Solid, in-depth piece on pricing

There’s lots of talk about optimizing the customer experience from a process perspective, but not much conversation from a pricing perspective.  Pricing, as the article I link to below, is more than building in profitability above product or service costs.  Achieving an ‘optimal’ price requires deeper analysis than most companies actually do.  According to the Sloan Review piece, fewer than 5% of Fortune 500 companies have a full-time pricing function, and less than 15% of companies do systematic research on pricing.  That, to me, was surprising.  Here’s a clip from the article:

 

How could companies go about rethinking their pricing strategy? The first area that may require a fundamental rethink is the way companies set prices. Many companies have a significant opportunity to differentiate themselves from competitors by learning how to create, quantify, communicate and capture customer value by implementing customer value-based pricing strategies. A second area concerns price realization — that is, the process of translating list prices into profitable pocket prices. Here, many companies lack the information systems, negotiation capabilities, incentive schemes, controlling tools and sales personnel confidence leading to superior price realization. Small improvements in any of these areas lead to quantifiable results very quickly. (See “Next Steps for Improving Pricing Capabilities.”)

CEO involvement is a critical requirement for ensuring that changes in a company’s pricing strategy lead to a true change in the company’s culture. At the same time, the CEO must ensure that these changes are not seen, as too many failed initiatives are, as “just another project.” CEO championing, bundled with organizational confidence, new capabilities and transformational change are key catalysts to obtain pricing power.

via Is It Time to Rethink Your Pricing Strategy?.

A definite must read piece.

Remembering September 11, 2001

It’s hard to imagine that a decade has passed, yet it seems just like yesterday. Ten years ago, on this day, I boarded an early morning flight from Pittsburgh to New York’s LaGuardia airport. I was beginning my weekly travels across the northeast a day late, delaying the routine Monday departure for Boston to be home for an extra day. Back then, a decade ago, I was working for Siebel Systems, and was overseeing one of the largest software deployments on the east coast. Like most financial services firms, our client had sprawling operations, with headquarters in Boston, but ongoing projects dotted the northeast. I usually started the week in Boston, then would work my way through Providence, Hartford, and New York City before heading back home to Pittsburgh. Because I had hastily changed my plans, I couldn’t get onto the direct flight to Boston from Pittsburgh, so I decided to fly into LaGuardia and jump onto the first available Shuttle flight from there upto Boston.

Following a well worn routine, I cruised into the Pittsburgh airport with just 35-40 minutes to departure, knowing that clearing security as a frequent flier was just a formality. I hadn’t booked my flight until the last minute, so I wasn’t able to get the automatic upgrade to first class, but I did manage to score a bulkhead row seat just behind first class. We departed Pittsburgh on time, and everything seemed routine. As we got up to cruising altitude, the flight attendants went about their morning rituals of handing out drinks, coffee, and peanuts throughout the cabin. Nothing seemed out of the ordinary until around the New Jersey border. As many frequent fliers know, when the pilot pulls the throttle back on the engines, it’s usually the first sign that the control tower has requested a holding pattern. It was around the New Jersey border, that the engines were throttled back, and the guy next to me said, almost instinctively, “Oh no, I’m going to be late for my meeting in mid-town.” I smiled and replied, “yup, looks like delays into LaGuardia.”

While we were caught up in our own world, we hadn’t noticed that the flight attendants had disappeared. They hadn’t come back through the cabin, to pick up trash or check on us. Later that day, once on the ground, it finally struck me that the pilot probably had informed them of the horror unfolding in New York, and emotions might have gotten the better of them. A few minutes after throttling back, the pilot came on over the air and said something like, “Well folks, there has been a problem in the New York area and we’re being asked to reroute further over the Atlantic to make our approach into LaGuardia. From what we understand, there is a major fire in lower Manhattan.” That seemed a bit odd, but LaGuardia has flight patterns that cross over large populated areas, so a ‘major fire’ could have meant anything.

As we approached lower the New York area, most of the plane could see smoke billowing out of what looked like one of the World Trade Center Towers. Someone behind me joked, “That’s not a copier fire for sure.” When we got closer, we could see both towers were smoldering. It didn’t make sense. From the air, it was hard to fathom what might have caused both towers to catch fire like that.

After doing a large sweep across the Atlantic, we descended onto LaGuardia’s active runway and quickly parked at the gate. The flight attendants never came through for their routine landing checks. Upon getting to the gate, one of the attendants, with tears in her eyes and visibly shaken, opened the plane door and we quickly shuffled out into a chaotic scene at LaGuardia. I turned on my cell phone and noticed over a dozen missed calls and messages. My first instinct was to call home, but the phone circuits were jammed. While I kept trying to call, an announcement came over the loudspeaker at LaGuardia, “LaGuardia is shut down. LaGuardia is shut down.”

I finally got through to my wife, and let her know I was alright. The family had been in shock, watching the scenes from New York, and knowing that I was on a plane bound for LaGuardia. The phone line got cut off mid-way through the call, so I decided to run downstairs to the taxi stand and see if I could hail a cab to, frankly, anywhere. LaGuardia didn’t seem to be the place to be at that moment. As I ran down the steps, I saw one empty cab, and waived at the cabbie to come over. He waved back and yelled, “I’m done today, going home.” “Which way are you headed?” I asked. He said, “Jamaica,” as in Jamaica, Queens. I yelled back, “can you drop me off in Forest Hills?” He reluctantly nodded and I ran over and jumped in. I blurted out Forest Hills almost instinctively, as I knew it was between LaGuardia and Jamaica, and my cousin lived there.

In his cab, the cabbie was crying. The radio was on, and of all the people to have dialed in he had Howard Stern running. Stern was mumbling something about two airliners having hit the World Trade Center, a third having hit the Pentagon, and something about the Sears Tower in Chicago. To Stern’s credit, soon after, he essentially turned his broadcast over to ABC News. The cabbie and I listened in shock to Peter Jennings describe what was happening across the country.

The cabbie turned around to me, as we got onto the Brooklyn-Queens Expressway, and asked where to in Forest Hills. I gave him my cousin’s address, and when we got there he refused to take the cab fare. He just said, “Be well, man” and took off. He had dropped me off at the intersection of Queens Boulevard and Yellowstone. As I made my way over to my cousin’s place, I heard a fighter jet scream across the sky above. That’s when it really struck me that this was going to be a day never to forget.

I got up to my cousin’s place, and out her south facing window, we could see the towers smoldering. The intensity of the smoke had reached a point where the top of either building was not visible. She had the TV on, and we kept switching between channels to learn as much as possible as the morning wore on. We were having problems with both landline phones and cell phones, but the internet connection was working. I logged into my email account and fired off emails to my relatives and friends. I then logged into my Siebel email address, and it was flooded with messages from across the company.

Working in the Financial Services practice at Siebel, I knew that many of my friends and colleagues were in lower Manhattan on assignments. As fate would have it, many Siebel employees where in and around the towers that day, but all of them were able to escape in time. Other friends of mine would not be so fortunate.

Prior to working at Siebel, I had been a part of the Oracle Financial Services practice in New York. In those days I lived in the New York area, in fact just across the river from the World Trade Centers in the Newport area of Jersey City. The Oracle financial practice had been booming across North America when I joined, but I had been promptly told by the practice lead that there would likely be no travel beyond Manhattan since the biggest projects, and biggest financial institutions, were all a subway ride away. Coming on board at roughly the same time was Ken Zelman, a native of New Jersey and one of the hardest working guys I’d ever met. Ken and I worked on a few small accounts together, but really established ourselves working on a massive project at Merrill Lynch. We spent the better part of a year at Merrill’s World Financial Center building across from the WTC, and at 100 Church Street, which was also next to the towers. It was a year in, and around, the towers. Through the long hours there, we got to know the street food, restaurants and rhythms of the towers quite well. I eventually left for Siebel, but Ken continued to flourish at Oracle. We stayed in touch after I left, and I even tried to coax him to come join me at Siebel. He was doing well at Oracle, and more importantly, had a job that kept him at home. Once the Merrill project wrapped up, he naturally took the Marsh opportunity inside the towers.

A few months before that day, I called Ken, just to catch up on things. He was excited to hear about the growth at Siebel, but less interested in the amount of traveling I was doing. He said that the Marsh ‘gig’ was great because the NJ Transit Bus from Central New Jersey stopped right in front of the Towers, which made his commute a breeze. We even joked that I would have probably been at Marsh with him had I stayed at Oracle, given that I used to live just one PATH stop away from the towers.

As that Tuesday wore on, we saw the first tower collapse from my cousin’s Queens apartment. At first we didn’t know what had happened. Then, CNN kept reporting of a possible collapse. We then saw the second tower collapse. It was then that I thought of Ken.

We sat around at my cousin’s place, getting reports from relatives across the country. Everyone was safe. As night began to fall, I decided to call Ken’s phone. Ken’s wife picked up. Initially, I was relieved, figuring Ken was home and all was well. She then said she hadn’t heard from Ken all day. I didn’t know what to say. I kept thinking that he must be ok, just stuck somewhere. As it would turn out, he along with another colleague Frank Deming, never made it out of the towers. I told Ken’s wife that I’d call back the next morning to see if all were ok, but never could muster the courage for that call.

The next day, I made my way to Manhattan. I must have walked 200-300 blocks of the magnificent city, just observing the terrible silence that had descended upon it. Nearly every corner of the residential part of the east side had pictures of missing people up. I, along with nearly everyone else, felt a duty to look at each picture, almost out of respect for the missing. New Yorkers, pushing pause on the New York minute. That scene would repeat itself from east side to west side, and as I made my way down toward the village. Through the cavernous views down Manhattan’s avenues, the smoke was visible looking southward. Having lived in New York for many years, I always knew that New Yorkers were some of the toughest people on earth. On this day, they displayed their humanity. It was a stunning sight.

It would be several more days before I made it back home, but it was hard to look toward lower Manhattan for the longest time. A couple of months later, as travel picked up again, I returned to New York for an assignment. This time it was at the American Stock Exchange. Just blocks from ‘Ground Zero’. After making it through layers of security toward the exchange, we were ushered up to a higher floor to begin our review. The conference room that we used for the next several weeks had a direct view into the ‘pit’. Those days at the exchange were some of the most difficult working days in my professional career. I’ve continued to return to New York for work since that day, often to lower Manhattan. It’s never easy to go back to that place, but life does move on.

On that day, I would later learn, that a close friend from graduate school was working at the Pentagon when he was blown out of his chair from the impact of the third plane. He managed to get out without physical injuries. In October, my friends from graduate school all gathered in Washington, DC to honor those lost in the Pentagon.

A lot has happened since this day a decade ago, the country has changed. But, through all the noise, the memory of those lost on that day hasn’t faded. Passengers on the ill-fated flights, the firemen – New York’s Bravest, the policemen – New York’s finest, the Port Authority policemen, the workers and visitors to the towers, those who lost their lives in the Pentagon, and the Heroes of United flight 93 that began the defense of the homeland while crossing Pennsylvania. This day should be to honor them. For me, it’s a day that, a decade ago, I lost my friends Ken Zelman and Frank Deming. Much has changed in a decade, but they are not forgotten.

End of an era in knowledge management

Earlier today, Oracle announced an agreement to acquire knowledge management vendor InQuira.  Given InQuira’s deep integration with legacy Oracle products, and despite partnerships with SAP and Genesys, it was just a matter of time that Oracle absorbed InQuira.  R.Ray Wang explains why Oracle finally pulled the trigger:

InQuira “is one of the top knowledge management vendors in the business,” said analyst Ray Wang, CEO of Constellation Research. “They’ve been positioning for a sale to Oracle or SAP for the past 24 months.”

While knowledge management is “a critical component” of CRM systems, most have “a big gap in this area,” Wang added.

It might seem that a vendor such as Oracle, which already had content management and enterprise search capabilities, could build out its own knowledge management system. But the fact is that knowledge management is “a specialized niche,” not only in terms of technology but the customer base, Wang said.

via Oracle Buys InQuira to Boost Fusion CRM | PCWorld Business Center.

The last point that Ray makes is key, knowledge management is a specialized niche, a niche that ultimately wasn’t big enough to sustain standalone vendors.  To put it another way, enterprise KM turned out to be a small pond.

Having spent many years in that pond, I can tell you it was a tough place to swim.  While we all might have thought we were creating a blue ocean for ourselves, market realities and shortsighted sales strategies ended up creating a red ocean.  Knowledge management in this red ocean required access to channels, or flows of knowledge.  That meant ultimate dependency on the owners of those channels – the CRM vendors.  So it comes as no surprise that the last fish in that small pond gets gobbled up by the largest CRM vendor.

The era of bulky, on-premise enterprise KM is over, but that doesn’t mean a blue ocean doesn’t exist for KM.

Forrester’s Kate Leggett also offers some good insight on the announcement as well.

Interesting development from Wolfram

We all know Wolfram for their Mathematica and Wolfram Alpha products, so the arrival of Computational Document Format (CDF) shouldn’t come as much of a surprise:

The idea is to provide a knowledge container that’s as easy to author as documents, but with the interactivity of apps—for CDFs to make live interactivity as everyday a way to communicate as spreadsheets made charts.For too long, authors have had to aggressively compress their ideas to fit down the narrow communication pipe of static documents, only for readers at the other end to try to uncompress, reconstruct, and guess at the original landscape of information. Static documents are like a very lossy format, fuzzifying clear and fuzzy thinking alike, disguising problems, and often resulting in overwhelming communication failures: undeployed R&D, misunderstood risks, and wrong management decisions, not to mention limiting the flow of information intrinsic to education.Static documents take their share of the blame in making us “information rich, but understanding poor”, to repurpose the common saying.With CDFs we’re broadening this communication pipe with computation-powered interactivity, expanding the document medium’s richness a good deal. Actually we’re also improving what I call the “density of information” too: the ability to pack understandable information into a small space—particularly important on small screen devices like smartphones.

via Wolfram Blog : Launching the Computable Document Format CDF: Don’t Compress the Idea, Expand the Medium.
What’s interesting here is the attempt to add learning and knowledge traits to an actual knowledge container.  One initial downside of this new format is that it requires yet another browser plug-in (and a large one at that). Anyway, this is certainly worth keeping an eye on.

Gamifying everything

Interesting notes related to a book that was recently published, and is probably worth adding to my list of books to read:

The only difference between the current fad for ludology — the study of games — and any other time in the history of the internet is that now that marketers and entrepreneurs know that humans have a weakness for game mechanics, and that we can be trained to do almost anything as long as it involves a reward, however ephemeral, they are actively pursuing gamification as the latest and most sophisticated strategy for selling us stuff and/or capturing our free time.

via Has the “Gamification” of Reality Already Begun? – Technology Review.

Global Social CRM meet-up today

For those of you who follow the social media landscape as it relates to businesses, please join an interesting bunch of folks at today’s Global Social CRM meet-up.  While some of us will take advantage of being at a Cisco Telepresence site, you can join via Justin.tv or via WebEx.  Details of the meet-up, and how to attend remotely, are at the link below:

Meeting will start with introduction video by Paul Greenberg, followed by master interviews with Natalie Petohouff, Ray Wang, Mitch Lieberman, Brian Solis and Frank Eliason.

They will cover the following topics:

– How SCRM plays in the world of enterprise applications;

– Justifying Communities in SCRM planning;

– How does SCRM work for SMB?

– How communities grow from Twitter..

This will follow panel discussions with LaSandra Brill [CISCO], Katy Keim [Lithium], Munish Ghandi [HyLy], Peter Grambs [Cognizant], Kira Wampler [Ant’s Eye View] moderated by Esteban Kolksy.

Topics that will be discussed are:

– Using online communities for SCRM;

– How are communities being used today?

– How has the advent of the Social Customer changed communities?

– How are businesses reacting to these new social-networks-as-communities?

– Is there a business justification for using communities?

– What can we expect going forward?

– How can a business benefit from using communities?

– Case studies.

via Happenings, advice and technology thoughts !: Global Social CRM Community meet-up tomorrow.

I’m looking forward to this lively discussion.

Hello, is this thing on?

It’s hard hard for me to imagine that, despite all the writing (and tweeting) that I’ve done over the past year, I haven’t updated this blog in nearly a year!  I guess there are many reasons, but instead of dwelling on them, I figured the time was right to get back in the swing of things.  First, a quick housekeeping notice, I’ve moved off of my own instance of wordpress and onto WordPress.com.  There may be some broken links or missing pages, but I’ll try to get those back up asap.

The last time I posted here I linked to a great photo collage on India, so why not kickstart this weblog with another inspirational link about the subcontinent?

The video below is an animation that was done by Arjun Rihan as his graduate school thesis at the University of Southern California.  I first met Arjun several years ago, as he was contemplating a career change (he was at Oracle at the time, if I remember correctly).  He followed his passion, and as the clip below demonstrates, became a creator, and a first rate story teller.  Arjun recently put Topi up on YouTube, and you can read about the process to the final product on his weblog.  He now works at Pixar:

Rethinking target markets

Image representing GigaOm as depicted in Crunc...
Image via CrunchBase

Mike Speiser, Managing Director at Sutter Hill Ventures, has an interesting post on GigaOm today.  An excerpt:

Self-Service Nation: Why Targeting Small Business Is Good Business

While the 80-20 rule can be very powerful, the reality is that many of the costs associated with building, supporting, distributing and selling technology products have dropped dramatically in the past decade. Yet many enterprise technology executives are operating as though the cost of distribution hasn’t changed since the early 1990s. In the coming years, I expect startups to increasingly target the massively underserved small- and medium-sized business (SMB) segment by taking advantage of the arbitrage between actual and assumed costs of sales. Self-service sales models will be a key element of these startups that will forever change the face of the enterprise technology business.

As he further explains in his post, there is a significant nascent market at the small business level that has, up until now, been left for Microsoft to dominate. Smart SaaS players, as well as others that do not have legacy enterprise software DNA, are best positioned to successfully target this market in coming years. I think companies like 37Signals are already flourishing here, and serve as a great source of ideas and experience for anyone looking to tap into a greatly underserved market.

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How Microsoft extends the R&D model in India

Microsoft India Development Center, Hyderabad,...
Image by Marc_Smith via Flickr

Navi Radjou has an interesting post on how Microsoft approaches it’s global R&D over at the Harvard Business blog, excerpt:

Microsoft Reinvents Its Global R&D Model – Navi Radjou – HarvardBusiness.org

What impressed me most about TEM is its staff members’ multidisciplinary backgrounds. In addition to computer scientists and engineers, TEM also includes experts in the areas of ethnography, sociology, political science, and development economics, all of which help Microsoft understand the social context of technology in emerging markets like India. For instance, we met with Aishwarya Ratan, an associate researcher trained as a development economist, who is exploring the delivery of financial services to poor and low-literate clients using mobile technologies. Another researcher, Nimmi Rangaswamy, who has a background in social anthropology, is conducting ethnographic research in urban slums to identify the socio-economic needs of micro-entrepreneurs there — many of which can be addressed with technology.

By leveraging its multidisciplinary talent, TEM has developed some amazing solutions designed for emerging and underserved markets, both in rural and urban environments. For example, it has developed the MultiPoint mouse, which allows a single computer to be shared by multiple children in developing nations. My personal favourite is Digital Green (which I nicknamed “American Idol for Farmers”), a Web 2.0 initiative which tapes progressive farmers to disseminate their best practices across agricultural communities. Digital Green just won the 2008 Stockholm Challenge Award in the Culture category.

Undoubtedly Microsoft is pioneering the R&D 2.0 model that I discussed in my last post — an organizational model that relies on anthropologists and development economists to first decipher the socio-cultural needs of users in emerging markets like India and then use these deep insights to develop appropriate technology solutions. And it’s telling that Microsoft picked India as the epicentre of its global R&D transformation.

I don’t think Microsoft is alone in taking this approach in India or elsewhere, but it is notable that Microsoft recognizes that technological advancement alone will not lead to greater success in the future – particularly in emerging markets.

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