Are you blinded by cloud sprawl?


The flexibility to purchase cloud services with just a credit card and without technical IT knowledge, has meant that cloud sprawl is a much bigger issue than shadow IT ever was.

Cloud can be invisible; it can be locked up in individuals’ user accounts, it can’t be registered on an asset list by walking around an office.  Shadow IT was more visible – is that a new printer you’ve got over in the corner?  What’s this server under your desk?

But cloud – who knows where it is throughout your organisation?

Have you tried documenting and tracking your organisation’s true cloud usage? Or have you become blinded by cloud sprawl?

Purchasing

The ease of purchasing cloud has contributed to its ubiquity across businesses.  Anyone with a company credit card can purchase cloud services – and companies are now also seeing more BYOA (Bring Your Own App) where staff are selecting their own apps, sometimes free, to get their jobs done.  A good example is Mailchimp – the email sending and tracking software.  Many people wouldn’t think twice about setting up a Mailchimp account and importing contacts to send out a company newsletter – but what happens when that staff member leaves; does the account go with them?

We are often trying to manage cloud in the same way that we managed traditional IT purchases – but the purchasing models are now fundamentally different.  CFOs are struggling to understand what their IT budget is with so much cloud sprawl muddying the numbers.  Traditionally, the IT budget would be set, but now it’s often unclear what the real spend is, and it can be impossible to predict costs if using a pay as you go cloud service based on consumption.  Bills can vary, budgets can increase and planning becomes more difficult.

Who is in charge?

So who is in charge of the cloud services across your business?  Who makes a decision about whether to purchase the services? Is it always IT? Or does Marketing purchases their own SaaS apps?  Does HR use its own SaaS HR tool that they purchase locally?

Who sits above all of these cloud decisions?

Often, it’s now the CFO or Finance Manager. Before, it would often be the IT Director with Finance signing off on budgets.  But now, in the wake of cloud sprawl, it’s often the Finance Director having to make the call on whether to approve purchases.

Perhaps in some businesses, there is a joined up approach to cloud purchases: Finance signs off on the business case, IT is notified and everyone discusses how the new service will sit alongside current systems and how the cost will fit into IT’s budget.
But I wager that there are many more organisations that don’t have this joined-up approach in place; where cloud has run rampant through their business, and the cost-savings originally intended as a result of moving to the cloud may all have disappeared due to the number of new services added every year.

Bring back control

When I started writing this article, I thought about how could organisations better control cloud sprawl.

But I’m not sure they can – we can put in place recommendations about developing asset registers for cloud services, and cloud service purchase process standardisation – but will that be realistic?

Perhaps cloud will have to fully mature within organisations before we can hope to start controlling it more thoroughly.

A few things to look at in the interim, are:

  • Are you overprovisioning cloud services? Many times, out of a fear of moving to cloud services, customers overprovision and end up paying more than they need to.
  • How are you managing user logins for cloud services? Do you have a central system for keeping track of user logins for the different cloud services used across the business in the event of a staff member leaving?
  • Do you have a purchase code in your accounting systems to track when cloud services have been purchased for easier reporting?

 

There’s a saying (some say it’s from Spiderman, I couldn’t possibly say), that ‘with great power comes great responsibility’ – and a similar saying is true for cloud: ‘with great flexibility, comes great complexity (if not managed)’.

What are your thoughts?

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Think you don’t have a hybrid cloud strategy? You’re wrong.


I recently spoke to an IT Manager, and during our conversation, I asked what his hybrid cloud strategy was. He said that his company didn’t have a formal hybrid cloud strategy; they were moving more applications out of their data centre and choosing SaaS apps where available, but there wasn’t a hybrid cloud strategy in place.

But he’s wrong.

Whether that IT Manager likes it or not, he already has a hybrid IT strategy in place. The company itself has set it in stone, with or without the help of IT.

No one person is responsible, but many have contributed. Over the years, each additional SaaS service purchased, each new application that was brought in and hosted with a Public Cloud provider, and each new upgrade to the existing onsite data centre has developed a hybrid cloud ecosystem.

Cloud has already spread throughout the business I met with, and every month, as new services are added and old applications are taken offline, a hybrid cloud ecosystem continues to grow.

Perhaps the attraction of hybrid cloud is that it may not be something that can be entirely set in stone in a formal strategy. By its very nature, perhaps it has to be a living, breathing ecosystem, that flexes and changes as new situations arise: perhaps your data centre experiences a failure and more services are moved to the cloud one year; or your ERP provider moves to a pure cloud play strategy so you’re forced into SaaS world for your central business applications.

You can’t always plan for that – with Microsoft Dynamics being Azure-led now, customers may be moving central systems to the cloud earlier than their strategies may have previously anticipated.

But it doesn’t mean a strategy doesn’t exist, it just means that maybe the traditional way of deciding on a long term IT strategy for your business doesn’t fit in a world where new providers can launch applications on the fly or the industry’s largest vendors can change their position on onsite or public cloud hosting overnight.

A hybrid IT strategy is all about being flexible enough to allow for change both internally (i.e. what your business decides to do commercially and operationally) and externally (i.e. what the market dictates and also what technology industry and vendors offer each year).

Previously, vendors might introduce a newer, shinier box – but it was just a newer, shinier version of the previous box. It didn’t mean you had to throw out your IT strategy and start again. Today, an application vendor deciding to only release their updated version as a SaaS product means that your strategy to keep that application in-house for the foreseeable future changes. And perhaps it has a knock-on effect on your other applications; making it more costly to keep other apps in-house if you don’t have the economies of scale of all of your applications being hosted within your own data centre.

And, the stakeholders responsible for your hybrid IT strategy have changed. Shadow IT and the proliferation of cloud services means that the people involved in making a decision about your hybrid IT strategy may be sat in diverse roles across different departments of your business. They may have been purchasing their own cloud services for over 10 years and now have a key voice in decisions about future IT strategy of the organization.

So, do you have a hybrid IT strategy? Or has your company sorted it out without you?

The State of Cloud 2017 – What’s the opportunity?


With all the articles you’ve probably read on cloud, all the hype and all the talk about cloud – you’d think that every business was now at least 90% in the cloud.  Yet apparently there’s still some way to go.  Here’s a little round of some of the latest predictions, stats and figures relating to the cloud industry.  We also think there’s a great opportunity for innovative startups in the enterprise IT and cloud market to disrupt the status quo for cloud migration and enterprise hosting services.  What do you think?

 

So what’s the state of cloud in 2017?

74% of tech CFOs believe cloud computing will have the most measurable impact on their business in 2017. Is this the year that things get done? The year in which those large scale moves to cloud happen and central business applications finally tip over the edge into the cloud abyss? Perhaps… (Source: https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#2e4fa41631e8)

 

Enabling top performers

A report from IBM showed that the top-performing companies in the banking sector are 88% more likely than underperforming banks to implement a hybrid cloud strategy. We’ve always had an inkling that the best performing companies have embraced cloud where it makes sense, but it’s good to see it in stats and facts! (Source: https://enterprisersproject.com/article/2017/8/hybrid-cloud-10-notable-statistics)

 

Cloud spend 6 times the rate of spend as traditional IT

Still pushing against the pull of cloud and refusing to budge?  Apparently cloud compute spend is growing at 4.5 times the rate of IT spend – and that rate is expected to increase to 6 times the rate of IT spend between 2016 and 2020.  Is your IT reseller still telling you to buy on-premise or ignore SaaS tools?  Maybe 2017 is the year to reconsider your supplier strategy. (Source: https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#5834998231e8)

 

91,740,000,000

The hybrid cloud market is expected to be $91,740,000,000 in 2021, raised from an estimate of a comparably feeble $33.28bn in 2016.  With such a huge increase in the market size, we’ll be paying close attention to who the big players in the hybrid cloud market are – surely it’s going to be an attractive play for many existing cloud providers and startups? (Source: https://enterprisersproject.com/article/2017/8/hybrid-cloud-10-notable-statistics).

 

Global IT-as-a-Service spend

Deloitte believes that in 2018 the global spend on ‘IT-as-a-service’ will be $547bn, up from $361bn in 2016.  With such an increase in spend, we are predicting that providers will be bringing evermore innovative solutions to market to make it easier for the larger organisations with complex ERP systems and on-premise legacy environments to move over.  We haven’t seen much innovation in the arena of cloud migration services and taking legacy apps to the cloud – maybe this is an area for startups to focus on in the future to harness the uptick trend in as-a-service spending? (Source: https://www.forbes.com/sites/louiscolumbus/2017/04/29/roundup-of-cloud-computing-forecasts-2017/#5834998231e8)

 

I believe that many of these cloud statistics offer a lot of possibility for newer market entrants to capture a piece of the cloud pie – customers are looking for something different; they want simpler systems and easier paths to migration.  Who will own the market for easier migration to a hybrid cloud environment?

Make Your Sales Stick


One of the top books I’ve read over the past few years is “Made to Stick” by Chip Heath and Dan Heath – and although most of the book and ideas are focused around how to make new products ‘stick’ in a particular market, I think some of the ideas can be applied to sales.

I’m always looking for new and different ways to reframe how we apply learning in the world of sales, and looking for new ways to explain why customers buy and what we can do as sales teams to improve how we align with those buying patterns.

So, if we look at the core ideas below from Made to Stick – you can instantly see how these ‘rules’ can be applied to sales activities.

 

Made to Stick – the ‘Succes’ formula

  • Simple – find the core of any idea
  • Unexpected – grab people’s attention by surprising them
  • Concrete – make sure an idea can be grasped and remembered later
  • Credible – give an idea believability
  • Emotional – help people see the importance of an idea
  • Stories – empower people to use an idea through narrative

 

(Heath & Heath)

 

Simple

Finding the core of any idea

What’s more frustrating than speaking to a sales rep who tells you hundreds of facts, figures, stats, and points about their product.  Not many sales execs are good at finding the core of an idea – they make propositions too complicated, and they include too much info.  We are simple beings, and we need simple messages.

 

Unexpected

Grabbing your audience’s attention

The reason why most of our customers have chosen to partner with us is because we are unexpected.  They didn’t expect our sales guy to visit them over the weekend to help them wire up their new datacentre, and they didn’t expect the Jonathan Palmer Race Day experience invite.  It’s not just about unexpected gifts, but it’s also about taking a different approach to how you sell.  Be unexpected, delight your customers – make them smile.

 

Concrete

Make your idea memorable

Once you’ve done your presentation and you walk out the door, that customer you’ve just met goes back into their world.  That world might include catching up with voicemails missed during your meeting, or dealing with a problem that’s keeping them up at night.  How does your message break through all of that so that they remember it?  If it sounds vaguely similar to most of your competitors, then it’s unlikely they will be able to differentiate between you and your competitor a week later.  So instead, think about how you can simplify your message down and present it in a way that sticks.

One of our best sales reps mapped out a customer’s new IT solution using coasters, pens and whatever was to hand in a meeting – as a way of visualising a new solution for a customer.  This was memorable as it required the customer to physically engage in designing their own solution – it was an interactive process whereas a traditional PowerPoint presentation is often a one-way conversation from presenter to audience.

 

Credible

Give an idea believability

How do you demonstrate credibility to your customer? Could it be by sharing interesting customer anecdotes (and we’re not talking about a boring case study) – or inviting an existing happy client to come along to a meeting with a new customer?  Or perhaps get a customer to record a quick personalised video message in preparation for your meeting?  Customers want to feel reassured that they are making the right choice, don’t make it difficult for them to find the info they need to make that choice.

 

Emotional

Help people see the importance of an idea

In sales, it’s important to develop an emotional connection between what you’re selling and your buyer.  Your product or service will have a business impact on your customer’s organisation and job, but it will also have an emotional impact on your buyer – they have a very important choice to make.  If they make the wrong choice, it will have both business and personal ramifications for them.  They might not be put in charge of selecting a new supplier in future, or perhaps their confidence in managing large projects where they are the decision maker will be dented.  Understand the emotional impact of your service, but also the emotional opportunity of your product.  What could they achieve with your product? What would it mean for them personally?

 

Stories

Empower an idea through narrative

Perhaps the most important one of all: stories.  We talk a lot about story-telling in sales, but do you actually do it?  How could you shake up your traditional customer presentation by making it story-centric – could all the same points be told by telling your customer a story about how you helped someone before and talk them through that particular story?  Moving away from information overload, and to a valuable story that captures your customers’ attention is the only way to form true connections with buyers and help them to better understand your business, your product and your value to them.

 

What do you think? Have you read Made to Stick? Do you think it applies to the world of sales?

What Role Does Loyalty Play in Online Shopping?


Customer loyalty has historically been formed largely through face-to-face interactions. However, with the advent of online shopping, retailers have found it significantly harder to build brand loyalty, instead focusing on factors such as product selection, convenience and lower prices to drive revenue.

 

There’s no doubt that ecommerce channels present many advantages to retailers and consumers alike, particularly given the rise of mobile and the added accessibility and convenience it brings. At the same time, being spoiled for choice has also had its effect on the consumer market – there is now so much competition that it’s easier to lose customers than ever before.

 

Transforming new customers into brand ambassadors can be challenging when you’re working with a medium as impersonal as ecommerce. Nonetheless, by guaranteeing customer satisfaction and taking steps to acquire their trust, you’ll be in a better position to turn a new customer into someone who will happily spread the good word about your business through social networks and other platforms.

 

Customer Loyalty Is Declining

 

Being spoiled for choice in an often extremely competitive marketplace, it shouldn’t come as any surprise that customer loyalty is dropping steadily. In fact, conversion rates have dropped by 28% in the last seven years. The rapid rise of comparison shopping and the relative ease of finding alternatives online have also made it more difficult for brands to hold onto existing customers. As such, many consumers don’t even consider brand loyalty to be a significant factor in their purchase decisions.

 

To overcome this trend, retailers need to work harder to better accommodate their customers through personalized loyalty programmes and excellent online content. After all, no longer is customer loyalty just about face-to-face interactions and competitive prices.

 

How Mobile Commerce Influences Customer Loyalty

 

Mobile commerce is rapidly catching up with desktop commerce, with more than 40% of online transactions now occurring on the small screen. Online stores that don’t provide an optimal experience on smartphones will likely be losing out on a great deal of potential revenue. Additionally, some digital loyalty programmes are not nearly as effective as they’re only tailored towards desktop users, or those using physical loyalty cards.

 

Studies show that 70% of consumers will develop a better impression of a company that allows them to save a loyalty card to their smartphone. From the consumer’s perspective, mobile loyalty programmes are far more convenient, since they can present things like personalized discount cards and digital loyalty cards in-store rather than having to print something out or carry around an additional card.

 

The same study also found that 83% of consumers appreciate a personalized approach whereby they receive specific rewards and promotions for events such as birthdays and anniversaries. By demonstrating to new customers that you’re aware of their individual needs and desires, you’ll be in a much better position to retain their business. If, on the other hand, a customer feels like nothing more than just another sales statistic, they’re not likely to feel any sense of loyalty to your business.

 

The Importance of Online Content for Building Brand Loyalty

 

One of the biggest challenges with building a highly visible online brand is getting heard amongst all the noise. However, according to NewsCred Insights, 62% of millennial consumers consider meaningful online content to be a major driver in brand loyalty. Every day, millions of people, particularly those belonging to the millennial generation, turn to the web to find answers to their questions and solutions to their problems. That’s why content marketing, especially social media, have become so important. Nonetheless, many companies have yet to embrace the potential of quality, engaging and relevant content to increase their brand’s visibility and influence.

 

Millennials generally aren’t interested in receiving sales messages, hence the rapid decline of traditional advertising in recent years. Instead, they want actionable content in a variety of formats, such as social media updates and blog posts, that helps them to fulfil their goals.

 

Building an ecommerce empire is no longer about sending sales messages – it’s about building loyalty through a strong, consistent and genuinely helpful online presence. From personalised loyalty rewards to value-adding content, online retailers need to do everything they can to build and retain audiences in an increasingly crowded marketplace. It’s about a two-way, engaged conversation between retailers and customers.  

Mobile Ecommerce Trends – What Are the Numbers Telling Us


While adopting a mobile-first approach may require an extensive overhaul of your website, the benefits are undisputable. Thanks to the increasing ubiquity of smartphones and tablets, interactions with potential and existing customers can happen anywhere at any time instead of being restricted to the desktop.

 

Mobile traffic overtook the desktop around three years ago, and around 90% of consumers now keep their smartphones with them around the clock. The mobile share of the ecommerce industry continues to skyrocket, profoundly effecting the industry to the extent businesses are now more likely to talk about ‘m-commerce’ rather than e-commerce. Mobile is now the defining platform of the online shopping experience, as these trends and statistics prove:

 

Ecommerce Sales

Just a few years ago, using a smartphone for online shopping was fraught with frustration as consumers struggled to navigate the average website on the small screen. Today, mobile accounts for well over half of all web traffic, and more than 40% of e-commerce transactions now take place on smartphones or tablets. From the consumer’s perspective, mobile is more convenient for shopping, since they can browse online stores, add items to shopping carts and make payments no matter where they are.

 

Shopping Cart Abandonment

People abandon online shopping carts for all sorts of reasons, such as a lack of preferred payment and delivery options. However, easily one of the biggest impacts on shopping cart abandonment is the user experience. Try navigating an online store that’s designed primarily for use on a desktop device, and you’ll quickly see how fiddly and frustrating the experience can be. Nonetheless, despite the unprecedented rise of mobile, many e-commerce stores are still woefully outdated when it comes to user interface and functionality.

 

Studies show that almost a third of mobile shoppers will abandon their shopping carts if the experience isn’t optimized for the small screen. Given the fact that mobile commerce is growing, this clearly isn’t an opportunity that retailers can afford to miss out on.

 

Buyer Journey

Online shopping has very much become an omnichannel experience, and while desktop devices aren’t going anywhere in the foreseeable future, there are now more ways to access the web than ever before. Mobile now plays an important role at every stage of the buyer journey from initial discovery to making a transaction. In fact, the latest statistics show that sixty percent of consumers have made a purchase on a mobile device, either to pick up an item in store or order online.

 

What this statistic demonstrates is that different people like to shop in an increasing number of different ways. For example, many consumers still use mobile devices only for initial research, hence the growing popularity of mobile-friendly comparison shopping, while leaving transactions themselves to desktop devices. Others, however, prefer to use the mobile for the entire buyer journey right up to making an order. In fact, the mobile-only consumer, who doesn’t even use a desktop device, is rapidly becoming commonplace.

 

Black Friday Sales

Despite being an American tradition, Black Friday sales are rapidly gaining ground in the UK and elsewhere in the world. In the US last year, shoppers spent $3.34 billion on online shopping during Black Friday, with $1.2 billion worth of those transactions taking place on mobile devices. That presents a 33% increase over the previous year, yet again exemplifying the fact that mobile commerce is already a big thing.

 

Online shopping is now an omnichannel experience with a strong focus on the availability and convenience afforded by mobile devices.

Cybersecurity and Law Firms


Handling activities with large associated financial values such as property sales, or mergers and acquisitions, is making targeting law firms a highly attractive target for cyber criminals. Once hacked, law firms lose their most prestigious asset: their reputation. Clients will switch firms even if they just sense there is the potential risk of having personal data leaked.   Data is money, and even power.  It has to be protected at all costs.

It’s been suggested that law firms are not taking cybersecurity seriously enough and are not putting appropriate measures in place to avoid attack. Firewalls and antivirus systems may not be enough to ensure protection; clients are sometimes now asking firms to prove their cyber-security capabilities by requesting that periodic security audits and ‘ethical hacking’ exercises be carried out regularly to expose any weaknesses.

Law firms are the new target

Hackers have already breached the security systems of at least one major international law firm, transforming a long-predicted cyber espionage scenario into reality. In the US, two magic circle firms were among the top 48 firms targeted in order to gain sensitive information on mergers and acquisitions, highlighting the sophistication of hackers and their more bespoke approach to targeting firms in specific sectors or following high-profile business deals.

Yet it can be difficult to implement new cyber-security procedures within firms if senior partners do not adhere to them. For example, while firms may have policies barring the use of online storage services such as DropBox, some partners continue to use them (2).

Hacking is a growing threat

In 2014, 173 UK firms were investigated by the Information Commissioner’s Office in reference to a number of incidents that were suspected to have breached the Data Protection Act. A total of 187 incidents were recorded – 29% related to security and 26% related to the incorrect disclosure of data (5).

Victims of this rise in attacks are both big and small corporations; however, small businesses are becoming the easiest and preferred target due to a lack of security measures in place. In fact, half of last year’s cyber-attacks in the UK were directed at businesses employing fewer than 2,500 people (1).  With the majority of law firms falling within this bracket, cyber-security measures should be taken very seriously by everyone working in a law firm.

Particularly for law firms, many of the staff are decision makers, compared with other business sectors where only Managers or the Accounts department have access to important company information.  Conversely in a law firm, lawyers and partners have access to huge amounts of highly sensitive data about their clients.

Recommendations

The Metropolitan Police offers a variety of information on how to prevent firms from being hacked. The most relevant recommendations for law firms centre around protecting access to data, across: ensuring access control so that staff only have access to the files they need rather than granting company-wide access to shared folders.  Additionally, encrypting any information stored on removable media or portable devices and considering the use of systems that eliminate the need for any files to be stored on portable devices is important for controlling how and where data is stored.

In addition to this, firms should be making sure that any device connected to organisational systems, including remote working, is vetted for security. Data transmission within and beyond the firm should be secure at all ends and access rights for staff who have left the firm should be revoked immediately.  Predictably, it’s important as we know to conduct background checks on applicants, especially those who will have access to highly sensitive data – thinking about how employees could use or export data.  Are you making it too easy to quickly download all of your client information onto a hard drive?  Or are you providing adequate controls to employees who are using their own devices to record client information, such as tablets and mobiles?

Price Waterhouse Coopers also recommend to take other specific measures.  Firstly, some clients will have specific requirements around how their data is managed by the law firm.  IT Directors at law firms need to be mindful of how these requirements are adhered to over the long term so that standards remain high.

Secondly, a global law firm needs to be able to satisfy global clients on a global basis. So, sharing information across a global network in a secure way is critical, as is ensuring that data protection policies in each region are adhered to.

Finally, understanding what data you have, and where it is located is key.  With so many easily accessible cloud storage tools and USB products available, it can be a huge task to even figure out where information is stored.  Which applications have which data, who has used a USB stick to handle client data in the past year, and is anyone using DropBox or personal Microsoft and Google accounts to share information or send files?

Apart from the previous recommendations, it is also important to consider practices such as ethical hacking exercises, which are carried out from the inside to detect a firm’s weaknesses to uncover potential opportunities for hacking. One firm which is already carrying out this practice is London media specialist practice, Schillings.  The firm has recently rebranded itself as a risk consulting and technology security practice, even promoting its services to other law firms to help with penetration testing and ethical hacking exercises to test system vulnerability (1).

C24 is holding a specialist cyber-security and social engineering course that is nationally accredited and delivered by UK specialists who train police forces in cyber security.  Each place normally costs upwards of £300 ex VAT per delegate, but C24 is offering ten IT Managers, Directors or CIOs the opportunity to attend the accredited half-day course for free.

Register your interest here.

 

 

References

(1) https://www.thelawyer.com/issues/28-october-2013/cyber-security-lawyers-are-the-weakest-link/

(2) https://www.lawgazette.co.uk/practice/manda-hack-attack-on-48-elite-law-firms/5054524.article

(3) https://www.lawsociety.org.uk/news/stories/scams-against-solicitors-met-police-offer-advice-and-support-on-fraud-prevention/

(4) http://www.pwc.co.uk/industries/business-services/law-firms/insights/cyber-security-issues-facing-law-firms.html

(5) https://www.lawgazette.co.uk/practice/ico-probes-173-law-firms-over-data-protection-breaches/5048260.article

 

C24 wins European Cloud Above and Beyond Award 2016

C24 data centre hosting award

Birmingham based C24 Ltd announce their success in the European Cloud Above and Beyond Awards, held in Monaco.C24 data centre hosting award

C24 has been announced as the winners of the Cloud Above and Beyond Award at the Data Cloud Awards 2016, held in Monaco in June 2016.  In order to win the award, C24 had to demonstrate how they went above and beyond to deliver a cloud service that delivered tangible results for their customer.  The award was presented to C24 at an event in Monaco in June 2016.

C24’s entry was for a project delivered at the Arthur Terry Learning Partnership, one of the top academy consortiums in the country comprised of eight schools.  The Arthur Terry Learning Partnership (ATLP) has worked with C24 for many years and describe them as a true technology partner for their academy trust.

Following the award winning project, C24 created a case study from which Microsoft followed up with a video case study, filmed on site at ATLP.

The case study highlights staff opinion on their experiences with C24 and working together with Microsoft in order to deliver a better learning experience for students. C24 and the IT team at ATLP worked together to deliver a Microsoft Office 365 solution across the schools, which will provide them with collaboration capabilities in order to better communicate between different schools and enable improved learning experiences.

C24 believes that the ATLP and Microsoft project is a great example of a way in which technology partners can work together to add value to their customers, above and beyond delivering core tech services.  By bringing in the support of key partners such as Microsoft and HP, it enables C24 to offer more value and expertise to their customers.  This latest award is another example of their commitment to delivering exceptional technology experiences.

David Ricketts, Head of Sales and Marketing at C24 Ltd, a Six Degrees Company, said, “We are delighted to have been chosen for this award – and we are really pleased that it has highlighted the great work that the IT team at Arthur Terry are doing to improve the learning experiences of many children across the Birmingham area.”

Watch the Microsoft and C24 case study video: https://www.youtube.com/watch?v=sb2Vi_wNPUo

 

 

How EBITDA killed innovation


What kills innovation in companies?  What makes a young, growing company stop in its tracks and stay fixed there?

Often, it has something to do with EBITDA.

EBITDA is a company’s earnings before interest, taxes, depreciation, and amortisation – which helps to determine a company’s operating profitability.

Many tech companies regularly trade innovation and long-term gains for a better EBITDA measurement or to boost their share position.

But this can have disastrous long-term effects on a company’s ability to innovate.

In the tech sector, where innovation is the underlying basis of any business, being able to quickly respond to trends and changes in the market, however, unprofitable they may be in the beginning, is critical to long-term success.

Amazon is an often-cited company when it comes to innovation; refraining from generating any profits over a number of years in order to build a business which would eventually dominate its market.

This ability to think long-term and dominate a market can often be down to the funding structures in place behind the company.

Forbes reports that VC backed companies have less focus on EBITDA, instead choosing to focus on the ‘race for long term market dominance’.  Yet, private equity firms who usually come in after a VC are more conservative and risk-averse in their outlook, instead using EBITDA as a measure to determine business performance.  Finally, once the company is listed publically, there is market pressure to achieve targets and report performance to shareholders on a quarterly basis.

This stops companies from thinking about how they could invest their precious cash in innovative, blue-sky thinking.  Companies who are focused on EBITDA due to a pending merger, acquisition or are having to meet quarterly targets to satisfy shareholders, don’t have the room to take risks and instead end up stagnating, doing the same thing with the same resources; and wondering why their business isn’t flourishing or changing.

Investing for the future.

Whilst investment in innovation can impact on short-term financial goals and make the company appear less profitable, innovation is critical to making sure the company is profitable, or at the very least making sure it exists, in 2 – 3 years’ time.

Think about all the technologies that have wiped out their predecessors.  Vacuum companies who haven’t invested in cordless technology may be out of business in 2 years’ time when the market shifts to cordless devices.  Car manufacturers who haven’t spent money on R&D for electric vehicles may be a few years behind their competitors and unable to compete effectively over the next 10 years.

Too good to ignore

Without innovation, the business relies on its run-rate business – the customers who purchase now because it’s ‘what they have always done’ until a disrupter comes along and takes the decision away from them and the new alternative is too good to ignore.  In standard businesses, that rate of change could take place over 10 – 20 years.  Service led businesses could offer the same types of services for decades (i.e. lawyers, accountants) however in the technology business, your product is more damaging in the tech sector than any other industry.

This has led a number of tech businesses moving away from the pressure of quarterly earnings calls and forecasts, to concentrate on sustainably growing their business.  Dell recently took the decision to go private while it figured out its place in the new competitive world of enterprise technology and cloud.    Google also recently spun off a number of its business segments so that it could better focus on each area, and be able to invest heavily in certain businesses without hampering the performance of its run-rate search engine business.

Google also recognised that this adherence to EBITDA performance can choke creativity.  Without the room to fail and risk money on a project, great things rarely happen.

Many of the larger tech companies are even scaling back the labs which once made them great, in order to reduce operational expenditure.  Unbeknownst to many in the tech business, some of the multinational tech businesses have (or did have) large lab facilities where researchers would develop innovative new ideas; many that would not fit into the company’s portfolio but might be able to be sold off as a patent or idea elsewhere.  For instance, HP developed its print technology into high-tech skin patches that ‘print’ onto the skin rather than inject.  What inventions are we missing through our inability to focus on long term growth over short term gains?

However, a relentless focus on EBITDA goes beyond just stifling innovation, it can also seep into a company’s culture, making the persistent quest for efficiency and profitability a recipe for culture disaster.  Many next generation start-ups lose their quirky office perks once they are acquired – on a balance sheet that weekly pizza and beer session on a Friday afternoon makes little sense but on the sales floor it can make the difference between staff staying or leaving a company.

Which brings me to my final thought.  We often say that smaller companies are able to innovate quickly due to their flexibility and size – making them able to pivot and change course without tiers of management to wade through.

But maybe that ability to innovate is less to do with the structure, because after all, having the resources of an IBM or Microsoft must be an enabler to innovation.  Maybe the innovation killer is actually more to do with the fact that once a company generates a significant level of interest or revenue, the focus on its EBITDA position overshadows all of its other dynamic and entrepreneurial pursuits in favour of the share price.

 

 

Image provided courtesy of UCL.

Can corporates be disruptors? The value of partnerships


“The customers we’ve reached, the opportunities we’ve bid for and the projects we have carried out would not have been possible without our partner ecosystem.”

Startup Stock Photos
Startup Stock Photos

Partnerships hold different value for different organisations.  For a start-up desperately seeking new customers to drive their business forward, value from a partnership could mean business development and client introductions.  For a multinational corporation, the value of a partnership could be a new use for their product set, or access to innovation opportunities.

This is the beauty of partnerships – two different organisations can come together and both equally receive value – by providing each other with different support.

Corporates are seeing that partnerships with start-ups are good for business – they enable innovation and provide them with visibility into a world they haven’t had access to for years.

The Coca Cola Company is leading the way with their Coca Cola Founders program, where Coca Cola’s business challenges are put out to start-up founders to come up with solutions and ultimately create spin off companies that still work with Coca Cola.  In effect, Coca Cola is annexing its innovation and R&D departments, putting ideas into smaller, entrepreneurial companies that can leverage the support from Coca Cola, without the inhibitors and mindsets that come with larger business processes.  This enables companies to ‘stay nimble’ and respond to challenges in an entrepreneurial way, and the Founders program must also be a way of cutting through the processes that need to be in place to run a big company like Coca Cola, but don’t need to be in place when embarking on product design sprints for a start-up.

This shows that partnerships don’t all have to look and feel the same.  Partnerships can range from being a pure resell model through to being spin off companies where there is still a strong partnership in place but a degree of separation to allow for innovation.

Partnerships can be great for start-up companies who want to grow quickly and reach new customers but lack the infrastructure and staffing resources required to deliver this growth.  Partnering with a larger company who can resell your services means you have instant access to an established sales force without the cost of investing in sales teams.

One thing we always talk about is the time and trust required for a successful partnership.  These relationships don’t just work from day one – they take a long time to establish and work out a good fit, and an ever longer time to build trust so that our partners know how we like to work at C24, and likewise we know how our partners like to work.  Despite the time and effort involved, we couldn’t have grown our business without our partners – the customers we’ve reached, the opportunities we’ve bid for and the projects we have carried out would not have been possible without our partner ecosystem.  Our business intelligence tool, BI24, might never have reached the many different sectors it has without our strong partnerships in place with industry leaders in their respective sectors.

And partnerships don’t just mean ‘reselling’.  We also partner with clients and deliver a range of services to them, above and beyond just IT.  This could take the form of marketing and PR – helping to promote their stories alongside our own – and helping to grow their businesses in the process.

Many companies struggle with partnerships because they don’t have a built in framework for how to engage with partners.  A partner contract is not going to fix it – it’s about having a go-to-market strategy for your partner base; how you’ll work with them, what resources you commit to them and the methods that are going to be used to attract and retain partners.

At the end of the day, the worry about partnerships usually comes from risk.  And usually risk to customer relationships.  Working to eliminate the risk to customer relationships is the most important, yet most difficult, issue to overcome.  We usually work with our new partners on an initial project to test the water and let each side see that we aren’t after each other’s business, but in fact we are trying to develop incremental new revenues for both parties.

As a relatively small company (that is now part of a much bigger company with Six Degrees Group), we have been able to work with customers of all scales and sizes through partnerships – and larger companies who we have partnered with have helped us to reach better press coverage with our clients, and generate connections with other similar companies in our sector.  In some partnerships we are the sales engine, whilst in others we deliver the technicians and hardware.

I feel that many companies, especially in the IT sector, are not making the most of partnerships to become disruptors in their space.  Multinational corporates could call on the thousands of entrepreneurial start-ups across the country to reinvigorate their processes, products and innovation practices – rather than doing things in the same way for the next twenty years.

We have to be confident in our partnerships that our partners aren’t going to compete against us.  We in fact say, approach us to partner and compete with us, not against us.  Let’s see what is possible through new partnerships and invigorating old partnerships – what can we come up with?  What innovations can we develop?  Who can we reach?  What can we solve?

 

Here are a few interesting follow on links that might be of interest to anyone looking at corporate and start-up collaboration and innovation:

Partnerships between technology-based start-ups and established firms: making them work – University of Cambridge

Coca Cola Company: How big companies can work with startups

Forbes: How start-ups can land big partnerships