Cloud is increasingly becoming a familiar topic for many companies. Although it is still early in the lifecycle, Cloud Computing goes Mainstream, according to the BBC. And I am seeing an increasing amount of large enterprises discussing the subject with ever increasing understanding. Many are testing the public cloud, but a number of issues, including security and legal ones, are keeping them from using it effectively for their key requirements.
The public cloud ecosystem consists in three key parts, the cloud infrastructure (IaaS), the network and the devices. Although there are these security and legal aspects to take into account, the cloud infrastructure is becoming more robust by the day. As times passes, new services with higher levels of security, more business tailored service level agreements, and more business oriented services are starting to appear on the market.
The device space is still in its infancy. It is increasingly becoming clear that the PC or the laptop will no longer be THE interface into the cloud. As the Millennial Generation, also referred too as Generation Y, is entering the job market, they bring with them a complete new approach to interacting with technology. They use smart phones, tablets, iPAD's or slates etc. to surf the internet, to remain in contact with their peers and to interact with each other. They expect a similar approach in their business. While PC's and laptops will still be sold in large quantities over the coming years, building new devices allowing such interactions with the cloud will be the new battlefield. Highly visible battles between companies such as Adobe and Apple are the first examples of what is doomed to happen. Indeed providers of cloud services are looking at a single standard, being de-facto, to develop the interfaces allowing them to offer their cloud based services on any device, going from a set-top box to a smart phone. Many see Adobe Flash as just providing that capability. This however works for everything except the Apple camp.
Who will win this battle is uncertain at this point in time, but what is interesting is that the battle is happening and that many are tipping in. People are looking for an intuitive experience to access the cloud, regardless of the device they have chosen to use. It is actually interesting to see that a number of enterprises are no longer dictating which device their employees should use, but rather give them a compensation to buy the device they wish. Compatibility in the device world is quickly becoming an issue that needs to be addressed.
But the device side is not the only one. There is also the network. And here things are more complex. First, networking is quickly becoming the most expensive cost element of your cloud bill. First, the cloud service providers charge you per GB of information you upload or download. And if you do anything else than a compute intensive task, these start counting pretty quickly. Second your network provider also charges you for transferring data over the internet. So, you are being charged twice. But the cost is not the only aspect. There is also the real bandwidth available for uploading and downloading information. I have checked bandwidth during my travels over and over again, and found download speed going from 3-7Mbits/second, and uploads from 300KBPS to 1.4MPS. Even with the lather, transferring 1GB takes more than 15 minutes. You may argue that you have way better numbers in your premises, and I believe you, but the whole objective of the cloud is ubiquitous access, this means access from any place. Indeed, the cloud facilitates the work of the mobile worker, giving him/her access to his/her computing environment from anywhere in the world. Unfortunately, then you need to take consumer type network bandwidth into account.
It is the combined experience of the cloud services, the network and the devices that will make cloud really attractive to the mobile worker of the future. Today I see activity happening in each of the areas, but unfortunately, I do not see a lot of work going on where all three are looked at in combination. Maybe this is a new area we need to focus on moving forward.
I have been in India these last couple days and had the opportunity to speak at an Automotive event in Chennai. One of the presentations there intrigued me as the speaker bluntly pointed out that "Manufacturing is moving East". I went digging a little and found an interesting document from Eurostat, titled "Industrial Product Indices - Global Developments" . Unfortunately, the one I found only goes to 2007, pre-dating the latest recession. However, the numbers are staggering. Taking an index of 100 in 2000, China is at 240 and India at 160 in 2007. Contrasting with that, the 27 countries of the EU are at a meager 112, while the US is at 110. You could argue that moving east is maybe not completely correct as Brazil is at 125, but still far away from the India and China numbers.
The internal market in China grows as demonstrated by a growth of 17.2% of retail and consumer sales during this year's lunar new-year as reported by the Global Times. This has a number of implications.
First, as the internal market grows, American and European companies seeking growth are attracted by the Indian and Chinese markets and increasingly invest in the local markets to have/increase presence in the market. This brings an interesting new competition to the local companies. On the one hand, the Europeans and Americans have to learn to do business in Asia, but on the other, they bring efficiencies and production methods with them that local companies not always used.
Both China and India have experienced the American and European production methods through the outsourcing of manufacturing and services. Many Indian and Chinese companies are subcontractors and suppliers to large European and American enterprises. They have had the exposure allowing them to compete effectively in their local markets. However, smaller companies may have more difficulty and may end-up either going bankrupt or being absorbed by larger ones as they struggle to survive.
But as one of the attendees pointed out to me, globalization is increasing fast. He fully agreed that manufacturing was moving east, but pointed out at the same time that a number of Indian and Chinese companies had started buying European and American companies lately, citing Tata Steel buying British Steel, Mittal Arcelor, Tata Motors Jaguar-LandRover, Jelly Volvo, and I'm sure there are a number of others. So, in the end is it "Manufacturing moving East, Investments moving West"?
I don't know, but it definitely demonstrates increased globalization. And this brings with it a number of challenges for all parties. First, companies increasingly require working in a multi-cultural environment. This often, and I can speak from experience, brings with it misunderstanding and frustration. Indeed, the same word does not always have the same meaning, and decisions are not taken in a similar way. Doing some research for this post, I ran into a quite interesting article titled "Cross-cultural differences in decision-making styles: A study of college students in five countries", pointing to such differences. Now, such decision making differences do not only affect business people involved in the supply chain, but also the consumers. A study performed in Columbus, Ohio, researched the difference in decision process when buying a car between Japanese and American students. It's often difficult for management, located in one country, to fully assess the differences in the market in another country. They need to rely on local people and trust them enough to involve them in the decision process.
Second, as supply lines become longer and more complex, companies need increased communication levels to keep abreast of the situation. History has demonstrated at multiple occasions that it is often supply lines that stop the greatest worriers on their way to conquer new territory. The same applies for businesses. Building strong communication and supply lines is critical to embark on this movement east.
Local companies on the other hand have to increase their efficiencies if they want to maintain their competitive advantage, the knowledge of the terrain.
So, the current trend to globalization, the move east are great opportunities to develop more robust enterprises that take full advantage of their size and capabilities to conquer new markets, east today, maybe south in the near future. Whether these enterprises are from the west or the east, does not matter, it is the ones that can combine a strategic vision with strong operations and a deep understanding of cultural differences and global collaboration, that will be the winners in the future.
The latest recession has gotten a profound impact on many supply chains and forced rethinking strategies. In a quest to reducing costs, many have diminished safety buffers, established lean thinking, and redesigned their flows. In that process they have made themselves more vulnerable to variance, while their objective is to maximize sales. Doing so implies a much closer relationship with ecosystems partners. Cross Supply Chain collaboration is critical to gain visibility, address issues early and improve agility.
Many "Recession Survival Kits" are out there, and although they will add value and improve the situation, we should not forget the simple communication & collaboration aspects. It is when people talk, share information and experience, and jointly come up with solutions, that problems are resolved.
What is needed to build a culture of collaboration throughout an ecosystem. Obviously, there are technologies out there that facilitate the sharing of information, the interaction and the visibility. Private and public hubs, unified communication, supply chain visibility, are all tools that can be used to develop supply chain communication and collaboration. NiST, in its definition of Cloud, introduces the concept of Community Cloud. This is probably the next technology that addresses ecosystem collaboration.
But my point today is not so much on the technologies to be used, but rather on the intangibles that need to be in place to foster the collaboration. I'd like to highlight following elements:
- Building Collaborative Relations. It may sound obvious, but there must first be a willingness to collaborate. In the late 20th century, the principle of squeezing suppliers to the last nickel has been promoted and presented as the only way business could be done. Such approach has benefited some companies and pushed many of them to bankruptcy. As a side effect it has inhibited collaboration amongst suppliers and customers, as there was a fear that any information shared would be used to squeeze a little more. So, changing the paradigm and approaching the supplier relationship from a more collaborative angle is mandatory for developing the visibility, communication and collaboration required. Procurement departments may have to adjust to such approaches and move to collaborative sourcing, but they should do so, as it will help the ecosystem becoming more responsive at a lower price point.
- Trust. Sharing information, collaborating, adding value to the community, requires trust to be developed amongst the partners. According to the definition provided by the Merriam-Webster's Online Dictionary, trust is the assured reliance on the character, ability, strength or truth of someone or something, one in which confidence is placed. This very much corresponds to the trust that needs to exist between partners in the supply chain. They need to be willing to hear the bad news, to have confidence in each other, to understand that they both will act for the common good etc. Building such trust between ecosystem partners takes time. This is why I would advocate it can only be established with a small amount of partners.
- Win-Win. This is an overused term, but the essence of it is critical. If the partners do not have the impression they all win from working more closely together, they will not pursue the relationship. It is often counter intuitive for companies to think about how a particular action may benefit their supplier. They are in business to make money, isn't it? But helping the partner and ensuring he also gains benefits, has demonstrated over and over again as a wining proposition in the long run. Despite the fact Wall Street pushes us to focus on this quarter's revenues, looking at long term benefits, ensures the viability of the enterprise. And this should never be forgotten.
When looking at implementing communication & collaboration tools along the supply chain, the above 4 aspects should never been forgotten. The technology is there, but alone will not provide full advantage. Combining technology and the more intangible aspects are critical to gain full return from a unified communications & collaboration project.
Earlier in the year, I was asked to organize a summit for some of our key customers. The objective was to share with them some key thought leadership and start a dialogue around a number of topics including sustainability, cloud computing and innovation. As preparation progressed, so did the enthusiastic responses of our customers, unfortunately to tell us they would love to be there, but that the economical situation did not allow them to travel. This got us to completely rethink the approach resulting in us launching a virtual community. The stealth launch was June 1st and we are now ready to communicate more about it.
What I want to do in this blog entry, is not so much talk about the community itself, but give you some background on how we built what we ended up with.
The first step was for us to identify the key principles and features of our virtual community and we came up with following:
- The community should allow members in multiple time zones to share ideas and exchange information, which meant that the community should essentially be "asynchronous" in nature, allowing members to interact and consume thought leadership at a time that is convenient to them
- We wanted to combine provisioning of thought leadership (one way communication) with interactions (two way communications) between the members of the community. These interactions should be public or private, this means that for the public ones the other members could see them and potentially intervene in the conversation, while the private one should remain private.
- Thought leadership should be able to be provided in multiple formats including documents, podcasts, slide presentations with voice over and video. (This turned out to be a headache just before we got the community on line, but I will come back to that.)
- Community members should be able to share ideas publically, and to comment on other people's ideas. With the platform we decided to use, we have an additional capability that turns out to be quite interesting. The members can promote or demote an idea. This means that they get scored and that the most relevant ones bubble up to the top of the list. It's a sort of a vote of interest from the community and provides us, facilitators, with a good understanding of what interests our members.
- The community would be limited to Chief Information Officers and Chief Technology Officers to ensure common interests and a particular level of dialogue amongst the members. We would invite external guests to share their knowledge in the community, and initiate focused dialogues around particular topics of interest.
We choose a platform, www.brightidea.com, focused on innovation, and developed our community on top of the platform. Obviously, we struggled a little with the design of the site and its home page, but that actually turned out to be the easy part. However, we learned a lot along the way, and I would like to share with you some of those experiences.
- We realized that thought leadership, to be effective, should be short and sweet. So, we are urging our content providers to give us material (in particular multi-media) in around 20 minute chunks, as we discovered this is about the time somebody remains concentrated on a particular subject. Longer pieces are split in parts.
- It is not easy to "stream" multi-media" and as our system was in the cloud, it took our partner and us some time to experiment how to approach things.
- Sharing a slide presentation with voice over on the internet sounds like the simplest thing to do, isn't it? Well, that's actually not the case. Microsoft used to have a tool, but sunset that one with Office 2003. So, after a long search time, we finally found a tool converting to flash, allowing a simple view on a screen without having to wait for hours that the whole presentation is loaded on the local PC.
- To be able to refresh the content regularly, it is important to plan a pipeline of content providers with clearly defined due dates. This turned out to be one of the difficult things as for most people it's not their primary job. On the other hand, being able to refresh regularly is mandatory to have members coming back on a regular basis, which in turn fuels the conversation.
- The last one was how to motivate sales teams to invite their customers. Here reactions were very different, going from extremely enthusiastic people to people that did not want this ever to happen. It turned out that, when showing them what we were trying to achieve, many changed their mind and supported us well, but it took quite some effort to get there. Same applies to guests, some enthusiastically want to join and contribute, while one in particular, told us bluntly he did not want to get involved, demonstrating to us the still existing distance between university and enterprises.
We are now looking at refreshing the site, making navigation easier and creating some sub community pages. This will allow particular groups to have their own environment while still getting access to the other assets available in the community. We received quite some interest from members for this new feature. As any website, we see this one being in constant evolution. It has been an interesting journey, and continues to be. We are also looking at doing some events on the site, actual webinars on particular subjects. We realize this goes against one of the principles established at the start, but it fosters the community spirit. Obviously, those webinars should be recorded for inclusion in the thought leadership library.
If you happen to be a Manufacturing & Distribution Industry CIO or CTO and wish to experience our community by yourself, feel free to sign up here.
One last point that has nothing to do with the above. I am taking some time off, so my next blog entry will take a while to be posted. I do hope you don't mind, and wish all of you a great summer.