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Notes from the Field – the Microsoft World Partner Conference

by Kendall Lougheed, President

Washington, DC.  July 16, 2010

There is nothing like the World Partner Conference when it comes to BIG. Microsoft does it all very big with 9,500 partners and 3,500 employees.  The 20,000-seat Verizon Centre was home to our daily fireside chats.  The Convention Center that covers 6 city blocks over 4 floors was the nucleus of our countless show and tell sessions.   So what really happened?  Read on for my report as one of the many partners who made the pilgrimage.   

Cloud Computing

Cloud, cloud, cloud, cloud, cloud.  This was Microsoft’s main message to partners this year. Cloud replaces local servers, network management, and expensive communications infrastructure, and rids us of our unruly IT staff. Is it that simple? No, because system integration is hard to achieve, even with the latest suite of Microsoft products.    

My take is that the cloud may have immediate attraction for companies wanting to minimize cost rather than gain deep integration between applications.  Microsoft offers Windows Azure as the new universal platform for all cloud services and operating systems including those of its rivals.  So is IT going to become a commodity, or are companies going to continue to make investments that enable their critical market differentiators?

SharePoint

SharePoint is Microsoft’s most successful product ever! Microsoft announced that SharePoint reached $1B in sales faster than any other product and the $2B mark will be hit this year.  The new SharePoint 2010 and Microsoft Office 2010 are more tightly integrated than ever and I have to admit that this is going to be really big when it comes to document management, enterprise content management, and collaboration.  Our own Information Management team is very excited and also very, very busy with it.  SharePoint happens to figure prominently in our business.  Our goal is to build the best knowledge repositories and SharePoint does a great job when it comes to being practical and easy to adopt – assuming you started with good architecture. 

Unified Communications

Microsoft has set its sights on unified communications - coming out with version 14 this Fall. UC will allow people to communicate over any combination of phone, desktop (with or without audio/video), and mobile device. UC includes white boarding, conference calls, voice messaging integrated with Exchange Server, a thick client or a thin client.  My personal prediction is that UC will become the battleground for the epic fight between the two titans Microsoft and Cisco. Round one has Cisco owning the domain of infrastructure and telephony while Microsoft owns the desktop. Who will win the next round?

Mobile Devices

One thing about Microsoft is that they don’t give up.  After many years of struggling against Apple and RIM for market share, Microsoft is coming out with Windows Mobile 7 this Fall. I have a collection of Windows Mobile devices that I abandoned, mostly because of battery drain or a hung device, especially the 802.11-supported devices.  The promise of a killer device is big, so let’s see.

What happened to my newspaper? What executives should know about Information Technology’s future.

By Kendall Lougheed, President

A light bulb went on this morning.  Two news items on CBC radio are telling us an important story and I don’t think that very many corporate executives are ready for the ending.  One news item tells a final chapter - the end of traditional communications.  The other news item announces the beginning of another communications era.

Traditional communications media are on the way out

This morning, CBC reported on the CanWest media empire bankruptcy and disposition of its TV stations and newspaper assets.  These companies no longer know how to make money. Their declining audiences have moved elsewhere and advertising revenues have declined.  Bottom line is that traditional media communication systems are anachronisms.  This trend can be quite discomforting to those of us who grew up on “old” media. After all, there is something special about Lloyd Robertson telling us the news with his confident, professional and authoritative demeanour.   And what joy we feel sitting down on a Sunday morning with the newspaper and a cup of coffee.

But there is a decline and we need to question why.  Are audiences just moving to other media such as the Internet?  Yes, to some extent, but content itself is also changing and with it, the communications model itself.   But first, consider the new communications media.

The new communications media are Internet based and have no limits

On March 9, 2010, Cisco Systems, the world’s largest networking systems manufacturer announced their new CRS-3 carrier-class router.  This new media-aware equipment provides a 12-fold increase in network performance and offers 322 Terabits per second of information transfer. Sounds impressive… how fast is that?  Well, it “enables the entire printed collection of the Library of Congress to be downloaded in just over one second.  Every man, woman and child in China can make a video call simultaneously; and every motion picture ever created can be streamed in less than four minutes”.  The CRS-3 is 8 million times more powerful than the Radio Shack computer I bought in 1979. 

Canadian Telco and cable companies will soon install these Cisco CRS-3’s.  In fact, the carriers are busy upgrading their infrastructure to deliver more content in more forms to our homes, our offices, and everywhere in between.  We will watch high definition movies in 3D, we will have access to more online services and enjoy any content without delay. Why run down to the video store when you can click a button to get the same movie?  Why not watch the news when it’s convenient rather than when the network slots it into their schedule?  Why not put together your own TV series on submarine warfare? 

Your TV, radio, computer, mobile phone, alarm system, stereo, even your 8-track will all be connected at limitless speed to everything everywhere.  And according to Cisco, the CS-3 is designed to transform the broadband communication and entertainment industry by accelerating the delivery of compelling new experiences for consumers and new ways to collaborate in the workplace.” 

The new communications model and the new content

The old media model is essentially a one-to-many distribution system. Content is delivered from a single source to a mass audience, usually in a given geographic region.  Content production and distribution reflects the capabilities of the technology. One printing press manufactures a newspaper’s content that is distributed by truck overnight.  A television station broadcasts local news while its network does national or regional news.

The new communications model over the Internet permits a varied and dynamic communications model, including one-to-many, one-to-one, many-to-one, and many-to-many. Because of this, new media can engage audiences or users in new and unique ways.  Mass communications to broad audiences is giving way to common interest groups, or communities of interest. Groups may be Westmount High School pals, an interprovincial policy working committee, an Elvis fan club, or an ad hoc group of engineers specialising in constructing tall buildings on mud.

Public and office communications are becoming more personal and less formal.  I am one person who likes privacy and am horrified at the thought of exposing my life to the public.  We send and receive vast amounts of email daily and we have all become more tolerant of typos, concatenated sentences, and fuzzy ideas. We gave up quality writing standards because of the sheer volume we have to deal with.  Our dependence on email is becoming increasingly heavy.

With the new communications model we can work and play online, near line, or offline.  We can communicate with increasingly varied forms.  Through its short history the Internet started with plain email, became a mainstream technology when layout and graphics (HTML web pages) became available, and now easily does audio, video, text, animation, and live action.  Microsoft Office, our source for Outlook e-mail and productivity applications, is going 2010 this year and it promises to take us to the next level of design and communications.   Multimedia support will finally integrate our computer-based phone system with our contact lists, video with our audio and rich animation to liven up our PowerPoint presentations, and offer rich online meetings. 

What does this mean for your organization?

Facebook, Twitter, LinkedIn, YouTube, Delicious, Digg, EOS, Netmeeting, and Plaxo are names of systems you’ll want to know about.  The same applies to social bookmarking, blogs, cloud tagging, Wiki’s, and RSS.   You are going to need to learn when and how to apply these technologies in your own organizations.  

You will have to accept the co-existence of the personal and the professional. Decentralized communications means loss of control. Content about your organization will come to exist as much outside your physical and electronic walls as inside. You will have decreasing central control over the conversation between your organization and your customers.  Your reputation will be determined by people you never knew.  Your corporate records now hide in your email. They will soon be pasted onto Web sites or stuck into some Facebook discussion that you can neither save nor destroy.  Your administrators will have to figure out how to manage corporate information assets in this environment.

I have a University degree in communications, over 40 years of technology experience, and, as you can probably tell, communications is a favourite subject.  Yet the challenge of coming to grips with new media is daunting to say the least. Maybe it’s because I am pushing 60.  Younger generations coming into your companies are not troubled in the least by these new ways of conversing.  But for you - the executive - the mission of your organization may remain just as valid now as before, but execution of your mission is going to transform into something very different, very quickly.

The broad objective for the savvy media-aware executive will be two-fold. First, you must develop good communication tools that will engage your customers in an open forum.  You will have to deal with the bad and the good, so get used to it. Your ability to respond to your customers will still define your success.   Second, you must find a way to capture and manage significant content to leverage it in the future.  The communications tools and the leveraged content will foster tomorrow’s success. 

100%!… that’s how much Ottawa is giving back in technology spending

So you’ve been thinking of boosting your productivity by adopting new technology.  The 2009 Federal Budget is providing a stimulus to act. 


Newly acquired computer equipment and software for use in your Canadian business and purchased after January 27, 2009 can be fully expensed in the first year (that’s 100!).

 

In prior years, the capital cost allowance rate (CCA) was 55% declining-balance and deductions were restricted to one-half of the CCA write-off in the first year.  As a stimulus to assist businesses to increase and accelerate investments in computers, the 2009 Budget allows a full deduction on new investments in computers and system software in the taxation year CCA is first available.  That means your business can fully expense the costs of the investment in year one.

 

Eligible computer equipment and software must be situated in Canada, and be used in a business carried on in Canada, or for the purposes of earning income for Canadian property.


Thinking of boosting productivity with new technology?  Include technology investments in your business plan.  Act quickly because the 100% CCA deduction rate applies only to technology investments purchased from 27 January 2009 to 01 February 2011.

 

Contact me (Shirley.Chung@MicroWorks.ca) if you'd like more information about this.

 

Shirley Chung

Senior Business Analyst

How to Survive Tough Economic Times

Staying in business for over 25 years has not always been easy.  MicroWorks had to survive all kinds of growth, shrinkage, capacity, delivery, and sales problems.  But our worst events were the three recessions that took place in the 80’s, 90’s and  2001.  Speaking from the point of view  of February 2009 I still believe that no economist or government can predict the bottom of the current economic slide.  It appears more like a free fall and we are in for some very tough times.  But there is a silver lining in that cloud – a recession has always made us stronger and I believe it can do the same for our private and public sector clientele.  We have our strategy in place and it may be relevant to both private and not for profit organizations.   One thing I have to say is the weak may not survive. 

When I became a consultant in the early 1980’s I was unaware that a recession was going on around me. I just knew that it was difficult to find work and I concluded that I was simply not very good at marketing. The next recession in the early 1990’s hurt my IT business hard, as contracts were cancelled and work dried up almost overnight. I made a big mistake by hanging onto to my cherished but idle staff until our last dollar was nearly gone.  Of course we inevitably suffered a shortened work week and layoffs anyway and we had to manage cash flow on a daily basis.  We did survive but it hurt, and recovery was slow. 

But in 2001 I had learned a little about marketing and I remembered our failings from the previous recession. This time we decided on a strategy of acquiring new customers. After all, we had lots of capacity.  Our sales volume did go down but not a lot.  To my surprise, by the time the economy recovered 18 months later, our sales shot up even more quickly.  I realized that our customer base had grown by 20% and now they had the need and the money to reinvest in IT.

So here is my plan for the future.  The 2008 recession is still a big unknown. Many experts feel that the recession will be deep, but nobody knows how long it will be.  For MicroWorks, our strategy is to help our existing and new customers find focus. With less money and fewer opportunities around, it is important to identify what is most important to the organization and focus on it. We have to target our limited capital to maximize impact. 

Now is a very good time to understand your markets.  You must determine how things will change for you, your clients, and your competitors.  And whatever actions you take, you will also have to show a quicker return on investment, possibly within one year if credit remains tight. 

Publicly funded organizations face the same problems. They face cutbacks from their funding sources, including private and corporate donations and government funding. In the Great Depression, charities were cut back to 60 of their previous funding levels, just when they needed more.  By 2010 I expect governments to be looking very closely at their own expenditures and the visibly weak NGO’s could get cut back or cut out.  To me the solution is similar – identify key objectives and focus on them, making sure that your renewed impact is both highly felt and highly visible.   

I see three areas that stand out for planning a recession. First, is strategy development in your organization that will provide the necessary focus.  It means identifying only a few key activities that could help shift your future from survival mode to prosperity. Mostly those key activities will relate to work optimization (reducing cost and increasing productivity) or to finding more work. 

When it comes to work optimization, I believe that collaboration and content management technologies can improve the productivity of information workers by 15 to 25%. This includes document management, information management, project sites, corporate intranets, and customer or stakeholder extranets.  But to succeed, these tools must be well integrated and well adopted.  Well-adopted collaboration systems are not hard to accomplish when your plan it right. Work optimization and mission impact opportunities are especially important for NGOs because they are not likely to grow revenues in hard times.

When it comes to getting more work, it is time to bring structure to the ad hoc.  And whose marketing, communications, or sales department seems to run like a Swiss watch?  A CRM or constituency management system can help to organize your marketing initiatives, and ensure the quality and reach of your sales funnel.  If a managed funnel can increase sales by 10% in good times, doing so in hard times will help to defray a loss of revenue and keep your cherished staff busy. Cutting staff may be a quick choice for the short term but can be bad for the long term for lots of reasons.  Keeping your staff productive is harder to do, but when the economy does turn around, your sales will shoot up like a rocket.

You can also finance your initiatives by getting rid of the clutter: the unproductive projects, the unyielding and high maintenance legacy systems, and activities that may be important but are not in the top 10.  Consider how you operate your IT systems and consider outsourcing.  Hosting, server consolidation, and using consultants for highly technical work or project implementation are money savers. 

Here are some related references: 
“Seize Advantage in a Downturn” by David Thodes and Daniel Selter.  Harvard Business Review, February 2009 p50.  Also online. 

Microsoft testimonials on SharePoint productivity: http://www.microsoft.com/sharepoint/savemoney.mspx

Kendall Lougheed
President

What is the business value of your IM investment?

Return on investment (ROI) is simple to determine when you measure the value of transactional systems like unit processing.  But how can you measure the value of an information management or collaboration solution because they appear to be vague?    

Harvard’s Roger Kaplan, talks of knowledge management in simple terms:  There is no greater waste than a good idea used only once.”  Numerous studies find office workers wasting over 2 hours per day searching for information.  Other studies find that corporate decisions are made without the correct information (58%), and many managers unknowingly redo work they cannot find (25%).  If you thought your organization was wasting time and tripping over each other, you were right. 

Let’s implement an IM solution to overcome these problems.  To calculate the ROI, let’s define your office workers as saving a minimum 20 minutes daily by finding better information more quickly.  You will realize a productivity increase valued at two weeks’ salary or  $2,000 per employee per year based on an average salary of $50,000.  For an office of 100 information workers, your ROI on the $300,000 IM investment will be under 18 months. 

Kendall Lougheed, President
IT Investment and Alignment Continue to Make Companies Competitive

We work to align IT and IM implementations with business strategy… but so what? Why does this matter? What effect does IT investment have on a bottom line?

 

This year’s July-August issue of Harvard Business Review demonstrates the “so what” of IT investment in McAfee and Brynjolfsson’s Investing in IT that Makes the Competitive Difference.

 

“We set out two years ago to compare the increase in IT spending with various measures of competition, focusing on three quantifiable indicators: concentration, turbulence, and performance spread. In a concentrated or winner-take-all industry, just a few companies account for the bulk of the market share. For our study, we focused on the degree to which each industry became more or less concentrated over time. A sector is turbulent if the sales leaders in it are frequently leapfrogging one another in rank order. And finally the performance spread in an industry is large when the leaders and laggards differ greatly on standard performance measures such as return on assets, profit margins, and market capitalization per dollar of revenue—the kinds of numbers that matter a lot to senior managers and investors.

[…]

Were there economywide changes in these three measures after the mid-1990s, when IT spending accelerated? If so, were the changes more pronounced in industries that were more IT intensive—that is, where IT made up a larger share of all fixed assets within an industry? In a word, yes.”

 

Our authors explain that the competitive gap has indeed grown in industry, whereby successful companies increasingly push less successful competitors straight out of the market. This trend emerged just at the time that corporate IT investment boomed; average IT development expenditures of $3500 per worker in 1994 jumped to $8000 in 2005. With the increasing adoption of internet and enterprise-based software tools, such as CRM and Enterprise Content Management systems, IT growth shows little probability of decline.

 

What is the correlation between these two factors? How can IT alone set the competitive market aflame across multiple corporate environments? McAfee and Brynjolfson elaborate:

 

“While it’s true that the tool kit of corporate IT has expanded a great deal in recent years, we believe that an overabundance of new technologies is not the fundamental driver of the change in dynamics we’ve documented. Instead, our field research suggests that businesses entered a new era of increased competitiveness in the mid-1990s not because they had so many IT innovations to choose from but because some of these new technologies enabled improvements to companies’ operating models and then made it possible to replicate those improvements much more widely.”

 

IT capabilities, such as enterprise content management and online applications, improve and optimize both processes and deliverables. Companies work faster and with greater results and consistency, bolstering their competitive advantage. When organizations of all corporate domains make these investments, the “so what” of IT and IM rests with the need to remain up to date and relevant in your own market.

 

Melanie Sucha, Information Management Specialist