Emergic

Technology is changing the enterprise. The combination of cheaper and faster computers, devices, broadband and wireless networks, software being offered as a service, and the ubiquitous presence of the Internet worldwide is bring enterprises closer. The last two decades have seen the rise of technologies like Enterprise Resource Planning (ERP) to bring together information about what has happening within the enterprise, Supply Chain Management (SCM) to better integrate and manage the value chain, and Customer Relationship Management (CRM) to connect on a one-to-one basis with customers.

So far, adoption of many of these technologies have been limited to the top few thousand companies in the world because of the investments needed in the purchase, customization and integration of these technologies within the enterprise. The coming years will see the penetration of technology into the next level of enterprises, opening up markets which hitherto have been untapped.

Says Walter W. Buckley III, of Internet Capital Group, “Most distribution channels over the last 50 years have become fragmented and fractured. This significantly inhibits communication flow, and that, in turn, creates tremendous inefficiencies at all stages along that supply chain. The Internet allows real time communications along the entire supply chain. When coupled with business applications, this begins to squeeze out inefficiencies and increase productivity.”

Enterprises have to manage not just the flow of goods, but, more importantly, the flow of information. Take for example the semiconductor business. The design of a new chip may be done in Silicon Valley and Bangalore, the fabrication in Taiwan, the integration into the motherboard or device in China, with distribution happening in different countries across the world.

Tight co-ordination between all the enterprises in the supply chain has become critical because in the semiconductor business (as in any other) being saddled with unfilled customer demand or with inventory can mean disaster.

Writes John Ince in Upside:

The goal is the transformation of linear, serial supply chains into parallel, collaborative communities, dramatically reducing cycle times, improving customer relationships, and increasing productivity.

Potential savings accrue from better planning and execution — both upstream and downstream — involving design, forecasting, procurement, production and fulfillment, logistics, order management, change orders, and channel management. Companies reap savings from process efficiencies, better inventory management, and unencumbered working capital.

The real action comes from shearing away the huge inefficiencies that exist because of the incompatibilities between inter-company and intra-company applications. The savings inherent in this process will likely overshadow the relatively meager savings in pricing and commodity e-procurement that were once hailed as the shining promise of b-to-b independent marketplaces.

Increasingly, manufacturers and suppliers are becoming one enterprise. The reduction in information-flow latency also permits faster product-to-market strategies. Collaborative-supply chain communities are witnessing the breakdown of boundaries between businesses.

Wharton’s Newsletter on Vipin Gupta and Ian C. MacMillan’s paper on Entrepreneurial Leadership:

The entrepreneurial leader must perform two functions: First is “transformational enactment,” or envisioning possible outcomes in the face of uncertainty. Second is “cast enactment,” or motivating a group of people to help create new business models that reduce the uncertainty. Transformational enactment consists of three tasks:

1. Absorb uncertainty: Shoulder the burden of responsibility for the uncertain outcome of a new project. As MacMillan explains, “It’s saying to your people, ‘If I’m wrong, it’s my problem, not yours. Therefore you can behave as if the world is going to be the way I have set it up.'”
2. Frame the challenge: Set forth a project that pushes employees up to, but not beyond, the limits of their ability.
3. Underwriting / path clearing: Create a conducive environment for the entrepreneurial transformation, negotiating support from key stakeholders inside and outside the firm.

Kevin Werbach (Release 1.0) on Weblogs, an interesting new publishing format
(http://release1.edventure.com):

In the beginning, there were the voices: people expressing themselves, communicating with one another, offering their perspectives on the world and sharing their passions. By lowering the barriers to publishing, the Web can make those voices, whether representing individuals or their organizations, more powerful than ever before. But that requires the right tools, metaphors and platforms. Through a gradual process of evolution and technology development, the voices have finally found a native online form through which to express themselves: a new kind of Website known as the Weblog.

A Weblog (also known as a blog) is a personal Website that offers frequently updated observations, news headlines, commentary, recommended links and/or diary entries, generally organized chronologically. They vary greatly in style and content… Weblogs are mechanisms for people to share their lives and their interests with a global audience, to build communities or to create targeted information resources. Some things have changed, though. E-zines are typically static or are updated monthly. Weblogs are inherently dynamic, with new content added whenever the author has something to sayin many cases daily or several times a day.

An example of a Weblog is Dave Winer’s website
at http://www.scripting.com.

Andy Grove, in a Wired interview, on the Internet
(http://www.wired.com/wired/archive/9.06/intel.html):

[The Internet] makes everything faster. Genomics discoveries come faster. You can crack data faster. You can build and correct supply lines faster. You can get information faster. Email has absolutely changed interpersonal and intercompany communication in a fairly profound way. That phrase “Internet time” – that’s real. It’s not always pleasant, by the way. I used to laugh at my friends who are doctors for being tethered to their beepers. Well, that’s all of us now. But everything being faster also has enormous benefits. The most direct way of increasing productivity is doing the same thing in a lesser period of time – turning things faster. And productivity is the key to everything – greater productivity increases economic growth.

[On business-to-business ecommerce], there are a few high tech companies, like Intel, who are leading the way in that area, but we are only leading in the simplest applications. We do almost all of our sales and about half of our purchases via Internet connectedness. By the time that sort of thing becomes commonplace in most businesses, which it inevitably will, we hopefully are going to have implemented a bunch of tools and business practices using what we’ve built. First, you deploy these things internally. Second, you connect your internal connections to other people’s internal connections. Third, you start changing business processes to take advantage of what connectedness allows.

On Communication, from “Words, Meanings And People” by Dr Sanford:

One of the most important is the need to pause, delay and analyse in our communicating and behaviour. Many misunderstandings and disagreements result from an automatic, trigger-like response to someone else’s words or behaviour. If we could but pause and delay a little longer than we normally do — a two-second activity delay — we would not have some of the arguments and disagreements in which we find ourselves.

The problem of misunderstanding is one of the most common and pernicious. The amount of time and money that is wasted due to misunderstandings and otherwise poor communication is difficult to estimate. But it is enormous indeed. Why do people have misunderstandings? There are many reasons, of course, but let us mention just a few.

One of the causes is the unconscious assumption on the part of the speaker that the listener understands him. He therefore, fails to aid the listener in getting on his (the speaker’s) channel of communication by asking him if he understands.

Listeners, too, unconsciously assume that they understand the speaker. They fail to ask the speaker, “What do you mean?” or “Jane, is this what you meant, or want me to do?”

Vinod Khosla on how to “re-invent” India:

I believe that 5% of the people empowered by the right tools can pull the remaining 95% of the country along in a very radical way. And in fact a few years ago I looked at this country [US] and said, how many people accounted for the bulk of the social and economic changes in the last decades. There were no more than a few thousand people who drove that change. You can look to a few people, you can look at people in academia, people in business or political activist. No more than a few thousand people accounted for the bulk of the change. Not for doing it but for driving it in this country.

If we can take our [India’s] limited resources and give them to 5% of the people and I will come back to how we pick which 5% percent as that’s the politically important question, and let them put it to the highest use so that we multiply these resources. When we start with a dollar, next year we don’t have 50 cents to give away, but we have 5 dollars to give away. Because entrepreneurial energy and a business case is being applied.

Let me do a simple calculation for you. I originally did this calculation in the US context. For 3% real growth accumulated over a 100 years results in a multiplication factor of over 20. So if you assume the US per capita income is, pick a number, say 35,000 dollars and we accumulate 3% growth for a 100 years, the per capita income in the US at the turn of the century will be over 700 thousand dollars. That’s a humungous number. Why? We are applying the exponential equation at 3%. At 3%! We can clearly achieve much larger figures in the context of India if we use these resources effectively.

The full text of Vinod Khosla’s speech, including his suggestions on what should be done in India, is available at (MS-Word file):
http://www.kpcb.com/files/
bios/STANFORDINDIANOV2000.doc

Michael Porter on Strategy in Fast Company
( http://www.fastcompany.com/online/44/porter.html ):

The essence of strategy is that you must set limits on what you’re trying to accomplish. The company without a strategy is willing to try anything. If all you’re trying to do is essentially the same thing as your rivals, then it’s unlikely that you’ll be very successful. It’s incredibly arrogant for a company to believe that it can deliver the same sort of product that its rivals do and actually do better for very long. That’s especially true today, when the flow of information and capital is incredibly fast. It’s extremely dangerous to bet on the incompetence of your competitors — and that’s what you’re doing when you’re competing on operational effectiveness.

Azim Premji, on Leadership and Management:

1. Lead by example. Saying one thing and doing another will only compromise your effectiveness. You are the role model for your staff. Practice your own beliefs faithfully and you will find your staff following your lead.
2. Take the toughest problems on yourself. You can’t delegate difficult decisions to your staff. As a leader you must assume personal responsibility for making the calls and accepting the consequences.
3. Set standards of excellence and measure performance against them. If you accept mediocrity, you will get mediocrity. Demand the best. Be consistent and explicit in both setting expectations and evaluating results.
4. Give commitment, get commitment. Commit yourself and demand commitment from others. Make the extra effort to ensure that goals are met and results are achieved. Demonstrate your own commitment in everything that you do and expect nothing less from your staff.
5. Maintain a driving sense of urgency. Take action now. Don’t be afraid to make a mistake. It may not be the absolute best choice but it is better than no choice at all.
6. Pay attention to detail.
7. Accept failure. Nobody likes to fail, but a leader cannot afford to be paralyzed by the fear of being wrong. Take risks and be prepared to deal with the outcome.
8. Recognize limits. A true leader changes what can be changed and manages what can’t. Don’t waste time trying to solve problems beyond your control. Focus instead on the problems you can solve.
9. Set priorities. If you try to do everything at once, you will end up doing nothing at all. Rank what you and your staff have to do in order of importance. Use this ranking to spend your time and their time most efficiently.
10. Be tough but fair. Leadership is an intensely personal and interpersonal skill. How you relate to your people means everything. Toughness starts with your own standards, your own performance and the example you set. Fairness is the other side of the coin. Judge others as you would judge yourself: fairly and consistently.

Sharmila Ramnani of Credit Resouces, on Failure:

There is no such thing as failure. There are only results. Most people in our culture have been programmed to fear this thing called failure. Yet all of us can think of times when we wanted one thing and got another. People always succeed in getting some sort of results. The super successes of our culture aren’t people who do not fail, but simply people who know that if they try something and it doesn’t give them what they want, they’ve had a learning experience. They use what they’ve learned and simply try something else. They take some new actions and produce some new results.

Winners, leaders, masters – people with personal power – all understand that if
you try something and do not get the outcome you want, it’s simply feedback. You use that information to make finer distinctions about what you need to do to
produce the results you desire.

This week Something Different – a collection of interesting thoughts from various people. Many of things stated seem obvious, but it is good to remind ourselves of these every so often, and reflect and make part of our daily life.

Narayan Murthy, speaking at Wharton recently:

Leaders transform reality from what it is to what they want it to be and raise the aspirations of followers. It is about making people believe in themselves; it is about making them confident; and it is about making people achieve miracles. Leadership is about dreaming the impossible and helping followers achieve them. Lofty aspirations build great firms, great countries and great civilizations.

The best form of leadership is leadership by example. In a knowledge company whose core competencies include human intellect and learning through a process of observation, data collection, analysis and conclusion, leaders have to walk the talk. Any dissonance between rhetoric and action by leaders will hasten the loss of credibility.

In [Infosys’] case, human intellect, technology and processes are the three key strategic resources. We operate in a domain where customer preferences and technology change rapidly and business models, paradigms and rules quickly become obsolete. Thus, the only constant for us is change.

These days, the world moves so fast that often the person who says that something cannot be done is proven wrong by another person who is already doing it.

10 Habits for IT Success, by Paul Kampas
(http://world.std.com/~pkampas/):

1. Be a Player: New technology will not go away, so play now or pay later
2. Begin Early: There is no substitute for more time when managing change
3. Anticipate: Use trends, patterns, predictions, models, academics, early adopters, etc. to look ahead and thus prevent crises
4. Engage Early Adopters: Identify, engage, and learn from early adopters, who may be employees, suppliers, customers, etc.
5. Experiment First: Make your mistakes on the prototype/pilot
6. Combine Vision and Focus: Plan methodically and respond to the moment
7. Expect Uncertainty: Identify alternative scenarios, then craft strategies that span them
8. Learn: Expect, admit, and move beyond mistakes, but make only new ones (from Esther Dyson)
9. Simplify, Standardize, and Renew: Minimize support and maximize opportunity by relentlessly simplifying, standardizing, and retiring aging stuff
10. Persist: Keep trying until you get it right.

There are two emerging opportunities in the New Internet: wireless devices and real-time enterprise software.

Wireless Devices

The world already has twice as many cellphones as computers. In 2001, nearly 500 million new cellphones will be bought. The race is now on to add data features to the cellphones, and to add voice to PDAs (installed base of about 11 million). In both cases, what is clear is that the devices of tomorrow will be network- and data-enabled, truly providing anytime, anywhere access to information.

Writes Walter Mossberg in the Wall Street Journal:

I believe afundamental distinction is emerging among hand-helds, one that will dominate and define the category in as little as two years. The key question will be: Is it a live device or a dead one? A live device, in the coming era, will be one that “lights up” in the presence of any wireless data network — instantly connecting to that network so it can exchange e-mail and instant messages and retrieve Web content. A dead device will be one that lacks that capability.

These “live” devices will need wireless networks. An interesting alternative to the highly expensive cellular network rollouts is the creation of community networks, based on wireless LAN protocols like 802.11b and leveraging unlicenced spectrum. These devices will also need software, security, billing and a whole new platform of applications to be created.

Real-time Enterprise Software

Imagine being able to close the financial statements of your enterprise daily – within fifteen points. This simple capability will define the real-time enterprise. It will need the ability to have visibility of information and integration across multiple databases – not just with the enterprise, but also across the extended enterprise, comprising suppliers and partners. Customers will need to be provided information in real-time also. The opportunity lies in creating an integrated e-business suite of applications, which that data is only entered once and is visible across the enterprise.

Says Ray Lane, General Partner, Kleiner Perkins:

[A real-time enterprise is] a company that uses Internet technology to drive out manual business processes, to eliminate guesswork, and to reduce costs. The key feature of a real-time enterprise is spontaneous transaction flow. In most businesses today, an event like a customer order spawns thousands of transactions that go through a series of vertically organized departments. As a result, most companies have a highly fragmented view of their customers. A real-time enterprise addresses that problem.

The Internet is still the most important business platform of the past century. Nothing rivals the Net when it comes to reinventing business processes. Size begets complexity, and complexity loses. But the Net can enable big companies to behave like the small, homespun companies that they once were.

While there are many software companies working to target the larger companies (especially, the Global 2000), the small and medium-enterprises (SMEs) of the world have an equal need for such software. After all, supply chains are only as good as their weakest links, and SMEs comprise more than 80% of the supply chains.

Target the World’s Poor

While there is a significant opportunity in the New Internet in targeting the “developed markets” like US, Western Europe and Japan, there lies an opportunity which is perhaps a magnitude in addressing the 4-billion strong “emerging markets” of Asia, Africa, Eastern Europe and Latin America. In many of these markets where the penetration of technology and the Internet is still very low, the New Internet holds promise in helping these markets, their people and their companies leapfrog into the New World.

In the words of Paul Kampas: “Success will be based on the ability to translate opportunities and discontinuities into a vision.”

The two defining themes of the New Internet will be Pervasive Connectedness and Real-Time Infrastructure. The Internet will be like an envelope around us, creating an always-on, always-connected world. It will also provide us – at home, at work, and everywhere else – with information and services on demand and in real-time. In doing so, the Internet becomes invisible and yet provides visibility across the value chain.

Pervasive Connectedness: Broadband IP-based networks built using a mix of optics for the backbone and wireless for the last mile will ensure that there is ubiquitous connectivity. Today’s cellular networks ensure reach through in most parts of the world. Tomorrow, a combination of the high-speed cellular networks like 2.5G and 3G, and community networks using technologies like 802.11b (Wi-Fi, which uses the free 2.4 Ghz spectrum) will provide high-speed connectivity everywhere.

Real-Time Infrastructure: When software and data moves into the network “cloud”, it becomes possible to deliver just the information one needs – based on location, time and context. Sensors embedded in places and machines originate information which gets carried over wireless networks into the network for distribution to users based on interests and preferences. As information increases, there will be a need for automation through agents (or “knowledge bots”) which can not just filter, but also process the information in real-time.

There are two outcomes: the Connected, Communicative, Consumer (C3) and the Electronic, Extended Enterprise (E3). The successful integration of the two results in the Digital Dividend (D2) – sustainable competitive advantage and superior profits.

For Consumers, the New Internet means universal connectivity to information, application and services via personal, wireless devices. Instead of just pulling up and reading information, the experience now becomes interactive through streaming video. We are already seeing this today as people in countries like India use the Instant Messaging platform combined with multimedia computers have “phone” conversations with family and friends elsewhere in the world – all for the cost of a local call.

For Enterprises, the New Internet extends the enterprise value chain to include its suppliers, partners and customers. Self-service forms, integrated databases in which data is entered only once, event-driven notifications, corporate portals ensure visibility of information across the value chain. An immediate by-product of this will be in the reduction of inventory. The Internet ensures cheaper communications and the reduction in transactions costs by streamlining business processes. Outsourcing will increase as companies think hard about which of their processes add value and which do not.

Among all this change, there are some constants: the need for Vision, Strategy, Capital and Innovation to build the successful businesses of tomorrow.

Tim Berners-Lee, James Hendler and Ora Lassila, writing in Scientific American (May 2001, http://www.sciam.com):

The essential property of the World Wide Web is its universality. The power of a hypertext link is that “anything can link to anything.” Web technology, therefore, must not discriminate between the scribbled draft and the polished performance, between commercial and academic information, or among cultures, languages, media and so on. Information varies along many axes. One of these is the difference between information produced primarily for human consumption and that produced mainly for machines. At one end of the scale we have everything from the five-second TV commercial to poetry. At the other end we have databases, programs and sensor output. To date, the Web has developed most rapidly as a medium of documents for people rather than for data and information that can be processed automatically. The Semantic Web aims to make up for this.

The Semantic Web is not a separate Web but an extension of the current one, in which information is given well-defined meaning, better enabling computers and people to work in cooperation. The first steps in weaving the Semantic Web into the structure of the existing Web are already under way. In the near future, these developments will usher in significant new functionality as machines become much better able to process and “understand” the data that they merely display at present.

A view from Forrester (http://www.forrester.com):

Web browsers have brought Internet services to millions of people. As a result, Internet usage has boomed. However, the Web’s days are numbered as the Internet moves to a second round of expansion beyond the browser. Two new waves of innovation will eclipse the Web: an executable Net that greatly improves the online experience, and an extended Net that connects the real world.

The first stage in the X Internet is an executable Net. Users will get real-time, interactive experiences over the Net through disposable code — programs you use once and throw away — downloaded to their PCs and handheld devices. These quick downloads will allow users to carry on extended conversations with Net services.

An extended Internet is also emerging through Internet devices and applications that sense, analyze, and control the real world. With cheap chips and a worldwide Internet backbone, nearly every device that runs on electricity will have an Internet connection, through both wired and wireless networks. The result? The number of Internet devices will boom from today’s 100 million to more than 14 billion in 2010.

John Doerr from Kleiner Perkins (http://www.kpcb.com), quoted in International Business Week:

The Net [in the future] will be very, very different than the Net we know today. It will be what I like to call an Evernet. It’ll be always on, it’ll be on all kinds of devices, not just on PCs. It’ll be on set-top computers, and it’ll be on tables in kitchens, and God hope, in all the classrooms. And it’ll be wireless everywhere. Lots and lots of Net everywhere, pervasive Net, Evernet, always on. And it will be a very high-bandwidth Net. It won’t be static little pictures and text. Or if it is a picture when you click on it, you’ll get a movie behind it. It’ll be highly personal also. It will know that you are there in the room, and it will know a lot by virtue of your portal or your provider. It’ll present the stuff you’re interested in. It won’t show you ads you’re not interested in.

Forrester calls it the “X Internet”. Tim Berners-Lee calls it the “Semantic Web”. John Doerr calls it the “Evernet”. Everyone’s in search for it, and yet no one can lay claim to it. This is the Internet that is emerging – an Internet which will go beyond the Web of hyperlinks and documents that we know today, an Internet which will be more than just a way of allowing people to access information put up on computers through browsers.

This is the New Internet and it being built around two themes: Pervasive Connectedness and Real-time Infrastructure.

The Internet of tomorrow will be powered by changes taking place today in computing, communications and software.

Computing: The first trend is Moore’s law, which continues to power the rapid progress in semiconductor development. Each new chip doubles in power every 18 months. This has led to an exponential increase in processing power (coupled with falling costs) in the past three decades and is likely to continue for the foreseeable future. The second trend is the increasing proliferation of non-PC devices. Cellphones and PDAs are at the forefront of the race to create smaller but powerful devices which are truly “personal”. The third trend is that of embedded computing. An embedded processor does one task with a larger machine. From cars to elevators, embedded computers are today everywhere. Over 1.6 billion embedded microprocessors are reported to have been shipped.

Communications: The first trend is Gilder’s Law which holds that bandwidth increases exponentially – doubling every 6-9 months. This is being largely driven by fibre optics. Undersea cables with huge capacities now circle the globe. Adding new bandwidth means lighting up more fibre. The second trend is Wireless. GSM and CDMA networks connect a billion cellphones into the telecom network.

Broadband wireless is also becoming a reality to bridge the “last mile”. To bring the connection to the “last few feet” are emerging protocols like Bluetooth, and 802.11b (Wi-Fi) and 802.11a. The third trend is the building of the farms of the technology age – Data Centres. These data farms make technology a utility – offering computing and applications on demand.

Software: The first trend is that of Web Services – software becoming a service. Instead of paying large upfront licencing costs, software will increasingly become available as a utility service in the network “cloud”. Components from different vendors can be assembled on the fly from across the network through standards such as XML, SOAP, WSDL and UDDI. XML allows data to be exchanged, SOAP provides the wrapper for exchanging data, WSDL is the language to describe web services while UDDI provides the directory to locate web services on the Internet. The second trend is open-source, where developers work worldwide on projects which are in the public domain, and can be extended by anyone. Linux and the Apache web server are two examples of open-source software. The third trend is the creation of zero-defect software. Software is at the heart of real-time applications and mission-critical. At the same time, it has become increasingly complex. Yet, it simply cannot fail.

These are the trends which serve as the foundation for the creation of the Internet of tomorrow.