Your business is complex. Big data promises to manage this complexity to make better decisions. But the technology services that run your business are also complex. Many are too complex to manage easily, fueling more complexity, delays, and downtime. I predict this will inevitably get worse. To combat this onslaught, you can no longer just accelerate current practices or rely on human intelligence. You need machines to analyze conditions to invoke the appropriate actions. These actions themselves can be automated. To perform adaptive, full-service automation, you need IT analytics, a disruption to your existing monitoring and management strategy.

Big data is a label for the trend toward processing dynamic (and therefore voluminous) data using in-memory architectures. This trend is being played out in 8 major scenarios that I can find. In each case, enterprises are struggling to understand how the various big data solutions will help generate revenue and profits, manage expenses, and service customers and citizens. Without seeing Big Data for what it really is, organizations risk trying to put in the one-size-fits-all solution as you say, but also risk creating a solution heavily dependent on analytics and large data sets but missing the key pieces that bring value. It starts with defining the uses cases and ends with starting over to create better and better outcomes.

All too often the rest of the company views the IT department as being a gigantic black hole when it comes to funding. More and more money gets poured into IT every year and yet at the same time the rest of the firm probably feels that they are getting less and less value for that money.

The one thing that both parties can agree on is the importance of information technology. By doing what a CIO needs to do – improving internal communication, you can make sure that the rest of the company has a higher level of satisfaction with the products and services that your department is providing them with. In order to make communication happen between the two parties, you are going to have to create a system that will allow everyone to understand exactly what the IT costs and associated performance is. This means that your IT staff is going to have to take the time to document what downtime and problem resolution times are as well as publicizing what project and budget performances are.

The ideal business model is one that makes the project self-sustaining either through revenue generation or through cost reduction. Performance-contracting, as one example, embraces the latter. These business models are based on creating efficiencies in enterprise applications and IT infrastructure, or in better managing operational costs such as resource and asset management. Consolidating apps and rationalizing infrastructure reduce license costs. Better water, energy, or lighting management reduces utility bills. Better space optimization reduces real estate expenses. And, vendors enable these savings by taking on part of the risk through performance contracting.

In short, real smarts is about business smarts, not necessarily smart technology. It’s about pragmatism. It’s about recognizing the value of the shiny new object, but being able to ignore it long enough to build a solid foundation on which to put it. It’s about using technology intelligently, rather than focusing on what’s new and cool. And, it’s about figuring out the business model to sustain the investment in the shiny new object – when the time is right to buy it.

The other day I read the financial reports for Netflix (NFLX) and I think Netflix has clearly reached its top value, due to the fact that, the company is burning through cash and its financial health continues to worsen. Moreover, I believe things will continue to get worse since it is virtually impossible for the company to become cash flow positive. This will force the company to take on even more debt and make it more fragile. I believe the company’s book value is a good approximation of this. As of the most recent quarter it was only $813 million, but mostly made up of intangible assets (in other words, the content that the company paid too much for). It is also true that Netflix has over 36 million streaming subscribers, which probably also adds value to the company. However, they do not add as much value as some might think. There simply is no customer loyalty and stickiness – as we saw back in 2011 when a price hike caused the company to lose one million subscribers.

After reading thier Financil statement I noticed that there is another off-balance sheet liability that must be mentioned. In the footnotes it is just called other purchase obligations. At the end of the most recent quarter, other purchase obligations amounted to approximately $116 million. Since these obligations primarily relate to DVD content acquisition (a shrinking business), I expect them to be insignificant in the years to come. In fact, these obligations have decreased by about 57 percent over the last twelve months alone. I expect this trend to continue in the future.

The final off-balance sheet liability I want to talk about is the company’s non-cancelable operating leases. Operating leases should be capitalized and treated as debt and that is what I have done in my analysis. At the end of the most recent quarter, capitalized operating leases totaled approximately $202 million.

There is a new approach that leading enterprises and governments are taking today that is significantly simpler, more manageable and empowers companies to share their key data more freely, opening up massive new market opportunities for all. Here’s how American Airline is taking advantage of this new model:

At the recent South by Southwest conference in Austin, Texas, American Airlines opened up some of its data for real-time route optimization for your trip to the airport, predicting if you can make it from one gate to another to catch an earlier connection and other new capabilities that could become future features of the AA.com web site and mobile application.

This new approach to data sharing is the next big shift in business intelligence. In all aspects of business (and life) we can derive far greater value from having a more complete picture. When you visit the hospital, you get better care when the doctors know more about your medical history, what drugs you are taking and how they would interact with those they might prescribe. In retail, you can more accurately fulfill your customers’ needs if you know who they are, what they have bought from you before, what they can afford, and where they go next when they leave your store.

But no company has anywhere near a complete picture. We do the best we can with the information we can gather through customer interactions and what we ask our customers and suppliers to share with us and what data we can buy. But no one’s interested in sharing more than they have to for fear of that data getting misused or stolen. And no one wants to share the really valuable data for free.

Recently I read a great article in that talked about some of issues SAP has had in China, however, after extensive research I applaud SAP, as is taking the right steps to integrate local requirements and deliver product capabilities that address the some of its issues in China:

• Solutions customized for China regulations and business practices. SAP Labs China developed not only localized solutions for general purpose such as Golden Tax features, which is mandated by the Chinese government for its interfacing national taxing system, but also key solutions for local industries such as business real estate, international commerce, public finance, and healthcare.
• More ease of use. To solve the ease-of-use problem, including the user interface look and feel and usage behavior of the product, SAP Labs China reinvented finance user experience and business processes for Chinese customers, and it also optimized the user interface for its human resource module.
• Reverse innovation. To standardize SAP’s global offering so it can be applied to different customers, industries, and regions, SAP also reverse integrated the local innovations into SAP solutions as add-ons, such as the account aging analysis based on HANA, as well as mobile workforce scheduling features.
• Design-thinking strategy. All the above capabilities are based on the design-thinking strategy rolled out in SAP Labs China. The product design and release plan is based on the customer requirement by engaging clients from the bottom up.

Although SAP is taking the right path, it still should:

• Set up a regular collaboration mechanism and build reference customer cases of working with clients in each industry.
• Consider the right organizational structure and technical enablement to support the increased requirement on the internal bandwidth of its local resources.
• Improve the efficiency of managing SCRUM teams. Today, SAP Labs China has rolled out SCRUM methodology inside its project-based technical team, but the efficiency could be further improved, such as by sharing and discussing product backlogs electronically rather than with paper stickers.
• Enable partners to provide solutions on long-term basis. Today, many SAP partners do not have the same product knowhow or similar agile development process. SAP should also effectively transfer its knowledge and experience to its partners to better serve its customers and reduce its own pressure.

SAP clients in China should identify the gap between their requirements and SAP’s offerings, escalate these business requirements to SAP, and work closely with SAP by sharing business insights. Finally, recognize that a pure SAP solution may never have the flexibility to address your unique needs, so you should choose the right workaround, such as using a business process management suite (BPMS) to extend SAP when necessary.

What do your direct reports say about you!

In my career as an executive / CIO and a global technology consultant to C level executives, I have never met an executive who was too intellectually slow to be successful. Most executives have more than enough skill and intelligence to be wildly successful. What set the best ones apart is their ability to know their limitations, surround themselves with others who fill their gaps, and perhaps most important of all, freely and openly admit to others that they are aware of and comfortable with their shortcomings. These leaders attract and retain the best employees, and inspire them to be vulnerable too. As a result, they build companies that clients trust, stick with and enthusiastically recommend to others.

Today, we are reminded constantly of the power, and fear, of vulnerability. In business and politics we watch leader after leader defend themselves, deny responsibility for mistakes, and reject offers of assistance seemingly unaware that the long term impact of their defensiveness is a growing distrust among the very people whose support and loyalty they need.

Perhaps we’ll see a renaissance in the appreciation for vulnerability one day, not the kind that is designed for press conferences and talk show interviews, but the genuine kind that is as painful as it is real. And if that renaissance doesn’t happen, then the advantage for those who are willing to embrace vulnerability will be that much greater.

@Ramin_Rastin

Expect the European Central Bank (ECB) to be pressed hard to join other central banks in actively seeking to depreciate the currency – by cutting the policy rate (currently 0.75 per cent) and quantitative easing of the type pursued by the Bank of England, the Bank of Japan and the US Federal Reserve. This is not a road that the ECB will should or would embark on easily, and if it does, it would seek to address a regional dilemma by adding to a global one.

Being a relative price, all countries cannot simultaneously weaken their exchange rates (except against gold, real estate and other “real” assets). And should the ECB feel forced to join collective attempts to do the impossible, the risks of a global currency war and related beggar-thy-neighbor outcomes would increase meaningfully.

The euro zone is undergoing an extreme negative domestic demand shock. France is especially worrying, monetary trends and the latest PMI indicate a downturn on a similar level to 2008/9 taking place. The periphery has only improved marginally; all the strength is coming from the German bloc making the aggregate look ok. The economic divergence within the zone is at record levels.

The ECB seem to be repeating the mistakes of 2011, wishful thinking is the order of the day. It will be interesting to see the rhetoric / action on interest rates / QE at the next few ECB press conferences. There is a large risk of further market distress in H2.

This is one of the best commercials I have seen in a while, Best Commercial

It’s been clear for years now that small business startups don’t build massive IT departments and big operations teams. Instead they focus on the capabilities which truly differentiate them in the marketplace – their strategic capabilities. They hire experts in these capabilities as employees and continue to improve their differentiation. At the same time, they look to source their more generic bus

iness capabilities from business partners and technology service providers.

We are going to see a seismic shift in big business in the coming years: there will be an increasing appetite to source generic capabilities from vendors and business partners; at the same time CEOs will focus increasingly scarce human capital resources on improving their strategic capabilities – the capabilities which give them a competitive edge. While digital technology will remain at the heart of these strategic capabilities – leveraging cloud, big data analytics, mobile and social – the majority of technology services will be sourced from partners and vendors. The company’s own technology resources will become more and more intensely focused on developing unique systems of engagement around strategic capabilities.