This is the Benefit per stock from 2007 till 2017 of the main utilities companies from Spain. This reinforces my bet on Red Electrica and Enagas.
I had a conversation with some friends that started with the following question:
Does it make sense to me to purchase a Diesel van or I should wait to the electric van?
To purchase a car/van is an investment to be analyzied, the disruption that is coming in terms of electric vehicles makes that some type of models do not make sense anymore.
This is specially important as the law is being adapted to fulfill the CO2 targets we have in the EU. Nobody wants to purchase a diesel van and 5 years later the valuation is zero because basically you cannot circulate in the city (there are local authorities applying this type of practices in big cities).
For cars the situation is different, the market already offers solutions and the trend is clear through the electric vehicles. The government is also promoting the procurement of electric vehicles through subventions, so these are things you can add to the analysis of cost.
are changing a lot, in my case, now we do not use the car at all during the week, and we only do it during weekends when we go out of city. I have jumped from doing 25.000 kms / year to drive just 11.000 kms / year.
In the city we live there are sharing car companies, so you can access to a car whenever you need.
We are asking ourselves if it makes sense to purchase a car or not.
European Green Vehicles Initiative,
EGVI is a is a contractual public-private partnership dedicated to delivering green vehicles and mobility system solutions which match the major societal, environmental and economic challenges ahead.
I have read the electrification roadmap defined for Europe which contains a lot of data related to:
- Stakeholders implied on this revolution.
- Forecast of readiness of the industry.
- Level of CO2 targets estimated and how they can be achieved.
- What are the legal aspects that need to change.
- How the electric net needs to evolve.
- What are the expected benefits of the changes.
- Logistics challenges for the transport of energy, the peaks of compsumption…
- Scenarios about the penetration of electric vehicles during next 15 years.
- The importance of the research projects and the local investments in the different countries for the right deployment of the whole thing in the different regions.
- How this initiative is founded by Horizon 2020 framework.
The document answers a lot of questions about where we are going to, and there are so many other challenges that right now are still not known.
In a nutshell, if you want to purchase a van now, you can do it, it will be useful for the next 10 – 15 years. The electrification roadmap document details that for vans there are still so many technical challenges that they need to be resolved, and they give a pesimistic forecast that the peaks of high presence of new sold vehicles will be happening around 2030.
Two in a box model is an Anglo Saxon model that works well with Anglo Saxon people. They understand the grey area and they handle the positive tensions in the right way. Depending of the situation and the need of the organization each part of the box makes decisions and the things run with “back and forth” discussions.
Unique direct report is a Latin model, you report just to one person and there is an unique direction (wrong or right) to follow.
When you implement a “2 in a box model” on a mainly Latin organization, the situation is different. Generally, we try to find who in the “2 in a box” who has really more power, and then follow it. It takes time to understand how to articulate these tensions in a positive way so the organization advance properly.
I’m writing using the context of the “stereotypes”, so please consider that not every single person falls on it, it’s just a generalization.
So many companies are moving from their current environments to the new ecosystems available in the market. This drives the organizations to perform a rationalization of their portfolios.
This is no-brainer, but the first step is to understand your current portfolio of assets and what are your business priorities for the future. Once done, next step is the selection of the target ecosystems. There are different ecosystems in the market available, and the first questions to be asked are:
- What are the best ones for my organization needs?
- Do they integrate properly with respect my needs?
- How mature is my organization to embrace the selected ecosystem?
Below I have tried to define what are the components of the different ecosystems or platforms, independently of the business processes or the industry where the organization is:
The picture is full of lines, so let’s divide them from end-user and CEO/CIO point of view. I have added CEO on purpose, because the IT activities are not a support department anymore. Some organizations still do not understand that IT is a core capability of their organization and this is a big mistake.
For the end-user:
- Platform , is the environment where they access and perform their duties. User experience is key and a logical way to integrate with different tools and services is relevant to enable the expert users to dig into the platform and obtain as much benefits of its use. The user assumes they can send e-mails, manage documentation, chat with their colleagues, perform workflow activities…. This is not an added value, it’s a must.
- Applications marketplace: users are wise people with specific needs. The platform does not need to satisfy all specific needs, but an application marketplace that offers specific solutions is important to make your platform to fit within your business needs.
- Certification program : it enables the organization to have a clear roadmap of required knowledge your teams require. It also sets some standards on the use of the platform. Finally these programs also enable the business to understand the technical side of the platform which is key when managing transformation projects.
- Development community: the link with the end users is the applications marketplace, but in addition this can be also linked with specific projects done by a third party. The third parties have to be able to provide customized solutions, respecting the platform best practices and enabling a long term use of these specific solutions. Here the robustness of the platform is key.
For the CIO / CEO. The majority of the comments are around the value of time, as this is the key aspect we have to look at long term: time to market.
- Application marketplace, relevant to access to specific solutions for your organization. You pay, but immediately you obtain the solution on your environment. You will enable the different business units to invest their money where they want.
- Partners network is important to understand if we can integrate the other assets we have on the target ecosystem. We require flexibility to enable the platform to adapt to our organization. A platform without integration with the main vendors will drive us to an isolated environment with limits at medium term, which will finalize with a fiasco and more $$ investment.
- Development community. We have to understand how big is the development community, understand if there are qualified vendors with these capabilities, if we can create a competitive environment, if we just can depend on a given partner…
- API, indeed the versatility of the API for your partners, your third parties, the development community.
- Continuous development : this is key when the complexity of your platform is increased and you are attending needs from different BUs into the same environment. How fast, which quality and how stable is the delivery of new pieces of software is a relevant aspect.
- Software development speed. This indirect parameter is the more relevant aspect of the map, because it gives you a lot of information about the rest of the components and how they impact on your time to market.
The origin of a slow software development speed could be:
- The platform does not have a good API to integrate other systems.
- The first integrations are easy but continues development of different activities makes the integrations more complex and the platform is not able to respond quickly.
- There are too much re-coding.
- There are not good quality checks of the code.
- There is not a good development community.
- There are not good partnerships with other vendors that require to perform extra efforts for integration.
- Once the complexity of the environment is increased the time to market decreases. Stress analysis and understand the limits of the environment is key.
- The distance between the business requirements and technical solution is so far away and it makes the achievement of the new solutions to be a complex process.
- You have not knowledge of the platform in house to launch/manage these type of projects.
Fast software development speed means:
- You will reach the market faster,
- You attend your business processes faster,
- You can define shorter cycles of software delivery.
- You potentially will be more competitive.
In 1961 organizations tried to send a man on the moon. In 2015 organizations try to be the fastest developing code.
Ok joapen, but you did not answer “which ecosystem/s are the right ones for me?”
No I did not, this is just an introduction of the main aspects of this exercise. To be continued.
Gartner is advertising “bi-modal” ; a “new” way to drive operations and new activities of a corporation. I was reading the idea and the concepts around it and I found it “old” idea, with some propositions that are so nice to have, and that they can be defended on the paper, but that in the reality of the companies (where there are real people and real egos) I find difficult to implement.
Review the basis of organizations behavior before to accept the “bi-modal” proposition. On this topic Simon Wardley defines here three attitudes, cultures and type of people: pioneers, settlers and town planners (the main “modes”), which impacts the way the organization mainly behaves.
- Pioneers →develop novel concepts.
- Settlers → create great products.
- Town Planners → create highly industrialized commodity and utility services.
Not all combinations are possible, and that in some cases you have to give up some of the “modes” to do not be in the “middle of everything”:
- DON’T try and break into Pioneers and Town Planners . These two groups are far apart. You’ll create a them vs us culture. None of the novel concepts will ever be industrialized because the Pioneers won’t develop them enough and the Town Planners will refuse to accept them for being underdeveloped. Both groups feel they are the most important and both ridicules the other.
- DON’T bury your Settlers into one of these groups. They won’t feel welcome, they will be in conflict with the group becoming second class citizens. Put them in the Pioneer group and they’ll be denigrated to documenting the “glorious” inventions of others and fighting a losing battle over user needs. Stick them with Town Planners and they’ll be seen as ‘lightweights’, the people whose job it is to deal with those annoying Pioneers and document what they’ve done etc.
Then, what is new in bi-modal model?
- IT industry is full of marketing concepts, which need to be evaluated and understood.
- Ideas are easy to defend on the paper, but it’s different to put in place with people. When talking about organizational transformations and changes, the risk are high.
What does “Digital” mean for you?
I have asked this question several times and it’s a good way to put the listener of the question in an embarrassing situation almost all the times.
That question was also done to me a couple of times and apparently I almost did well. I found this Point of view document from Horses of Sources where they explain their understanding of what digital means right now.
In a nutshell, “digital” describes the technologies that enable enterprises brands to exist electronically with their customers, employees, partners and suppliers. It’s the journey from a situation “AS-IS” to a situation “TO-BE”, where the there are six layers or dimensions that you have to take into account.
- Enterprise brand: “digital” is the way the enterprise utilize technology to interact with customers, employees… This component is marketing centered topic.
- As a Service: the “digital” world is interested to consume as a service, with clear price models and reducing CAPEX, so companies needs to adapt their services/products to this finance model.
- Infrastructure: there are changes at this level: be quicker, less expensive and take into account new spaces: IoT, more security requirements…
- Enabling technology : in a digital world companies need to bridge the gap of communication and understanding between clients/consumers and the enterprise itself.
- Omnichannel: in a digital world all communication channels need to be taking into account, a clear strategy about how to reach the consumer attention is clear. Here is where marketing has started to call themselves “Digital Marketing”.
- Digital engagement: how the consumer experience is with respect the company, the brand through the Apps, web page and other digital elements. This component is marketing centered topic too.
Do you remember the years where all people where talking about “internet era”, “web 2.0”, “cloud era”? well now all is about “Digital”, another transformation of the companies to stay competitive in a changing world.
So many USA companies follow a common pattern when they want to start to compete in Europe: they basically do it starting their moves in Ireland.
- English, as common language so they can communicate well each other and start with UK as main market target. In the main cities there are too many immigrants from other European countries, so to find native employees from Germany, France, Easter countries, Italy or Spain is not difficult. To build a service center offering a multi-language capabilities is not a big deal.
- Low taxes offered by the government: this is one of the attractive aspects offered and very criticized by other European countries.
- Competitive cost of living, which makes the investment to be lighter than in UK (specially London).
- IT capabilities: there are a good bunch of companies already there, which attracts people with so many different skills.
Scenario planning of a company, product, solution or organization is a tough work. You have to understand the landscape, competitors, your capabilities, inertia, common patterns, weak signals, anticipation & game-play. I face the situation on solutions (which is less complex) and an start-up company and the concentration to do it well is enormous.
To gather the information is relatively easy, the tough side is to define plan you want to put in place and be sure that it really is aligned with all these factors.
Image from Bits or pieces?
This is a nice article that talks about some myths about digital transformation.
I like the comments related to:
- Maturity of your organization: not all organizations can start from the same start line, the level of current maturity is important to understand how drive it.
- Talent challenge: as in the 90’s the companies wanted their people to know about WordPerfect, Lotus 123… now the people have to increase their skills (again). Nothing new, by the way.
- Survey about how digital transformation is Today on a dashboard.
- Taking Risks Becomes a Cultural Norm; why? The digital mature companies knows that today, the costs of inaction almost always exceed the costs of action.
- It is a transformation, it requires leadership and involvement from leaders of the organization (surprise, surprise!).
- Beth Israel Deaconess: “I have never seen a technology drive change on its own, culture leads the adoption of technology. Our ability to innovate depends on the impatience of our culture.”
- Greater integration between online and offline experiences.
The goals of this transformations are not so different to the competitive challenges of the organizations 5, 10 or 15 years ago.
With the banks the bottom-line is that they come from a very regulated market with big barriers for the penetration of new competitors. They have an ecosystem who has been changing so much during the last 30 years, and they have been the first ones to take the advantage of the IT, so the challenges they are facing today is not a new situation for them (for instance, the newspaper companies are not used to have these type of dynamics where the market completely changes).
The new ingredient to the banking market is that some IT companies wants to become banks. Paypal, Google, Facebook…. they have started to manage so many volume of payments. Payments who are not managed by traditional banks anymore.
The next step can be that with a good volume of treasury, these IT companies, can request to the central bank of a country to be able to extend credits, loans… as the major supermarkets are already doing.
So this is the situation, there are so many different reactions the banks have had and they are managing it in different ways. I can only write about 2 cases that I know.
Case one, the bank identified these threads so much time ago (2000) and they took the determination that the IT was not an auxiliary department of the bank, it has to be considered as a core capability that the organization has to define, nurture and mature. In this situation they started to acquire niche small companies, they started to in-source capabilities that in the new map of capabilities were considered as core capabilities, and they started to define a strategy where the end consumer is demanding “more” in terms of accessibility, products…
Case two, the bank has continued their expansion buying other banks, acquiring with them new IT departments, people with knowledge in their own areas and making the complexity of the IT organization to be so much complex. They have integration plans that are not always completed properly, so they are not able to take the competitive advantage that they where assuming during the acquisition analysis. They also have a strong dependency on third parties who has the knowledge of the processes and these vendors are only interested on the T&M contracts, that’s it. They were too much far away in terms of percentage of outsourced consulting services.
In this situation, the second bank has an organization with low costs of operations, but their time response to evolve their solutions is slow, their ability to change and adapt the organization and the operations are very poor. They know they can compete in the next quarters and be operationally efficient, but the 5 years road map they draw in 2007 is obsolete and they as organization have not been able to react to the changes that were coming.
This is my personal view, if you type “traditional banks challenges” in a search engine, you will read more! For instance this one.