Saturday, May 31, 2008

msft: accelerating market share?

I wanted to blog about this musing earlier. However, other competing priorities delayed this.

MSFT has just 5% of the search engine marketshare and wants to expand it to a formidable # 2 slot. Currently, Yahoo has #2 slot and has expressed its dissent in joining hands with Microsoft.

MSFT has resolved to alternative means to capture market share - cash back ! An interesting thought in a dwindling economy and the most bang for the buck as it targets the highly lucrative click-thru-to-revenue.

How can they expand the volumes for the same?
1. Targeting gems at the bottom of the pyramids: I mean the emerging economies !

For instance, if the MSN folks can make their finance site for India better, they will be able to eat up that entire market. Google has no product for that market and the Yahoo product is appalling.

Another example is if MSN can introduce bill-pay for Indian service providers. The population will happily get onto MSN site for paying bills at nominal premiums of INR 10 or a quarter.

2. Focusing their information security dept's innovation to online payment safety.


What is still lacking in their product?

accuracy:

As against the rival Google, the accuracy of the Live search product is inferior. For instance, I gave a search string of "Sony Cyber-shot W120 Black 7.2 MP". Despite of the fact that the product was available on the website, it wasn't the first one that came up. It came up way at the bottom of the page and that too, I had to scroll down. At Google, the only product in response to this search string was the one I was looking for.

This reminds me that "attention" is a pricey commodity for which every advertiser is craving for. If the search result is not at the top then it loses the relevance.

cheapest prices:
Also, the price was not comparing itself to other deals that may be available. However, that's a flaw that even Google has. Google checkout had higher prices for this search than Microsoft search.

I think that MSFT can innovate on the cheapest prices point to get an edge!

Wednesday, May 28, 2008

moody's bug in the model and the art of IT management

Moody's recently discovered a software bug. Details of the story are here.

This incident exemplifies the reason why financial services firms need to follow a more rigorous service management approach. Service Validation of the IT Service Management paradigm from ITIL v3 would've helped. However, I am reasonably assured that Moody's IT staff didn't follow it.

The IT departments of US financial services' institutions are more matured when compared to IT departments of other industries in technology and speed-to-market aspect. Yet, they are neither frugal nor disciplined. Some of the reasons are:
  • The attrition rate: In an inflationary economy at locations such as NYC, the attrition rate is cause of their miseries but also the reason why they must have a strong process rigor
  • Demand for agility: This leads to lack of strict discipline in IT operations. I do not propose that one cannot achieve discipline without agility - one can; it just needs practice and perseverance.
  • Demand for higher speed-to-market: This leads to lack of thought given to service-strategy as well as service design. As the industry is matured, if someone comes up with a service idea, s/he wants to take it to market ASAP to capture the market share.
I am pretty sure there are many other cases such as Moody's that result in losses and may have been absorbed either by the consumer and/or the banks. Time for the banks to think about their money now!

Saturday, May 17, 2008

talent war...

The global war for talent is intense! Nature of work, composition of workforce, and new world order are the key drivers for such a war.

First, the organizations are operating in an environment with ever-increasing proportions of tacit knowledge. This stems from the fact that the proportion of services in the global GDP is increasing and the fact that many services are getting highly specialized.

There was a Congressional hearing on why CEOs of loss-making investment banks were compensated millions of $s. The board members from the compensation committee for these companies were drilled by the Senators. However, the board members had a simple stance: there is a war for talent and if we have to run our businesses, we will have to award these bonuses. Such politically satisfying rituals help the elected representatives to go back to their people and say - "ah, I tried ...did you see that on the television?" :P. Also, there are surveys by IPS-DC on executive excesses (2006 report, 2007 report). The ludicrous hearing by the Senators (I watched it on C-Span) and/or the surveys had no effect on the pay-practices in the financial services sector. This is evident from the recent WSJ article on "Say-on-Pay doesn't play on Wall St."

Second, the increasing global nature of workforce is posing other set of challenges. McKinsey & Co had an article on why multinationals struggle to manage talent. Mobility among countries and cohesiveness in achieving cultural diversity are prime challenges for multi-nationals. The global workforce today demands wage equality across the globe and is ready to move around to other companies that offer so. For instance, one of my former colleagues at a US-based system integrator/consulting firm didn't get US visa (lottery issues) and the firm could not make arrangements for him in some other country than India. She didn't want to be in India due to wage-difference. This led to her resigning and joining some other global consulting firm that could deploy her in Europe.

Third, the huge transfer of wealth from the US to West Asia (via oil) is leading to demands for talent at higher wages in a global demand uptick. The new world order is causing countries with immigration policies non-conducive to immigrants to lose out on competitive workforce for the nation. For instance, most of the financial services firms which cannot get visas for their workforce in the US are retaining the talent by deploying them in the UK or Canada. Similarly, west coast companies (such as Microsoft) is deploying its workforce (that lacks visa) in Canada.

Another evidence of the war for talent is apparent with the current talent-sourcing practices of leading organizations. Cyber sleuthing, an art practiced and perfected by Shally Steckerl and the likes, along with the boom for niche jobsearch sites for 100k+ jobs (The Ladders.com or 6figurejobs.com) are evidences for the same.

As Friedman mentioned in his book "The World is Flat", the companies that are not ready to change will cease to be competitive and later, the countries that are not ready to change will lose out. I think that the companies that are ill-equipped with HR policies to tap the global talent will lose out in the medium to long run and the countries that are having mis-aligned immigration policies will miss out in the medium to long-run. So, catch up with the times - change or else there will be nothing left to change !

Sunday, May 11, 2008

fear and loathing at the airport

US air traffic is simply atrocious. The aircrafts are getting older - so are the flight attendants! The snacks and food offered on flights went from complimentary to paid and to disappearance (they don't want to have the inventory management headache!) - LOL.

Safety is in question. First, lack of inspection by the authorities is increasing the risk. Recently, we saw a spate of a large number of flights being canceled due to pending inspection. In a bid to keep the carrier running, safety was prioritized. The rich no longer want to fly with commercial airlines and they fly via NetJets! There were 339 incidents in 2007 when two aircrafts came dangerously close to each other or to objects on the ground. I experience more bumps in landing these days, hmmm.....are those due to reduced paychecks to the flight pilots?

Consolidation emerged much to the disadvantage of the chagrined consumers. Prices were hiked as soon as the Delta-Northwest merger started coming into transition phase. I see further consolidation in form of combining the points, miles, etc. The airlines must be cursing themselves for introducing the points system to begin with.

The options provided to the consumers are causing the issues to a certain degree. To woo the customers, airlines provide tons of options. However, the infrastructure required to support it is simply absent. For instance, take the condition of La Guardia airport. It is no where close to the state-of-the-art airport-designs I have seen at other domestic or international locations. Yet, it is a nerve center for the entire US traffic. Any backlog there causes cascading effect in the system. Such airports need to be corrected in terms of design.

Most of the US airline carriers are trying to improve. Air aviation is a highly leveraged business with huge capex and/or leases (depending on how you laid it out) unless you have a niche target market to focus on luxury flying. The fuel prices are leading airlines to become very insensitive to the consumer needs. Airlines started taxing consumers with charges for checked in luggage in order to make up for prices. Southwest has good hedge against oil. What about others? I saw someone shouting on cnbc when the oil went up by $11 /bbl (chuckles).

I blog this as I am waiting at the airport due to a flight cancellation - they said that there was some weather issue. However, another airlines is letting its flights go at the same time to the same destination. Is this an outright lie? who knows? Can FAA do something about it? Do they care? Blakey unabashed the airlines publicly last year. Does he have enough powers to do something?