EMC’s Next Play: Compliance As A Service

On October 15, 2009

Ghana’s Jubilee Field Keeps Getting Bigger, and the Bidding War Does Too

The Jubilee field offshore Ghana may be bigger than previously thought, news that promises to ramp up exploration interest in the area and potentially complicates ExxonMobil's plans to acquire a piece of the West African oil-and-gas pie. U.S.-based Anadarko Petroleum and the UK's Tullow Oil announced Thursday another successful appraisal well in the West Cape Three Points Block within the Jubilee field -- home of one of the largest oil finds in the past decade in West Africa. With each successful exploration and appraisal well -- this is the eighth consecutive one -- interest in the Jubilee field and exploration prospect offshore West Africa have continued to grow. Now that one of Jubilee stake holders has put its share up for sale, that interest has boiled over...
On October 15, 2009

Hulu Is Starting to Show Itself the Money

This afternoon, I tested out a theory that I've had a few months now: that Hulu is finally really beginning to sell inventory. Time was, as many of you know, that the site was chock full of public service ads, even on its most highly trafficked content; today, in a spot check of 20 videos I found that at least 18 of 20 carried advertising. Unless you're such a moron as to believe that there should be no advertising anywhere, this is great news. Hulu, and content producers, have to make money to keep the game up and running. Now, it looks like it's happening. By contrast, I conducted a similar experiment back in May and only 40 percent of...
On October 15, 2009

The Business and IT Must Work Together. Can You Help?

My last post asked you to be the judge of whether a business sponsor of a major initiative should take the advice of their consultants to "go big" or the advice of their IT counterparts to "go small."

Your advice was virtually unanimous:

  1. Break large projects into a series of small projects ("Remember: the larger the project, the larger the risk of failure. I would much rather see a dozen small successes than one huge failure").
  2. Place your faith in your internal IT group — provided they have earned your trust ("IT are stakeholders too and they are raising valid concerns").
  3. Select consultants with the right expertise — and motives — so they work for you and not the other way around ("Any consultant with any experience knows that a waterfall approach in the above problem guarantees three years of income. And that's ALL it guarantees").

Unfortunately, for our business sponsor, your counsel didn't arrive in time.

As this blog unfolds, so does this story. As it stands now, the business sponsor pitched the three-year "big bang" approach to the executive committee only to receive a lukewarm response and a polite "thank you." Not a "no" but definitely not a "yes." Any lingering hope that approval and funding would be close at hand was squelched by a phone call requesting a follow-up meeting with two of the executive committee members.

At the meeting, they asked, "Isn't there a lower-risk approach?" The business sponsor threw the question to the IT VP who revealed that he felt strongly that a series of smaller initiatives would be lower risk and ultimately more successful. This being new news, at least to the executive committee members, the remainder of the meeting was spent grilling the IT VP to explain the who, what, where and why of the iterative approach. In the end, he held his own, and the committee members asked the business sponsor and the IT VP to put together a joint recommendation.

Unfortunately, at this point, everybody is dug in. The IT guy wants iterative, the business sponsor wants big bang. The probability that either party is going to adopt the other position is slim to nil. The opportunity for win-win disappeared the minute the executive committee meeting convened.

Let's rewind the tape and help our business sponsor avoid this IT dance-of-doom. With the benefit of your counsel, he would have realized that the issue revolves around trust — both in the approach and in IT. He would have worked with the IT VP to verify that the iterative approach is the "appropriate practice" in this case and that IT has the chops to pull it off. He would have insisted in talking with others who had walked a similar path, obtained second and, if necessary, third opinions from outside advisers, and grilled the IT VP on his past experiences and accomplishments. Based on the mutual due diligence, the business sponsor and IT VP would prepare a joint recommendation to the executive committee. Any "give" by either party would occur within the privacy of the one-one-one relationship and outside of public view.

In general, assuming that trust is warranted, business sponsors should delegate the definition of the approach (the "how") to IT and hold IT accountable for delivering on commitments. For their part, business sponsors should focus on defining the required business capabilities (the "what") and delivering business value. If trust isn't warranted, business sponsors have every right to demand the right complement of IT resources to help ensure that the IT-enabled business change is successfully delivered.

There's a whole world of external IT service providers waiting to help you — just be sure you do whatever it takes to work with IT to form an integrated team. As one of our "judges" emphasized in response to the last post, "After the consultants are gone, you are going to have to live with the IT group, and probably lean on them for support."

Come back to the current business-IT standoff. How would you advise the business sponsor to proceed in working with the IT VP to develop a joint recommendation?

On October 15, 2009

The Banks are Recovering – Are You?

A survey of the nation's top CEOs shows business conditions are improving. I don't know about you, but I'm not feeling it. So who is? Goldman Sachs announced quarterly profits of $3.2B while setting aside $5.4B for compensation. But how does that help the 9.8 percent of unemployed Americans?
On October 15, 2009

Gap Stands Behind Flailing Banana Republic

[caption id="attachment_4460" align="alignright" width="125" caption="Banana Fall-Line Outfit"][/caption] Gap Inc.'s Banana Republic chain, once a go-to place for young professionals, is a victim of hard times nowadays. But Gap executives said at their recent investor conference that they are standing by the brand and rolling out new initiatives to get it rolling again. While sales at none of the Gap chains are hitting it out of the park this year, Banana is consistently performing as the worst of the three, which also include the company's namesake chain and Old Navy. Same-store sales at Banana are averaging a 13 percent drop so far this year. Meanwhile, Gap is down 10 percent, and Old Navy is turning in a surprisingly good story as...


On October 15, 2009

Roche Developing a “Hedgehog Inhibitor” for Cancer

Roche has a "hedgehog inhibitor" in Phase 2 of development, according to an investor presentation that accompanied its Q3 2009 results. Don't panic. This is not a substance intended to kill the spiny-but-adorable endangered species native to the hedgerows of Europe. Rather, it's a new therapy for basal cell carcinoma in colorectal and ovarian cancer.


On October 15, 2009

Credit Quality Poses Biggest Threat to Banks

FDIC chief Sheila Bair, OCC head John Dugan and other banking regulators were on Capitol Hill yesterday to update lawmakers on the state of the industry. As their testimony makes clear, the major concern for commercial banks and thrifts today is no longer liquidity, as in the early days of the meltdown, but declining credit quality. The percentage of overdue loans has reached the highest level since the mid-1980s, during the Savings & Loan crisis. The rate at which banks are writing off loans is also accelerating. For example, net charge-offs for credit card loans rose to a record 9.9 percent in the second quarter. Meanwhile, continuing economic uncertainty is dampening new lending. Dugan highlighted a number of factors driving...


On October 15, 2009

An Update from one of BW’s America’s Most Promising Social Entrepreneur Finalists

Last spring, when we first wrote about Sam Goldman and Ned Tozun, founders of D.Light Design, they were one of BusinessWeek’s America’s Most Promising Social Entrepreneur finalists. Goldman and Tozun, who met as MBA students at Stanford University's Institute of Design had transformed a class assignment into a full-fledged business with $6 million in venture funding. Their goal: commercialize and sell solar-powered LED lamps to those living on less than $5 a day in Africa and Southwest Asia.

It’s always nice to get an update and hear what has happened to any of our finalists and D.Light checked in to tell us they are about to globally launch the Kiran lamp, (which means “ray of light” in Hindi) and they are calling it the “most affordable quality solar lantern in the world.” Currently available in India, the Kiran, which resembles a kerosene lamp and costs $10, provides four to eight hours of bright, clean light on a single day’s solar charge. It can also be AC-charged with a Nokia mobile phone charger (which D.Light says many of their customers already own).

Replacing kerosene with affordable, scalable alternative light sources has the potential to greatly improve the lives of millions in the developing countries where D.Light is focusing its efforts. In addition to the safety factor (kerosene is highly combustible and dangerous), D.Light found that having an LED light made it possible for children to study in the evening and saved families both time and money rendering it unnecessary to travel (in some cases days) in order to replenish their kerosene supplies. In Africa, families can pay up to $10 per month for kerosene and in India, where kerosene is heavily subsidized by the government; families will still pay a few dollars a month. The new lamp (cheaper by more than half from some of D.Light’s earlier products) will appeal to even lower income families – those living on less than $3 a day.