New Normal: Bold IT-Based Business Agility

European business leaders believe their companies are more vulnerable to IT-enabled market disruptions than companies in other parts of the world, according to a new market study by McKinsey & Company.

McKinsey found that 74 percent of European business leaders believed their company was 'very' or 'extremely' exposed to IT-based market disruption. Regardless, only 18 percent of European IT executives believed their companies were 'very effective' at introducing business technology faster and better than their competitors.

According to the McKinsey assessment, European companies need to grasp the opportunity to make bold, transformative moves to ensure their business continues to thrive within the "New Normal" environment of ICT-empowered borderless commerce.

A significant number of businesses have recognized the need to adapt, with 31 percent of European executives saying the development of new products and services in response to changing consumption patterns was a high priority.

'Good Enough' isn't a Winning Strategy
McKinsey believes that the attitude of European business leaders towards IT must shift. Organizations have achieved 'satisfactory' results by attaining some success in improving IT productivity, operational productivity, or innovation.

However, the performance expectation bar is now much higher and "IT must truly excel in all of these dimensions to support a winning company." McKinsey's guidance for European companies includes:

• Align IT and the business, upgrade business skills of IT leaders and close performance gaps.
• Improve governance models to facilitate joint decision making and strategic planning between IT and the business.
• Fundamentally restructure the IT function to dramatically improve productivity.
• Transform the company's operating model and cost structure with IT-enabled business processes.
• Enable transformative moves by promoting a mindset that fosters and rewards experimentation with new ideas.
• Identify opportunities for IT-enabled innovations and be prepared to respond to competitors' disruptive moves.
  

Outlook: Prepare for More of the Same
McKinsey says companies have begun to recognize that the current recession is not simply another turn of the business cycle but a restructuring of the economic order -- and that they need to look beyond relieving short-term cost pressures.

In summary, the current economic environment should be treated as the benchmark conditions for the foreseeable future. Where's the upside opportunity? Become that 'agent' of change.

McKinsey research has shown that downturns are times when industry leadership often changes. Forty-eight percent of global IT companies and 40 percent of U.S. industrial companies that were leaders before the 2000-01 recession did not retain their leadership positions afterward.

Innovation insights and wisdom from the greatest innovators

"My greatest challenge has been to change the mindset of people. Mindsets play strange tricks on us. We see things the way our minds have instructed our eyes to see." - Muhammad Yunus, Nobel Peace Prize winner, Bangladeshi banker, economist, and innovator of microcredit loans. These microcredit loans are given to entrepreneurs too poor to qualify for traditional bank loans. (It's about time U.S. banks begin to microfinance loans to entrepreneurs who can help turn the economy around.)

Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world

In 1976, during visits to the poorest households in the village of Jobra near Chittagong University, Yunus discovered that very small loans could make a disproportionate difference to a poor person. Jobra women who made bamboo furniture had to take out usurious loans for buying bamboo, to pay their profits to the moneylenders. His first loan, consisting of USD 27.00 from his own pocket, was made to 42 women in the village, who made a net profit of BDT 0.50 (USD 0.02) each on the loan. Thus, vastly improving Bangladesh's ability to export and import as it did in the past, resulting in a greater form of globalization and economic status. (Imagine if the Jobra women in Bangladesh can create real product such as bamboo furniture with small loans, what can entrepreneurs do with small loans given out to create new products in energy, environment and education.)

Muhammad Yunus was awarded the 2006 Nobel Peace Prize, along with Grameen Bank (who he founded), for their efforts to create economic and social development. In the prize announcement The Norwegian Nobel Committee mentioned:[1]

"Muhammad Yunus has shown himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty."

Muhammad Yunus is a modern day innovator, who had the foresight and insight to provide opportunities in the form of microcredits to the poor women in Bangladesh, who were anything but poor in their entrepreneurship drive, and aptly turned these microloans into innovations.

An age old innovator, Leonardo Da Vinci, shared his wisdom by telling us: "There are three classes of people: Those who see. Those who see when they are shown. Those who do not see." Innovators foresee. Innovators see beyond the ordinary, and yet have uncanny common sense. Leonardo has often been described as the archetype of the renaissance man, a man whose unquenchable curiosity was equaled only by his powers of invention (1.). Leonardo's approach to science was an observational one: he tried to understand a phenomenon by describing and depicting it in utmost detail, and did not emphasize experiments or theoretical explanation.

Thomas Alva Edison, inventor of the light bulb and phonograph, an innovator unlike any other, and founder of GE, shared this insight: "I never perfected an invention that I did not think about in terms of the service it might give to others." He goes on to say, "The three things that most essential to achievement are common sense, hard work and stick-to-it-iv-ness". And of course, his most famous quote used by magazines and leaders all over the world is: "Genius is one percent inspiration, and ninety-nine percent perspiration." He was one of the first inventors to apply the principles of mass production and large teamwork to the process of invention, and therefore is often credited with the creation of the first industrial research laboratory.

"Think big, think fast, think ahead. Ideas are no one's monopoly," is a famous quote by an entrepreneur from India, credited with the modernisation of Indian textile and petrochemical industry, and whose rags to riches story has made him a cult figure in the minds of Indian people. Dhirubhai Ambani, founder of Vimal, Reliance Textiles and Reliance Commercial Corporation, is an innovator behind the multi-billion dollar Reliance Industries in India. Mr. Ambani, who began his occupation with a salary of Rs. 300 (about $7), grew his business by taking risks, building inventories, anticipating price rise, and reaping profits. In the year 1975, a Technical team from the World Bank visited the Reliance Textiles' Manufacturing unit, certified as "excellent even by developed country standards" during that period. "Pursue your goals even in the face of difficulties, and convert adversities into opportunities." - Ambani never gave in or gave up during his storied entrepreneurship career and always thought BIG, and forever inspired Indians to become modern day innovators.

Innovations necessitate lots of failed experiments and hard work to uncover the latent customer need. Innovations require processes to think creatively, ideate and experiment. Build an Innovation Factory, Learn to be an Innovator, Launch new Innovations by downloading the Innovation Resource Kit

References:

Muhammad Yunus

Leonardo Da Vinci

Thomas Edison

Dhirubhai Ambani

1. Gardner, Helen (1970), Art through the Ages, Harcourt, Brace and World

Selected references:
Leading eBook on Creativity and Innovation in Business
Creativity and Innovation Best Practices
Creativity and Innovation Case Studies
The Innovation Index
Top 50 innovative companies in the world

How to Stay Ahead of Hackers and Cybercriminals

My conversation with Jonathan Nguyen-Duy, Director of Product Management for Verizon, ended up being very thought-provoking. We were supposed to talk about a new security offering, a backbone-based solution aimed at stopping Internet-based attacks even before they hit a company's network. (I'd spoken previously to Nguyen-Duy about Verizon's risk-correlation service.)

Nguyen-Duy is a fount of knowledge about the changing landscape of international cybercriminals. Verizon is expanding its denial-of-service (DOS) detection and mitigation capabilities into eight network management centers serving 24 countries with new levels of scalability -- in part because of an increase in international cybercrime, according to Nguyen-Duy.

"Our customers are telling us that the frequency and complexity of DOS attacks has grown. We're now seeing cyberattacks based on social and political activism. We're also seeing less sophisticated hackers getting access to attack methodologies."

A case in point: consider the following related events.

Item: The Bureau of Alcohol, Tobacco, and Firearms, he says, recently arrested "the eBay of cybercrime" in Phoenix, Arizona which was selling automated attack programs, called botnets.

Item: A CIA official said at a conference that the recent power outages in South Florida were results of an unauthorized probe of the utility network originating from China.

Item: Crime syndicates are more frequently attacking financial services firms, online retailers, and government agencies for extortion purposes, in countries where there may be no laws or no enforcement of the laws.

"If you're a global enterprise or agency with deep pockets and a brand to protect, the challenge is real," Nguyen-Duy says.

"This gives rise to a clear problem: If you have a DOS attack that floods a device with five times the normal amount of traffic, do you have the capacity on site to parse through it and separate the legitimate traffic, and can you do it in real time so you don’t have degradation in service?" Remember that typical consumers won't sit through a transaction if they experience latency of more than 10 seconds.

Protection: Around the Clock, Around the Globe
No, we're not trying to write the script for Die Hard V here. However, because globalization is increasingly driven by the ability to share information anywhere, companies that take advantage of it are also making themselves more vulnerable.

Unless you want to deploy high-priced security experts everywhere you do business, it would be prudent to consider how expanded managed security services can protect your multinational communications network. And, thereby prevent the unthinkable from becoming a reality.

Exploring Managed Services - Key Performance Indicators

All business has become global. Companies of any size can now market products and services worldwide over the Internet. At the same time, competition has intensified because customers can investigate global competitors with ease.

To compete effectively in the global networked economy, companies need new capabilities:

• Global procurement and sales 24 hours a day.
• Integrated internal and external business processes.
• Up-to-the-minute access to sales, order processing, production, and other business critical information required for informed decision making.
• Flexible processes that can adapt dynamically to changes in the business climate.
  

The application of Business Technology is now a primary enabler of strategic advantage. However, chief executives have become impatient, as their companies have failed to keep pace with these advances. There are alternatives, for those who choose to act. The managed services model can be applied to accelerate this much needed change.

Review the following common business needs to decide if managed services can provide benefits to your business. If you answer yes to these key performance indicators, then perhaps there are areas where out-tasking could help drive change.

Are you a candidate for managed services? Consider these scenarios.

Our business is facing challenges:

• Staffing IT professionals.
• Staying up-to-date with evolving technologies and IT skill sets.
• Managing and maintaining current infrastructure, hardware, and software.
• Securing data, transactions, and communications.
• Responding quickly to time-to-market demands.
• Remaining flexible enough to maintain competitive position.
• Reducing network overhead costs.
• Operating in real time in order to meet 24-hour demand.
• Delivering services to branch offices and remote workers.
  

Our business is in transition:

• We need to upgrade, refurbish, move, or relocate existing infrastructure.
• The scope or scale of current business operations is changing.
• A merger, partnership, or acquisition is altering operations.
• We need to increase the range and level of service.
• Our growth targets depend on implementing new technologies.
• We are expanding into new markets.
  

Our business must increase profitability:

• We prefer to dedicate resources to our core competencies and mission critical processes rather than network support activities.
• We view managed services as a good strategy for gaining efficiencies and reducing costs.
• We need to implement a global network service but lack internal global resources.
• We are concerned with our ability to keep up with the latest security threats and to meet privacy or security regulations.
• We are experiencing dynamic business growth while undergoing downsizing and hiring freezes.
  

Initiate a dialog with a managed service provider, and you can begin to explore the possibilities of how to effectively adopt Business Technology as a Service.

Managed Service Providers: Serving Small Businesses Worldwide

Thousands of small businesses in the United States have already embraced managed services. Now, thousands of additional businesses across the globe are climbing aboard the managed services bandwagon.

Consider the following data points:

• Asia Pacific organizations will spend more than $10.25 billion on hosted and managed services by 2010, up from $6.47 billion in 2007, according to Frost & Sullivan.
• Australia's managed security market will grow roughly 20 percent annually through 2013, the same research firm predicts.
• Small and mid-size enterprises will drive nearly half of Europe's managed services revenues -- jointly spending nearly 11 billion euros in 2008, estimates Forrester Research.
• Small business managed services spending will reach $5.4 billion in 2008, according to Techaisle. The data covers the US, United Kingdom, Australia, China, Brazil and India. In the US alone, small business managed services spending will hit $1.5 billion this year, Techaisle predicts.

Quest for Managed Service Guidance
When you string those data points together a clear pattern emerges: Small businesses worldwide have overcome their fears of the IT unknown, and they're turning to trusted advisers for managed services guidance.

So, what services are small businesses outsourcing most frequently to MSPs? The answers include:

• Remote administration (94%)
  
• Help desk services (90%)
• Managed security (82%)
• Managed storage (65%)
• VoIP and telephony (57.1%)
• and unified communications (32.1%)

The data, culled from MSPmentor.net's global survey of managed service providers, reinforces a clear fact: Small businesses across the globe are realizing they need to focus on their business strategies, while outsourcing core IT responsibilities to external professionals.

Globalization and the Small Business Teleworker

The trend of globalization, and the need to connect remote employees, now touches nearly every segment of American business -- regardless of organization size or industry. Here’s a case in point.

Founded in January 2001, Illinois-based Kirix began as a data analysis specialist for the recovery audit industry. They've done a lot of data analysis and software development work in that time and have had a particular specialty in identifying duplicate payments and other overpayment errors in large corporate accounting systems.

More recently, by generalizing their tool set and incorporating Web connectivity into their software, they apply that analytical firepower to all kinds of data -- regardless of where it is located -- even data that's on the Web.

The Borderless Communication Challenge
Benjamin Williams, one of the company founders, had been planning to relocate to Germany. As a valuable asset to their corporation, Kirix wanted to retain his services, but wasn't sure how the international transition might work -- particularly with the potential latency of connecting a Voice over IP (VoIP) phone halfway around the world.

Kirix turned to Geckotech to provide a fully hosted communication solution to enable their corporation to utilize Ben's services overseas, without compromising the quality of their voice and data network.

In this scenario, one feature has proven to be very beneficial -- four-digit extension dialing. This enables simple "internal" calls by dialing the last four digits of a direct-dial number -- even if that employee works in a different country, in another continent.

Unified Communications for the Teleworker
By using Geckotech's outsourced IP phone system, Kirix has been able to retain a key employee while conducting business overseas. The corporation's staff has been pleasantly surprised by the actual quality and reliability of their voice and data network.

"Four-digit dialing to my co-workers from Germany is obviously tremendous, but the quality of service is unbelievable," marvels Mr. Williams. "All that was required was a DSL broadband connection and my Cisco phone and I was making perfectly clear calls to my U.S. office as if I was in the next room over."

As more companies entertain the idea of employing the best talent that's available globally, the demand for the out-tasking of multinational IT and networking services will escalate. It's efficient, it's effective and infinitely more flexible to adapt to the changing communication and collaboration needs of a geographically diverse organization.