Message to Chinese SIs: How to Win!!
I'm not sure where this post will end up, but I know where I want it to start. What I'd like to tackle is something near-and-dear to the hearts of many Chinese SIs, i.e., how to beat the big(ger) boys at the SI game.
This brings me back to the good 'ol days of 1995-1996 when I was brought in as the President and CEO of Presence Information Design. In a previous life, Presence built the Mars Observer Camera. Yes, Presence (under the name of Altadena Instruments) built a camera-on-a-chip for an interplanetary probe. We used to joke that it didn't necessarily take rocket scientists to build Web sites, but we had rocket scientists building Web sites! Presence built the first site with shopping cart ordering (and for a local Pasadena company selling chili sauces). Presence also designed the first Java-based game, this time for the TV show, Tales from the Crypt. In the gaming arena, we pioneered "live" gaming similar to Jeopardy for Sony's Game Show Network. We also invented the whole notion of state ID. I was personally selected as a presenter at the first JavaOne conference and Presence engineers were noted in the trade press for helping debug aspects of Java code. We launched a true VRML (virtual reality) site for Fujitsu, set up a plethora of webcams for Disney, built the site for id Software (makers of Doom), and did lots of other very cool stuff. At 37, I was the grandfather of the company!! Most of our engineers were Caltech alumni/ae. (Presence was located in Old Town Pasadena, only a couple of miles from Caltech.) Shoes were optional, hours were EXTREMELY flexible, and one guy name Ben used to dye his hair a different color each week!! Geeks we were -- but proud geeks. No technology was too great for us to overcome. Frankly, I've never worked with a more brilliant group of engineers and artists, from my partner who went on to become the CTO of Goto.com/Overture, to a guy still in the space biz (and part of my LinkedIn network), to another who spent many years with WiReD magazine. Even though the hours were quite flexible -- as was the attire -- I could ask these guys to invent sunshine and they'd have it for me the next morning (no pun intended). Of course, we had networked Doom as well as working arcades in our loft -- and lava lamps on many desks (mandatory in the mid-90's). It was the relatively early days of a graphical Web -- wonderful days, to be sure.
So why all this history about Presence? Because I believe the lessons that we learned apply, in large part, to strategies that may (perhaps should) be used by Chinese SIs. The cultural elements are different, to say the least. But I believe there are lessons to be learned and shared. When I came on board as "Acting President," we had five employees. We grew into the largest Web systems integrator in Southern California during 1995-1996, topping Paul Grant's company. But how did we grow? What did we do? What lessons were learned? And did we hit a home run -- or a grand slam?
The fact is, we did hit a grand slam. Presence managed to become the lead contractor on the largest outsourced Web site development project in the entire world circa late '95-mid '96. The $20 million project was for a group within Pacific Bell (now part of SBC) called, "At Hand." Presence was the prime and two very notable SIs/Web design firms were subs, including none other than CKS. But what was more amazing is that we managed to not only top CKS, but took the honors (and contract) away from EDS and Andersen Consulting (now Accenture). Just think, a bunch of wild-haired Caltech grads beat out EDS and Accenture!! So how did we do it?
First, we proved that we knew project management. This was easy, after all, Presence built the Mars Observer Camera for NASA -- and interplanetary probes have rather inflexible launch schedules. But this isn't why we won. Certainly EDS and Accenture had similar project management capabilities, albeit of a different type. However, their project management skills were actually more appropriate to the task at hand: Large-scale software development versus designing and building part of an interplanetary probe!! So why did we really win?
This goes to core competencies, perhaps even the related concepts of strategic intent and expeditionary marketing. I think that executives too often focus on core competencies, yet forget strategic intent (a precursor to core competencies) and expeditionary marketing (which often follows from core competencies). Okay, so enough Stanford Business School gibberish. Why did we really win?
Presence was able to defeat EDS and Accenture because we proved that we had much more knowledge in enhancing a user's experience. Sounds simple in words; not so simple in practice. If the project would have required best-of-breed integration or even a fairly complicated B2B marketplace, Presence would have lost. But portals -- where a lot of today's action remains -- are much more focused on the user experience. Because of the Caltech and academic aura/genius of Presence's engineers, we were NOT shy about tackling the latest and greatest in just about every single aspect of a user's experience. Squish the spiders -- the first Java based game. Navigating the chili sauce company's online catalog. Tracking the Japanese explorer (courtesy of Fujitsu) in a VRML environment. We even developed our own development language which was similar to Perl. (We called it, "Guppie.") Presence tackled the hard stuff and succeeded -- and was able to defeat the staid software engineering environments of EDS and Accenture. Matter of fact, Presence was in talks with the Xerox Parc spin-out which was recently acquired by Microsoft. We called our entity, Shared Reality, Inc. (SRI, of course). Persistent objects was the name of the game and luminaries such as Pavel Curtis, the inventor of MOOs, was the head techie on behalf of Parc. We even had a guy from NASA's Jupiter collaboration project (true collaboration, not like Lotus Notes) working for us.
So here's my point. If you're a smaller company without the resources to compete with an EDS (or a Wipro, for that matter) on a level playing field, change the game!! Let your engineers "play" and push the frontiers of what can be done to enhance a user's experience. This might be a bit of VRML. It might mean avatars. It might very well mean software agents. (I was the chair of the Web Session held during the First International Conference on Autonomous Agents. Don't underestimate what can be done with software agents. Amazon's recommendations don't happen out of thin air!) It may also be more "mundane" things, such as adaptive personalization (beyond the ordinary stuff we see on a lot of sites), semantic computation for a Q&A system (a system which works with Chinese, too), and even taking advantage of grid computing environments. And, how about variations on XML and autoCAD for designing state-of-the-art interactive interfaces? BTW, I may occasionally touch upon these subjects and may even provide links to key reports and articles, but since I plan to do consulting in this area, I probably won't say too much in this blog. Tidbits, perhaps, but not much more. Readers of this blog are much more likely to get my take on something like HP's Smart Office initiative than you are on "SmartClients" developed at the Swiss Institute of Technology (even though the research being done at the Swiss Institute of Technology's Human Computer Interaction Group is much more interesting -- and may have much greater potential in providing a Chinese SI with a competitive advantage). Stay tuned for more ...
A must read: The hot-off-the-press "Offshore Location Attractiveness Index" published by A.T. Kearney. Get it; read it; take it to heart. Overall, China was in second place. (Of course, India came in first.) But China beat out Malaysia (3rd place), Singapore (5th place), the Philippines (6th place), and all other Asian countries. China is considered weak, however, in its business environment, which consists of IP protection, cultural adaptability, infrastructure and country risk. (I believe the A.T. Kearney ratings were fair: Country risk ratings were lower for Israel, South Africa, the Philippines, Vietnam and Russia.) No surprise, but language was cited as a major weakness for China. Yet, the report states, "English language proficiency is another skill gap receiving attention. For example, some Shanghai elementary school students receive math and science instruction in English." Good for China!! Now it's my turn to learn Mandarin!!
Okay, some other brief takeaways. The enterprise applications market may have a pretty good year. Well, at least some Indians think so. Chinese SIs may also want to investigate working with certain e-services suites, although the Gartner report doesn't take into account branding. EAI work: A great place to look for high(er) margin projects. You may want to consider getting active in the EAI Industry Consortium. Net markets might be another opportunity in China. A lot has been learned by mistakes made in the States. Also, I believe that Net markets are a more natural fit for firms accustomed to pricing wars, which is something that many (most) U.S. suppliers avoid(ed) like the plague. (In reality, combinatorial auctions and other emerging forms of B2B auctions will solve this problem, even in the States.) In the Chinese electronics marketplace, enter GXS and good 'ol E2open -- one of the surviving U.S. Net markets. For "fun," read the article from MIT Enterprise Technology Review on India's brain drain.
Lots of stuff on speech technologies. I'm yawning again!! But there were some POTENTIALLY significant announcements, from IBM, from Microsoft and from the W3C. Microsoft as a viable CRM vendor? You've got to read this and another story for yourself! (Both are from Computerworld, which I generally respect.) I'm going to stick my neck out and buck a trend: Even though converged devices don't do very well in surveys, I'm a believer. Of course, I own one, too -- and can't really imagine how I'm going to get by in China without a converged device. One idea is to tie the knot between Wi-Fi and IP telephony. Sounds good to me. Computerworld reported something similar from CTIA Wireless 2004, along with an increase in smartphone sales.
On a timely note, there is a lot of speculation as to what will happen with Microsoft after the recent EC ruling. Let's just say that not all are convinced that the ruling poses a significant setback for Microsoft. Besides, open source is NOT a panacea. (More on this in a future posting.) I always say, "stick to your core competencies." Try CRM with SCM and you might as well put a loaded gun in your mouth and pull the trigger. Of course, there are two sides to this story.
Now for some fun stuff. A potential ISV partner to keep in mind is Mark Logic. They have some cool stuff and are finally out of stealth mode. Always good to be early to an ISV's party!! More fun stuff: Is India getting too expensive? Also, don't be surprised if China's military pushes for some innovative software technologies. A lot of the best IT technologies were (and are) funded by various U.S. military organizations. Let's take one example: The Internet!! China's military may follow a similar course of action.
Finally, some outsourcing "gotchas" from Computerworld. Well, since I'm moving tomorrow and leaving for China on Friday, this will really be my last blog for at least another week or so.
David Scott Lewis
President & Principal Analyst
IT E-Strategies, Inc.
** Tell a friend about this weblog. **