Designing IT for Business

McKinsey Quarterly writes:

business and IT managers are starting to gather IT systems into “domains”sets of applications and databases that are managed as units for business reasonsinstead of managing them on the applications level or organizing them by the types of computers and operating systems on which applications run. A company might, for example, bring together the systems that contain customer information and rethink the links among them; in this way, it streamlines the tangle of interconnected systems, roots out duplication, and retires unneeded applications, thereby slashing its maintenance and development costs. IT employees find it easier to change or scale such systems and can thus support business changes more rapidly and less expensively. Moreover, the new approach eliminates a source of tension between the two cultures, business and IT.

By transforming the IT architecture in this evolutionary wayrather than tackling change by patching in systems individually or replacing whole areas in “big bangs”companies make it possible for IT and the businesses it serves to learn how to work together through a series of small, clearly defined projects. These companies can also apply the savings they gain from one project to finance the next. A team of business and IT executives, basing its decisions on the companys current business needs and future strategy, defines the domains, identifies the systems to be grouped together, and specifies how they should communicate with one another. IT experts then deploy an integration backbone based on middleware technologies to establish the necessary connections. The goal is to turn something that resembles a plate of cooked spaghettiwith innumerable applications and databases dispersed across the architectureinto a system of modular and logical blocks with a minimum of interconnecting wires.

We need to think how we can apply these ideas to small businesses.

MicroRevenues

The Guardian writes about an area that has been the dream of many in the past decade – how to make money on the Internet. The focus is not on the big companies, but on the creative people. “Can an individual with a talent for writing, drawing, photography or music use the internet, not to create millions, but to make enough to live comfortably and do what they want to do professionally?” A related issue is that of micripayments.

The real action on the internet is at the fringes, where small content producers are finding that the internet is not only allowing them to make a living doing their thing and selling it directly to the customer, but taking the hard work out of it in the process.

The original and most obvious ways of making a living in the creative arts have usually been advertising, sponsorship and patronage, and the internet is no different. Weblogs, once again on the cutting edge of the internet, are starting to move in this direction, with the recent launch of two major advertising services, Google Ad-Sense and BlogAds.

Advertising, however, is not the most cutting edge of business models. For that, we need to visit the concept of micropayments.

“If you think about it,” says graphic artist Scott McCloud, “for any kind of content on the web, the natural price per unit of these things should be under a dollar. So really the market for these things doesn’t exist without a micropayment system.”

A workable micropayment system has historically been the holy grail for internet content providers. The idea of being able to charge for content worth only pennies has long appealed, with the theory being that given small enough prices, a smooth enough system and compelling enough content, people will be happy to pay a few pence for a good read, a useful program or a fine tune.

Titans Swallow WiFi

WSJ writes on how an emerging industry has been taken over by the might of the giants, leaving behind the fledgling start-ups:

Intel’s move into Wi-Fi, and Intersil’s retreat, illustrate how a maturing high-tech industry has changed. For all of Silicon Valley’s mythic start-ups, sudden billionaires and startling innovations, the advantages of size, longevity and brand identification are now often overwhelming. Giants such as Intel, Microsoft Corp. and Cisco Systems Inc. began as upstarts, but today their sheer size means they don’t need to be first anymore. Instead, it’s enough for the titans to be observant and nimble, so they can scoop up new ideas before threats develop.

Technology has settled into a more traditional cycle of innovation that in a general way resembles how Detroit auto makers absorb design advances from California custom-car shops. Rather than the perpetual sense of revolution that permeated the Internet bubble, the elite titans co-opt breakthroughs accomplished by others.

Big players moving into Wi-Fi are quickly achieving economies of scale and reducing the potential for others to make healthy profits. Some giants are using Wi-Fi as a “loss leader”: Intel, for example, sells its Wi-Fi chips to computer makers at — or below — cost. That tactic is designed to boost sales of laptop computers with other Intel chips that are more profitable for the company. A growing number of hotels offer free Wi-Fi in lobbies or rooms. They are converting Wi-Fi into the high-tech equivalent of air conditioning or color TV — just another amenity.

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