Saving $20m and going agile in the process

From an interesting sounding panel on government IT:

“We do discovery on a small chunk and then development, and then while that’s going on, we’re starting discovery on the next small chunk, and so on and so forth,” Smith said. “And then when the development is done, we loop back and we do user testing on that piece that’s done. But we don’t release it. That’s … one of the differences between agile and the way we did it. At the end of the phase we release everything.”

Also, some fun notes on consolidating legacy systems and resistance to going agile.

Don’t worry, computers are just causing a class war

On the contrary, as this book will argue, the digital revolution is very much like the industrial revolution. And the experience of the industrial revolution tells us that society must go through a period of wrenching political change before it can agree on a broadly acceptable social system for sharing the fruits of this new technological world. It is unfortunate, but those groups that benefit most from the changing economy tend not to willingly share their riches; social change occurs when losing groups find ways to wield social and political power, to demand a better share. The question we ought to be worried about now is not simply what policies need to be adopted to make life better in this technological future, but how to manage the fierce social battle, only just beginning, that will determine who gets what and by what mechanism.

Underlying the problem is rich people putting all their money under the mattress. Their wealth isn’t flowing down to the rest of the people. These wealthy folks have worked hard, and feel like they’re owed all that money (rather than having taken away by high taxes and redistributed); or, at least, they feel others are not deserving.

However, as the book goes into say, this mind-set ignores how a functioning society enables that success in the first place, and now sustains it:

A makers-and-takers conception of the world is one that neglects the social foundation on which wealth is built. We aren’t merely divided into makers and takers. We are participants in societies, operating according to a broad social consensus. When that consensus breaks down, the wealth goes away. Society either agrees a way to share its riches that most members find acceptable, or the system fractures and the social wealth available to everyone shrinks.

Source: The Wealth of Humans: Work, Power, and Status in the Twenty-first Century by Ryan Avent.

Go to where the customers are. True story.

By making it easy for people to buy movie tickets online or through a smartphone app, Fandango has experienced breakneck growth over the last two years. A couple of taps and presto! The seats are yours.

And on the “omni-channel,” even cyberspace has lots of omni:

“Consumers, particularly young ones, find it inconvenient to hop into different silos to get something done,” she said. “They want it all in one place. That sounds obnoxious, I know — the definition of a ‘first-world problem’ — but it’s true, and Fandango is solving it for them.”

Source:
Buy Movie Tickets on Facebook? Fandango Makes It Possible

Why do you have to burn $4bn to add mobile apps to taxis?

In the first quarter of this year, Uber lost about $520 million before interest, taxes, depreciation and amortization, according to people familiar with the matter. In the second quarter the losses significantly exceeded $750 million, including a roughly $100 million shortfall in the U.S., those people said. That means Uber’s losses in the first half of 2016 totaled at least $1.27 billion.

Meanwhile, revenue:

Bookings grew tremendously from the first quarter of this year to the second, from above $3.8 billion to more than $5 billion. Net revenue, under generally accepted accounting principles, grew about 18 percent, from about $960 million in the first quarter to about $1.1 billion in the second.

It’s expensive to start a global, meat-space business, even if you’re “assetless”:

Uber, which is seven years old, has lost at least $4 billion in the history of the company.

I find the continuous usage of Uber as an example of “the way forward” in business unhelpful. Not because it’s not an interesting business, but because without these kinds of numbers in context, you think it’s easy. If you’re prepared to burn through $4bn before profit, sure thing!

The advantage established businesses should have is less spending to build a market: they just need to do better serving their existing customer base at first, not spend all that money to start from zero. What I find devilishly fascinating is why it’s so hard for those large organizations to take advantage of the assets they already have and why, possibly, it’s easier just to start from scratch, as Uber has been doing with that $4bn.

Source: Uber Loses at Least $1.2 Billion in First Half of 2016

Agile Development’s Biggest Failure Point—and How to Fix It

Companies commonly make one of two mistakes when selecting a product owner. Often they tap a junior employee with ­limited experience and therefore a limited understanding of how the project fits into the larger mission. Product owners need enough seniority to inspire and motivate peers across multiple business units. By earning the respect of teams in customer experience, enterprise architecture, and risk and compliance, for example, the ­product owner can help ensure that ­projects move smoothly without costly ­bottlenecks. Other companies err in the ­opposite direction, selecting a senior ­executive who is too harried to devote ­adequate time and may not adapt well to the highly responsive, iterative nature of agile development.
So what should companies look for when appointing product owners? In our view, the key is to find people who think and ­behave like entrepreneurs.

Much of the advice here falls under the category of “if you do good things, good things happen”:

success comes from simply managing a sound process: conducting market ­research, understanding the customer’s needs, identifying where the product will create the most value, prioritizing the most important features, testing ideas, capturing customer feedback, and continuously ­refining their vision over time.

The tasks is setting up and environment, processes, even “culture” that encloses and rewards good behavior like this. And the protecting that structure from corporate barbarians. That’s a job – and the responsibility – of management. So, perhaps it’s good to get some management consulting advice on what good looks like.

Source: Agile Development’s Biggest Failure Point—and How to Fix It

Would you buy auto insurance from Google? The Kids and auto insurance

The young people account for 20% of of the $180bn US auto insurance market. Here’s some trends in their buying behavior a la a BCG infographic:

Infographic on car insurance buying habits.

Some items:

  • That nearly 40% are willing to buy from Amazon, Google, and others should put traditional insurance vendors in full on freak out mode.
  • Once The Kids start the long (up to two weeks!) research process, they’re 70% more likely to switch than The Olds. So, it’s probably a good idea for incumbents to heavily get involved in research, pointing to native content sponsored “third parties” and providing their own research.
  • As one of our Pivotal customers, Allstate, put it: “Everybody is going to disrupt the insurance industry. It hasn’t been disrupted in eighty-plus years.”

Source: bcg.perspectives – How Digital Switchers Are Disrupting US Auto Insurers

How Companies Like Dollar Shave Club Are Reshaping the Retail Landscape

“After two years in business, Casper is on track to book $200 million in sales over the next year, but its success isn’t ensured.”

Also, a new category phrase: “the digitally native vertical brand.”

Source: How Companies Like Dollar Shave Club Are Reshaping the Retail Landscape

The point of business computing is increasing productivity

In covering his latest framing for why opportunity in enterprise IT Geoffrey Moore recounts some history:

Let me give some examples. In the 1980s there was enormous trapped value in manually intensive office paper work; office automation, especially word processing, spreadsheets, and email, became the mechanism by which that value was released. In the 1990s there was enormous trapped value in redundant functionality replicated inside every corporation, especially in relation to manufacturing and customer service transactions; enabling outsourcing to release that trapped value became the fuel the drove the client-server ERP revolution. In the 2000s there was enormous trapped value in media and entertainment being confined to a handful of publishers and physical distribution to tethered endpoints; this drove the deployment of wireless broadband networks, mobile devices, and electronic distribution.

That’s what business computing is all about: productivity. You either are removing costs and speeding up a process (a room full of mathematicians and accounts turns into an Excel spreadsheet) or, similarly, creating a new way to interact with your business that was too expensive, or impossible, before (advertising with Facebook and Google, ordering groceries from your couch, outside of NYC – not the best example).

“Entertainment” and, let’s call it, “personal productivity” (health trackers, Facebook for the users [not the real customers of the advertisers], mint.com, etc.) are much of the “consumer IT” benefits.

Whatever the case, the goal of using a computer (and the software on-top of it) in a business case is to increase productivity.

Source: “The Next Trillion Dollars,” Geoffrey Moore, April 2015.

Improving IT recruiting by rethinking IT priorities

Allstate people working

Most people seem to have complaints about hiring IT staff. They can’t find the right skills, or just people. Of course, what little economics I know would suggest that this means the price (wages) should be higher.

Also, there’s probably a need a rejigger how organization’s think about IT, namely by dividing projects up into low-value (non-differentiating), and high value/differentiating buckets. Those answers are all too simple, really. The question is how to get the IT department to the point where management can do those things.

Jon Reed summerize a and comments on an article on this topic:
Continue reading Improving IT recruiting by rethinking IT priorities