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Five Biggest Issues Facing the Business Technology Industry: from Mervyn Adrian, Senior VP, Forrester Research

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This is the continuing series of special interviews appearing first here in the Canadian IT Managers (CIM) forum that are highlighted in Computing Canada’s (CC) Blogged Down (BD) editorial columns.

This week we talk with top-ranking executive, Merv Adrian, Senior Vice-President of Forrester Research. On Monday we began the interview, and profiled Merv’s rich and long history in the industry. Today I put this question to Merv:

SI: What are the five biggest issues facing the business technology industry in 2006, and in 2007? How can they be solved?

MA: This is an interesting question, no matter who you ask. These responses are mine, not official Forrester positions – we have not published a ranked list of the most important issues. In no particular order:

ISSUE 1: Effective innovation with minimal disruption of existing business. This is a perennial dilemma. Invention is not innovation – innovation occurs when invention changes the way we live or work. But once a high-tech company experiences some success, maintaining its position becomes a tightrope walk – you need to support your installed base and still continue to innovate. How to balance those vectors is an eternal problem – look at the time it takes Microsoft to put out a new operating system, or Intel its next chip generation, as examples. They are always carrying their legacy along for the ride, and it slows them down.

Solution: To the degree we have a solution at all, it exists in building what Forrester’s Navi Radjou has labeled the Innovation Network. I’m leaving most of the richness out of his model, but the essence is that stakeholders are all involved, (including your customers, suppliers, financiers, brokers, etc.), in the process. This acts in part as a guide to keep you on the rails – if something is too far off the mark, you’re likely to know it. And if something truly disruptive comes along but clearly meets the needs of this wider network, you can be bold with some confidence. And then separately, you have to solve the problem of how to bring everyone along and support them effectively through the transition.

ISSUE 2: Economic uncertainty – where will the next tranche of revenue come from for high-tech?

Solution: Incremental growth will continue to occur in the enterprise business market, but that is what it is likely to be for some time – incremental. We have penetrated the enterprise market with today’s technologies and until a truly new thing comes along, the model will not shift dramatically. We are “doing verticals” already, and technologically in most spaces the big directions are the same – there’s no radically different technologies competing. The next large piece will come from SMBs and new geographies. Neither of those markets will be amenable to a direct sales model for most business technology – it will be about channels. The battleground for the reset of this decade for the biggest suppliers will be in building the biggest and best partner ecosystem. Good technology is table stakes. For the smaller companies, it will be about using the Net creatively to compensate for not having the channel organization, and about partnering carefully with the big players where it makes sense to.

ISSUE 3: People. The loss of experience.

We’re about to lose a generation of people who know how our systems work. And the shortage of new people – we can’t seem to graduate engineers fast enough, and in the US, for example we can’t get enough visas for those who want to come in. And some bright people are concerned about whether they can make money from their own IP in this industry without an army of lawyers.

Solution: I have to get on a soapbox here for a minute; our industry must be involved in policy decisions about these things. From retirement to education to immigration to whether IP law will support people who want to create new things, we are surrounded by legal, political and governmental issues and only a few companies know what to do about it. If there is a solution, it lies in the traditional path of getting involved with trade associations – in the US, the ITAA is a good example – and making our voices, as an industry, heard. The technology industry needs to engage.

And there are some technology solutions– eLearning has enormous intellectual and economic promise, for example. And knowledge capture, expertise location, the use of social computing techniques like wikis, blog crawling – all these things play a role too.

ISSUE 4: New economic and licensing models – software as a service, open source, value-based pricing, etc.

Solution: This is an uncertainty for any individual company, but it’s healthy for the industry as a whole. There is a new IT ecosystem emerging that will create a new model of pricing, licensing and payment mechanisms. Its shape is uncertain, but the best guidance for most companies is to watch closely and listen to the customer’s needs. Forrester spends a lot of time tracking how companies want to buy, and they are as uncertain as the suppliers are. But one thing remains clear – if the offering has demonstrable value and the price is fair and in keeping with that value, we’ll find a way.

ISSUE 5: Technology change. Everywhere we look – chip architecture, communications protocols, software architecture – everything seems to be undergoing wrenching redefinition. What to do?

Solution: This is often perceived as a problem, but in fact, it’s a sign of health. Nobody is suggesting that the basic problems have been solved and we don’t need to change anything. We continue to improve – more power, less cost, easier management, more flexibility. Arthur Clarke once said that “any sufficiently advanced technology is indistinguishable from magic.” Sounds like a good goal to me. We simply need to keep up – and remember that it’s about the customer

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Look this week for more of Merv’s insights. On Wednesday, Merv will discuss his five predictions of future trends, their implications and business opportunities.

I also encourage you to share your thoughts here on these interviews or send me an e-mail at sibaraki@cips.ca.
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Computing Canada (CC) is the oldest, largest, most influential bi-weekly business / technology print publication with an audience that includes 42,000 IT decision makers in medium-to-large enterprises. For more than 30 years, Computing Canada continues to serve the needs of Canada’s information technology management community—you can request your free subscription at: http://www.cornerstonewebmedia.com/plesman/main/Subscription.asp?magazine=CCA.

For the latest online business technology news go to: www.itbusiness.ca

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Thank you,
Stephen Ibaraki, FCIPS, I.S.P.

Comments
  • Some added thoughts on Merv’s issues:
    Issue 1: I see this innovative and dynamic approach happening in both CIPS and Microsoft. For Microsoft, their Mix06 conference is a prime example and we have blogged about it here. Another would be Microsoft’s free Virtual Server program—again search for it here in the CIM.

    For CIPS, their new Body of Knowledge, Certification Paths, Code of Ethics, Best Practices are examples.

    With both, this Canadian IT Managers (CIM) forum is a way of engaging diverse stakeholders – working with communities. Blogging is the new medium for interaction and collaboration and both Microsoft and the Canadian Information Processing Society are partners in this venture. We also have the support of Computing Canada and ITBusiness.ca, the two leading print and online publishing channels.

    Issue 2: SMBs are still relatively untapped and channels are the key. This is true even in emerging areas such as SaaS (Software as a Service). I have been recently interviewed a number of times in this area and I have an interview upcoming with a Microsoft channel partner Ideaca where we will talk about this.

    Issue 3: A national voice and advocate for the IT professional is the home base or one constant for the business technology worker where job change is frequent in a dynamic industry. John Boufford CIPS President, recently talked about CIPS being a Community of IT—community being the key work here. Merv’s speaks about a trade organization and in Canada, the non-profit Canadian Information Processing Society (CIPS), serves this role as advocate for the IT practitioner. We act as a collective voice on new legislation, public policy, risk mitigation for business, privacy, security, IP protection, educational accreditation, professional certification, international trade law, labour standards, and related matters that are prime importance to the IT professional and to their careers.

    Issue 4: There have been blogs on licensing and pricing models. Stay tuned here as new programs are released.

    Issue 5: Change speaks to opportunity and you create your own luck, “Luck, that is where preparation and opportunity meet”—Vice Lombardi.

    Cheers,
    Stephen Ibaraki, FCIPS, I.S.P.

  • Some quick comments:

    Issue 1: I see a few ways to solve this problem.

    a. "Software + Services" or even "Software as Services". If you host part of your software on your own website, then it is a lot easier to bring your users along for an orderly migration. I understand this is not appropriate for all scenarios, so it is just one of the solutions.

    Example: Most of MSN software and services, even Instant Messenger, are easily upgraded, due to their Internet nature or Internet connection.

    b. Services-oriented architecture and component technology.

    More and more software will rely on web services and other components to provide functionality, so change will mostly occur in the back-end services and therefore easier to manage.


    Issue 2: I see a lot of small companies desperately in need of custom software but they do not have the budget to do it. So software for small business is generally in vertical markets where the requirements are well-defined, so software vendors can write once and sell everywhere. A good example of this is restaurant business. If the business is not so well-defined, then how can you make money by writing custom software for small companies?

    The reason it is hard is because for each project, you will need to travel to client site and hold meetings. You will need to discover requirements, define a solution concept, write a proposal, and negotiate a contract. Only after all these can you actually bill client for your time. Then comes the installation and support, and this you may or may not be able to bill client depending on the budget.

    Recently I developed a web-based order management software for a small company client, and billed for about $2500. It occurred to me that maybe I can customize it for other small companies and bill the same amount. And customization will enable leverage, and possibly a more viable business model.

    Actually, recently I met a J.D.Edwards consultant, and she told me that she received a lot of requests from small companies on order management or inventory control software. Obviously J.D.Edwards is an overkill and there is nothing suitable out there for small companies. This got me thinking about writing once and customizing for each small company.

    Issue 3: The baby boomers are leaving workplaces, and it is hard to replace them. We will need to step up to be managers and leaders. Traditioanlly IT people are not known to be great with people, so this is a great opportunity for those who are great with people or want to grow to be.

    Issue 4: The Google and Open Source business models are the good innovations in a healthy marketplace. It helps to ensure Microsoft does not become complacent and must continue to work hard for their money. Even though I make a living on Windows, I believe competition is essential for all of us to grow, and it is in our best interest to welcome and encourage competition. If we cannot do this, then we have already failed because we are retreating from life, not embracing it.

    Issue 5: Again, change is good because it creates a lot of opportunities for the courageous and adventurous. We all liked change when we had nothing to lose. But when we have vested interest in status quo, then we get afraid of change because we are afraid of loss. The courage to give up what we have to pursue something better is probably the highest level of courage, and it is something I always think about and grapple with.

    Thank you for your time, and I hope you find some useful points.

    Jing

  • Jing,

    That’s a very fine analysis of Merv’s “Issues.”

    On your first point, I see the consumer space leading the enterprise market. So watching what happening in the consumer area is a way of predicting future trends. SOA is pervasive and an enabler for wide spread collaboration.

    On issues 2: what are your main challenges when your write systems and how do you resolve them? Can you share two overviews?

    Issue 3: I agree there is a real opportunity here. I would recommend a versatilist approach or multiple skill sets with business acumen. There are several blogs here in this area.

    Issue 5: If I feel too comfortable, I know I’m not growing so I take on new projects in new areas. I do this self-check daily. I also recommend a personal SWOT analysis. Here’s a blog on the topic:
    http://blogs.technet.com/cdnitmanagers/archive/2006/03/31/423788.aspx

    Thank you,
    Stephen Ibaraki


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