Are the Economics Viable? December 23, 2011
Posted by stewsutton in Communications, Economics, Education.Tags: allocation of resources, enormous changes, internal resources, overindulgence, staff reductions
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There are enormous changes taking place in many businesses and across multiple markets. One need only look at a newspaper article or magazine or web-based media to see this rapid change. However within the rush to become more cost effective in how we execute our business, we should also carefully consider the implications of making reductions – sometimes significant reductions in areas that appear to be non-essential. Even that phrase non-essential has a rather strange ring don’t you think? It sort of implies that when we are doing good, we can waste resources in areas that are non-essential and its only when things get tight, we must be realistic in our allocation of resources.
At some level its as if we need to go on a resources diet based on a season or two of overindulgence. This is a cycle that seems to repeat across all industries and throughout history. We never seem to learn from our past – even with its record being so clear. A couple of examples come to mind that will illustrate the poorly planned cutting taking shape within two distinctly different industries.
The first example is within the banking industry. One of the nations leading banks is making some dramatic adjustments to its allocation of internal resources (in the form of staff reductions) where the role and function of this staff is directed squarely at the quality of the banks communications. That is to say, in the spirit of increasing the potential for more profit, the bank is going to reduce the clarity of its customer communications. Now this is the sort of stuff that typically does not make headlines and it certainly would not be a candidate for communications to the customers of the bank – ironically because those individuals will no longer be there to write this correspondence. Some would argue that smart people in the bank’s workforce will just add corporate communications to their list of existing tasks, but when was the last time you considered that your bank’s correspondence was not long enough – too short a narrative to really matter. The well known objective of writing the short letter requires work – no matter what the profession. So the customers of this bank can soon expect to see some longer letters, or if the letter is short, it may lack some clarity in its intended purpose.
Another example of misplaced economic choices is within the collective set of campuses that comprise the University of California system. Once considered an incredible value, now each dollar spent on a UC education is increasingly consumed by layers of administration that seek to assure that the delivery of education meets all of the criteria set by another group of administrators. Gone are the days when the educational dollar paid for faculty, facilities, and supplies. We now live at a time when the layer upon layer of politically correct bureaucracy takes priority to that service for which the bureaucracy is subordinate. Its not the quality of what we teach and the value of that instruction in relationship to a persons skills and value to an employer upon graduation – but rather the more important priority is that we have internal reviewers, compliance administrators, and a significant percentage of the university budget directed toward being compliant to a way of delivering education. This overhead raises educational expenses and take the attention away from learning. So students get less value and it costs them more. Where is the sound economics in that prioritization? And could sound economics even be possible within an educational institution where the administrative component setting the priorities would need to diminish itself to achieve a more effective solution.
Other businesses are going through similar difficulties. Many organizations will make strange choices when confronted with reducing budgets and increasing operational costs. Will R&D be sacrificed because its benefits are not immediate? Will processes be restructured in a way that diminishes a connection between the provider and the customer of the product or service? Will we rely too heavily on technologies like social media to establish and maintain a connection where other options should be given priority? Keep your eyes on the choices taking shape in your workplace and speak up if things seem to be drifting away from basic common sense. Everybody has potential to offer perspective on the more viable solution that follows sound economics.
Corporate IT Trends December 9, 2011
Posted by stewsutton in Collaboration, Communications, Information Technology, Social, Software.add a comment
Does this look like the correct ratio as we trend into different tool sets within corporate IT? What do you think? Leave a comment.
Suggested Trends for Corporate Information Technology
A Simple Social Web Architecture June 30, 2011
Posted by stewsutton in Architecture, Collaboration, Communications, Information Technology.add a comment
The web business of today has a small number of key components. Each of these components surrounds the unique business offering creating a scaleable structure that can be replicated and managed with integrity. This simple model addresses some of the key components in most web-based businesses of the post 2010 timeframe. While not referenced specifically in this diagram there are other components that can weigh heavy in the design of the business system including the mobility strategy. But for now, lets consider four components that surround the core business offering and enable it to function as a modern web-based business.
Interface – Building an interface that makes sense is a concept that has emerged with the consumerization of information technology. It’s hard to believe that in 1997 the company called Apple computer had a stock value of about $3.50 per share and was on the verge of bankruptcy. In just a few short years a steady march of products would begin to turn the fortunes of that company and introduce to the world the very definition of consumer-friendly information technology. From iPhones to iPods to iPads to the new iCloud, Apple’s innovations in consumer information technology have educated the world and have set the bar on what people expect in their user interfaces (whether on mobile devices or via their computer web browser). Today Apple’s value is over 100 times that of the company that almost did not survive in 1997. The interface of most consumer information technology has been influenced heavily by “iDevices” and this creates expectations in the design of new products and services on the Internet.
eCom – In the early days of Internet eCommerce, some different companies emerged early with differentiated offerings. Having an ability to remain adaptive and agile to customer needs while staying ahead of the competition was the formula for several early offerings like Yahoo Stores. The eCommerce systems of this early stage were custom built solutions that were largely oriented to providing “shopping cart” services to web-based merchants selling online. The eCom solutions of today are much more sophisticated. They allow much more flexibility in integrating transactional processing to take money in many different forms for services rendered.
Social – Social computing is a key part of many business strategies and operational models and it is segment that integrates crowd-sourcing, network effects, and friend relationships into the business model. The social component is how many web business achieve their scale and market capacity. It will become increasingly unique to see web-based businesses that have strong consumer-relationship ties expand to large market shares without a well-planned social strategy.
CMS — Whatever the business, there is unique “content” that must be managed. This content could be pictures, videos, text, audio files or any combination of interesting digital assets. Its the content that is unique to your business that needs to be managed and at a level above the traditional database service. That is where the “CMS” or content management system comes into action. The purpose of a CMS is to make the management of the businesses online digital assets much easier. It addresses the presentation, arrangement, and permissions associated with these assets. As the business grows, keeping the expanding collection of digital assets under control is where the CMS really earns its value.
Jane Lynch, Eric Schmidt, and the Digital Gang May 31, 2011
Posted by stewsutton in Knowledge Management.add a comment
Tuesday Opening at the Digital Tech Fest…
Death is Inevitable January 25, 2011
Posted by stewsutton in Simulation.add a comment
Nobody escapes death. Here are the current actuarial tables in an active simulation for you to experiment with…
System Dynamics December 16, 2010
Posted by stewsutton in Information Policy, Information Technology, Knowledge Management.2 comments
So the field of System Dynamics is about 50 years old*. And while it has been around at least as long as I have been wandering the earth, I only recently connected to the power and potential of this discipline and how it can offer an important way to critically evaluate complex systems. Started around 1961, the field developed initially from the work of Jay W. Forrester. His seminal book Industrial Dynamics (Forrester 1961) is still a significant statement of philosophy and methodology in the field. Within ten years of its publication, the span of applications grew significantly.
So what is system dynamics and how can you define its approach?
- Defining problems dynamically, in terms of graphs over time.
- Striving for an endogenous, behavioral view of the significant dynamics of a system, a focus inward on the characteristics of a system that themselves generate or exacerbate the perceived problem.
- Thinking of all concepts in the real system as continuous quantities interconnected in loops of information feedback and circular causality.
- Identifying independent stocks or accumulations (levels) in the system and their inflows and outflows (rates).
- Formulating a behavioral model capable of reproducing, by itself, the dynamic problem of concern. The model is usually a computer simulation model expressed in nonlinear equations, but is occasionally left unquantified as a diagram capturing the stock-and-flow/causal feedback structure of the system.
- Deriving understandings and applicable policy insights from the resulting model.
- Implementing changes resulting from model-based understandings and insights.
Mathematically, the basic structure of a formal system dynamics computer simulation model is a system of coupled, nonlinear, first-order differential (or integral) equations. Simulation of such systems is easily accomplished by partitioning simulated time into discrete intervals and stepping the system through time one interval at a time. Each state variable is computed from its previous value and its net rate of change.
The simulation tools for System Dynamics have evolved considerably and today there are several different simulation tools that can be acquired to perform research and analysis based on system dynamics methods.
The Feedback Loop is the Key
Conceptually, the feedback concept is at the heart of the system dynamics approach. Diagrams of loops of information feedback and circular causality are tools for conceptualizing the structure of a complex system and for communicating model-based insights. Intuitively, a feedback loop exists when information resulting from some action travels through a system and eventually returns in some form to its point of origin, potentially influencing future action. If the tendency in the loop is to reinforce the initial action, the loop is called a positive or reinforcing feedback loop; if the tendency is to oppose the initial action, the loop is called a negative or balancing feedback loop. The sign of the loop is called its polarity. Balancing loops can be variously characterized as goal-seeking, equilibrating, or stabilizing processes. They can sometimes generate oscillations, as when a pendulum seeking its equilibrium goal gathers momentum and overshoots it. Reinforcing loops are sources of growth or accelerating collapse; they are disequilibrating and destabilizing. Combined, reinforcing and balancing circular causal feedback processes can generate all manner of dynamic patterns.
For understanding, system dynamics practitioners strive for an endogenous point of view. The effort is to uncover the sources of system behavior that exist within the structure of the system itself.
These ideas are captured in Forrester’s (1969) organizing framework for system structure:
- Closed boundary
- Feedback loops
- Levels
- Rates
- Goal
- Observed condition
- Discrepancy
- Desired action
- Feedback loops
The closed boundary signals the endogenous point of view. The word closed here does not refer to open and closed systems in the general system sense, but rather refers to the effort to view a system as causally closed. The modeler’s goal is to assemble a formal structure that can, by itself, without exogenous explanations, reproduce the essential characteristics of a dynamic problem.
The causally closed system boundary at the head of this organizing framework identifies the endogenous point of view as the feedback view pressed to an extreme. Feedback thinking can be seen as a consequence of the effort to capture dynamics within a closed causal boundary. Without causal loops, all variables must trace the sources of their variation ultimately outside a system. Assuming instead that the causes of all significant behavior in the system are contained within some closed causal boundary forces causal influences to feed back upon themselves, forming causal loops. Feedback loops enable the endogenous point of view and give it structure.
* References taken from “What is System Dynamics” authored at: http://www.systemdynamics.org/what_is_system_dynamics.html
Additional References
Ford, A. 2009. Modeling the Environment. Washington, DC: Island Press.
Forrester, J.W. 1961. Industrial Dynamics. Cambridge, MA: The MIT Press. Reprinted by Pegasus
Communications, Waltham, MA.
Forrester, J.W. 1969. Urban Dynamics. Cambridge, MA: The MIT Press. Reprinted by Pegasus Communications,
Waltham, MA.
Maani, K. E. and R. Y. Cavana. 2007. Systems Thinking, System Dynamics: Understanding Change and Complexity.
Aukland: Printice Hall.
Morecroft, J. D. W. 2007. Strategic Modeling and Business Dynamics: a Feedback Systems Approach. Chichester:
Wiley.
Morecroft, J. D. W. and J. D. Sterman, Eds. 1994. Modeling for Learning Organizations. System Dynamics Series.
Cambridge, MA: Pegasus Communications.
Richardson, G.P. 1991/1999. Feedback Thought in Social Science and Systems Theory. Philadelphia: University of
Pennsylvania Press; reprinted by Pegasus Communications, Waltham, MA.
Richardson, G.P., Ed. 1996. Modelling for Management: Simulation in Support of Systems Thinking. International
Library of Management. Aldershot, UK: Dartmouth Publishing Company.
Richardson, G.P. and D. F. Andersen. 2010. Systems Thinking, Mapping, and Modeling for Group Decision and
Negotiation, Handbook for Group Decision and Negotiation, C Eden and DN Kilgour, eds. Dordrecht:
Springer, 2010, pp. 313-324.
Richardson, G.P. and A.L. Pugh III. 1981. Introduction to System Dynamics Modeling with DYNAMO. Cambridge,
MA: The MIT Press. Reprinted by Pegasus Communications, Waltham, MA.
Roberts, E.B. 1978, ed. Managerial Applications of System Dynamics. Cambridge, MA: The MIT Press. Reprinted
by Pegasus Communications, Waltham, MA.
Senge, P.M. The Fifth Discipline: The Art and Practice of the Learning Organization. New York:
Doubleday/Currency.
Sterman, J.D. 2000. Business Dynamics: Systems Thinking and Modeling for a Complex World. Boston: Irwin
McGraw-Hill.
System Dynamics Review. 1985-present. Chichester, U.K.: Wiley-Blackwell, Ltd.
Vennix, J. A. M. 1996. Group Model Building: Facilitating Team Learning Using System Dynamics. Chichester:
Wiley.
Wolstenholme, E.F. 1990. System Enquiry: a System Dynamics Approach. Chichester, U.K.: John Wiley & Sons,
Ltd.
Event Networks October 15, 2010
Posted by stewsutton in Collaboration, Communications, Community, Information Technology.add a comment
The buzz continues within the enterprise around blogging, microblogging, and wiki’s. Now we are seeing a compound buzz (if there is such a thing) in relationship to how all this works nicely as a coordinated set. There are several commercial products out there that were built in the “suite” approach for that very reason. IBM Connections, the latest release of Microsoft Sharepoint (SharePoint 2010), and Jive to name a few. There are also open source software “suites” like ELGG that one can consider also. So what do all these suites do that is so interesting?
What the current crop of “suite” approaches in the social software / social media / social computing arena are pointed at is the gold mine of enterprise event streams. Getting the population off their further entrenched addiction to mobile email and out into open aggregated communications channels where these communications in combination with their enterprise activities (events) are also recorded and routed into event channels is the new frontier.
Placing these event aggregation tools in the path of work is essential. It allows us to more efficiently share expertise and to discover expertise when needed. As the push and pull toward these event networks becomes more commonplace, then our collective efficiency may further improve quality and performance in wiring the right information to the right person at the right time for the right reasons.
