Leaving on a Jet Plane, thinking they could have done it better


I am in Trivandrum Airport(Capital of Kerala,the southern most state in India – and also my hometown) now, at the domestic terminal waiting for the flight to Bangalore . There is no internet access here, so by the time I post this, I will probably  be in Bangalore, Frankfurt or even Boston.

I am on my way to Boston, MA to attend the SAP influencer summit, and this is the shortest of the 3 flights I have to endure to reach Boston. This airport now has a new international terminal, so they shifted the domestic flights to the old international terminal. Needless to say, the whole place has a big facelift now compared to any other time in the past that I can remember.

The security here is impeccable – they do a rather intrusive (by US standards) pat down before they let you in. And they seem to physically check about 50% of all carry on bags. In my childhood, they still used to do this to some extent – but used to let politicians, big company executives and the like go through without any hassle. Now they appear  very strict – and if you refuse the pat down, you can just leave the airport. No middle ground here !

The lady at the Jet Airways counter that checked me in told me – “you have 2 options to check in your bag. 1. I check it to Bangalore, and you take it physically to Lufthansa and check it again. Or 2. I check it all the way to Boston, but there is no guarantee it will reach there”. Hmmm…hard choices indeed. Seriously ? Is that even a choice to give a passenger? I appreciate the advice, and will keep it for future reference…may be 🙂

Air travel in India has been totally below par for me, and I am just very frustrated at the moment with how this Industry does its customer facing work.

Let me take it from the top – from the moment I landed in India few days ago, in Bangalore airport. The immigration guy asked me where is the immigration entry stamp in my passport for the last time I was in India. I said I know the approximate date, but no idea where the actual stamp itself is on the passport. He asked me to search and show him, before he lets me enter the country. I found it eventually amongst a million other stamps, and he solidly wasted 20 minutes of my life that I will never get again. On the plus side, I think I just found out a better game than sudoku for frequent fliers – it is called spot the random stamp.

I picked up my bag and tried to go over next door to the domestic terminal to catch a flight to Kolkatta, which was about 4 hours later. Well – no dice. The security dude won’t let me past the transfer area to the Air India counter for another 2 hours. He wouldn’t give me any reason – more like “because I said so”. So I hung around there, without even access to a decent bathroom. The one I had access to – well, let me just say I can’t describe it to you without both of us throwing up.

So two hours later, I go to Air India counter. There are 5 counters, and about 25 Air India staff there. As soon as they saw me – they said “Pls wait for 5 minutes – we won’t start till 4AM”. I waited, and then it just erupted in to chaos. They could not handle a queue – and all the passengers started jockeying for position and so on. Few minutes later, 22 out of 25 people manning the counters went over to help the lady in one counter who could not get her system to work. You can imagine the speed at the other 4 counters at that stage. It was a good thing I had 4 hours to check in.

Onward to the gate now and I will skip the minor inconveniences till I got into the flight. Well – maybe except the fact that it took about 10 people in uniform to board one flight (any wonder these airlines cannot keep their cost structures under control?). This was the first Air India flight I had taken in maybe 10 years or so. And it was as pathetic as the last time. Most of the seats had duct tape holding pieces together. The 3 flight attendants had absolute boredom writ large on their faces. Just looking at them made me yawn. They did serve a hot breakfast (of sorts) in the flight. After 2 hours of fog delay, we took off. The silver lining was the skill of pilots – amazing take off, cruise and landing despite the weather.

My bag was the first to come off the belt, thanks to the priority tag. And it had a big broken piece of what used to be a handle hanging from it. Par for course so fa, eh?.

The flight out from Kolkata – despite me being mentally prepared -was just as bad. It was Jet Airways this time, the modern airline – unlike Air India. I had higher expectations. I soon found out that Kolkatta air must be heavier by 3 KG than Phoenix Air, because they charged me for excess baggage despite me not adding any thing to my suitcase.

We took off on time, and arrived on time. Of course it took – again – 10 people to board passengers into this one flight. For a flight leaving at 6 AM and flying 2.5 hours to Bangalore, I expected it to have breakfast – either complimentary or for purchase. No luck again – and I just drank glass after glass of water till I landed. The flight attendants were all nice, but the pilot needs to go back to a simulator to learn how to land a plane without making passengers feel that their kidney and brain swapped places in 2 seconds.

I have been reading in the papers that the Airline industry in India is in some serious trouble, and that government is trying to help airlines become profitable. I know India generally has a socialist outlook historically about these things –  so I am not holding my breath on anything good happening to change this. But if there is ever a moment to let Darwin get his due, now would be it. Let the crappy airlines all die, and let more competitive, customer friendly ones take their place. Millions of passengers will be eternally grateful.

Believe it or not – I am now EAGERLY looking forward to flying US Airways flight from BOS to PHX on Wednesday. Now that is saying a LOT, as many Dividend miles elite members will agree.

SAP buys SuccessFactors – a few random thoughts


I heard the news of SAP buying SuccessFactors while in the cab to PHX airport for a last minute business trip to India. And I am typing this from the plane – the first of four that will take me to Kolkata. On my way back from India, I will get to attend the SAP influencer summit in Boston, MA. And I think I will have to throw away all the questions I had for SAP so far, and ask some on its focus on cloud. Too bad that GoGo internet is not working for me in this flight, else I wanted to contact a few people I trust to get some additional input. I guess I will post this from Denver airport before the next flight takes off.

HCM has historically not been a core focus area for me, and is probably the only part of the core Business Suite modules I have not played with hands-on. But over the last couple of years, HCM has been constantly getting on my radar, and I even put it in my top trends in SAP consulting opportunities for 2012 in my SCN blog.

The first thought that ran through my mind when I heard the news was “The founders of Workday must be partying hard”. I think SAP buying Workday sets them up nicely for bigger valuation. I know the company keeps saying they are not for sale – but then what else do you expect them to say? . Either they will have an extremely good IPO, or they will get acquired at a high premium by another company. May be SFDC will buy them? or Oracle?

SAP’s leadership team has a big job to do now – decide quickly how to integrate this new acquisition into existing architecture, and how to rationalize the portfolio. There are two major considerations in my mind – there is the platform play compared to ByDesign, and there is the solution play compared to CareerOnDemand, Business Suite etc. And of course, I assume Vishal Sikka will want to make this work on HANA, BI 4.0 and SUP too, with probably SUP being the more important one for now. I don’t think ByD or CareerOD will survive due to overlap.

Actually, I think the bigger worry for SAP is ironically their own talent management for cloud. They could not keep Wookey. All that talk about him moving out for family reasons don’t ring true anymore once he joined SFDC. So what about Lars who will come in now – will he stick around long enough? And even more important – what about the excellent team in place now for OD in SAP? Will they stick around long term and re-engineer everything new to whatever is the new platform? Will SuccessFactors team integrate well with legacy SAP? More than anything else – that is what would probably dictate success and failure for SAP in cloud.

Communication to customers and partners is key. This is where I think SAP needs the most focus in short term. They need to figure out their roadmap at the earliest, and start talking to customers and others in the ecosystem. After the experience with BOBJ and Sybase, I think SAP would know how to do this effectively. I did like one thing – I saw plenty of tweets from existing cloud team at SAP saying they are thrilled. I am looking forward to talking to them soon to get some details.

What about customers? I am going to India now for some customer meetings. I do intend to ask them what they feel about SAP’s cloud strategy now. In my opinion, customers of SFSF should expect SAP reps opening up many opportunities to buy more solutions. I am not equally sure of the converse. Existing SAP customers I guess will be in a “wait and watch” mode. SFSF reps might offer better deals now to close out – but I am in two minds on whether this is good or bad to jump into. And the reason is – I don’t know what SAP will do in terms of rationalization. Once we know the roadmap more clearly, I do expect SAP to have big time cross selling opportunities, and customers to have many solutions from one shop.

Bundled sales is the name of the game for SAP to get to the 20B plan for 2015. So far, Bill McDermott has been extremely bullish on pipeline for HANA, mobility and now also on SFSF. If that holds – I expect him to up his plans to something more than 20B, and even declare a bigger EPS plan for 2015. 2012 will be a very interesting year in SAP land. Can’t wait to see what else will happen. Parting thought – will there be few more M&A deals in 2011 in Enterprise Software? I guess there will be.

Is “Pursuit of Profits” the killer of Innovation and the U.S. Economy? hmmm..I don’t think so


I saw this today morning on twitter via Frank Scavo

http://www.forbes.com/sites/stevedenning/2011/11/18/clayton-christensen-how-pursuit-of-profits-kills-innovation-and-the-us-economy/

It is an article on Forbes.com by Steve Denning, based on a talk at the Gartner Symposium ITExpo 2011 on October 16-20, 2011, given by Clayton Christensen.

While I have a lot of respect for Christensen, I don’t think all the arguments made forth in the article are reasonable. I do think some of them have social merit, although I doubt they make economic sense. Here are my thoughts for what it is worth. Of course, this is just my personal view, not that of my employer.

The Dell Example

So Dell did outsource most of what it does, and it does not look smart anymore. Makes perfect sense to me – but, that does not prove everyone who outsourced got burned.

The icon for American innovation -Apple – heavily depends on Foxconn in China for the profit margins of iPads. Does that make people say Apple is less innovative ? If Apple moved manufacturing jobs to US, it probably will lose a third of its profits (I guess..have not researched ). So it might not make direct sense economically, but definitely makes sense socially leading to indirect gains on economy too. Many more Americans will get jobs, but then either Apple will have less returns for its investors, or iPads will cost more – thereby reducing its appeal somewhat.

Dell and Apple are at 2 extremes probably. All I am saying is that for every extreme example used to make a point, there is almost always an extreme counter example.

There is one point I fully agree – if you outsource your core competence (assuming you can even define what it is in the first place), you have just booked your ticket to a chapter in the history books. Apple still keeps design in US so far from what I understand, and it helps them be in control. If Macro-economic conditions favor them, they could very well bring the jobs from China back to the US.

Business schools are to blame, but only in part

It is not the first time B schools get beaten up for everything that is wrong, and some of it is absolutely well deserved. But I don’t think B schools should be beaten up for teaching that profitability is a good thing, and that it is the ultimate goal of a business. Also, I don’t think anyone makes investment decisions based on any one ratio like IRR or RONA or any other ratio for that matter. B schools do teach that trusting any one ratio without context is a terrible way to make a decision – at least the one I went to did. Decisions are made by looking at a bunch of ratios in relation to each other, and then by absolute numbers and comparison to benchmarks, and finally by the experience and judgment of managers. In real life, it would take forever to make decisions without some help from ratios.

Where I agree wholeheartedly is that some financial analysts dumb down these ratios to compare companies which have no similarity. That is not the fault entirely of business schools – it can be argued that it is the fault of the business itself. Business Schools just ape what seems to be SOP for business. Over time this is a chicken and egg problem – trying to figure out if academia started it or some one in the street started it. In short – B Schools at best should only be blamed for some part of the problem.

The case of Fabless companies – did they really miss the point?

From the late seventies / early eighties when fabless started to today, that industry moved from just about a million dollars between 3 companies to the top 3 companies ( Qualcomm, Broadcom etc) making about 15 Billion dollars or so today, and growing steadily. These companies do the design and then trusts contract manufacturers to build. The one company that does all manufacturing by itself – Intel, is also now going after the business of letting other companies use its terrific foundries. And where does Intel do all its manufacturing – is it in US? Nope. Semiconductors are very cyclical, and innovation typically outpaces the ability to keep up investment in fabs to match it. So there is a higher threshold for entry into this field. As long as design capabilities ( design in/ design win) remain in US, why would US lose out?

As things get to a stage in maturity curve when the manufacturing process is fairly repeatable, I would argue it continues to make sense to outsource the repeatable process. The innovative part – the brains which do design – are the ones that should not be outsourced. The resources saved by outsourcing can then be utilized for the next round of innovations. There is only so much investment to go around – just as we did not hold tight to horse buggies when it became possible to mass produce cars, we should not hold on to the past just to be extremely risk averse. if we do so – then we will not be able to invest in further innovation.

There is an angle of incremental innovation vs disruptive innovation that should be considered. Outsourcing can probably hurt the incremental innovation side quite a bit. However, if the money saved by outsourcing is reinvested partly to R&D for disruptive innovation – can’t it be argued that it more than makes up for the opportunity cost?

Cost accounting surely needs to evolve

I readily agree here. We have to understand that the world is not static, and there are always new types of costs that need to be addressed. But this is also subject to interpretation to a large extent – it is a best guess to compare opportunity cost of “lost knowledge due to outsourcing” to “investment in new innovation”. The reason is that in both cases – it is only after the fact that we can see what the benefits truly are. So this is not a concrete argument, although it has some merit.

Customer delight vs Profitability

This is where I have the biggest disagreement. If the end result is customer delight, and profitability is not an objective – why is Apple not selling iPads for $50 or for cost or free even? Obviously customers will be delighted if the price is lower with the same set of features, right? The reason is simple – the company that is not profitable cannot invest in innovation, or reward its employees enough to delight the customers on a sustainable basis. Customer delight is a great means to an end – not an end in itself.

In every case, customer is not the king. When something new comes into the market that customers like, sellers are the kings. Semiconductor industry is an excellent example – they ran on quota basis for a while, but cannot do so for the last few years. Once competition starts heating up, sellers cannot take the same attitude – and slowly make customer the king, and try to delight them. But seller’s motivation is always to make the next thing that makes them king, and ride the next wave. If you just try to ride any one wave for long – you risk the chance of booking the history chapter ticket. IBM and Apple and many others have proven this already in history.

What is killing the US economy and Innovation then?

In my un-researched opinion, it is due to multiple factors – which need comprehensive long term policy changes . Education is one area that I think where US needs to concentrate the most. Without Science, Math, Design skills etc being encouraged big time – it will be hard to remain competitive over time. Immigration is another – why wouldn’t US want to keep the large chunk of students who come here for higher studies, instead of making it difficult for them to get visas and permanent residence? And about taxes – why would we not have tax laws that make it attractive for US companies to bring back money home from abroad?

This country has solved some of the biggest problems that mankind ever faced. I would think these problems we face today on the economy can be solved too with our collective will – if only people can let go of the left/right type thought process and other petty differences and instead look at the problems with the sole objective of solving them.