Category Archives: People

Disrupting the IT Services market: Consultancy 2.0

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Some time ago I had dinner with SAP co-CEO Jim Snabe. Jim is a bright and talented individual and one of the topics we got into was the setting of unreasonable boundary conditions as a mechanism to get the best out of employees. The principle is that by asking for the unreasonable, you will cause people to come up with more creative, better solutions to problems. I was instantly fascinated.

However, it wasn’t until a late phone call with friend and mentor John Niland of VCO Global some weeks ago, that my thoughts started to finally mature on this. We discussed the topic of motivating contributors, and how you get the best out of those people who work for you.

I told Niland that my experience was that the best way to get more out of great employees is to ask more of them. As humans, we tend to be limited by what we believe is possible and this in turn restricts us. In an interesting twist, contributors are actually happiest, when pushed in this way. So I came up with an idea to test this theory:

The SI Smackdown

We took what would normally a 3-4 week SAP HANA technology project and I told a team of two that they had 2 days to complete it. Everyone thought it was crazy. To make it crazier, we orchestrated it to happen live, on a conference room floor, in front of 8000 people. And just to make it interesting, we used two Systems Integrators and turned it into a competition. Oh, and we used a real customer, Consumer Products giant ConAgra, with real data.

Because unreasonable boundary conditions – think back to the conversation with Snabe – were set, the SI Smackdown competitors found a way to make it happen. And then they blew my wildest expectations out the window by not just doing what was asked, but so much more. They demonstrated not just a better IT system running on SAP HANA, but radical ways to show ConAgra how they could change the was they run their business.

The thing that really interested me about this most was that the two participants from my team, once they had a few days off after the conference, were demanding when they could do it again. It turns out that they loved it.

Extreme Consultancy

And so it happened a few weeks ago that I was in a situation. We had committed to a UK conference to show a customer demo and we got the data 7 days before the conference to build the demo with. Worse, I had no resources that week spare to work on it and we had a good portion of our team out at another conference that week.

So, I wondered what would happen if we applied the two concepts above at the same time. Set unreasonable boundary conditions, and ask even more of our employees. So, I designed (OK… handwaved) a really cool solution based on the customer data, using technology that wasn’t available yet and would only be released the day before the conference. Note once again the importance of making the boundaries unreasonable.

Then, I emailed 5 very talented individuals, each of whom would bring an invaluable skill to the table, and asked them if they would be prepared to do the project in their spare time before the conference. Every one of them replied within an hour and agreed. They created the most amazing solution that showed how the customer, one of the largest Pharmaceutical companies in the world, how they could revolutionise their Integrated Business Planning process. Wow.

Managing Contributors

It’s worth jumping back to my conversation with Niland, because my second assertion is that if you want to get more out of your contributors then – I believe – you have to observe an interesting set of rules, which are even more important when setting unreasonable boundaries:

First, there has to be a purpose and you have to explain it. This becomes a shared vision for the contributors, who usually deeply care about actually making a difference. In both cases above, there was a customer scenario and a reason for creating the technology solution. Ensure there are unreasonable boundary conditions. If they think it’s possible, it won’t motivate them.

Second, you have to motivate them by providing them with what they want – and here’s a hint – it’s never about money. In both cases above, they got access to cool technology – a $400k appliance, plus access to software that wasn’t readily available and the request to do something that had never been done before. Be very mindful here because different things motivate different types of contributor.

Third, you have to give them other great contributors to work with, and clear the decks. Both by getting out the way yourself, but also by making sure they have access to get assistance when they need it – assistance from people they respect. Listen to what they need and provide for them.

Fourth, you have to look after their wellbeing because they will not. When you set unreasonable boundary conditions, I’ve often observed that contributors fail to manage their own wellbeing. Ensure they take a break when they need it, and they get days off after a high-pressure stint. But, don’t be confused into thinking that wellbeing is about a 37.5 hour week – that’s Eurobullshit. Happy people can work long hours. Stories of early Apple suggest 90 hour weeks were a regular occurrence and they were some of the most motivated workers I have ever read about.

Does the consultancy market need disrupting?

One of the things I lay in bed thinking about at night is the Consultancy business model. It was borne out of the large business process change and globalization models of the 70s and 80s and it made a lot of people at Accenture and IBM very rich, earning $2000 a day for poorly trained graduates. This got better after the markets crashed in 1999 and again after the collapse of Lehman Brothers in 2008 and the sorts of customers I deal with are very sensitive to getting value out of consulting projects. Many customers will now opt for fixed-price contracts, which is the right way to do consulting engagements.

But I still agonise every time I get a call saying “we need your help, XXX consultancy quoted this price to do this work and it’s way more than the customer will pay” – and I get a few of those every week. Surely there is a better way? Surely we don’t need 18 month projects that cripple business change and the ability to be agile? We have worked on ways – templates, agile methodologies and amazing people – to be cheaper, better and faster than our competitors but I don’t believe it is enough.

So, I’ve been working with friend and SAP Board Member Vishal Sikka, to try and challenge all of our assumptions about how we deliver consulting engagements (paradoxically, he helped me, by setting some unreasonable boundary conditions). Could it be that the consulting market is ready to be disrupted?

It’s cloudy out there

Cloud advocate Dennis Howlett often waxes that the solution is in the cloud, with companies like Salesforce and Workday offering much faster implementation times. This works great – even for integrated business processes, in the mid-market, but the processes that sit behind the Global 500 customers are so complex – with many languages, end-markets and integration points that if Workday and Salesforce do start to be able to offer a solution, it will probably be just as hard to implement as any other software product. And the consultancy gravy train will start afresh.

To add to this, there is no lever for Accenture or IBM to change – they have a lucrative model and while there is no alternative, they will continue to milk their cash cow. In most cases, I think the customers, particularly at the board level, are in any case not unhappy with the large consultancies and their business model.

Consultancy 2.0

So this is a call to action. Do you think Consultancy 2.0 needs to happen? Let me know your thoughts, publicly or in private. And if you work for a large consultancy, or if you are a board member of the sort of organisations I’m talking about and want to discuss this off the record, then let me know.

And equally, if you would like to help with this by co-innovating on a project together then let me know.

Thanks go to everyone I worked with on this, and particularly to Vishal, Jim, and John Niland for being the contributors and inspiration to this process and to Lloyd, Tristan, Anooj, Gary, DJ, Ollie and Brenton for being the contributors, unwitting guinea pigs and for creating unbelievably amazing solutions.

The SAP HANA Career Guide – Part 2, SAP HANA Business Consultant

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Hopefully you have enjoyed the SAP HANA Career Guide so far, which kicked off with Part 1, Overview. This piece focusses in on the first specialty: the business consultant.

The Business Consultant

Business consultants analyse the needs of the business and create a strategy to transform businesses, or line of businesses. The essence and principle of this doesn’t change with SAP HANA – indeed it is much of the same. They listen to the needs of the business and the ways in which it must change, and then apply technology concepts against that to create a technology strategy.

For instance I have a customer who has a problem with fraud prevention. The business consultants came up with a solution that enables the business to reduce customer fraud.

Why does SAP HANA change this?

That’s just it: SAP HANA doesn’t change the needs of the business consultant. Instead, it changes the envelope. Let me illustrate how the technology changes the envelope.

I have a customer where we used SAP HANA to accelerate sales order reports within ERP. The approach was to read a bunch of sales order headers, get detail from within, cross reference them against various attributes and exclude a bunch of orders, to produce a report. This requires between 10-20 thousand questions, that SAP asks and takes 30-60 minutes to produce a report.

Now, SAP HANA performs the same as any other database to answer 10-20k small questions. But, with some small changes, we changed 10-20k small questions into one huge question. What happens now? SAP HANA responds in a few short seconds.

Why does that matter?

The answer is, in itself, it doesn’t. However, now we can give these repots to sales execs on the road and they can access them on a mobile device in seconds, giving information about past spend, profitability and other key elements. But even that doesn’t pull the real power of SAP HANA.

The real power is when we move this thinking to whats happening in the moment – let’s take automotive as an example. We can collaborate with a customer to create a quotation with them – price that quotation against very complex pricing structures that exist in complex business models. Even calculating margin on the fly against a car with 10,000 parts. Looking at upstream supply chain visibility to see that removing an option for an automatic gearbox changes the delivery date from 4 months to 1 month. Discounting on the fly based on available stock and the desire to sell particular options.

In this case, the customer experience becomes collaborative and communicative and you can close the deal in the moment, rather than having to come back with a quote the next day and an estimate for delivery 3 weeks later. It’s real, and customers will buy it.

SAP HANA Use Cases

The first thing the business consultant needs to do is to read about SAP HANA use cases and consume them for their industry. They are available for public consumption at Experience SAP HANA and this will begin to cultivate a HANA State of Mind.

The HANA State of Mind

I have written about this before and I see this change in consultants who get immersed in SAP HANA. Once you see the capabilities, you will be able to apply “HANA Thinking” to everyday live. You will see the business possibilities where producing a particular report can reduce costs by millions of dollars a month. Only you thought it wasn’t possible.

Education and Training

Here’s the kicker with SAP HANA Business Consultants – I’m not sure that it can be taught. You have to combine existing Line of Business and Industry expertise with the knowledge of how SAP HANA can disrupt businesses. If you’re good at business consulting already, all you have to do is to understand how SAP HANA can help.

Perhaps I’m wrong here and I’d like to be challenged. Perhaps there is a “Power of SAP HANA” set of webinars, videos or instructional content. What do you think? Is it just a question of repeating a few business scenarios where SAP HANA makes a difference, and business consultants will just “get it”? Let me know.

The SAP HANA Career Guide – Part 1, Overview

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SAP HANA is one of the fastest growing software technologies ever. It was released mid-2011 and sold $250m in the first year. In 2012, financial analysts expect $500m+ and it is expected to be a $1bn+ market in 2013. In software services terms, this is at least a $4bn market, next year.

It’s hardly surprising, therefore, that there is a huge interest in training, education and certification right now and there isn’t a good guide to what makes a good SAP HANA consultant. So, in a 8 part series special, I am going to lay out what types of consultant exist, where to get educational resources and how to get ahead in getting a job in the SAP HANA market.

SAP HANA creates a new category of consulting

It’s really important to note that there isn’t just one type of “SAP HANA Consultant”, whatever someone tries to tell you. SAP HANA, like any other technology, has a number of sub areas. My advice: first, understand the different categories and then decide – based on your experience and interest – which one of these you will be best at specialising in, and learn that subject matter.

This guide will help you understand which category you fit in, and where to find the resources to become an expert.

SAP HANA Distinguished Engineer Program

Whatever type of consultant you are looking to be, I recommend looking at the SAP HANA Distinguished Engineer Program. I’m on the council, so I would say that – but the program will support you in your learning, and then recognise you for your achievements, knowledge and community efforts. Read the FAQ for more details.

Let’s get on and discuss the different categories of SAP HANA consultant directly.

1. SAP HANA in-memory Business Consultant

Business consultants understand one or more industry verticals, and typically a number of lines of business, with a specialty – for example Retail Sales, or Utilities Supply Chain. The SAP HANA in-memory Business Consultant also understands how in-memory technology technologies can disrupt businesses and gets how to apply the technology concepts to business scenarios.

It’s fair to say that this consumes a good number of what used to be described “functional consultants”. In some instances, like the Finance Line of Business, their skills may be applied cross-industry.

Click Here to link to the main article

2. SAP HANA Performance Consultant

SAP HANA leader Steve Lucas and I coined this term earlier in the year because it is very emotive. The SAP HANA Performance Consultant takes the concepts developed by the Business Consultant and creates solutions, architectures and designs using SAP HANA Enterprise. Typically these include using the SAP HANA Modeller tool to create models.

Click Here to link to the main article

3. SAP HANA Operations Consultant

This is what in traditional terms used to be called SAP Basis, but I always hated that term and was glad that a new term could be coined! SAP HANA Operations Consultants understand technical architecture, Linux, how to install SAP HANA or migrate systems, and also have some understanding of SAP Basis.

Click Here to link to the main article

4. SAP HANA BW Consultant

The SAP HANA BW Consultant is fairly similar to a regular BW technical consultant but there are some specific skills about architecting, re-architecting and modelling BW solutions within SAP HANA that are essential to know.

5. SAP HANA Application Developer

SAP HANA requires a change in the way in which you develop applications, so whatever type of apps you are looking to build – be it ABAP applications using the HANA database, or mobile applications using the HANA XS Application Services layer, you will need to understand your existing development platform, and in-memory computing concepts. The SAP HANA Application Developer combines these skills to produce high-performance apps.

6. SAP HANA Security Consultant

This is a niche area but one we can’t do without. Security design, access control and security models are different because of the way that SAP HANA is designed and you need an appreciation of business security concerns, access, audit and compliance as well as SAP HANA to do this well.

7. SAP HANA Project Manager

I didn’t add this category into the original blog post but I’ve decided to add it: managing SAP HANA projects requires the usual PRINCE2-style project management experience, but combined with some elements of agile methodologies, but more importantly taking into account how SAP HANA changes project life-cycles.

Final Words

Hopefully you understand from this article which of the categories fits you best. I think it is safe to say that, provided you have the background, skills, and desire to be an awesome HANA Consultant, any of these could be a lucrative career choice.

In the following 7 articles, I will discuss each of these roles in detail, along with any relevant certification programs, training material and other self-help locations, so you can pursue your SAP HANA career of choice. Good Luck!

Credits

As usual this post wasn’t possible without the help of others. In particular, thanks have to go to the rest of my HANA Distinguished Engineer Council members: Michael Eacrett, David Hull, Harald Reiter, Jon Reed and Vijay Vijaysankar. But also to nearly everyone else I spent time with over the last 5 years.

10 tips to getting started in blogging

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I was 8 years old, sat in classroom 2GC, petrified. I had writer’s block. The brief was simple: write a piece of creative writing on any topic and I couldn’t do it. The end of class bell sounded and I was terrified as Mrs Barton walked over and saw my blank sheet. She asked me to stay behind as the class filed out and I awaited the obligatory abuse.

Instead, she took me out the class room, over to the tuck shop and bought me a 10p Matchstick sweet. She told me to go back to the room and come back out once I had written my assignment. 2 minutes later I made the conscious decision to let go of my fear and 30 minutes later I produced copy.

Columnist Red Smith was asked if turning out a daily column wasn’t quite a chore. “Why, no,” dead-panned Red. “You simply sit down at the typewriter, open your veins, and bleed.”

So please believe me, all writers struggle. Getting started is about the hardest thing and I thought I should share my personal tips. Remember though that writing is a deeply personal thing. What worked for me might not work for you. Do what feels right.

1) Just do it

There are many reasons to procrastinate and many more important things to do. But if I want to produce content I create a time box and I write – and stop writing when I’m finished. Sometimes for example I have a 40-minute commuter train which is a 40-minute time box.

Also don’t put barriers in your place like creating a site. I didn’t create this site until a year ago – 18 months into my writing. I used to write on SAP’s Community Network and my corporate blog and only later did I create my own blog. I set it up in 2 hours on a Sunday morning.

2) Write about what you know best

Writing about things you don’t know about requires research and I wouldn’t recommend this as a means to get into writing. Instead, write about what you’re deeply acquainted with: write about your specialism.

3) Write about what you’re passionate about

Again, you may not always have this luxury but it makes writing so much easier. You will likely find that the words flow off your fingers and onto the page.

4) Be experiential

If you look at my early material it is actually copies of my own personal notes on documentation on how to do technical stuff. Interestingly some of that is my most popular content because it was simple stuff that people appreciated knowing about.

This material will also naturally be SEO-optimised because it will contain the terms that people are searching for to find solutions to their problem.

5) Let go

You may be thinking that you could never write as well as Dave, as much as Julie. Or perhaps, you do not have the best experience in the market and there are better people. Trust me, those are all just excuses.

6) Keep writing

Your early work may suck but it doesn’t matter because the only way to get better at it is to practice, practice and practice. My early work sucks and I’m still embarrassed to read my own content.

7) Use your personal style

In combination with (6) don’t worry about any rules of blogging: that can come later. There are tons of blogs on what to do and how to write and it can be intimidating. My style for example is just to create a piece of content and move on.

Good friend Jon Reed creates structure and thought processes and then often pulls an all-nighter to get it out. Incidentally way that’s why his content is so well structured and his point so well made. For yourself, focus on what feels right.

8) A blog on the site is worth 10 in your mind

The world is strewn with partially completed blogs in people’s minds and draft boxes. Focus carefully on starting a piece of content that you will complete. And if you get part way through and don’t want to complete it any more, then make the conscious decision to trash it – and find a new subject material.

9) Focus on quality language

Use a spell checker – and quickly scan the document for organism vs orgasm. If your English is poor then use a friend to proof read it. On our corporate blog our marketing department will help with this.

But don’t think that your content has to be vetted by an expert. I often get blogs sent to me because people feel they should get my blessing. I scan through them and let them know if I believe they are crap, but other than that, the publish button is the best thing to do.

10) If you promise 10 tips and only think of 9, don’t worry

Just press the publish button. See what I did there?

People, Process and Technology – is IT the new HR?

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I created People, Process and Technology as the title of this blog because I believe that all three are the cornerstone of business and society and most people have a home base. They return to that home base when pressured or threatened and this affects their behaviour.

For example my home base is technology. Our head of finance caused a problem on our core finance system on Friday at 6pm and my default reaction was – despite not having used that system in 6 months – to dive in and fix it. Rather than lever other people or some support process.

So I will fittingly start by discussing the technology dimension.

Technology

I was sat in a booth in Orlando at SAP’s business-focused conference last week, and the comments made by one my friends was really interesting. They were bemoaning the difficulties they were having, getting their management to implement SAP’s in-memory technology, SAP HANA.

The language used was interesting: “my management do not get the benefit” was the essence of it. It was late so I responded slightly too bluntly: “is it because you have not articulated the benefits to them?”. I probably could have put it better but the semantics are there: technology is an enabler for making People’s lives easier through Process change. To invest in tech, we have to convince people of the benefits of this.

People

I also spent some time with Lars Daalgard, CEO of Success Factors and current head of SAP’s Cloud division. Lars is essentially a salesman and you can see this in the bromance between him and SAP’s charismatic co-CEO, Bill McDermott.

And a few weeks ago he commented that “everyone is in sales”. This caused some community backlash because technologists don’t like that idea, but I happen to agree with him. It is just a matter of how you explain this to people, and Lars did that poorly.

But however you look at it, there is some truth in it – see my example above. When you believe in something and want someone to send money, you need to explain the value to people and process. That – in Lars’ viewpoint – is sales.

Process

The third person I spent some time with lately is Kate Daly, who runs a Change Management consultancy and is advising one of my customers on their HR change programme. And I bring her up because she came up with a very interesting observation for which she deserves credit.

20 years ago, HR departments ran processes for companies. Well two processes, hiring and firing. They transformed over the last 20 years from process droids into strategic advisors. My head of HR, Cheryl, is one of my most trusted advisors and drives business change, currently on career development of our most senior consultants. And they want to be called Human Capital Management to signify this. Good for them!

The IT revolution

Currently, the IT department of most large organisations does what HR did 20 years ago. It runs a process, keeping business processes up and running. There is often a “IT and Business” or “us and them” divide.

We believe that those IT people who figure out how to bring strategic change to their organisations will be the kingmakers of the industry and will afford success. And I for one am focussing on building a team of IT consultants who are focused on challenging and changing I our customers’ businesses.

And yes, I do believe that everyone is in sales but you can’t sell that to them by saying that. From my conversation with Lars, I think he gets this nuance.

Are you a back-seat driver in your own life? We’re in Godin’s forever recession – differentiate yourself.

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I was reading Vivian Giang’s article “Seth Godin: If You’re An Average Worker, You’re Going Straight To The Bottom“. Now I’m not a big fan of Business Insider, because I think they trivialise matters and are in it for the page views and not the insight, but I seem to keep sending traffic their way.

Take a read of the article; you may find, like me, that you understand a bit of what Godin is trying to say. For 80 years ago, 80% of the workforce was self-employed. Now 80% of the workforce is employed, and they have got used to a culture of entitlement where you do your hours, pay your dues and get your retirement package.

Back in the 1980s and 90s, if you worked for Andersen Consulting or IBM, this equated to a boot camp on some technology or other, and bums on seats, earning your employer the big bucks.

But the world has changed and it is no more visible in the services marketplace in which I work – perhaps more visible than anywhere else. Because if people are paying a substantial day rate for your services – and that is universally true in the corner of Enterprise IT in which I work – they expect very tangible value.

There are those people who were born differentiators in my team. For instance, there are those that have a way of spotting cool new technology and relating it to customers businesses. These guys will probably always be one step ahead of the curve and always be able to add insight and value.

“If you’re different somehow and have made yourself unique, people will find you and pay you more” – Seth Godin

But this is what made me think, because this is a pretty elitist thing to say. Surely only the best people can be unique. The elite. And the more I thought about this, the less I believe it’s true.

I suspect that the secret to this could be as simple as knowing what you could be great at. With some people it’s bloody obvious, and their skills come to the forefront. With others, their differentiators are less obvious. Perhaps being easy to work with and never complaining. Or the gel to the team that isn’t visible, but keeps everything together. Or, the detail person, the completer-finisher, the documenter. Perhaps the ability to relate to people. To listen. To disseminate.

And perhaps the only thing you really need to know, is your strengths. Perhaps you should ask around a bit and find out what people value in you?

Because if there’s one thing that’s true about what Godin’s got to say – there is only one person that will differentiate you – and that’s you. You are in charge of your own destiny here, and that includes articulating your own value proposition. Are you being a back-seat driver in your own life?

Do you have ghongai – the art of good timing?

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You know that phone call you dread, right? The one that comes from someone that always calls at the worst possible time? It’s not that you don’t want to talk to them – but just they always call when you’re in the middle of something urgent. And they always really need to speak right now.

It’s not because they are stupid, or rude. It’s because they have bad ghongai. I’ve been theorising this for a while and my conclusion is that some people have good ghongai, and some people have bad ghongai.

For example I have a great relationship with my mentor, John. I think one of the reasons for this is that he has this ability to call at a good time. When I’m quiet, my mind is still and capable of being opened. And if it’s a bad time, we always easily setup a new time to continue the conversation.

And yet other people including suppliers, customer and colleagues always call at a bad time. This sometimes makes me look less available than I really am. Interestingly with these people, there are several factors that don’t matter. For instance, some have access to my schedule and some do not. This makes pretty much no difference.

There appears to be no rhyme or reason to whether a person has ghongai; but I believe that it is a bilateral relationship. For instance I like to speak to my colleague Tristan Colgate. But it is almost possible to get on a call with him – we are always busy at different times. In other words, he has bad ghongai. Or wait, is it me that has it?

But what I’m wondering is what the impact of the subconscious is here. Are there people I subconsciously prioritise, and therefore grant them good gonghai? And if so, what does that mean of what I secretly think of Tristan?

Why the services industry is in turmoil, and British Airways are screwed

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I was sat on the sofa this morning, trying to think of a truly amazing customer experience that I have had in 2011. And if I’m being honest, I’m not sure I’ve had one. I’ve lots of OK experiences. A few good ones. And plenty of terrible ones. Maybe I’m wrong in thinking that me, the customer, should be the focus during an interaction, because I so very rarely feel that way.

And it was so that I ended up today at The Cheese And Wine Company in Hampton. It sits on the site that has housed no less than four cafés in four years. Organic this, children’s that. Each was a failed business because they had no idea what their customers wanted – usually bad home-cooked cakes and muddy coffee. Really?

Steve, on the other hand, has created a simple and oddly unique value proposition. He selles cheese, wine, and associated paraphernalia. In the store, online, you can sit and eat it or take it home. He does tastings and parties and events and has engaged his audience very nicely. And what’s more, he’s not competing with the supermarkets because he sells stuff you can’t buy there. Stuff like Epoisses soft cheese and Binfield Brut sparkling wine, that comes from a few miles from where I was born in Berkshire.

It’s a simple value proposition and his customers love it. He’s sold out on every event and I had to settle for a rather nice stilton today, because he’d sold every other cheese in the shop. Trust me, he has a truckload coming tomorrow, on the next working day of the year.

The shop next door to him shut down a few months back. As far as I can tell, Harry and Paul’s I Saw You Coming took this store to run a parody. As they say, “It’s basically a bunch of crap that I’ve tastefully displayed. And a bunch of candles”. And now it’s been replaced by a store called OhSo. Which as far as I can tell sells the same rubbish that the old store (which went bust) sold. It’s sad, but they won’t be open in Christmas 2012.

And this neatly brings me to British Airways. The airline industry is in trouble. Their consumers have less disposable income than ever before. Fuel prices and taxes are rising year-on-year. A bunch of low-cost airlines have cropped up, cutting margins further and increasing competition. And consumers are better informed than ever before, with better price comparison sites.

They have two potential differentiators to choose from: either price, or quality of service. With airlines like the US domestics (US Airways, Delta etc.) and European budget airlines like Easyjet and Ryanair, you know what you are getting. Very little, for the lowest price possible. A return trip from London to Madrid is £37 by Easyjet in January, and £114 with BA.

So BA try to compete on perceived quality of service. But they have a serious problem here too, because their staff hate them. They are used to being given a platinum pay package for the last 30 years, and the market can no longer support it for the reasons explained before. What’s more, the delays to Boeing’s Dreamliner planes mean that BA are operating a tired fleet of ageing planes.

And in reducing their salaries and making the shifts and perks more similar to other competing airlines, BA have made their staff hate their jobs – and they take it out on the customers in many cases. In 2011 I have experienced the following:

  1. Being charged for a ticket change after I was told I could have it for free because I was changing flights at their convenience.
  2. Being charged for a ticket change after an administrative fault
  3. A nice coat I left on a plane never made it to lost property – in a small airport
  4. My bags vandalised and my property stolen on a flight from London to Madrid
  5. Nearly missing a flight because of computer security check problems
  6. Having my complaint letter opened by the crew that I complained about – they then confronted me
  7. Flights with no water, broken heating systems, broken seats or rest rooms

And no one gives a crap. Their customer complaints department certainly don’t and from what I hear, the management team isn’t any different. When you talk to staff at the airport on a flight, they are invariably unhappy and disaffected.

And the share price shows it. They are down from 243p at the beginning of this year to 150p at the time of writing. To be fair, this is more or less in common with the rest of the industry – but what is not in common is they are barely breaking even. Lufthansa, for example, has an operating margin of 4% compared to the International Airlines Group (which owns BA and Iberia), which made 0.7% last year. I’ve not looked into it, but it wouldn’t surprise me if there were some creative accounting going on there.

Now last week, FedEx got in trouble on YouTube, when a disaffected customer uploaded a video titled “FedEx Guy Throwing My Computer Monitor”:

Now this video already has nearly 7,000,000 views and 22,000 comments. Fedex Senior Vice President Matthew Thornton III turned this into a fantastic opportunity and apologised to the customer, as a YouTube response, here:

And if BA want to survive, I believe they need to apply some customer-centricity. I’ve been told by some senior people in BA that they have a program in place to try to ensure retention of frequent flyers and offer them a good quality of service.

Now, I get a fantastic quality of service from Carl and his team at BA in Philadelphia International Airport and this is probably the main reason why I fly BA (along with the rewards points, and the convenience of London Heathrow Terminal 5). But I think this is a pocket of excellence caused by a good manager and it is not representative of my overall experience.

The risk to BA seems so obvious – there will be some major casualties of the recession. I’m already tempted to switch to US Airways, who have a very generous upgrade system (they always fill business class, upgrading passengers by order of seniority). The fact that US Airways don’t give you access to their lounge, even if you are a frequent flyer, is the reason I’ve not. It costs $375 a year.

During a visit to the NASA space center in 1962, President Kennedy noticed a janitor carrying a broom. He interrupted his tour, walked over to the man and said, “Hi, I’m Jack Kennedy. What are you doing?”. The janitor responded, “I’m helping put a man on the moon, Mr. President.”

It sounds corny, but having a company with a single vision may have something to be said for it. I work with a lot of large global organisations and it is often a problem that IT functions do not serve the wider needs of the business. One company that this is not true in is Howdens Joinery (previously the wholesale arm of MFI), which is a very interesting organisation.

For a start, everyone in the organisation is remunerated based on the same criteria. This shared sense of purpose is very visible in the CIO, David Hallett. We were talking about depot outages and he explained that they don’t operate on the basis of an acceptable failure rate: a depot which is not operating, is margin lost, and that is unacceptable.

What’s more interesting is that it appears that because everyone has a shared and common goal, they work as a team. The results are clear. Revenue in 2009 was 769m with 6.5% profit after tax. This was up to 808m and 8.2% profit in 2010. 2011 Interim results are available here but they aren’t very relevant because Howdens does much of their business in the run-up to Christmas. What is interesting is the first few pages which explains their business model.

If you do so, you will understand that Howdens is 100% customer-centric. They know who their customer is (the small builder) and know exactly what is important to them – and they deliver it, surrounded by a viable commercial model. Their massive market share is testimony to getting that right.

For my money, there will be airlines that figure out that being customer-centric first and foremost builds long-term sustainable success. And there will be those that will roll over and die. And from where I’m sitting, British Airways may be a Very British Institution, but I’m not convinced it can survive this recession.

Why does the tech community hate Enterprise IT?

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I have a serious case of writers block, and a more serious case of insomnia. I wrote an blog on Tuesday entitled Why TechCrunch is boring, SAP is not, and the world has gone mad, and it went viral. I received more page views in a day, than my combined page views on my blog, ever. It was read by people from individual developers and the SAP management team alike. And now, like a musician writing a second album, I don’t know how to follow it up.

15 years ago I was studying Computer Science at Cambridge. These were heady days. We theorised on Richard Stallman and The Cathedral and the Bazaar. The open source community was starting to rear its head and we felt on the cusp of a revolution. We installed Linux by hand and RedHat was just starting to emerge. We hacked code until 5am, drinking Jolt Cola and listening to 80s rock, exposing vulnerabilities in Windows NT. I had a Digital Alpha running Linux under my bed. Microsoft was the devil. Times were good.

And I remember the process of leaving college and receiving interviews. CSC, Oracle and Microsoft would woo us with their graduate programs, offering booze, pens and the promise of the good life. We scorned them and took the junkets. Colleagues went off to banking, software development. The lucky ones went off to startups where they applied their Linux skills and programmed in ML. Some sold their soul to the devil and went to work for Microsoft, SAP or Oracle.

In the meantime, I went through a career where I have done many things. I spent some time in Analytics, I’ve programmed C++ and perl and 20 other languages. And now, I’m a parody of myself, running a consulting practice in SAP Enterprise IT. I’m sitting here wondering what my 19-year old self would think of me now.

So it came to pass that for some reason, my article hit Hacker News and it went viral; as a result I got a very different audience reading my content. When I write about enterprise, I get a small but engaged audience reading about SAP. They say nice things about what I write and I feel warm and fuzzy. On Tuesday, I found a new audience, and some of what was written is akin to hate mail:

“Get a life, stop wining about how a tech b2b company that you are more interested in isnt getting the same amount of press… it is a boring company. and seems like less profitable too.”

I know why this is and I’m pretty certain my 19-year old self would have chimed in with the accusatory language. But that’s not what’s important. What’s important is that I believe – like in 1996 – we are on the cusp of another revolution; one where the Enterprise IT and tech communities can – if they want to – meet in the middle ground of the Consumerization of IT. Here’s why:

From what I can gather, the tech and open source communities hate SAP for a number of reasons; the worlds evil and antichrist came up a lot in my blog comments. My inner hacker knows exactly what they are:

1) Idealogical. SAP protects software patents, has an army of suited sales executives and lawyers. It’s not cool.

2) Community. SAP is implemented by armies of consultants charging high day rates. It’s a boys club and the community is hard to get into.

3) Integration. SAP is an information silo and it is hard to get stuff in and out of it.

In order for any of this stuff to change, there have to be socioeconomic factors which are a catalyst; I think in 2012 we will be in exactly a time where an inflection point is possible.

1) Economy. Let’s face it, the global economy is screwed. Budgets are tighter than ever and there is no end in sight. It will be business as usual to work to get Even More for Even Less.

2) Pervasiveness. SAP is here to stay; 65% of the world’s business transactions touch SAP. It is the most successful Enterprise IT software. Even if SAP becomes irrelevant like IBM AS/400, many SAP environments will be around for 20-40 years.

3) Consumerization of IT. We all expect Android and iPhone user experiences. We want it for our business interactions. I use my personal MacBook Air as my primary business machine. The dam has broken on this and we can’t fight it. This is a real pain as SAP’s user experience traditionally sucks.

4) Business Networks. Much of the world now operates as a living breathing business network. Invoices, sales, supply chains – many of these operate automatically and electronically. Integration is necessary.

5) Big Consulting. SAP want to break up the Big Consulting Systems Integrator model of the 1990s. For every $1 of SAP license spent, there is $7 spent on consulting and hardware. The big consulting houses have been ripping off customers for years. Customers clench when they hear the words “change request”. There is an irony that SAP and IBM created this business model, but the world has changed.

You may be able to see where I’m going here. If you are in the main tech industry let me tell you what is going on in the SAP world that makes it relevant:

1) Open Standards. SAP’s relatively recent CTO, Vishal Sikka, has been championing open standards. The new in-memory database, HANA, only runs on Linux and on commodity x86 hardware. The modelling tool is Eclipse-based. It supports ODBC, JDBC and MDX for integration. The new Gateway integration layer allows REST-based integration with any SAP function.

2) Developer Ecosystem. Work is afoot to cut red tape and open the ecosystem. This is very hard in a big organisation and I don’t envy them, but it is happening. I challenged the SAP management team to measure how long it takes to become a SAP developer from start to finish – and make it as good as Apple and Google. The new developer website – SCN – will be launched on Monday 12th December. It too supports open standards.

3) Technology. SAP have produced technology with big developer potential. The Unwired Platform allows secure integration for mobile devices and supports open standards like REST, Apple, Android etc. Plus, systems will be available in the cloud for developers to use without having to install gobbing great big SAP systems at home.

You may get the sense that I’m pro-SAP here; I am. And I think, with good reason. Because, SAP have – unlike any of the other Enterprise IT players like Oracle – listened to the advice that they have been receiving over the last few years. And I think this dramatically plays into the hand of the wider tech community.

Because, if you are willing to put aside your ideological problems with working along side The Antichrist, there are enormous and interesting opportunities out there. For instance, you could write a Ruby on Rails web app that exposes a web shop – continuing to use an existing SAP ERP system for sales order processing and pricing. Or mobile apps for time and expenses that run on iPhone and Android. Don’t let me constrain you – you can do anything your mind can imagine.

And the wider tech community already has the skills and will be able to get into the SAP Ecosystem easily. The issues around community and integration can evaporate. And we can do away with some of those awful legacy interfaces that people have to put up with. SAP has embraced design thinking and is making much better looking solutions lately, but imagine the power of a community which is 10 times the size that it is now?

The question is – are people willing to put aside the ideological problem? I’m not sure what the 19-year old John would have said. Bring on the hate mail.

Why TechCrunch is boring, SAP is not, and the world has gone mad

80 Replies

It’s cold by the way. Winter finally arrived, I realised as I pondered SAP’s acquisition of SuccessFactors on the run into work. I can still feel the cold imbued from the run into the metal palmrest of my laptop as I write this.

The highlight of the weekend was Alexis Tsotsis’ faux-gonzoistic impression on TechCrunch. I say faux, because it has the attitude of gonzo journalism but not the style. From what I get of her article, if it’s not Apple or a startup, she’s not interested – and therefore the SAP acquisition of SuccessFactors is not worth reading about:

…you can never be too sure with these incredibly dull companies. I am too bored to Google it. In fact, I am literally bored to tears writing this, like I am seriously crying here in my local coffee shop and everyone is looking at me weird…

Really, this says a lot more about what’s wrong about TechCrunch, and actually the world as a whole. And so last night, I was discussing this point with a bunch of Enterprise Irregulars on Twitter. I’m going to disagree with Dennis Howlett (who used to be an Irregular), which is always a good way to start the morning.

@dahowlett: @applebyj giving idiots ANY play is plain dumb

Sameer Patel chimes in with a reminder that the Facebook acquisition of Gowalla – a FourSquare-style location based service, got much more airtime.

@sameerpatel: @applebyj @dahowlett not shocking. Most of yesterday tech meme led w/ reruns of Gowalla FB acquisition for an undisclosed sum vs a $3B buy.

And Frank Scavo got the feel of the enterprise community spot on:

@fscavo: I stopped reading TechCrunch years ago. @alexias’s recent post reminds me why. cc: @dahowlett @applebyj

But actually I think that Timo Elliott nailed it. Yes Timo, this is the real world.

@timoelliott: Strangely, this techcrunch post about the “boring” SAP acquisition made me very proud: techcrunch.com/2011/12/03/zzz… #dudethisistherealworld

And let’s just be reminded about how real this world is:

Facebook SAP
Revenue $4bn (estimated) $12.46bn
Profit $1bn (estimated) $1.18bn
% of world’s transactions Ermm? 65%
Users 800m 500m
Market Capitalization $82bn $72bn

If you compare Facebook even by their own metrics, they are still insignificant compared to the behemoth that is SAP. Billions of people interact with SAP on a day to day basis – every transaction with giants like Barclays Bank. 90% of the world’s beer is produced by SAP. And since SAP’s Chief Marketing Officer Jonathan Becher took the time to point it out, I’ll quote him:

@jbecher: @applebyj Amused by bit.ly/tFOK7J Don’t forget 65% of world’s televisions, 86% of athletic footwear, or 70% of world’s chocolate

Who says that SAP isn’t cool, with such accolades! And yet Facebook has the greater market capitalization. Why is this? High growth and cool factor. But Facebook has not proven that it has a sustainable market model.

Why does this mean there is something wrong with TechCrunch?

Well it strikes me that TechCrunch gets Consumer IT and is all over the topics that generate a lot of traffic, like Apple, Facebook and Google, and there’s nothing wrong with this. I do however think there’s two major areas where TC has a problem:

First, Founder and former co-editor Michael Arrington sold out to AOL then whined about their involvement. What amazes me here is first, his naivety, and second his desire for self-importance.

Second, it’s fine if you don’t understand Enterprise IT. But don’t whine about it being boring – because if you read Alexia’s article you will see that there are (currently) 99 comments, all of which criticise her and her journalism. Don’t write a crap piece of journalism and then follow it up with “I was just being honest” on Twitter – and then delete the Twitter post.

06/12/11 Correction – Alexia’s “I was just being honest” was in the comments area, not a Tweet. She didn’t delete it. My bad.

And what’s wrong with the world?

Well for my money SAP is possibly the most interesting technology firm in the world right now. I make my money out of the SAP industry so perhaps I would say that, but it’s also born out by facts.

They have the leading enterprise mobility platform, integrated back into an incredibly complex suite of software that covers 65% of the world’s business transactions. They are leading the world with in-memory technology.

And to add to that they have just made a major cloud acquisition, which might be the third dimension to prevent the risk of their becoming irrelevant in 5-10 years time.

What’s wrong with the world is that they are so focussed on Apple, Google and Facebook – with their over inflated IPOs and everything that comes with that. The world was not built on technology bubbles – it was built on hard work and honest money.

For a small number of lucky individuals there is a bubble with an IPO and a retirement salary. For everyone else, the world is a very tough place to live. My advice: stop being bored by the stuff which makes the world turn.