Thoughts on running a software company

September 26th, 2007

I was pleased to read From vision to execution by Ismael Ghalimi.  I’ve spoken to Ismael a few times and I know how much of his life he has put into Intalio.

In this post he comes across as an exhausted inventor who has finally seen his new gadget rolling off the production line.  It is hard work launching an enterprise software company.  I know because I have tried it.  Many of Ismael’s comments could apply to Blue Prism equally.  The issue of market timing resonated in particular.

Does this mean that there is a degree of serendipity about the chance of success?

I wouldn’t pretend for one moment that Blue Prism has yet reached “success” whatever that is (and it means different things to different people).  Like Ismael, I am very encouraged by progress, especially in the last 6 months, albeit the first version of Automate was released in 2004, some 3.5 years ago and, let’s just say that meeting our revenue forecasts was much harder than anyone expected.

It can be lonely at times as a Managing Director (try not to weep).  When I used to work in a bank as a middle manager I had any number of peers I could relate to, and discuss ideas and issues with.  Since that is no longer a route open to me, I try to find peers outside the company.  As a result I know quite a few people who either run (or used to run) enterprise software companies.

This got me thinking.  What are the key characteristics that determine a successful MD or CEO?  Obvious requirements that might spring to mind might include:

  • A keen aptitude for marketing
  • Technical vision
  • Ability to inspire people
  • Financial astuteness
  • Ability to sell
  • A propensity for making customers happy
  • The gift of the gab

Looking across the successful people I know, the most important characteristics are none of the above.  They are energy and determination.  Fortunately, both characteristics that Ismael has in Spades.

Are CIOs just byte counters?

September 24th, 2007

I follow a fair amount of financial press as many of our customers are in that sector.  I was interested to see that the “IT vs the Business” argument rages in this sector like many others, and the future of the role of CIO is being questioned, likewise.

The arguments are summarised neatly by Chris Skinner in his finextra post Bankers are from Mercury, techies are from Uranus.  Chris sits firmly on the business side as you might expect from the title.  The arguments, though, are interesting.  The most alarming is that we have now been discussing the chasm between IT and the business for 25 years or more and where is the progress?

Despite taking the business angle, Chris does acknowledge that the business needs to take IT seriously and up their understanding of what IT can do.  But this doesn’t mean that business people need to understand SOA, how to code, what a network protocol is, or where the nearest server farm is.  It does mean that they should understand the power of social networking, wiki style collaboration, the power (and dangers) of software as a service, the use of the internet as a channel, the advantages and disadvantages of outsourcing/offshoring vs technology solutions etc.

In this brave new world, according to Chris, the CIO role gets devalued and becomes the keeper of the nuts and bolts.  I think this would be a shame.  I hope the rumoured demise of the CIO role is premature.  All senior managers can read a P & L account and a Balance Sheet but that doesn’t remove the need for a CFO.  There is room on the board for expertise in all important disciplines and surely technology is one of the most important in most organisations?

Perhaps the onus is on the CIO to understand the business better?  Using my analogy above, CFOs need to understand the business.  The types of accountants known as bean counters do not make it to the board.  The IT equivalent is maybe someone obsessed with technology for its sake and not for what it can do for the business (a byte counter?).  Just as the responsibility is on the rest of the board to understand technology, so the CIO must understand the business.  I believe this will secure a valuable board level role for IT for as far ahead as I can see.

Mixing one’s metaphors

September 17th, 2007

Given that one of my big interests outside software is wine, I was bound to find this article by Sam Sethi.

Comparing Microsoft’s strategy to the maturation of a fine wine is one thing.  Doing so in the same sentence as referring to their Windows and Office product range as “cash cows” that are “withering on the vine” is a mixed metaphor too far, Sam!

The CIO change request dilemma

September 12th, 2007

As you might imagine, my job brings me into contact with many CIOs and IT Directors and nearly every one has different views and different problems to solve.

I guess one part of my job is to try to read their minds and get a feel for the aggregate of opinion in this field.  I have believed for some time that senior IT guys have a focus (rightly) on the longer term.  In today’s business environment the long term is usually seen as between 1 and 3 years.  As a result, IT resources are deployed onto major projects leaving scarce little left to do the everyday changes the business keep requesting.

I have been putting the argument that CIOs need some ideas aimed at getting the business to solve those problems for themselves.  So it was nice to speak to a CIO from a worldwide distributor last week and hear him echo those views.  “I like giving the business tools that they can use” he told me.  Nearly all his own staff are on major projects.  Meanwhile he has a list of 150 business change requests that he cannot attend to (this is a low number compared to most large organisations).  His team sits down with the business every couple of months and assesses a “hit list” of top priority changes and he struggles to deliver even those.  This is a very common scenario and is a management dilemma.

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Banking on process improvement

September 7th, 2007

It is becoming ever apparent that Financial Services companies, and in particular banks, in the UK are adopting process improvement methodologies from the manufacturing sector.

One bank that I know well, specifically refers to its back office as “the factory”.  I was at another bank last week meeting the Director of Business Process Re-engineering (BPR).  The very appointment of this title at such a high level is an indication of the importance of process excellence in the financial sector.

Just about every UK bank I am aware of has some capability based around Lean/Six Sigma or similar flavour and many of the recruits are coming from manufacturing, retail, and other service companies.

There are big gains to be made since (although the banks wouldn’t like to admit it) they are horribly inefficient.  A further concern is the cost/income ratio.  Most senior executives have some target set around this ratio.  Major investments in technology can take years to pay back.  This increases costs in the short term and brings any benefits way down the line, which adversely affects the cost/income ratio in the short term.  Call me cynical but most senior execs will have moved on by that point, so they will not see the benefits in their bonus payments.  So there is a degree of short-termism and BPR fits the bill because it is about making low cost investments in continuous improvement.

I would argue that this actually benefits both the short and the long term, and you have certainly heard me argue before in favour of incremental rather than big bang projects for a whole range of reasons.

So it is clear to see why they are doing it.  What about how?

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Another (tiny) step towards electronic wallets

August 30th, 2007

My dream of using my mobile phone to replace all the useless tangible items in my wallet (like cash, credit cards, debit cards, memberships cards, receipts, loyalty cards etc) is clearly some way off, in the UK at least.

Royal Bank of Scotland is the latest UK bank to offer a contactless payment card.  But targeting 12 McDonald restaurants in London by October as being capable of taking the payment?  Exactly what use is that?

Come on UK banks – we need more ambition here.  The technology is surely available to jump the next 14 tiny steps and take one giant leap into the 21st century by enabling us to use our mobile phones as wallets?

Maybe APACS needs to get together with the mobile phone manufacturers and create some standards?  Or maybe we need to think more widely.  Is this a job for Monitise?  I suppose Monitise are too payments focussed, so to get loyalty/membership cards in the mix perhaps Nectar need to get involved too?

Or maybe there is a new business venture here – perhaps a spin-off from a major tech company, a mobile phone manufacture or even a forward thinking bank?

Surely the rest of the world is miles ahead of the UK here – can anyone enlighten me?

Software Product Maturity

August 24th, 2007

I asked our CTO, Dave Moss, if he fancied writing a few guest posts on this blog, on the topic of developing a software product.

I think blogs should represent the views of the author and that there should be a single author.  However, you may recall me saying that Dave is the “techie” I respect the most of all I have met.  So having read his first effort (below), three comments sprung to mind:

  1. I totally agree with his views in this instance and, therefore, since they exactly match my own, I am happy to put them on this blog in my name.
  2. Dave is one of those rare CTOs who has acute commercial focus and places the highest emphasis on customer need, when evaluating product development objectives.
  3. The writing is in Dave’s hand and his analogies stink!  So I refute responsibility for the way the message is communicated.

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75th post – age old subject

August 20th, 2007

I was surprised to see that this is my 75th post after only starting the blog in February of this year.  When I started out, I guessed that posting a couple of times a week might strike the right balance between boring people to death, balancing my work/life time demands, and making a contribution of at least some use.  After 26 weeks I am slightly ahead of target.  Natural enthusiasm one might say, or just poor forecasting as my board would no doubt argue….and let’s not even discuss quality issues just now!

Anyway I really risk boring you here, as I am on my old hobby horse – the inability of IT people to be smart enough to understand the business and make a meaningful contribution at all levels of the enterprise.  In particular the worrying emerging trend seems to be that CIOs are losing their seat at the board table.  This article in Computer Weekly is typical of late.  American readers should note that we Brits see less difference than you between a CIO, and an IT director, and the terms are often used interchangeably here.

Transatlantic idiosyncrasies aside, the important point is that the top IT job in the enterprise is losing power and voice.  This worries me because IT really ought to find it easy to justify its seat at the board table in the vast majority of large organisations.

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Why are some IT people so blind?

August 14th, 2007

I once met a financial adviser who offered to help me sort out my finances.  Within five minutes of meeting her, she had told me what I ought to do.  I had not given any information about my financial affairs, my needs, or desires, yet she was proposing a structure for my financial arrangements, based on one single fact, that I was a director/shareholder of a company.  Needless to say, she did not make the sixth minute of the meeting.

This morning I read more coverage of the stupidity blindness of IT people, this time observed by Lorraine Lawson at IT Business Edge.  In her post How You Talk about SOA to the Business, it is clear that IT folk are still keen on pushing SOA to their business counterparts.

This has really gone on long enough.  Do you think business people really care about SOA vs EAI?  Whether you think of SOA as a tool, an infrastructure, a methodology, or a technology, it is invisible to the end user.  What is visible to the end user is whether or not a business problem has been solved.

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Dear WordPress, am I a geek now?

August 10th, 2007

I am so impressed with WordPress – it is the platform for both my blogs.  But I may have stepped over the line in my loyal devotion, because I am the new, and proud, owner of a WordPress T-Shirt.

I’m so proud…but am I a geek?

I now have two real concerns about wearing it.

  1. The only people who will recognise the logo will be geeks, and I will look like one myself.  Do I have to stop shaving?  What do I do if I get approached and asked an awkward question?
  2. As a Manchester City fan, the colour red (Man United) is anathema to me.  What if people think I am a Man United supporting geek?  Come on guys, can we please have a blue T-Shirt next????