Enterprise 2.0

I read a recent McKinsey interview with Andrew McAfee, Enterprise 2.0 Impresario Extraordinaire, and was rather struck by the similarities to two bygone eras:

Firstly, on Implementation, the fight between bottom up and top down :

....the debate is typically between people who advocate [a top-down approach and those who
advocate] almost a purely bottom-up approach—in other words, deploy the tools, stop worrying about what’s going to happen, and get out of the way as the management of the company and let it percolate up from down below. Or, if you hear about a grassroots effort, encourage it, support it financially, but, again, get out of the way, let the bottom-up energy happen.

The other school of thought says that you need some top-down energy, or at least
signaling—that this is appropriate, we want this to happen, this is in line with the goals of
the organization. And the top-down school of thought says if you don’t have those signals
from the top of the organization, people are going to sit on the fence for a long time and
they’re going to wonder if this is a worthwhile use of their time, if it will increase their
human capital in the organization or not. And until they have clear answers to those
questions, they’re going to do nothing, or they’re going to sit on the sidelines.

I have a lot of sympathy for both approaches. I find myself agreeing more with the topdown
crowd, though. We know how important it is for management to create culture and
to signal what’s valued inside the organization. These tools are not an exception to that; I
think they’re a great example of it.

I'd agree - near 40 years of experience of system implementation (20 of which I've been around in) tells me that top management support is crucial for anything bigger than a few pilots (and I was around in the early "sneak a PC and a LAN in days)

Secondly, on justification of the project he notes a number of old saws:

- Another failure mode [the first was "build it and they will come"] is to be too concerned about the possible risks and the downsides. If we get wrapped up in those, we’re not going to take the plunge and actually deploy any of these new tools and turn them on and encourage people to go ahead.

- A lot of them [CIO's] see their roles as essentially conservative, though. In other words, “My job
is to not increase the risk profile of this organization before everything else.” That’s a legitimate concern, it’s a legitimate job for the CIO, but all my experience so far tells me that Enterprise 2.0 doesn’t increase the risk profile of an organization.

- I haven’t come across people who have done our old-fashioned technology ROIs1 and are happy with it. What I’ve seen instead is organizations that do a bit of thinking about: What do we want to have happen? What business need are we trying to address? What challenge, what opportunity, are we trying to seize here? And then think about which exact technologies they can deploy to help them with that.

My worry about these - conservative CIOs, boring beanies wanting ROI, careful company men - are that they are the standard saws of the vendors trying to knock down perfectly rational client concerns. As he does admit, it is their job to do so. And everybody's been through Web 1.0 where they heard all this before and those that drank too muck Kool Aid got washed away.

As a parting shot, there is also a lot of breathless hyping of the benefits, very little is heard about the downsides of having all your employees connected al the time. The last wheeze in this gig was "Employee Engagement" (see Dilbert cartoon above) and the easiest way to guarantee failure of Enterprise 2.0 is to give people the feeling that this is just a way of getting all those brain cycles they currently spend elsewhere harnessed to the Corporate Mill.

The latter part of this week I had an experience which I thought was quite an interesting use case for the Government 1.0 to 2.0 transition, ie exception handling. In a nutshell, I had to pay the road tax on my car. This, in the flow of things, is a fairly simple process. You take a renewal notice for the car or its ID document, go to the post office with evidence of insurance and its MOT (roadworthiness certificate) and Bob's your auntie. You can even do it online.

Except if you have moved house. In that case, you have to send in a part of the car's ID document, you get a new one back, so even if you do not get a renewal form in time, you can use the ID document to prove the existence of the car. You with me so far?

So where does this go wrong - simple, for some reason the new car ID document hasn't come back. Nor, for some reason, do we get the renewal notice this year. Something has clearly gone wrong. But the car needs its tax disc as a legal requirement to use it, the police start hauling you off the road and fining you if you have last year's (the tax disks have different colours year by year and very big numbers telling you what year it is, so its very visible).

If this case occurs, you then enter Kafkaland.

The DVLA (Department for Vehicle Licencing Annoyance) may have messed up the paperwork trail, but it now becomes your problem. You are no longer allowed to register online, as you don't have the requisite documents. The nearest DVLA office is miles away, so off you go to the post office, armed with the photocopy you took of your original form. This was allowed the last time we moved, a few years back - in fact it was the recommended approach.

Except that the Post Office has now decided not to accept photocopies of the original any longer, nor do they accept the remainder of the form that you have kept as evidence. In short, if the DVLA messes up returning your new car ownership form, you cannot tax your car, and you will be fined etc. You wind up in bureaucratic limbo because the Online and Post Office systems no longer recognises forms that were once deigned sufficient, and the process has not been updated. A long (hour plus) drive to the nearest (hah!) DVLA office beckons. A process that would have any jobsworth swelling with pride.

Except, we found a solution - human intervention. Our local post office is in a corner store, the lady who runs the store knows me. My car is parked outside, I show it to her, and she makes an executive decision to disentangle the Gordian system by granting me my tax disk on the basis of my photocopy and kept half of the ID (after the handing over of the money of course) so I can avoid the long arm of the law, and I can now chase the DVLA to find my lost change of address Car ID form at my leisure.

The lessons for Government 2.0 from this?

(i) You can't automate existing workflows, this process could not be solved online. Existing "Social" technologies on their own didn't solve this, I had long arguments with jobsworths over phone and post office counter, so it is unclear how new ones would do any better.
(ii) There has to be a continual stress test process - when you are mashing up multiple systems in a workflow and some later change their own policies, it will cause problems. The System has to accept that their own systems may have problems.
(iii) There needs to be "human over-ride" when The System is broken in these cases, rather than the default "user is wrong" assumption.
(iv) There needs to be a way to represent social capital - the postmistress knows me, and judged I wasn't trying to cheat the country in any way. The "system" as it stands is blind to an ordinary citizen frustrated by its rigidity, and a bad person trying to subvert it. There are far more of the former of us than the latter. There were multiple instances of my ownership good intentions that I have on paper (Proof of past payment, other proofs of ownership etc), but the system cannot see them.

Anyway, that was what a simple car tax disk renewal taught me.......

A few days ago we were looking at Augmented Reality (AR) and thinking about the potential of the emerging early plays, and how most of the ideas were old* (how many times has the "find a great restaurant in the neighborhood that you can visit" use case been used to flog dodgy mobile apps in the last 10 years?), but the combination of smart phone and big, cheap(er) bandwidth has now changed the dynamic. However, one curious thing struck us - there was virtually nothing in the literature about Augmented Reality for Enterprises (most under that term in Google are Star Trek based, and the most prominent article searched under "Augmented Reality for Business" was written in 2001, for example.

Anyway, what followed was a bit of mental freewheeling which I thought I'd put down here, to get others' creative thoughts flowing. So, in some semblance of an order:

Why AR Now?

Combination of the penetration of increasingly smart phones with various types of sensor (GPS, Camera, motion detection etc) plus good coverage of high bandwidth at increasingly affordable costs drives a "tipping point". Potentially.

Why AR for Enterprises?

Enterprise AR already exists in early forms - the Helpdesk person who has access to a lot of supplementary customer data is using an early form of AR. Some field service apps have online access to extra data. Also, RFID sensors and suchlike have been "augmenting" the ERP and CRM systems' data for some time.

Consumer AR seems to be purely mobile based - is this how Enterprise will go?

No, and its probably not even how consumer service AR will go, for 2 reasons:

- AR is not purely about mobile phones: Laptop ownership is still high compared with smartphones, and netbook ownership is rising fast. The mobile screen still has a tiny real estate, so risks AR clutter (and thus massively reduced utility) very quickly. Netbooks, Tablets and even smarter e-Readers are potentially powerful platforms for AR applications

- AR is not purely about physical location: The "great restaurant" use case is a mental trap. Enterprises have huge ecosystems all of their own, partly physical (in office) and partly structural (who is doing what) - much of this data could be used to "augment" reality. (There is an amusing piece in Pattie Maes' TED demo of Sixth Sense where it projects the data about a person onto their T shirt for the device user to read )

.

Where will early Enterprise AR applications be used?

Early applications of similar types of technology have in the past been deployed first among staff away from the office - salesmen, drivers/deliverymen and field service staff. Next up has typically been staff requiring data but not at a desk - shop floor, warehouse, front of house etc. One could also imagine "reverse AR" devices which are more dedicated to picking up AR data in other companies' sites when one is visiting them.

What about RFID?

RFID will be a key component of Enterprise AR as a lot of the AR will probably be about taking and interpreting data from RFID systeme (and other simpler forms like Bar Codes). This could be one of the main differences between Enterprise and Consumer AR, in that consumers by and large won't deploy RFID infrastructure (though we can imagine businesses that will, specifically to feed consumer AR data applications)

What's the Business Case?

As with all information handling tools, a combination of faster/better information has a number of knock on impacts, typically around:

- Better customer acquisition
- Potentially, better knowledge allows better upselling
- More effective/timely service and help reduces dissatisfaction and churn
- Operating cost reduction via higher labour productivity' less waste (lean operations) etc

Which Industries will deploy early?

Probably those with large numbers of staff outside the office, and where the responsibility / value of those people "getting things right" is high. Also, potentially very large enterprises where it is impossible to meet everybody in the normal course of events.

What sorts of systems will be deployed?

Probably a combination of systems with new and useful metadata in them, plus ones with interfaces to older company systems that extract and re-present the existing data in more usable ways. These new systems will have to be partly online and near real-time to be most useful. One of the issues will be security as multiple formats and data sources will need to be accessed (unless the whole service is a walled garden) so we would expect layered apps with various levels of access

How does this square with Enterprise 2.0?

To us, Enterprise 2.0 thinking at the moment seems to be taken up too much with the social network aspect of Web 2.0, and the other vectors have been largely ignored. This is more part of "Olde 2.0" - about getting useful data collated above a single device rapidly to the point of use. At the moment, most "Enterprise 2.0" implementation is of blogs, wikis and social media front ends - these will be datastreams into the AR, but will need judicious filtering. (In fact we predict that filtering will be a major growth technology in enterprise and consumer AR)

*Most of the AR apps emerging today existed in some form 10 years ago at MIT and other R&D labs around the world. What has changed is the application of Moore's Law over 10 years and rational data pricing behaviour by mobile companies

The McKinsey Quarterly has published an interesting survey of about 1,000 respondents' use of Web 2.0 techniques. To be sure, the sample is somewhat self selecting (ie Web 2.0 laggards are less likely to participate) but in a way that makes it more interesting as its what the front runners are doing and what they find works. The chart above shows what people are doing (I'd slightly retranslate it to "are trying" though, I'd doubt that much of this is deeply embedded based on our experience). Results so far are:

The median level of gains derived from internal Web 2.0 use ranged from a 10 percent improvement in operational costs to a 30 percent increase in the speed at which employees are able to tap outside experts.

The results are to an extent an indication of where most technologies have been tried to date - in the overall Marcomms areas rather than deeper in the operations of the business, and as such report the reduced transaction costs and lead times of information flow. The 30% number is interesting - the problem with information flow today is it is hard to put a direct economic benefit to it. Although everyone knows it helps maximise the utility of a business's assets, its often hard to cost justify in a stand alone way (just ask the Knowledge Management industry). I recall many years back when Japanese companies started using Just-In-Time methods, western companies found it very hard to justify as they didn't have the economic/accounting techniques to correctly value it until they started to cost low quality, inventory and opportunity costs correctly (and fully). This strikes me as a similar issue today - we just don't have the metrics for the white collar / knowledge economy equivalents yet. This is borne out later in the report, where of the most deployed types of Web 2.0 technology - in order of benefit Videos, Blogs, RSS, Social Nets, Wikis, Podcasts all glean over 1/3rd of users claiming some benefit - of these only Video, Wikis and Podcasting report substantial differences between those finding some benefit and those finding none (Social networking seems to be effective in customer handling but little benefit elsewhere - which surprises me a bit, as we have seen success in post sale support as well - but then I think we are rare in that nearly all our Web 2.0 work in non-Marcomms and I know we are in a minority there)

Other highlights from the report are:

Comparing respondents’ industries, those at high-technology companies are most likely to report measurable benefits from Web 2.0 across the board, followed by those at companies offering business, legal, and professional services. Companies with revenues exceeding $1 billion—along with business-to-business organizations—are more likely to report benefits than are smaller companies or consumer companies. Among functions, respondents in information technology, business development, and sales and marketing are more likely to report seeing benefits at various levels than are those in finance or purchasing. IT executives, in general, are more focused on using Web tools to achieve internal improvements, while business development and sales functions often rely on the technologies to deliver better insights into markets or to interact with consumers.

Regionally, respondents in North America and India are most likely to claim that they are reaping benefits from their companies’ use of Web 2.0. These respondents also report higher levels of technology usage in general. Respondents in North America and China report the highest customer benefits.

Which makes me wonder about us Europeans - are we more Luddite, or just less inclined to bullsh*t? If I look at where the hype comes from, I am tempted to assume quite a bit is from the latter...... tangible benefits I would subscribe to are:

Respondents reporting measurable benefits say their companies, on average, have Web 2.0 interactions with 35 percent of their customers. These companies forged similar Web ties to 48 percent of their suppliers, partners, and outside experts.

In addition, nearly all respondents say that their global penetration has gone up (this being a 2 edged sword if your competitors are also in the game of course). It is easy to be sceptical on these fairly nebulous early results. Those of us who play with these technologies know how powerful they can potentially be, but it is clear that deployment is non trivial.

Many companies experiment with Web 2.0 technologies, but creating an environment with a critical mass of committed users is more difficult. The survey results confirm that successful adoption requires that the use of these tools be integrated into the flow of users’ work. Furthermore, encouraging continuing use requires approaches other than the traditional financial or performance incentives deployed as motivational tools.

But, if we are looking for radical performance improvement, it is going to come from this overall area of information networking and management - replicating technology is relatively easy, replicating the workflow is non trivial but possible - these can be seen and copied. But for a competitor to see the information flow, meme transfer etc is very hard. (An aside - we are doing a workpiece on "Radical Innovation" and looked at wartime as a time when it is literally Innovate or Die to see what lessons can be learned. If I may generalise, whenever you see a radical difference in kill ratios between opponents with roughly similar weaponry, and once both sides are experiened veterans, the 80/20 difference is almost always in information flow. We would suggest that the same is true for enterprises)

Day One of the Telco 2.0 conference, and the New Thing that has hit me is the emerging importance of Real Time Systems and the Internet of Things - here are my notes in point form as aide memoire (will fill in with names of guilty later):

The Terasumer and the Internet of Things

- A billion consumers, a trillion devices - say hello to they Internet of things

- Role of cloud vs device - the differential between processing power on edge vs in net is rising fast - Cloud can never keep up.

- Nokia - 12% of use of n series Is for telephony, 50% for Internet , rest for various other

- There will be major shift as smartphones - aka mobile computers - hit home. Lots of spare cycles to do stuff, Lots of sensors on these devices will mesh/manage IOT.

- These devices will be clients and servers, and will be net-aware. Web 3.0 will be contextual, not social

- (Related) The netbook revolution has just started, has a long way to go

- Move between online and offline worlds, driven by participation/sharing systems by devices with spare cycles

- The new end device revolution will be in the home device Market. Home ecosystem is too complex today, big opportunity to build open ecosystem

Online, On demand, Realtime is the future - off portal trends will accelerate:

- Need to personalize my devices for me, how best to do this ? Smart algorithms and tracking, plus type guessing

- Smaller and smaller customer segments. One can invest in predictable outcomes. - the digital generation has predictable behaviours

Location is a part of the new OSS

Privacy trade off for efficiency is higher priority on mobile - give user control to get accepted, be clear, don't cheat in the small print

- Cradle to grave ownership of your data is the endgame - but who will aggregate it?

- Real time online payment is the new OSS Holy Grail- real time policy mgmnt allows real time pricing and billing.

The emphasis on realtime has been fascinating, its clearly seen as one of the "post Freeconomic" ways that can be used to extract extra revenues from customers and suppliers.

A piece by Neville Hobson commenting on a post on RWW talking about the Death of Enterprise RSS asks:

...the fact is that RSS has not captured corporate imaginations. What do you think will be the trigger, the tipping point if you like, that will make decision-makers within corporations sit up and take notice?

In fact, this probably marks the tipping point when it comes to life - when publications like RWW start to proclaim the "Death of X" it probably means its started to slide down from the "Peak of Inflated Expectations" on the Hype Curve, down into the "Slough of Despond", and from that point on it becomes increasingly useful.

Actually, in the RWW comments section there are a number of helpful pointers to RSS's future in the Enterprise - Eric Brown notes:

When it comes to RSS readers, we've got to look at the enterprise itself and ask the following questions:

Does IT want users installing yet another software product?

Probably not. Microsoft Outlook is fairly standard in most large organizations. When people have to subscribe to internal / Enterprise RSS, IT staff will normally chose an existing application (Outlook) to read RSS.

Do users see the value in the RSS feed?

Many people still don't understand RSS. I've yet to run across an organization that puts really valuable information on an RSS Feed. If there is no valuable information on the feed, why subsribe? Hence...the reason Enterprise RSS is dying/dead

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And this post from Nigel Hall

I think the more pertinent point is, where is the use of RSS as a technology within the enterprise.

Obviously, outbound marketers are starting to use it to syndicate messaging via blogs and corp web sites. However, I suspect inbound use is beginning to pick up. My evidence for this is purely anecdotal, as I haven't worked in the enterprise for quite a while, however, for the past couple of years I've had tangential connections to Microsoft SharePoint projects. These are only just starting to roll out in the enterprise - It takes big companies forever to change how they do things (the proverbial business processes), but once an idea takes hold, change can happen quite quickly.

I think Microsoft SharePoint could be the killer app for RSS in the enterprise. SharePoint has RSS built in and uses it to syndicate changes that happen within the SharePoint ecosphere and notify enterprise workers that something significant has happened. Of course, SharePoint RSS could work with third-party RSS readers, but it's really designed to be used with Microsoft's Office Suite, where enterprise workers can interface with SharePoint, through RSS and other means, directly.

And from another commentator called Jon:

Looking at Newsgator & Attensa, these are expensive enterprise tools and trying to sell them to IT managers that don't fully understand RSS is next to impossible. Imagine saying to a CIO, who barely understands what RSS is, that you need $175,000 for Enterprise RSS software... it isn't an easy sell.

As someone who is responsible for bringing these tools into a large enterprise, it's taken a year just to explain & sell blogs, wiki's, etc. We're starting with lots of Open Source tools, and then trying to sell a huge expensive tool from one of these vendors is not easy. We're in the process of rolling our own, not because we want to, because we just can't get the funding for one of these products.

You get the picture - overpriced products, low practical utility, doesn't fit into existing system stack and the existing "good enoughs" do the job as well as the early RSS systems. Enterprises change slowly and tend to use technology when it has some form of track record - the risks of implementing unproven stuff are usually too great unless the situation is dire or an emergency, or the business benefits are too great to ignore - none of which apply in RSS's case.

But I suspect, as the last commentator notes, that many companies have been quietly playing with RSS and finding what works, and the trigger that Neville is looking for is The Crunch - where RSS genuinely saves time and money it will be used. If it has no benefit over say extending email to adopt the key features, it will be exposed and rejected.

McKinsey on the growth of the Data Crunching Web and its energy impact:

Companies are performing more complex analyses, customers are demanding real-time access to accounts, and employees are finding new, technology-intensive ways to collaborate. As a result, demand for computing, storage, and networking capacity continues to increase even as the economy slows. To cope, IT departments are adding more computing resources, with the number of servers in data centers in the United States growing by about 10 percent a year. At the same time, the number of data centers is rising even more swiftly in emerging markets such as China and India, where organizations are becoming more complex and automating more operations and where, increasingly, outsourced data operations are located. This inexorable demand for computing resources has led to the steady rise of data center capacity worldwide. The growth shows no sign of ending soon, and typically it only moderates during economic down cycles.

And as they show, the power consumption will be no small contributing factor to the Greenstrain on the planet:



Solution - First address the wastage:

Within one media company, almost a third of the nearly 500 servers we analyzed had utilization rates below 3 percent, and nearly two-thirds were below 10 percent. This company used none of the number of readily available management tools for tracking use. On a global basis, we estimate daily server utilization generally tops out at 5 to 10 percent, wasting both energy and employed capital.

Second, forget about the need for New Green Centres, just sort out what you have first:

When we began our research, we expected to find that building new energy-efficient data centers would offer the best hope of reducing their cost and carbon footprint. New facilities could take advantage of current technologies that make use of natural cooling and of power supplies that produce fewer emissions. However, we also learned that the most dramatic reductions in cost and carbon emissions come from improving the low efficiency of data centers that companies already operate. Through better management of assets, more accountable management, and setting clear goals for reducing energy costs and carbon emissions, most companies can double IT energy efficiency by 2012 and halt the growth of their data centers’ greenhouse gas emissions. Indeed, the greenest data center is the one that you don’t have to build.

Thirdly, stop drinking the Freeconomic Kool Aid and stop lying to yourself about "Data being too cheap to meter"

In many organizations, data centers are treated as buckets waiting to be filled, rather than as scarce and expensive resources. To combat this tendency, companies can adopt true cost of ownership (TCO) accounting when estimating costs for new servers or additional applications and data. Lifetime costs of running applications and operating servers are rarely included in spending decisions by business units, software developers, or IT managers. Building them in upfront can help limit excess demand.

Finally, give the problem and its management to someone who has an overarching view.....

We suggest a new governance model for managing data center needs, with full responsibility and accountability falling to the CIO. Under such a regime, the CIO would have much greater visibility into the data demands of business units and could enforce requirements that energy consumption and facilities costs figure into return-on-investment calculations for new data projects requiring additional servers or software applications. We also suggest that CIOs employ a new metric for measuring progress. With sharpened accountability, the CIO will have greater incentive to seek improvements, such as virtualization and better use of existing facilities.

...because if you leave it to "empowered individuals" they will suboptimise, f*cking up the companies profits and the planet at the same time:

Frequently, managers purchase excess devices to guarantee capacity in the most extreme usage scenarios, creating large amounts of excess capacity. And managers often build facilities with excess floor space and high cooling capacity to meet extreme demands or all expansion contingencies.

Multiplied across an organization, these decisions result in both costs and environmental implications.....Within the organization, managers optimize for their own interests, resulting in the inefficiency observed in most data centers. In many instances, only a single software application runs on a server.

Thats puts the kibosh on a lot of Enterprise 2.0 dreams then, which rely on departmental subversion - nixed cos it ain't Green .

I note that McKinsey did not cloud the issue with Cloud computing either, using the term "virtualisation" which I prefer - because that is really all you are trying to do in creating efficiency - how yu do it is tactics, and it clarifies the issues. In fact, McKisey is suggesting there is a long way to go for exsting companies before they need to consider any form of outsourcing at all

People are lining up to kick Jerry Yang as he departs Yahoo's top spot, this is typical (from the NYT):

The announcement comes a year and a half after Mr. Yang assumed control of Yahoo from Terry Semel, a Hollywood studio boss that he handpicked for the job. Mr. Yang’s tenure has been marked by a precipitously declining stock price and the high profile collapse of a $44 billion acquisition offer from Microsoft last spring.

“It’s definitely positive from a shareholder perspective,” said Ross Sandler, an analyst at RBC Capital Markets. “Jerry has done less than a stellar job after taking the reins from Terry Semel last year, not just completely botching the Microsoft deal but with poor execution and multiple company restructurings that have done little to restore confidence of any of Yahoo’s shareholders, employees or customers.”

Amazon and Google, of course, who are admired by all as an exemplar of great management and flawless execution, has fared nearly exactly the same:



Yet (as of today anyway) no-one is calling for Messrs Schmidts or Bezos' heads or publicly stoning them in blogland.

They, of course, are merely struggling under adverse market conditions , but clearly - from what the blogosphere and the less financially savvy journalists say anyway - Yahoo's decline is all due to Jerry. Sack him and Yahoo could surely have defied global economics and seen its share prise rise while all about it fell. I await this phenomena now he's gone with eager anticipation!

One of course could argue that they should have sold to Microsoft 6 months ago - a great idea in hindsight, because of course everyone knew the crunch was coming, right? Right! But Yang, imho not unreasonably, felt that the business was worth more than a breakup price. Not only that, but one suspects that Microsoft would no doubt have tried to negotiate as the market dropped - these sort of deals are not sealed on the day.

From Silicon Alley Insider:

Forrester Research says the financial sector's troubled firms (Lehman, Merrill, Bear Stearns, AIG, Fannie, Freddie) all together equal about 2% of tech spending. Given Forrester sizes the US tech market at $572 billion, that's about $11.4 billion dollars at risk.

That 2% puts things into perspective, though the knock on effects would make it bigger than just the immediately effected business, as SAI goes on to note quote Forrester CEO George Colony:

The biggest risk to the tech market comes, not from the Wall Street collapse, but from a collateral U.S. recession. Forrester expects a mild recession in the U.S. and Europe lasting through Q3 and Q4 of 2008, and Q1 of 2009. While tech spending grew 8% in the U.S. in 2007, we are forecasting tech purchases to be up 5% in 2008, and up 6% in 2009.

SAI notes that the government bailouts are keeping some of those firms and their billions of dollars in tech spending alive. And even in death banks like Lehman and Merill spur Wall Street IT spending. Colony again:

the rigors of mergers and integration could also be drivers of new tech spending. Bank of America, Barclays, and JP Morgan have 36 months of intensive technology integration work ahead -- this will drive professional service, software, and to a lesser extent, hardware spending.

As SAI notes:

Translation: Bank of America took over Merrill, and Barclays bought Lehman's data centers. The work to get technology and enterprise systems like general ledger and human resources under the same umbrella can be a bonanza for tech consulting firms like Accenture (ACN) or HP's (HPQ) EDS.

True, and thats not really a spend that New Tech will see - unless the Enterprise 2.0 movement can persuade these players that there are significant benefits to adopting new technologies during rationalisation.

Sorry, no real conclusions yet, this is just an early datapoint. This is a big thing we are seeing happen, and it will take some time to play out.

Saw this on the WSJ stream via Techmeme: yet another refrain about the End of CIO's as you know it, this time from Rebecca Wettemann, an analyst at Nucleus Research:

There was a time when IT departments could get away with forcing employees to use complicated and hard-to-use software. The average worker didn’t know that better alternatives were out there. But as workers gain experience with consumer-focused software – either in their personal lives or at the office – they’re starting to realize that software can be easy to use and quick to get started on. It started with productivity boosters like instant messaging and collaboration software, but it’s crept into the realm of software that’s traditionally the realm of IT departments, such as sales automation.

“No CIO is going to tell me that [a software project] is going to take 12 to 18 months,” Wettemann tells us. Workers will just find an alternative on their own.

Thats cool - one hopes that the workers will also find ways to integrate it with all the other systems in the enterprise, and maintain and fix it on their own too, and take responsibility for the updates and all the re-jigging required when another system updates itself. (And will decommission it in 6 months time when the next New Shiny Thing comes along )

I didn't think so.......

This sort of reporting makes this interesting assumption that "user delight" rather than "does it work" is the key determinant of a CIO's continued employment,. What people like Ms Wetteman don't get (one suspects because they have little experience of actually running any big IT operation) is its not the User Presentation Layer that is hard to do - which is why N thousand Web 2.0 startups running on shoestrings are blooming. The hard thing is integrating the many complex components at the infrastructure level. A CIO is not fired if the users think an interface is clunky - a CIO is fired if the critical systems don't work.

But, CIO dinosaurs clearly needs to get their priorities right:

An IT pro’s “job is to pay attention to what is going on out there with the humans in your organization, not the servers", and...

Managing tech equipment and maintaining older systems will become decreasingly important. Identifying the best new tools early on and figuring out how to get them into the hands of the people they’ll benefit will be the more important skill.

Actually, that is exactly a CIO's role - with the underlying proviso that it all has to work. One is tempted to see what decisions Ms Wetteman and her ilk would make re rate of adoption of shiny new things if they were actually put in charge of running a company's IT, and their jobs - and reputation - depended on it.

(Afterthought - that is not to say that better user interfaces are not a good idea, just that they are not a first order priority - consumers, on the other hand, are initially far more "sold" on system UI rather than capability, hence the huge emphasis on that area in consumer systems. There is no doubt that the newer "stuff that works" will be brought into the enterprise, but it will be on a more careful, more selective basis.)