Numbers Deceive Only Those Who Want To Be Deceived

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Calculating Total Cost of Ownership (or TCO for short) is something that’s familiar to those of us who’ve been through the large organization planning processes.  Yet, there is no shortage of entrepreneurs that believe they can move mountains with nothing more than bubble gum and shoe string.  And there’s no shortage of investors who believe that they can fund the next Google with $25k.

Well, as John Adams quipped, “facts are stubborn things, and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”  Today brings news of investment freeze by Joystick Labs, a Triad-based video game accelerator.  Accelerators and incubators can be attractive to investors than an a single startup since they provide a rudimentary diversification mechanism, and hence reduce risk.  But without proper due diligence, the foundation on which this diversification is based is shaky at best.  And TCO is part of that due diligence (at least in our model.)  Bubble gum and shoestring, duck tape, and other such pronouncements may sound soothing, but things take as long as they take and there’s still no such thing as free lunch.

Joystick Labs seems to have found this out the hard way:

John Austin, managing director of Durham-based Joystick, said the prevailing economics of the video game market – which have changed considerably since Joystick was launched in 2010 – requires more financing than Joystick and its investors could afford.  “It has become very difficult for an independent developer to get noticed,” Austin said. “For every ‘Angry Birds,’ there are literally tens of thousands of great companies not getting noticed.”

Did the prevailing economics of their market changed that significantly since 2010?   Or is it that they found through two years of experience in launching new video game companies that the startup TCO for their market wound up being much greater than anticipated?   Not a day goes by when I don’t hear from entrepreneurs and investors questioning why something costs much more than they “feel” it should.  Those of you who know me (which is probably why you’re reading this in the first place,) I’m not into feelings, I’m into numbers, and numbers only deceive those who want to be deceived.

AAB

Read more here: http://www.newsobserver.com/2012/10/22/2430856/joystick-labs-ends-funding-for.html#storylink=cpy

Numbers Deceive Only Those Who Want To Be Deceived

by

Calculating Total Cost of Ownership (or TCO for short) is something that’s familiar to those of us who’ve been through the large organization planning processes.  Yet, there is no shortage of entrepreneurs that believe they can move mountains with nothing more than bubble gum and shoe string.  And there’s no shortage of investors who believe that they can fund the next Google with $25k.

Well, as John Adams quipped, “facts are stubborn things, and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”  Today brings news of investment freeze by Joystick Labs, a Triad-based video game accelerator.  Accelerators and incubators can be attractive to investors than an a single startup since they provide a rudimentary diversification mechanism, and hence reduce risk.  But without proper due diligence, the foundation on which this diversification is based is shaky at best.  And TCO is part of that due diligence (at least in our model.)  Bubble gum and shoestring, duck tape, and other such pronouncements may sound soothing, but things take as long as they take and there’s still no such thing as free lunch.

Joystick Labs seems to have found this out the hard way:

John Austin, managing director of Durham-based Joystick, said the prevailing economics of the video game market – which have changed considerably since Joystick was launched in 2010 – requires more financing than Joystick and its investors could afford.  “It has become very difficult for an independent developer to get noticed,” Austin said. “For every ‘Angry Birds,’ there are literally tens of thousands of great companies not getting noticed.”

Did the prevailing economics of their market changed that significantly since 2010?   Or is it that they found through two years of experience in launching new video game companies that the startup TCO for their market wound up being much greater than anticipated?   Not a day goes by when I don’t hear from entrepreneurs and investors questioning why something costs much more than they “feel” it should.  Those of you who know me (which is probably why you’re reading this in the first place,) I’m not into feelings, I’m into numbers, and numbers only deceive those who want to be deceived.

AAB


Read more here: http://www.newsobserver.com/2012/10/22/2430856/joystick-labs-ends-funding-for.html#storylink=cpy

How Can CIOs Prepare for the Age of the Customer?

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By: Ben Geller – VP Marketing, Troux

According to Kerry Bodine and Bobby Cameron at Forrester, we’ve entered the age of the customer (http://tinyurl.com/9jauwhg). “In this new era, past sources of competitive advantage have been commoditized in the face of customers who are empowered by information.  In this age, the only source of competitive advantage is the one that can survive technology-fueled disruption: an obsession with customer experience. And this obsession must extend into the CIO’s organization.” 1

Good news: it appears CIOs and IT professionals see eye-to-eye with Forrester’s view.  Recently Troux conducted an opinion poll of IT professionals (http://resources.troux.com/tsurvey12).  Our poll asked respondents to rank the priority of 5 investment areas:

  • Investments that help retain exiting customers and attract new ones
  • Investments that increase efficiency
  • Investments that help increase profitability
  • Investments that help maintain a competitive advantage
  • Investments that help expand into new markets or geographies

The results…more than fifty percent of all respondents agreed; investments that help retaindescribe the image
existing customers and attract new ones are most important when it come to IT priorities.  This sentiment also matches those of CIOs that participated in the Gartner-Forbes CIO Survey2 conducted earlier this year. 

It’s now clear to the corporate IT community at-large that the customer experience (CX) is the last bastion of differentiation and ultimately will determine the difference between market leaders and also-rans.  But the role IT will play in improving the CX will be a difficult one.  Bodine and Cameron state “Although it can sometimes be difficult to see the connections between the customer experience and the systems, processes, and policies that exist — deep behind the scenes — it’s critical for CIOs to understand them.” 

For CIOs and IT professionals ready to take on this challenge there is good news.  Enterprise Portfolio Management (EPM) solutions can help.  EPM can help CIOs illustrate these relationships and ensure the right investments are being made. EPM can help shine a bright light across the complex model(s) that define the customer experience and as a result uncover and expose the relationships between:

  • the business architecture/capabilities that support a company’s customer experience goals and strategies,
  • the applications that support the customer experience business architecture,
  • the technology that underpins the applications that support the customer experience and
  • the information that flows between these applications

With the understanding of the connection between the customer experience and the systems, processes, and policies that exist, CIOs will be in an ideal position to guide and counsel other business leaders with the empirical data that is needed to ensure the right customer experience investments are being made.

In order to ensure good CX investment decisions are being made, Bodine and Cameron state,  “[CIOs] must understand [the] customer experience ecosystem – the complex set of relationships among [a] company’s employees, partners, and customers that determines the quality of all customer interactions. The dynamics of the customer experience ecosystem are such that every action and decision of every employee and external partner affects the customer experience in some way. Now consider the extent to which employees and partners rely on technology to do their jobs, and you can quickly draw a line from information technology to customer experience.”

Successful CIOs need the ability to draw (and re-draw) the line from information technology to the customer experience to truly see the connection between technology and business goals and strategies.  This ability will help all executives better prepare for Age of the Customer and the good news is… EPM can help.

1 Kerry Bodine, Bobby Cameron, “How CIOs Can Help Companies Survive the Age of the Customer,” Wall Street Journal CIO Journal (18 September 2012).
2 Jorge Lopez, Mark Raskino, and Dave Aron, “Board of Directors, CEO and CIO Survey Comparisons Point to Actions That CIOs Must Take Now to Prepare,” (28 June 2012).

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A Cautionary Tale

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Heard an interesting story recently, from a software developer advocating Scrum. I shall omit the names of the companies and individuals, and I may get a few of the details wrong, to avoid embarrassing anyone.

Our hero was working for a mobile device …

Executive Education With Penn State: Enterprise Transformation & Integration

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Enterprise Transformation & Integration: Beyond IT/Business Alignment. Accelare and Gartner Research have partnered with Pennsylvania State University’s Center for Enterprise Architecture to create a unique program: Enterprise Transformation & Integration: Beyond IT/Business Alignment. This program is designed for CIOs, EAs, business architects, strategists, and other senior business and IT leaders to provide the current theory, […]

Power-issues in EA – tread carefully…

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Continuing with the series on power and politics in enterprise-architecture, a brief summary-so-far, some practical suggestions on modelling of power-issues, and a very important warning… The quick summary is as follows: the practice of enterprise-architecture is often ‘relentlessly political’ one…

Link Collection — October 21, 2012

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  • Some advice from Jeff Bezos by Jason Fried of 37signals

    “[Bezos] said people who were right a lot of the time were people who often changed their minds. He doesn’t think consistency of thought is a particularly positive trait. It’s perfectly healthy — encouraged, even — to have an idea tomorrow that contradicted your idea today.

    He’s observed that the smartest people are constantly revising their understanding, reconsidering a problem they thought they’d already solved. They’re open to new points of view, new information, new ideas, contradictions, and challenges to their own way of thinking.

    This doesn’t mean you shouldn’t have a well formed point of view, but it means you should consider your point of view as temporary.

    What trait signified someone who was wrong a lot of the time? Someone obsessed with details that only support one point of view. If someone can’t climb out of the details, and see the bigger picture from multiple angles, they’re often wrong most of the time.”

    tags: bezos strategy

  • The Future, as Imagined by Google – NYTimes.com

    “Eventually technology just disappears,” Mr. Schmidt said. “It’s the ultimate achievement. No more ports and prompts and plug-ins.”

    tags: google future

Posted from Diigo. The rest of my favorite links are here.

The Business Architect’s Service Portfolio Part Two: Organizational Performance Services

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For some time now I have been promoting the idea that the practice of business architecture is not about creating blueprints and models but applying a set of tools and techniques to form broader perspectives, create deeper insight, and solve business problems. If business architecture is a practice then what is its portfolio of services? […]