsoft should certainly be alarmed by Google’s progress, I don’t think SAP & Oracle have anything to worry about—yet. SalesForce, and its brethren in SaaS have a long way to go before they can take on the mega vendors. As I have written before, here, we might end up with a hybrid of the pure SaaS and pure packaged application models in the medium term. As far as tracking each coke can is concerned……


Thursday, May 04, 2006

Protect, Extend, Evolve with Oracle

Niel Robertson writes about the recent Collaborate 06 conference, where three Oracle Users Groups: Quest Direct (traditionally the JD Edwards users group but now extends to include PeopleSoft), IOUG (Independent Oracle Users Group) and OAUG (Oracle Applications Users Group) came together.

“…they have launched a new “Protect, Extend, Evolve” messaging campaign. This was clearly Oracle’s mantra at Collaborate.

And, as usual, Oracle messaging is not just rhetoric – they are actually trying to back it up with product announcements. A few notable announcements from the Collaborate conference:

  • PeopleSoft 8.48 is coming and PeopleSoft 8.49 is planned (a vague 2007 date was given)
  • PeopleSoft 9.x applications are coming and there is “commitment” to a release after 9.0 (although no specifics could be given by John Webb, VP Application Strategy who filled in for Jesper at Collaborate)
  • A new release of JD Edwards is now available with more features on the way
  • The Announcement of an “Applications Unlimited” program claiming Oracle will continue to develop all application platforms for the foreseeable future”

I have written about the Applications Unlimited program here.


Wednesday, May 03, 2006

Industry Concerns-Attrition Part 2

This is in continuation to my last post on Industry Concerns. Today I will share my thoughts on the second area of focus to arrest attrition—recruitment.

RECRUITMENT: In any Service Industry focused on knowledge, recruitment of the right people and allocation to right roles is of utmost importance. I look around me, and the situation is despotic. Interviews are conducted over phone (face to face in some cases) for functional knowledge, masses are recruited from B-schools and engineering schools and people poached from other similar organization without discretion. BG checks are done in name only, and no thought is given to the persons aspirations when allocating roles. Pathetic!!! My hypothesis is that if we conduct a random sampling of people inside and outside the organization (in a busy mall, say) and rate them on a 5-point scale according to attitude, qualifications, previous experience etc., the proportions we get will be disturbingly similar. That usually means that the recruitment process is not discriminating enough, in fact not even required. We will probably achieve similar results if we open the office gates to everyone whenever recruitment is required, and closing them after the required number have walked in. Why spend so much of the shareholders’ money on something that just does not work???

In counterpoint to the above, there is high pressure on recruiters and the number of recuitees is very high in any timeframe. Hence, it is difficult to focus on quality and organizational fit, just meet the numbers. This in turn increases attrition and increases the recruitment numbers for the next time frame, forming a vicious cycle of never ending recruitment. Dante would have loved this scenario!!

As in any processes focus on the end goal is very important. Let us pause and think, maybe take example of an industry leader. Google, for instance, has a very rigorous recruitment cycle, almost like a 6-month long IQ test. Of course, they are an engineering company and it serves them well to have loads of braniacs cooking up innovative products all the time. This reflects in their attrition rate (Less than 1% for engineering employees). I am not suggesting that we go berserk over IQ of applicants, but we should have a criterion for people who will like it in this environment. An example might be “attitude” (psychometric testing is standard for evaluating attitudes). Recruitment must be geared towards sifting out everybody in the “poor” and “average” category, even if in the process we lose out on a few “above average” and “excellent” people.

Anyways, here are a few simple (:))) ways to improve recruitment:
  1. Make recruitment specific. Too often we recruit first and allocate later, when the requirement arises, in order to have ready numbers quickly. The first step should be to recruit for specific requirements if we are to find the best fit of people. It is difficult in this highly competitive industry to predict requirements accurately. The resolution should be to have the best people serve the customer, or to not take the business at all. If this means cutting down on ad-hoc orders, or staff augmentation opportunities, so be it.

  2. Involve performing practitioners. Second step is to reduce the workload of recruiters through the involvement of practitioners who have proven performance track record. Let them sift through the applications and pick out outstanding ones for further processing.

  3. Screening before interviews. All screening should be done before the interviews take place, to avoid resource wastage and fraudulent entries.

  4. Strengthen referrals. Employee referrals are very important if the right talent is to be attracted. While reward systems are already there, a high standard when referring and an informal procedure of reprimand in case an employee, once selected, turns out not to be what he was touted to be should be in place.

  5. Above all, set high standards. Do not recruit just to make up the numbers.

Recruitment, especially of the wrong variety, has widespread implications. Teaming, Morale, Attitude, Culture—everything is predicated on recruitment. And yet, this is treated as HR domain. Effective recruitment is the job of everyone in the organization, and not just HR. You, me, the cheerful lady in the next cubicle, the slick HR guy we meet for coffee—everyone has a stake, and hence everyone has the responsibility. The role of HR is restricted to primarily recruitment in IT Services organizations. I am no fan of HR in IT, but even I think this is unfair. Next time, I will deal with the role of HR in arresting attrition. Do let me know your thoughts on this in the meanwhile.

Update: Seth Godin, the author of Permission Marketing & Survival is not enough, talks about Recruiting here. A super read for anyone remotely interested in the woes of the business world.


Monday, May 01, 2006

Oracle & Siebel CRM

John Wookey talks about the synergy between Siebel and Oracle:

“There are four very strong parts of Siebel's business that made it an attractive acquisition target for Oracle.

One, obviously, is the core CRM technology. Siebel is clearly the world leader in this marketplace by all measures: customer success, market share and technology. The company has rich, deep CRM functionality and their success shows it.

But Siebel also has amazing industry-specific capabilities. I've come to appreciate that horizontal CRM is a fantasy. Dream CRM is about specific vertical marketplace requirements. Siebel took a very strong core set of functionality around service, marketing and sales, and developed best practices and specific capability around specific industries--such as high-tech, pharmaceuticals, and CPG. And they did it in an innovative way. They invested a lot in industry-specific domain expertise and built some very unique industry content and capabilities on top of the CRM components.

The third very powerful capability from Siebel is the company's business analytics. They acquired analytic technology about six years ago and really invested in it to create market-leading analytics capabilities. And of course, because they were an applications company, it wasn't just a BI engine. They'd invested a lot in building content-rich dashboards--again, by industry. That allowed them to go out and help customers understand what was happening in their business. And to do it from data sources beyond just Siebel applications--including other applications, and custom systems that customers themselves had created.

Additionally, the combination of Oracle and Siebel also created the world's largest and most comprehensive on-demand offering. The combined talents, expertise, and vision of the Oracle/Siebel organization will give customers access to the industry's broadest range of enterprise computing solutions delivered with a services-based approach. That means continued innovation and flexibility, but with additional options and at a lower cost.”

IMHO: Seems like Siebel will be leading Oracle’s CRM charge. Also, there has been speculation (confirmed???) that Oracle is going to segregate its CRM business from its other application businesses and treat is as different from other applications. Makes sense too, in that CRM technology is unique as far as Enterprise Applications are concerned. It deserves a dedicated, focused approach to development, implementation and change management. Another point to note here is that Oracle’s latter acquisitions—Retek and Portal—nicely complement and enhance the vertical specific functionality. I think they will form important pieces in Oracle strategy going forward, providing rich, deep vertical functionality and built-in best practices. Sounds good, but the challenge will be to seamlessly and efficiently integrate these disparate technologies.

We’ll see how it pans out, but for now Siebel seems to Oracle’s flagship CRM product.

Benefits of CRM

The CRM Mastery E-Journal reports on a survey by CSO Insights:

"We asked participating sales executives to assess the impact that technology was having on their sales performance. A consolidated review of their responses found that 71.9 percent stated that CRM was improving their performance, 18.2 percent said it was having no effect, and 9.9 percent didn't know.

Initially we see that for more than seven of 10 firms there is a plus side to their CRM initiative. But these figures prompt a follow-up question: What exactly is different as a result of using this technology? To get a more definitive answer we asked these execs to get specific about what "better" looked like now that the CRM applications were in the hands of their salespeople.

The article includes a chart analyzing the "Benefits Resulting from CRM Usage." Here are the top 10 benefits:
  1. Improved Communications - 60+%

  2. Improved Forecast Accuracy - 50%

  3. Reduced Administrative Burden - 40+%

  4. Increased Revenues - 30%

  5. Improved Best Practice Sharing - 25+%

  6. Shortened Sell Cycles - 20+%

  7. Reduced New Rep Ramp-Up Time - 20+%

  8. Improved Win Rates - 20%

  9. Improved Order Processing - 15+%

  10. Increased Margins - 10%"
IMHO: Sounds good doesn’t it? But the problem is putting dollar numbers to improvement, and attributing some of the improvement to CRM. Having gone through a CRM initiative in my own organization recently, while I am a big proponent of the technology, I think CRM has a long way to go to fulfill the promise of “Customer Relationship Management” and more than the technology has to evolve to realize that. I will go into details of this soon. Do let me know your thoughts.