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17 June 2013

By: Danny Singer

Mammoths can't run - why the man who only bought IBM was eventually fired

Danny-Informal

The saying goes that nobody got fired for buying IBM meaning, of course, that it is safe to buy big brands, no matter the cost. It makes sense, doesn't it? A large multinational technology vendor will be able to provide polished, tried and tested products which stood the test of time and are used by your peers right across the industry. It's a no brainer.

Not only is it the safe choice, but it also delivers that warm glow that only a luxury product can bring. It will come with glossy manuals in 53 different languages bound in genuine leather, a welcoming and well-established user group which meets twice a year in a sunny five star resort, as well as an over-friendly account manager who will offer you tickets to Wimbledon and the occasional long lunch at the odd Michelin-starred establishment. It's all part of the service.

The party doesn't stop there. You will be sending a strong message around your industry as a company which can afford to buy big brands, projecting an air of stability and financial rude health. Even on a personal level it will indicate to all your peers and rivals that you must be commensurately appreciated and remunerated in a lavish manner, whether that may be the case or not.blog #12 pic 1

You will exude an air of importance and seriousness as someone who is able and trusted to make such financially monumental decisions. Most importantly, the damned thing will just work. Whatever it is, it has been working for others for donkeys' years and you will not end up with egg on your face having bought a dud. If budgets are not a problem, go for the top of the range every time. After all you get what you pay for, don't you?

Does it sound too good to be true? Well, that's because it is.

The first thing that you will notice after the smart boxes have been unpacked and put away is that you will now need to change the way your business works. The technology you've just spent millions on will not adapt to the idiosyncrasies of your enterprise but will expect your business to adapt around it. That's precisely because any change in the platform you bought would be unimaginable unless it is planned many years in advance by a committee meeting thousands of miles away from where you sit.

And let's face it, you are not that important to them. They have hundreds or even thousands of customers just like you and many much larger and wealthier than you. They may listen to some of them but not to you. You will have to adjust. In the meantime, at the global customer conference in Martinique they will dazzle you with some native dancers, a free bar and the fantastic new technology that is coming soon. It's just around the corner. Really. Of course, it will cost a bit and you may have to wait a few years. Have another cocktail!

Adjusting to the new systems is not that simple either. You will need to get the "experts" in and those silk bow ties don't come cheap. But hey, in for a penny… The experts will come highly recommended by your vendor and the first thing that their glossy report will tell you will be that you need more experts. The second wave of "consultants" will take a while "discovering", "scoping" and whispering quietly and smugly to each other that you are, how should we put it politely, intelligently challenged.

Your business processes are no good. Your existing technology is a joke. Your staff are a bunch of pathetic amateurs. You will now have to spend double the amount you already spent on your shiny new technology in order to even begin to contemplate using it. In the meantime, while you think about it and try to find the money to finally deploy it, the technology has become virtually obsolete anyway.

Your friendly and generous account manager (remember him?) who had been avoiding your calls for a while, will start getting a little irritated with you. He has sales targets to meet and you should buy the new modules and upgrades that he feels entitled to sell you. After all, he didn't wine and dine you for nothing. You are letting him and the side down. For some reason, your next meeting is at Starbucks and you're paying for the lattes.

Meanwhile, the board will want to know when the new technology will start to deliver that fabulous ROI they were promised. You prepare a report and a really attractive PowerPoint presentation on the "vision" and why they should now plough many more millions into restructuring the business and buying the latest release of the platform that you haven't yet deployed. The presentation is a great success and you collect your P45 on your way out.

And this is how the man who only bought IBM got fired. By the way, before we get sued, let me clarify that this story has nothing to do with IBM. It's just how the saying goes…blog #12 pic 2

OK, it's all a little over-simplistic and facile, but it serves to make a point as it is a pattern that tends to repeat itself in various forms and guises right across all industries and nowhere more than in call centres. Particularly call centres related to big business. Whether it is in the financial sector or global outsourcing, utilities or media, buying big name brands has been a rite of passage for companies aspiring to join the big league.

 

Millions are being spent on software and hardware from "market leaders", under the blessing and encouragement of analysts such as Gartner, IDC, and others who are making a fortune from both sides, vendors and users, to ensure that you make the "right" decision. I would urge you to think for one minute about the "magic" that propels some vendors to the top right corner of those magic quadrants.

A large proportion of these systems end up sitting in their original boxes for years and never get deployed. It is not something that the IT directors who made these purchasing decisions would easily admit, so in a way it is a hidden problem. One of the main reasons for this state of affairs is that a lot of this "safe" technology is old fashioned and years behind the state of the art. In many ways adapting the enterprise to be able to use these systems would be a retrograde step.

So, what is the point I'm trying to make? Simple really. The problem is that technology big brands do not innovate. Their culture is geared entirely to the financial exploitation of intellectualproperty that they own for the benefit of shareholders. It is a climate that stifles innovation.blog #12 pic 3

Instead, with the money they accumulate, they tend to acquire small innovative companies and exploit their intellectual property in similar fashion. By virtue of doing so, they manage to kill the innovative spirit inherent in those smaller, agile companies. And so they grow larger and the cycle repeats itself. To use a perhaps gratuitously sinister metaphor, in order for Count Dracula to remain immortal, he needs to feed on the blood of young maidens who in turn become blood thirsty vampires themselves.

Large technology companies find it almost impossible to carry out any commercially viable R&D that would eventually lead to the creation of new components and products which the market might actually want. Institutionalised innovation is an oxymoron just like enforced jollity or scheduled spontaneity. This is why they are constantly on the lookout for acquisitions.The safety and security of a large corporate R&D department turns it invariably into a poor relative of an university campus, an ivory tower removed from the realities of the marketplace and simply a refuge for technologists and geeks that nobody in the many layers of management knows what to do with or indeed what they might be spending their time on.

Even if something truly interesting came out of these places, the sheer size, bureaucracy and byzantine processes that large technology firms need to go through in order to bring any such new ideas to market are such that they are more than likely to be too late by the time their polished offering hits the streets. The world would have moved on by then.

Because of all these reasons, and many others, and perhaps against all intuition, buying technology from a big brand vendor is not the safe option. Like with most other things in life, risk and reward are closely linked.  Taking risks does not guarantee rewards, but taking no risks guarantees no reward. You could do a lot worse than buying your technology from a smaller, agile, creative company who will actually care deeply about your success because theirs depends on it.

You will be amazed by what smaller vendors have to offer and how keen they will be to understand your business and make their products work within your context. Their prices will also be a pleasant surprise, as they do not need to feed an ever expanding army of administrators and managers to support a bloated bureaucracy. You will get some cool technology, some great service and most importantly, you will get to keep your job.