“Acquisition at high cost with high risks”
This is a blog post that is not ECM related, but I feel that the issue is so interesting that I can’t leave it without a comment.
In the last week there has been massive media coverage on the Microsoft bid, and the last respond from Yahoo is “raise the offer and we talk”. In my opinion Microsoft objectives to merger is a strategic mistake, and I will try to explain my opinions in this blog spot.
I think one of the main reasons for Microsoft to buy Yahoo is that they want to enter and develop a global “cloud computing” platform to support distributed internet applications. Microsoft’s analyse in this matter is right – they need to build capabilities, but the way they do it (acquire Yahoo) is a mistake. Buying Yahoo is not the cheapest and smartest way for Microsoft to enter the cloud computer game. The treat from Google regarding free software is real, and need to be taken serious, but in my opinion Microsoft can gain capabilities smarter.
So why is this acquisition a strategic high risk game – ok I will give you three reasons:
1. Cash Cow will eat the Star
I believe that Steve Balmer know witch division is “butter and bread”, and so does the employees in Microsoft. Steve knows that someway down the road Google and cloud computing will threaten their Windows products, but how can he bring this enemy into the house without threatening the Cash Cow.
There are a fundamentally difference in the business models between Google and Microsoft. The offensive Google model is to use the internett to build a huge business so they can “kill” Microsoft, while Microsoft would like to use the internett to protect its already huge Windows/Office business. So if this is true what are the implications on innovation; at Google every cool application/feature that undermine Microsoft will be rushed into production, and at Microsoft every exiting new idea that undermine the Cash Cow will be killed or delayed.
So, if Microsoft acquires Yahoo there will be huge challenges in gaining synergies, because Microsoft will always support the dominant Cash Cow.
2. A new war - war on all fronts
Microsoft has a war going on all fronts, and each war requires a new battle-plan with different skills, allies, strategies and expertise. In every front Microsoft are up against strong competitors. Google is one competitor but so are Oracle, IBM, and Apple. Now Microsoft would like to enter the media advertisement (Yahoo main business) to support distributed internett applications. – I don’t think its wise to enter this battlefield?
3. Pre deal turmoil
There will be years not months before the acquisition closes. Regulators will look closely into this acquisition, especially in the EU. In this period the employees in Microsoft and Yahoo will enter a period with uncertainty. Combined with the fact that Google will bombard the Microsoft and Yahoo employees with good offers, and there is a high risk that the new entity will lose key personnel in the transition period. Another point is that innovation in both companies will be stiffened. Who want to launch new innovating products when there is a high risk that anyone associated with the new products will be eliminated by new management team. In this transition period towards a combined entity there will be uncertainty and shift of focus, while Google will be steaming full speed ahead – with perhaps new employees.
The bottom line
Google has built their business around Internet advertisement, distributed applications and cloud computing while Microsoft trying to transform business to gain capabilities in this field. In my opinion Google has the offensive strategies while Microsoft is the defensive part, trying to gain capabilities to avoid being decimated in the Internet segment.
Different strategies and different objectives! In this case, my bets are on Google
As I see it Business Process Management will be the back-bone of every ECM project, and in this blog spot I will focus on BPM in this context. The trends show shift from information/content driven customer interaction to one-on-one customer interaction. In this paradigm shift Process Management capabilities are essential. In the last month I read several case studies that shows premium benefits for organizations that implement cross functional business self service processes such as order to cash, procurement to order, service and claim. These cross functions integrated processes are classic examples on Value Chain Integration – and as I see it the “holy grail” of Enterprise Information Portals.
To implement a holistic e-service view the organisation, culture and skill set need to change and e-service initiatives need to be backed-up by unified process management
Why is BPM essential
Many organizations have started BPM and SOA projects (I will describe SOA in later blog spot). As I se it many of these initiatives are independent and disconnected. The BPM initiatives often start in the business arena, while the SOA projects often start in the IT department with a focus on new technology (hype-masters) and easy application integration. However, there is increasingly recognition that BPM is the business side of SOA, and together PBM and SOA will accelerate the business value with coordinated implementation.
Some recommendations regarding implementation of BPM
You should start to adapt process modelling as early as possible. Look at the business side and implement holistic process architecture. Start mapping (as-is) the critical and manual processes that are customer- or partner facing and require a higher level of integration and flexibility. These processes will often enable customer satisfaction, growth and competitive advantage for your organisation. Work with your team to improve (to-be) these processes. Implement self service through web/object presentation closely linked to improved processes.
In the weekend I will be at a kick-off, and I will be a bit late with my weekly blog spot.
Next week I will give my view on Microsoft’s bid on Yahoo.
I my opinion some of the expected benefits of implementing intranets with Microsoft Office SharePoint Server 2007 (MOSS) are enhanced collaboration and sharing through the organisation with proven application and known user interfaces.
However, without governance your intranet will come out of control and lead to chaos. Many organisations don’t implement a holistic plan for the intranet, instead intranet project is initiated from various departments and projects, resulting in multiple, uncoordinated and separate deployments, each with its own structure and server farm. Often content grows and the user experience become inconsistent. If end-users are unable to collaborate, find and search for information due to poor implementation and lack of Information Architecture (IA) the total value of the intranet is lost.
Why implement a governance plan? You need to gain early support from key stakeholders across the organisation. A governance plan forces consensus and designates ownership, roles and responsibility. Ultimately governance is critical to avoid chaos.
My 10 bullet-points for governance, planning and implementation:
1. Business objectives (agreed upon measurable goals linked to the business strategy)
2. Information Architecture (consistent site structures and navigation)
3. Taxonomy (consistent naming conventions)
4. Search (users can find information – linked with taxonomy)
5. Provisioning (consistent site usage and user policies)
6. Branding/design (correct use of corporate profiles)
7. Testing (to ensure consistent use of sites and content)
8. Training (tools and governance plan)
9. User feedback (monitor and measure)
10. Change- and deployment plan (structural change and implementation)
In my opinion organisations will enjoy greater success with their MOSS installations if the pay attention to the listed 10 bullet points for governance, planning and implementation. Use the bullet point to write an implementation and governance plan, ensure stakeholder buy-inn, ownership of tasks and consensus of business objectives.
I know that this is just bullet points, and they need to be described further for you to be able to use them in daily work. I will describe some of the bullet points by separate Blog-spots on a later stage. – Stay tuned!
For more reading: Microsoft TechNet
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10 bullet points for MOSS governance
* Business Process Managemnet from an ECM perspective
For some time the innovative web-developers has developed and build cool webs and solutions using free components that they “glue” together. I worked with some rather amazing developers that used mashup-methods – “a little bit of this and a little bit of this put this together with this and viola here is the new web-solution”
I`we been working as a consultant in the portals segment since early 2000. To bring some insight in the difference between portlets and Mashups I suggest that you reed the section on Wikipedia regarding “Mashups Versus Portals” – as an “old” portal visionary I find this quite interesting.
Will this work for the enterprise ?
In my reading I came across an article on InformationWeek that highlights the release of IBM’s Lotus Mashup Builder, which allows end-users build their own mashups on a webpage and share it with the rest of the organization. IBM is an innovator in introducing new Web 2.0 tools for the Enterprise, and I think this application show that they take this seriously. Employees can embed useful applications like a Google search bar, a Wikipedia page, or any other useful tool. I also find usefull sites that have directories of mashups, also for the enterprise. The next step in this process is getting IT to understand the business value of mashups in order to include these web-pages within a corporate profile. But this is another discussion…
I feel that governance is a missing-link, but as I see this Mashup Builder it can track vital information such as who were building, who is sharing, the services that are being used, and a lot more. It also helps that IBM is bringing this on an Enterprise level.
It looks like IBM has a head start regarding Mashup for the Enterprise, but I hope other giants will see the usefulness and follow.
