Comments on: What (Else) Happened? http://andrewmcafee.org/2008/10/what_else_happened/ The Business Impact of IT Sun, 14 Mar 2010 01:50:57 -0700 http://wordpress.org/?v=2.8.1 hourly 1 By: Loan Modification leads http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-14178 Loan Modification leads Mon, 08 Jun 2009 00:01:53 +0000 #comment-14178 Nice blog.. it really informs me about IT.. I wish you do more post like this.. i really learn on your blog.. Nice blog.. it really informs me about IT.. I wish you do more post like this.. i really learn on your blog..

]]> By: Loan Modification leads http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-14077 Loan Modification leads Sat, 06 Jun 2009 00:46:49 +0000 #comment-14077 A very informative Blog.. Surely, your are very brilliant person.. In this field, competition is always their.. it will not disappear unless, only one company is standing.. i enjoy your post.. thanks a lot.. A very informative Blog.. Surely, your are very brilliant person.. In this field, competition is always their.. it will not disappear unless, only one company is standing.. i enjoy your post.. thanks a lot..

]]> By: Live Lead Transfer http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-14054 Live Lead Transfer Fri, 05 Jun 2009 14:42:15 +0000 #comment-14054 nice post. nice post.

]]> By: Valentin http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-4161 Valentin Sun, 23 Nov 2008 22:00:33 +0000 #comment-4161 hm, you seem to be missing the obvious: 'mobility' and a decrease in marginal cost of production for many goods and services. Mobility: There seems to be a steady increase in Mobility of capital, goods (in particular digital goods) and people (due to changes in law, society and technology). This directly leads to more complex decisions and more competition. More competition because there are simply more players competing for the same market, the same people and the same capital, e.g. if shipping a bottle of vine from Australia to France costs five times its production, there is (almost) no competition between me and Australian Vine producers. More complex decisions, because increased mobility means more opportunities. These days the best thing to do with Shrimp caught in the Baltic Sea may be to process them in Spain, package them in Poland and then sell them in Switzerland. This is just quite a complex process to develop and manage, a process I would not even need to think about if transport costs where higher. Marginal Cost of Production: For almost all digital goods the marginal cost of production is near zero. The same is becoming true for many other areas as well, e.g. once I have the factory and the design, making another CPU is very cheap; in a modern (self-service) bank, serving one more customer is almost free ... the continuing trends of "self service economy" and "mass customization" (and "desktop manufacturing" and "cloud computing" in the future) make this true for more and more areas. I would speculate that this means that more and more markets become "winner takes it all markets" making it very hard for smaller players to survive. Also, this means faster competition because you cannot rely on the fact that your competitor will take years to scale his business to serve all your costumers. hm, you seem to be missing the obvious: ‘mobility’ and a decrease in marginal cost of production for many goods and services.

Mobility: There seems to be a steady increase in Mobility of capital, goods (in particular digital goods) and people (due to changes in law, society and technology). This directly leads to more complex decisions and more competition. More competition because there are simply more players competing for the same market, the same people and the same capital, e.g. if shipping a bottle of vine from Australia to France costs five times its production, there is (almost) no competition between me and Australian Vine producers.
More complex decisions, because increased mobility means more opportunities. These days the best thing to do with Shrimp caught in the Baltic Sea may be to process them in Spain, package them in Poland and then sell them in Switzerland. This is just quite a complex process to develop and manage, a process I would not even need to think about if transport costs where higher.

Marginal Cost of Production: For almost all digital goods the marginal cost of production is near zero. The same is becoming true for many other areas as well, e.g. once I have the factory and the design, making another CPU is very cheap; in a modern (self-service) bank, serving one more customer is almost free … the continuing trends of “self service economy” and “mass customization” (and “desktop manufacturing” and “cloud computing” in the future) make this true for more and more areas. I would speculate that this means that more and more markets become “winner takes it all markets” making it very hard for smaller players to survive. Also, this means faster competition because you cannot rely on the fact that your competitor will take years to scale his business to serve all your costumers.

]]> By: John McDonald http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-4153 John McDonald Sat, 25 Oct 2008 07:25:51 +0000 #comment-4153 I agree with a large part of what Tom Rose above me has said. It seems like the current era is displaying symptoms related to the expansions of credit and debt over the prior 25 year period. There is currently a lot of chaos in the macro-economic picture and that is sort of a clear signal that a new era is coming upon us, but not quite so clear about what this new period will look and behave like. It is even likely that this chaos and volatility will become the new "norm" for a while to come and the key to success will be finding niche markets and ways to balance risk exposures related to credit, currency, and commodity markets. I agree with a large part of what Tom Rose above me has said. It seems like the current era is displaying symptoms related to the expansions of credit and debt over the prior 25 year period. There is currently a lot of chaos in the macro-economic picture and that is sort of a clear signal that a new era is coming upon us, but not quite so clear about what this new period will look and behave like.

It is even likely that this chaos and volatility will become the new “norm” for a while to come and the key to success will be finding niche markets and ways to balance risk exposures related to credit, currency, and commodity markets.

]]> By: Tom Rose http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-4152 Tom Rose Mon, 20 Oct 2008 12:45:42 +0000 #comment-4152 The source of our difference comes from "easy" money is not so easy anymore, leading to careful understanding of spending and a hypersensitive environment for improving the top line revenue streams. I think many executive teams in large organizations have operated in a no-real-thought-required environment for so long, and now they actually have to execute, as opposed to only giving the appearance of execution. So from their perspective, yes things are extremely more difficult, when in fact real change is of a much smaller magnitude. Global competition from much smaller companies, the availability of technologies that level the playing field for all companies, as well as global flow of ideas and money puts competitive pressure on organizations from all sides. No longer can a large organization have competitive advantage simply because of its size. Large companies have coasted for such a long time, and now there is competition again, most don't know what to do, and now it shows. So is there any difference in how a company looked 20 - 40 years ago, well sure, and things will be different 20-40 years from now. Things are always changing, new tools/processes are always available, as well as new competition. However, fundamentally nothing has changed in how to run a company. I expect Senior Leadership Teams to adopt a posture of change in their companies, they should be continuously evolving. This concept is nothing new, and for an executive leadership team to say their environments have drastically changed, and now "everything" is different so their jobs are significantly more difficult means something...they are not in a posture to evolve, which is a fundamental tenant of managing an organization that has never changed. Best Regards, Tom The source of our difference comes from “easy” money is not so easy anymore, leading to careful understanding of spending and a hypersensitive environment for improving the top line revenue streams. I think many executive teams in large organizations have operated in a no-real-thought-required environment for so long, and now they actually have to execute, as opposed to only giving the appearance of execution. So from their perspective, yes things are extremely more difficult, when in fact real change is of a much smaller magnitude.

Global competition from much smaller companies, the availability of technologies that level the playing field for all companies, as well as global flow of ideas and money puts competitive pressure on organizations from all sides. No longer can a large organization have competitive advantage simply because of its size. Large companies have coasted for such a long time, and now there is competition again, most don’t know what to do, and now it shows.

So is there any difference in how a company looked 20 – 40 years ago, well sure, and things will be different 20-40 years from now. Things are always changing, new tools/processes are always available, as well as new competition. However, fundamentally nothing has changed in how to run a company. I expect Senior Leadership Teams to adopt a posture of change in their companies, they should be continuously evolving. This concept is nothing new, and for an executive leadership team to say their environments have drastically changed, and now “everything” is different so their jobs are significantly more difficult means something…they are not in a posture to evolve, which is a fundamental tenant of managing an organization that has never changed.

Best Regards,

Tom

]]> By: Mat Fogarty http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-4151 Mat Fogarty Sun, 19 Oct 2008 18:44:55 +0000 #comment-4151 Surely, if the corporate environment is becoming more and more competitive, then corporate profits (as a percent of gdp) would decline. The evidence does not support this. Corporate profits in 2006 were the highest since the 1960s. http://www.nytimes.com/imagepages/2006/08/28/business/28wages_chart.html Surely, if the corporate environment is becoming more and more competitive, then corporate profits (as a percent of gdp) would decline.

The evidence does not support this. Corporate profits in 2006 were the highest since the 1960s. http://www.nytimes.com/imagepages/2006/08/28/business/28wages_chart.html

]]> By: Henry Singer http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-4150 Henry Singer Fri, 17 Oct 2008 19:17:25 +0000 #comment-4150 Andrew, I believe that information technology; in particular Enterprise Systems (such as SAP) has been an enabler of the broad adoption of Enterprise Resource Planning (ERP) as a set of principles, processes and practices. As a result, Enterprises of all sizes can rapidly adjust their supply plans to respond to changes in the marketplace (demand). In my 25 year career as a supply chain management professional I have seen "planning" go from a paper based process that took weeks, if not months to replan from top to bottom, to one where supply can be replanned across the supply chain virtually synchronously with demand. As a result, the economy has seen significant improvements in customer service levels and acceleration in inventory velocity. From the perspective of both inside and outside the enterprise, this would be experienced as acceleration in the rate of change and an increase in the level of competition. Andrew,
I believe that information technology; in particular Enterprise Systems (such as SAP) has been an enabler of the broad adoption of Enterprise Resource Planning (ERP) as a set of principles, processes and practices. As a result, Enterprises of all sizes can rapidly adjust their supply plans to respond to changes in the marketplace (demand).
In my 25 year career as a supply chain management professional I have seen “planning” go from a paper based process that took weeks, if not months to replan from top to bottom, to one where supply can be replanned across the supply chain virtually synchronously with demand.
As a result, the economy has seen significant improvements in customer service levels and acceleration in inventory velocity.
From the perspective of both inside and outside the enterprise, this would be experienced as acceleration in the rate of change and an increase in the level of competition.

]]> By: Atul Rai http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-4149 Atul Rai Fri, 17 Oct 2008 04:16:15 +0000 #comment-4149 The basics of human society, and hence, business, dont change. what is changing is that the things are happening at a much faster speed today than they every have in the past. This continues to remind me of the title of the book by Bill Gate ... Business @ the speed of thought. This, of course, in addition to the "short circuiting" that social computing is doing ... the "voice" is there with more and more people. Hence, more and more people are in a position to be heard. The basics of human society, and hence, business, dont change. what is changing is that the things are happening at a much faster speed today than they every have in the past. This continues to remind me of the title of the book by Bill Gate … Business @ the speed of thought.

This, of course, in addition to the “short circuiting” that social computing is doing … the “voice” is there with more and more people. Hence, more and more people are in a position to be heard.

]]> By: Brian Gillooly http://andrewmcafee.org/2008/10/what_else_happened/comment-page-1/#comment-4154 Brian Gillooly Thu, 16 Oct 2008 18:34:46 +0000 #comment-4154 I know you're looking for what *else*, but first wanted to comment on one of your three: I agree IT is probably the biggest new factor, but specifically how IT is enabling the customer to influence the manufacture, pricing, inventory, delivery, and support of products and services (we've called it Customer Centricity 2.0). I could go on for a while about details, but essentially, IT and in particular Enterprise 2.0 technologies have enabled customers to gain greater access to -- and interact with -- company information, not to mention supply their own feedback. That has sped up product cycles and revved competition (particularly because customers are now more fickle and are only a mouse click away). There's so much more to this, but just wanted to mention that. The factor I'd add, which is related to your second point, is globalization, which of course is fueled by IT as well. Not the emergence of new geographies into the world of capitalism, which you already mentioned as your second factor, but the globalization of companies. The competition for tapping into new markets, the competition for resources, and the competition for labor have all contributed to an intensity in business that we hadn't seen previously. I know you’re looking for what *else*, but first wanted to comment on one of your three: I agree IT is probably the biggest new factor, but specifically how IT is enabling the customer to influence the manufacture, pricing, inventory, delivery, and support of products and services (we’ve called it Customer Centricity 2.0). I could go on for a while about details, but essentially, IT and in particular Enterprise 2.0 technologies have enabled customers to gain greater access to — and interact with — company information, not to mention supply their own feedback. That has sped up product cycles and revved competition (particularly because customers are now more fickle and are only a mouse click away). There’s so much more to this, but just wanted to mention that.
The factor I’d add, which is related to your second point, is globalization, which of course is fueled by IT as well. Not the emergence of new geographies into the world of capitalism, which you already mentioned as your second factor, but the globalization of companies. The competition for tapping into new markets, the competition for resources, and the competition for labor have all contributed to an intensity in business that we hadn’t seen previously.

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