The reality is that we have been using cloud services for years without knowing it, without calling it the cloud. Anyone who has ever signed up for Gmail, Webmail or Yahoo! email account has used a cloud-hosted email account – where your email service is not stored and kept primarily on your computer, but accessible on the internet wherever you are. And if you think that didn’t apply to you, don’t forget that your Blackberry is also a cloud-hosted email service stored and kept on one of Blackberry servers. The cloud is far from new – it’s been here for a while already and is spreading to all areas from data storage to office telephony and communications.
How did we get here? Why are here?
Way back when, with the advent of computers, it was the companies that wanted to get ahead, that invested in information technology such as computers, word processors, internet, servers in the back room, email for all staff, because the extent to which the business could use IT in order to operate more efficiently and quickly was a crucial differentiator. At that stage, you could make your company more competitive by applying technology to your various work processes and gain a march against your competitor who didn’t do the same.. This is no longer the case.
Now that IT services are much more readily accessible, it is no longer a differentiator but rather an essential cost of doing business. It’s now a commodity service like having running water in a building. And this is how the winds of change blew in the ‘cloud’. As with anything that becomes commoditized, the focus shifts to how the service can be improved – to be more efficient, and be better and even at lower price points.
We have seen this before
These kinds of shifts have happened before. As Nicholas Carr pointed out his book, The Big Switch, about a hundred years ago every business had to produce their own electricity to power their operations – this enabled them to get ahead of any other business that was using more primitive sources of energy at the time. Eventually, there were industrial advancements that enabled electricity to be transmitted over long distances and you didn’t have to create electricity in your backyard to have access to it. Major electrical companies emerged to provide this utility and it ceased to be a differentiator and it became a commodity. Businesses didn’t have to do this for themselves and it ultimately made them more efficient as they could focus on their core business instead of worrying about how to generate more electricity – if you are making clothes or furniture, why bother being an electric company for your own needs and build expertise in that if you don’t need to?
The impact of this shift was profound. Not only could businesses focus their resources on their primary business, but it also opened the door for smaller-scale businesses that had previously not been able to generate their own electricity. And then products and services that exploited this easy access to electricity became commonplace over time – televisions, vacuum cleaners, photocopiers and almost everything you can think of. This created whole new industries and ushered in the modern world as we know it.
The new kind of power plants
In the shift today, we see a new kind of power plant emerge: computing plants that will ‘power our information age the way electric plants powered the industrial age’. Computing power and utility can be generated in plant-like data centres – the cloud – and delivered to business and individuals through the internet. Just as the shift to centralized power plants did, cloud-based services will enable us to operate at greater levels of efficiency than ever possible before, making computing applications a ‘cheap and universal commodity’.
We have already noted the use of email services in the cloud as an example. And it doesn’t end there. It is no longer necessary for companies to have back rooms to host large servers on their premises; servers of even greater power are accessible on the cloud through services like Amazon’s EC2. We can back-up all the data on our computer through cloud services like Dropbox that perform the back-up automatically.
Before the cloud, the only way to manage office communication and calls was to buy a big box PBX system – now an entire PBX service can be hosted in the cloud and easily manageable online, with only a phone connected to the internet in your office or home to make and receive calls. Even office telephony will be significantly improved through the cloud; from the portability that comes with the cloud (accessing your office telephony system wherever you are, connecting multiple branches, home and mobile workers); to the lower entry barrier where any business no matter how small can access a full featured PBX service without a high capex cost.
The cloud is not hype as it is already self-evident and motivated by factors that are almost unstoppable – the efficiency of operation being primary. Why bother maintaining a server room or a telephony system when it is not your business’s core function? Surely the only services that should be maintained in-house, that a company should take on the cost of ownership for, should be those that give a business its competitive advantage over others – and not support services like email, telephony, data storage, servers and such like? In answering these questions, cloud-based services will undoubtedly shunt us into next age.
A Short Cut For Corporates To Digital Innovation: Start-ups
Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.
If there is one anathema in corporate culture, it is failure. With profit to be made and share prices to increase, failure is simply not an option. And yet, when listening to stories about success in the digital space, failure is there to put one on the right path to success. The phrase ‘Fail fast, Fail often’ is often bandied about, and innovation can be seen as a constant process of iteration, test and failure, repeating this until a well refined service or product is on the table.
Many corporates are waking up to the uncomfortable fact that at a structural level, the type of innovation required to grow in today’s digital landscape, is out of their reach, at least when trying to come up with it internally. So what to do? Charlie Stewart, co-founder and CEO of Rogerwilco shares his advice for turning to start-ups for solutions.
1. The start-up solution
Corporates comfortable in the digital space – Apple, Alphabet, Facebook and Amazon – have been buying startups for years, and now companies are realising that when it comes to Blockchain, artificial intelligence and machine learning, they need to turn elsewhere. And they are. Matt Garratt, Vice President of Salesforce Ventures noted that of the roughly 1500 tech acquisitions Stateside in 2016, half of them were bought by non-tech companies, showing that buying a start-up is a quick way to acquire new technologies, skills or patents.
But purchasing a company with a fully developed product can be an expensive and often risky play. Instead we are beginning to see a trend where corporates are framing agile startups as solution providers, offering them seed funding to come up with answers to digital headaches.
In the US, defence contractor Lockheed Martin has turned its investment strategy around, focusing on young startups instead of more mature companies. In the region of $20 million was ploughed into startups in 2017, helping Lockheed Martin to get a slice of the pie in fast moving spaces such as cybersecurity, autonomous vehicles and nanotechnology.
2. Outsourcing the problem
For corporates turning to start-ups, there are two benefits. Firstly, by doing so companies are casting their net a bit wider, with not only more eyeballs on the problems but, importantly, without the restraints of the corporate boardroom. There is more out-of-the-box thinking involved, no internal politics to worry about and far less of a threat of somebody’s career being jeopardised.
Secondly, if a start-up comes up with a solution, investing in the fledgling company can be cheaper than purchasing one with an established solution. If a buy-out is on the cards, it is less risky too since the due diligence process has been worked through and cultural challenges have been ironed out.
But not all start-ups actually want a buy-out. Some rather prefer access to market and skills transfer, especially around the commercial side of business. Yes, they do need investment, so companies can provide them with a proof of concept to take their idea forward, or potentially a more structured form of investment in their business.
3. Cape Town: the start-up hub of Africa
Locally, Cape Town can be seen as the tech start-up hub of Africa, and is certainly a good place for corporates to start sniffing around for that digital innovation golden ticket. Events such as last year’s AfricArena conference proved that Cape Town can be a fruitful hunting ground. 80 start-ups from across Africa attended the inaugural event, and were tasked to find solutions to problems provided by corporates beforehand. Air France, for example, was looking for innovative mobile solutions, the City of Cape Town wanted to see how technology can be used to improve the tourism industry, while RCS asked for a loyalty programme to match a new credit programme.
By all accounts the event was a major success, connecting start-ups with corporates and investors, both attending the event and dialing in. The winner of Air France’s challenge, mobile payment solution provider WeCashUp, received multiple offers of investment and the project has moved on to the proof-of-concept phase.
4. The start-up lifeboat
Many companies need to face up to the fact that the current corporate structure they are working within does not allow for the type of innovation required to adapt to, never mind thrive, in a digital world. South African companies were perhaps sheltered from the digital tsunami that has eviscerated the analogue business world, but the wave has hit our shores. If it is innovation that is needed, it is time to turn to agile startups, far better adapted to a sink-or-swim digital environment, to come up with the solutions.
R&D: Compulsory Homework For Your Business
Why Research & Development are critical to your company’s future.
It’s one thing to develop a technology that everybody wants. It’s a completely different thing launching it, if the legislation or environment aren’t encouraging. Often, the result is companies who have grand ideas and little influence, and this is why it’s essential that you carry out in-depth Research and Development (R&D).
Defining market research
Market research is the gathering and analysis of information, so that organisations can better understand the market, environment, and demand for a new product.
The purpose of this data is to:
- Understand and advise on existing and upcoming business plans
- Develop new products and innovations
- Forecast new developments that could disrupt the industry.
This kind of insight helps business leaders to be educated on factors that can impact their businesses, ensuring robust, up-to-date bases for their decision-making.
The reason you need R&D
The success of a new product depends heavily on its impact on people’s needs. If it doesn’t add sufficient value, it’s not worth the investment. Because of this, your innovations must be in line with the legislative, economic, political, technological, environmental, and social requirements of the people you hope to sell them to.
How R&D has evolved
R&D ensures that your organisation stays viable and sustainable. You can approach it through organic growth, innovation, or a mix of the two.
However, in this new era of the Fourth Industrial Revolution and the Internet of Things, we’re seeing some significant changes to R&D spending. Because these days, people aren’t alone in their connection to the Internet – machines are there too.
In the future, the success of a product is likely to be determined by its ability to connect to the Internet; without that, it will become obsolete. Smart devices will also create new challenges for organisations, as they’ll require entirely new skills and approaches to business, if they are to grow and evolve.
Innovating through R&D
Innovation is not just supported by R&D; it’s also enhanced by it. It’s also affected by:
- Understanding consumer needs
- Your ability to innovate sustainably
- R&D partnerships that allow you to collaborate with others, so you can share the risks and costs of innovation, and speed up the various processes.
An open approach to R&D
One approach to R&D collaboration is through open innovation, where an organisation partners with another party. An initiative like this works well for technological advances, globalisation, and changes to comms technology.
A closed approach to R&D
The more traditional closed approach to R&D is where one company funds and contains the R&D initiatives. And it can be successful too, as long as the initiating company has well-defined and measurable input, throughput, and output.
R&D in an investment company
Sometimes the subsidiaries in a holding company experience poor communication, resulting in divided direction and unhealthy competition. Because R&D can be expensive and resource-heavy, an organisation-wide strategy must be implemented.
Then, when all stakeholders understand the potential ROI and the operational process involved in R&D, healthy competition and an educated understanding of customer needs can be maintained. This is, of course, the ‘win-win’.
R&D is essential to making relevant, strategic, and educated business decisions. And in our global economy, it’s a competitive advantage you can’t afford not to have.
3 Strategies To Implement A Culture Of Innovation In Your Business (Without Blowing Billions)
Learn to think differently, encourage your team to do the same, and innovative disruption could become a part of your company’s DNA.
You’re seeing it everywhere. Disruptive innovation is becoming the new norm, and you’re concerned that your business is merely going through the motions, missing opportunities.
How can you join the Elon Musks of the world, without the corresponding bulging budget?
It turns out that many of the techniques of today’s top innovators don’t require vast outlay. They’re simply about different ways of thinking.
Here are three strategies for enhancing the culture of innovation in your organisation without blowing billions.
1Use ‘Ignorance as strategy’
You’ve encountered the aphorism, ‘To a man with a hammer, everything looks like a nail.’ Similarly, to a banker, the only imaginable approach to banking is ‘the way banking has always been done’. When bankers try to think of innovative new ways of banking, they invariably think of greater complexity.
Along came PayPal
In the April 2016 edition of Harvard Business Review, Reid Hoffman, one of the founders of PayPal, said, ‘All the banking people knew the rules. That prevented them from trying anything that looked remotely like PayPal.’
PayPal was not invented by a bank, just as Uber was not invented by a taxi driver.
To make use of ‘ignorance as strategy,’ try this. Gather a group of strategic thinkers and set the rule: ‘The old way of doing it has been outlawed. How else might we serve the same need?’
Or: ‘We are now our competitors. We have half the budget, but our hearts and souls are invested in one purpose: To topple the original company. We can’t do it the way they do it. So how could we go about it?’
Or: ‘The company has burnt to the ground. We’ve lost everything. We need to keep serving our customers but we need a new, cheap, fast way to do it right now that doesn’t rely on any equipment or systems we used before. What have you got?’
2Use commander’s intent
Imagine: You’re a military commander. You need to move a convoy of trucks through a dangerous canyon. Your intelligence tells you that there is a sniper on one of the escarpments.
There are two ways you could issue an instruction to a soldier:
The first way: ‘Go take out that sniper.’
That’s very clear, and very good. But there’s something surprisingly important missing from it. The ‘why’ is not overtly stated, and for that reason, the mission could actually fail.
Let’s try it again the second way: ‘Go take out that sniper because we need to ensure safe passage through the canyon for our convoy.’
That may sound like a ridiculously obvious addition. Here is why it’s not: In a real, dynamic scenario, things change constantly.
Let’s say your soldier breaks off from the convoy and heads up into the mountains. Very quickly, three things go wrong:
- He can’t find the sniper
- Enemy forces start firing at him, making it difficult to look for the sniper
- His own weapon fails to fire so that he can’t shoot back.
If our soldier thinks only about the literal instruction — ‘shoot the sniper’ — he is now unable to carry it out. But if he bases his actions on the commander’s intention — ‘secure our convoy’ — other options open up to him.
He might draw their fire. He might set a bushfire. Or he might cause a commotion in a different canyon, disguising the movements of his convoy. He might, he might, he might… But only if he is absolutely clear on Commander’s Intent, and not working according to an explicit tasked item only.
Managers love to create detailed rules and procedures. But these can actually stifle innovation. Commander’s Intent is the life hack by which we get the upper hand again, freeing up leeway for creative potential.
3Instead of rules: Imaginative debate
Organisations accumulate rules over time. Problematically, rules can become a form of culture. And there is a better way.
When NASA faced two separate, well-known challenges, their culture at each stage was very different.
In 1970, Apollo 13 was two days into its mission when an explosion knocked out one of their oxygen tanks. The ensuing creative scramble to get the astronauts safely home is the stuff of legend. The creative trial and experimentation that went into rescuing them was formidable. New procedures were made up back on earth, then tested in the simulator, then relayed to the astronauts 200 000 miles away, almost in real-time.
Through this process of creative trial and experimentation, of collaborative inter-disciplinary debate, one by one the issues were resolved and the crew was brought home safely.
At this point in time, NASA’s culture was ruled by imaginative debate. It was an exploratory culture, an experimenting culture, a culture based on learning and evolution.
By contrast, at the time of the Columbia disaster of 2003, the culture of experimentation had given way to one of formalised rules, regimented procedures and rigid hierarchy. NASA had stopped being a learning organisation. It had become a bureaucracy instead.
As Columbia re-entered the earth’s atmosphere, a large piece of foam fell from the shuttle’s external tank and broke the wing of the spacecraft. The shuttle broke into pieces. NASA recovered 84 000 pieces from a debris field of over 2 000 square miles.
The investigation revealed some damning insights about the culture that led to the problem.
During a post-launch review, a group of engineers actually saw this foam dislodge from the rocket. They tried to pass on this information. NASA’s management, which by this stage liked to manage everything ‘by the rules’, had seen dislodged foam before, and, according to their institutionalised perceptions, deemed it to be unimportant.
The engineers tried to argue that it seemed like a lot more foam than usual. It was a qualitative argument, based on human insight and intelligence. But NASA was unable to listen. Dislodging foam was a known quantity, and the voices of dissenters went unheeded.
NASA by this stage was so bound in rules and procedures that, in important ways, it had ceased to be a learning, experimenting culture. And that made it incapable of hearing an idea, to its great detriment.
Imaginative debate allows situational awareness to pass up and down the chain of command. It promotes the opportunity to see innovation possibilities. It shows up problems that fall outside of the capacity of norms and guidelines.
The Israeli Defence Force uses an examination of these two cultures within NASA as a way of perpetuating a learning culture within its own organisation. In Start-Up Nation, Israeli air-force pilot Tal Keinan is quoted as saying that if NASA had stuck to their experimental culture, the way his own air force and military do, they would have identified and seriously debated the foam strikes at the daily debrief.
Debating everything isn’t tedious. It’s illuminating.
Putting rules in place of debate isn’t clarifying. It’s dulling.
Rigid rules enforced by unlearning authority are a recipe for real danger. The use of strenuous debate helps to overcome these blind spots.
Cultures of learning are far more idea-friendly than bureaucracies. And it costs nothing to become one. Merely a little willingness.
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