The empire strikes back?

Star Wars –the most successful epic space opera franchise ever;  also happens to be my favorite movie series!

It was so ahead of its time it is said George Lucas the creator had to start a special effects company IL&M (Industry Lights & Magic) to realize his vision!

“The Empire Strikes Back“ the second of the six main Star Wars films is said to be the most popular and also the most critically acclaimed. This is the part where the Galactic Empire lead by Darth Vader gets their act together to hit back at the Rebel Alliance lead by Princes Leia and Luke Skywalker.

Year 1995:

  • Wal-Mart  already a gigantic corporation raking in $93.6 billion with 675,000 associates.
  • Internet had 16 million people users – expected to double the following year.
  • The cost of PC had reduced that it was affordable for people to start buying them for home use.
  • Jeff Bezos launched Amazon.com with initial funding of $ 100,000.

Not too long ago:

  • Growth in retail  firmly moves to on-line.
  • Amazon grew rapidly to become the world’s largest online retailer in the process wiping out several large retailers.
  • Wal-Mart grew to become undisputed world leader in the retail. However on-line retail continues to be an area of concern.

2012 – till now:

  • Wal-Mart hires Neil Ashe to lead their Global eCommerce the division that runs their online business.
  • Wal-Mart opens battles for on-line business on several fronts by merging online, offline and mobile commerce:
    • Rolled out a mobile app that puts its store on customer’s smart phones with significantly enhanced self-check-out.
    • Testing same day delivery service based on learning’s from ASDA, its UK subsidiary.
    • Setup technology centers across the globe to crunch its massive customer database.
    • Allows customers to buy on-line and take delivery from a store near to them.
  • Wal-Mart’s on-line revenue is expected to $9 billion tiny compared to Amazon’s $75 billion.
  • Amazon is investing in building required infrastructure to provide same day delivery.

The war is far from over.  Both are striking and striving to win more.  In the case of Wal-Mart getting the right leader for its on-line business seems to be working.

Coming back to the movie – there is a clear distinction between Rebel Alliance and Galactic Empire.

In the world of retail the question is: Who is who?

After recording companies is it now the time for Cable Companies?

It was a major setback for broadcasters on 1 April 2013 when a federal appeals court in New York upheld a ruling in favor of Aereo. The broadcasters have been trying to sue Aereo out of existence for over a year!

This may be the beginning of the end of cable companies.

What is Aereo?  It is a technology company based in New York City that allows subscribers to view content on Internet-connected devices. Imagine being able to watch and record live broadcasts  on your tablet or smart phone or phoblet as some of them are called now a days !

Why do TV or Cable companies hate, now fear Aereo? Aereo does not pay networks for the free-to-air channels it streams. It allows people to receive content without paying for the bundles of channels from which cable firms derive their profits.

How are Cable or TV companies responding? I am sure the initial response was to simply ignore, later as one would expect waste over a year trying to get the court to shut down Aereo.

Let’s look at the sequence of events that I believe have led to this:

WSJ on PC Market

  1. Tablet (iPad to be precise) is the disruptive innovation that has kicked PC industry to a corner.
  2. Windows 8 is having no effect on arresting the decline in PC sales. It is said significant number of customers instead of spending money on upgrading their PC’s are buying Tablets and retaining their existing PC.
  3. Video sharing sites like YouTube brought changes in consumer behavior – most of us watch considerable amount of video on our internet connected devices.
  4. It was only a matter of time before someone would think of streaming live content to these devices – hence Aereo!

The question why or how cable or TV broadcasting companies did not think of doing it themselves?

If history is any indication, not too long ago recording companies refused to see the changes in their consumer behavior as a result of MP3 and paid the price!

Coming back to the story of Cable companies, now that the court has refused to do their work they have finally started getting their act together. CBS has announced that they have acquired a minority stake in Syncbak a local TV streaming venture.

The question is: Are they already too late?

This would be an interesting space to watch as this is yet another industry that refused to understand changes in their consumer’s behavior driven by technology.

Could the BT in the flat-world offer help to the business of air travel?

The announcer said they were truly sorry for the inconvenience caused as the flight I was to take had been delayed.

I was not too perturbed as I love hanging around airports – especially the international ones. I believe they are truly melting pots of humanity!

The variety of people, nationalities, and luggage – yes bags the variety of bags that one gets to see at an airport is mind boggling! Every one heading somewhere – holiday, business meetings, relocation, family reunions, event etc. it always reminds me of a beehive – everyone doing something towards the greater cause, OK may in this case I am stretching it a bit too far but still the cause here is travelling!

I always wondered if airlines business was profitable to be in then I came across this famous quote:

“If you want to be a Millionaire, start with a billion dollars and launch a new airline” – Sir Richard Branson (founder of Virgin Atlantic)

Despite all the downside of the business many intrepid entrepreneurs are still having a go at starting a new airline. Airlines business oozes of glamor and probably hence the attraction is simply irresistible.

Back home in India, we recently witnessed demise of Kingfisher Airlines – what was once a flamboyant airline found by probably the only flamboyant businessman in India.

Running airline business is tough – especially when no airline has any control of that one thing that impacts them most i.e price of turbine fuel. They do however keep tweaking other aspects of the business to stay afloat. Given the state of the economy impacting business travellers airlines are scrambling to survive.

Areas where the airlines do have some control that impacts costs are:

  1. Self-help (Transfer some of the work to passengers like e.g. check-in)
  2. Reduce consumables
  3. Reduce the turnaround time leading to increase in on-time departures

Tweaking these have to be done carefully keeping in mind customer experience. There have been quite few bizarre sounding suggestions that have made rounds. Charging customer based on their weight and the most bizarre one being charging customers for using the bathroom!

Here are few areas involving Business Technology options smartly used I believe could result in real savings:

  1. Check-in: Low cost or budget airlines have got this right. May be they could push it even further with most passengers using smart mobile phones with capabilities like Near Field Communication (NFC) why not allow downloading of the boarding pass on to the handset which could communicate with the computer at the boarding. An image of the boarding pass should suffice for the security. Having check-in counters costs money which can be reduced or in some cases even done away with! On-line check-in too could recommend seats based on history of selections as most frequent travellers have their own preferences.
  2. Baggage handling– It is said 25 million bags are lost every year and airlines spend almost US$ 100 per lost bag – huge money indeed. Technology used is still good old paper with barcode. Barcode readers have to be brought close to the tags to read. Also the tags sometimes tear during processing hence making identification of the luggage difficult. It is said most of the luggage gets misplaced in the point of origin due to torn tags. Why not use stickers with Radio Frequency ID (RFID) tags? With RFID technology costs coming down and with the volumes required it may be worth considering. Given that most travellers reuse the same bags the tags are reusable reducing the amount of paper consumed!

     

I am sure there are several more opportunities where BT could help this industry that is going thru very challenging times; I could think of the two listed I would like to hear from you.

One revenue stream with massive margins is almost dead! Tougher times for mobile carriers!

http://online.wsj.com/article/SB10001424127887323466204578382733261211950.html?mod=e2tw

An article published in WSJ states that the rise of texting apps like Line and WhatsApp has taken away $23 billion in revenue from mobile carriers!

The business of texting (SMS) when started was free as at that time the carriers (mobile service providers) had no clue how to monetize it !
When they did figure out eventually they squeezed humongous margins (sometimes up to 2000%). Things could not be better till messaging apps like WhatsApp, Line On and many others entered with free or almost free service.

Entry of these players were particularly bad for RIM now known as BlackBerry. I find it rather funny when folks at BB keep harping about BBM (Black Berry Messenger – their proprietary messaging service) being the next best thing after sliced bread !It may be safer but how many of us need that kinda security good enough for the US government for our daily chats?

These new breed of messaging apps have also started nipping away at social media giants like FB..Sharing photos or video is lot more convenient with out having to worry about security or privacy settings of “FB Wall” etc.

Point to be noted is that all these players in trouble are top notch tech giants caught napping by these nimble start-ups…

Makes me wonder whose job was it to track this – Marketing or Sales or Risk or Technology (CIO) ?

Walmart explores options created by “Sharing Economy”

http://www.reuters.com/article/2013/03/28/us-retail-walmart-delivery-idUSBRE92R03820130328

Walmart is riding the flat-world – exploring possible options to strike back at “Click-only” competitors such as Amazon. 

A very powerful governance process needs to be in place for this to work.

Given the width and breadth of Walmart the scale of operations deep involvement of Business Technology team is critical.

I am sure other similar players looking for options are watching..

 

 

 

Birthday in the flat world..

My phone beep woke me up!

It was 6 in the morning on a Sunday. Irritated to be woken up that early in the morning I checked the phone. It was a message from our daughter’s school wishing her on her birthday! It certainly was a very nice gesture for her school to wish her on her birthday.

Knowing how customer focused, process driven and technology enabled her school is; receiving the text was not surprising.

I recall it took me all of 30 minutes to apply for our daughter’s admission – sitting in the comfort of our living room. A simple online form needed to be filled with scanned image of the supportive documents to be uploaded. Finding the documents that needed to be scanned took a while else it would have taken not more than 10! Five minutes after I clicked submit, yes I received a text on my phone confirming that our application had been received. Few days later we received another text and an e-mail informing us of the interview schedule and contact details.

Reminded of a time, not too long ago, (in few schools even now) when one has to spend minimum 2-3 days to apply for school admission. All that efforts, just to get hold of the application form. Then the journey of applying begins, getting information on other steps such as interview schedule are even more challenging.

Thinking of a simpler process and using technology intelligently the experience could be made hassle free and hence allowing parents to savor this key milestone event in their lives.

It is always the thought that counts and finding tools to enable is most often the easiest part! The thought is driven by the principles may be in this case wanting to be customer (parent) focused.

At this point business of primary school is still a seller’s market i.e. demand for school is higher than there are number of schools. I am sure when the supply finally catches up with the demand institutions such as these are well placed to delight their customers hence retain their lead.

All this effort is not just about delighting the customers, getting these right saves money.

In the case of our daughter’s school if they have been measuring parameters such as cost of application processing and cost of admission per student they must be reducing. Automation i.e. making the applicants enter data through a simple internet application has taken out the cost of data entry. A well designed portal on the internet providing necessary information has reduced the load on staff to handle parent’s queries.

This reduces cost of doing business hence impacting schools bottom-line. For parents (customers) smooth efficient process provides excellent customer experience.

Technology is touching and transforming our lives. Bringing people closer and hence empowering us like never before – thanks to blogs we were able to locate a school for our daughter in no time!

The question is how many of the organizations are leveraging it for the benefit of their critical stakeholder: customer?

Would love to hear what has been your experience getting your child into a school of your choice?

Is the World getting flatter by the day?

The flat-world platform is the product of a convergence of the personal computer (which allowed every individual suddenly to become the author of his or her own content in digital form) with fiber-optic cable (which suddenly allowed all those individuals to access more and more digital content around the world for next to nothing) with the rise of work flow software (which enabled individuals all over the world to collaborate on that same digital content from anywhere, regardless of the distances between them).

– Thomas L. Friedman (Author of the book “The world is flat” that kicked started the discussion in the year 2005)

The flat-world is a world where all involved have increasingly equal access to:

  1. The market – with more trade barriers coming down creating larger market
  2. The Information – with rapid adoption of mobility and social media people are sharing all kinds of information in public space indicating gaps that are opportunities
  3. Technology – Cloud and powerful start-up eco systems making this affordable to organizations with limited budget

This is leading to creation of a level playing field to all.

Flat-world is self-feeding in nature i.e. more of the world gets flat leading to more people to participate. These new joiners participate and contribute by pioneering some breakthrough creating a platform for more to join!

Faster cheaper telecommunication networks flattened the world for low cost location based IT service providers. Thus enabling them to compete for and deliver large outsourcing contracts of large global corporations.  This lead to evolution of offshore delivery model. The same model is being used by small software companies that provide niche services such as product prototype design. Startups based in the high cost locations are taking help of these niche service providers based in low cost locations to stretch their dollar a bit more!

In the recent past the effect of flat-world is moving rapidly to create three streams:

  1. Business – this was probably the first one that got created causing competition or opportunities for corporations from different corners of the world. In the recent past new breed of competition in few areas have emerged challenging the market leaders. Good example is the new age GPS enabled Taxi services that are very asset light allowing them to invest heavily into business technologies to enhance customer experience like never before.
  2. Peer-to-Peer – thanks mostly to the app economy created almost single handedly by Apple people are sharing assets they own like never before. From renting the spare room for a night or few via Airbnb to renting a car using flyte. The opportunities are simply unlimited. Interestingly this economy is slowly eating into the traditional businesses that provided those services. Long spells of economic uncertainty spurring the adoption.
  3. Intracompany– the economic slowdown is putting corporations under strain like almost never before. This is forcing segments of corporates like subsidiaries in some cases even departments to explore all possible options to stay relevant to business. They are now busy exploring new technology options (sometimes independently) and the wave of new startups with niche products/services are encouraging the move further.

 As we all know BT (Business Technology) is the primary driver of the world getting flat and it is rapid evolution of BT that continues to flatten the world. Just as BT has flattened the world it is also providing us to options to leverage the opportunities – the effect of the flat-world is two-way.

Also these changes are not optional or under anyone’s control – these have been set in motion by series of interconnected events and they are changing almost everything in its path.

The question is how many of us are prepared to protect ourselves or leverage this great ever increasing opportunity?