Open source paradigm now moves beyond building software, to building anything or atleast many things. Check out Crowdsourcing
Something business will clearly have to look closely at and see what it means for them and how to leverage it.
Saturday, July 22
Invention & Innovation
Invention is the development of a new device, process or method. Innovation is when the invention succesfully meets a market opportunity.
From the mythical days of lone inventors Ben Franklin, Wright Brothers, Edison, Alexander Bell etc. to mammoth R&D labs of large corporation like Xerox, IBM a single entity whether an individual or corporation could "innovate" if it owned the invention.
But things are changing as barriers to acquiring knowledge across the globe fall, ability of anybody anywhere to create new connections, new knowledge and hence "invent" constantly rises. Invention always a stochastic process is not something large R&D even with billions of dollars can now hope to control and own.
As Chesbrough points out "the old 'closed innovation' model-vertically integrated research-and-development departments that develop technology in-house for the sole use of their corporate parent-is becoming obsolete "
“Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology.”
Invention is not the sole domain of a few subject matter experts, scientists, or technical folks; users and customers are also participating as individuals and more importantly co-create their experiences as part of communities.
Open Source movement in software is the most visible example of this paradigm. Ron Goldman & Richard P. Gabriel's book "Innovation happens elsewhere" explore this phenomenon. But their book should have been more appropriatly titled "Invention happens elsewhere, but Innovation (hence profits) should happen here"
So how should firms and their R&D departments respond and see this paradigm as an unprecedent opportunity to deliever superior experience to their customers.
Coming up...stay tuned...
From the mythical days of lone inventors Ben Franklin, Wright Brothers, Edison, Alexander Bell etc. to mammoth R&D labs of large corporation like Xerox, IBM a single entity whether an individual or corporation could "innovate" if it owned the invention.
But things are changing as barriers to acquiring knowledge across the globe fall, ability of anybody anywhere to create new connections, new knowledge and hence "invent" constantly rises. Invention always a stochastic process is not something large R&D even with billions of dollars can now hope to control and own.
As Chesbrough points out "the old 'closed innovation' model-vertically integrated research-and-development departments that develop technology in-house for the sole use of their corporate parent-is becoming obsolete "
“Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively. [This paradigm] assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as they look to advance their technology.”
Invention is not the sole domain of a few subject matter experts, scientists, or technical folks; users and customers are also participating as individuals and more importantly co-create their experiences as part of communities.
P&G gets this phenomenon and is captured in its Connect & Develop Innovation Model
Open Source movement in software is the most visible example of this paradigm. Ron Goldman & Richard P. Gabriel's book "Innovation happens elsewhere" explore this phenomenon. But their book should have been more appropriatly titled "Invention happens elsewhere, but Innovation (hence profits) should happen here"
So how should firms and their R&D departments respond and see this paradigm as an unprecedent opportunity to deliever superior experience to their customers.
Coming up...stay tuned...
Thursday, July 6
Appropriating value from innovations in IT Services
Over next couple of posts, I would like to explore the subject of extracting value from innovation in IT services industry. I believe this is an extremely interesting problem.
In summary:
Unlike pharmaceuticals, biotech, microelectronics, chemicals; IT Services industry structure provides a “weak” appropriability regime for innovation. Patents, copyrights, secrecy etc. do not provide effective models to protect innovation from imitation by clients, competition and/or software application vendors.
In addition IT services firms rarely possess any “special” synergistic superior complementary assets for extracting value, rather it's salesforce that is "partner-led" or high touch account managers have very limited reach and associated overhead costs makes wider selling & marketing very costly & difficult.
Obviously I am ignoring innovations where value extraction can be achieved by spinning of subsidiaries, selling or licensing the innovation. In most cases R&D and innovation plays a critical role of signaling superior capabilities to prospective and current clients, thus playing a critical role in “premium rate justification”
Hence in general I believe IT services firms will move towards an “open innovation” paradigm by leveraging open source based business models to extract value out of technology innovations.
In summary:
Unlike pharmaceuticals, biotech, microelectronics, chemicals; IT Services industry structure provides a “weak” appropriability regime for innovation. Patents, copyrights, secrecy etc. do not provide effective models to protect innovation from imitation by clients, competition and/or software application vendors.
In addition IT services firms rarely possess any “special” synergistic superior complementary assets for extracting value, rather it's salesforce that is "partner-led" or high touch account managers have very limited reach and associated overhead costs makes wider selling & marketing very costly & difficult.
Obviously I am ignoring innovations where value extraction can be achieved by spinning of subsidiaries, selling or licensing the innovation. In most cases R&D and innovation plays a critical role of signaling superior capabilities to prospective and current clients, thus playing a critical role in “premium rate justification”
Hence in general I believe IT services firms will move towards an “open innovation” paradigm by leveraging open source based business models to extract value out of technology innovations.
Monday, July 3
It's not the method(-ology or tools), it's the mindset
On a recent roadshow I had the opportunity to visit and talk about innovation & research to IT leadership teams of some of the biggest/well-known corporations in US. Sadly most enterprise IT folks viewed innovation as mere application of new technologies, widgets etc. i.e SOA, BPM, Mobility. IT management practices in itself are rarely viewed as a source of innovation or catalyst to "business innovation".
Successful examples of truely innovative companies like Wal-Mart, Dell, Toyota, Progressive (Refer to HBR article "Deep Change: How operational innovation can transform your company") exemplify how IT can be exploited to achieve breakthrough business impact. IT leaders are supposedly in a unique position to champion this form of operational innovation. They have the broad top-management org-wide view of strategy, in addition are connected intimately with the nuts and bolts of key organizational & operational processes. Unlike HR or accounting leaders who might be constrained by their functional views & reach within the organization, IT managers have the resources and relationships to affect broad change and innovation. I have always held the view that IT function can be as good a breeding & training ground for general management leaders as finance, marketing functions.
YET, IT leaders are struggling to gain credibility, struggling to go beyond organizational cultures that devalues information technology. Worse many have abdicated the responsibility and instead of stepping up to the leadership challenge, view themselves primarily as a support/enabler function.
I believe it is this dangerous self-perception of IT as merely a support function that leads to some very dangerous trends of bureaucratic procedures, obsession with new technologies, us vs. them divide. Even the some of the popular industry language perpetuates this mindset i.e. "busines-IT alignment", as-if business (them) & IT (us) are different in the first place. Nobody talks of "business-marketing" or "business-finance" or "business-accounting" alignment.
IT leaders clearly have to step up and view themselves NOT as just supporting operational processes, but step up and show leadership in achieving operational innovation through effective & innovative IT management.
Successful examples of truely innovative companies like Wal-Mart, Dell, Toyota, Progressive (Refer to HBR article "Deep Change: How operational innovation can transform your company") exemplify how IT can be exploited to achieve breakthrough business impact. IT leaders are supposedly in a unique position to champion this form of operational innovation. They have the broad top-management org-wide view of strategy, in addition are connected intimately with the nuts and bolts of key organizational & operational processes. Unlike HR or accounting leaders who might be constrained by their functional views & reach within the organization, IT managers have the resources and relationships to affect broad change and innovation. I have always held the view that IT function can be as good a breeding & training ground for general management leaders as finance, marketing functions.
YET, IT leaders are struggling to gain credibility, struggling to go beyond organizational cultures that devalues information technology. Worse many have abdicated the responsibility and instead of stepping up to the leadership challenge, view themselves primarily as a support/enabler function.
I believe it is this dangerous self-perception of IT as merely a support function that leads to some very dangerous trends of bureaucratic procedures, obsession with new technologies, us vs. them divide. Even the some of the popular industry language perpetuates this mindset i.e. "busines-IT alignment", as-if business (them) & IT (us) are different in the first place. Nobody talks of "business-marketing" or "business-finance" or "business-accounting" alignment.
IT leaders clearly have to step up and view themselves NOT as just supporting operational processes, but step up and show leadership in achieving operational innovation through effective & innovative IT management.
Sunday, February 19
"Doughnut effect" in Enterprise IT
For decades enterprise IT was the queen bee around which all cutting edge technologies were developed. But just like many cities in the United States were subjected to the “doughnut effect”: the city centre becomes “hollow” as population moves from inner suburbs to the outer suburbs in search of newer, larger or more affordable houses, enterprise IT is going through a similar hollowing out effect.
Consumers & Clients drive technology choices
Today consumers external to enterprise boundaries have access to more choices, more powerful, richer technologies than enterprises. Earlier era was dominated by “processing industries”, where enterprise IT was characterized by “islands of automation” and that was ok as long as the islands supported the critical internal processes. Today with the growth of knowledge based economy, organizations cannot afford to lag behind in terms of being able to connect with stakeholders using latest technologies, where transactions, processes & relationships with all stakeholders, especially those external, need to be rich, dynamic, and adaptable, subject to constant reinvention. Ubiquitous connectivity and pervasive computing throws open unbounded opportunities for innovation across the enterprise. Consumers can now migrate from passive recipient to active co-creator of value.
Yet there is a rapidly widening technological schism between technologies within the enterprises and technologies consumers have access to. Rapid adoption rates of new technologies mobile phones, web based services, communities, blogging etc. is in sharp contrast to the way enterprise IT is stuck in legacy traps and is generally resistant to and suspicious of all new technologies even in the face of obvious end user adoption. In a competitive marketplace IT departments will have lead the way and move fast to close this gap to provide information and interact with consumers on their chosen technology platforms.
Software as Service
SaaS represent another dimension of this technology doughnut effect, where huge monolithic applications are being replaced by external web service providers. SOA & SaaS (Software as a Service) is gathering huge momentum; the buzz on the web is overwhelming. Salesforce.com has now morphed into Appexchange with all kinds of services available. http://www.salesforce.com/appexchange . MS has released Office live beta. Google is providing “customized” hosted email service. Rather than look SOA from internal Enterprise IT perspective, the disruption is applications being replaced by “outside-in” services. While conservatives would point to security, data ownership, customization challenges, I believe there are enough instances of Global 2000 going for salesforce.com. “Outside-in” services solve the legacy trap issue in single sweep. While the trends are not new or unknown, the tipping point is approaching faster than earlier thought.
Outsourcing
While nothing new, earlier outsourcing contracts were designed as a “all or nothing” total outsourcing deals, that essential transferred employees, sold assets to the outsourcer, changing little else. Infosys was among the earliest to promote Modular Global Sourcing where executives have to work hard to “modularize” IT into strategic and logical components that can then be distributed geo-locationally, to perform them where it creates the maximum value. Since then subsequent large outsourcing deals have confirmed this trend where companies have started thinking very strategically about how exactly outsourcing can/should add value.
Innovation Networks
Innovation and continous innovation is critial and this can only be supported by a market ecosystem i.e. Innovation Networks — that matches an enterprise demand for innovation with worldwide supply. "Innovation Networks will let firms fluidly weave internally and externally available invention and innovation services to optimize the profitability of their products, services, and business models. Innovation Networks will deconstruct vertically integrated invention-to-innovation cycles in software, finance, and CPG industries" (Forrester.com). Enterprise will have to facilitate complex webs of relationships among firms, universities, and other organizations for generating and sharing knowledge relevant to innovation.
While intimidating I believe these trends offer a unique unboundless opportunities to “Enterprise IT” leaders to go beyond “business-IT alignment-subservience" to leading businesses to horizons they could never see.
Consumers & Clients drive technology choices
Today consumers external to enterprise boundaries have access to more choices, more powerful, richer technologies than enterprises. Earlier era was dominated by “processing industries”, where enterprise IT was characterized by “islands of automation” and that was ok as long as the islands supported the critical internal processes. Today with the growth of knowledge based economy, organizations cannot afford to lag behind in terms of being able to connect with stakeholders using latest technologies, where transactions, processes & relationships with all stakeholders, especially those external, need to be rich, dynamic, and adaptable, subject to constant reinvention. Ubiquitous connectivity and pervasive computing throws open unbounded opportunities for innovation across the enterprise. Consumers can now migrate from passive recipient to active co-creator of value.
Yet there is a rapidly widening technological schism between technologies within the enterprises and technologies consumers have access to. Rapid adoption rates of new technologies mobile phones, web based services, communities, blogging etc. is in sharp contrast to the way enterprise IT is stuck in legacy traps and is generally resistant to and suspicious of all new technologies even in the face of obvious end user adoption. In a competitive marketplace IT departments will have lead the way and move fast to close this gap to provide information and interact with consumers on their chosen technology platforms.
Software as Service
SaaS represent another dimension of this technology doughnut effect, where huge monolithic applications are being replaced by external web service providers. SOA & SaaS (Software as a Service) is gathering huge momentum; the buzz on the web is overwhelming. Salesforce.com has now morphed into Appexchange with all kinds of services available. http://www.salesforce.com/appexchange . MS has released Office live beta. Google is providing “customized” hosted email service. Rather than look SOA from internal Enterprise IT perspective, the disruption is applications being replaced by “outside-in” services. While conservatives would point to security, data ownership, customization challenges, I believe there are enough instances of Global 2000 going for salesforce.com. “Outside-in” services solve the legacy trap issue in single sweep. While the trends are not new or unknown, the tipping point is approaching faster than earlier thought.
Outsourcing
While nothing new, earlier outsourcing contracts were designed as a “all or nothing” total outsourcing deals, that essential transferred employees, sold assets to the outsourcer, changing little else. Infosys was among the earliest to promote Modular Global Sourcing where executives have to work hard to “modularize” IT into strategic and logical components that can then be distributed geo-locationally, to perform them where it creates the maximum value. Since then subsequent large outsourcing deals have confirmed this trend where companies have started thinking very strategically about how exactly outsourcing can/should add value.
Innovation Networks
Innovation and continous innovation is critial and this can only be supported by a market ecosystem i.e. Innovation Networks — that matches an enterprise demand for innovation with worldwide supply. "Innovation Networks will let firms fluidly weave internally and externally available invention and innovation services to optimize the profitability of their products, services, and business models. Innovation Networks will deconstruct vertically integrated invention-to-innovation cycles in software, finance, and CPG industries" (Forrester.com). Enterprise will have to facilitate complex webs of relationships among firms, universities, and other organizations for generating and sharing knowledge relevant to innovation.
While intimidating I believe these trends offer a unique unboundless opportunities to “Enterprise IT” leaders to go beyond “business-IT alignment-subservience" to leading businesses to horizons they could never see.
Thursday, February 16
Digital Identity, Reputation meets real world
Check out dontdatehimgirl.com. Is this identity theft or freedom of speech? How far behind is a mashup with Google Maps ;-)
21 million subscribers of myspace.com, facebook, and other public social networking group don't care about privacy. Reputation is treasured more than privacy and security is taken for granted (government's job)
Sometimes with issues like privacy, security, trust we get confused between "ends" and "means". And the technology possibilities overshoot real world requirements
21 million subscribers of myspace.com, facebook, and other public social networking group don't care about privacy. Reputation is treasured more than privacy and security is taken for granted (government's job)
Sometimes with issues like privacy, security, trust we get confused between "ends" and "means". And the technology possibilities overshoot real world requirements
Internet Freedom and Tech companies
The recent controversy around Yahoo’s role in arrest of Chinese writer, Google’s self censorship, and in the context of “Prophet Muhammed’s cartoon” controversy raises the question of role of industry in furthering values of democracy and freedom of speech. Should industry and companies go beyond mere passive compliance to local laws to a more activist stance?
In the 80s Sullivan Foundation & Sullivan principles represented a voluntary industry effort to oppose apartheid. Religious, gender based discrimination, repressive Islamic regimes, environment, etc. etc. are all equally worthy issues that companies should not shy away from. Passive compliance seems like the easy way out, I believe firms should proactively aim to be a force for “good” while striking a fine balance with respect for diversity and differing value systems. It is difficult, yet responsible leaders will have to struggle with and find the right balance.
As opposed to a voluntary effort the proposed “Global Online Freedom Act 2006 ”, does look like overly intrusive in scope that takes a rather simplistic view of the nuances of issues involved. Check out Rebecca Mackinnon’s (former CNN China correspondent) website for a better understanding of the context and issues involved.
In the 80s Sullivan Foundation & Sullivan principles represented a voluntary industry effort to oppose apartheid. Religious, gender based discrimination, repressive Islamic regimes, environment, etc. etc. are all equally worthy issues that companies should not shy away from. Passive compliance seems like the easy way out, I believe firms should proactively aim to be a force for “good” while striking a fine balance with respect for diversity and differing value systems. It is difficult, yet responsible leaders will have to struggle with and find the right balance.
As opposed to a voluntary effort the proposed “Global Online Freedom Act 2006 ”, does look like overly intrusive in scope that takes a rather simplistic view of the nuances of issues involved. Check out Rebecca Mackinnon’s (former CNN China correspondent) website for a better understanding of the context and issues involved.
Wednesday, February 15
Universal Identity Metasystem
Recently announced Infocard project from Microsoft aims to provide “a uniform way for people to log on to Web sites, conduct transactions and prove their identities online” and will be incorporated into
Kim Cameron’s website http://www.identityblog.com/, gives a good insight into the thinking that went behind the project. It begins with laws of identity that defines the architecture:
Law 1. User Information should be revealed only with consent & user has control of how and when this information is released
Law 2: Minimize the information revealed
Law 3: Information should be released to only participating entities in the relationships
Law 4: The universal identity metasystem should support “omnidirectional” identifiers (for public entities) and “unidirectional” identifiers for use by private entities
Law 5: The Universal Identity Metasystem should channel and enable interworking of multipleidentity technologies run by multiple identity providers
Law 6: The system should extend to and integrate the human user in a manner that is meaningful to him/her
Law 7: The system should provide a consistent experience across contexts,
The components that implement the above architecture are
1. A way to represent identities using claims
2. A means for identity providers, relying parties, and subjects to negotiate
3. An encapsulating protocol to obtain claims and requirements
4. A means to bridge technology and organizational boundaries using claims transformation
5. A consistent user experience across multiple contexts, technologies, and operators
The Identity Metasystem is built on interoperable Web Services (WS-*) protocols, i.e WS-Trust, WS-Metadataexchange, WS-Security Policy and secured using WS-Security
The first law concerning user consent and control has generated some controversy. What extent of control should user expect over the records of transactions he/she conducts with service providers? What about reputation information like credit score, ebay ratings etc.? What happens when regulations demand users reveal their identification? Does users control over their identity information conflict with someone else’ freedom of speech? Check out http://identity20.com/ for in depth exploration of these issues.
Within large enterprises too identity management aims to go beyond access control, SSO, directory integration and provides scalability and business agility in a way the was not possible with earlier technologies. Whether strong centralized IT departments see the need to re-engineer their legacy identity management systems yet is still unclear. But as SOA paradigm gains momentum federated digital identity cannot be far behind.
Security, trust, authentication, privacy, identity management are all interlinked and among the biggest challenges facing Internet based applications/services, yet the solution has to be “simple, and open” and Infocard from MS looks like a great start.
Other candidates include sxip.com
Tuesday, February 14
Bill Gates sees end to passwords in sight
"Bill Gates sees end to passwords in sight:
Bill made it clear that he really cares about privacy and security, just as he is committed to helping build an identity metasystem that moves the industry to the next stage of collaboration and reach. ...Now, with Windows Vista, Gates feels he finally has the right weapons to supplant the password as a means of verifying who is who on computers and over the Internet. The new operating system, due later this year, introduces a concept called InfoCards"
For detailed background, whitepapers on Infocard, design principles check out Kim Cameron's blog at www.identityblog.com
Bill made it clear that he really cares about privacy and security, just as he is committed to helping build an identity metasystem that moves the industry to the next stage of collaboration and reach. ...Now, with Windows Vista, Gates feels he finally has the right weapons to supplant the password as a means of verifying who is who on computers and over the Internet. The new operating system, due later this year, introduces a concept called InfoCards"
For detailed background, whitepapers on Infocard, design principles check out Kim Cameron's blog at www.identityblog.com
Monday, February 13
Technology Futures and Forecasting
For the zillions of techgurus, futurists etc. out there, here is a publicly transperant way to prove your technology forecasting skills: http://buzz.research.yahoo.com
My guess is there are some holes in the system: Volumes are low, keyword selection could be controversial, multiple accounts can skew results
This is definitely something that can prove useful, at the minimum some fun.
My guess is there are some holes in the system: Volumes are low, keyword selection could be controversial, multiple accounts can skew results
This is definitely something that can prove useful, at the minimum some fun.
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