Andy Hayler

Different States of mind

Mon, 22 Feb 2010 17:02:00 GMT

US software companies have a big home market but also outscore their European counterparts in marketing and dynamism

There is SAP from Germany, and there was Business Objects from France (now part of SAP) and the British accounting software firm Sage. There is also Dutch digital security solutions provider Gemalto, and Software AG, the German database...

Verify the skills of IT consultants

Wed, 27 Jan 2010 12:47:00 GMT

It is perhaps no coincidence that the word 'consultant' starts with the three letters 'con'.

One of my ex-colleagues joined a well-known systems integrator. On his first day on the job he was told to meet his new boss in a taxi on the way to a client meeting. A technical manual was thrust in his hand and he was told to have a glance through it. "We've told the client that you have two years of experience with it," said his new boss. Despite never having touched the...

Cloud computing brings CIOs back full circle

Mon, 25 Jan 2010 10:11:00 GMT

The mainframe's revenge

When I started as a database administrator in the 1980s, everything was on the mainframe. This gave a high degree of central control and was efficient in many ways, but proprietary hardware and operating systems meant high costs.

Minicomputers offered dramatically reduced capital costs and boosted creativity among software developers. The dawn of the PC era meant that...

Picking Winners

Tue, 29 Sep 2009 14:26:00 GMT

Smaller firms innovate more because they simply have less filters and blocks

Although there are some large companies who have become known for a culture of innovation (such as 3M), it is generally recognised that small companies are usually better at innovation than large ones. In the case of enterprise software that holds true, with most of the innovation occurring in small angel- or VC-backed companies, with larger companies waiting to see whether a market takes off before eventually buying one of the innovative firms and using that as a vehicle for entering a promising market. There is an analogy with the pharmaceutical industry, where despite the industry giants having vast R&D budgets, many of the most promising drugs come from smaller bio-tech firms, whose products are either licensed by or bought up entirely by the industry giants.It is interesting to consider why this state of affairs persists. On the face of it, a software company with large R&D resources is in a much better position to develop products, and they already have the marketing muscle and sales channels to exploit the products that their labs produce. Yet time and again new markets are developed by innovative products from small software firms, who do this despite the obvious disadvantage of having far fewer resources at their disposal. One reason for this may be that in a large company there are (rightly) more processes in place, which have the effect of meaning that several layers of people need to be convinced of the merit of an idea before significant resources are devoted to it. If a software engineer has a bright idea for a new product then not only do they have to convince their supervisor, but the corporate marketing department and assorted executives, who may or may not buy into the bright idea, or think it is a priority for the company. The more people that look at the project, the more objections will spring up: "we tried something like that years ago and it failed"; "is there a real market for that?"; "if it is such a good idea then why hasn't someone else already built this?" and so on. It takes great determination to wade through this morass of obstacles and objections.One reason why smaller firms innovate more is that they simply have less filters like this. Writing software does not have high barriers to entry, so someone with a bright idea, determination and at least enough capital to live on for a few months can actually produce at least a prototype, and possibly catch the eye of a potential buyer. Of course most of these bright-eyed individuals will fail, but the truth is that in reality human beings are not very good at picking out the great ideas from the dross anyway. I have met a very experienced and successful venture capitalist who turned down Google (who were entering an existing market with several well established brands, some from large companies). Even very wily venture capital firms, whose job it is to spot promising people and ideas, routinely turn down opportunities to invest in what turn out to be excellent companies. Large software companies are no better at this murky art, and because by their nature they are more bureaucratic, they are likely to be less agile and good at selecting the best ideas.Most software companies that turn out to be innovative and successful did not look like world-beaters in their early days, and there are a hundred reasons why a new idea might not succeed. The more stages of process and filters that we apply to weed out the good from the bad, the more likely we are to miss some hidden gems. There are plenty of such cases where people end up presenting a promising idea within a large company, having it rejected, and then leave to prove their bosses wrong; Siebel was a well known case in point.In the enterprise software space few innovations come out of the industry giants, who more and more sit back and wait to observe which ideas turn out to have real traction in the market, and then just purchase one of the promising start-ups that created that new, emerging market. They then apply their sales channels and established brands to shift far greater volumes of that software than was possible for the smaller company. The conservative buying habits of large companies, especially over the past decade, have amplified this behaviour, making it very hard for smaller companies to build up to a significant size without the comforting presence of a large familiar brand. The disappearance of the IPO market for enterprise software companies that existed in the 1990s has had the effect of reducing the amount of reducing the amount of venture capital available, so fewer ideas are being backed that was the case in the late 1980s and early 1990s (never mind the late 1990s gold rush). This is a pity, since although there are doubtless many dismal ideas which got backing in those headier days and wasted some investor money before dying off, at least some of these companies went on to produce genuinely innovative products which benefitted everyone. I don't believe that we are really any smarter than before at picking winners, so the best thing for all of us would be to have an environment to "let a hundred flowers blossom" (ironically this is a quote from a 1957 Mao Zedong speech, a man not noted for his capitalist views), and see which ideas really take off and deliver customer value. Difficult economic times militate against such an environment, and in the end we will all be worse off as a result.

What lurks beneath...

Tue, 21 Jul 2009 15:14:00 GMT

Bad data held in hastily written and openly distributed spreadsheets should scare the life out of C-suite executives

Yet the flaky state of data quality in our corporate systems is a shining pearl of perfection compared to the state of the data, much of it business-critical, in that most humble of tools, Excel. At least the data in the corporate finance system gets some attention, but much corporate data is on desk...

Flirting with relationships

Fri, 03 Jul 2009 16:33:00 GMT

Software vendors spend a surprisingly small amount of time keeping customers happy compared to luring new ones

I recently conducted research in which I asked software vendors to supply customer references to which a short satisfaction survey would be sent. You might think that this would not give very much insight, since the vendors themselves nominate the customers to be used as references, and how hard can it be for a vendor to find a chosen set of happy customers? It is rather like putting...

Architecture by PowerPoint

Wed, 24 Jun 2009 22:56:00 GMT

Too many CIOs prefer an idealised slideshow view of their estates to confronting the real complexity

Vendors do much the same thing, producing point solutions which address some genuine but limited problem and paint a pretty picture of the world after you have implemented their solution, glossing over the pesky problem of removing legacy applications that are the cause of the current complexity.

An example of this is in an area in which I specialise, master data...

My life and risky times

Tue, 05 May 2009 08:08:00 GMT

Modelling for risk management fails to account for the unpredictable, and investments might be better spent elsewhere

In these troubled times it is worth taking a careful look at how we deal with risk in our businesses. It can be seen that virtually nobody predicted the kind of economic upheaval which would befall the world once Lehman Brothers was allowed to fail. How can business better deal with risk, and how well prepared is your company?As baseball coach Yogi Berra said: "It's tough to make predictions, especially about the future." I would recommend reading two books by former derivatives trader Nassim Taleb: Fooled by Randomness and The Black Swan. While Taleb's writing style can be a little irritating, the points that he makes seem quite profound. Essentially, he believes that rare, catastrophic events occur a lot more often than conventional economic models, such as used in banking risk models, predict. He made considerable money in the 1987 stock market crash, and his 2006 prediction of the dire consequences of a bank failure in today's interlocked financial systems suggests his ideas are worthy of consideration.The interesting thing is that he does not pretend to have any idea when the next major crisis will come, but merely that such major events will happen a lot more often than conventional models allow. I have developed risk analysis tables for projects and even whole companies, yet how often do these lists of risk get translated into action rather than merely taking up Appendix A of the business plan? Not very often.While working at Shell in the 1990s, I was introduced to the notion of scenario planning. Every year the analysts would predict where the oil price was going, and very serious investment decisions were made based on these projections. However, if you took a look back at the historic five-year projections and compared them with reality, it was pretty shocking: there was essentially no correlation, and lest you think the Shell analysts were unusually dense, many years ago even The Economist predicted a $5 oil price at pretty much the exact bottom of the market in March 1999.This dilemma led Shell to develop scenario plans. The idea was that rather than sticking to a fixed price prediction, alternative plans would be developed to deal with a range of scenarios. This way, Shell would be more flexible in its response to sudden lurches in the oil price. Although I was unconvinced as to how deeply the scenario planning approach really permeated the business, the basic logic seems sensible.Most business plans merrily project the future in a linear fashion, extrapolating from today with some modest growth. While I developed a fairly detailed business plan for my previous company, I kept thinking that it was, to an extent, a comfort blanket, since there were so many variables that the projection could easily be swamped by unpredictability. For this reason I set out three separate scenarios, from conservative to optimistic, and used these when planning our activities. But even this proved problematic: in 2001 our sales projections were quite ambitious, and despite the March 2001 hi-tech meltdown our sales were actually well ahead of even the rosiest of the three scenarios. Yet in 2002, though we knew there was a difficult market, the reality was worse than the most conservative scenario. As someone who has developed a few computer models over the years, I tend towards a deep scepticism when the subject matter being modelled is inherently complex. As human beings, we tend to crave certainty and patterns, where in reality there may be high volatility. Rather than putting more effort into models that will almost certainly not be accurate, it would be better to consider in detail what we have to do in our businesses to create maximum flexibility for a wide range of scenarios. For example, a practical step could be to invest as little as possible in fixed, capital projects and make heavy use of services from outside firms, which can be easily cut back or ramped up if things do not go as expected. A culture where change is welcomed rather than resisted will help.This does not help much with making decisions on long-term projects like infrastructure, yet, in many cases I have seen, companies take steps that embed in-house resources rather than admittedly costlier external ones, in order to save money in predictable times. This may be the case, but in a volatile world it means that there is a price to be paid: it is much harder to shed or recruit permanent staff than it is to increase or decrease the service level of a third-party contract. There may be a price to pay for flexibility, but making our businesses more robust to rapid change in whatever way possible seems a better investment than building ever more complex risk management models that appear doomed to fail us.

Software is a buyer's market

Fri, 10 Apr 2009 09:14:00 GMT

Set up a competition to get the best deal from hungry vendors

It is vital to understand a little about the economics of the enterprise software industry. Most companies still sell on a perpetual licence model, with annual maintenance on top (typically 15 to 20 per cent of purchase price). Software companies are pushed by their investors to hit quarterly and annual revenue targets, and their salesmen have a significant personal incentive to sell...

Software is a buyer's market

Fri, 10 Apr 2009 09:14:00 GMT

Set up a competition to get the best deal from hungry vendors

How low will we go?

Fri, 20 Mar 2009 15:12:00 GMT

Looking around about him to read the runes, Andy Hayler says the effects of the credit squeeze could get a lot worse before they get better

Software vendors will have been wondering whether they have been naughty or nice, and looking more anxiously than usual to see whether their gifts of year-end software expenditure.

How low will we go?

Fri, 20 Mar 2009 15:12:00 GMT

Looking around about him to read the runes, Andy Hayler says the effects of the credit squeeze could get a lot worse before they get better

Software vendors will have been wondering whether they have been naughty or nice, and looking more anxiously than usual to see whether their gifts of year-end software expenditure.

CIO Debate: Collaboration is building momentum in 2009

Thu, 26 Feb 2009 10:30:00 GMT

Despite the budgets pressures, CIOs see collaboration technology as strategic in 2009, research carried out by MWD in association with CIO UK reveals.

Read the thoughts of an NHS CIO on collaboration

Economic downturn will affect IT sourcing choices

Tue, 02 Dec 2008 12:00:00 GMT

Research carried out by Macehiter Ward-Dutton in association with CIO.co.uk reveals changing attitudes to sourcing and SaaS

Enterprise IT spending is set to dip - but only marginally
It's no surprise that there's been a huge amount of industry debate over the past months regarding how overall IT budgets are likely to be affected by the economic downturn. On one hand, it's clear that few executive boards are going to be in the mood to grant significant IT budget increases in the...

Andy Hayler: The innovation game

Fri, 29 Aug 2008 16:00:00 GMT

Identifying five recent enterprise software innovations is almost as difficult as naming five famous Belgians, says Andy Hayler

IT is an industry almost synonymous with innovation, yet it seems to me that few examples of this are to be found in enterprise software these days. The rise of the internet has enabled all kinds of new companies to appear, sometimes, as in the case of Facebook, creating great wealth in a remarkably short time.

Andy Hayler: The innovation game

Fri, 29 Aug 2008 16:00:00 GMT

Identifying five recent enterprise software innovations is almost as difficult as naming five famous Belgians, says Andy Hayler

Andy Hayler: The innovation game

Fri, 29 Aug 2008 16:00:00 GMT

Identifying five recent enterprise software innovations is almost as difficult as naming five famous Belgians, says Andy Hayler

Andy Hayler: The innovation game

Fri, 29 Aug 2008 16:00:00 GMT

Identifying five recent enterprise software innovations is almost as difficult as naming five famous Belgians, says Andy Hayler

A balanced relationship with vendors helps

Mon, 04 Aug 2008 11:00:00 GMT

A bit of give and take would help IT vendors and their customers understand each other better, says Andy Hayler

I have a slightly unusual background in that I spent much of my time on the end-user side of the fence before setting up as a software vendor. The gulf between the vendor and the enterprise buying community can be seen by the term which software vendors use for their customers: “users”. There is only one other industry that I am aware of that names its customers in the same way, and that is the narcotics industry.

A balanced relationship with vendors helps

Mon, 04 Aug 2008 11:00:00 GMT

A bit of give and take would help IT vendors and their customers understand each other better, says Andy Hayler

A balanced relationship with vendors helps

Mon, 04 Aug 2008 11:00:00 GMT

A bit of give and take would help IT vendors and their customers understand each other better, says Andy Hayler

A balanced relationship with vendors helps

Mon, 04 Aug 2008 11:00:00 GMT

A bit of give and take would help IT vendors and their customers understand each other better, says Andy Hayler

When negotiating a software deal, information is key

Wed, 14 May 2008 17:00:00 GMT

Spot-on procurement

For much of my career, I was involved with selecting and assessing software vendors and was often involved with the procurement of software. Later, I went over to the dark side and set up a software vendor, so I have been on both sides of the procurement fence. This has given me perspective on some of the things to do, and not do, during the process of buying enterprise software.

When negotiating a software deal, information is key

Wed, 14 May 2008 17:00:00 GMT

Spot-on procurement

When negotiating a software deal, information is key

Wed, 14 May 2008 17:00:00 GMT

Spot-on procurement