Think Like a Startup

Many companies practice zero-based budgeting. The idea is that you do NOT start with last year’s budget. You don’t say, “We spent $xx in this category last year, so how much more or less do we spend this year?” You start with a clean sheet. This has the effect of getting rid of those costs that have always been there just because…well just because they have always been there. And that frees you to spend on what you really need, not on what you needed or thought you needed several years ago.

You can take the same approach to IT. Think like a startup, even if you have been in business for decades. Startups do almost all their IT in the cloud and using software as a service (SAAS). That is the default. A startup would think really, really hard about doing anything in-house or custom. Unless something is absolutely core (which means you should be the best in the world at doing it) it is best outsourced to a firm that does that as a core competency.

It is agility that really matters today. Huge companies are crumbling before our eyes. Watch Citigroup and General Motors and your daily newspaper as they go from invincible to suffering or dead. Huge companies have huge overhead. But medium-sized companies cannot afford that overhead.

In 1955, Fortune 500 companies accounted for one-third of the GDP in the US. In 2000, that had doubled to two-thirds. Within that cold statistic lies thousands of human stories of family farms, Mom & Pop stores and other small businesses trampled by Wal-Mart, Agribusiness and other large companies.

That is a massive shift. But it is not written in stone that large companies should control two-thirds of the economy. We may have seen the high water mark of this trend. It maybe reversing. The demise of huge companies is a massive, historical opportunity for smaller companies.

Mid-sized companies need to decide: Are you are agile like a startup or a smaller version of a large company? The latter may give you all the problems of a large company without their advantages of scale.

So, think like a startup. Only do some IT functions internally if you are really (no, really) convinced that those functions are totally core to your mission and you can be the best in the world at them.

That is easier said than done. You do have legacy IT and processes. The most important thing to recognize is that people’s jobs are at stake. If you make the process of moving to cloud/SAAS a genuine win for your people, those objections (”It’s OK for some companies, but its way too risky for us for this reason and this and oh this one as well.”) will disappear like morning mist.

Somebody who is maintaining/managing in-house systems needs to see one of two future career paths:

1. Within your company, moving from context to core, from cost center to profit center.

2. Outside your company, working for cloud/SAAS vendors, trading on the success of the migration of your systems.

Either is a good result, and it will vary by individual.

Are Marketers Adapting to the Cloud’s Impact?

As more and more businesses and applications make the move to cloud computing and Software as a Service (SaaS) solutions, it’s slowly changing the way businesses and individuals work, search, research, shop and compute in general.

According to a recent study conducted for The Economist, “Sixty‐nine percent of Americans connected to the web use some kind of ‘cloud service,’ including web‐based e‐mail or online data storage.” These changes in behavior and the accompanying changes in expectations require marketers to adapt the way they present information and run their services online.

Mobile on version 1.0

Many consumers of information are starting to lean heavily on their mobile devices as their primary research and reading tool. For marketers this means that mobile versions of services and sites need to be a consideration in the initial presentation and not a feature upgrade down the road.

RSS readers and conversion tools can do some of the lifting for basic information sites such as blogs, but marketers must be creating mobile‐friendly (read really small screen) versions of all information and mobile add‐ons and applications for all services.

No more lugging storage or power

Laptops, particularly the popular “netbooks,” rely increasingly on Internet based web applications and are intentionally stripped of power and storage capacity as the trade off for size and weight.

This means that marketing must be careful in the use of processor intense entertainment experiences and instead focus on simple presentations that can be viewed on 10‐inch monitors.

Where do the ads go?

Growing numbers of web applications are coming online as free or “fermium” offerings. Marketers of these services are finding increasing resistance to ad‐supported models.

However, web applications that deliver contextually relevant ads for products, services and information that supplement the primary offering should find greater acceptance as more editorial than interruption.

What’s the back­up plan?

The greatest friction to cloud computing and web application adoption is the notion of security and reliability. “If my data isn’t sitting on the corner of my desk in a pile of CDs, then how do I know who’s looking at it?”

Of course, the opposite is generally true, reputable storage and server facilities are often much more secure and reliable than the typical DIY platform, but it’s a perception that must be addressed.

Marketers can’t over do education in this arena and should probably consider offering back‐up, what if I can’t access my data, plans as part of their service offerings.

Gently adapting the changing demands and expectations of customers online is an ever-evolving communications and marketing challenge that’s better hit proactively than reactively.

Are You Keeping Up with IT Trends in the Marketplace?

According to a survey released last week by Robert Half Technology, seven out of ten Chief Information Officers (CIOs) said their companies will invest in information technology initiatives in the next twelve months.  Atop the list of projects they expected to invest in were:

43% in information security

28% in virtualization

27% in data center efficiency

26% Voice over Internet Protocol (VOIP)

26% software as a service (SaaS)

The survey involved 1,400 CIOs from companies across the United States with 100 or more employees. (Multiple answers were permitted — which is why the total adds up to more than 100%.)

A survey like this is good to know, for a number of reasons.  Among them: it gives you something to benchmark your organization against.

Ask yourself:  is your company staying abreast of what’s possible with newer IT solutions?  Even 24 months can change the IT landscape considerably. 

Rashid asks

What is the difference between cloud computing and software as a service? Some talk like they are interchangeable ….. but then someone else talks about it and makes it sound like they are totally different animals.

TJ McCue asks

From the Managing for Growth webinar, it talked about SaaS applications and I’m wondering if large companies like Sun or Intel are using SaaS apps like Basecamp or Smartsheet or Shiftboard? Have you seen any lists that separate tools from platforms? I see Basecamp and Smartsheet as tools. Shiftboard as an online scheduling platform for companies managing staff and shifts. I could be totally wrong, so let me know your thoughts. I haven’t seen any great lists besides the one at Mashable that lists 270 online tools.