The Data Silos are Back

Ten years ago in AEC technology, we were talking about trying to find ways to get data out of ‘silos’ – that is, storage and dissemination systems that didn’t integrate with each other. Files and data were strewn about in different formats and couldn’t be easily told to play nice.

Over a very short period of time, many firms tackled of the issues with silos – some even claim to have solved it. An ever increasing portfolio of data and systems interact with each-other quite well. That was before cloud-based-everything was the new normal.

As we migrate an increasing amount of data into the cloud into disparate systems in the name of cost, convenience and effectiveness – we’re creating new silos in these clouds that don’t know about each other. We’re back to having to keep tabs on where we put everything for projects rather than looking through a single folder structure on a file server and being able to ‘discover everything’.

Maybe that’s an okay problem to have. After all, AE firms are paid based on what they deliver – not what they can archive.

It does – however – call into question: What is the role now of Archiving and the Project Record?

Some food for thought.

But what does it cost?

You can look at a carton of eggs and do the math – $3 for a carton divided by 12 is a quarter per egg. Better yet, eggs are sold by the dozen. The math is already done for you. Your effort effort as a consumer to decide which carton to pick comes down to just a few variables – Grade, Color, Free-Range, “Low Cholesterol” – most of which are meaningless attempts to differentiate product, anyway. In reality, the products are nearly indistinguishable from one to the next.

Buying eggs isn’t a solution to anything. It’s part  of a solution with the goal of feeding ourselves. That solution is known as breakfast. What it costs for me to actually make breakfast is as unique to me as it is to anyone else. My kitchen, electricity, gas, pans, method – these all have unique costs associated with them. As a system, the cost is complicated.

So why is it when we are investigating a solution to a complicated problem, our first question is always what does it cost?

Because it’s easy. Asking what it costs lets you decide if you can do it or not. It justifies rejection based on your simplistic expectation of expected price. Too much money? NEXT!

What happens then if we don’t let ourselves off the hook that easily? What if we instead dig deeper and ask more meaningful questions?

What is the problem we’re trying to solve?

What is it worth if I solve this problem?

How do we qualify a solution as being viable?

Cost is always past tense.

Caught in the Middle: Subscription Software

pay-button-on-keyboard-630x300Software Subscriptions can feel like a vampire. They lurk on your OpEx ledger, claiming a value proposition for each month, hour or mile you use them. Gone are the opportunities to squeeze extra value beyond the design intent of the software. You can’t stop paying for them in a slow cash-flow month if you still need to use them. That feeling that you “don’t own” anything starts to sink in. The fear that if you leave it will cost more to find something new starts to materialize. Hiding under your desk sounds like a good idea.

Welcome to the new age of Subscription software. It’s everywhere now. It’s not going away either. Here’s why:

Customer loyalty is only skin deep

In hopes we would spend lots of money with them, software companies often gave deep discounts to get us in. In many cases, these investments would be the last time the customer spent money with the software company for years. It took a lot of customers paying a negotiated rate for software to make a profit. Remember that the people that code these solutions routinely capture $100k/year+ salaries and executives many more times as much. Add on to that the need to have a sales force in the first place (which isn’t cheap either) and you have a steep mountain to climb to profitability as a software company.

Pirating

It’s easy to pirate software that’s perpetual and use it for as long as you please. Just ask Adobe, AutoDesk and Microsoft. It was so bad, that to combat it, they created the Business Software Alliance to go around and threaten to sue companies in high risk verticals if they didn’t submit to an audit. Many Mid-Sized and Small companies were audited and most were found to be out of compliance to some degree, though it’s unclear as to how bad it really was.

Upgrades aren’t always enticing

Many software companies would charge about 2/3 the original cost of the software to ‘upgrade’ to the latest version. Some could justify the cost if the value proposition (new features, typically) meshed with their business. Smaller businesses learned that they could skip versions or never upgrade and be fine. This meant that a new release might only capture a small percentage of existing customers. If it didn’t entice new customers, the new release could be a complete flop. Software companies learned that this was not working consistently. After investing sometimes millions in a new release, new revenues from it might only be a fraction of that.

Support costs are high

All software depends on other software for it’s reliability (Operating Systems, Drivers, Databases, etc.) When there are at least as many deployments of your software as you have customers, the cost of support goes up. One of the primary reasons is because each deployment has it’s own set of risks and potential for supporting software to have issues. In most cases, you’re left holding the bag as a software company to prove to the customer that the issue isn’t your software. In major cases where a supporting piece of software takes your software down, you as a software company typically have to release a fix at your own cost. It can get expensive fast.

Agile Emerged

Some very smart folks came up with a manifesto for developing software better. Known as the Agile Manifesto, it dictated, among other things, that software companies release new versions all the time with minimal bug fixes, features and little to no upgrade labor on part of the customer. Software companies who started into Agile quickly realized they produced a higher quality product as a result. Since no customer is going to pay for an upgrade that includes only minor new features or bug fixes, it didn’t take long for early Agile adopters to completely abandon perpetual licensing.

What can be done?

Software companies are trying to improve their businesses just like everyone else to be relevant into the future. Your job now as a Business Manager, CIO, CTO or CEO is to evaluate how you will manage this transition to “Pay as you Go”.

Communicate with software vendors

Find out what your software vendors intend to do in the future. Are they moving to a subscription model? What’s their roadmap? What will it cost? What’s their emerging value proposition? The worst thing you can do is sit idle and wait for things to happen.

Plan on a hybrid environment for a long time

Some of the perpetual software you have in your datacenter now probably has no subscription based replacement yet. Plan on maintaining these applications using as much virtualization as possible – even cloud based virtualization if it pencils out (note: it doesn’t always make sense to virtualize in the cloud).

Hire a Business Technology Consultant

Since your IT consultant isn’t going to be doing much for you anymore, it’s time to find a good Business Technology consultant to help out. A Business Technology consultant is going to help bring new systems in and manage them with you under this new model. A good Business Technology consultant should specialize in your particular line of business. Most of what they are going to be doing is matching technology, workflows and process to your business – not adding equipment to your server room.

Shift your technology spending

Take a look at your budgets and accounting classifications of technology spending. Most of what you will spend on technology in the future is pure OpEx – very little will still qualify as CapEx. Check with your Business Technology and Accounting professionals to adjust you’ve got your books and budgets to correctly accommodate this shift.

 

 

Business Technology

how-to-maintain-technology-in-your-businessYesterday, we called it “Information Technology.” It was a department of talented engineers and managers that could get the infrastructure in place and got really good at procuring the tools to ride on top of that infrastructure.

Today, IT is still important in larger organizations and industries who aren’t well served by mobile and consumerist cloud services. Fewer companies are investing in Information Technology the way they did 10 years or even 5 years ago.

Information Technology is quickly being replaced with Business Technology.

What is Business Technology? There are a few definitions out there that are fine, but I see it as this:

Business Technology is the combination of Information Technology and Business Practice into a single, holistic functioning mechanism that leverages the technology for achieving business goals directly.

In practical terms, it’s often the re-education of IT into BT. The world no longer needs shops of infrastructure experts – more and more infrastructure is headed to the cloud as shared services. Instead, it needs troubleshooters, analysts, project managers, trainers and a host of other roles to support the shift to less centralized and more democratized technology.

How businesses old and new interface and leverage technology is as chaotic and vulnerable as ever, despite continuous advances and improvements in much of the software and services available today. I fully expect that we will continue to observe companies make both disastrous and successful shifts into the Business Technology framework.

As you plan for 2017, it’s time to start thinking about how your business will transition to Business Technology from Information Technology.

Organization in a Google World

foldersIn the era of Google Searches, Minimalism, Social Media and Apps-for-Everything, folks are less inclined to implement good old organizational skills with their data. Why bother? After all, we can Google anything we need. We can re-download that app when we get a replacement phone. I can go on Instagram and see my photos.

Organization, admittedly, has changed a lot. Gone are the days of meticulous maintaining of file cabinets with folders full of critical documents for everything. We can scan those same important documents and keep them electronically and save all that paper and storage space.

Still, there’s plenty of reasons to keep your digital world organized. While you can put just about everything in the cloud and let the cloud keep things organized, it’s not great to rely on it. Sure, you can expect most cloud services that are popular and sustainable to stick around and continue to serve you. Until they don’t anymore. At that point, your data and convenience having the machine manage it for you are gone.

Much of my business involves helping clients extract maximum value from their data while ensuring it is accessible beyond the life of the cloud services and storage solutions they currently rely on. Value can be sentimental or financial – both are valuable. To lose it would be detrimental.

So here’s my formula for ensuring digital continuity that I take my clients through:

Establish a Digital Filing System

It doesn’t have to be detailed – in fact, the simpler the better. Keep file versions of all your important data. Digital files and folders are cross platform and continue to hard coded into every computer system in existence for a good reason – it’s reliable and a known quantity. As Operating Systems, Clouds and other technologies advance, the old reliable file and folder structure remains core to all of it.

Back up your Filing System

Keep that filing system backed up in multiple locations using multiple, independent backup solutions. If one fails (or goes out of business), you still have the others to rely on. Having a mix of external hard drives, cloud services and even on-premise servers are a great way to ensure your data will never disappear.

Sync your Clouds to your Filing System

Not every cloud provider can give you your data in a file format. Beware when this is the case. If you can’t get your data out of the cloud, you’re locked into that cloud and that provider is holding your data hostage. That’s not acceptable for any reason. If you’re not able to export your data to files, move on to a cloud provider that lets you export all your data to files.

Keep Read-Only Archives

Most of your data isn’t going to change over time, so it makes sense to archive the important bits to a read-only archive to avoid accidental changes to the data. Over time, dispose of the archives that are no longer of value (particularly the ones that could be a liability such as old financial records or building drawings).