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Buzz. Wall-E. Up. Walt Disney's Pixar is synonymous with animated films, which display creativity, magical stories, and unforgettable characters. Behind the fun of making these films, Pixar has a set of deeply rooted values that champion excellence, tap innovation, and encourage collaboration. Bill Capodagli, the co-author of Innovate the Pixar Way: Business Lessons from the World's Most Creative Corporate Playground, and co-founder of Capodagli Jackson Consulting, says, "These are just the starting points for pushing your own team or organization to unleash a Pixar-style creativity, innovation, and brilliance. From its humble beginnings in the 1990s, Pixar modeled its culture after Walt Disney's legendary studio of the 1930s. In fact, Capodagli has written one of the most authoritative books about Disney called the Disney Way. In deconstructing Pixar's success, Capodagli provides readers with a proven example of how an organization can cultivate innovative talent across all levels of employees and background.

 

Enterpriseleadership.org sat down with Capodagli to learn more about what fuels innovation at Pixar and how Capodagli's consulting practice applied similar techniques to technology-based organizations. Here is what he had to say:

 

EL. Why did you decide to write this book? 

 

BC. I have been studying the Disney culture more about 30 years.  I continue to speak on keynotes about Walt Disney's success. Pixar first came to our radar screen in 1995 when we were in the middle of writing the Disney Way. We watched this rather obscure boutique arise from being a subcontractor to Disney to replacing Disney animation in the late 1990s. Disney acquired Pixar in 2006 for a cool $7.4 billion. The Pixar president, the creative officer, and retired co-founder all admired and emulated Disney's creative genius. Pixar honors the legacy of Walt Disney by refusing to take short cuts and bringing the story to life in each of their movies. It lives by the simple formula that quality is your best business plan.

 

EL. What was your first-hand experience dealing with the Pixar folks?

 

BC. During the research of our book, Pixar was all consumed with the launch of UP, which ultimately got an Academy Award nomination for a feature film. We were fortunate to have one of the Pixar cofounders grant as much time as we needed to understand the inner workings of Pixar, especially how the organization was born in the spirit of collaboration and trust. We talked with other Pixar employees as their time prevailed. They shared with us some wonderful stories about the collaboration and this childlike playground Pixar has created.

 

EL. Can you describe some of the methods Pixar uses to innovation?

 

BC. The Pixar cofounders pioneered computer graphics technology back in 1974. The 1984 hiring of John Lassiter helped to bring all of the pieces together. Pixar's innovation brings technology and art together.  John was an animator and the cofounders were these computer graphics technocrats. Walt Disney said when art and technology come together magic happens. That is really Pixar's secret and that is how it works today. Everyone at Pixar works in a collaborative environment. The technical people and animators work hand and hand.

 

EL. If I want to make my organization more innovative, what things can I take from the Pixar innovation model?

 

BC. The culture of collaboration is the missing key in most organizations. At Pixar, everything revolves around the story boarding, which Walt Disney created.  In the traditional sense, it involves pinning up the story on the board and then starting to put the story together in that conceptual phase. Everyone contributes to the story during daily meetings.  In most film companies, the executive producers, directors, and some of the executives preside over the daily meeting. Everyone participates in the daily meetings at Pixar. An open discussion takes place about how they can make what they are doing better.

 

The brain trust is another interesting concept. Pixar has a brain trust whenever a director or a producer decides that their stock needs some input. The process includes a group of eight directors and other they would like to invite to this meeting. During the brain trust, they present segments of the film and have a lively two-hour discussion about how they can improve it. The key to the brain trust is that there are no mandatory notes, and no mandatory action. It has absolutely no authority. The director and his or her team make the changes as they see fit.

 

EL. Does Pixar normally have many people seeking them out for their innovation methods?

 

BC. I am sure they have many people seeking them out, but they are like a closed set. They are not like Disneyland or Disney World where you can visit and observe the innovation, creativity, and the customer service. They do know welcome people in to observe the process.  I have known many companies that tried to open Pixar's door.

 

EL. How does Pixar reward employees for outstanding innovations?  Do they have a specific rewards system?

 

BC. We asked the co-founder about that. The biggest reward system these people have is that they can publish their findings and their methods in technical journals and speak at technical conferences. Technical people value this more than to monetary rewards.

 

EL. What is the Pixar education program about?

 

BC. Pixar modeled its education program after Walt Disney's eight-page, 1938 memo to Don Graham. Don was an art educator in the Los Angeles area. Walt wanted his animators to, not only be technically competent in drawing, but he wanted them to be creative when they got into the story. This memo outlined ways of doing education in music and comedy and storylines as such. The two Pixar cofounders had a copy of this memo and decided this was a good way to provide an education program to everyone in the organization. As a result, everyone in the organization can take up to four hours of educational courses on company time at Pixar University. It offers more than 110 courses. They say someone can go to Pixar U as a janitor and take enough courses to obtain the equivalent of a BS in filmmaking.

 

EL. Can you provide an overview of your managing consulting business?

 

BC. I have spent most of my professional career in management consulting.  In 1980, my clients started asking us to benchmark the best-of-the-best companies. Disney would always appear at the top of the list, come up as one of the best of the best, not only in customer service, cut in areas of training, turnover, and even in production. Disney has the fifth largest laundry in the world. I have taken many clients behind the screen to Disney interviews. My firm has interviewed 1,000s of Disney employees. We started using Disney as a model for our consulting practice. In 1998, when we wrote the Disney Way, we did 90 percent consulting and about 10 percent public speaking and seminars. Because of the Disney Way, we spend more time doing the opposite.

 

EL. Where does the innovation initiative reside in many of your client companies?

 

BC. Our main thrust is to help our clients develop a culture of innovation. That means having a culture where you unleash the abilities of everyone in your organization.  Walt Disney and the cofounders of Pixar believed that innovation comes from everyone in the organization.  Because one person has the idea for a film, that person is not the only innovative genius. Rest assured that innovative ideas from everyone on the team went into making that film. Pixar promotes and encourages that. We have organization tell us that they cannot afford to have the Pixar-type innovators. We say that is not the case. 'You need to look at everyone in the organization as an innovator.' These people might not come up with the next Harry Potter novel or a flat screen TV. Instead, they need to be innovative about how they do in the cost-effective way to serve their customer.  Everyone has input into that.  Unleash that power on these things.  We encourage people to do that.

 

EL. Does that include IT? Is IT a different animal from everyone else?

 

BC. I do not think so. Pixar has taught us that the technocrats and the animators need to work in concert. One person is no more equal than another person is. In many technical organizations, engineers and IT people reign super. The production people and other support people feel like second-class citizens. In other organizations, the marketing people might have that perception.

 

Sure, you can train people on techniques like storyboarding, or improvisation that help stimulate those creative juices. On the other hand, everyone has a stake in helping to make people more creative. The good ideas come from everyone in the organization. We found that many of the ideas, especially in large corporations, come from the front-line people who are trying things out and saying, 'Gee, this seems to work better than what is coming from corporate. You need to unleash that capability and have a culture that nurtures that.

 

EL. Are you saying that storyboarding can apply to other things besides filmmaking? Have you ever applied it to IT people?

 

BC. Yes. I have storyboarded with many IT groups. One large IT group wanted to install a large computer system in many locations throughout a foreign country. We brought a group of 30 IT professionals from all over the world to convene at hotel for a week. We started storyboarding by throwing ideas out to the group.

 

To prioritize things, we said, 'What are the first things we have to do? What are the plans? How can we put it together to carry out a materials management system throughout this large organization?'  In turn, the group members put their ideas on a card, and then we posted the cards on the wall. It does not become that person's idea. The facilitator read all the cards after we presented the problem. We had a discussion around that. At the end of a week, we had this gigantic ballroom filled with cards, plans, and ideas that would have taken months to put together the comprehensive plan that emerged from this.

 

EL. Can you tell me more about what came out of that storyboarding?

 

BC. They started working on the implementation. They would meet quarterly and refine the plan-such as what barriers keep coming up? They would react according. What would normally take three years to four years to carry out took 18 months.

 

EL. Can you talk about another technology project you worked on?

 

BC. At Whirlpool Corporation, we worked with the global No-Frost team. It was very similar to this overseas IT team. The Whirlpool team had the task of designing a brand new no-frost refrigerator, along with a factory that could  be built and produce products anywhere in South America. Normally, individuals from marketing, purchasing, technology, and such would meet and say, 'You go do this and you go do that.' After a week, they would go off in their own corner of the world. Every six months, they would get together and start putting the pieces together. This process would take about four years.

 

This team had a 20-month time period to get this project off the ground. Instead of doing it the traditional way, we worked with this team throughout their 20 months. They brought in individuals from all over the world. They had full-time representation in Indiana.  Before they even began the project, we got together for an entire week of team building and planning. We did things similar to the IT team. We put strips of tape on the walls. We had cards and said, 'Now for January what are all of the things we need to do?'

 

This team came together with the common goal of getting this thing done in record time. The barrier with the organization broke down. When we had the entire plan up there, we asked everyone, 'What are the things you need to be involved in to make our goal of getting the plans for the factory and the no-frost refrigerator done on time?' We found that technicians were doing engineering tasks and purchasing people were saying, 'I could help with marketing.'  Everyone looked at accomplishing the goal rather than trying to work in his or her own silo. We had great results.  Despite a cut in the product cost half way through the project, the team still met all the milestones and deadlines.

 

Elizabeth M. Ferrarini is a free-lance technology writer. Reach her at elizabethferrarini@yahoo.com.

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What does the Apple's computer mouse, Oral-B toothbrush for children and Palm V handheld organizer have in common with each other?  Each company designed its respective product with the help of engineers from IDEO, one of the most recognized global design firms.  Since 1991, IDEO has helped to design more than 3,000 new products and to reinvent many established Fortune 500 companies.


IDEO's name has become synonymous with innovation. BusinessWeek has ranked IDEO in the top 25 most innovative companies in the U.S. Meanwhile, The Wall Street Journal dubbed IDEO's office, Imagination Playground. The company has become the subject of two books: The Art of Innovation and The Ten Faces of Innovation.

 

Collaboration among IDEO's clients and myriad of engineers who specialize in discipline ranging from human factors to interaction designs has played a critical factor in the company's success. Doug Solomon, IDEO chief technology officer says, "Because we are not content experts about the thing the clients come to us about, we need to learn from them and their colleagues, and them share this information with our colleagues." In fact, Solomon and his design team devised a collaboration platform, called the Tube, to improve the cross-pollination of ideas across global constituencies.  Employees generated more than 1,000 pages six months after the Tube went live.

 

Enterpriseleadership.org sat down with Solomon to discuss what design considerations that went into the Tube and what CIOs can learn from them.

 

EL. What challenges did you face in designing a collaboration platform for a company such as IDEO?

 

DS. We have employees in eight offices on three continents. In the past, we worked in a distributed manner locally with our colleagues. We might have five or six people meeting face-to-face to discuss a project. Now our global clients expect us to collaborate around the world. We had the challenge of scaling our local work process to how best to collaborate across all of these time zones.

 

Experiencing something works best when it comes to innovation. As a result, we like to take our clients on observations in the field, such as on shopping visits, or looking at analogous kind of problems and other companies in the ecosystems. We had to find ways to make it easy and convenient for our clients to be part of the process without having them be physical with us the entire time.

 

We also work with people in the ecosystem who might be affected by some product or service or idea we work on. We use an anthropological type of methodology where we do more than interview them. In fact, we might live with them, go to work with them, or go shopping with them.  Since our projects are so diverse, we never know in advance what kinds of interests and people we want to speak with.

 

EL. How did apply your experience as an innovation company to the design of your collaboration platform?

 

DS. We treated ourselves as if we were a client of IDEO. We used our human senses design techniques and methods to observe our environment. We talked to people to understand how they would like to collaboration, but felt it is difficult to do at this point. We looked at the culture within IDEO to understand what would motivate people to share what they knew. We looked at what kinds of technologies we could experiment with and use for system prototypes. We also looked at our business constraints to make sure we could support this initiative.

 

EL. Can you summarize the concept of the Tube?

 

DS. We designed the Tube, which is our Intranet, based on the London subway system. It connects all of the people around the company, and provides them with a way to share information with each other. Some parts of our Tube consist of homemade components. We designed a consistent, human interface based on Ruby on Rails and other Web 2.0 technologies. It pulls in information from many of our legacy information systems, such as project management and time cards. We also have third-party tools we have built in. For example a screen sharing tool makes it easier for anyone here to make a presentation to a client or a colleague in another office. You just click on a link and you automatically you will have your screen starting to share with whomever you would like to invite.

 

EL. What are the various page types that one has available via the Tube?

 

DS. Our system is built around a number of page types, such as people pages similar to Facebook.  Active Directory pulls in a person's official data, such as phone number, to create the page. People can also describe themselves in anyway they like to pull their official biography. They can turn their bio into a PDF document, click on a link, and mail the bio to a client. We have project pages that have a start date and an end date. If someone enters a new project, then the system will pull in all of the people who have ever worked on that project. The information will include their bios, photos, and email address.  Our digital assets pages pull in all of the different rich media, such as videos, PowerPoint presentations, images, or documents of any sort.

 

EL. What tagging capabilities do you have in the Tube?

 

DS. We also have tagging built throughout the system. You can tag every kind of object, such as rich media. You can search on the tags, on the people, and the digital assets. You can easily search them across our entire system. All of these associations are noted. You can easily find who you should talk to about something, in addition to reading about it. We call this feature our knowledge sharing rather than knowledge management.

 

The data feeds pull in feeds from external sources, such as blogs. You can even push out internal information, provided it is not proprietary, to external blogs. We have very little top down control of the information. Users generate everything except for a very small piece of our home page. Here our internal communication groups tell what is going on within the company. Each project page lists what information you can share with the public and which information must stay in-house.

 

EL. Do you have separate pages for clients?

 

DS. We have a page for each client that aggregates all of the projects that we have done for that client. You can easily look and see what we have done in the past. You can even see information about discussions we had had with the client. These pages help us with business development activities.

 

EL. How are you handling blogs and wikis?

 

DS. We are on our fifth Wiki system at IDEO. It is simple to use and does much of the work most wikis ask people to do, such as create the navigation. We have more than 15,000 wiki pages. They are the first place where people want to go and to collaborate with their team members around projects and personal interests.

 

We give everyone a blog when they join the company. They can decide whether or not to use it. We also have many group blogs. We get 100s of postings per month to the blogs. The ethnographic research about ourselves that we learned as an email culture has helped to make our blogs popular. In the past, we have had different types of blog systems. In fact, our blogs went through a cycle of ups and downs. Some people would blogging and then stopped because no one was reading the entries. People would stop looking for the blog. We built a small tool called Feedmail which watches the blog for you. Initially, we subscribe you to all of the blogs. You can unsubscribe to the blogs and custom which ones to watch. Each day it generates a HTML email with the images and a short summary of what is in the blog posting for that day. You can click through and read the entire posting or skim the blogs. In a minute you can see what's new on all of the blogs and decide what you want to read. That is where much of the content of projects comes from.

 

EL.  Is there email within your collaboration system?

 

DS. You just click on a link within the system and it opens your email...it is integrated with our email.

 

EL. Do you made any provision to use the Tube as a repository for company documents?

 

DS. We have also a tools section within the Tube that allows us to post a variety of different tools, everything from HR forms, such as health benefits and time cards, and screen sharing tools.

 

EL. How often do you update the Tube?

 

DS. Our internal development team pushes out a new version of the Tube weekly. Each new version contains bug fixes and new features.

 

EL. How would the Tube help me to facilitate putting a project team together?

 

DS. The Tube can help you look at what manpower resources are available to work on a project. If you use a combination of data from our enterprise management system and our time card system, you can see the kind of people who are available for a project within your time frame.

 

EL. Have you opened up a section of the Tube to your clients and do you plan to expand it?

 

DS. Yes, already have a custom section of the Tube opened to our clients. They cannot get confidential information about other clients. They, however, can get access to any work that is happening on their project, such as status reports. In fact, we give them access to all of their information in one place. They don't have to search through their email to find the last update on a project or a report that IDEO showed at a presentation.  It allows us to have a very direct link with our clients and share with them the work that is in progress, such as drawings, illustrations, or storyboards. We can even share videos people we interviewed to get information about the project.  Many clients like this way of interacting, but some clients prefer a more conservative way of sharing information, such as email.  The majority of projects with our clients include some external Web-based tool for collaboration.

 

EL. What can CIOs learn from you folks about collaboration?

 

DS. Like many companies, when we started looking at collaboration, we first looked at the technology piece, especially the dozens of existing tools. Of course, we wanted to see if we could find something that could meet our needs.  We experimented with all of the Web 2.0 tools such as blogs and wikis, social networking sites, telepresence, and video; conferencing. The more we spoke with other consulting companies about their collaboration tools, such as McKinsey & Company, we found the reason why most of these systems do not  meet the expectations of those who buy them. It does not have to do much with the technology as it does with the social network within an organization that wants to drive more collaboration. You need to understand the organization's culture. What are the rules around collaboration?  Do we really encourage it or discourage? Many companies do not look at the motivations that would really provide some benefit for people to collaborate. Unless it really meets some needs people have, you understand those needs and their rewards, then it turn into a system that people will not use.

 

You also need to understand the kinds of concepts you want to share. People carry around much passive, not explicit, knowledge of things. That explains why we decided to create links between people. This proved to be a better alternative than creating a knowledge management to suck information out of peoples' heads, put it in a database, and then download it in their heads.

 

So, the trick consisted of finding the intersection between what motivates people and what is important to the organization. People need to get some benefit from collaborating with the system. Most benefits will vary company by company. It takes a custom system to provide that kind of motivation. People at IDEO really want to express their interests, to share their work, and to be known to other people in the organization. We never told people they must use the system. We designed the system so that it would appeal to people. We then unleashed it, trained people, and watched what happened.

 

EL. What is the key to designing intuitive interfaces?

 

DS. Many systems are not designed to be intuitive. We have tried to do things such as eliminate all of the little roadblocks that make it difficult for people to use the system. For example, we made is very similar to use across every part of the Intranet. We use the Active Directory system. You only log on once. You do not need different passwords for blogs or wikis. For example, special wiki language can cause people to stay away from the system. We have a simple editor in our wiki system.

 

You need to allow people to go where they already are rather forcing them to go to new places. We tried to understand the work processes we have in our collaboration today. We provide ways for people to use the same type of methods but do it in a better more effective. For example, Feedmail brings the blog digest to you via email. Most companies make you go to each blog and search around to find what's new. People waste time searching through dozens of blogs.

 

We built our system to adapt to changes in the environment. To this end, our collaboration system is a constant work in progress. We always look for new ways to improve it. We have a built in feedback system which people can click on a link and send our team a message. We want to find the functions that people want and overcome any barriers to them using it as fully as possible.

 

Our innovative process as a company is based on prototype early, and often. We try to get things out as early as possible as we can get feedback from users. We set the expectation that we will need to change things. I recommend that CIOs do that over time.

 

EL. What has been the payoff from the Tube?

 

DS. It has helped us to understand how we can improve collaboration and use technology to improve our innovation process. It has also helped us to improve our efficiency and our quality of work. It has helped us to generate more revenue because we have been able to attract new types of project outside of our traditional IDEO community.


Elizabeth M. Ferrarini - She is a technology writer from Boston, Massachusetts. Reach her at elizabethferrrini@yahoo.com.

 

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In 2004, Andrew McAfee, an associate professor at Harvard Business School, wrote a case study about a Japanese taxi company that used Japan's i-mode technology to bypass the dispatch center and immediately put customers in touch with the closest cab. That case study led McAfee to search for other tools that allowed for similar interaction. Meanwhile, a student introduced McAfee to Web 2.0 tools, such as blogs and wikis, which had just started to become popular. Further research led McAfee to become a proponent of Web 2.0 tools, which he calls Enterprise 2.0. As a result, he developed a technology paradigm that companies can use to buy or build digital platforms for enabling their employees and other constituents to collaborate more freely. Each letter in his SLATES paradigm stands for the first letter in one of the six components -- search, links, authoring, tags, extension, and signals. In fact, McAfee, who is also a visiting professor at MIT's Center for Digital Business, has chronicled his findings in his forthcoming book, Enterprise 2.0 - New Collaborative Tools for Your Organization's Toughest Challenge (Harvard Business School Press).

 

At the MIT Sloan 2009 CIO Symposium, Enterpriseleadership.org sat down with McAfee to discuss the challenges CIOs face in making technology investments, especially in Enterprise 2.0. Here is what he had to say:

 

EL. Is there a correlation between a company's profitability and the amount of money it allocates annually for IT and the maturity of its IT investment process?

 

AMA. Those correlations tend to be very weak. Much of the research shows that the amount of money a company spends on technology is a bad indicator of how much benefit it gets out of technology and what its profitability is like. As far as we can determine, that raw investment number is not a good predictor of things we care about.

 

EL. Is the maturity of a company's investment process an indicator of anything significant?

 

AMA. Most executive teams look at capital IT investments the same way as any other capital investment. The amount of attention everyone in the company -- ranging from the executive team to business unit managers -- pays to technology issues determines the success of these investments.

 

EL. If technology decisions are driven from the top, is there a better chance these investments will have a high success rate?

 

AMA. Yes, especially if the technology investments are intended to change the business. The business side of the company doesn't get involved in things such as upgrading routers or swapping out databases. If the purpose of the technology project is to bring about change to the business, then you need to involve business people.

 

EL. What industry sectors have increased their technology investments and what payoffs do they expect from them?

 

AMA. My research shows that companies in IT-intensive industries, such as finance, have experienced turbulence and higher rates of growth concentration than non IT-intensive counterparts. You, however, have to put things into perspective. These days finance is such a strange place to do business. It is very hard to predict what is going to happen going forward. On the other hand, companies in IT-intensive industries can't switch horses in midstream and slow down their rate of investments. It might take longer, but they will realize a payoff.

 

EL. Are there any other companies that stand out in your mind that really exploit technology?

 

AMA. I did a case study about the Spanish clothing company Inditex, Europe's largest clothing retailer. Zara is this retailer's most popular brand. It is an inexpensive but fashion-forward retail chain. This company is a brilliant user of technology because it does not throw too much technology at the business. It has developed great insight into the kind of customers it wants to go after -- 20-something forward people. Trends for this market segment are hard to predict, As a result, Inditex does not do much forecasting or looking into the future with technology. Its technology enables store managers all around the world to articulate what products will sell in the next couple of weeks. The company can then design the clothes, make them, and get them to the stores quickly, thanks to a fast replenishment cycle. Inditex can take advantage of trends while they are still hot, instead of trying to predict what 20-year-olds are going to wear 18 months from now. That is impossible to do.

 

EL. If a company has immature technology processes, what steps can it take to catch up and move forward?

 

AMA. You don't begin by throwing buckets of money at the problem. The company has to make the commitment that it can catch up, especially if the company has not historically had technology as a strength. The company has to understand the needs of the business, and then look at the technology landscape to see what it needs to adopt.

 

EL. How does your approach to technology differ from some other approaches?

 

AMA. Many of the approaches have a great deal in common. We all focus on people, process and technology. Keep in mind that enterprise deployments can vary widely. You can run into different kinds of problems or pitfalls, depending on what kind of implementation you are doing. If you just do finance and human resources, you won't run into many problems. On the other hand, because technology deployments for distribution, sales, logistics and manufacturing are more complex, you will incur more risk. As a result, you need to plan these deployments carefully.

 

EL. What guidelines would you give CIOs about measuring the success of technology investments?

 

AMA.  I try to help companies understand that cost and time are not the most important criteria for measuring progress and success with technology initiatives. You need to keep your eyes on those things, but more importantly, you need to look at the business impact of IT. That is hard to measure. You need to keep your eye on achieving the objectives of the project. Is the project doing what we need it to do? If not, how can we turn it around? Is it giving us the capabilities we are after?

 

EL. What are some of the shortcomings of the tools and techniques large companies use to guide the capital IT investment process?

 

AMA. When I look around, especially at larger organizations, I see too much decentralization of decisions about technology. The governance process revolves around letting each division or business unit make a set of technology decisions. The corporate level winds up stitching all of these technology decisions together. That's hard to do. You wind up with a fragmented technology environment riddled with inconsistent business processes and inconsistent data. You can't drive the enterprise, never mind see what is going on. I tend to advocate more centralized governance around the enterprise decision-making approach. It doesn't mean that headquarters makes all of the business decisions. You just try to layer and place some consistent technology across the company.

 

EL. Many companies use an ROI approach for measuring technology investments. Is that a good metric for technology projects?

 

AMA. It is tempting to try to turn a predicted ROI number into a business case in advance for a technology project. These numbers are extraordinarily speculative. At the start, people come up with whatever number they want. I don't advocate that companies spend much time on that. Whenever I have a chance to talk to companies which do technology well, I ask them about creating a business case and coming up with an ROI. Many of these companies say they don't focus their energy on these things. Instead, they focus their energy on making sure they select the right technologies. They watch their budgets carefully so they don't spend more than they anticipated.

 

EL. Your forthcoming book, Enterprise 2.0, outlines your concept, called SLATES. Can you give examples of organizations that are moving in that direction?

 

AMA. The 16 agencies of the U.S. intelligence community, including the FBI and the CIA, really surprised me. They have deployed a consistence suite of 2.0 tools that have all of the SLATES elements. This toolset has started to change how some of the analysts go about their work. This is good news. Perhaps the federal intelligence agencies could have prevented the September 11 disaster if they would have been able to connect the dots among all of the people and all of the pieces of information throughout the community. The intelligence community's Enterprise 2.0 platform, called Intellipedia, provides a consistent internal blogging environment. It has something for tagging, such as an internal del.icio.us. It comes pretty close to comprising the entire SLATES complement.

 

EL. What companies are embracing Enterprise 2.0?

 

AMA. Many of the high-tech companies are doing many aspects of Enterprise 2.0.Sony is a big user of these tools. You also see unusual industry sectors, such as insurance, embracing Enterprise 2.0. In fact, Northwestern Mutual Life is a big Enterprise 2.0 user. Other heavy uses of Enterprise 2.0 include Procter & Gamble and Pfizer.

 

EL. What must proactive CIOs need to be thinking about in order to move in the direction of Enterprise 2.0? What challenges do they face in that area?

AMA. The main challenge is for CIOs to get out of the way. If you want to control events and control outcomes, you have to give up control of people and trust them. Enterprise 2.0 technologies put that philosophy to the test. If CIOs want to be successful with Enterprise 2.0, they need to trust that people will use the tools appropriately and encourage them to lead by example. CIOs need to stop trying to be interventionist managers. CIOs should deploy the tools, model the correct behaviors, and have some faith that good things will happen as a result.

 

EL. Can you summarize what C-level executives will learn from your book?

 

AMA. They will learn what is new under the sun. The 2.0 suffix is not hype. There really is a new set of tools out there. They will learn what those tools are, what characteristics they have in common, and how organizations are deploying them and distilling lessons about how to profit from this new opportunity going forward.

 

EL. Can you describe some of these tools?

 

AMA. All of these tools have SLATES elements, such as blogs and virtualization. They tend to social- or community-based. Overall, they tend not to tell your role in the workflow. They do not impose a business process. For example, wikis and Wikipedia are good examples here. We used to think that if you wanted a high-quality encyclopedia article, you needed to assign people into roles and walk them through a very specific workflow for generating a good article. Wikipedia comes along and shows you don't need to do any of that. Instead, you can tap into a huge amount of energy out there to write articles, share knowledge and just be helpful. You can generate the world's largest encyclopedia. By some measures, Wikipedia is a good encyclopedia developed by not dictating terms to people.

 

Whenever I do seminars on Enterprise 2.0, I ask audience members how many regularly use used Wikipedia. Almost every hand in the room goes up. I then ask if it is the first place they click on to start learning about new topics. Again, almost every hand in the room goes up. I ask people to think about how remarkable that is because it has no formal editors' staff. Any one of us can make changes to almost any article. The lack of formal ground lines is bizarre. My point stresses that this experience is not an accident -- it is what is key to what is going on right now. The new technology toolkit is a great assistant and a great help for open innovation.

 

EL. What are some of the benefits organizations will get from SLATES?

 

AMA.  They can come away with a better product than they would have otherwise had. For example, they can take advantage of new ideas that they did not expect, such as a customer who offers an idea for how to improve the product. This process gets built into the way the company does business. It can help to generate revenues.

 

EL. Does SLATES change the organizational culture?

 

AMA. It does not have to change the formal organizational structure. I keep stressing that the results of Enterprise 2.0 capabilities are an alternative to the formal organization; i.e., having a formal organization chart, a boss and a hierarchy. Call it a complement, if you will, because it is in addition to all the formal business processes and the hierarchy of the organization. As you deploy these tools over time, they will start to change the culture a little bit, and people will start to think in a more democratic way about many issues. It is not this deep threat to the existing organization and the existing hierarchy.

 

EL. Some companies have devised their own internal version of LinkedIn or Facebook. Don't those social media projects cut across organizational boundaries?

 

AMA. Absolutely! These technologies inherently do not respect organizational boundaries. They do not care what business unit, division, or geography you are part of. As a result, these technologies enable you to bring together a globally disbursed workforce to look at problems and to contribute knowledge to share what they know. It cuts across organization boundaries, but let us be clear: We already have technologies, like telephone and email, which are equally indifferent to those kinds of things.

 

Elizabeth M. Ferrarini - She is a free-lance writer and IT consultant from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.

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The proliferation of the Internet, the pressure of a global economy, and the need to remain competitive have transformed businesses all of sizes into extended enterprises. As a result, many companies have a complex network of matrix relationships with permanent employees, with contract staff, with customers, with partners, and with suppliers. Because customers and suppliers might need to have access to information, such as sales forecasts and inventory projections, companies also need to extend enterprise applications to these constituents, thus creating an interconnected network of information.

 

John Baschab, the president of TechniSource, says that the key to managing an extended enterprise is good collaboration. Baschab's company provides outsourced IT talent, ranging from CIOs to CISCO networking specialists, to privately held companies with revenues between $50 million and $600 million. Baschab, who also teaches part time at Southern Methodist University, and Jonathan Piot, his TechniSource partner, have written two editions of the 600-page book, The Executive Guide's to Information Technology.

 

Enterpriseleadership.org recently sat down with Baschab to discuss what companies must do to better manage their extended enterprises and what role collaboration plays in this process. Here is what he had to say:

 

EL: What types of investments are you seeing in collaboration to  extend the enterprise?

 

JB: We're seeing much IT investment going into extending the enterprise through collaboration. When it comes to internal collaboration, we're seeing improvements in the various ways people interact with each other. External collaboration looks at ways to leverage technology to bring suppliers and or customers closer together. The big difference here is who are your customers? If you're customers are consumers, then you can deploy social networking to drive more collaboration. On the other hand, if have business customers, then you have to look at how you can create a platform to bring each other's systems together to drive better collaboration?

EL: Why are we starting to see so much emphasis on IT investing  in collaboration?

 

JB: To understand what appears to be the sudden interest in collaboration, you need to take a historical look at things in IT. In the late 1990s and early 2000s, many companies experienced a wave of system adoption especially with the rapid use of the Internet. This system adoption became a pre-requisite for any type of collaboration. Why? You need to have all of your information, such as transactions, in one place before you can even begin to communicate either externally or internally. Unfortunately, the market took a downturn in 2003 and many companies cut their IT spending. To this end, companies weren't willing to invest in collaboration tools.

 

Since 2004, we've seen a lot of IT capital spending going into infrastructure build out or audit-related initiatives, such as Sarbanes Oxley. We're finally cycling back around to developing some of the collaboration tools that would've been a natural progression in 2003 if the economy hadn't gone down and companies didn't need to focus on compliance issues.

 

EL: Besides collaboration, what are  companies doing to extend their enterprise to meet the global economy?

 

JB: Companies have started to do the things the trade press talked about seven years ago. These things include exchanging forecasts and tracking inventory items. For example, some companies are using RFID to track their inventory. Meanwhile, some companies have started using something as simple as XML to have a common language for people to use to exchange information. Many companies have eliminated internal inefficiencies or improved external efficiencies that hampered working with their customers and suppliers.

 

EL: Can you give examples of how companies are taking advantage of the global distributed pool or knowledge resources and technology resources?

 

JB: It's easier than ever before to take advantage of global resources in both areas. If' you're a small business owner and you need some specific and discrete technology task done, then you can turn to elance.com or craigslist.com or a host of other sites to find the talent resources you need. The continued decline in the cost of computers and bandwidth and the proliferation of educated people into IT makes it easy for companies to find well-versed talent in every aspect of technology. We've seen a good example of this trend with large companies taking well-defined discrete IT tasks offshore or outsourcing a good chunk of the IT infrastructure.

 

The largest pool of technology resources is still in the open source movement. Look at all of the open source projects on a site such as Sourceforge.net. It has an amazing pool of thinkers and interesting technologies that people are doing through collaboration across the world.

 

EL: Is there any  downside to using some of these global talent resources?

 

JB: Open source collaborators might not be able to tell when it's the best time to launch a new product. Even elance.com professionals won't be a good source of advice for this. No one can do that thinking for you because it isn't discrete enough. That's why you need in-house technologies and in-house thinkers who can figure out your big issues. In other words, you need someone on your payroll, either an employee or a consultant who understands your business very well, and who can drive collaboration.

 

EL: What adjustments do organizations need to make to structure and to streamline decision-making in a matrix or an extended enterprise?

 

JB: The answer is collaboration. You see more and more companies going by design and by intent to a matrix decision-making structure, and you see them going through an extended environment by force. The most difficult thing about a matrix environment is how rapidly can you make decisions and what does it take for them to stick.

 

Any global company, even if it's a small or midsize company, must deal with people who are work across all time zones and all geographies. This's true for even national companies. If companies use collaboration tools the right way, they can improve the flow of information in a matrix environment. The information people need, however, has to be easily accessible and always available. It can't be in peoples' heads or on their laptops. The free flow of information can help to facilitate decision-making.

 

EL: As an IT outsourcer, what have  you done to extend your enterprise to your on-site employees?

 

JB: Many of the people in my group never come into our office because their full-time assignment is to work on-site for a specific client. To improve communications with our on-site employees, we created a collaboration portal to make them more aware of what's going on in the company, and to get them involved in decisions that affect the company.

 

The portal comprises Microsoft SharePoint for file sharing, a wiki, a blog, and a bulletin board. We experimented with a mix of both Open Source, as well as proprietary technologies to get this done. Some of these features worked, while some of them didn't. We thought the blog would be the portal's centerpiece. We also considered the blog as the carrot we'd use to draw employees to the portal and to get them to stop using email and voice mail. We asked members of the management team to provide daily blog entries about business-related issues, such as how we solved a customer problem.

 

I spent much time worrying whether or not employees would read the blog. They came in droves everyday to read all of the blog entries. Eventually, the management blog writers stopped providing daily content. They didn't have the time to devote to the task. To this end, I ran into a content problem, not an interest problem.

 

Because we didn't get the response we wanted the first time with our collaboration portal, we continued to work on making the tool more compelling and easier to use. If you don't do this, then people will go back to what they've always been using. While we gave them a carrot, we also gave them a stick. We told them to stop emailing people large files. If they wanted to trade files, they had to put them on SharePoint. That's was a tall order for people to handle. Eventually, people saw the benefits of using the portal.

 

EL: What steps can organizations take to make better informed  decisions about outsourcing?

 

JB: Regardless of how effectively you apply technology, you always fall back to the need to have a good personal relationship with the customer and to make sure the customer trusts you. During our initial negotiations with customers, we can usually convince them that we have great talent, that we have better access to information, and that we can provide good economies of scale. The real test of our customer relationship comes down to this: Can the customer depend on us to do the right thing when something goes wrong? To this end, we provide customers with much transparency into how we operate. We've carved off a portion of our collaboration portal to give customers some visibility into what we're doing. For example, we put up their metrics about how we're operating their help desk or how we're meeting their service level agreements.

 

Informed decisions about outsourcing depend on how well you understand which pieces of IT are good to outsource. The more measurable they are, the easier they are to outsource. A problem management area, such as the help desk, has become the most widely IT piece to outsource. It's easy to quantify because you're constantly getting feedback on how it is doing.

 

We advise customers to look at their IT organization in discrete components. How easily they can measure each component can determine the degree of outsourcing expertise they'll need. Also, looking across the spectrum of IT components will help them to answer questions about measuring the results. Managing the results should naturally consist of the outsourcer providing quantifiable metrics, such as service level agreements. The outsourcer should also have the burden of doing due diligence to report on how they are doing.

 

EL: Do you clients include you in their  governance process?

 

JB: We typically run the governance process for them, especially for making strategic IT decisions. We usually establish an IT steering committee that consists of one of our people who is functioning as the CIO and then their senior management team.

EL: What types of processes need to be in place to better manage  an extended enterprise both for IT and for the business?

 

JB: If you're going to be exchanging inventory forecasts between a supplier and yourself, for example, your systems needs to have specific characteristics, such as reliability, robust processes, and the proper middleware for handshaking between systems. If people can't get into the system, their productivity will go down and so will their incentive to use the system. You need to have all sorts of processes built into the system so if something breaks and the red flag goes up, someone can jump on the problem.

EL: To what degree should you extend the enterprise to say  suppliers?

 

JB: If you have a good, trusting relationship with your suppliers, then I'm in favor of giving them access to more information than less information. Sharing corporate information about the most common things, such as usually sales forecasts, and inventory positions, can help your suppliers and you make better decisions.

 

Author: Elizabeth M. Ferrarini - She is a technology writer  from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.

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Accenture ranks as one of the largest global management consulting, technology services, and outsourcing companies. In 2001, Accenture's IT organization supported 75,000 employees. Today, that number is 178,000 employees. Meanwhile, company revenues have gone from $11.5 billion in 2001 to $19 billion in 2007. By moving both IT service delivery and many internal business transactions to an online, self-service model and consolidating key applications, Frank Modruson, Accenture's CIO, says that his company will spend 30 percent less in real dollars in 2008. "As a percent of revenue per person, we've cut IT by 60 percent. That's a dramatic a reduction to the cost to serve."

 

Enterpriseleadership.org sat down with Frank Modruson, Accenture's chief information officer, to discuss how IT has cut costs but improved service delivery to internal customers. Here's what Modruson had to say in his second interview with www.enterpriseleadership.org.

 

EL. What improvements have you made to become more responsive to your internal customers?

 

FB. We've always focused on this as a priority. As the capabilities have evolved over time, we've had the opportunity to take it to the next level. All of our internal business transactions at Accenture happen online. We're a virtually paperless company. It doesn't mean we don't print paper, but all of your transactions as a business customer, whether it's changing your address or looking at your pay stub, occur online in a self-service model similar to the way you'd do any e-commerce transaction. For example, when you create a time report at Accenture, you create an online document, but you're really creating a transaction. We view that as being very customer centric.

 

When it comes to IT, we handle more than 40 percent of our helpdesk calls online in this self-service model. If you go to esupport, you can look up your problem, read about a solution, or escalate to a chat directly with the helpdesk via Instant messenger.

 

EL. Given that Accenture is an IT delivery company, what types of online services do you provide your external customers?

 

FB. First, we call our external customers clients. We don't do many things for them online because of the nature of our work. We have Accenture.com and other content sites about our business. We offer our clients micro sites that we'll tailor to them or to their industry. That's where it is ends. We've been racking our brains about what other online things we can do for them.

 

IT is trying to bridge the technology gap differently with our clients. For example, we've developed 12 telepresence sites internally. While I was speaking to a client about planning his trip to visit our facility in India, I told him that he might want to get on our telepresence link from Chicago to Bangalore and plan the trip that way. In fact, I added that he might consider conducting the visit via telepresence rather than traveling to India. This client was incredibly enthusiastic about them.

 

EL. What is your IT strategy and how does it to contribute to making Accenture a leaner, more efficient organization?

 

FB. Our IT strategy focuses on serving the business of Accenture by looking to make it more efficient and effective. To me, IT is about taking out the friction of our business and making it easier and easier to do the work of Accenture. One the key points in our strategy is to have a single instance of key applications globally. To this end, we only have one application to serve the entire organization for any particular functional area. We have one set of financials for the world. All of the transactions reside in the one system. You can drill down to any level of detail you want. You'll find one version of the truth. We don't have anyone saying this's what my report says and it doesn't agree with what your report says. Companies that have this scenario end up reconciling all the different reports to find the truth.

 

We also have one recruiting system and one scheduling system. If you go down the list, you'll find that we have one of anything. As a result, our data is cleaner because there are no discrepancies where this system has these fields and this other system has different fields. If you try to put these systems together, you have a problem.

 

EL. How do companies fall into the trap of redundant systems?

 

FB. Several years, we brought in a consultant to help us lead a strategic procurement project. I asked her how our technology compared with other companies she had done work for. She said that most companies begin the process by collecting all of the procurement transactions from all of the different systems, put the data altogether to try to make sense of it, and then do the analysis. We said that we skipped that step because we already had all of the data in one place. She said most companies don't understand how big a deal that is.

 

Here's how people fall into that trap. If everyone has their system, they do get their data faster. However, it doesn't work holistically across the company. You create a Tower of Babel where everything has a different name in each part of the world. It becomes difficult to get everyone to talk with each other. That's why we have companies with multiple ERP systems. I've heard of companies with 70 instances of their primary ERP. You wind up hosting 70 ERP systems, and you wind up reconciling all of these individual ERP systems to get total revenue. Accenture has one ERP system.

 

EL. What types of social networking or collaboration tools have you given your internal customers?

 

FB. This is a major program for us. We've launched Accenture Collaboration 2.0 to provide our internal customers with the next generation of social networking capabilities, similar to popular We-based sites such as Facebook. For example, in Accenture People Pages, employees can post their photo, a biography, a resume, and personal information, such as hobbies and interests. They can also list their areas of expertise, who they've worked with, and what things they have contributed to the Accenture Knowledge Exchange. Anyone can free text search this customized, extensible profile of our employees. IT contributed all of the base information, such as employee's name, address, phone number, and email address, but then we told employees to put in what they wanted.

 

We also have a media exchange similar to a Youtube for all of our media. We're doing an expert's page. We've introduced video from telepresence down to video on the desktop. We're deploying Office Communicator that will tie in Instant messenger, email, phone, and video -- all on the desktop. Since we have one Active Directory, one global email system, and one global desktop, our rollout of this Office Communicator will be straightforward.

 

EL. How are employees using these collaborative tools to make their job easier?

 

FB. We want people to cut through the company's hierarchy when they're searching for information and capabilities. People can locate expertise around the firm rather than going up and down the hierarchy of the person they report to. For example, when I did a free-text search on People Pages to find employees who have wine and beverage industry experience, I got 768 hits matching wine. I narrowed the search and found some people who had beverage, wine, and spirits brand management experience. If I go to Office Communicator, I can then check the presence indicator next to each picture. The indicator tells me if the person is online and available or not. Because I see the person's calendar, I know when he or she has a meeting or will be free. If the person is online and available, I can go ahead and contact the person via either Instant messenger, email, or telephone. This capability breaks down the barriers because we can just click on the person and reach out to them. We're trying to make it seamless for our people to get connected to the technology and then to make the experience better. We're trying to bring the power of 178,000 employees to each employee.

 

EL. Have you improved the way your employees search for documents on the Accenture Knowledge Exchange?

 

FB. We've added a new, enhanced search and preview feature. Our old search feature was similar to google.com. If your search found documents, such as PDFs, you had to search again on the term to find the page you want. With preview, you see a picture of the page in the document that has your search term. If Accenture is on page 32 of a 50-page document, then you see page 32 highlighted.

 

EL. What has been the most unusual experience with social networking?

 

FB. We put up a Wikipedia on Accenture so employees can add their entries about Accenture. Meanwhile, we launched an application, a social network experiment, call Percenture, which tells you the percentage of employees who've joined the company after you did. It also gives you a perspective about the size of the company, where you are, and how long you have been with the company. We didn't post it anywhere on any of our applications. We sent it to out to people via email. In the next 24 hours, more than 30,000 people hit it.

 

A couple of weeks later while I was speaking to a 100 people, someone asked me where he could find the link to Percenture. I said that because Percenture was an experiment, we didn't post it anywhere. One person raised his hand and said that the link was in the Wikipedia. Apparently, someone went into the Accenture entry and created a link to Percenture. The person who knew where the link was had been with the company for just two months. He knew to look there because of his online experience outside of the company. The best part of it is that someone created the entry for it.

 

EL. What unique wireless tool have you given employees who travel?

 

FB. We have a utility that allows employees to get connect to a wireless hot bus around the world. When I was going through Toyko Airport, I opened my laptop, and connected immediately without exchanging any credit card information. This utility just works.

 

EL. How do go about looking at the right technology mix for your internal customers?

 

FB. We do a variety of things. We have a portfolio management process for our applications. We manage those applications as products as we work with the customers they support. We do the same thing with our infrastructure. We channel initial funding requests through our IT steering committee, which I chair. The committee includes the chief operating officers of Accenture's operating groups, and the chief operating officers for internal functions for HR, strategy, and finance. Everyone gets one vote. We go through all of the project requests, and then prioritize them based on the importance to the business. Our portfolio management system tracks all of these products.

 

EL. What determines a successful product?

 

FB. Before any project gets going or funded, we put together the business case, which includes the cost to do the work and the expected business benefits both in hard dollars and in soft benefits that have some metrics attached to them. Once any project goes into production, we monitor attainment or realization of benefits against that original business case. We do this for three years. Once a year we have an internal audit to look at the process of measurement, to select business cases, and to report those findings to the IT steering committee right before we do funding for the next year.

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Additional Reading - Sponsor Links:
Streamlining Service Request Processes: A Key to Business Success
Taking the Service Desk to the Next Level


Author: Elizabeth M. Ferrarini - She is a technology writer from Boston, Massachusetts. Reach her at elizabethferrarini@yahoo.com.

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