Solar Array in Place!

For those of you interested in the progress of our green energy project, we're happy to report that our solar array is now in place!

It's hard to tell the size of the array from the photo. But, it's pretty large - measuring about 3 meters x 5 meters (10 ft. x 16 ft.).

Our SkyStream wind turbine has also arrived. Now we're just waiting for the 15.2 meter (50 ft.) tower that it'll be mounted to. There will be a great deal of ceremony and fanfare when the wind turbine is finally raised! Expect photos and a video to be posted.

We've come a long way since October and we're still on target to go "live" in January.

Notice the patch of white in front of the array. That's right. It's a bit of snow. Winter has arrived!

Will keep you posted!

Best,

Howard

A Fresh Look at Strategy (and a green energy update)

Most of us have been fixated on the current economic crisis that seems to worsen by the day. But, how many have used this as an opportunity to revisit strategy? At a moment when we're all riveted to current events it's also the perfect time to think about the future.

By way of an analogy, here's a quick update on my green energy initiative. BTW, thanks to those of you that have given me such positive feedback on it.

As you can see from these photos, we're continuing to make great progress and should be generating electricity very soon. The concrete pad is now sufficiently cured, the base of the tower is ready and the frame for the photovoltaic cells is in place. We already have the photovoltaic panels on site and are awaiting shipment of the tower and wind turbine - which should arrive within the next few weeks. And, the paperwork for "net metering" is being submitted, which will enable us to sell excess electricity back to the local utility.

The second photo offers a view to the west - the dominant source of wind. We're very fortunate to have such a great site - with an average wind speed of 10 - 12 mph! If you look closely, you might be able to see the the wind turbines (there are 12 of them) from New Hampshire's first commercial wind farm, which is about 10 miles away. This wind farm recently went online and will soon be generating 24 megawatts of electricity - enough for 10,000 homes!

Our wind turbine is the first residential one to be constructed in our town and will generate about 3KW. Like the commercial wind farm, ROI won't be achieved for 30 or more years!

As I mentioned in an earlier post, this is our investment in the future and an important contribution to our community and the world. It is "strategic" - in the truest sense of the word. In light of the current economic maelstrom, it is tempting reduce costs and scale back our efforts. However, I am not willing to retreat or change my "strategic plan" for green energy. Of course, in parallel, we've also been (tactically) pursuing energy conservation. For example, we've replaced most incandescent lights with fluorescent or LED equivalents, we unplug appliances when not in use, and we've super-insulated the house and updated the heating system for optimal efficiency.

Likewise, in the business world, it's tempting to completely abandon long-term strategy in favor of short-term tactics (e.g., cost reductions). However, I believe that we can't allow ourselves to lose sight of our goals for the future. Do you expect your company to be around in 25 years? If so, what sort of future do you envision? How will you achieve your vision? What sort of scenarios have you developed to help think about the future?

In fact, I believe that the current crisis is the perfect time to revisit strategy, and to update, enhance or totally recreate it. In my book, The Performance Management Revolution, I cite strategy as one of the four tenets of any performance management initiative. The use of scenarios - which consider political, economic, social and technological possibilities - will help direct any strategic thinking exercise.

With a compelling and credible strategy, the current crisis need only present a temporary set back, instead of allowing it to redefine the enterprise, ultimately hampering its future.

Best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Why Performance Management and Business Intelligence are Crucial at this Moment

Now that the US elections are behind us, we can start to refocus on the biggest single issue facing businesses (and individuals) right now – the economy. In January, I started talking about an economic recession:January blog posting

I think it’s now unanimous that a global recession is upon us with more bad news emerging each day. In fact, today the OECD issued a statement saying that its 30-nation member area “appeared to have entered recession”: OECD Press Release

Even Asia is not immune, with China announcing that annual industrial output growth has slowed to 8.2 percent for October. And, I think we’re just getting started! All signs point not only to a meager Q4 but a Q1 that likely won’t be much better.

In the corporate world, we’re seeing many respond with a “kneejerk” reaction to this malaise: budget cuts, RIFs, financial guidance reduced, assets sold, bankruptcies, etc. These organizations have adopted a sort of “bunker mentality” to face the threat. As a result, they overreact, shedding more “ballast” than they need to stay afloat. By exaggerating the challenge and overcompensating, they weaken the enterprise for the future. One doesn’t have to look far to find these sorts of companies – for example: a number of companies in the auto and telecommunications industries. A friend of mine, who works for a large telco, shared with me extreme frustration concerning ongoing and across-the-board RIFs. Seasoned employees have been eliminated in favor of cheaper, less experienced labor, making it hard, if not impossible to get important work done. While this may please Wall Street (in the near term), this sort of tactical approach doesn’t bode well for their future.

In contrast, the wise organization carefully analyzes the current threat, developing multiple scenarios for the future and creates suitable short and long term plans. This forward-thinking approach allows management to proceed strategically, with an eye to the future, but still grounded in the present. Of course, organizations may still have to take measures to reduce costs – perhaps dramatically. However, they will do so with greater precision – ensuring they haven’t seriously hampered their future ability to execute. It’s also reasonable to expect that this sort of sober, yet visionary direction will expose new opportunities to invest in, which will have been obscured to less sophisticated organizations. A good example of this, in my opinion, is Alcoa. Hit with an industry-wide surplus of aluminum (and a dramatic decline in price), it took aggressive action to reduce costs, employing “a four-part model that spreads the curtailments across [the] global system and minimizes the costs associated with plant shutdowns and re-starts and, in turn, minimize the impact on plant communities.” You can read their press release here: Alcoa Press Release

Of course, the title of this posting has already given away my core message – that EPM and BI are critical during this time. This is true. However, I don’t mean just the technology. I mean the philosophy! This begins with transparency and accountability. Without those as core tenets of an organization, the best technology won’t help. However, under the right conditions, BI and EPM can work wonders – allowing an organization to quickly develop perspective, to assess strengths, weaknesses and capabilities. To plan, execute, analyze, re-plan, alter strategy, and plan and execute again in a continuous cycle – matching the changing dynamics of the real world.

So, I encourage organizations to avoid the reactive and tactical approach to a worsening economy and take a more strategic outlook – embracing transparency and accountability - with BI and EPM as enablers – delivering true perspective, precision of execution and agility and a better chance to survive and see the next era of growth.

Best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Sustainable energy update

We've made great progress on our renewable energy site - including running all of the electrical "chases" and pouring 15 tons of concrete for the pad including the base for the wind turbine tower and piers for the photovoltaic arrays. Now the concrete has to "cure" for thirty days before the tower can be erected. So far we're right on schedule for going live in January!

-Howard

Sustainable energy as a starting point

Let me start this posting, by talking about one of my pet projects that I'm very excited about. I've invested in a sustainable energy project, which will go live early next year. We're installing a wind

-driven turbine and solar photo-voltaic (PV) arrays - for a total of ~5KW/year of electricity generating power. This is something I've wanted to do for a very long time. So, I'm realizing a dream of mine. It's a modest project by most standards, but it's my investment in the future of my community and the Earth.

Right now, it's just a big whole in the ground. However, by the beginning of next year, it will start to generate electricity and will serve as a new energy source for the local utility when it produces excess power. In any event, it will reduce our dependence on the electric company for power and reduce our carbon footprint. Here's a picture of what it will look like when it's done. If our initial project is successful, we will plan to expand it to generate even more power in the future. For those that are interested in learning more about the wind turbine we're using, check out http://www.skystreamenergy.com

So, why am I telling you this? Well, as some of you may be aware, we are in the midst of a global economic mess. Some of you may be wondering how we got here and have probably heard various politicians and economists promoting their theories. However, I think it's amazingly simple. Most people these days are not focusing on the long term, say 50 years or more. Our thinking has become frighteningly short term. Most businesses (especially those that are publicly traded) focus upon near-term results and are tactically driven to deliver positive top and bottom line growth. This is exacerbated by the demands of Wall Street and discourages companies from investing long term. It takes courageous leadership to turn a blind eye to Wall Street to do the "right thing" because of the immediate and inevitable negative response - resulting in a lower market cap, class action law suits, and a potential hostile takeover. Not for the faint of heart.

Back to my sustainable energy project for a moment. If I had had a short-term mindset, using ROI as the sole criterion for investing in renewable energy, I never would have done it. Even with government incentives, the ROI is between 30 - 50 years out. Some people think I'm crazy. Why bother investing 50 years out when I will (undoubtedly) be gone from this world? It's because I'm betting (hoping) that people will still inhabit the Earth after I'm gone. It's my attempt to go against the grain of conventional wisdom and do what I know is right.

The bottom line is that if everyone thinks that someone else will worry about the future, then no one will! Each of us is responsible for thinking, planning and investing for the future - now! This means individuals, families, communities, nations - and businesses. Fifty years is a good starting point. A century would be better. If everyone had this perspective, imagine how different and better the world would be. We would be forced to think beyond our own lifetimes and personal interests and would collaborate on a scale unknown before to ensure the future of the Earth and our civilization.

Perhaps I am an idealist. Or maybe crazy. Or both. In any event, I'll keep everyone posted on my little sustainable energy project. If you have a sustainable project of your own, let me know!

All the best,

Howard

Don't forget to check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Summer is over and it's time to get back to work.

Well, it’s the end of the summer here in the Northern Hemisphere and time to get back to business. Summer and vacation are always a nice change, but it’s good to be back working – writing, and talking about Business Intelligence (BI) and Enterprise Performance Management (EPM)!

So, now that we’re back, I’ve been pondering: what will business look like at the end of 2008 and going into 2009?

I don’t want to appear like the harbinger of doom, but businesses continue to be profoundly affected by a declining economy. Overall spending is down and RIFs abound. Although many have not officially cut budgets, they aren’t being allowed to spend them either. One client of mine referred to their spending plans as "fluid". Of course "fluid" implies "flowing", which is certainly not what she meant.

In a recent study that I participated in, almost all organizations are hoping to use EPM solutions to reduce costs. For small enterprises, this means operating more efficiently and better leveraging existing resources. For larger enterprises, it means being able to reduce the workforce and continue to function.

On the brighter side, a slow economy represents an ideal opportunity to focus upon implementing performance management solutions, which will help right now by delivering greater efficiency, but also better position companies when the economy begins to improve.

Still on the brighter side, EPM is enabling new kinds of organizations to emerge and thrive. In a case study that I presented last week at TDWI, I spoke of a young company that outsourced nearly every function – using EPM as the “glue” to hold it together. In Tom Malone’s The Future of Work, he talks about new organizational structures becoming possible as the cost of communications decreases. Well, the cost of communications these days (i.e., The Internet) is practically free. A dividend of this phenomenon is that EPM is now available to any organization – using the Internet.

Accordingly, innumerable Software-as-a-service (SaaS) vendors have emerged, offering less expensive EPM solutions that are relatively easy to buy and implement. Now, I don’t want to seem like a cheerleader for SaaS, but that same study indicated huge interest and openness to SaaS solutions across the board: small and large organizations, IT Departments and business users. So, what does this mean, exactly? Well, at least two big things that I can think of:

1) Smaller, innovative organizations can emerge – anywhere – and rapidly become serious competitors in most any market and

2) The very notion of software is going to change for everyone.

On the supply side, I expect to see a growing number of SaaS-based solutions appear on the scene. Back in 2000, you had to be a dotcom to get funding. Today you have to be a SaaS solution. The large enterprise software vendors will also offer SaaS solutions, but only half-heartedly.

You see, SaaS competes with the dominant enterprise software model (e.g., higher margins). So, for a time, it’ll be like the “wild, wild west” with a myriad of offerings from many smaller suppliers. This is a good thing. There will be amazing innovation until consolidation begins. If you're interested in hearing more about the subject, I recently participated in a webcast with DMReview: http://www.dmreview.com/dmradio/10001661-1.html

So, in spite of a difficult economy, there are some hopeful signs – with EPM as a key enabler of whatever the emerging business and software paradigms turn out to be.

Next month I'll be a keynote at Palladium's Business Performance Conference 2008, in Boston, September 9th - 12th:

http://www.thepalladiumgroup.com/events/exec/Performance/Pages/Keynotes.aspx

Hope to see you there!

All the best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Some stories from the road

It feels like summer here in New Hampshire. It’ll be over 90F (32C) today and pretty humid, making me long for the cold of winter. Of course, one way to avoid the weather is to go on the road - spending time in air conditioned airports, airplanes and hotels.

While on the road over the past few weeks, I’ve had the pleasure of presenting at and facilitating a number of executive roundtable events across the US. It’s been great meeting some new people, learning about their businesses and the challenges they face.

Here are three things that I’ve learned recently:

• Whether companies are publicly saying so or not, IT budgets are getting cut. This has been confirmed by everyone that I’ve spoken to in the past few weeks. In some cases I have heard of explicit cuts of 5% or more. In other cases, additional levels of approval or scrutiny, delay spending beyond the budget “window” – causing a “de facto” budget cut.

• Many feel “stuck” in their ability to drive Performance Management (EPM) initiatives within their companies. I spoke to one woman who felt completely hopeless in her efforts to inspire management to move forward with an EPM initiative. My advice was to try and partner with Finance to break the logjam. However, sometimes that’s not possible – e.g., politics, lack of CFO vision.
  

• The inclination to buy “yet-another-tool” remains strong – even though most acknowledge it’s the wrong thing to do. Of course, vendors like to sell more technology. However, most organizations already have plenty. What they lack is a roadmap and the vision to properly deploy it. But, buying another tool is so much easier than addressing the real problem: a lack of management commitment and organization dysfunction.

Next week I’ll be off to Copenhagen for IM2008. I’ve checked the weather forecast and it’s supposed to be much cooler than home, making it possible to be outside and cool at the same time. I can’t wait!

All the best,

Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Lecture at MIT Sloan School

Earlier this week, I had the privilege of delivering a guest lecture on Business Intelligence for Professor Malone’s graduate “IT Essentials” class at MIT Sloan. The experience brought back fond memories from when I taught back in the early 1980s.

Most in the class already had some real-world business experience. As a result, there were a number of excellent and insightful questions.

Here are a few of the questions (paraphrased), with my responses:

Q: How do you create and sustain an “information democracy” in a startup venture?

A: First, you need to plan as though your “startup” will someday become a large enterprise. Decisions made today will either help or haunt you well into the future. So, with that in mind, at the top of the list are transparency and the open sharing of knowledge and insight. By nature humans are hoarders and prefer to withhold information for their own benefit. That’s why it’s nearly impossible to change the culture of a large organization where “in-transparency” has been the norm. Of course, it’s easy to put transparency in the mission statement and ignore it. However, to be truly successful, one must “live” transparency. This means encouraging and incenting the sharing of information – especially if it exposes problems!

It’s also useful to look at the dysfunction surrounding BI implementations in large organizations today: disparate applications and data, conflicting business semantics, multiple master files, and a multitude of user tools (including spreadsheets!) – have created pockets of BI automation and what I call information “myopia”. These problems can be minimized if you start out with the notion of an enterprise data model and build (or implement) enterprise applications that are fully integrated and which are equally well designed to analyze the data which they process and store. Although data warehousing will still be necessary, its creation and maintenance will be substantially easier.

Q; How do you balance data quality shortcomings and urgent user demands for access to information?

A: Data quality and integration are areas where getting it “right” is critical. It’s expensive, takes lots of time and energy (and skill) - but is hard to readily demonstrate value to business management. In contrast, users are easily excited by fancy BI tools with cool visualizations. And, with innumerable tools available for purchase and download over the internet – users are buying them and loading them with report extracts, spreadsheet data, etc. and making decisions based on incomplete or erroneous information.

The solution is to balance urgent end user requests with needed data quality programs. This means doing some things that are expedient: delivering user applications quickly without perfect data quality. As a part of this, users must understand the limitations and that the reliability and utility of these applications will eventually improve as a result of strategic data quality programs. One of the best ways to achieve this is through the creation of a BI competency center –whose charter it is to document and implement best practices for BI.

Q: Can organizations use the tools they have or do they have to buy new ones to succeed with BI?

A: It turns that that success with BI has much less to do with the tools than the people using them. I’ve seen some BI successes that employed very modest technology and some colossal failures that had all the technological bells and whistles. That’s why much of my book focuses upon the human and organizational issues that determine the success of BI initiatives. These include management vision and commitment, organizational alignment, culture, and skills. Although buying “yet-another-tool” is easier than solving these problems, it ultimately makes things worse.

-Howard

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

Some good sources

Last week, at the Gartner conference, I was asked several times for good books and other sources of information on Business Intelligence and Performance Management.

Here are some books from authors on the subject that I respect:

- "Successful Business Intelligence: Secrets to Making BI a Killer App" by Cindi Howson

- "Scorecard Best Practices: Design, Implementation, and Evaluation" by Raef Lawson, Denis Desroches, Toby Hatch

- "Smart Enough Systems: How to Deliver Competitive Advantage by Automating Hidden Decisions" by James Taylor, Neil Raden

- "Performance Dashboards: Measuring, Monitoring, and Managing Your Business" by Wayne W. Eckerson

- Freakonomics : A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt , Stephen J. Dubner

- Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart by Ian Ayres

and, of course my own book:

- "The Performance Management Revolution: Business Results Through Insight and Action" by Howard Dresner

And, here are a few of good blogs:

- Frank Buytendijk's Blog

- The Business Foundation Blog

- Neil Raden's Blog

- Smart Enough Systems Blog

And, some good on-line mags:

- B-Eye Network

- BIReview

- Intelligent Enterprise

- SearchDataManagement

Check out my website for details on where I'll be speaking, presentation abstracts, articles, my book and more!

-Howard

Gartner's Business Intelligence Conference

I’m just back from Gartner’s BI conference in Chicago and I feel energized. First of all, let me mention that I founded this very conference in 2003 and chaired it until I left Gartner in 2005. So, I was honored and delighted to be invited back to deliver a keynote on Thursday with “Mr. Balanced Scorecard” himself, Dr. David P. Norton, in addition to presenting at a “power breakfast” and a doing a book signing.

I was impressed with how the conference has grown since 2005. With over 1,200 attendees and more than 50 vendors on the show floor – it is the biggest vendor-neutral BI/EPM show in the world. When we started the conference in 2003, it was at the Sheraton in Chicago. After three years – and growing from 400 attendees to 800, it moved to the Hyatt. Now at 1,200 attendees, Gartner will be moving it to the Gaylord National Resort & Convention Center, in Maryland, for 2009.

Unlike when I was chairing the conference, I had plenty of time to talk to people and even attend some sessions. Here are some of the things that I observed:

Even though many of the sessions were designated “advanced sessions”, most attendees were first timers and were there to begin learning about business intelligence, data warehousing and performance management. This confirms my belief that, while vendors consolidate and make for a more mature supplier market, user adoption and penetration is still in its infancy. Absent a real BI strategy, these organizations are rife with the misuse of spreadsheets and other personal productivity tools. To cater to them, Gartner offered tutorials and even some workshops this year.

Eighty percent (or more) of the attendees came from IT departments. The rest (presumably) were business users. Gartner has been trying to encourage its traditional following to bring a user “buddy” with them by offering discounts. Having said this, much of the content was oriented towards IT, not business. Among the most popular sessions: data warehousing and master data management – i.e., the “plumbing of BI”.

Some of the attendees that I spoke with felt frustrated by their inability to take what they learned and change the status quo of their organizations. This is nothing new and underscores the fact that success with BI and EPM requires much more than architecture and technology. In fact, while it might be easier to buy yet-another-tool, it is often the wrong approach. Change requires vision and leadership at the highest levels of the organization. Those who have read my book, The Performance Management Revolution (John Wiley & Sons), know that I have focused predominately upon organization, culture, politics and method as the obstacles or enablers of “information democracy”.

Others attendees were sent with a real mandate to supply better information to management. Here I see the potential to change management’s perception of BI and EPM. However, shifting from a tactical request for better information to a performance-driven culture is fraught with risks and challenges. Working with Finance and establishing a competency center outside of IT can help. Gartner had at least two sessions on competency centers. The one I went to was extremely well attended. However, at my “power breakfast” I surveyed the audience and found that only a small minority of them had a competency center in place.

With some of the changing market dynamics, I was pleased to see sessions on “open source” BI and DW and software-as-a-service (SaaS). However, to my great surprise, when polled during the MQ Power Session, none of the attendees indicated that they were using any open source products for DW, DI or BI. A few seemed to be exploring SaaS. Perhaps those were the few business users, as most IT folk view SaaS as a problem. And, while the “mega vendors” (e.g., IBM, Microsoft, Oracle, SAP) were often mentioned, I found no in-depth or critical discussion of their offerings, strategies or relative merits.

All-in-all, it was a great conference which was very well received by attendees and vendors alike. And, given the imperative by management to improve decision making and access to information, I suspect that 2009 will see continued strong demand – with the indoctrination of the next crop of “newbies” to DW, DI, BI and EPM.

And, don't forget to check out my website for details on articles, speaking engagements, presentation abstracts, my book and more!

Buffets says it, and I believe it

I am a devout Buffet fan, and I don't mean Jimmy. Instead, I refer to his "Uncle Warren".

Today Warren Buffet declared that the US economy is now in recession. Here's the quote from this mornings Reuters article:

"Buffett said that 'from a common-sense standpoint right now, we're in a recession,' though the U.S. economy has not yet recorded two straight quarters of declining gross domestic product, a traditional indicator of recession.

He said the environment is 'nothing like '73 or '74 yet,' referring to a deep economic downturn also marked by rising oil prices, higher inflation and falling stocks."

Here's the link:

http://www.reuters.com/article/ousiv/idUSWEN425620080303

Here's what I think:

With all of the mounting evidence that the US (and other western economies) are cooling off, the effect is already starting to show up in business spending. Even if businesses are healthy, management sees it as prudent to prepare for the worst. This means renewed spending scrutiny, budget cuts and precautionary RIFs. Of course, it should be noted that this has the effect of a self-fulfilling prophecy. And, the tools that government has at its disposal - putting money into the economy through interest rates and tax rebates - will not work if everyone believes the worst is yet to come. So, my belief is that conditions will continue to worsen and that we'll be dealing with the effects for the rest of 2008.

From a software industry perspective, this means that companies that can't demonstrate real value - i.e., an ability to save money - will suffer mightily. Having said that, Business Intelligence and Enterprise Performance Management solutions, positioned accordingly and to the "right" person (senior levels of business management), ought to fair better than other initiatives.

Software companies focused upon selling tools to IT will have a hard time in this economy and will need to retool (no pun intended) to address the requisite business priorities. Many will fail trying.

Ironically, many domain-specific application software companies that have been successful in niche markets, are seemingly intent on expanding into the more general tools market. In this case the "grass" is NOT greener on the other side of the fence. My advice to those companies is to sit tight and appreciate the successful (albeit smaller) market that you're in.

Here's another cheery thought: those software companies that survive the recession will emerge stronger and more viable and will reap substantial rewards when the economy starts to improve.

-Howard

Brave New World?

It’s February and winter is nearly over here in New Hampshire. Well, maybe not. But it’s nice to have an extra hour of daylight since the start of winter and the snow is starting to recede a bit. But, this is New Hampshire and it’s always wise to temper one’s optimism for an early spring. After all, the groundhog has said six more weeks of winter (ten in New Hampshire).

Recently I’ve been spending some time in “the valley” where the weather hasn’t been much better (cold and rainy). However, some software companies that I’ve visited have a pretty sunny outlook on the future, and with good cause. Here’s why:

1. Acquisition mania, which has led to the near total demise of “pure-plays” has created significant complexity and confusion with “mega vendors”. This has led to a slowdown in sales, a decline in employee morale, and opportunity for smaller, more agile vendors, with a simple message and little or no baggage.
2. Entrepreneurial/innovator types rarely stick around long at mega vendors. This has freed up the main ingredient of innovation (really smart and talented people). I’ve met many of them in recent weeks. Joining ranks with smaller concerns, they bring energy, enthusiasm, experience and a pent up desire to “get it right this time”.
3. Almost all of the emerging software vendors that I’ve spoken to recently are focused on selling to the business and not the IT department. Often they solve tough business problems, faster and cheaper than many internal IT functions can (e.g., this fiscal year not next). This obviously creates some internal tension and these vendors have taken to checking under their cars before leaving the customer site.

I try to resist new buzzwords like “BI 2.0”, but there’s definitely something different going on. This market is changing dramatically. It’s exciting and invigorating and I’m enjoying being a part of it. But, for now, I’ll hold off trying to name it.

See you out there,

Howard

Retailers had weak sales in December - AP Newswire Jan. 10, 2008

Today AP Newswire released an article which supports my 1/2/08 post about the economy and holiday retail sales.

"Many merchants who reported sales figures Thursday failed to meet already lowered sales projections, making this the weakest holiday season since 2002. Their performance led a string of stores to reduce earnings outlooks for the fourth quarter."

Here's a link to the article:

http://news.yahoo.com/s/ap/20080110/ap_on_bi_ge/retail_sales;_ylt=AuL7PSbZ9fVMg5apxkBGdPqb.HQA

Goldman Sachs Expects Recession

Looks like Goldman Sachs agrees with the prediction that I posted on January 2nd.

Today they released a statement saying that they expect the U.S. economy to drop into recession this year, prompting the Federal Reserve to slash benchmark lending rates to 2.5 percent by the third quarter.

You can read the release here:

http://news.yahoo.com/s/nm/20080109/bs_nm/usa_economy_goldman_dc_2

New Year's Predictions

Happy New Year to all!

With everyone back to work after holiday celebrations, it’s time to start thinking about what’s ahead in 2008. To help, I’ve put together a few predictions.

The Economy: In my opinion, the “Big Kahuna” of predictions has to do with the economy. I may not be an economist, but I’ve been around long enough to know the signs of recession when I see them. A quick look in the local (US) newspaper tells part of the story: numerous housing foreclosures and auctions. I haven’t seen that since 1992. In addition, rumors a of a weak holiday retail season abound. Coupled with the current and unfolding lending crisis, a dismal Q4 earnings report could seal it. If I’m right, this means that 2008 budgets will be flat to down – especially for IT. The rest of my predictions are either caused by or accelerated by this prediction.

Market consolidation: As everyone is already aware, 2007 was a year of massive consolidation for BI and EPM software vendors. Although Hyperion, Business Objects and Cognos are gone, the fun’s not over yet. As the big guys feel even more pressure to boost revenues and profits, I believe they’ll gobble up any remaining, above-average software vendors of size (> $100M USD).

Leveraging Existing Investments: With a combination of lower budgets and real urgency to improve business performance, I expect many organizations to try and get more value from software and systems they already own. This would be especially good news for systems integrators – especially those with deep expertise in key vertical and functional areas. So, I would anticipate consultancies become even busier than in 2007 and for a whole new crop to emerge in 2008. Caveat Emptor!

Rise of the Business Buyer: I don’t want to give Nick Carr (Does IT Matter? Information Technology and the Corrosion of Competitive Advantage - Harvard Business School Press) too much credit, but many IT Departments have become alienated from the business and less relevant than they could or should have been. An exclusive focus upon the largest software solution providers doesn’t help. In defense of IT, much of this may not be their fault and they may find themselves in an impossible situation. Nevertheless, emerging software vendors and consultants have caught on to the trend and are focusing selling efforts on business management – with the promise of implementing business solutions faster than IT can. Of course, these vendors may eventually have to deal with IT, but will avoid it (if at all possible) until business management is “on board”.

New Approaches Map to the Emerging Market: On-demand, open source and software appliances have been around for a few years and have experienced varying rates of adoption and success. However, with the above forces changing the shape of the market in 2008 – these options - offering lower cost and fast deployment - become vastly more appealing – especially to business users! Expect to see lots more of each at the expense of traditional software offerings.

What do you think?