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The Lost Art of On-boarding

You only have one chance at a first impression. In the same vein, you only have one chance to welcome a new person to your team. If your business revolves around team cohesion, being a rockstar on-boarder will pay massive dividends down the road. As a former consultant I was constantly on-boarding new individuals as engagements ramped up or skillset needs changed. I’m not claiming to have the silver bullet answer on how to on-board, but over the years I began to stick to seven guidelines that seemed to make the process smooth and productive.

The ultimate goal in on-boarding is to have practitioners “hit the ground running” but not at the expense of having them feel as though they are part of the team. In several of my high-burn, pedal-to-the-metal projects, on-boarding required me to fight the urge to take shortcuts like building a comprehensive on-boarding document or off-loading the responsibility to junior members of the team. I found that taking the time to bring on a new team member in the proper way paid huge downstream dividends and, in my humble opinion, maximized the productivity and ultimate happiness of every newcomer. Below are my seven suggestions. I would love to hear yours – feel free to leave a comment.

(1) Be Personal

Handing someone an on-boarding document that “should” answer all their questions makes them feel like a number. A document is fine as a starting point, but leave enough out of the document that it drives dialogue between you as a manager and your new team member. Getting verbal communication flowing on day one will make task-oriented communication much more effective as the team member begins to execute.

(2) Be Immersive

Introduce the individual to as much of the existing team as humanly possible. More importantly, introduce them along with a brief description of their role and a few facts (personal or professional). The more the existing team knows about the newcomer, the more they will feel comfortable “breaking the ice” socially and making the new person feel at home.

(3) Be a Listener

The best way to instantly give a newcomer confidence is to enable them to make a quick win. Do this by listening intently to their past experiences and self-identified strengths and give them an assignment that is almost sure to be a homerun. With the momentum gained by an early win, any subsequent task that may stretch the newcomer’s abilities will likely be approached with a higher level of confidence, energy, and enthusiasm.

(4) Be Clear

If there are certain deal-breaker rules of the road, don’t leave them for the person to learn over time. Be explicitly clear upfront what those rules are so you avoid the embarrassment of needing to confront the individual later.

(5) Be Thoughtful

When I first started in consulting, I sat down for my first goal-setting session thinking to myself, “just let me work, enough of this fluffy kumbaya campfire stuff.” What I didn’t realize at the time was that goal-setting was enabling me as the goal-setter to craft a roadmap of how I wanted the engagement to benefit me. No matter how busy you are, give each newcomer this opportunity. If they try to play the “easy going card” and say  “I’ll do what you want me to do,” push them. If you establish that you’re willing to adapt the project to meet their personal goals, you immediately establish a heightened level of respect.

(6) Be Inclusive

The earlier you include the newcomer in team meetings, client calls, or brainstorming sessions, the earlier they feel like they’re part of the team… even if the subject matter may be only on the periphery of their direct assignments. This also gives them perspective on who is working on what so they can independently navigate the team to further come up to speed and begin adding value.

(7) Be Consistent

I’ve been on projects as small as 3 practitioners and as large as 75. While it may be tempting to reduce your emphasis on a solid onboarding as the team grows, don’t relent. Keep the “small team” feeling for as long as possible. Small teams tend to have stronger cohesion. Stronger cohesion tends to breed sense of belonging. And sense of belonging tends to heighten motivation, energy, and attention to detail.

Why Steve Jobs Doesn't (And Shouldn't) Give a Tweet

While Apple’s latest additions to its product lineup are arguably their best ever, their latest gaffes have been even better (at least for entertainment value). The iPhone 4, the sleekest, sexiest, thinnest, most fully functional badass superphone to hit the market, came with two amazing undocumented “features”: (1) it didn’t quite sync with exchange and (2) it came with an unanticipated hang-up button. How a company that is known for developing stable, easy to use products could release its flagship iPhone without first finding these flaws blows my mind. In the aftermath, Steve Jobs (whose email account is very well known to the public) has sent some scathing remarks to Apple customers via email. The same customers that he’s spent the last decade training to insta-buy his products whenever he chooses to release them. It is Steve’s zesty remarks that are the foundation of this post.

Twitter is all about brand building (both for people and for companies). The reason it acts this way is two-fold: (1) it’s an open environment to share thoughts, express feelings, and “legitamize” content (i.e. saying you believe that certain content is relevant to you / your company) and (2) it naturally induces conversation by reducing the distance between any two human beings (whether they’re little ol’ me or Mark Cuban) to an “@” symbol and 140 characters. Branding is all about an inherent dialogue between the brand and current / potential customer. Traditionally, by the sheer limits of media, branding was a primarily one way conversation. Today, however, through services like Twitter, both you and I can engage in a two-way communication with the brands we love and hate. As a consumer obsessed with technology, I’m a fan of a lot of things that optimize / enhance my life or just entertain me. Today when I am either pleased or pissed with a product I turn to twitter. Over the past year I’ve noticed brands engaging back in response (Tungle, Zappos, Comcast amongst many others). These responses have had a consistent positive impact on me as a consumer; they’ve either reduced my discontent or strengthened my brand loyalty (BTW, Comcast I hate you less, and Tungle / Zappos I <3 you more).

Onto Steve Jobs and why, given the latest emails he fired over the bough, he is the last person on earth that should be tweeting. Let me preface this by saying that I believe everything I read on the internet. Based on this preface, from what I’ve read Steve Jobs acts as a monarch at Apple (just see how he parks), is transparent with his expectations, and says EXACTLY what’s on his mind. Those are phenomenal qualities for a visionary leader, but horrible qualities if aimed at a pissed off and rabidly fanatical fan-base. Steve needs to learn this and FAST. While he doesn’t “Tweet” per se, any email he sends to an individual gets plastered on a thousand blogs and becomes a trending topic on Twitter.

So here’s my suggestion. While I have infinite respect for Steve Jobs and his willingness to spend time engaging with customers via email, he should only do so when it reinforces positive product / brand perceptions. For the negative situations, the situations where perhaps holding a phone in a certain way drops a call, he needs to let a herd of professional communications / PR folks take the lead on managing the brand’s response to the consumer. Oh and whoever is doing PR for Apple, don’t ever, EVER, let Steve Jobs get a Twitter account. Instead of 9 out of 10 fiery messages making it into the spotlight (and at least some question as to their authenticity), you’ll have all 10 to contend with.

Keep Rambo Happy: Don't Screw Up the Intro Email

When you ask a friend or colleague to introduce you to someone else via email, very simple email etiquette kicks in. From what I’ve seen, the vast majority of people have little to no clue that this exists – and given how simple it is to make email introductions work for you, this makes no sense. In my mind,  you can equate the outcome of an email introduction to the plotline of the movie Rambo: First Blood… if you demonstrate exceptional email etiquette, John Rambo is the hero and ally that will fight beside you. If you piss him off with poor etiquette (i.e. restraining him illegally in a jail cell with a fan blade that induces Vietnam flashbacks), he goes on a rampage and leaves a wake of destruction in your small, midwest town. Two quick anecdotes of things going horribly wrong…

A classmate of mine recently shared a story about how she refused to make introductions for anyone else in our class searching for internships. This was alarming – the specific person sharing this frustration happened to be someone who I know has an amazing and unique network given her background. What led to this was two different individuals who had asked for introductions to two very influential people. In both introductions the intro email had been made and the person being introduced did little to move the conversation forward.

The same thing recently happened to me when a former colleague at Deloitte asked if I could speak to his current team-member (a prospective Sloanie) for waitlist advice. After agreeing, he followed up with a boiler plate email intro to myself and the prospective Sloanie. I left this email in my inbox for over a week waiting for an energetic response expressing how super-excited this person was about coming to Sloan. All I got was radio-silence. A week later and frustrated as I was doing my inbox cleaning (striving for “Inbox Zero” of course), I sent off an email reply “Sure thing, happy to chat whenever.” An hour later, I got a reply from the potential Sloanie.

Why do people not understand that an email introduction is an expenditure of social capital by the introducer on behalf of the person being introduced? Gratitude in this situation is best expressed by responding with immediate excitement around whatever purpose is behind the introduction. Only two reasons can exist for someone not taking this initiative: (1) the email fell into an inbox abyss, or (2) the person being introduced believes that the person they were introduced to should reply first. Failure to follow email intro etiquette will likely result in two things: (1) they’ll never get an introduction from that person again and (2) they won’t get any value out of the present introduction whatsoever.

This entire post stems from some pent up frustration I have had both in my professional and academic life. Making this frustration post-worthy, however, was a great article I read on TechCrunch by Chris Fallick called The Art of the Introduction.

The $500 Experimental Twitch

I recently interviewed with an early stage start-up in Cambridge who described one of their core principles as experimentation via hypothesis testing. They were looking for an MBA who would take the same scientific approach they used with their product to develop a road-map for their business. This got me thinking about experimentation and the massive one we’re trying right now with the MIT $100K: the MIT $100K Twitch (or Twitter Pitch) Contest.

The Hypothesis: using prize money and almost frictionless entry criteria, the MIT $100K will reach current and future entrepreneurs from across the country. This will unite the nationwide entrepreneurial community and bring together individuals with similar interests.

The Experiment: With the Twitch Contest, nearly anyone can now participate in the MIT $100K without leaving their armchair. All they need to do is pitch their idea on Twitter (and a few other odds-and-ends) for a chance to win $500 and global recognition as the first ever winner of the MIT $100K Twitch Contest. The winner will be chosen by two criteria: (1) objective Twitch quality and (2) virality. Virality here is key –  it will be judged by who retweets a Twitch and the number of followers that person has.

What will happen? We don’t know. What do we hope happens? We have at least one contestant from every state and we attract influential individuals from across the country to cast their vote for Twitches simply by retweeting them.

So if you’re reading this, you have no excuse – enter the contest. Once you’ve Twitched, wage war on the Twittersphere and get the most influential people you can find to retweet you. The Twitching begins on April 20th and will continue for 20 days in celebration of the 20th year of the MIT $100K. Follow the MIT $100K on Twitter and read the rules here.

Going From S.W.A.T. Team to Start-Up

Looking back on my past five years what I believe made my days and weeks so interesting was the cultural dynamic that forms when a team is moving in sync towards a common goal. Each of the many teams I was a part of developed strong but uniquely fun cultures. I could define some artifacts of those cultures as: “arcade toys from Dave and Busters = team mascots”, “work hard and Wednesday is red meat and cheap beer night”, “back-of-door basketball tournaments to break up the day”, “let’s see who can challenge the most senior client to a ping pong match.”  At the end of the day, five years of long hours flew by because each team had an identity, and from that identity we were highly effective at executing our collective mission.

Now I’ve convinced myself that joining a start-up for the summer is the right idea – heck I thrived in the fun, high energy, and innovative environment of the consulting engagement team. The difference with a start-up and a consulting team, however, is that a start-up is (hopefully) going to grow tremendously. Most would agree that high growth challenges the cultural fiber of a start-up. An article I found on this topic used the analogy of Bruce Banner transforming into the Incredible Hulk; to me the analogy really resonates. If I “succeed” in finding that right start-up, one that will be successful and grow, will I inherently find myself in a situation where the culture becomes no longer fun and innovative? Sure you can argue that counterexamples exist in companies like Google and Facebook, but what can you use to predict this in the next wave of small companies that grow to Google’s size?

The Colts and Patriots Agree on Sports Analytics

The best $40 I’ve spent during my time as a student: a ticket to the MIT Sloan Sports Analytics Conference. My buddy Raj (contributor to BC Interruption) and I went to the BCEC with high expectations and left agreeing that those expectations had been exceeded. Bill Simmons (one of my favorite sports writers and a panelist) affectionately dubbed the event “Dorkapalooza” given the event’s affiliation with MIT. I have never pretended to understand sports in any great depth; but what I heard at the conference I believe transcended sports and can simply stand alone as solid business practice. One lesson was this: even the best quantitative analysis will never put a business into auto-pilot while it executes a plan.

Bill Polian, the president of the Colts, and Jonathan Kraft, the Owner of the Patriots had an amazing volley back-and-forth around the role of quantitative analysis in football. Their approach to quantitative analysis was far from how Mark Cuban (Owner of Dallas Mavericks) & Daryl Morey (GM of Houston Rockets / Sloanie) described basketball, and even further from how Michael Lewis (Author of MoneyBall) & Bill Simmons (ESPN sports writer) described baseball. Baseball and basketball, which both have more discrete actions than football, seem to be better suited for making in-game decisions based on analytics. Football, however, resembles the business world in that it operates in an almost infinitely complex environment with many “good” answers but no “perfect” answer.

Both Kraft and Polian agreed that the complexity of game-time situations in football, which could include injuries on a previous play, receiver / safety match-ups, offensive / defensive momentum, and a dozen other factors, are far too complex for a super-computer based on analytics to make better decisions than the best tacticians in the game (professed to be Polian & Belichick). Contrary to Polian and Kraft’s aversion to in-game analytics was their belief that pre-game analytics could be a critical success factor for designing a game-plan and strategy for an opponent. I couldn’t help but remove football from the picture and apply this to standard business management. Taken a different way, what they said was that in an infinitely complex environment you should build a plan based on sound analysis. When it comes time to execute, however, you need to have the wisdom to potentially divert from this plan as new and impossible-to-predict information emerges.

I plan on covering the Sloan Sports Analytics Conference in several subsequent posts. I urge everyone to look into going next year, it was an absolutely incredible experience. If you want to follow the ongoing conversation on Twitter: #SSAC.

Tiger Woods, at One Point, Defined Perfection

A risky title, I know. Read on, it’s not what you think.

Tiger Woods’s recent transgressions totally de-valued a story I was convinced I would one day tell my son – a story that would be so awesome he would retell it in his kindergarten class and his schoolmates would think I was far cooler than I actually am.  It’s a story about perfection. Specifically that perfection is best measured by how someone handles imperfection. This post is not by any means related to adultery, infidelity, or marital transgressions. The perfection I saw Tiger demonstrate happened on the golf course (not off of it).

This past summer I went to my first professional golf tournament at TPC Boston. I was absolutely star-struck watching my favorite golfers play in one of the preliminary tournament rounds. For those that don’t know, preliminary rounds don’t have much notable media coverage (not even for Tiger) so the events I’ll describe may not have made the front page of the Boston Globe. I joked to my friends that the only thing I really wanted to see was a top golfer completely implode: dropping a ball in the pond, hooking one into the woods, or knocking a ball into the gallery. Let’s just say, my dream came true.

Tiger was clearly the star of the show so we followed him for the majority of the day. He was having a horrendous day maintaining control with his driver but was hanging with the pack because he’s the best golfer in the world (period). On the 5th hole, Tiger unleashed a beast of a drive – a slicing bomb that probably went 800 yards straight, but 120 yards due right. Tiger wound up as deep in a thick patch of woods as I usually am – just ~500 yards further down the course. As Tiger walked from the tee box towards the gallery he launched his driver 10 yards straight into a marsh. Aghast, I just stood there. If I had fists that could be pumped without anyone else (let alone Tiger) noticing, I would have pumped them like a mad-man. At the time I may have referred to this as one of the single best moments of my life. As I watched Tiger’s caddie trudge into the swamp to fish out the club, Tiger walked an arm’s length away from me muttering to himself. I couldn’t believe it. Everything I hoped to see that day and more had just happened. The single best golfer of all time had imploded right before my eyes.

The story doesn’t stop there. Muttering to himself, Tiger walked directly over to his ball which was well into the woods. The gallery, knowing this was a chance to be inches away when he took his next swing, literally surrounded Tiger’s ball only leaving a narrow ten yards on either side of the trajectory the ball was about to take out of the woods. I couldn’t help but put myself in Tiger’s shoes. If I had just hit a drive into the woods, tossed my club into a swamp, walked down a fairway muttering to myself in front of a thousand people, and knew laying up was not an option – one of two things would happen. I’d either blast my shot over the fairway into the woods again, or drill someone in the gallery.

Neither option even crossed Tiger’s mind. With the ball teed back in his stance on a hard-packed forest floor, Tiger played the most graceful fading approach shot imaginable. He landed it ~20 feet from the pin and ended up making par. Tiger’s mental fortitude blew me away. In a million years, having played several hundred rounds of golf, I would have never had the same result. It made me realize that perfection isn’t really the absence of imperfection. In the real-world, where nothing is truly “perfect,” perfection is simply knowing what the next best step is when you encounter imperfection.

This concept doesn’t only belong on the golf course. It applies across nearly every experience we have in our personal and professional lives. I hope you enjoyed the story… even though the story is now severely devalued by Tiger’s latest accomplishments.

[If you're doubting that this actually happened, articles citing the event are here and amateur video here]

What Makes the MIT $100K Entrepreneurship Competition Special

This past weekend, the lead organizers of the MIT $100K Entrepreneurship Competition had their annual off-site meeting to discuss our yearly objectives and mission statement. As I sat around the table with some of the most intelligent and dedicated individuals I have ever worked with, it dawned on me that I haven’t taken the time to reflect on something that we as organizers sometimes take for granted – that we run the single most successful, highly regarded, and emulated entrepreneurship competition in the world. I don’t know how many times in my life I’m going to be able to say this about the places where I work, the organizations where I volunteer, or the businesses I start. For that reason, I’m going to make the most of reflecting on why the MIT $100K is so special to me and why I’m so proud to be a member of the organizing team.

Track Record of Successful Companies are Great Role Models

The MIT $100K has a long track record of developing highly successful companies. It is this momentum that attracts the brightest minds from around MIT to submit their innovations and ideas to each of the three contests that the MIT $100K hosts annually. To put some numbers to this, in the full version of a 2009 report published by MIT Professor Ed Roberts (executive summary here), it is estimated that entrants in the MIT $100K alone have generated more than $15B in market / exit value, have founded 120 companies, and have created 2,500 jobs. That’s impressive – but if you drill down a bit and look at some of the individual companies you can really get a picture of what I’m talking about. A short list of MIT $100K alumni companies includes: Akamai, valued on the NASDAQ at $4.6B; Harmonix, the makers of Guitar Hero; Brontes Technologies, which sold to 3M for $93M; Direct Hit, which was acquired by Ask Jeeves for $517M; VirtualInk, the technology behind the Kindle; and last year’s winner KSplice, which has won multiple awards including one from the Wall Street Journal for “Best Security Innovation of 2009.” Companies like these provide inspiration for new companies to follow in their footsteps.

Large Prize Pool. No Strings Attached.

The MIT $100K disburses more than $400K in cash and prizes to provide a giant carrot meant to pull aspiring entrepreneurs and innovators out of the woodwork. That’s great, right? What makes it even better is that there are almost no strings attached to how these prizes are distributed. We don’t dabble in convertible debt, equity rights, milestone restrictions, or other inhibitors to keep the entrepreneur from realizing their maximum potential. We believe that flexibility is critical to an entrepreneur’s exploration of uncharted territory. So when it comes to how winners of the MIT $100K use the $100,000 in the bank, the six months of free office space, the free tax advisory services, the free professionally designed website, or the free public relations services – the MIT $100K leaves the decision making to the entrepreneur.

Mentorship Opportunities Galore

At the core of the MIT $100K is education and mentorship. As an organization co-founded between the engineering and business schools, the MIT $100K is meant to engage in mentorship both internally and externally to MIT. As it relates to external reach, the competition attracts some of the most successful individuals in the entrepreneurial community. These individuals donate their time with one goal in mind: to help propel teams forward. Teams have the option to take advantage of this by engaging in activities like “Coaches Corner” events which occur multiple times per year. These events offer 30 minutes of individual face time with industry professionals – an activity that hopefully brings people together in productive ways. In our business plan contest, teams refine their business plan hand-in-hand with a partner-level venture mentor and similar legal mentor. These mentors are matched with teams based on areas of expertise, something that has proven its value both during the contest and after the contest as teams seek investment and business partnerships. The net desired result of these activities is to educate student entrepreneurs and give them the practice necessary to get a business off the ground following the MIT $100K.

The MIT $100K Spotlight Means (Almost) Guaranteed Business Validation

Along with mentorship, members of the Boston / Cambridge Entrepreneurial eco-system donate their time to help judge contestants’ entries. These judges bring a highly discerning eye for business potential – and they do so from multiple angles. Judges generally come from a diverse set of backgrounds including successful founders, venture capitalists, angel investors, and legal experts. With such a highly capable and selective judging group, many external parties (including our sponsors) value the credibility of MIT $100K winners as strongly as companies who receive investment from some of the most competitive VC firms. This instant credibility is an ideal foundation from which to launch a business.

Student Run Means the Focus is Always on the Entrepreneur

While the MIT $100K has an external focus to the entrepreneurial eco-system, our allegiance is always first with the entrepreneur. The reason we have maintained this commitment is simple – we’re entirely student run and all of our organizers are believers that entrepreneurship has the power to shape our future lives. Believe me when I say this, but the organizers of the MIT $100K want nothing more than to help launch the next Akamai, watch that company generate jobs, and see it contribute to the sustainable growth of our economy.

Next Steps in this Year’s MIT $100K Entrepreneurship Competition

Please come and join us on this amazing entrepreneurial journey. We welcome anyone to share in our celebration of entrepreneurship at the next two events.

  • BPC Semi-Final Event – March 11th, 7PM, Stata Kirsch Auditorium: We will select the top twenty-five contestants who will move on to our Business Plan Contest finale.
  • BPC Finale Event – May 12th, 7PM, Kresge Auditorium: We will announce the six ~$20,000 track winners, the $10,000 audience choice winner, and the $100,000 grand prize winner.

Connect With the MIT $100K

Is Mobile Enterprise Meant For the App Store?

I am probably one of only a handful of MBA students in my Sloan class thinking about enterprise software in my spare time. In this world of iPads and iPods, App Stores, Droids, and multi-touch interfaces – the enterprise seems to be getting less sexy by the second.

My intrigue with the “mobile craze” coupled with a deep appreciation for enterprise software has led me to examine the intersection of these two worlds. Why? Partially because I don’t believe anyone has solved the puzzle on how to extend enterprise software into the mobile domain effectively.

One question I have been grappling with is what’s the optimal deployment medium for mobile applications centered around the enterprise. Is it a web-based “thin client” which relies on advanced browser features? Are we going to regress back to a “thick client” mentality – a world which in today’s terms would have us going to our device’s app store to download and install a piece of software? After thinking about this question, my thesis is that the “thick client” will win out on mobile devices at least for the next several years simply because the user-base demographic will insist on it. Recognizing that there are at least half a dozen good arguments against this statement, I’ll do my best to defend my stance.

To me this issue boils down to solving the problem of user adoption. In my experience deploying enterprise applications for Fortune 500 companies, I’ve always put application usability high on the list of priorities. Without usability, you would not gain the buy-in of users. Without users, you would not have a transformative information system. When I was implementing enterprise systems, we would always try to tailor the user interface decisions around what users were familiar with from their pre-existing information systems. This mentality allowed us to achieve incredible user-adoption rates.

Following this, if we were to design an enterprise-focused mobile application what would our users be familiar with? Well first let’s take a look at the core functions of today’s mobile devices: contacts, calendars, e-mail, and texting. Each of these functions run in a native user interface specific to the user’s device (iPhone, Pre, Droid, G4, etc.). Users are comfortable with this – and I’ve even seen highly tech-challenged people whiz around their device with incredible adeptness (my mother is one example – but I’ve witnessed many many others). In my mind, to optimize usability and subsequent user-adoption the decision would be to focus on the native application over the browser.

The argument against this approach is fairly robust. It hinges on a distinct trade-off made between the usability of a native application versus the scalability achieved by building a web-based application which runs on multiple “mobile web browsers” via open standards. I would agree that applications such as mobile Gmail on my iPhone are incredible: floating menus, navigation bars, and dynamic controls, can make you forget you’re still navigating within Safari. However, using mobile browsers to deploy applications favor the younger more tech-forward crowd. This group does not represent the core demographic that uses enterprise applications. When today’s twenty-somethings are the prominent enterprise application demographic the browser will in fact become the ideal deployment platform. Until then, I firmly believe that a native application is the optimal deployment tool to maximize user adoption.

If I were to create a mobile enterprise software platform (and who’s to say I won’t), I would aim to create native applications for each of my target mobile platforms. I believe the additional development investment would pay massive downstream dividends.

Are Incentive Structures Aligned for Enterprise Cloud Adoption?

The adoption of the cloud as an enterprise platform is a fascinating topic and one which introduces challenges we have never seen before in the IT industry. The world’s progression from a terminal/mainframe model to client/server and then web-based thin client have all kept enterprise software consistent along two dimensions: (1) it remains within the corporate firewall and (2) it requires a small army to implement. Today in Managing Entrepreneurship and Innovation class we discussed how incentive misalignment can severely slow an organization’s adoption of the latest technology innovations. In this context, let’s agree that the latest and greatest innovation in enterprise software is cloud based solutions. The question is this: if the economics of cloud computing are compelling and if the technology can provide more value than competing solutions, why not adopt the cloud today?

Take a step back and think about the end to end transaction of an enterprise software sales cycle. Typically an integration partner (i.e. Accenture, IBM Professional Services) and a software vendor (i.e. Oracle, SAP) collaborate on a sales strategy to solve a client’s business problem through the implementation of an enterprise application. The software vendor hopes for license sales. The integration partner hopes to put a small army of warm bodies on the ground to see that the implementation is tailored to the client’s needs. Cloud based solutions typically have a smaller integration footprint and due to the economies of scale achieved through pooled resources (i.e. infrastructure, bandwidth, redundancy, etc.), the license costs are typically much lower. Neither the integration partner nor the software vendor are all that interested in pitching a cloud-based service to satisfy the client’s needs…

Now who is on the other side of this sales effort? Typically the CIO. Today, the average Fortune 500 CIO is in charge of a massive business unit comprised of people managing IT infrastructure, application support, and business integration. Their political power-base within the organization is founded on (a) the sheer size and budget given to their business unit and (b) the fact that they are the gate-keepers for continuously delivering solutions that meet business needs. Cloud-based applications typically require a much smaller support organization to achieve the same net benefit. From a political perspective – is there an incentive to scale to the demands of a leaner cloud-based enterprise? The answer today is no…

These are certainly not the only two areas of resistance to Cloud adoption within the large enterprise – they’re simply two to add to what is likely a long list. I would urge CIOs, software vendors, and integration partners to re-think their incentive structures so that cloud-based software can be considered alternatives to current solutions and the financial benefits of the cloud can be realized by the shareholders of Fortune 500 companies.

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