Friday, July 29, 2011

Intermission: Back to the Retailer

I was looking through the Sydney Morning Herald today and found the following piece

Grumpy Customers Enraged by Bad Service


Thursday, July 28, 2011

If you don't own it you can't be responsible for it...

I want to revisit a post that originally showed up in Australian Anthill a while back about technology ownership, responsibility and reporting.

The original post was entitled “Grab it all. Own it all. Keep it all.”

Since then I’ve done a lot of consulting to a lot of companies and I keep seeing the same mistake being made.

For all those Managing Directors, CEOs and Boards out there you need to read this and really digest it because your finance departments are leading you down the garden path.

Your ICT team must be treated as a business unit, just like any other operational unit otherwise you lose visibility and spend money like there’s no tomorrow. This is going to happen because your business units won’t be responsible for technology consumption. If you query them on it they’ll say its ITs fault, but, IT doesn’t actually have the visibility and clarity needed to be proactive because this has been buried in management fee this and administration fee that and shared services something else.

If you’re on a board and one of your accountants comes to you with a suggestion to bury clearly identifiable expenditure into administration fees or some sort of nebulous shared services model take him/her/it out the back and shoot them. These ideas are just bad news for a business.

When it comes to technology there is no such thing as shared to the point where you can’t identify the consumption by business unit/user/site and anyone who says otherwise is either deliberately burying the facts or is breathtakingly ignorant of the capability of technology today.

This has come up because of the time I’ve been spending in Brisbane dealing with a client who is moving to a Windows monculture on the recommendation of their Group Financial Controller. As part of her ‘transformative technology strategy’ she’s also moved away from a user pays cost allocation methodology to a shared services/administration fee cost allocation methodology. Her rationale is that there is little difference if cost is allocated by percentage of revenue rather than by actual consumption.

Accounting doublespeak, smoke and mirrors. Its really all about reducing reporting on something that isn't seen by the Financial Controller as really important to the business. The company used a Voice over IP phone system so the data lines that were moved into corporate charges were actually the phone lines for the various business units.

With one magical flourish of a quill, whole divisions had direct costs eliminated from above the EBIT line.

Suddenly financial results looked better than they really were. Bonuses would be paid on patently false results and for the IT team, they would watch as the company slowly sank into the mire of self-congratulatory oblivion.

I’ll have more on this one soon because the turn of events at this company makes this a really compelling story.

Retailers have to stop blaming the Internet for eating their homework

Earth to Australian retailers.

People are buying online because your service sucks.
People are buying online because they can compare prices around the world.
People are buying online because they don't want to buy Gerry Harvey another racehorse.
People are buying online because they're sick and tired of limited product choice.

But mainly people are buying online because you're really bad at your job! It has nothing to do with GST this and exchange rate that. Well actually the exchange rate does have something to do with it only because people are getting an idea of how much they're being gouged by the retail and distribution channel.

You screwed it up for yourselves and you can't man up enough to admit it!

Its all about service.

The other day I walked into a Bunnings store. I needed some help and went looking for a staff member...I should have known better. As soon as I made eye contact with one of the "team" members they suddenly found something more interesting to do in another aisle.

By the time I got there they'd disappeared from sight, never to be seen again. Seriously if Australia wants to win gold at the London Olympics in the 100m all we have to do is enter Bunnings staff.

Just walk through your local shopping centre and have a look at the staff working behind the counter, I mean really look at them.

Retailers want to have the lowest cost staff possible, because they've signed up for insane leases that charge the national debt per square metre.

The staff spend more time using their mobile phones, trying on the clothes/shoes/whatever, or, talking about their last big night out. This is usually happening while a customer is waiting at the counter and being made to feel as though their mere presence is an affront to the staff who are discussing/texting/trying on far more important things.

You are the architects of your own downfall.

Another good example of this was a sad and painful visit to a Harvey Norman store. The staff didn't want to know about me. They walked around looking very important, ignoring all the customers. That all changed once a customer picked up an expensive item - all of a sudden it was another Olympic class event as they all tried to write up the sale.

I had to wander the store like a lost bedouin in the desert until I finally found what I was looking for and then I was swamped by sales staff like the winner of a marathon all clamouring to write up my purchase.

If you're going to provide me a retail experience that has no benefit over an online experience why the hell should I drive to the shopping centre and struggle for parking and service when I can sit at home and buy online.

Every retailer on Pitt Street Mall salivates at the crowds waiting to get into Zara, but I don't think one of them actually looks at why they are lining up to get in.

There's choice, something that you can't find somewhere else. The service is pretty good. The prices are reasonable for the quality you are getting.

There's a clue there for somebody if they'd just take a second to realise they don't know all there is to know about retail.

Now everyone in Australian retail has decided that they'll get into 'online' because that's the future and they're going to screw that up as well because 'online' has to deliver a quality experience for the customer.

Unfortunately it seems to be ingrained in Australian retail that the customer only exists to keep the retailer in racehorses.

Wednesday, July 20, 2011

Final Cut Pro X - Apple Screws the Pooch

Normally I wouldn't talk about video editing software here but I think the problems Apple is having with Final Cut Pro X is interesting to talk about.

When Apple announced that they would be upgrading Final Cut Pro to a 64-bit application and rewriting it from 'the ground up' the collective cheers from the FCP user community rang out around the world.

Then the product showed up at its first public demo and it appeared to be heading for a hard landing. Then it showed up and it cratered.

You know when Conan O'Brien is making fun of a piece of software that it can't be a good thing.

If this is anything to go by then the big winners may be Avid and Adobe.

Not wanting to miss out on a chance to stick it to Apple, Adobe have announced a programme for people who want to switch from any version of Final Cut Pro to their product.

The lesson here is that revolutionary change is good but rapid evolutionary change is better.

Apple got rid of Final Cut Express and Final Cut Pro and merged them into one product at a reasonable price, which, in itself is a great idea, but then they went and made it look like iMovie. The one thing I've learnt in many years in the tech industry is that 'experts' don't like advanced tech being made accessible.

I also think that not allowing users to import projects done in previous versions of FCE or FCP was a colossal can just see the conversation:

"I'm sorry Mr. Spielberg I won't be able to re-edit the Final Extreme Blu Ray Directors Cut of 1941 for your already scheduled release date because I upgraded to Final Cut Pro X and it won't let me work on everything I've done to date. Oh and by the way Apple also didn't release a DVD/Blu Ray authoring package so after I've redone everything then I'll have to put together the menus for the disc on iDVD so could you have a look on your home computer and tell me which theme you think would work well for the disc."

I'm thinking this won't go over too well.

This smells like another MobileMe debacle so when is Steve Jobs going to step in and get this one fixed? Or have Apple decided that they want to get out of the high end non-linear video editing business?

Tuesday, July 5, 2011

Toto. We're not in Kansas anymore!

I never understood the whole Mac/Windows/Linux/UNIX wars thing.

I've been in the tech industry long enough to remember Mainframe Vs. LAN, NetWare Vs. LAN Manager, Windows Vs. OS/2, Netscape Vs. Internet Explorer and all the rest of them, and there's been a lot. These “wars” proved one thing - they are the invention of small minds who want to fight an ego fuelled crusads.

Its a guaranteed way to spend money like a drunken sailor and deliver a sub-par system.

Following on from my post Here we go down the Yellow Brick Road because there’s a Pot of Gold at the end of the Rainbow I wanted to talk about some more of the happenings at my client site in Brisbane.

It was the first day, officially, on the job. I arrived and did the whole sign in and meet and greet thing and then got introduced to the IT guys by the Financial Controller.

It was pretty obvious that she was about as popular as a turd in a swimming pool with them. She introduced me to all the guys and then proceeded to talk to them like she was:

a) Really knowledgable in technology, and
b) Doing them a favour

Then she left leaving me there. Surrounded by a group of people that she’d just riled up to the point where they made the rampaging hordes of Gengis Khan look like a rambunctious bunch of primary school kids.

Talk about a pregnant pause.

The IT Manager looked like he was about to order a hit on me and the rest of his team looked like they were drawing straws to decide who’d be the first to take the job.

The IT Manager, lets call him George, and I went down the road for a coffee and had a long conversation about how this sad, sorry state of affairs had come about.

The way the story went was that prior to the new Financial Controller the IT department was focused on the mantra, ‘low cost, high availability, provide the functionality the business wants without the expensive shiny toys’. After she started with the company it became an exercise in ‘tech trend of the week’.

It turned out that in her last job she had inherited IT because finance were the biggest consumers of technology resources and no one else wanted the job.

When she took this job she immediately went to work telling everyone exactly how much she could improve IT because of her vast experience in the strategic and operational deployment and use of technology. She’d been doing it for about 6 years. George had been in the IT industry since the mainframe days and had seen it all.

The owners of the business bought into this hook, line and sinker and let her have responsibility for IT.

That was how this whole sorry, expensive saga began.

Monday, July 4, 2011

Lets talk about Office 365 baby

The trumpets blare! The Hallelujah Chorus comes up! Office 365 is here! Let all rejoice!

Australia get ready to grab your ankles!

Over the weekend I was talking to a friend of mine who is looking into Office 365. He was working through the numbers to try and see if there's a benefit for his company.

Initially he was doing all of his budgetary forecasts on the quoted price on Microsoft's website of USD$24 per user per month. At that number the pricing looked interesting.

Then Telstra comes riding over the hill with a price of AUD$40.10 per user per month.

Now while I may have a Vodka addled brain, even I realise that with the USD sinking to record lows someone is making out like a bandit on this deal.

The only way that pricing difference makes any sense is if AUD$1 got you about USD$0.58 - as I'm writing this AUD$1 gets you about USD$1.06.

This is a cloud based service. There is no 'product' as such. Nothing is shipped, warehoused, stored and so on so what the hell is the justification for such a huge increase in price? My friend was told that there were pricing differences based on geographic region.

I just don't get that, it defeats the purpose of the cloud. I mean Office 365 for Australia is, as far as I know, driven out of a data centre in Singapore.

According to the Singapore Office 365 website users are being charged USD$24 per user per month so why are Australian users being hit with such a massive price increase for the privilege of using their bandwidth to access these applications?

At these prices, unless Microsoft hoists the prices of their other products, I can't see this generating torrents of cash out of Australia.

It would be cheaper to go and register a company in the United States and buy Office 365 from there.