The Future Bank Blog

Quote of the Week

2006-03-30T11:38:00.000+02:00

"Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're led, and how much you get it."

Steve Jobs - Fortune, Nov. 9, 1998

Paypal Mobile

2006-03-29T09:58:00.000+02:00

This service really blows my mind. Finally, a killer app for cellphone payments.

So what makes it different from Wizzit, MTN Bank, ZA Bank Cellphone Banking? Let's explore...

It's simple
Every phone can make a payment (The carrier is SMS). Everyone else (except for FNB) is trying to make WAP/WIG work. Newsflash! WAP/WIG sucks!

Paypal customers are special
Paypal customers are tech savvy folk, who are used to making theses kinds of paymets. And the 'Opt IN' is there already. South African banks are trying to replace internet banking, instead of complimenting it. They are also trying to target low income groups, who are often illiterate, and not exactly interested in 'digital cash'.

It's cheap
No additional charges. Same as making a regular paypal payment (vendor pays). Unlike the R5 we pay here in SA for an INTERNAL TRANSFER!!! (ugh!).

It's safe
Hell, we pay so much for calls here in SA, I'm more worried about some loser stealing my phone and calling uzbhekistan than a reversible, refundable (limited) payment to a known person!

It's not here
Available in the U.S, Canada and the U.K.

What we should do in SA
Well, if the banks really had comsumer interests at heart, they'd create a SASWITCH-esque clearing house for text mobile payments (and I'll have to eat my hat). What they MIGHT do is create this functionality for Internet Banking users.

Lessons Learnt
It's time to stop flogging the WIG/WAP dead horse, time to stop basing business cases on mobile penetration, and time to start creating products which might. actually. work. Hell, if I had the option I would build a prototype TODAY.

More information
here, here, here and here

SOA or So Ahhhhhh!

2006-03-15T07:47:00.000+02:00

Services orientated architecture - the holy grail of application architects that we have been striving towards is now within grasp. The web services world is alive and thriving! Are we about to see the same happen in the enterprise space?

Looking across all major platform suppliers we now see that SOA is being marketed as being the core of the strategy. IBM with websphere, SAP's ESA, Microsoft's .Net and oracle and Weblogic's BEA all play to this approach. The promise of open systems is clearly not happening as each of the companies platforms is increasingly proprietary! So much for the Java promise!

So have we arrived?

There are lots of articles and cases about firms adopting this approach and yet there are few stories about the challenges of this approach. They range from a single point of failure, contention management, challenges in terms of how granular to define the services in order to make them reusable, inter organisation sharing of services etc. The challenge of converting legacy, managing orchestration, middle ware selection and deciding on level of abstraction all present serious obstacles to this race. Creating repositories and tracking services changes over time and managing reuse and maintanability are additional problems.

This is clearly a journey of a decade or more. Most firms will have to extablish a multi generation strategy to putting this in. Its true that the person that starts this strategy in most firms will not be the person who finishes it! Have firms planned for this? Most firms have adopted on the journey without a clear understanding of this journey.

So my view on answers to some of the perenial questions.

So is it real? As real as any other ISV vapourware.

Worth doing / Asbsolutely

Guaranteed business case? Better to have than not have!

Crossing enterprise borders? Unlikely for quite some time, which is taken for granted in the web services space.

Will we have open systems? Probably not

Will u have vendor lockin? Duhhhhh!!!!!

The Citibank PIN Scandal

2006-03-13T09:06:00.000+02:00

I'm sure by now you've seen the coverage of the Citibank PIN Scandal.

"But Citibank is only the tip of the iceberg, said Avivah Litan, a Gartner research vice president. The scam -- and scandal -- has hit national banks like Bank of America, Wells Fargo, and Washington Mutual, as well as smaller banks, including ones in Oregon, Ohio, and Pennsylvania, all of which have re-issued debit cards in recent weeks".(link)

I obviously can't comment on the story - because I'm waiting for official comment AND I don't know enough about debit cards, but do I feel better after reading these articles (1)(2)(3).

I'm sure we'll see press releases from Herman, and from other South African banks today. Watch the Google News RSS feed (link).

BlackBerry Saved. Franco Ecstatic.

2006-03-06T07:46:00.000+02:00

So by now you know that the BlackBerry/NTP litigation is finally over (link). BB stock surged 19 percent. And PALM is still in trouble. Meanwhile Microsoft extended the functionality of Exchange 2003 SP2 to include teleportation and cold fusion powered handsets.

HAS EVERYONE GONE MAD??? YOU DON'T NEED MIDDLEWARE!!!

Why are companies STILL buying BlackBerry? If you already have Exchange 2003 and your CIO just signed for BlackBerry, well...

I give up.

…all I can say is you probably deserve to be paying for it.

Look, I'll admit that BB has a great product. And a fanatical user base. But really, IT history is littered with vertically integrated (BB owns the devices, the server, the protocols etc.) products which were ousted by leaner, meaner, better integrated (can anyone say IBM compatible/UNIX/HTC?).

I never thought I would be making the case for a Microsoft product. But for cripes sake…

Don't buy BlackBerry/Intellisync/SeeBeyond until you've tried what you ALREADY HAVE.

sigh

Making the right choice

2006-03-02T09:19:00.000+02:00

I’m an impulsive guy. Knowing this, I often try and take my time on decisions – usually up to a week. I ask the people around me what they think, and I debate as much as I can. I used to think this was the responsible thing to do.

But I'll always end up with the same conclusion as my initial reactive impulse. The extra week just adds complexity and overhead to the decision, and generally confuses myself – and the people around me. It’s quite destructive. If I’m not able to make a snap decision, I’ll probably never make it.

In my job, I spent a lot of time trying to help others make decisions. I don’t really enjoy writing motivations (Business Cases), because the really important criteria are almost always hidden within the complexity of the document (which is designed to mimic the environment). In other words, we try and address a complex decision with a complex deliberation process.

So this post is about changing my personal policy, and hopefully changing yours.

Having read ‘the Tipping Point’, I was quite stoked to see that Malcolm Gladwellhas started a blog. A quick read led me to his second book, entitled “Blink : The Power of Thinking Without Thinking”. The book deals with rapid cognition, and the benefits of using instant decisions to make choices in complex scenarios.

About “Blink : The Power of Thinking Without Thinking”
"Gladwell's conclusion, after studying how people make instant decisions in a wide range of fields from psychology to police work, is that we can make better instant judgments by training our mind and senses to focus on the most relevant facts—and that less input (as long as it's the right input) is better than more". (link) Reed Business Information, a division of Reed Elsevier Inc.

In his blog, Gladwell linked to this article:

On Making the Right Choice
The Deliberation-Without-Attention Effect
Ap Dijksterhuis,* Maarten W. Bos, Loran F. Nordgren, Rick B. van Baaren
“Contrary to conventional wisdom, it is not always advantageous to engage in thorough conscious deliberation before choosing. On the basis of recent insights into the characteristics of conscious and unconscious thought, we tested the hypothesis that simple choices (such as between different towels or different sets of oven mitts) indeed produce better results after conscious thought, but that choices in complex matters (such as between different houses or different cars) should be left to unconscious thought. Named the "deliberation-without-attention" hypothesis, it was confirmed in four studies on consumer choice, both in the laboratory as well as among actual shoppers, that purchases of complex products were viewed more favourably when decisions had been made in the absence of attentive deliberation” (link)

Deliberation often destroys the value of a project - More examples

Lot’s of couples get married after only a couple of months. They don’t want to add complexity to the decision.
Then there’s also Design by Committee ("a camel is a horse designed by a committee”)
Not to mention the potential for bozosity

So What?
We need to learn to harness and USE our instant judgement. Make the complex decisions quickly (elevator pitch), and the simple decisions slowly (project process!).

For example in IT, projects kick off with an ‘elevator pitch’ motivation. No convoluted business case templates to facilitate complex decisons!

There's freedom in simplicity!

Looks like we should rename this blog to 'Future Branch'

2006-02-27T13:50:00.000+02:00

Do it.

Google the phrase "Bank of the Future".

You'll notice that almost all of the top sites listed involve some kind of branch innovation.

"...branches are about to undergo a renaissance as "buying centres". The challenges financial institutions face include, making it more attractive to visit their branches, using time more effectively for advisory and sales activities, and displacing administrative activities into service areas. To do this, customers need to be offered a more positive shopping experience where personalised customer service is made a core issue, as is the trend in the retail industry. The way to achieve this lies with automating business transactions that have no relevance to sales, and providing systems-support for the advisory process that can make information and processes available that are tailored to individual customers' requirements."(link)

And this article ("...a play area for children equipped with electronic games...") reminds me of the IKEA store concept.

Accenture is pushing branch applications of RFID cards, here and here. Yuck. The last time I asked about privacy and RFID at a (SA) conference, the audience looked at me like I was a lunatic (people here need to get educated).

How about getting simple things right first? I still get bank mail sent to 3 different addresses. ( OK - I'm an edge case... I move around a bit). Or not having to fill in all my details multiple times, every time I go into a branch? Or not being allowed to make an appointment with a 'consultant'.

It's all about streamlining transactional banking, and improving the sales process.

You're cool in 2006 when... you're feeling lucky

2006-02-22T10:43:00.000+02:00

You're cool in 2006 when your businesss card reads:

1. Go to Google
2. Type Matt
3. Press “I’m feeling lucky”

That's WordPress creator Matt Mullenweg’s buisiness card (from TopTenSources).

Don't underestimate the power of your google ranking!

To Transfer or not to Transfer... That is the question

2006-02-21T20:12:00.000+02:00

I recently purchased a flat, the biggest obstacle was not the property search but rather the transfer costs! After numerous efforts to raise the required funds, we decided to concede and then take out a 108% Bond. Then 2 weeks later Trevor Manual announced his intention to waive the transfer costs for properties under R500K!

The following day, I contacted all the responsible parties in my housing transaction, I asked them if I qualified for this break. Unfortunately I did not, one of the parties started laughing and said that I was the 15th caller! It was 9 AM! This has caused a frenzy in the property market, buyers are stalling on signing documentation, sellers are re-negotioating sales to get more from a sale.

So you may ask, what is the point of this... Well in my opinion, I believe that this move will boost the booming property market. The buyer who was limited to R400 K because of the transfer costs , can now look for a property in the R450K & above range! This small change could mean looking in a neighbourhood closer to work or an area with bigger properties.

The buyer's choice and options increase, and believe me, this choice means the world of difference to a satisfied buyer!

Finally, as a new home owner, I can get my asking price! Thanks Trevor

The Institute for the Future

2006-02-21T11:26:00.000+02:00

There's an interesting interview with 'professional bystander' Paul Saffo over at SFGate.

It's 'an hour-long interview in which Saffo balanced his fears -- notably of an anti-modern, fundamentalist backlash -- against a more hopeful view that technology will elevate moderation over extremism -- even if the digital future turns out to be more suburban than utopian.'

Saffo makes some interesting points:

As Stewart Brand (co-founder of Emeryville's Global Business Network) likes to say, "Information lasts forever. Digital information lasts forever or for five years, whichever comes first." There are examples everywhere. The tapes from the original Viking landers that went to Mars are at (NASA's) Jet Propulsion Laboratory, but there is no machine that can read the tapes. Every day huge amounts of information break off like icebergs and melt away. What worries me is that much information in electronic form is never reduced to paper. Some people have described this as being on the edge of a digital Dark Age and fear we may commit a massive act of amnesia (Link).

And

People who call themselves futurists don't have a sense of history of the term. It dates back to the early 1900s. Tied into fascism, these guys would have parties and go hang out and stroke the streamlined lines of new cars. I think of futurists as people who have a particular attitude about the future. They're advocates for a certain kind of outcome. As a forecaster I am something very different. I am a professional bystander. I have opinions about the future, of course. But my whole posture is to be detached and to identify what I think will happen and not allow my judgments of what should happen to get involved(Link).

Pretty cool stuff!

Team Theory

2006-02-16T13:15:00.000+02:00

Recent tax legislation changes have me thinking that many organisations will look to expand their R&D budgets and recruit new personnel. In my view team size and composition in an R&D environment is crucial to the success of R&D.

"Boston Consulting Group recently reported that the 500 executives it surveyed in 47 countries in all major industries ranked innovation as one of their company’s top three strategic priorities in 2005 (link).

But be careful when you expand your innovation team. Some research shows that there are only very limited incresing returns to scale when you grow a team beyond 5 or 6 people. For example, Salary budgets grow, meetings become impersonal, you need an HR person, communication becomes difficult etc. etc.

"The primary focus of a team that size is simply to sustain momentum. You can’t stop and change direction. You can’t jump on great new opportunities. You can only keep pushing in the same direction, struggling to keep enough money coming in to keep from having to let someone go (link) ."

That quote comes from an article which popped up when I was googling for information on sizing teams (link). The article went on to describe an ideal software development team, and how the roles are analagous to a very.famous.team... I've applied the roles to how I think an R&D team should function. Here's how we can use the lessons of... The A-Team.

Hannibal Smith - High-Potential Business Person/Leader

"The cigar chomping leader of the A-Team was forever “on the jazz” (meaning he loved the adrenaline of action). He just loved to play it tough and cocky to the biggest bad guy. Named after the Carthaginian general who almost destroyed the Roman Empire 2200 years ago. Like his namesake, Hannibal is a master tactician, but his plans never quite turned out as they were supposed to. According to Amy Allen, “Hannibal’s plans never work like they’re supposed to, they just work”.

Hannibal was also famed for his “mastery” of disguise – usually involving a wig and a pair of false teeth, that any person with some semblance of vision could have seen through. Nethertheless he was man the Team revolved around and after every successful victory he would utter his infamous catchphrase, “I just love it when a plan comes together!”."

Roles associated with Hannibal are Sales, Management, Networking and Supporting the Team. Hannibal is hungry for success, and drives the A-Team. Hannibal is also an expert at extracting business development funds from company leadership. The leader of the team, this fast-tracker should be placed in the role for a limited period of time - Up or out!

Face - Art Direction

"Face was the A-Team’s conman, often managing to cheat people out of everything they owned and still leave them smiling. Whatever was needed, be it a lawnmower engine (in the jungle) or an American Air Force Jet (in Peru) he could obtain it. And if the hapless victim was female it was all the easier for Face (nicknamed on account of his clean-cut good looks). However, Face was never one for the inevitable fighting that being an A-Team member entailed, and he was forever complaining about getting hit too often.

Face was effectively second in command to Hannibal in the A-Team (Murdock technically had a higher rank, but he was certified insane!), but he devoted much more time to the women and seemed to get one during every mission – simply by smiling at them."

Face is in charge of internal public relations and most importantly... Presentation! Any proposal or plan lacking visual appeal is immediately at a disadvantage. Aesthetics are key. Face should have skills realted to DTP, web design, powerpoint and writing copy. Face is a yuppie metrosexual. He wears a scarf in summer.

Murdock - Technology Virtuoso

The craziest member of the A-Team resided in a military mental hospital for most of his time and it wasn’t hard to see why. Running through different personalities like a hot knife through butter, and talking randomly to objects and things that did not exist. B.A. had a particular problem with this “crazy fool”.

However, despite his umm.. inconsistencies, Murdock was a top class pilot. He’d fly anything and fly it well – if a crash was iminent he was the man to get the ‘plane down safely. Despite his mental state (and was he really crazy?), he was an irreplacable member of the Team.

Innovation is often dependent on harnessing technology. You need someone who can tap into any given technology in a short period of time, buiold a prototype and make it fly! Murdock may have to be chained to his desk, and may be insane. Murdock has 7 cellphone contracts, more than 6 pc servers at home, he contributed code to the Linux Kernel and once modified a beermug to stay cool using 4 PC fans.

B.A. - Old Timer

Nicknamed “B.A.” on acount of his ‘bad attitude’ (he used to enjoy beating up senior officers whilst in Vietnam), B.A. is possibly one of the nicest guys there is, devoting his little free time to helping poor children. B.A. is the team’s mechanic and has a truly amazing talent for making impressive machinery e.g. a tank from a standard pipe and the odd matchstick! And he managed to achieve this despite the weight of jewellery on his hands and around his neck – an amount that would have caused any mortal man to just keel over.

B.A is the cynical old-timer, the guy who know how to get things done. He's been drinking on a Friday with the mainframe guys since 1968, WROTE the project office process, rolled out credit cards and knows about the secret braai area on the roof behind the airconditioning plant. B.A will give you the low-down on the history of every initiative ever tried, why it failed, what makes yours similar, and what you need to do to avoid the same mistakes. B.A. 'pities the fool' who doesn't get the change request/motivation/business case doc competed and in his inbox on time!

I'm sure based on individual skillsets, you can add or subtract a team member. But I feel that the A-Team theory encompasses all of the essential skills required, without duplication of personalities. Or as a Mckinsey drone would say, 'Collectively Exhaustive and Mutually Exclusive'.

Acknowledgements:
The A-Team theory for software development teams (link)

Using Einsteins theory to find innovative talent (link)

How to make big things happen with small teams (link)

Open Source - From Zero to Hero

2006-02-16T08:40:00.000+02:00

I recently supervised an MBA student who did some research into open source solutions and their role in RSA. We are now collaborating on an article that we hope to publish together.

Up to now open source has been a niche player and serious enterprises have also considered this to be part of a "lunatic fringe". It was mainly adopted by fanatics and anti-mainstream users who did this as a matter of principle. Then we started to see governments and municipalities adopt the solutions. We began to see the mainstream proprietary players sit up and take notice.

What is happening? How do we see this changing business in the future? It does not matter whether one is discussing Apache, Jboss, Linux or Star office, one is looking at products that work and deliver value for money to a particular segment. The sweet spot for these solutions is now starting to broaden largely because the key obstacles to adoption are being dealt.

So what were these obstacles? The list below is not comprehensive but includes the bulk of the factors that will influence decision makers.

"The Dirty Dozen"

1. Lack of support
2. No future roadmap
3. No service level agreement
4. No major player to talk to
5. Installation and configuration problems
6. Lack of drivers or full product extensions
7. Future migration challenges
8. Integration challenges with widely used proprietary solutions ( and I did not mention windows, doors or other orifices)
9. No-one ever got fired for buying IBM, Oracle, Sap or Microsoft. So there is great inertia in the market.
10. Open system mean greater risk from a security perspective.
11. Too many variants of these so called standard products.
12. Who do I buy this from?

The consequence of all of this is on the total cost of ownership and so the business case for open source was not compelling.

We are now starting to see the open source movement get their act together and deal these issues.

HP and IBM's strategic support of Linux and sun's aggression on star office together with Google are examples of this. Novell's endorsement of a variant of Linux by purchasing Suse and the rapid growth of java all underpin these trends. Sun has now open sourced a version of Solaris and IBM is lifting patents on key components of its IP.

Linux on the server is now rated by Gartner as a mature deployment and all of our 25 deployments at standard bank are stable and deliver value. This forces us to review the basis on which we procure future technology.

So, there are good moves in the right direction! There is clear evidence of a tipping point here, no single action will cause this swing but the point is getting closer. Is it going to happen this year for your pc? Unlikely, but don't discount this over the next 5 to 10 years

What's next? My Blackberry runs java, my cell phone is on Symbian, my supermarket runs Linux on its tills and we all know that the bulk of the web sites in the world use apache. The next generation converged device in my lounge runs Linux and my favorite browser is Firefox. So the revolution is here! It’s not a tsunami! It’s like a slow squeeze, non threatening and unnoticeable.

There is no one thing that will swing this in the same way that there was no single thing that made the internet. It was incremental change that made this happen and slow adoption. SMTP, html, www, 56 bit encryption, mosaic (worlds first browser), apache, etc voila!!!!!!

The network effect is in action around us all the time! It’s changing us and it changes the world but we don't see it because it’s so slow.

Watch this space.

ANOTHER list of innovation commandments

2006-02-15T12:21:00.000+02:00

Everyone has something to say about innovation. So I'm following the herd with this article. Ironic because you'd think innovation wasn't about following the herd... but it actually is. You just need to see where the herd is going before anyone else does...

No-one likes a smarty pants (Be Humble)
You want people to like your ideas. Get them to like you first. The 'arrogant' tag will kill you.

Get money quick (Governance)
Find an autocratic executive sponsor with dedicated budget and an impeccable reputation. Make him/her look good. Repeat.
Present something cool and useful to top level management at least once a month. It had better be good.

Play (Prototype)
Don’t ask. Build prototypes. Scare people. Break things. Create havoc. Do it where the organisation can see you. Screw up. Take accountability. Ask for forgiveness later. Create a fake brand and test your ideas (Wando's?).

Smiling (Networking)
Make friends within the company. It’s much easier to gain acceptance for change when you already have people’s trust.
Make friends with your suppliers. Find out how you can help each other. LISTEN.

Always have free sweets on your desk (Communicate)
Have a full-time person dedicated to communication. Innovation is a holistic process, and communication is vital to its success. Invite and incentivise participation. Blog it. Flickr it.

Sit next to the Nerd/Jock (Don’t separate technology and business innovation)
Business must drive technology innovation. Technologists must educate business. Business must educate technologists.

Rent, don’t buy (Disposable Innovation)
Too many organisations invest in a rigid structures and process for innovation. Intranet portals. Expensive infrastructure. Slow turn-around times. If you can’t show ROI in 3 months, give it away to someone who can concentrate that long.

Invite a boring person to the party (Accounting)
Find someone who can measure innovation on return on effort and ROI. Make sure they speak the CEO’s language. Prepare a monthly report with these numbers.

Learn to count in binary (Do random things)
Randomness breeds creativity. Do something different every day. It's easy.

The good ones are the last four. Also, the most original, I think.

Previous articles on Innovation are here.

You will Never Walk Alone

2006-02-01T12:29:00.000+02:00

So I got to thinking about privacy recently when I requisitioned some security cctv tapes. Most of us have seen the research on the number of times we are recorded on cctv cameras in a day but have you considered that your calls to a call centre are often recorded and that banks have access to your spending pattern while telco's know who you are calling and both of the latter can then place you physically in a particular location. My vehicle is tracked via satellite for security reasons and my ID card places me at the scene whenever I enter the bank or university. My log in IP address tells you which pc I'm using and the cookie on my PC tells you about my habits. The RAS connection can locate the physical access point and which ISP I used and even the port that I came thru. My employer can tell what I do on-line, which sites I frequent, what applications I use, where I've stored my information, how often I take my laptop home and even how many emails I send and receive. They can even determine the amount of times I clicked my mouse and what I'm working on!

So now retailers will be adding RFID tags too many grocery items and you know this means that I can check out quicker and that the retailer has more real time updates in stock movements. But it also means that strangers can know what I buy and when I consume them just by scanning my garbage. Anyone driving past my home can tell what's in it! Really useful for the fussy burglar!

My network service provider can triangulate my position while I'm emailing on my blackberry and my grocery store have a record of my buying habits. Bmw keeps a record of my driving patterns on their electronic engine management system installed in my car and my security company knows what time I sleep and when I get home.

Excusive books know about my strange reading habits and Musica and iTunes are aware of my unusual tastes in music.

SARS know what monies I receive and spend and whether I'm paying the appropriate amount of tax and home affairs are aware the instant I enter and leave the country. There is a scary thought! Of course my bank knows where I am every time I spend something and therefore whether I'm in the country or even my home city.

Banks know where I spend, when I do so, how much I save, what I'm worth and what my risk profile is. They know who I pay and whether I am likely to need additional funds.

My life insurers have all of my medical records on an electronic file and this contains some of the most intimate details that I have. They know my genetic predisposition for contracting particular dreaded diseases and what my life expectancy is based on my life style and current state of fitness.

The police force know about my driving habits from my traffic fine profile (something that I'm not proud of) which is now available on line and know what my likelihood of paying it is.

My Telco know where I live, what I likely earn, what I spend on long distance calls, what my likely disposable income is, what my payment risk is and who I'm calling.

Wow. Well I'm off to the gym now and they know when I'm there, how often, where I park, what I drive, how many hours I work out for every week, how much of squash I play and what my family workout behaviors are.

If u are lonely in today’s world, u are quite lucky! We all be paying more for privacy very soon (in this so called third world country)

Ps. I just realized that 4 different entities can track when I exceed the speed limit: the SAP! My Telco, BMW and my satellite tracking company!

A response to Franco

2006-01-19T09:34:00.000+02:00

Whenever there is an interesting article, a lot of debate is generated, Nico had the following to say...

Just a point of note - what carrier is used by BlackBerry? GPRS of course. Blackberry, when deploying their solutions into networks and countries will also take the responsibility to set up the various (including GPRS) configurations. Given that they own the device, the OS, the software and all the back-end stuff (i.e. BES servers etc), not taking responsibility for the configurations would mean effective suicide for their company and the BB brand. This they have done extremely well and hence why BB has grown as much.

Having choice and variety in life also means certain downside aspects such as having to take ownership for configuring systems. For example, can the WiFi hotspot owner be held responsible for every manufacturer's laptop and what drivers they use for WiFi cards in whatever configurations - of course not. Hence why companies such as iPass will be around to make a business of solving some of these issues.

As far as I know Vodafone has no ownership of a GSM operator in France (busy confirming). Given that we have travelled to the UK (Vodafone), Germany (D2) I seem to recall that I had to do absolutely NO configuration changes for GSM, GPRS and 3G - it work out-of-the-box! Is this not Vodafone stable taking the ball and try and ensure smooth, seamless operation going from one Vodafone operator to another without having to make changes and raising the ire of people? This is in many ways compatible to what BB is doing except that Vodafone is having to buy stakes in other companies compared to BB selling a service.

How does Vodafone try and ensure this seamless operation; it starts by being able to write to every Vodafone stable SIM card all the Vodafone related systems settings etc. In addition, through Vodafone Internatiional, work will also be done to ensure systems are configured and set up in a manner which strives to give consistent operation.

Why Blackberry is better than PPC when travelling..

2006-01-19T09:28:00.000+02:00

I have been a long time user of both the BlackBerry and PPC platforms. Recently, I have switched to BB away from PPC due to the ease of operation and the fact that a BlackBerry removes complexity from your life.

Having arrived in Paris this morning, I decided to give both platforms a fair chance. When ariving this morning, I switched on my BlackBerry and I could send and receive messages within a minute. I even tested the responses with my colleague also on a BlackBerry device and found a 4 second response from send a test message from my BB to his.

Arriving at my hotel, I decided to give my PPC device a chance. Once the device was booted up, I could get a GSM signal, I could see that there was GPRS, but I could not connect to it to retrieve my mail. And there is the problem, when traveling and connecting to mobile data networks, you need varying user credentials to connect to these networks. If you do not have the network's details, your PPC device is useless.

So how do we resolve this issue. Well for one, you could create an aplication that will have the credentials for all the mobile roaming partners installed on the device. When you arrive at your destination, just change your credentials to those required by the host country.

Otherwise, you can always get a BB...

***Posted on behalf of Franco Rothner***

From Germany.....with Connectivity

2006-01-19T09:12:00.000+02:00

So I'm sitting here at SAP in Waldorf close to Heidelburg in Germany with the most astonishing experience - I am fully connected to my office in real time and am truely experiencing the wonders of tele-commuting.
I have connected up my GPRS roaming on my 3G data card and it is seamless, simple and robust. No setup, invisibly linking up to a German service provider and at the same speed of data transfer which I get in RSA. Now we have a killer proposition!
When we combine this with the GPRS Blackberry that I am also carrying the service is incredible! The Blackbery also connected seamlessly.

I have used my new Vodafone 3G card and its been a very pleasant surprise. My colleagues here from 6 counties around europe and all from other banks are quite surprised by my set up as their banks do not even support this type of functionality! My colleage from Norway has a bank that does not even allow him to link his cellphone to his work mailbox. So here we are from Africa and we are showing up senior IT execs from banks from Norway, Spain, belguim, England and Germany itself.

The roaming agreements for both Blackberry and 3G just took a phone call to set up and usage just required one to power up and activate. I had a weird experience with my password reverting to the previous one on the 3G card but otherwise have been pleasantly surprised by the speed of the system, it's almost as if im in RSA based on response speeds.

I'm able to read RSA papers, deal my mail and do so in near real time, which means no full mail boxes when I am back and even though I'm out of the office and put in an "out of office' in my mailbox, I'm probably even more productive and quick to respond to incoming mails. Not sure what all this is costing me yet but the enhancement in productivity and agility definitely worth it.

Roaming just took on a whole new meaning for me - now I take my internet connection with me! This stuff is real, it works and its value adding

Definitely like an American Express card - "Dont leave home without it".

Connectivity on the Go!

2006-01-19T08:56:00.000+02:00

Herman is in Germany, Franco is in France yet they continue to fire off emails quicker than wild west gunmen. Their weapons are Blackberry, the Hummer of handheld device world!

Enjoy

Connectivity 101!

2006-01-15T20:40:00.000+02:00

So the country is starting to really get serious about broadbank, wireless and mail on the move. The average consumer in this country that I have spoken to is totally confused by the plethora of connectivity options open to them. I am currently using multiple connectivity options to stay in touch with the world around me and have come to the conclusion that the fragmented market will exists for a while because we have a high level of confusion partially caused by the industry itself. So what's available in RSA. Well for wireline users is concentional Dial up, DSL, ISDN and ADSL and wireless options are either gsm or not. The gsm solutions are gprs, edge, umts (so called 3 G) , hsdpa. And the non gsm solutions are the sentech option and the iburst solution from WBS (that’s Wireless business solutions and not Wits business school). There is also VSAT (very small aperture terminal from Telkom). There is a further barrier in the handheld challenge with Blackberry "push mail" options vs the "pull" email solution sets of for example microsoft and Nokia's solution although all of these tend to be gprs based.

3G is definitely one of the most overused phrases in this industry and the reason is that there is no body that governs what may or may not e called 3G and the same is true for broadbank. Even data transfer speeds are an issue with quoted speeds often not being achieved in practise or only at 2am! Contention levels and users per port continue to be the means that the industry uses to manage profitability (recall the free internet access debacle in 2002?).

I am personally using Iburst at home, GPRS, 3G and of course have a corporate access as well. Telkom tell me that I cannot have ADSL at home because im in the "wrong" area.(hello!!! The customer is???? Fill in the missing word telkom....very frustrating). Ive experimented with ADSL at the a friends offices and have had an ISDN system at home as well.

Lessons for the unwary:

A wired solution will mean that you will need to have a Telkom connection! Why would u want that because about a quarter of the people that I speak to(and I speak to a few thousand people a year) no longer have a telkom phone at home and about a third of the balance only have a home telkom phone because of connectivity and not voice! I would definitely go the ADSL route here because ISDN in perticular is a particularly poor offering and value for money is weak. ADSL is an enhancement on DSL so u would definitely go the former. I have advised most of my associates to dump their wired services and go wireless even with the monthly data caps.. Sorry but bye bye Telkom! You will need to work within the 3Gig limit but that should be easy for most families as long as you don’t try to download illict movies etc.

Now on the wireless side your choices will depend on what you actually want to achieve and what your lifestyle and workstyle is. I have had terrible reports on the Sentech service with very few happy clients. The I burst service that I have been using for over a year has been teriffic (and I have 4 connecetd leptops accessing it from home). The installation, reliability and quality of the service provider has been great and Tami (the owner) can be proud of his achievement. Most users will not even know that this is a no fanfare true BEE startup. A fantastic story for RSA!

For mobility I would recommend the true 3G solution from Vodacom (branded Vodafone). Im impressed with the completeness of the solution from Vodafone from the pcmcia card and software to the user interface. If this is what vodafone brings to vodacom then woza takeover! MTN had better watch out. Cell C is just not in this league and are at least a year behind.

For mobile connectivity its has to be GPRS. There is very little 3G content in this country and even in countries like the UK 3G has not taken off well. So it may be great for parties and show and tell but little else. I have a personally bias towards the blackberry which is like my employer , simpler better and faster! I get thru 150 - 200 mails a day and am the second highest user of the device on the Vodacom network so trust me on this one.

So my suggestion is iBurst, blackberry with gprs and a 3G card if you are on the move a lot.

Great value for money and has dramatically increased my personal productivity levels!

Happy connecting!

Home, sweet home – but for how long!

2006-01-09T13:37:00.000+02:00

I just got back from a holiday in the UK and was struck by how much this first world country had changed. This follows on from trips to Germany and India in the previous two months . Globalisation fever has certainly caught on! The nature of work has significantly changed but we are not noticing it in real time. The implications for RSA and the financial services and IT industries are quite profound. A few broad themes describe my observations.

1. Globalisation is accelerating and the consequences are unanticipated
2. Knowledge is becoming a commodity
3. Prices do not fall for consumers but profits rise faster.

1. Globalisation is accelerating and the consequences are unanticipated:

The queue at Heathrow passport control for foreign passport holders into the UK is longer than the one for returning citizens by a few orders of magnitude. The London subways are disproportionately populated by foreigners. The fastest growing ethnic group in the metal working industry workforce in the UK is Polish! The fastest growing retailer in the UK is ASDA (read Walmart of America) and this is leading to the demise of the ubiquitous UK corner news agents.

We must be one of the most popular destinations from Heathrow, judging by the numbers of flyers and flights. There are four flights to and four flights from the UK to / from Johannesburg every 24 hours!

The proportion of individuals over the age of 50 years in the British population has to be close to 30% (just based on my observation at refuelling stops and malls). We can see why the British need so many new immigrants.

I have been asked to respond to three customer satisfaction questionnaires by large international Software houses. In all cases the call came in from a call centre hosted in a low cost foreign location. Made in China is ubiquitous in manufacturing.

So the UK’s growth rate may be good not because of British productivity but in spite of it. Amazing that the off shoring and on-shoring phenomenon created the opportunity for the local population to take the foot off the accelerator of competition. This is an ominous sign for the future of the UK – hard working foreigners and lazy citizens? Crazy? The bulk of the people who voted in the last German elections were on the state payroll (either as civil servants or on state granst) – so what would be my incentive to open up the economy even more?

2. Knowledge is fast becoming a commodity

I was amazed at how fast best practise was being rolled out into different parts of the world. From automated parking payment machines and ticket dispensing machines to the process modelling techniques and service management models it was clear that competitive advantages are becoming much harder to maintain

An MSc software engineer in Bangalore who is 28 years old earns $12000 per annum! We pay that to our call centre operators in RSA and many of them do not even have a matric qualification!

My kids’ Grandma in the UK has almost a thousand satellite channels on her TV for a few quid a month and don’t even get me started on the ridiculously low cost of REAL broadband.. You can even buy a set top box that will give you free satellite TV which translates into any access to any information and content at a ridiculous price! I can vote for free on my Sky TV remote, so why pay for surveys if I can get my views instantaneously on line. (How pathetic is it that we are asked to sms our votes in this country at R1.50 per sms! Makes me want sick at how doff we can be some times in this country)

India produced 300 000 engineers in one year. That’s more than RSA produced in its entire existence!

Knowledge flows seamlessly around the world. So the key to success is perhaps not knowledge but the ability to access it, assimilate it and utilise it.

3. Prices do not fall for consumers but profits rise faster

The amazing thing is that consumers in all countries are lamenting the rising prices of services while at the same time the input costs to the suppliers are dropping as they move their resourcing to lower cost units through off-shoring, on-shoring, in-sourcing etc. British firms are declaring record profits.

And at the same time the median income per family in the UK is still at around 30000 Pounds Sterling per annum. That’s not bad when you consider that a basic sedan goes for R120000 but consider that it costs over 50 Pounds to top up your tank. The train fares went up by three times the inflation rate in the UK as I was leaving!

I have never seen as many sports cars in the UK as I did on this trip. The rich are certainly getting richer. The foreign workers are getting financially secure and the off shore facilities are getting smarter. The middle class are just getting fatter! Starbucks do not seem to employ English citizens anywhere! So low cost staff must mean low cost coffee? Nope, its 2 pounds a cup and even up to three in places.

I bought British spoons as a souvenir at each of the tourist locations that I visited. Its what I do everywhere that I go because my wife has been collecting them for 22 years now. They have great British emblems on them depicting the castle or a royal figure. All made in China! The little miniature farm houses are all quaint replicas of the English country side. They are all made in China! One pound fifty is the going price for spoons while the houses go for eight pounds! So where is the cost benefit to the consumer. The British have the most expensive spoons in the world – all made in China!

You can imagine how pleased I was to land back in safe old RSA.

And then I saw the relative sizes of the foreign and domestic queues at passport control!

***POSTED on Behalf of Herman Singh

2006 NKOTB

2006-01-09T13:30:00.000+02:00

There is a NKOTB- New Kid on the Block! I am going to be handling the posting and admin of the site. Hopefully there will be more posts more often, so watch this space because 2006 is going to be a Cracker!

Future WORK is different?

2005-09-21T08:19:00.000+02:00

It struck me this week that no one under the age of 32 in this country has worked in a recession. And that everyone under the age of 16 probably has no recollection of apartheid.

This is an amazing set of statistics when combined with the fact that the last flight engineer has probably already been born due to the use of intelligent neural networks to automate the tasks on all new generation aircraft. Similarly, we have already seen the birth of the last secretary, german motor mechanic, local area network administrator, jet fighter pilot and call centre operator for manual tasks. All of these jobs are slowly being rendered extinct by the inexorable march of technology.

The nature of work is changing radically due to the rapid explosion of IT, knowledge industries and the services sector. The changing demographics in the world combines with this to create a toxic cocktail. Routine work is being rapidly automated and re-engineering is eliminating non value added functions. Value chains are being compressed by new and innovative business models enabled by these new technologies. Both manufacturing and routine services are experiencing rapid productivity improvement and deflation. The consequent job losses are likely to cause massive social upheaval. China and india are in for some big surprises!

Humans are not being prepared for this massive onslaught of technology. My grand parents worked for 150000 hours each in their lives. I'll probably only work half of this. This is because I started working later than them and will retire earlier after working a shorter work week. These stats were first quoted by charles handy in his book " the elephant and the flea". He pointed out that we will live 5 times longer after we stop working due to younger retirement ages and beter health care. All this at the same time that we are eliminating jobs, ill preparing our youth and changing the nature of work.

So it’s less simple work, fewer jobs, shorter working lives, less experience, greater automation, increased need for IT knowledge and smaller disposable incomes. IT will cause poverty? Well we will need jobs to afford what we are making. Who will be working? Most new jobs are very capital intensive - an average job in the steel or aluminium industry will cost over R10 million to create. This means that each parent will have to save over R10m before they have a child. The figures may be even higher in the IT and knowledge industry.

So , greater need for funds and capital and therefore savings. All this happening at the same time. Our global problem of the future will be the same one as the third worls has now: not unemployment but unemployability!

Do you fear for your children? I do! What kind of world are we creating here? An automated world of low cost goods and services for people with no jobs?

So this is a dark view of the future! Is it likely? Well it ignores the fact that humans are incredibly creative and the jobs of the future will be very creative and innovative - knowing how to think differently and not doing the same thing all of the time. A quantum change in human society is underway and being driven by technology. Everyone looks at the business and process impact of tech. Its time that we started looking at the social consequences as well.

Revisiting ERP

2005-09-06T10:53:00.000+02:00

Jon and I were having a discussion at the watercooler, and 'revisiting ERP' was born.

Your Business is a square peg.

Your ERP system is a round hole.

Who needs to change...?

The move to adopting an ERP solution for any company is not a decision taken lightly. As a general rule moving to an ERP solution is a costly and complex affair – driven by a compelling business need. Given the measure of investment by the business, the expectation associated with reaping an equivalent or greater reward is high – and yet, the reality is that ERP solutions tend to swell in complexity as they evolve to fit the business requirement.

The question that begs asking is “Why the divergence in expectation and implementation?”

Often companies embark on a journey of making the ERP solution their own. This means spending time and effort on mapping out the business, modifying the ERP solution accordingly, testing their modification, implementing and then training their staff on the new way of doing things. This path also has the knock on expense of performance complexity, additional upgrade cost and challenges when implementing the next release of their ERP solution – since the “out the box” ERP solution is likely to have evolved and that evolution is unlikely to coincide exactly with a specific companies customisation.

An alternative path to consider is for the company to align the business with the ERP solution. This means implementing an “out the box” ERP solution and training the staff on a new way of doing things, with the knock on benefit of a simple and completely aligned upgrade cycle.

The hidden benefits of aligning to the ERP solution lie in the fact that the solution is being used as it was designed. Value propositions, system performance and optimization are built into or aligned with the “out of the box” solution. Stretching the ERP solution away from its intended form only degrades the value it can return, with a perceived benefit of an easier fit to the existing business process. ERP solutions typically rely on highly optimised databases– which when mapped to a business process implies that the process is as streamlined as possible already. Modifying the ERP database structure, to conform to an existing business structure can only reduce the optimisation and performance of the ERP solution.

While the above analysis is simplistic, a new question emerges……

“How many businesses are truly prepared to change to an ERP solution?”

By Jon de Pre le Roux

Et tu FSI?

2005-09-05T08:41:00.000+02:00

Where to for the Financial Services Industry?

The global FSI is undergoing a quantum change that is unprecedented in its history. For an industry that is focused on supplying simple products to its clients it is finally experiencing the global winds of consolidation and commoditization and the advent of newer technologies have lowered barriers to entry and encouraged the entry of disintermediaries.

The FSI supplies 4 basic services viz; asset financing (lending); wealth creation (investments); risk mitigation (insurance) and transaction services (mainly payments). Four basic services with a wide range of customization opportunities!

This industry has resisted the global forces of change shaping the worlds industries due to a high level of regulation. The changes in this aspect of the FSI have opened up the Watergates of change for the industry.

The levels of reinvention occurring in this industry are accordingly unprecedented. Most of them are being driven by the adoption of new technologies or channels. There has rarely been a more dynamic period in this industry. That is especially true for the adoption of technology.

Some of the largest corporate deals in the last two years have been bank mergers or takeovers. One of the reasons for this is the need for economies of scale and the need to consolidate in the face of declining prices. We are starting to see increasing litigation and deregulation that is driving margin opportunities down and we are seeing rapid entry of new non-traditional competitors and disintermediaries into this industry. Examples of the latter are paypal, virgin one and pick and pay go.

Technology is poised to play a huge role in the reinvention of this industry. It will underpin the new payment solutions being developed from micropayments and emailed money or ecash to cannibalistic plays such as mtn banking. Merging of banking systems during mergers and the redesigning of banking architectures to cater for more agility are just some of the examples of the role that technology will play in the future. Whether we are looking at reducing costs, enhancing customer satisfaction, lowering risk or increasing revenue, we will be looking at the innovative use of technology.

This is a great time to be in a technology role in the FSI - it has never been more relevant, strategic or credible. After the hype of the last 5 years we are beginning to see technology truly live up to its promise. New technology choices are creating significant cost containment opportunities from reduced branch costs due to the adoptionj of the latest client - server solutions and lower transaction costs due to the adoption of more open systems. New revenue will come from the myriad of new payment solutions that are exploding across the solutions: for medical services and smart cards to virtual prepaid money and services.

Brace yourself: we will be seeing more use of technology to enhance channels, especially in rural areas, to create bottom end products for the unbanked and to mine data to optimize product and customer solutions.

Woza tech - this wave will be in place for at least the next 5 years would be my guess. The banks that win in the future will be thiose that build a cogent technology approach as part of the overall competitive strategy!

Alan Knott-Craig on MTN-Banking

2005-08-29T14:51:00.000+02:00

Is MTN-Banking a big deal? The CEO of Vodacom doesn't think so...

"Banking over cellular has been gone for two to three years already, and it works very well. I think what MTN has done is really interesting, and I’m keen to see what results they bring out of it. But banking over cellular is not new, and the fact that some 25 million-plus people in the country have cellphones just puts them in touch with banking already. The MTN offering is an interesting one, and I’m sure people will take that up. If it’s particularly successful, then duly we will follow. But I think that, really, banking is for banks and the banks are doing a good job of placing their banking facilities over cellphones already."

As seen on Moneyweb; Link

The Infostructure

2005-08-24T07:57:00.000+02:00

Apologies for the long absence from the Blog – I had “writer’s blog"!

Whilst doing research into an academic project last night, I discovered the following in Funky Business [Ridderstrale and Nordstrom]:

“..one certainty is that “infostructure”, the electronic nervous system of the company, will become more important than infrastructure. Organisations with lousy infostructures will look like 65-year-olds competing in the Olympic marathon wearing high heals and evening gowns.”

Now let’s analyse:

Enterprises cannot hope to have infostructure if they have a fragmented approach to architecture. The backend, application, network and infrastructure architecture needs to be designed and advanced according to a single roadmap; should any part go out of sync, the glue will come undone.

A nervous system by nature is a transparent system with ubiquitous awareness – not matter where you touch it, the reaction will be appropriate. The question is: can we design an infostructure around inefficient legacy systems? And if so, at what cost?

The debate of infostructure being more important than infrastructure is still hot in the banking industry where the take-up of electronic services is relatively low. However the debate goes beyond branches; it goes to agility. Service from physical infrastructure cannot be agile without supporting infostructure and in that sense, infostructure is more important than infrastructure. Customers might still prefer the branch as interface, but that is all it is – the preferred user interface for specific interaction at a specific time. Underlying should be an infostructure, agile to respond and consistent in experience.

As for the evening gowns…yes I see them draped over legacy systems that underwent too may cosmetic surgery interventions all the time!

A NEW KIND OF BANK

2005-08-22T16:11:00.000+02:00

Freed of the constraints of legacy systems, MTN Standard Bank go after the mass market

The excitement in Hemmanth Singh's voice is palpable. "We have built the competitor from hell," he says. Singh, Director of technology engineering at Standard Bank, is talking about the financial institution's new joint venture with cellular network operator MTN, called MTN Banking. He says that by using technology - much of it developed in SA - MTN Banking is able to offer financial services to the mass market cheaper than anyone else.

Financial Mail, August 19 2005.

The Most Influential Company on Earth?

2005-08-19T10:20:00.000+02:00

I love to 'bang on about' how the next logical step for transactional systems is a redundant software architecture built on a distributed supercomputer (like google). But no one here believes me. Do you?

If you haven't read up on google yet, you're sleeping. Do it! And maybe you'll understand why I think Operations Processing is going to change BIG TIME in the next 10 years.

"Google is a company that has built a single very large, custom computer. It's running their own cluster operating system. They make their big computer even bigger and faster each month, while lowering the cost of CPU cycles. It's looking more like a general purpose platform than a cluster optimized for a single application.

While competitors are targeting the individual applications Google has deployed, Google is building a massive, general purpose computing platform for web-scale programming.

This computer is running the world's top search engine, a social networking service, a shopping price comparison engine, a new email service, and a local search/yellow pages engine. What will they do next with the world's biggest computer and most advanced operating system?" more

And...

"Even though everyone's down on Google these days, they remain the most interesting company in the world and I'm optimistic about their potential and success (while also apprehensive about the prospect of using Google for absolutely everything someday...I'll be cursing the Google monopoly in 5 years time). If they stay on target with their plans to leverage their three core assets (which, if Gmail is any indication, they will), I predict Google will be the biggest and most important company in the world in 5-8 years." more

And...

"Here's an anecdote to illustrate how far Google's cultural approach to hardware cost is different from the norm, and what it means as a component of their competitive advantage.

In a previous job I specified 40 moderately-priced servers to run a new internet search site we were developing. The ops team overrode me; they wanted 6 more expensive servers, since they said it would be easier to manage 6 machines than 40.

What this does is raise the cost of a CPU second. We had engineers that could imagine algorithms that would give marginally better search results, but if the algorithm was 10 times slower than the current code, ops would have to add 10X the number of machines to the datacenter. If you've already got $20 million invested in a modest collection of Suns, going 10X to run some fancier code is not an option.

Google has 100,000 servers.

Any sane ops person would rather go with a fancy $5000 server than a bare $500 motherboard plus disks sitting exposed on a tray. But that's a 10X difference to the cost of a CPU cycle. And this frees up the algorithm designers to invent better stuff.

Without cheap CPU cycles, the coders won't even consider algorithms that the Google guys are deploying. They're just too expensive to run.

Google doesn't deploy bare motherboards on exposed trays anymore; they're on at least the fourth iteration of their cheap hardware platform. Google now has an institutional competence building and maintaining servers that cost a lot less than the servers everyone else is using. And they do it with fewer people.

Think of the little internal factory they must have to deploy servers, and the level of automation needed to run that many boxes. Either network boot or a production line to pre-install disk images. Servers that self-configure on boot to determine their network config and load the latest rev of the software they'll be running. Normal datacenter ops practices don't scale to what Google has." more

Don't you think that we could do this to retail transactions? Tell me!

The Great Debate - Linux vs. Windows: TCO Comparison

2005-08-17T12:37:00.000+02:00

Another salvo in the debate. Without a doubt, the best article on the Linux vs. Windows debate I have seen. Because it's so obvious. Duh! You can't manage what you can't measure (sorry!).

"Pragmatism -- not misguided passion -- should decide whether Linux, Windows, Unix or any combination of the three is the best solution for an individual organization.

Don't get me wrong. I applaud the passion of the software developers and I.T. administrators who pour their time, effort, energy and enthusiasm into their work. But I abhor it when the passion disintegrates into mudslinging and counterproductive internecine warfare. That does not help the business or any of the corporation's end users."

And

"The most startling revelation coming out of the report was the fact that more than 50 percent of the respondents said they had performed a thorough TCO analysis. But when asked to calculate their specific Linux and Windows capital expenditure and maintenance costs, 75 percent, on average, could not answer explicit questions about their own environments.

Businesses lack basic, crucial TCO information, such as the cost of a Linux or Windows server upgrade and what they are spending on network management, third-party applications, tools, utilities, ongoing maintenance, security Latest News about Security, systems downtime Latest News about downtime, calls to the help desk Latest News about help desk and hardware and software breaks and fixes.

The absence of such crucial financial information makes it difficult for corporations to make informed purchasing decisions and heightens risks when choosing technologies that are ill-suited to their business needs."
Link

FYI - Posting proudly from a Windows machine running Firefox. Beacuse it's easier

Gartner Symposium/ITxpo Cape Town 2005

2005-08-16T07:31:00.000+02:00

Now I'd hate to bore you, dear reader with Gartner's predicts for 2006. Anyone who's reading the interweb will know all about Mesh, Grid, OLED/LEP, Blah blah blah... Eugh!

The main value add for me was the way in which the presenters put together their presentation. We can learn a helluva lot on how to present to IT Management. I keep forgetting that too often the corporate IT audience hasn't ever held an IPod, experienced broadband or even used Wikipedia.

There's a good article in the Business Day if you're interested in the opening address...

"The IT industry is largely used to supporting administrative processes and handling transactions, rather than to improve a company's information and knowledge, said Gartner vice-president Andy Kyte.

But, he said this did not deliver competitive advantages, so mundane tasks would increasingly be outsourced to third-party suppliers who could run them more cheaply. To remain relevant, an in-house IT unit had to develop systems and technologies to lead the business into new growth.

"There is less and less justification for running some transactional systems inside the business if someone else is prepared to do it," said Kyte.

"IT needs to focus on supporting the decision makers who use information to deliver the changes necessary to ride out threats and exploit opportunities. You have to understand the strategies and be ahead of them in helping to achieve their business objectives."...more.

More Gartner

2005-08-02T08:16:00.000+02:00

The main theme of the conference is "The changing face of the IT workforce". Of course, I can't say that theme was very evident from the attendees - the vast majority of attendees were pale males (myself included). Anyhow yesterday was an interesting affair...

One emerging theme appears to be the threat of an economic downturn on the recently (2004) revived IT budgets and strategies. Let's call that one "Getting the most out of your ERP investment". :) A related theme is the suggestion that corporates should look to finding opportunities for 'value add' in compliance projects, and not just view them as ... erm... compliance?

Another recurrent theme is the importance of what's been dubbed "Sissy IT". Automated business processes and transactional IT (REAL man's IT) are definitely not the flavour here, the impact of worker productivity tools (collaboration, mobility etc.) has been emphasised instead.

Of particular interest to me was the emphasis (once again) on the importance of consumer devices (phones, players, DTV etc.) to business. No-one really seems to know what the killer app will be for banking, but everyone agrees that it's coming...

If there's anything you'd like to ask the analysts, please let me know. Futurebank has Gmail (hint hint).

Gartner Symposium 2005

2005-08-01T09:05:00.000+02:00

Greetings from Gartner Symposium ITxpo Africa 2005!

I've been sent here as part of a team from work. Seems like there are some very interesting speakers and events lined up for the next 3 days. I'll be sure to keep the blog updated on how it pans out.

I've got a very broad range of connectivity options here, from Wifi to Internet Cafe's to Vidacom 3G to MTN Edge. Right now the fastest is definitely the internet cafe.

The best company to work for?

2005-07-19T08:53:00.000+02:00

Everyone here is completing the Deloitte "Best company to work for" Survey today.

Coincidentally, the HBR has recently published an interesting article on SAS...
"Based in Cary, North Carolina, SAS has been in the top 20 of Fortune's 100 Best Companies to Work For list every year it's been published. The employee turnover rate hovers between 3% and 5%, compared with the industry average of nearly 20%. The governments and global corporations that rely on SAS's sophisticated business-intelligence software are overwhelmingly satisfied: The subscription renewal rate is an astounding 98%."

link to Harvard Business Review; via Slashdot

Telkom - The Wikipedia Article

2005-07-15T12:27:00.000+02:00

Another great entry from Wikipedia - Telkom

The majority of better informed and educated South Africans do not view Telkom in a positive light, as their daily net income is numbered in the millions of dollars whilst still maintaining some of the the highest local and international call charges in the world. The high cost of Internet access in South Africa is generally ascribed to South Africa's extreme southerly geographical location, but others accuse Telkom of exploiting its monopoly on the SAT3 & SAFE backbone lines, which account for the majority of international bandwidth in the Republic.

Telkom has persistently fought through the legal system to retain monopoly position, and were particularly vocal against the introduction of a Second Network Operator (SNO) into the country. Tata, an Indian conglomerate, is a major stakeholder in the new SNO. South Africans usually give Telkom very low marks for customer satisfaction... more

Moneyweb Power Hour available as a Podcast

2005-07-11T08:46:00.000+02:00

Anyone in business with an MP3 player should be subscribing to this free service. I’m now downloading the daily Moneyweb Power Hour Podcast mp3’s onto my iPod for listening in the traffic. It rocks! More information here.

Mobilise Africa to grow!

2005-07-01T08:03:00.000+02:00

"I believe that it is about time that our continent woke up to the fact that the wireless and mobile revolution promises to be the best option the continent has to raise itself out of abject poverty and to propel itself into the cluster of successful nations"

South Africa’s ICT expenditure of 11.43 Bn USD is 9.2 % of our GDP (vs. 7.1% for Tourism) and translates into an annual per capita charge of USD 268 – quite low really. The Telecommunications Union reports some interesting stats for Africa’s digital divide which I have updated with some other fascinating data:

One out of 8 people in the world is African (born here)
One out of 25 cell phones in the world is in Africa
One in 25 of world tourists go to Africa
One out of 50 dollars of exports is in Africa
One out of 60 land phones is in Africa
One out of 75 pc’s is in Africa
One out of 100 internet connections are in Africa, and’
One out of 100 dollars of GDP is in Africa!

So the digital divide is awful and oddly enough our share of global GDP actually maps to our share of internet connections! Why is this important? Well Thomas Friedland , in his book “a history of globalization in the 21st century” refers to the view that the world is flat i.e. Location is irrelevant if you have device and access to the internet with over 11 billion pages of information (searched by Google). This means that any child anywhere has theoretically the same opportunity to develop and grow if the basic infrastructure is in place. Schools actually become irrelevant in this world but more importantly, you can deliver knowledge from anywhere on the planet and that this connectivity will revolutionize the world of commerce and work to a greater extent than any revolution that human kind has ever seen.

A thought: Africa can never hope to catch up using traditional means! The gap is too large and some radical innovation is called for.

So how does one address this basic enabler of national growth? The key seems to be in low cost and broad based access to the internet with smart devices that can manipulate information and communicate using standard protocols.

India has a similar profile and their approach is to go the small device, simputer, route running on linux together with cheap telecommunications to assist growth. The jury is still out on the efficacy of this approach but full marks for the unique solution and the energy that is being thrown into execution.

What thoughts on Africa? Well we have 4 times more mobile devices than traditional pc based connections. This device is also experiencing a 100% CAGR (compounded annual growth rate) on the African continent and is one of the fastest adoption rates in the world. The implication would certainly be that mobile in Africa promises to be a far more strategic solution than it has been in other countries especially given how starved for capital Africa actually is E.g. The 4 giant South African banks account for 75% of all of the tier one capital of all of the banks on the continent of Africa! So there is just no money for the traditional routes.

We have just seen the deployment of WIFI, 3G, GPRS, etc in RSA and it is clear that these service offerings are quite superb and also deliver rapid rollout potential. So, it would appear that mobile and wireless solutions are a huge strategic opportunity for the continent if the governments recognize the critical role that ICT plays and the enabling role of the internet. What I am missing is any kind of focus on this but rather an ongoing search for tired and worn out solutions that have failed elsewhere. Even the open source debate misses the point completely – its about access stupid!

I believe that it is about time that our continent woke up to the fact that the wireless and mobile revolution promises to be the best option the continent has to raise itself out of abject poverty and to propel itself into the cluster of successful nations. None of the top ten countries in the world are agrarian or mineral based countries – they are all knowledge or manufacturing based ones. Africa does not have the skill nor the capital for manufacturing and the logistics of getting products to international markets may prove to be prohibitive , so that really leaves the knowledge and online services economies as the obvious entry points.

The challenge is that this is a limited window of opportunity. It will probably only exist for a generation and will then pass. The rate of national redesign is accelerating and we need to get onto this bandwagon. It took Britain 200 years to go from an agrarian to an industrial economy, the U.S.A. took 100 years, Japan and Germany did it in fifty, South Korea did it in 25 and china seems to be doing it in 10 years. Dubai’s transformation also only took about 10 years. So the rate of national transformation is accelerating but only for those regions that see the opportunity and mobilize rapidly around it.

A continent wide initiative is really needed to build the African solution very similar to the Indian and Chinese models. They will be mobile based and work with wireless and they will deliver the combined knowledge of humanity stored on the internet to be accessed by 800 million Africans in order to lift themselves up by their bootstraps. (I am ignoring 419 scams here!). And the device? Probably the next generation of smart mobile device – larger than a phone, smaller than a pc – community owned and running whatever software makes sense!

I really hope that this paper gets presented at the next African summit!

Goodbye International Call Center Industry

2005-06-30T07:54:00.000+02:00

This year the South Africa Foundation comissioned this study. Here's a screen cap of the first graph (click for a larger size). It's the cost for a 2mb international leased line.

From the study: "At least two crucial issues regulatory issues were identified. Firstly, the high pricing of international bandwidth needs urgent attention. Secondly, the playing field between Telkom’s VANS services and those of its competitors needs to be leveled. This could be accomplished by, for example, the establishment of a wholesale pricing division within Telkom."

It's almost impossible to quantify the damage done to the South African econcomy by the monopolistic nature of our Telco landscape, and the ineffective legislation thereof. But I'm guessing it's quite a lot. Like.... Huge!

If you'd like to rant, may I suggest Hellkom.

And on the topic of Intellectual Property...

2005-06-29T08:02:00.000+02:00

Whilst on the topic of IP, there have been two interesting (contradictory) news items this week:

Grokster Loss Sucks for Tech

As Hollywood and record labels cheered Monday's Supreme Court decision in the MGM v. Grokster case, technology companies and consumer groups warned that the ruling will chill innovation and result in more gadget-killing lawsuits.

In a unanimous ruling, the justices said that Grokster and StreamCast Networks -- the company behind the Morpheus network -- can be held liable for copyright infringement if they encourage customers to illegally share copyright movies and music. The Supreme Court returned the case to the district court where the two software companies will be tried for inducing infringement. Link to Wired article.

The key word is 'encourage'. Does CDR manufacturer Verbatim not 'encourage' me to make back-ups of my data (docs, music, pictures, video)? This ruling is 'a bad thing'.

Brazil Threatens AIDS Patent

Brazil’s Ministry of Health has demanded that Abbott Laboratories cut the price of its AIDS drug Kaletra by 42 percent, threatening to break the company’s patent and produce generic versions of the drug if it does not comply.

The Abbott Park, Illinois-based company has 10 days from the time it received Friday’s ruling to agree to reduce Kaletra’s price to $0.68 per pill from $1.17. If Brazil follows through on its threat, the move would mark the first time the country has adopted compulsory licensing. Link to article.

Perhaps it's worth mentioning that "the US spent its first 100 years as a "pirate nation," using every other country's patents, trademarks and copyrights without compensation as part of its efforts to bootstrap itself into an industrial power. Why the hell should Brazil be sending its GDP off to the US now, while it is a developing nation in desperate need of AIDS drugs?" Link to BoingBoing.

Intellectual Property and Christina Aguilera

2005-06-28T08:46:00.000+02:00

I was doing a presentation the other day on the idea that intellectual property is worth more than physical items and how it has come to dominate the world, and I really struggled to convey this message for the audience of non techies (it was a biscuit company)!

I scrambled around for an analogy that everyone could understand and that would not be too technological - but at the same time would be easy to understand by most. I was looking for something that everyone used regularly and didn’t think twice about. So I searched in my laptop bag and pulled out a CD that had been burned with the slides from a recent conference where I had presented. PERFECT! I thought!

So I changed my entire presentation mid stream!

I asked the audience what they thought a blank CD would cost and received responses in the range R3 – R5. That’s probably rich! (I could get three at this price from my contacts in Fordsburg - and if I bought three then I may actually get one that worked!)

I then asked them what it would cost to buy a Bollywood movie at the Durban beach front ( having experienced this recently) and the Indians in the audience confirmed a price of about R25 (a real steal!). And for a music CD from a traffic light vendor or a flea market (grey products rule in the informal sector!), and they responded about R40.

OK, then what about a Musica CD on special, R90 they yelled at me. Fine, so now you want to buy the latest Christina Aguilera CD from Musica (teenage daughter - duhh!) - That’s easy they said: it’s R150.

Well, now we change to a DVD and its on special in a flea market, ok so that’s R100. What about a brand new movie, and everyone agreed that this would be R 200 approx.

So then I asked how many of them had teenage kids and prompted those individuals to tell me what their typical game console CD game cost and they mentioned prices between R300 and R600 with horror. Fine, so now let’s say that you wanted to buy a software CD from Incredible corruption with Windows XP and Office 2003 on it. Well now we are talking numbers in the range of R 3000 – R5000 depending on student discounts and which version you acquired.

I then made two points: It’s still the original disc but now the premium is over 2000 times! And, what would it have cost at iTunes to get that music, or to download the software from Microsoft by buying it from them directly and downloading it?!

We live in a world where knowledge dominates, where IP rules and where true value is not in things but in knowledge about things. Where more money is made trading options (information about commodities), then on the commodities themselves, where airlines make more money from booking systems (information about flights) than by flying their own planes and where all the electronics in my car (which I can carry in one hand) are worth more than all the sheet metal in my car which I can never hope to carry.

Channels add incredible cost to content and that the forces of commerce will inexorably eliminate them as we optimize the industry!

The lesson to my audience: Competitive advantage today stems from the acquiring and use of information and insight and less from the physical act of owning assets - From adding value and not from adding cost. Let’s immerse ourselves into this information economy where everyone (!) is in IT (!). The journey has just begun!

Strategy By Design - You'll need T-shaped People

2005-06-21T12:58:00.000+02:00

Simon sent me a link to this great article at Fast Company.

Quote:

"We look for people who are so inquisitive about the world that they're willing to try to do what you do."

I'm a big fan of this approach. In the IT world you pretty much get two types of people - the people who can execute, and the people who hold up the process. The era of the techno-primate in IT is over. IT needs 'T shaped' people. It's the nature of the beast.

Goodbye Techno-primate

Some Tech-illiterates have justified their existence by exploiting the gap between business and IT. These people result in a widening of the gap, where they can hide behind organisational structures and process to protect and entrench their jobs.

The new age of IT will come when we realise the IT IS the business, and we stop trying to hide IT's inflexibility behind the brittle mainframe to protect ourselves from those silly disruptive business demands.

If you dont believe me, look up the Gartner Infrastructure Maturity Model.

Guest Post - Cellular Data Strategies in the South African Space

2005-06-13T11:39:00.000+02:00

As a technologist, I like to keep up to date with the data strategies especially the large cellular service providers in South Africa, Vodacom and MTN, has in place driving their data business models.

What is very interesting to see, is the great differences in approach from the two cellular companies. MTN appears to be lagging somewhat with not making even EDGE services available commercially South Africa. Why would you deploy an EDGE solution in a 3G world? Well, the promise of EDGE is that since you are predominantly making use of the GPRS network, wherever you get a GPRS signal, you will be able to get access to the EDGE network. With 3G, you need to deploy a brand new network over and above the existing components. This means that the 3G service will only be available in converted or upgraded locations.

In our tests and trials, this has certainly not been the case. Response times on the EDGE network has been disappointing, to say the most. Yes, it is slightly better than GPRS, but we are still a long way off from 3G. Although the limits do not sound that far removed (200Kbps and 384Kbps), the user experience is quite tangibly different. We were also not always successful in connecting to the EDGE network, even with the GPRS services being available.

MTN seemed to focus their 3G strategy around the availability of 3G handsets in the market. Due to the lack of these 3G handsets from suppliers in the local environment, it made sense to go the EDGE route. EDGE handsets were already available and was increasing, it made a lot of sense; or did it? You see, I can, to a certain extent, understand that MTN would be less risk averse in deploying a 3G network. These networks add huge costs since you physically have to upgrade and improve the existing base stations and infrastructure from an equipment and bandwidth perspective. The expansion into Africa also added significantly to their financial burden, hence the squeeze in the local market from a data perspective and the drive towards EDGE instead of 3G.

The Vodacom approach around data and 3G has been inspiring and I do believe, they have the model right. The Vodacom model is one of unlimited bandwidth. The more available bandwidth you have available, the more bandwidth people will utilize. And they have pitched it at the right level. You see, where MTN was looking at the individual making use of 3G services, Vodacom realized that it was predominantly corporate companies and businesses that were going to snap up the 3G solutions for their mobile workforces, remote offices and Executives that travel not just locally, but abroad as well.

They have aggressively bundled data packages with their 3G solutions for as little as R350 per month. Yes, agreed, for R350 per month, you only get 500MB of data, but for a business user that predominantly lives in Outlook and does some web surfing, this is more than enough. I have yet to break my 3G 500MB barrier, and that is with a lot of surfing and mailing.

Vodacom has also taken it one step further. In the weekend’s edition of the Sunday Times, reference was again made to the intention of Vodacom to include data devices with their data packages. This is a phenomenal concept. Imagine the small business owner that does not necessarily have cash available to purchase a notebook computer to run his life on. These guys will now be able to get a computer, a 3G data connection and possibly a BlackBerry device all in one bundle from Vodacom for a fixed mount monthly. Now this sounds like business to me!!

Following on from the discussions above. How long will it take corporate South Africa to realize that a solution like this is so good, they might just want to outsource all of their mobile communication devices and services to a business partner like Vodacom? The company will control the policies and infrastructure governing what applications will be used, security software be installed and what solutions will be exposed and the partner company will make sure that the data device and channels are available for use. This has to make you think, right?

If MTN want to retain their position in the Corporate segment of the South African Market, they must be able to provide their corporate users with at least the same type of services that their competition are providing. Certainly, why would I pay a similar price for a 200Kbps connection, if I can get a 384Kbps connection? Yes, agreed, footprint and coverage areas are important, but with the significant investment the competition is putting into their data network deployment, I fear, MTN will play catch up for quite some time.

As for Vodacom. From a data perspective, they are certainly the sweethearts of the corporate environment. Their 3G service is fantastic if you can get coverage and the use thereof can provide real benefits. We have however seen that being the leader in a certain segment can be painful and you do pay schooling fees in the process. The Novatel 3G data cards are a case in point.

The innovative way Vodacom is looking at getting people to use their data services exhilarates me and reminds me of the analogy:” If you want to sell coffee beans, give people free coffee machines.”

By Franco Rothner

Why South African IT companies struggle in the O.E.M. space (Original Equipment Manufacturer)

2005-06-09T13:35:00.000+02:00

I have been observing many South African companies delivering original hardware and software solutions over the last two decades. I am struck by certain common features over the years that have not changed and that result in lots of fanfare but little success for these firms. They all shine bright for a few years and then die rapidly. This is concerning because this is the space in which we will grow true innovation and IT giants - not in the reseller and system integrator or service spaces which is where all of the current IT giants are positioned.

I have a view that South African firms struggle in this space for a few reasons. Although we tend to be very innovative on a global basis, our solutions tend to be very niche focused and we tend to produce point solutions. We are able to find a niche and to move faster than international players with a wider focus who lumber along at a slow speed due to broader interests.

We are also limited in development budget even after we have a proven solution and tend to focus on building scale without the marketing presence or budget to do so. Sometimes we get complacent and defend what we have and do not build migration roadmaps for early customers who then leave in disgust. We also tend not to have large anchor clients or investment partners.

So, this is a very innovative space producing companies with awesome solutions in email management, payment engines, user interfaces, SCADA systems, mobile solutions etc. But where are they now? Mainly bought out by larger international players or rapidly dying as their international rivals catch up and surpass them.

We often moan about the lack of a venture capital capability in this country and yet I see lots of monies being invested - but through alternative routes. A good example is via focused investment houses and venture capital firms and also via large organizations that require research and development or product development in a particular space.

Some companies in RSA are tying up partnership with internationals for marketing (only in order to use their larger channels) and product development arms (usually based in Cape Town). I recall signing two of these up in my days in Siemens SA.

The other avenue is to move the entire business overseas and I have also seen a few of those. Many small companies have burned up amazing amounts of cash trying to break into international markets on their own but to no avail. We certainly need some government assistance for the market building side of the equation i.e. via an innovation fund grant.

So I see lots of innovation in this country but also find that some of it withers and dies pre-maturely because of a lack of vision, finance or poor management. It’s a tough nut to crack but is strategically very relevant for the country.

Connectivity 24/7

2005-06-08T11:53:00.000+02:00

Kavendra Naidu is one of my colleagues at work. He can drive a golf ball over 300m - and for this I'm forced to respect him... And ask him for golfing tips.

Kaven also likes Blackberry...

Blackberry, 3G, GPRS! What is it all about? I have been inundated with these technologies in the past months. I have used them all! I can admit that I don’t know how I managed without them! Being connected is addictive and I like it.

The Evolution of my 24hr connectivity began with GPRS via my cell phone. This connection to my email allowed me to work and prepare for the next day. The connection speed was good and served my needs. I would generally spend about an hour or two online.

3G changed my productivity 3 fold! I would connect at a lightning fast speed, read my email, surf websites and do the occasional download! 3G is amazing, I have used it in a number of locations and it works fantastically (signal dependant). The role of the office worker has entered a new phase where your connectivity to the office is not dependant on the LAN point.

I love my Blackberry, I didn’t at first, but I love it now. Simplicity is the best description of this device. I get my emails, read, reply and that is it! I use it for work, and carry my Sony as my cell phone. On the weekend the BB stays in its cradle and I check it every 3 hrs or so. If I need to email, it is quick and easy. The Blackberry is perfect for my needs. I recommend it to people who want a straight forward device, with functionality and practicality and which is easy to use.

I love being connected, try it, you will to.

By Kavendra Naidu

Quote of the Week

2005-06-08T09:58:00.000+02:00

"If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today."
Bill Gates - From WikiQuote

What Banks can learn from Google - Part 2

2005-06-04T13:40:00.000+02:00

Part 1 of this article can be found here

Back to Banking

Unless you’re in coma, you may have noticed that banks are consolidating worldwide. Their geographic footprint is widening as they search for new markets, across borders and continents. TheBanker.com publishes an annual ranking of the world’s biggest 1000 banks:

“The Top 25 (ranking) represents the biggest banks in the world and, following the consolidation trend, these giants are taking an increasingly large slice of the overall banking pie. This year’s listing shows that the Top 25 continues to expand and account for 37.06% of the aggregate total assets of the Top 1000, a significant increase on the 31.08% in the 1995 listing.” more

Incidentally, there’s also a ranking of the top 100 banks in Africa:
“…the South African banks account for 73.9% of the total Tier 1 capital of the Top 100, 83.2% of the total assets and 69.3% of the total pre-tax profit.” more

More of the same

Basic banking products and services are same worldwide - Partially thanks to the card associations (VISA, Mastercard etc.), and partially thanks to the impact of global trade (SWIFT etc.). Sure, the rules are different – rates, legislation etc., but I hope you’d agree that from wholesale to retail banking, the core of banking remains the same.

It’s the customers that are the problem. They want the best service, (and if you can’t provide it, they’ll find someone else who will). They want personalised services, in their own language, tailored to their business, personal account managers, internet banking, branches, telephone banking, bank managers, forex dealers, call centres, ATM’s … the list goes on.

My point here is that the complexity in banking belongs with the customers, not with the back-office. Banks have to differentiate on the front-end (“decision based”), and keep the back end flexible and cheap (“rules based”).

Gear Change

A quick IT lesson – the Application Programming Interface (API):
“One of the primary purposes of an API is to provide a set of commonly-used functions—for example, to draw windows or icons on the screen. Programmers can then take advantage of the API by making use of its functionality, saving them the task of programming everything from scratch. APIs themselves are abstract: software that provides a certain API is often called the implementation of that API.” more

Google (and Yahoo) happen to have pretty good API’s linking into their RULES BASED services. Any programmer can ‘plug-in’ to the search giants seamlessly and cheaply. Why?

John Batelle tells us:
“So, what if Google becomes an application server cum platform for business innovation? I mean, a service, a platform service that any business can build upon? In other words, an ecologic potentiality - "Hey guys, over here at Google Business Services Inc. we've got the entire web in RAM and the ability to mirror your data across the web to any location in real time. We've got plug in services like search, email, social networking, and commerce clearing, not to mention a shitload of bandwidth and storage, cheap. So...what do you want to build today?" more

Wow

If banks are serious about scaling out, they need to start thinking a lot more like Google. Can banks also use a 'platform', in this case a banking platform, built on a rules engine?

How did Google create the worlds’ biggest 'scale-out' application? What can we learn from them, and apply in our world? Coming soon in part 3.

The Answer That Lacks A Problem

2005-06-03T18:43:00.000+02:00

There's an interesting post on the CIO.com-Koch's IT Strategy Blog on this report from Deloitte. coughedconcough...

"It seems that the big, kitchen-sink outsourcing deals are another example of poor relations between IT and the business. Unless the business is facing a sale or merger and needs to get costs off the books at all costs, the risks of outsourcing--at least as portrayed in this report--can smother cost savings. Deloitte’s suggestions for reducing risk, which include focusing on commodity outsourcing or using outsourcers to reinvent a failing department or process, seem fraught with risk, too, given the tendency to customize the deals and the lack of visibility that companies have into vendors’ operations.

With cost savings far from guaranteed, companies need to have other reasons for outsourcing. But they don’t seem to bother coming up with them. The most telling question of all those in the survey was this: "Did you outsource a function in order to solve a specific problem?" Frighteningly, 83 percent said no. If the vendor isn’t brought in to fix a problem--i.e. come up with a better way of doing things--companies are throwing away the opportunity to reduce risk and manage the vendor to real benefits (like cost reduction). Why is this critical factor seemingly absent from these contracts?"

Read more here

Why I love Blackberry - but for the next 6 months only...

2005-05-31T07:35:00.000+02:00

I believe that RIM is exploiting a gap in the market – a gap that is rapidly closing. So is BES a point solution, or a real strategic one?

Blackberry Enterprise Server (BES) is a solution in the true sense of the word – the answer to a problem. When you purchase the BES middleware, you get a nicely packaged, MANAGED email solution. No worries about security, provisioning or deployment – it’s all taken care of. And it’s really not too expensive. Not to mention that soon you’ll get a blackberry client for Symbian and PALM (who?), abeit with limited functionality.

But guess what? Exchange 2003 already supports much of the functionality. I’ll bet that Microsoft is slaving away right now - to build all that functionality into the next version of exchange server (12). And Microsoft is also licensing exchange clients to PALM and Symbian.

Let’s cast our minds back to the great Betamax vs. VHS videotape format wars. Betamax was a superior technology, but SONY boss Akio Morita always said that it failed due to SONY’s inability to license the technology out. That’s why VHS became the dominant format.

Neither Microsoft nor RIM are going to make that mistake, hence their licensing strategies. But RIM is ultimately vulnerable. Microsoft has over $1 Billion in annual Exchange Server sales, and could easily choose to close the gap exploited by RIM.

So my advice – see who’s got the best licensing strategy, and watch out for Microsoft!

Music downloads and DRM come to .ZA - so what?

2005-05-30T12:03:00.000+02:00

Simon is is unimpressed with Musica right now...

Musica has gone ahead and launched a music download service in South Africa. Yay! I am beside myself with joy, I might even wet my pants, but then I remember there had to be a catch somewhere [what with telkom, sentech, the mobile networks, the receiver of revenue, etc] and its pretty damn obvious.

In this interconnected age, one would expect businesses to pay attention to what is going on, on the rest of the planet, but no this lot seem to have missed the plot. R9.99 for one song! that's 70% more expensive than iTunes [@R6 to the $], even if you buy in bulk it is still 46% more expensive!

If they put their own infrastructure in, I might have sympathised, but they are just using a white-box solution from OnDemandDistribution [OD2.com]

Some info from the December edition of IEEE spectrum, and I quote Steve Jobs: 'Out of every 99c that Apple charges for a song, about 65c goes to the music label that recorded it. Another 25c goes to 'distribution costs' - mainly credit card charges, but also for the servers, bandwidth, and other expenses needed to operate a large online service' I cannot fathom how the other 88c is being eaten by Musica's marketing efforts.

The darker problem here is that this brings the bigger issue of Digital Rights Management/Restriction to our doorstep.

It's the kind of thing you think you'll only do a few times. It's only harmless you say. You hear the horror stories, but you think that it won't happen to you. And then it does. You're at a party. Your party in fact. And it all goes horribly wrong. And you're left feeling a bit like you've been done.

Yes, that’s right. You tried to play a legally downloaded track, and it wouldn't play.

You think DRM (digital rights management) is ok. That you can deal with it, that it's not really all that bad. You buy a few songs from Musica, some especially for the party in fact.

You see this is why DRM is bad. In that it's not management at all, it's restriction. Sure the artist gets their cut, but the record company gets an even bigger cut. The consumer however gets ripped off. What you are paying for is essentially the right to have someone else dictate what you are allowed to do with you music.

The difference is, previously it was only a legal statement, that you couldn't make a copy of the music, etc etc, with some sort of fair rights assumed. Now that are trying to enforce it with technology.

See when we tried to play the track on the night, it needed an internet connection to authorise the computer. Now this is what I call untenable. A situation where I have paid for music, but suddenly at 1am I need an internet connection to listen to it simply is not a sustainable business model.

Which is why consumers wont feel bad, stripping the DRM off in future on music they have legally bought. And why right now they don't feel all that bad downloading albums off the net. Largely because the current music model just isn't working. People still buy CDs, they are probably buying less CDs that they don’t wont than they used to, but they still buy CDs.

Having someone else tell me what I can do with my music and how I can listen to it, and not getting the headline track played at my party, isn't.

By Simon Hudson

Simon Hudson is a gambler with a consulting problem. He's been working at a "Major South African Bank" on some important projects, and sometimes we listen to him when he gives us great ideas. Simon has a company called Red Squirrel Networks.

The Future of Television

2005-05-26T08:40:00.000+02:00

Last week Janie wrote about TV as a transaction channel. Using this (tenuous) connection I feel I can link to this great article on MSNBC regarding the future of television...

"Screens so small they fit inside coffee cups. Marriages arranged by TiVo. Production facilities on Mars. The king of late night peers into his plasma crystal ball."

By Conan 'O Brian

"...TiVo, the digital recorder with a brain, will continue to evolve with alarming speed. Super-TiVos will arrange marriages between like-minded viewers and will persuade mismatched couples to throw in the towel and start seeing other people. Tough-talking TiVos will even confront viewers, saying, "You've watched 40 straight hours of 'Sponge- Bob'—get off the weed!" One of TiVo's best loved features—its ability to provide viewers with commercial-free television—will inevitably force TV advertising to go extinct. As a result, celebrities will be forced to find new and creative ways to compromise their integrity. (At this moment, the writer pauses to slake his thirst with a delicious Diet Peach Snapple... now with less aspartame!) The sudden loss of ads on television will push many companies to stage their pitches live on Broadway, revitalizing the theater in America and garnering Patti LuPone a Tony award for her work with Geico..."

More here

Who are the IT Leaders of the Future?

2005-05-24T13:20:00.000+02:00

Technology is a nebulous environment where business demands for relevance are changing the thrust from a technology push to need pull.

The challenge must be met by a new breed of technology leader who speaks the language of business and technology. This new generation of leader will typically not be a traditional IT person but rather a Tech savvy business person who is a good communicator, and who is a brave innovator.

There are clear trends emerging around what good leadership is. These are mainly behaviors and not technical competencies. It’s about the soft stuff of management.

But ‘Techies’ are typically not hired for their soft skills. You get to the top of the tech pile by being a tech expert i.e. hard stuff not soft stuff. But the soft stuff is the hard stuff.

IT is catching up with the rest of industry where leaders are appointed based on soft and not hard skills. This ability to build and drive teams is not deemed core in the industry and so we will see more senior managers being appointed from outside the industry. Wow, quite a shock for an industry driven by tech ego.

This pulls it into alignment with what is best practice in other functions and industries. Its time every techie started thinking about their empathy and teaming and visioning skills. This will be alien for most of us.

Mike Hammer in his book ‘Reengineering the Corporation’ said “Change is like a steam roller. You are either in the driver’s seat or you are destined to become a part of the road.”

Wise words

Why we love Blackberry

2005-05-23T08:51:00.000+02:00

Franco Rothner wrote this great post for Future Bank on his experience with Blackberry in South Africa. Thanks Franco!

Ok, so my buddy Dave, the king of technology soap boxing and an expert prairie dog, has been bugging me for while to write something about the little fruit that has everyone so excited; Yep, you guessed it, the BlackBerry.

Believe me, there was no bigger non believer than myself over the BlackBerry value proposition! I mean come on. We have Exchange 2003 that enables remote synchronization with your PIM style information. This is certainly enough, or is it?

I thought of myself as an ardent and experienced mobile device user, having been using devices from the first Psion 3a's right up to the IMate PDA2k. None of this prepared me for the BlackBerry experience. During a business trip last year where I did a whistle-stop tour of North America, I saw a BlackBerry being used for the first time. This was on a Canadian Airlines flight from Toronto to Seattle. The person using the device was a consultant and was a frequent traveller on this route. How do I know this? Well, the cabin crew knew him on a first name basis! Back to the point. He had access to a Sony Vaio notebook with Office 2003, but he opted to complete a presentation using PowerPoint and then strangely enough switched to the BlackBerry and started doing his e-mail. This was very interesting, because logic told me that the notebook had to be more comfortable to use doing mail?

Fast forward to this year. I deployed a Blackberry pilot environment to really answer the question still in the back of my mind: "Why BlackBerry?". So, we received our allocated BlackBerry devices from the friendly Vodacom and MTN guys.

The initial reaction was one of disappointment. It had a terrible screen compared to the Pocket PC devices, the device was not touch enabled, had no Wi-Fi and the Bluetooth was only for Voice use, not data.

But then I started using the 7290, initially just for SMS while the BlackBerry Enterprise Server was being deployed. I started realising that the user interface is extremely usable, the battery life was excellent and that the small buttons did not hamper the speed at which I could type. Once the BES was in place and e-mail was being forwarded to my device, the world just opened.

Within 2 weeks of using the device I developed 2 BlackBerry thumbs, the equivalent of a tennis elbow. But oh boy was I hooked. My IMate was retired to the drawer and I started operating on only my BlackBerry. Since then, I have received more than 4000 e-mail messages and have typed more than 500 mail responses on this device. I am still not sure as to why I am so absolutely fascinated by this ultra pervasive technology, but I cannot be without mine.

I have now become an absolute BlackBerry fanatic. I get nervous sweats when I walk past my device and the little red LED is blinking. That means I have an unread e-mail message. With 2-3 second responses from sending a mail message to the other party receiving the mail, the velocity of information flow has increased significantly.

The BlackBerry solution delivers on the promise of providing an affordable, real time mechanism for remaining in contact with your crucial PIM information (E-Mail, Calendar, Contacts). The BES middleware platform equips companies with a toolset of services that are required to remotely manage these devices by enforcing profiles governing the use of passwords, types of encryption and also making sure that when the devices are lost or stolen, the data is kept secure, a new device can be deployed and provisioned, this even when the user is travelling, while rendering the lost device useless over the GPRS network.

From a cost perspective, the BlackBerry device is less than half the price of a pocket PC equivalent. With a data package bundled with the device, users can still expect to pay the equivalent of a business package on the major cellular networks in South Africa, this while getting the BlackBerry handset for free.

The little BlackBerry devices have proven to be exceptionally reliable, with not a single reboot required in 10 weeks of use. Compared to the pocket PC devices where a reset was required at least once a week, this is a huge improvement.

The BlackBerry revolution is going to drive change in the usage and adoption patters of devices and data bundles in this country. Where in the past, everybody had to have a cellular number; you will in future see a phase shift to everybody having at least an e-mail address. In time, SMS messaging will diminish since it is just as fast to PIN somebody from your BlackBerry, or sending them and e-mail, at a lower cost. Instant messaging will replace voice usage since people will be able to have voice sessions using SIP communication servers, not even looking at the Skype style of solutions.

We have seen a dramatic drop in the cost of data packages from the cellular players in the South African space. I believe this is all in line with the next wave approaching, where all communication will be IP based, and users will pay for a single data package on a monthly basis with no need for voice on these contracts. Id I was a cellular service provider here and now, I sure would make sure tat I am ready to embrace this phase shift in thinking and to embrace these approaching technologies. As for Government owned terrestrial based telecommunication monopolies; be afraid, be very afraid…..

In conclusion, the answer to the question “Why BlackBerry?” is simple. The BlackBerry device is a perfect example of a purple cow that has reached the tipping point. It does not try to be everything and do everything for everybody. It simply excels at that which it is good at, the real time delivery and management of a user’s PIM based details.

Franco Rothner is a technologist at Standard Bank Technology R&D. He has an 'otaku' for technology like you wouldn't believe! I'll just have to forgive him for saying "...a perfect example of a purple cow that has reached the tipping point"...

Where is my Budget?

2005-05-20T07:00:00.000+02:00

In his book “Leadership – Inspire, Liberate, Achieve” Tom Peters explore the 50 traits of a great leader – in no particular order I assume. Number 34: “Leaders Love New Technology” – he goes on to say that the expectation is not for the 50-something year old CEO to also be the CTO; however she needs to be hopelessly in love with the technologies relevant to her trade. She needs to appreciate [value + understand] and instinctively harness their powers to topple industry norms.

What a great insight! How often do we see both business and IT leaders stick to what they have or replace like with like? Excuses like “new technologies will only bring complexity into the environment” are often used. True…but did you explore technologies that can actually simplify the environment? Do have time to do that? Are you afraid of losing control? Do you know what technology companies are working on? Are you excluding great potential to come to fruition? Will you be first?

Today’s technologies are more and more open to integration, expansion and flexible application. My car is an entertainment tool; my TV is a Bank channel. In an enterprise we have the opportunity to use various technologies to do integrated innovation – use what we have, add a bit more and create a new value proposition! To do that we need an intimate knowledge of what we have, what is new out there and a crazy bunch of fearless pioneers to explore the possibilities. Great leaders give themselves and their talent pools the space to do that. Great leaders love technology, are fearless about failure and promote weird demos!

Where is my budget?

Future Bank in the news!

2005-05-18T10:15:00.000+02:00

In "Finance Week" today:

"In March Singh set up a web log or blog where he discusses issues such as virtualisation and banking as well as "long tail economics", "purple cows", "branded brands" working from the beach and takes a few sideswipes at the competition.
Blogs are online journals with links to articles, personal observations and debate, and a rapidly growing publishing phenomenon. As for long tails and purple cows, visit http://futurebank.blogspot.com for more."

Mergers

2005-05-18T08:12:00.000+02:00

"A 1999 study by KPMG International found that only 17% of mergers made shareholders richer, while 53% actually made things worse."

Thomas Grose, Time Magazine

IT is a commodity!

2005-05-17T07:18:00.000+02:00

Anything you can do I can do better…………….!

These used to be the words of a song from the 70’s. They describe exactly the challenge faced by IT Exec’s the world over Today. The IT industry is starting to go through the typical commodity cycle with large scale consolidation, standardization and price deflation. There is talk that the future software industry will be made up of 6 major houses (including SAP, HP, IBM, Microsoft and Oracle), down dramatically from the over 4000 today. We are struggling to find differentiators between the offerings of different suppliers and marginal differences are being hyped up. Features are being sold as benefits but business struggles to extract sustainable profit from this. We are increasingly seeing marginal benefits being punted as differentiators. Where is all this heading? We are starting to buy increasingly on price – if it looks like a commodity, walks like a commodity and quacks like a commodity – then it probably is a commodity!

It’s heading to an age where it’s not what you have; it’s how you use it. Its not about processors, it’s about architecture. Not about bandwidth, it’s about load sharing and shaping. Not about memory size, it’s about database mining and insights. So selling technology is less important than selling solutions. How is more important than what. We have seen these trends before. Every industry that reaches maturity goes through a phase shift from a product to a process innovation basis – not the what but the how. We are there now and the IT industry will never look back. What used to be custom and bespoke is now best practice and standard. State of the art and avant garde is now routine and standard.

What used to be in application is now in infrastructure. What was a differentiator is now invisible and hidden in the background.

So stack it high and sell it cheap. Scale up fast and differentiate on the how, the solution, helping business make money. Kinda obvious when you think about it. It’s scary how few commentators are talking about this!

….I can do anything better than you……

The Lessons Banks can learn from Google

2005-05-16T13:42:00.000+02:00

In this posting trilogy (I do have a day job), I'll compare a Search Company and Banking. I want to figure out what's so different between the search and the financial services industries, and what we can learn from the company that revolutionized the web.

Part 1

How do banks make money?

“Banks are just like other businesses. Their product just happens to be money. Other businesses sell widgets or services; banks sell money -- in the form of loans, certificates of deposit (CDs) and other financial products. They make money on the interest they charge on loans because that interest is higher than the interest they pay on depositors' accounts.” - howstuffworks.com

Now a clothing store can mark-up clothes 200%, but in banking the mark-up (interest charged minus interest given) is only a few percent. To be profitable banks need to rely on huge economies of scale. Economies of scale tend to occur in industries with high capital costs in which those costs can be distributed across a large number of units of production.

In South Africa, you need a huge amount of capital just to get permission to start a bank! The exploitation of economies of scale helps explain why there are only a few large banks here in South Africa, but also shows that there are increasing returns (and profit) to scale.

So to conclude this section, Banks make money through Interest Income and Fees. The more of this they do, the more profitable they are.

How does Google make money?

Google buys and sells advertising. Businesses pay Google to place adverts on the web. Google pays website owners to place ads on the web. Google takes a cut. This cut was $443 million dollars in the first three months of 2005.

So what differentiates Google from any other online advertising broker? How come Google has a staggering market capitalization of $63 Billion? Nowhere on the Google.com website will you find a mission statement to “be the best and most profitable online advertiser”.

Why? - Because Google's mission is to organize the world's information and make it universally accessible and useful. By doing this, and understanding better people want, Google happened to create an opportunity to make money off targeted advertising.

Google really gets the concept of increasing returns to scale. Google indexes over 8 billion web pages, and has thousands of servers dedicated to serving up search results, 36% of the entire search market - forbes.com

To conclude this section, Google makes money by being the best at fulfilling a genuine market need, and leveraging the opportunities that arise as a result. And of course the bigger they are, the more money they make.

So Banks and Google have a lot in common. They're both "middlemen" who sell services, and both achieve increasing returns to scale. They deal in low value commodities, and have 'a lot' of IT.

So why is banking and searching so different?

Part 2 coming soon!

Update - part 2 here

The Perils of Spell Check

2005-05-13T11:45:00.000+02:00

Simon and I were hunting for the last two chocolate muffins in the campus when I came across this supremely misguided notice tacked to a soda fountain.

I'm not sure whose incontinence led to the breakdown of the refrigeration unit - and I'm sure I don't want to know either!

Reminded me of this poem that I first saw a couple of years ago:

Eye halve a spelling chequer
It came with my pea sea,
It plainly marques four my revue
Miss steaks eye kin knot sea.

Eye strike a key and type a word
And weight for it two say,
Weather eye and wring oar write
It shows me strait a weigh.

As soon as a mist ache is maid
It nose bee fore two long,
And eye can put the error rite
Its rare lea ever wrong.

Eye have run this poem threw it
I am shore your pleased two no,
Its letter perfect awl the weigh
My chequer tolled me sew.

-Sauce unknown

Have a great weekend!

Speak Out! – A cool new way to deliver dynamic content

2005-05-12T11:20:00.000+02:00

Voice Portal technology is a web orientated self service enabler; what it really does is enable users to access and interact with web-based content and services via a phone. One can explain it this way: the text-to-speech [TTS] engine facilitates a synthetic voice to read the content to the user in a fluent manner - this turns the earpiece of the phone into a monitor screen for the customer. As navigation input the user does not need a mouse – instead she can use her voice to navigate, courtesy of Advanced Speech Recognition [ASR].

The benefits of Voice Portal technology are twofold; firstly the operation of content and service delivery becomes simplified through the following:
• Back-end convergence, enabling a single point of maintenance across all web-based channels. This facilitates ease of development, ease of maintenance and single data updates. This is especially helpful in a fast changing, dynamic content environment like share price or forex enquiries.
• Lower total cost of ownership due to the availability of open standards solutions and converged development resources.
• Flexibility to enhance or change services on the fly, without the need to change the static recordings and tone settings associated with a traditional Interactive Voice Response [IVR] system.

Secondly, the users experience the following benefits:
• Existing devices, traditional phones and mobiles, can be used to access content and services anytime, anywhere.
• Rich user experience by enabling browser functionality [such as filling in forms and using drop down menu’s] on telephone channels as well as enabling a fully interactive, conversational-style, speech interface.

The business application of the technology is varied. Typically the technology is used to add voice channels as access points to both structured, menu-based information such as Internet Banking and flight schedules as well as to unstructured, information in the form of informative web pages. The technology can also be used to access personal information like web-mail. However, the ultimate application is the use of a person’s voice print as an authentication biometric through the use of a Speaker Verification module. This brings the elusive third factor authenticator that can be used in electronic channels.

So what are the implementation pit-falls? By nature speech recognition relies on the various speakers to utter words in a similar way. This necessitates a local linguistic model to be available in the user regions. Strong accents can render the technology useless. Fortunately South Africa has a fairly robust S.A. English linguistic model already, thanks to the foresight of the CSIR and various business partners. These groups are also working on some of the indigenous linguistic models. Customer education is another must; the synthetic voice is so fluent and natural sounding that the users might think they are talking to a real person. Users must also understand that heavy background noise can influence the quality of the service.

In order to fully leverage the investment in the technology, companies must draw up an enterprise wide roadmap for the deployment of Voice Portal technology. This should take into account the architecture roadmap for backend convergence, call centre strategies, multi-channel service delivery strategy, authentication requirements and IT strategy on portal technology.

This artcle first appeared in the e-Business Handbook 2004

Quote of the week

2005-05-12T10:32:00.000+02:00

"Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can praise them, disagree with them, quote them, disbelieve them, glorify or vilify them. About the only thing you can't do is ignore them.

Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward. Maybe they have to be crazy. How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that’s never been written? Or gaze at a red planet and see a laboratory on wheels?

We make tools for these kinds of people. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.

-Apple Computer Advertisement"
From the Multi-Sites quote Search Engine.

Banks as purveyors of trusted computing

2005-05-10T07:52:00.000+02:00

Large banks by their nature, tend to have a lot of computing equipment from high-end mainframes to a plethora of different desktop pc platforms. The question is how efficiently do they make use of all of these assets to improve their businesses, make their lives easier and earn a return on investment?

Most high-end hardware such as mainframes will be well managed and pretty efficiently used, but nearly all of a banks desktop hardware will only be used to their maximum capacity for a few minutes a day at most and therein lies an opportunity.

The solution is to create a virtual high-performance, fault-tolerant computing pool of existing or next-generation processing power without a complex and costly architecture by virtualizing their computing resources, decoupling applications from dedicated resources and dynamically and adaptively distributing applications unobtrusively over this pool of dedicated, underused or intermittently available mainframes, clusters, servers and desktops

The most obvious advantage of a distributed computing platform is the ability to provide access to supercomputer level processing power or better for a fraction of the cost of a typical supercomputer. The world’s most powerful computer, IBM's ASCI White, is rated at 12 Teraflops and costs $110 million, while SETI@home currently gets about 15 Teraflops and has cost about $500K so far.

The next step from there is to resell any excess capacity that a bank may have onto the open market - the advantage banks have over other grid computing initiatives is the inherent trust attached to a banking institution, with the assumption that because we can trust them with our money, we can trust them with our data, its use and the output thereof.

The time will come when financial institutions will use their networks to implement highly reliable, scalable and cost effective computing solutions to their customers, thereby optimizing their resources, ensuring a return on investment on desktop hardware and offering trusted computational platform.

By Simon Hudson

Simon Hudson is a gambler with a consulting problem. He's been working at a "Major South African Bank" on some important projects, and sometimes we listen to him when he gives us great ideas. Simon has a company called Red Squirrel Networks.

He also reads the Future Bank blog. Religiously.

Virtual reality

2005-05-09T07:22:00.000+02:00

I am sitting in a mall while my wife replaces her 17 year old sewing machine and am struck by the way the world had changed in this time. What got me thinking was a sewing machine that links up to the web to download embroidery patterns. Wow.

I had just done my mail on my Blackberry and am now typing this blog article up on my i-mate. I am surprised that the sales lady thinks that this is cool. When does something become mainstream?

Virtualisation, a dream for over 15 years has truly become reality. Presence technology at a practical level is now real as my mail follows me around the world. Quite a neat trick when you travel to 12 foreign destinations in a fourteen month period and spend 12hours a day in up to 24 meetings. Presence allows me to be where I need to be in near real time.

We recently completed South Africa’s first large scale virtual PC pilot. This has allowed the bank to run two operating systems on the same PC with very little contention. The business benefits to an organisation that is running OS2 and seeks to migrate to Windows are immense. This virtualisation technology is real, it works technically and quite incredibly it works financially too.

We are now looking at the first real grid and utility computing platforms that promise to provide on the fly repurposing and provisioning solutions in the data centre. SAN’s are now creating virtual storage, processing is being made virtual by blade frames and component based application design is abstracting functionality. This is real and happening now. XML and video via UMTS or webcams for desk based collaboration all support a view that this stuff is happening.

Yesterday I saw my first soft PLC, process logic controller, used for industrial automation. This has created a virtual PLC that promises to change the world of industrial automation forever.

IP based solutions have created IP based PABX's and we are already seeing catastrophic declines in sales of TDM based systems. When do we get our first virtual call centre. Soon.

So like the sewing machine, we are seeing this stuff become mainstream and real. Getting back out of the looking glass. The thing is that most users don’t get it. We will be challenging these boundaries aggressively for the bank.

Virtual is real, today, already, now.

Banking on Purple Cows

2005-05-06T11:50:00.000+02:00

This post is about two parallel product launches from ABSA and Nedbank/Go Banking, and how they shape up to the "Purple Cow" test.

So what's a Purple Cow?

“Seth Godin's new book, Purple Cow is about transforming your business by being remarkable.”

“For years, marketers have talked about the "five Ps" (actually, there are more than five, but everyone picks their favorite handful): product, pricing, promotion, positioning, publicity, packaging, pass along, permission. Sound familiar? This has become the basic marketing checklist, a quick way to make sure that you've done your job. Nothing is guaranteed, of course, but it used to be that if you dotted your is and paid attention to your five Ps, then you were more likely than not to succeed.

No longer. It's time to add an exceptionally important new P to the list: Purple Cow.”

More on this at FastCompany

'Go Banking' repackages itself....again.
"In a world first, Pick 'n Pay Go Banking, a division of Nedbank Limited, today launched the Go Account as a retail product which will be available on the shelves of selected Pick 'n Pay stores nationwide. The Go Account is a transactional account with all the features of a current, transmission and money market account. The account can be used for shopping purchases, depositing and withdrawing cash, making account payments and transfers and arranging stop and debit orders. Customers can access this account via Pick 'n Pay tills, all ATMs, self service terminals, telephone and Internet Banking." Source: Bizcommunity

Another day, another re-launch. I remember when it used to be called Pick 'n Pay Financial services. I've always thought that in-store banking is a great idea, up until now poorly executed. Pity.

I say pity because I firmly believe it's a Purple Cow. GO Banking targets loyal Pick 'n Pay Customers, and tries to be the best Financial Services company for that group. Soccer Moms LOVE it. The structures of the products are spot on.

The main problem with Go Banking is of course that the service is often totally unprofessional. I want to be able to trust my bankers, and I struggle to relate to the bagger who's helping me with the application forms at the check-out counter. They seem to be improving, but the whole offering reeks of half-assed execution. I need a legitimate looking identity for Go Banking.

Banking at furniture stores:
"Absa Bank, JD Group and Thebe Investment Corporation have formed a new financial services group to provide mass market consumers with improved access to personal loans and other related financial products.
...the new group will bring financial services closer to the consumer by initially offering personal loans through outlets in JD Group stores, namely the Bradlows, Russells, Joshua Doore and Price "n Pride chains. Other Absa financial services products are planned to be available at a later stage." Source: Finance24 - Banking packaged on shelf in store

+Insert cliché about how this is as exciting as a 2 week old peppersteak pie here+

Y'know, launches like this REALLY don't excite me. Not anywhere in this article did they mention how ABSA would improve on the cash-loans-shop-next-door-to-the-furniture-shop. Research shows that micro lending customers don't shop around too much, so cheaper rates ain’t going to cut it. Small loans are an incredibly specialized business. Capitec shows it can be done by being the best at collecting and managing, but it's their core competency - it's all they do. None of the other banks have demonstrated a real competency.

So, even if ABSA executes the concept extremely well, they'll still end up with a mediocre offering. I reckon they would do better to spin this off as a separate business, who could REALLY focus on the target market.

I'll wrap this up in my next post, when I'll discuss what I want to do with banking. :)

Routine copying isn’t the same as a habit of fresh thinking

2005-05-05T12:49:00.000+02:00

What is happening in the world of innovation?

Today every second company describes itself or its products as innovative. Most JSE-listed companies have thrown the word into their annual report somewhere and marketing messages routinely punt companies and products as “innovative”. On the Internet, a Google search on the word “innovation” delivers 17 400 000 results. Amazon.com carries 49 928 books with this key word. Kalahari.net has 300.

How do you differentiate yourself in a world where everyone is innovating? Innovation is now a commodity. Competitors can read the same books; they can hire your consultants and even poach your staff. Your innovative products and processes are then easy to emulate, lead to competitive convergence and thus cease to be a basis for differentiation. Innovation should be like breathing, something natural, essential and a matter of common sense for any organization. The answer for many firms, however, has been to follow best practices and use formalized innovation methodologies. Is this innovating or are we just going through the motions, like learning the musical notes rather than feeling the rhythm?

There are a number of examples in recent corporate history – 3M, P&G, Wal-Mart, GE and Canon – which illustrate that it is culture and organizational dynamics that really drive the innovation potential of a firm. But it’s the soft stuff that’s the hard stuff! A common theme from these remarkable successful firms is the need to encourage entrepreneurial behavior inside the firm (so called “intrapreneurship”) and that this channels resources in the most effective ways. These resources are talent, capital and ideas, just as they are in the broader entrepreneurial economy.

But can one have too much innovation? Clayton Christensen, author and Harvard professor, refers to this question as “elegant obsolescence”. It’s the mindless pursuit of innovation when all evidence indicates that clients don’t value such development and that nobody wants to pay for a surplus of functionality or complexity. How many of us use more than 10% of all the functions available in Excel, or on our cellphones?

Business competes by filling products and services with features and benefits that appeal only to the more sophisticated clients. And they call this innovation? Consumers want simpler and more complex solutions, favoring those fewer features that deliver the core benefits but that are significantly cheaper or more convenient. This leaves room for new competitors with ore basic offerings which, initially anyway, appeal to only a small number of consumers but have a market and development potential that allows them to challenge the incumbent.

Adding features all the time is not innovative; it is mimicry. True innovation is to do better what the competitors are already doing or to do something different. Choose the path less traveled, be contrarian, challenge the existing rules of the industry and, more importantly, build organizations that do this automatically. The exclusive club of companies that have got this is right proves this is the new frontier in developing competitive advantage.

(Originally published in the Financial Mail)

Quote of the week

2005-05-03T12:57:00.000+02:00

There's a little bit of an ulterior motive behind this quote:

"Take young researchers, put them together in virtual seclusion, give them an unprecedented degree of freedom and turn up the pressure by fostering competitiveness." - James D. Watson.
Brainyquote.com

In Standard Bank Technology Research and Development, that's what we're all about.

Out of Office

2005-04-29T09:12:00.000+02:00

This weekend I’m in Plettenberg Bay on holiday, staying at the beautiful Robberg Beach House. Of course, I still want to be blogging, emailing, sms’ing and surfing the web so I’ve brought along some technology to help me achieve that.

Internet access is courtesy of Vodacom 3G, connecting at 384kpbs (Much faster than Dial-up), plugged into my trusty laptop. I’ve been using the card since December, and I’m very happy with it. The bandwidth allows for flawless integration between outlook and the Exchange (Email) server.

My Blackberry gives me my email in real time, and I’ve used it to respond to several short emails over the past couple of days. The QWERTY keyboard layout enables very efficient typing. It’s a silly looking device, but it truly is a brilliant, compact all-in-one solution for staying in contact.

Now that I’m connected to the pulse of work, it’s tough to pull myself away! I’ll limit myself to only 1 hour a day on my laptop!

The call of the veld: banks go big-game hunting in Africa

2005-04-25T08:28:00.000+02:00

In the U.K. Independent, there's an interesting round up of the current U.K banking interests in Africa. It's interesting to note the perceptions of the industry of what we're doing here in Africa. Funny that the article didn't mention that Standard Bank SA is huge in Africa!

In my experience, most of the banks in Africa are very much focused on wholesale banking. It’s easy to understand why. A traditional retail branch network is an expensive (risky) proposition, especially in a continent renowned for political instability, corruption and an unstable economic climate. Not to mention limited telecommunications infrastructure (notable exception - GSM), low literacy rates and notoriously poor power supply!

To service the retail banking market, banks need to look beyond traditional channels. Perhaps that’s why FirstRand bought Cellpay, a mobile payments operator based predominantly in Zambia and DRC. An innovative technological solution, and an exciting acquisition for them.

Adobe to buy Macromedia for $3.4 billion in shares

2005-04-20T19:16:00.000+02:00

The leaders in rich internet media have merged! I've always been a great fan of rich internet applications, and I truly hope that this merger will strengthen the "user experience matters" message.

In fact, this is a great chance to plug one of my favorite sites on the net - NYSE Marketrac. The site doesn't work on Firefox, but I still think it's brilliant. Make sure you select the "3D view" and "fly" around the trading floor a bit.

Links to news:
Adobe, Macromedia Deeper than PDF/Flash
Adobe adds Macromedia to form a multimedia giant

Is Yahoo! is catching up to Google?

2005-04-19T23:45:00.000+02:00

Yahoo! has got some great new services. For example, Yahoo! video search has quickly become my search engine for video clips. Read the Wired Magazine Article or this great article in the Guardian for more. Then there's the other argument.

Another example - I just wandered across the Yahoo Search Blog. Yahoo! recently launched a great initiative - they're offering a free 5 page website to every small business in the U.S. This forms part of the Yahoo! Local service, which allows users to find businesses and services by geographical location. Apparently, they based this move on the statistic that more than 50% of small businesses in the U.S aren’t online. Free web hosting has been available for years, but to link it to an intelligent geographical search is a fantastic idea.

In South Africa, I shudder to think how few small businesses have a web presence. Of course, we do have the online yellow pages.

Site Statistics

2005-04-19T07:35:00.000+02:00

Who's visting the Future Bank blog? At any time, you can see site statistics for this blog at SiteMeter.com.
Or click on the SiteMeter Icon, situated on the FutureBank sidebar.

Innovation and Zero defect

2005-04-18T10:30:00.000+02:00

Much has been written about the subject of triggering Innovation in large companies. Various techniques have been lauded as solutions to the intractable problem of simultaneously maintaining strategic direction while engaging the full intellectual and creative potential of the employee resource base. A solution to the problem may already exist in another field of business!

An interesting parallel can be drawn between the management concepts of Quality and that of Innovation. The analogy extends from the strategic impact, the mode of creating these opportunities and the manner of designing and implementing improvement programmes.

Quality, especially in manufacturing, has had a very profound impact on the global competitive landscape both between firms and nations. This was most widely observed during the two decades from 1970 up to 1990. The subject ,an attribute of both products and services, had largely been ignored as a competitive tool for decades of modern competition. Lip service was at best paid to this subject in the West and the reality was that this strategy worked well in a world where no single company sought to differentiate on this attribute without massive pricing disadvantages.

This all changed rather dramatically when the Japanese economy began to emerge from the serious ravages of the second world war and with the aid of the Marshall plan. The Japanese nation had very few natural resources and so was forced to seek out new and unique bases of competing. It came up with the idea of TQM (Total Quality Management) which had as its ultimate goal the search for zero defect. This single minded and ruthless drive saw the Japanese expend vast amounts of time and energy on developing a formal methodology for enhancing quality levels in an incremental fashion. This involved the integration of various management ranging from the Pareto principle to cause and effect analysis and from Failure Mode Analysis to the concept of Jodoka where employees were empowered to stop a production line in the event that they spotted an example of poor quality.

Every employee in the organization was then trained in this set of techniques and expected to partake in the identification of “Muda” or waste. These examples of waste were then catagorised and action plans were developed to gradually wear down this mountain of waste until the Japanese industries that adopted this strategy had emerged as lean operators who were world class with a distinctive competitive advantage. This led to the Japanese economy dominating products as diverse as car, trucks, motor bikes, consumer electronics and toys. This competitive advantage continues today especially in industries involving discrete batch production of assembly intensive products. This culminated in the introduction of JIT (Just in Time ) by Toyota which directly led to the organisation becoming the number three manufacturer in the world at the same time that Japan became the second largest economy in the world( and twice the size of Germany’s)

So what does this have to do with Innovation? Actually, quite a lot! Quality and innovation are two of five drivers of competition in the world today (the other three being speed, cost and flexibility) that drive differentiation. A more interesting analogy may be drawn in terms of what it takes to drive these two attributes through an organisation. Innovation, like quality, is an intangible that requires the full commitment and engagement of all employees. It is the output of the application of intellect and the creation of inspiration.

The Japanese were forced to adopt this quality approach because there were very few other options available to them as a resource starved nation. Necessity is the mother of invention? The most innovative firms in the world use exactly the same approach. The trick to innovation is to think like the challenger even when you are the incumbent. Bill Gates says that Microsoft is always 18 months away from total failure. It is all about attitude and this approach fight complacency famously.

The Japanese pursued the pursuit for zero defect ruthlessly and with passion. This is exactly the kind of behaviour and zeal that we see in highly innovative companies. Every innovation opportunity is collected and analysed in a structured manner, it is pursued and prioritized and then ruthlessly delivered. In these kinds of companies, innovation is a natural part of a job, not something that you take off a shelf when you need it to use for a short period of time.

As with quality, we see that anyone can play. This is not something that is restricted to the higher echelons of the organisation but instead is embedded into the day to day activities of all staff. Another extension to the analogy is that the process calls for the full committment and engagement of staff. It requires that staff take ownership of the process and apply their intellectual capabilities to a challenge being faced by the firm. Just like innovation!

The net strategic impact of innovation, again also true for quality management, is that it is the sum total of hundreds of initiatives in an enterprise. The firm would not be adversely affected if they did not do any single one. The collective impact, however, of these multiple initiatives is to keep the rate of change constantly moving higher in order to move ahead of the competition. There is a recognition in both instances that firms are in a race and that any small improvement, no matter how minimal could be the swing factor winning the mind of the client in favour of your firm.

One does not need permission in order to improve quality in a firm. Yet many firms have a bureaucratic system in place to institutionalize the deployment of new ideas. Many of you will have seen the now famous IBM desk top label that simply said THINK!. I once saw a vandalized version of this where some wag had added two words underneath this. They simply added “OR TWIM!” That, I think, summarises the strategic choices that many firms face in this arena.

Securing the Corporate network in a wireless world

2005-04-18T10:16:00.000+02:00

Private and corporate networks needs to change drastically to support the 21st century technology and culture. This arises from new technology and business drives such as smart phones, presence, always in-contact, wireless, voice over IP as well as power users and home users.

These drivers demands three major network changes
1. The network boundary is now expanding beyond the traditional perimeters namely firewalls, therefore we will need to cater for extending this boundary.
2. Infrastructure fragmentation – Our applications and infrastructure is becoming more physical dispersed and thus we require more interconnections.
3. Identity centric management – As the network is being de-perimeterised we need to make sure that correctly validating and managing users logical access, and account for availability, integrity and accountability.

The business problems are as follows:-
• Uniform, simple and flexible access methods are needed for all types of collaboration and commerce
• Extending existing private networks to meet new connectivity requirements is becoming too expensive
• Security controls that need to be changed, simply because of distance, access method, or constraints imposed by existing network structures and security perimeters, fundamentally limit the organization's ability to meet its objectives [What is Jericho Forum?, Jericho Forum White Paper, February 2005]

Some of the problems with business cultures are :-
• With the need for mobility wireless it is becoming the technology of choice, power uses needs to roam buildings, floors, cities and continents and always have connectivity.

• Senior staff consider it a “right” to use devices that they own to achieve efficiencies, one of the major problems are staff that connects to the corparate network whiles also connecting to the Internet via a 3G card. This opens the corparate network to the world.

• This senior staff tend to work with the most valuable data in the organization, keeping this information on mobile devices and removalble disks.

• These devices (e.g. smart phones, ipods) normally have low management capabilities, and it is not easy to track and support.

• Inevitably, the problem is growing: “In most organizations, about 50% of transactions are unstructured E-mails. By year-end 2006, 10% will be wireless (70% probability).” [Monica Basso, Gartner Research Analyst, September 2004]

Some of the recommendations are :-
Mobility should be encouraged in order to obtain the innate efficiency benefits, and to overcome adoption lethargy
A framework is required to achieve both the mobility and security benefits
We should make sure that policies are created first and the technology implementation comes later
It should be made clear that ownership of a device does not automatically grant the right to use it on a corporate network.
Policies should state what devices are allowed, how they are configured, what Security Software is required (Anti-Virus, Disk Encryption, Secure Authentication), and the conditions of use

Organizations should limit their exposure to security threats by controlling and reducing the amount of sensitive data that is stored on their devices, and deploy solutions for remote wiping of wireless devices.

The de-perimiterisation can be managed by :-

Corporate data being subject to the controls implemented on externalized network, we require tunneling to become the pre-requisite for true mobility. These standards includes protocols such as SSL, IPSec, S/MIME, PGP and 3 DES

Authentication of identity, and authorization of rights become more relevant. Additional technologies (Multi-Factor Authentication, Provisioning, PKO) should be implemented when appropriate. In order to contain administrative overhead and costs, consideration should be given to centralizing these functions.

Organizations should give consideration to deploying standardized, managed solutions such as those offered by RIM (Blackberry).

The need for advanced application and network security
With the technology boom, networks and applications are increasing at an alarming rate, As security professionals we need to make sure that our network is capable of handling these changes, and know the risks associated with these new technologies.

With the aggregation of applications and web services, there are problems such as multiple instances of data, applications that is not fed synchronous input. Thus the network is now becoming the application.

As the technology drivers is becoming more relevant, the network boundaries has disappeared, also the geometric growth in infrastructure has created exponential growth in complexity.

There are ways that these problems are being addressed:-
We are externalizing our security though use of technologies such as VPN’s, thus extending our network beyond the “traditional” boundaries to the user.
One has to look at user provisioning and provide absolute identity accreditation thought technologies such as PKO or multi-factor authentication.
We have to limited the exposure to information thought the use of policies by determining what may reside on mobile devices. A way to overcome this would be to use technologies such as citrix that employs procedures
One has to adopt digital rights management technologies where appropriate to defend against data loss.

A few of the problems associated with a converged network are :-
The growing convergence of voice and data networks only serves to exacerbate and magnify the security risks of today’s traditional prevalent cyber attacks. Successful attacks against a combined voice and data network can cripple an enterprise, halt communications required for productivity, and result in irate customers and lost revenue. As VoIP deployments become more widespread, the technology becomes a more attractive target for hackers, increasing the potential for harm from cyber attacks. The emergence of VoIP application-level attacks will likely occur as attackers become more familiar with the technology through exposure and easy access.

Companies need to observe and follow legistlation when implementing these new technologies such as Voice over IP. Currently VoIP can be used internaly within a corparates network, but toll bypass is still an issue.

There are a few Issues pertinent to convergence and VOIP include:

– Control mechanisms such as 802.1x used for authentication, cannot be used with the introduction of new devices such as IP phones, Digital Camera's, Wireless phones, PDA’s etc

– Most of these technologies are cannot be managed and maintained by technical staff as there is a kaleidoscope of different vendors and products on the market.

– We will have to look at issues such DOS and DDOS on advanced applications and networks, as a hacker might want to decide to take down a call manager, and thus disrupting business as telephony will be down.

– A hacker can modify VOIP signalling protocols such as (H.323/SIP/MGCP) to achieve voice tapping.

– Uses can uses decoys such as VOIP Call I.D Spoofing to commit fraud or other related crimes.

– With voice being converged onto the packet network it is more prone to irritations such as SPIT (SPAM over Internet Telephony). SPIT has not become a problem as yet, but as the world is moving towards a more flexible multimedia standard, then the potential use for SPIT increases

– One of the major problems with a converged network is managing Rogue devices attaching to the network. Examples of this is uses attaching their personal AP devices to the network thus extending the network geographically without the knowledge of network and security personal. Most laptops comes out standard with a wireless card, most of these cards are by default in Ad-hoc mode, thus with the correct combination of attacks the hacker can use this users machine as a hub into the network. Other problems such as modem attachments can course major issues. A scenario might be a user adding a 3G card to his machine, while attaching to the corporate network via the wired Ethernet port. This user might not realise it but they have just connected the corporate network to the Internet.

Some of the ways to overcome these problems is to make sure that you have strong policies and procedures in place to control and maintain security standards. When converging your network make sure that they are separated by virtual local area networks (VLANS). Make sure that all machines on your network complies to your corporate specific patch level and has the latest antivirus and signatures, One can employ technologies such as Network Admission Control (NAC) to enforce these controls.

When extending the network boundary, use technologies such as Virtual Private networks (VPN). To ensure that signal (H.323, SIP,MGCP) or voice (RTP) packet is not ceptable to sniffing or modification, Use encryption technologies such as ASE or 3DES that can be decoded fast.

Quote of the Week

2005-04-14T14:14:00.000+02:00

This week’s quote, courtesy of Good Quotations by Famous people.
'If you want to make an apple pie from scratch, you must first create the universe.' - Carl Sagan

A Tale of the Long Tail

2005-04-13T08:52:00.000+02:00

Last year, Wired Magazine had a great article on the "Long Tail" phenomenon.

"For too long we've been suffering the tyranny of lowest-common-denominator fare, subjected to brain-dead summer blockbusters and manufactured pop. Why? Economics.

Many of our assumptions about popular taste are actually artifacts of poor supply-and-demand matching - a market response to inefficient distribution.

The main problem, if that's the word, is that we live in the physical world and, until recently, most of our entertainment media did, too. But that world puts two dramatic limitations on our entertainment."
Link to the wired magazine article.

For more information, The Long Tail is a truly excellent blog on the famed "long tail" of the internet. If you've never read up on this topic, it's a great place to start.

Down:
* Music: sales last year were down 21% from their peak in 1999
* Television: network TV's audience share has fallen by a third since 1985
* Radio: listenership is at a 27-year low
* Newspapers: circulation peaked in 1987, and the decline is accelerating
* Magazines: total circulation peaked in 2000 and is now back to 1994 levels (but a few premier titles are bucking the trend!)
* Books: sales growth is lagging the economy as whole

Up:
* Movies: 2004 was another record year, both for theaters and DVDs
* Videogames: even in the last year of this generation of consoles, sales hit a new record
* Web: online ads will grow 30% this year, breaking $10 billion (5.4% of all advertising)"
The Long Tail: Mainstream Media Meltdown

The name of the Game is Co-Branding? It's more than that.

2005-04-13T08:33:00.000+02:00

"The concept of co-branding was brought to the fore when three giants in the telecommunication and banking sectors - Telkom, Vodacom and Absa - announced their intention to join forces in the marketing of their respective services".

2005 is becoming the year of the Telco. VOIP was liberalised in February, the launch of the second network operator is just around the corner and mobile number portability is coming soon to a network near you! Battle lines are being drawn and players are taking sides. Strategic alliances are cropping up weekly. It's quite dramatic!

I have seen the future - Google maps and Craigslist

2005-04-11T12:49:00.000+02:00

Last week I saw a few posts floating around the blogosphere linking to this great site. Paul Rademacher at the University of North Carolina, who wrote his doctoral dissertation on measuring the perceived visual realism of images, has combined the google maps service with the online classifieds website "craigslist".

I get really excited about this kind of stuff. Banking is such an important part of our daily lives; it's easy to think of loads of opportunities for integration into other information services. Part of the success of the google API is that there are so few restrictions on its use, encouraging creativity, proliferation and integration. The challenge for us in banking is to determine how we can do the same whilst still holding customers interests first.

All things Barclays

2005-04-06T07:18:00.000+02:00

Yesterday Sundaytimes.co.za had a nice article on the history of Barclays in South Africa. Google news gives a nice synopsis of the last month of news on the proposed deal. For a quick background read, I found this opinion piece on FT.com which outlines the motivation behind the aquisition.
Interestingly, it seems that Barclays has been shopping around in the EU as well…

Conversely, in March Standard Bank's CEO Jacko Maree told South Africa's Mail & Guardian newspaper "(Standard Bank) does not need, and is not seeking a foreign partner".

Quote of the Week

2005-04-05T06:46:00.000+02:00

This week’s quote, courtesy of the quote garden:
Any sufficiently advanced technology is indistinguishable from magic. - Arthur C. Clarke
Posted by Dave

Be the first to know with Google Alerts

2005-04-01T09:00:00.000+02:00

If you aren't already using them, you should be! 'Google Alerts' is a service from Google that sends an email to your inbox based on any predefined search terms. You can choose whether to search 'News' ,'Web' or both, and be notified either immediately or periodically.

For example, I have an alert based on the search term “Standard Bank”, and have chosen the option to have it sent to my inbox once a day. Every morning, I open my inbox to see an email from Google alerts which contains a link and a short synopsis of all the news items published on the web containing the phrase “Standard Bank” from the previous day.

Quote of the week

2005-03-31T09:58:00.000+02:00

This week’s quote, courtesy of Quote Cache:
DOS Computers manufactured by companies such as IBM, Compaq, Tandy, and millions of others are by far the most popular, with about 70 million machines in use worldwide. Macintosh fans, on the other hand, may note that cockroaches are far more numerous than humans, and that numbers alone do not denote a higher life form.
- New York Times, November 26, 1991

Reaching your customers through improved technology

2005-03-29T07:43:00.000+02:00

The evolving power of technology:
Technology is nothing more than the physical manifestation of the combined knowledge in a particular domain. Knowledge in turn is the extraction of insight from Information. We clearly live in a world driven by information and technology. The total amount of information in the world doubles every 5 years and the rate of development is itself increasing. There are 8 Billion pages of information on the web searched by Google (some of it of questionable value) and the number of patents registered every year now typically exceeds 10000. The power of microprocessors followed Moore’s law since the 70’s with the number of transistors doubling every 18 months. We have seen similar radical improvements in the speed of processing, the cost of storage and the speed and costs of communications.

Figure 1: Microprocessor evolution

The banking industry is an increasingly technology driven one having evolved from automation of the back office systems in the 60’s and 70’ and then the front office systems in the 80’s and 90’s to the automation of the client in the current millennium.

Figure 2: Banking technology application

Adoption rates on technology and devices:
Technology evolution has not, however, been occurring in a vacuum. It has indeed been driven by the growing sophistication of clients and the increasing affordability of technology to clients. The rising levels of wealth in the world, increasing levels of globalization and massive concentration of manufacturing capacity combined with economies of scale both in production and distribution have driven this affordability of technology. Increased levels of education, access to knowledge and exposure to global marketing have made clients more sophisticated consumers of technology.

This is best illustrated by the adoption rates of various technologies where we note that whereas the pager took decades to get to 10 million users, the internet browser was adopted by the same number of users in a matter of months. The rate of change is clearly increasing!

Figure 3: Time taken to reach 10 million users by varying technologies

The global figures are quite staggering with access to the internet reaching close to a billion users and access to mobile technology forecast to hit the 2 billion subscriber level this year. Over 500 million cell phones will be sold this year and the population of ATM’s will approach 1.5 million globally. Visa recorded one trillion dollars of volume on their card platform and electronic payments in RSA alone have now reached 8 times the GDP of this country!

Figure 4: Mobile technology adoption

Mobile Connectivity has also experienced rapid evolution with the speeds of connectivity commercially available rapidly rising from a data transfer speed of 56 Kilobytes per second to speeds exceeding a million bytes per second. This is a 1000 fold increase over a period of 5 years!
Technology is certainly becoming more pervasive, user-friendly, and affordable and is demonstrably adding to the productivity of both enterprises and clients. The growth rates of online transactions, sms’s, mobile commerce, electronic payments and virtual business all regularly exceed 100% per annum. The growth rate in the number of ATM’s installed in the Rest of Africa is also in high double digits and that for mini ATM’s (non- cash dispensing devices) is again over 100% per annum. The migration to the virtualization of prepaid vouchers from airtime to electricity and water is matching the growth rates that we have seen in the sexiest of technologies.

Figure 5: The growth in eCommerce Volumes

Africa itself is rapidly catching up in the adoption of technology with the CAGR of mobile users in Africa exceeding 100% and the rollout of latest generation infrastructure at lower costs and higher functionality often leapfrogging older infrastructures in first world countries. The appropriateness of many of these technologies for Africa is rising with greater modularity, lower costs of installation, lower operating costs and greater use of global standards combining to lower barriers to adoption. This is leading to greater product and service innovation in a continent where many clients are often not considered commercially credit worthy but increasingly are debit or cash worthy.

What customers want?
So what does this mean to banking customers? Customers of financial institutions are demanding 24 by 7 access to real time online services that are easy to use, pervasive and secure. The services should be integrated, transparent and within their control. Payment functionality should be secure, universally accepted, seamless, standard and irrevocable. They require this to be delivered in multiple channels, across all products and in multiple locations. Systems availability as in uptime, reliability and performance levels are leading to bullet-proof deployments that need to be future –proofed at the same time. They demand privacy of their information yet require seamless access to it instantaneously – almost a paradox but illustrating the dilemma faced by this industry.
They demand security and constant availability with simple interfaces yet at the same time expects customization of their service and consideration of their total banking relationship with the institution. They also expect their institutions to rapidly maintain parity in their offerings with that of their competitors. They seek affinity with their brands, especially in African markets due to the asp rational nature of some of these product offerings, and build tight emotional bonds with their service provider of choice. Clients are simultaneously looking for value for money and simplicity and convenience.
Finally, banking is about trust and this is a scarce commodity requiring years of investment and delivery before it is earned!
In a phrase it’s about being Simpler. Better. Faster.
Banking institutions, given their role as adopters and promoters of technology, have accordingly been voracious proponents of this new age and this has allowed for higher levels of innovation in products, processes as well as service levels and costs. Customer self service is increasingly becoming the norm while online real time services are now routinely demanded and provided. But ultimately, technology investment must pay if it is to be paid for.

How technology adds value:
The promise of technology in banking is to deliver exactly that. We are on the cusp of a new age in banking. An age of appropriate technology serving clients. We are seeing this being applied in a number of core areas viz:
• Distribution,
• Product,
• Operations
• Customer service.

The technology being applied in banking typically falls into the categories of physical technologies, as in branches, and in ICT. Information Technology typically falls into four categories viz.
• Capturing information,
• Transmitting information,
• Processing information
• Storing / retrieving information.

Productivity levels in all of these areas have been rising at levels of 100% every 18 to 24 months on average. We are also beginning to see an increased role for collaborative technologies to enable the migration towards true learning organizations based on competing on knowledge.

The consequences of appropriate technology adoption have typically been in 4 areas viz.
• Enhancing customer satisfaction,
• Increasing revenue,
• Lowering risk
• Lowering costs.

Examples of how technology is being used to deliver these benefits in the business of banking are legendry and include:

Customer facing technologies:
• The imminent rollout of smart card into the local market
• The attainment of milestones in internet banking adoption
• The pervasiveness of ATM technology and the increased functionality of the same channel
• The dispensing of virtualized services from airtime to electricity
• The migration of services into the retail channels for both banking and payments
• Voice enabled telephone banking

Front office technologies:
• The branch teller interface
• Cash management systems
• Mobile and EMV compliant POS devices
• Self service terminals
• VOIP networks to branches

Back office technologies:
• Straight through processing
• Middleware technology adoption
• Real time settlement
• Online Credit scoring
• Imaging of documents
• Workflow management
• Server and application convergence
• Intelligent management tools
• Neural network technology combating fraud

The most promising technologies for better reaching customers will surely be the pervasive embedded chip, mobile communications and devices, virtual services, new and innovative physical self service channels and the continuing evolution of card as a means of executing in person payments.
It is clear that the rapid propagation of technology to customers will continue and indeed accelerate and that this phenomenon will present opportunities to reach and serve customers in new and innovative ways. This is however only possible for the alert and agile enterprise that views technology as strategic and is committed to operating entrepreneurially in this space.

Conclusion
In conclusion, you can bank on technology in banking! But, this does not happen by accident. The realization of these benefits requires focused and deep strategies with associated roadmaps for each level of the bank’s technology platforms, aggressive implementation plans against specification, schedule and budget and ruthless extraction of value from these investments in order to justify these spends. Certainly not an endeavor for the faint hearted!
The picture that I have painted is merely a snap shot at an instant in time. The environment is dynamic and uncertain. Leading banking institutions are in the midst of a technology refresh and adoption strategy that will require world class ICT skills and bold executives. They will also deliver significant stakeholder value to both investors and customers

Thank you!

Herman's presentation was to the African Banking Congress on Wednesday 9th March 2005

Welcome to Future Bank

2005-03-29T07:33:00.000+02:00

Good morning and welcome to Future Bank, a blog focused on technology innovation in the South African financial services industry.

The Future Bank Blog is driven by Herman Singh, the director of Technology Engineering at Standard Bank, and Dave Glass, a technologist in Technology Engineering.

The views expressed in the Future Bank Blog are (obviously) not necessarily the views of the Standard Bank Group. This Blog is written in our private capacity, and is intended to encourage debate and idea sharing.

Regards, Dave.