PracticalSOA

In case you’ve been marooned on a desert island, a certain four-letter word starting with the letter F has got everyone in a tizzy these days. I mean “free”, of course.

Recently, Chris “Long Tail” Anderson’s book about “Free” (read it for free here) was reviewed by New Yorker writer Malcolm Gladwell, in which he wondered why the idea of selling for free was “being elevated to a philosophical principle”. Good point. Maybe “free” is simply a pricing strategy.

My company plays in the SAP world and naturally, it’s hard to imagine anything being sold for free here.

Like any other business application, our solutions and services are are evaluated by individuals from business (Sales, Marketing, Supply Chain Management), IT (ERP, CRM, BI), Security, Governance and of course, Finance.

The reason for that is partly functional (”does it meet everyone’s needs?”) and partly for impact reasons (”does your solution introduce yet another layer of complexity for my database administrator?”).

So even if we gave some things away for free, the customer would still have to worry about details like interfaces and if those interfaces would break when SAP introduced the next enhancement pack and so on.

Just because they don’t have to pay for the software doesn’t mean it will run for free. What CIO would like to explain a possible CRM system crash to the Sales VP by saying “well, it all began when we downloaded this free software….”? Not in a million years.

The problem isn’t one of enterprise vendors not being creative enough to “sell” things for free. It’s that companies won’t buy free. A contract and a price tag are a promise of accountability. That’s the way it has been and that’s the way it will be.

I quite liked this analogy of fixing a roof, when talking about “maintenance/upkeep” type of IT projects.

Companies don’t like to spend money on fixing the roof and as we all know, changing the foundation is rarely an option. So what’s left? The walls, of course. But pulling those down means you are going to hit some water pipes somewhere.

Now I think I’ve gone too far with the construction metaphor.

Imagine walking up to a soda dispenser and mixing your own flavor. (Please try and get past the “what about the calories and sugar” argument for a second here ;)) You can experiment with different recipes, go for some outlandish tastes, whatever. The old promise of mass customization, right?

A prototype project at Coca Cola called “Freestyle” allows consumers to do just that. (Link to a press release by Coca Cola.)

What interests me here is not the promise of exotic flavors (though a lime-cherry-orange-grape-vanilla thing would be - theoretically, at least - welcome on a long, hot summer afternoon) but the brainstorming and collaboration that must have gone on behind the scenes.

Then of course, there is the application of technology:

“Ingredients include Windows CE, wireless networks, Microsoft System Center Configuration Manager for Mobile Devices, Verizon VPN, Verizon wireless cards, SAP point-of-sale management software, Tibco middleware, SAP Business Warehouse, SAP CRM system/portal, and RFID readers and sensors.”

The big deal here is that this high-tech kiosk allows the marketers at Coca Cola to study consumer preferences in real-time and make faster decisions about “productizing” a flavor before a Jones Soda or a Sobe gets in on the action.

I am sure people in SAP are following this story with great interest. It should make for an excellent case study for how SAP products can truly drive top-line growth.

Bob Evans of Information Week makes many more excellent points in his article about this innovation. Do read the article as well as the original story, also in Information Week.

Now back to my no-flavor, low-tech water….

A short but thought-provoking article on Harvard Business Publishing about the importance of measuring IT costs not in conventional business terms but in terms of “demand-side metrics”:

“Most IT shops are good project economics — but they don’t create, nor are they asked, to estimate the ongoing operational costs denominated in demand-side measures like cost per car.”

It seems like a terrific concept but I also wonder about its feasibility. Many companies lack a good handle on what their product or service really costs. Approximations (and political maneuverings) abound. But imagine if the cost of on-going maintenance of  a CRM software or an ERP system could be communicated to the stakeholders in terms of transactional costs. The challenge of IT prioritization could be addressed so much more clearly and effectively.

Read the article here.

From the Effective CIO blog, a post on quarter-end discounts on enterprise software:

“…the last thing any of us should be doing is running to the CFO’s office on June 30th, looking for a signature to close a deal before 5 PM. Rushing a deal to save a buck is unprofessional, and any other C-level executive should question our abilities if we behave like that.”

Sometimes, just sometimes, it feels as though our high-tech (and high-touch) industry shares ZERO empathy with the buyer.

This is bold (and if you are a data geek, it is CSV manna from heaven:)): a publicly viewable “dashboard” that shows the health of IT projects in the Federal Government.

You can check out the dashboard through this page or go directly to the dashboard and play around with the interactive charts. (Yes, full drill-down capabilities are included.)

Not only that, the website also lets you directly pull data from the sources and analyze it yourself.

Of course, like any other analytical system, the real work probably begins now: ensuring quality of data, timeliness of updates and all the other mundane details that high-paid consultants don’t want to work on

But for this first step, hats off to the administration. The NY Times covered this story, as did ZDNet, which calls it “a great example of how to promote IT”.