Digital Business; Mastering New Financial Controls

Andy Mulholland

Vice President and Principal Analyst, Constellation Research
Constellation Research

Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems. Coverage Areas Consumerization of IT & The New C-Suite: BYOD, Internet of Things, IoT, technology and business use Previous experience: Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...

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Do your new, and exciting, moves into Digital Business make money? Well of course they do, or you wouldn’t be doing them, but is it really that simple? Many first steps don’t seem to be making as much money as expected, and do you really feel in full financial control of this new business activity with all its new technology based components? At the heart of this is a simple fact; I have yet to meet, or even hear of, a CFO from a traditional Enterprise who could put together a really accurate spreadsheet for a Digital Business unit.

That’s quite a challenge, and I would like to hear that I am wrong, but why would an experienced CFO, be able to do this? It is an accepted fact that Digital Business is a giant game changer so why would the majority of the factors in the new Digital Business model spreadsheet be the same as the old business model? Sure, at a head line level there are all the common factors for any business, but lets dig down below starting with the question are you using the same basic spreadsheet as for the rest of the business as a starting point?

Probably, after all it has been built up over the years in increasing detail and accuracy to reflect your enterprise and its Business. However simple aspects like the apportionment of the overheads are quite likely to be wrong, does the new Digital Business really make use of the same elements as the older traditional business? Has the Finance Department carried out a realistic reappraisal, or is it a case of more revenue spreads the load and helps the whole business? These are all understandable issues and as the Digital Business grows the CFO and Finance department will get round to investigating them in line with normal management of costs.

Dig deeper and two key differences emerge; the first is that Digital Business models are usually based on Operational Expenditure, or OPEX, and the traditional business model is based on Capital Expenditure, or CAPEX; the second is that OPEX means buying in ‘Services’ to support a variable trading model, an entirely new business activity and set of costs.

The Board is full of enthusiasm for the shift from CAPEX to OPEX, in the IT department the shift in ownership of expensive IT assets is looking good, may be even the overheads are getting adjusted too. But the Sales and Marketing departments pressing ahead into Digital Business are into using OPEX based services in a far deeper and wider manner than the IT Department simply because this is what Digital Business is built upon. New Technologies used in a new and innovative manner to create a Business dependent on external suppliers of OPEX services. There is not too much of the old IT operating model here, nor of the old business model, and yet where is the corresponding change in the Financial management?

So back to my opening paragraph; Its very difficult for a CFO to itemize exactly what these new, usually technology based services are, together with correct benchmarks for budgeting. Now add the further complication of how you link the purchased services to the revenue producing activities to ensure accurate financial reporting with the ability to have genuine financial management. This is new, complex territory that requires the newly constructed Digital Business plan to be matched by an in depth technology review of functionality provisioning and linkages.

An Enterprise Board will have built a sophisticated set of Financial Controls for its existing business, but in its Digital Business most of the major operational factors are technology based, in a completely new and different set of costs!

The Technology Industry is already experiencing this, with two visible results, the obvious moves to introduce new products, no, not so much products, but ‘services’, and the headline grabbing rearrangement of their own businesses. The latter often makes more sense if viewed against this point of two different business models leading to two different financial, management and even shareholder returns. Thinking in this way can make it more interesting and instructive to look more closely at these changes.

But it’s the first point about changing what they are selling, and how they are delivering it, that really needs careful examination in the context of your own enterprise as these ‘services’ will be entering your business. The question is visibly and managed, or, invisibly and building up hidden distortions in financial management.

My colleagues at Constellation Research have done a great job of analyzing Oracle, Salesforce.com, et al as the ‘customer events’ season reaches a climax, and I suggest reading their reports on the technology suppliers your enterprise is using with the points of this blog in mind. In my own case I reported on Cisco InterCloud service being a potential game changer in how Business and Financial Management could be brought to use of external cloud services.

Crowd sourcing private sector surveillance

Steve Wilson

Former Vice President and Principal Analyst
Constellation Research

Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA). Coverage Areas: -  Identity management, frameworks & governance-  Digital identity technologies-  Privacy by Design -  Big Data; “Big Privacy”-  Identity & privacy innovation Previous experience: Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...

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A repeated refrain of cynics and "infomopolists" alike is that privacy is dead. People are supposed to know that anything on the Internet is up for grabs.

In some circles this thinking turns into digital apartheid; some say if you're so precious about your privacy, just stay offline.

But socialising and privacy are hardly mutually exclusive; we don't walk around in public with our names tattooed on our foreheads. Why can't we participate in online social networks in a measured, controlled way without submitting to the operators' rampant X-ray vision? There is nothing inevitable about trading off privacy for conviviality.

The privacy dangers in Facebook and the like run much deeper than the self-harm done by some peoples' overly enthusiastic sharing. Promiscuity is actually not the worst problem, neither is the difficulty of navigating complex and ever changing privacy settings.

The advent of facial recognition presents far more serious and subtle privacy challenges.

Facebook has invested heavily in face recognition technology, and not just for fun. Facebook uses it in effect to crowd-source the identification and surveillance of its members. With facial recognition, Facebook is building up detailed pictures of what people do, when, where and with whom.

You can be tagged without consent in a photo taken and uploaded by a total stranger.

The majority of photos uploaded to personal albums over the years were not intended for anything other than private viewing.

Under the privacy law of Australia and data protection regulations in dozens of other jurisdictions, what matters is whether data is personally identifiable. The Commonwealth Privacy Act 1988 defines "personal Information" as: "information or an opinion (including information or an opinion forming part of a database), whether true or not, and whether recorded in a material form or not, about an individual whose identity is apparent, or can reasonably be ascertained from the information or opinion".

Whenever Facebook attaches a member's name to a photo, they are converting hitherto anonymous data into personal information, and in so doing, they become subject to privacy law.

And yet too many people still underestimate the privacy implications of face recognition. Some technologists naively claim that faces are "public" and that people can have no expectation of privacy. And yet the words "public" and "private" don't even figure in the Privacy Act.

If a government was stealing into our photo albums, labelling people and profiling them, there would be riots.

HR Tech Conference 2014 - Holger Mueller's Takeaways

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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• Achievers,
• ADP (Progress Report - here)
• Cloudpay
• Equifax (Equifax Workforce Solutions Event Report - here)
• FinancialForce 
• Findly
• FurstPerson
• Halogen
• HireVue (HireVue Digital Disruption First Take - here)
• Hireology
• IBM (Connections First Take - here)
• Infor (Infor Inforum Event Report - here)
• Jabra
• Jobvite
• Kronos (KronosWorld (2013) Event Report - here)
• Lumesse
• Mercer
• NGA HR (Analyst Summit Progress Report - here)
• onesource VIRTUAL
• Paychex
• Qualtrics
• Sentric
• Skillsoft (the acquisition of SumTotal Market Move blog post is here)
• Smashfly
• Randstad Sourceright
• Technomedia
• Towers Watson
• Haufe Umantis
• Visier

Constellation Research Video Takeaways from Salesforce Dreamforce 2014

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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• Salesforce positions as the Customer Success Platform
• Salesforce launches its 6th cloud (after Sales, Marketing, Service, Communities and Apps) - it is the Analytics Cloud
• Salesforce announces the Lightning framework to build applications faster. 

• Look at Analytics Cloud value proposition - The Analytics cloud with $125 for a regular user and $250 for a professional user comes with a steep (list) price. What is the value / cost relationship for your enterprise, start from here.
• Consider (existing) alternatives - It is very likely your enterprise has already a place where 3rd party information is brought together for insights, so have a look at that and compare it with Salesforce's Analytics Cloud. 
• Take stock and plan for 2015 - Look at what systems you have, but also look larger and include people and training and then start planning for 2015.
• Revisit Collaboration - Don't look at Chatter and Collaboration as stand alone, but bring them into business processes across sales, marketing and engineering (and more) to make them more efficient. 

Event Report – Salesforce Dreamforce – A Customer Success Platform, Analytics and Lighting – but really Salesforce is re-platforming

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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I had the opportunity to attend the Dreamforce conference in San Francisco this week. The conference has only gotten bigger, and probably better. There are more Salesforce customers, developers and partners than ever before and the force multiplier was visible and palpable all across the conference.

So let’s take a look at the top 3 takeaways, which was not a too difficult a task as Salesforce did not announce too much, but more about that later.

1. The Customer Success Platform – Slogan or Credo? – The leitmotiv of this year’s Dreamforce is (the conference is not over as I blog this) and was all about Salesforce positioning its offerings as a Customer Success Platform. Last year it was the customer customer pitch. Some time ago it was Social Business. So every year Benioff and team need to come out with something new (and ideally bigger) – but as an analyst covering next generation applications – platform matters. And Salesforce thinks that with its 6 clouds (Sales, Marketing, Service, Communities, Apps and Analytics (new see below) it has all the ingredients to ensure customer success from a platform perspective. And certainly Salesforce has a formidable collection and market share of CRM capabilities, I leave it to my colleague Alan Lepovsky to comment on the attractiveness of the Community cloud, and I will comment below on the (new) Analytics cloud.

As far as the vehicle of a customer success platform I’d say there are many more business functions that need to fall in place to make a customer successful, notably the ‘back office’ functions that Salesforce does not have but partners for. And more importantly, in my view, people make the difference – they are part of the equation of customer success, too. But let’s give Salesforce the benefit of the doubt, it would be great to see one of the yearly leitmotivs stick more than 12 months for the vendor, and platform should be to a certain point timeless and always matter.
 

2. The Analytics Cloud – This is the 6th cloud that Salesforce has added – and was the most substantial product announcement of the conference. From a minimalist point of view one could say that this is the next generation of the existing reporting capabilities of Salesforce. And these were by no means bad, did the job, were included in the license and were (and are) good enough to power millions of users in their reporting needs every day. But one key challenge for Salesforce’s existing reporting has been the addition of 3rd party data and most of CRM information becomes only meaningful when put into context of all information the enterprise produces and uses (incl. the ‘back office’ – see above). 

The Wave technology that powers the Analytics Cloud puts that concern away, it’s easy now to import 3rd party data, put it into context and visualize it. For the latter, visualization, Salesforce has done a superb job – the graphical rendering of data is fast, smooth, responsive and almost dazzling. Not sure how much of that performance was demo – especially on the mobile devices (yes it was again build mobile first – what else) – but if performance will be only half as good in real life than what it was a Dreamforce – then kudos to the Salesforce engineering team behind the Analytics cloud.

On the flipside, the Analytics cloud is not ‘true’ analytics, those class of software that takes actions or at least recommends them in a priority sequence (more here). As a matter of fact – following that definition – it is not analytics at all, but visualizations and reporting. Nothing wrong with that and it certainly creates value for Salesforce customers. Critical is the high list price of $125 for a regular and $250 for a power user per month – that is a lot of money for a first version product, but we all understand it’s before discount. 

Salesforce was also very uptight on the technology behind Analytics Cloud, the versions going from open source (Cassandra, Riak, HBase), to existing platform (Oracle) all the way to proprietary (a row format store with flexible pointers). Not sure why Salesforce has been so secretive in this area – the product launch is imminent and the cat fill be out of the bag soon. It’s a first version, and by default capabilities will only be upgraded. Talk about dimension tables wakes up good old Data Warehouse memories – and the product is not ready to handle large amounts of non-SQL data. Equally predictive analytics capabilities are missing, but I was repeatedly was assured they are on the roadmap.

Finally Salesforce is leaving all the ‘heavy’ lifting to partners, and with that I mean the ETL functions to get data from 3rd party systems. Using the OData protocol opens the Analytics Cloud well for SAP and Microsoft applications, not so much for Oracle applications, but it’s a good start. Involving all these partners make the Analytics Cloud powerful and allows to move it to market fast, but in day to day life it will make it hard to purchase license wise and operate complexity wise. But then Salesforce realistically did not have a chance to build 3rd party interfaces themselves – so partnering is a good and smart (short to medium term) strategy.

3. The Lightning framework – Once you have a new platform like Salesforce has with Salesforce1 – then you need to work on getting developers more productive. Enters Lighting, which allows to easily build mobile, tablet and desktop applications on Salesforce1. As a matter of fact it is so easy, that Salesforce has probably empowered business users and system administrators to build some Salesforce applications. If Salesforce can really make this user community productive building applications, it has achieved a breakthrough in the industry and re-invented how (simple) business applications can be build. And though the demos have that potential and Salesforce has realized that – we will have to see in real life how many non-programmers are up to the task. But certainly there is a lot of potential here.

The Lightning Frameowork Overview

On the flipside out of briefings with the relevant development execs – it has become clear, that Salesforce has not thought (yet) about layering access in Lightning. Usually you see vendor proprietary, vendor vertical, ISV and then customer customization layers. In this version one, users will copy components, which quickly can become an oversight and code maintenance problem. But it is early days, first version and Lighting starts out with a lot of promise.

Tidbits

• Industries – Salesforce has launched a common industry product group under the leadership of enterprise software veteran John Wookey. We attended a briefing on the new effort and Wookey and team can hit all the vertical messages well (we heard healthcare, finance and government) but it is not clear how all will be build (consider the layering concern from above) but a roadmap will come soon.

• Europe – It is clear that Salesforce needs to grow beyond North America and Europe seems to be the prime target, with European customers being show cased in the keynotes and even executives from the German Coca-Cola bottler on main stage. And we heard that the UK data center is coming very soon, the German one later, all good moves to overcome the European cloud angst. 

• Developers – Developers were central users Salesforce needs to woo in 2013, but that was less a topic this year. Nonetheless the developer zone in Moscone West is vibrant, developers are excited, another hackathon is under way and I had a chance to see Adam Seligman launching the new Trailhead know how transfer tool. As with any new platform - training and education are crucial. 

More platform innovation that helps attract developers

• Work.com – With Wookey off in charge of verticals, work.com has become part of the ‘platform’ which is managed by Linda Crawford. We had the chance to meet with Crawford and it is clear that if Salesforce ever had any larger Talent Management ambitions, they are gone by now. The focus now is to improve CRM user performance, natively embedded into their transactional applications. The quid pro quo argument would be, that Salesforce needs to build or acquire learning capabilities – something to be seen. And it is certainly a worthy and valuable cause to improve sales performance while not reducing sales active time for CRM users. 

MyPOV 

It all fits well where Salesforce is right now, as we have seen it many times in enterprise software history: First you need the platform (Salesforce1), then you build reporting on it (Analytics Cloud) and then (or in parallel) you think of developer productivity (Lightning), next comes horizontal product (in 2015) and verticals (roadmap coming soon, see above). 

The cookie cutter approach of re-platforming, something Salesforce (and most other vendors) does not talk about publicly, but that’s what is happening behind the scenes at Salesforce in my view. As such Salesforce is going through a building year with little new and additional business functionality to show, but that should change in 2015 and 2016. As usual roadmaps would be good to have, once the cat is out of the bag (it almost is). And a little more transparency how things are build would also be good, being in the ‘cloud’ is not a good enough answer for technical architecture details anymore. 

It’s 2014 by now, not 2004 anymore.

Earlier today Alan, Natalie and me recorded our takeaways in a hangout - watch it here:

More on Salesforce.com:

• Constellation Research Summary of Salesforce Dreamforce 2014 - read here
• Research Summary - An in depth look at Salesforce1 - Better packaging or new offerng? Read here.
• Dreamforce 2013 Platform Takeaways - All about the mobile platform - or more? Read here. 
• Platform ecosystems are hard - Salesforce grows it - FinancialForce shrinks it - read here.
• Our take on Salesforce.com Identity Connect - from three angles - Identity, CRM and PaaS - read here.
• Takeaways from the Salesforce and Workday Strategic Partnership - read here.
• Act II - The Cloud changes everything - Oracle and Salesforce.com - read here.
• How many Pivots make a Pirouette? Salesforce's last Pivot - read here.

Dreamforce 2014 #DF14: Benioff Announces Customer Success Platform

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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One of the many scoops at Dreamforce this year is the announcement of the Customer Success Platform. The idea behind what Salesforce is offering is that companies and brands need a way to connect with their customers in new ways. There are nearly trillions of devices, apps, cars, cameras, watches, etc… that could be connected. The thought being that– if everything was connected, brands could deliver better experiences that were more relevant. The result of that is to drive customer loyalty, advocacy and referrals and long-term customer lifetime value.

Salesforce has 6 core technologies: mobile, connected products, 1 to 1 capabilities for the marketing customer journey, social, data and apps. And they want brands to be able to manage it all on one platform- theirs. They showed several difference examples: GE for analytics, Coke for building mobile applications and Honeywell for sales, marketing, service, community and engagement.

Salesforce is also taking about the data divide and wants to put an end to it by making it easier to for the business people and the people who manage data to see it visualized. While that is empowering to the business users to be able to create applications, it could be an issue for IT to maintain it… and security, and… So we’ll see if things get better or worse. It will help IT get more relevant and perhaps end the cycle of departments like Customer Service suffering from the Rodney Dangerfield Affect… they just don’t get enough respect so their requests end up at the end of the IT list… Something’s gotta give… to make business run better and make customers return.

Wondering what to do once you have sold a SaaS product? Customer Success Platforms are there to help you make sure you maintain the relationship throughout the customer lifecycle so that renewals are easier. And what will be interesting is to see how the various players in the Customer Success Management field fair. If you are looking at this area there’s some of the companies you’ll want to consider: GainSight, ServiceSource and Totango… to mention a few.

What is confusing to many is what does the term “Customer Success Platform” mean? To some it means a platform to build your customer journey on and have all apps, data, devices, etc connect. To others it means managed services and/or a platform to manage a SaaS software sale after the sale – i.e., during its whole customer lifetime- way before renewal time…

It’s important for vendors to do the work to make sure the messaging is not confusing, to understand who they are selling to and very deliberately show their benefits. This means doing the persona selling buying exercise – i.e., for each persona you are selling to, know what keeps them up at night and how does your solution or platform solve that. The benefits are very different for various roles, CIOs, CEOs, CMOs, SVP of Customer Service, etc…

I’ve been writing about Customer Experience for nearly 20 years and while the technology has gotten much better, exactly what technology one needs and for what department has gotten more confusing each year. The idea of serving your customer has not changed. It’s needed and wanted more than ever. It’s important to distinguish what each vendor brings to the table for what roles and why they should be considered. It’s not an easy thing to sort out all the “very” similar marketing messaging.

I will be creating some Vendor Profiles to help our end users figure what the best choice is for their company.

@DrNatalie

VP and Principal Analyst Covering Marketing, Sales and Service to Deliver Better Customer Experiences.

Security or Risk Management - a board level concern

Andy Mulholland

Vice President and Principal Analyst, Constellation Research
Constellation Research

Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems. Coverage Areas Consumerization of IT & The New C-Suite: BYOD, Internet of Things, IoT, technology and business use Previous experience: Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...

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Another week, another security breach, or so it seems as the weeks go by, with each breach highlighting the importance of security, or the inadequacy of current security practices? Clearly Enterprises need to do better and as with operating and strategic issues it is an Executive Board who has the responsibility to lead on this. So are we approaching the whole question of ‘Security’ the right way?

Should we be talking about 'Security' at all? The word and associated practices impart the implication that there is a definable environment to be made secure. Substitute the term 'Risk' and there is a wider sense of commercial forces that any enterprise and its partners including customers are subjected to. To trade any Enterprise and its management must accept a series of risks, the question is how to identify and quantify these risks.

Maybe I am wrong to say this, but I feel that currently for many Boards the issue of 'security' is neatly parked under the CTO as a defined task involving the IT department and its operations. Defining Security in this manner as a technology matter means it is not seen as part of the Executive Boards ongoing duties to define and manage as part of the Enterprises trading risks. It is off the agenda and ignored at Board Meetings with the exception of an occasional agenda item for budget purposes, or as a result of external publicity.

This state of affairs may be good for ‘Plausible Deniability’ allowing the Executive Board members to express shock and bewilderment in the face of a 'security breach', and maybe in the non Digital Business world it was okay. But what about now and into the future when all Industries are becoming increasingly online trading organizations? As the role of technology is continually expanding across their industry, market, and enterprise it's not just the IT department involved, nor is it only internal IT operations that traditional security is designed to address, now it’s the whole business model. A business model dependent on new and still changing technologies deployed in new ways, all of which involve increasing online connectivity on demand to the market place for the success.

Digital Business is a game changer in every sense for the Enterprise, and its Executive Board needs to change its game in response or be held to account for failure to discharge their duties to shareholders.

So how does an Executive Board go beyond the current security of internal IT to embrace the necessary wider mandate required by online Digital Business without trying to become technology wizards? Having defined what we currently think of and expect from Security in its current role let’s consider Risk Management within the Enterprise. 'Risk' is usually understood to encompass a wide range of potential threats across all aspects of the Enterprise. Risk management is concerned with the identification,  assessment as to the level and impact, even in selected Risk cases contingency planning. All of which would normally form a Risk Register for the Board to supervise, monitor, and call for further actions as and when needed.

As Digital Business evolves there are a lot of new potential risks, and some very real short term risks, not just in hacking breaches, other areas too. Extending the Risk Register, and Executive Board monitoring to understand and direct expert attention is a very necessary move. One that Auditors should equally be calling for as well, after all not knowing exactly what risks your new and growing online Digital Business is creating for your enterprise in all aspects is pretty obviously a rather disturbing operational oversight!

The Challenge in extending the Enterprise Risk Register lies as much in finding experts with the experience to identify and assess.

Creating new revenue streams, gaining market share, capturing new customers are all the reasons why Digital Business is growing and will continue to grow. But it is a huge game change in the way business is conducted through opening up online relationships, transactions, and models in a manner that introduces new commercial risks. Security is one of them, but as all the recent failures show its not possible to partition the topic off as a simple technical challenge to the IT department, instead it is up to the Executive Board to start to firmly lead the way in gaining recognition of what is at Risk across the whole enterprise in a manner the Executives can understand.

A full Risk Register of Digital Business will initially paint a disturbing picture, but that’s to be expected, and allows structured actions. Failure to identify Risks and act can only lead to questions about competency when the inevitable happens. Executive Board leadership of the Digital Business elements is required every bit as much as for the traditional Business!

Salesforce Dreamforce 2014 Wrap-Up Webinar

Director of Customer Programs, Constellation Research
Constellation Research

Carole oversees the Constellation Executive Network, an executive community for innovative senior leaders who value strategic guidance from trusted advisors who understand the power of disruptive technologies. Carole brings over 15 years of marketing, strategic account management, and operations experience, specializing in high technology and professional services. She holds a BA from Santa Clara University and a MBA from Thunderbird, School of Global Management.     ...

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Join Alan Lepofsky, Holger Mueller, and Dr. Natalie Petouhoff for a Google Hangout to hear their analysis of the announcements at Dreamforce 2014! You'll catch the latest developments on platform, Future of Work, collaboration, and customer experience live from San Francisco, while the conference is still going strong.

Details

• Dreamforce 2014 Wrap-Up Webinar
• 30- minute briefing webinar- October 15, 2014 11:00a.m. PT/ 2:00p.m. ET
• Follow along on Twitter with #CRchat 
• @alanlepo, @holgermu and @drnatalie will cover #collaboration #platform #custserv, #custexp, #custengagement, and more

?Update: webinar recording now available

News Analysis - IBM and SAP partner for cloud success - good move

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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Earlier today IBM and SAP announced a partnership to move the SAP HANA Enterprise Cloud onto IBM’s cloud.
 

 

So let’s dissect the press releases in our typical new analysis and implications style:

ARMONK, N.Y. and WALLDORF, Germany— Oct. 14, 2014: SAP SE (NYSE: SAP) and IBM (NYSE: IBM) today announced that SAP has selected IBM as a premier strategic provider of Cloud infrastructure services for its business critical applications – accelerating customers’ ability to run core business in the cloud. The SAP® HANA Enterprise Cloud offering is now available through IBM’s highly scalable, open and secure cloud. SAP HANA Enterprise Cloud will expand to major markets with the addition of the IBM cloud data centers. This is expected to enable customers to deploy their SAP software around the globe in a faster and more secure environment that is backed by IBM's proven cloud capabilities.

MyPOV - So IBM gets the first mover advantage becoming a 'premier strategic provider' for SAP cloud infrastructure. In early 2014 IBM announced to expand to 40 data center locations over the next quarters, an investment that is well under way for IBM (our take here). Given traditional cloud players like e.g. Amazon, Microsoft and Google have not responded formally with an announcement to expand to 40 locations, too – if SAP really cared for global coverage then there was not better option than IBM’s cloud infrastructure that is powered by SoftLayer (our take on the acquisition here) as well as IBM's Cloud Managed Services data centers, which IBM has build prior to the SoftLayer acquisition. And SAP is probably one of the enterprise vendors more sensitive to data location and data privacy laws, giving global experience, coverage and customer demand. 

"We look forward to extending one of the longest and most successful partnerships in the IT industry,” said Bill McDermott, CEO of SAP. “The demand for SAP HANA and the SAP Business Suite on SAP HANA in the cloud is tremendous and this global agreement with IBM heralds a new era of cloud collaboration. We anticipate customers will benefit from this collaboration and expansion of SAP HANA Enterprise Cloud."

MyPOV – Interesting that McDermott refers to HANA and Business Suite on HANA only – SAP runs  more than these two products in the SAP Cloud, which is also the home of the acquired SAP applications, Ariba, SuccessFactors, Hybris and probably (not announced and confirmed) Concur soon. So we will need to learn more which applications (and with that related load) SAP is bringing to the IBM cloud. If it’s only Business Suite on HANA that would be certainly a lot of potential, but a lot of future and not current load. But as almost all acquired products have a roadmap to be 'ported' to HANA - 2015 should see the full potential of the partnership.
“This announcement is a significant milestone in the deployment of enterprise cloud,” said IBM Chairman, President and CEO Ginni Rometty. “It builds on our two companies’ long history of bringing innovation to business, and extends IBM’s position as the premier global cloud platform. Our secure, open, hybrid enterprise cloud platform will enable SAP clients to support new ways to work in an era shaped by Big Data, mobile and social."  
 
MyPOV – Similar to the Apple announcement, it’s again not ‘Ladies First’. So we may speculate that IBM wanted this partnership more than SAP, or that SAP is senior partner here. Unrelated Rometty is surely right that this is a significant milestone for both vendors. IBM gets load, and SAP gets data center access around the globe.
  
Together, IBM and SAP have the expertise, solutions and cloud infrastructure to deliver SAP business solutions on the IBM Cloud. SAP brings the power of realtime through in-memory computing capabilities of SAP HANA combined with the ability to run mission-critical business applications, like SAP Business Suite, in a cloud environment. IBM brings enterprise depth and the open architecture of IBM Cloud Managed Services and SoftLayer — enabling customers to securely manage SAP workloads from trial to production on a consistent infrastructure, with transparency and control over where data resides. In addition, customers will benefit from the technology and services from both companies that offer industry-specific best practices, enabling customers to transform their organizations. SAP and IBM customers of all sizes will benefit from this joint collaboration of two of the most trusted companies in the industry.

MyPOV – Some reading between the lines: The SAP scope got extended in comparison to the above quote from McDermott, leaving room to other applications 'like' the SAP Business Suite. Good and makes sense. Interesting enough the section also refers to ‘trial’ – something that traditionally does not happen for SAP applications – but something this partnership could enable more efficiently. And then IBM stresses its large consultant force knowledgeable of SAP. But if this partnership is gated to the IBM services on the consulting side, then I think it will not reach its potential. We will have to see if SAP / IBM can attract additional customers beyond existing IBM consulting customers. It remains one of my concerns for IBM cloud that it is run out of the services division, with the risk of too much focus of consulting centric services.
  
Key Benefits to Enterprises of All Sizes

· Customers can take advantage of the SAP HANA Enterprise Cloud with the global footprint of IBM Cloud. This enables customers to put data to work with SAP HANA and business applications in the IBM Cloud built for speed, transparency and control.

MyPOV – Location matters both for regulatory compliance and performance of cloud deployments. IBM Cloud does very well here.

· SAP HANA will run on IBM Cloud to provide an open-standards-based approach that will help create the foundation to more easily integrate existing technology investments with new workloads.

MyPOV – We will have to understand in more details on what machines HANA will run in the IBM Cloud. [Update from IBM, October 15th 2014: HANA on SoftLayer is using SoftLayer bare metal servers, HANA on IBM Cloud Managed Services for SAP us using the IBM System x appliance.]

· IBM and SAP are committed to security for enterprise customers in the cloud. The IBM Cloud provides visibility and control to enable enterprises to apply and extend their security best practices into a cloud environment.

MyPOV – Both the bare metal capabilities and recent Intel TXT partnership (read more here) will help in the aspect of security.

· Companies will now have additional reach and scale to more easily start locally and scale globally with cloud capabilities and also comply with data residency and other regulatory mandates.

The Four Pillars

Brian Katz

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Brian Katz is a director at pharmaceutical company Sanofi, where he manages mobile initiatives, including mobilizing the salesforce, building best practices for developing apps, handling BYOD initiatives, enabling new devices and form factors for success, and looking at ways to innovate in the mobile space for Sanofi. He started his career working with a multi-national New York financial company as an email architect, designing and maintaining their email and communications systems, which also involved supporting their mobile computing platforms. ...

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Note: Special Thanks to Jessica M. H. Smith for some editing and a few ideas, she’s a class act

Robert F. Kennedy said, “Only those who dare to fail greatly can ever achieve greatly.” It’s among the scores of failure quotes meant to encourage us to take chances and turn our defeats into victories. Daring greatly in the app world is important, but it doesn’t mean that you have to fail or suck into order to build a brilliant app.

Building an app is easy. Find a few developers, give them the specs, and you’re off to the races. If you’re really lucky, had some vision, and great developers, you end up with a hit. More likely, you’ll end up with a crapplication, those apps that you use once and never use again unless forced. They’re difficult to use and really don’t help you accomplish anything.

This isn’t much of an issue if you’re building your app for the public, if they don’t like your app they will just find another one in Apple’s App Store or Google’s Play Store. On the other hand, building an app for your business and employees can involve huge risks. If they don’t like your app they will find alternatives that work better but may be less secure.

The question isn’t whether you should be building brilliant apps for your business (you should) or whether your CIO thinks apps are vital – they do. The question is: what are app development best practices for your business, and on what principles are they built?

You have to start with the four pillars whenever you are designing an app. It isn’t just something to go on a device, but an experience for the user that helps them get stuff done.

When you base all of app development on the four pillars and you add a dose of the business requirements to the mix, you are going to build a great app that meets your business’ needs. Identity Identity and access management (IAM) are hugely important when you are designing any experience. Who is the person using your app, and what should they be accessing? It doesn’t matter whether you are Facebook or an email app, you need to know who the person is that is accessing the app. This requires that you build interfaces for querying someone’s identity and that you have access permissions on your content. If you start with designing an IAM framework that your developers can plug into, then it becomes much easier for them to build an app properly. Security Most app projects take a dim view of security. They’ve spent years dealing with security “slowing” their projects’ releases, and they care more about meeting the needs of the business and hitting a deadline. This “slowing” is usually due to the fact that security wasn’t consulted until the end of the project when it was ready for release. This puts the security team in an impossible place. They have to figure out what an app does and then make sure it has a low risk. It is easy to see how this becomes an antagonistic relationship. The right approach to building an app involves Security throughout all phases of app building. The security team itself must strive to build frameworks and secure APIs so that developers are following secure principles whether they realize it or not. The only way for security to stay ahead of the needs of the developers and provide the building blocks that they need is to be part of the process from the beginning. As they understand the business’ and user needs, they can work on making those connections secure and less risky to achieve. The security team will learn that no isn’t the only answer, but that they have to say yes and show how to achieve that yes. They have communicate and work like partners with the business, rather than treating them like an obstacle course to get through when a project is finished. FUN principle FUN in this case is an acronym for Focus on the User Needs. Many times, especially in the enterprise, development is solely based around the business requirements. The user needs fall between the cracks. This isn’t just an issue with the developers, but also with the business itself. Companies are too frequently focused on the perceived outcomes rather than how the user works and what they need to get things accomplished. Developers need to insist on focus groups and user previews if the business isn’t already providing it. The lack of focus on users tends to lead to scope creep and monolithic apps that are difficult to use. Note: there is a difference between user wants versus user needs. User experience (UX) No matter how much work you put into an app, if it doesn’t have a great user experience , it will become a failure. There are too many options for your users in the OS app stores. If they don’t like the UX of the app you created for them, they will choose an equivalent app that meets their needs better. The fact that you can force your employees to download an app and ostensibly use that app leads to the rise of shadow innovation. Your employees want to get their work done and will find ways (other apps) to do that. You need to remember that in the end, mobile isn’t about giving them a device or an app, it giving them an experience which allows work to be done without hardware or software getting in their way.

When you set up your foundation for developing apps with these four pillars, all you need to do is feed business requirements in and watch as your team builds great apps that are popular among your employees. Remember, the goal of mobile is enablement, helping your workforce to be flexible and agile while improving productivity and efficiency.