MIST 7500 - Fall 2013 G1; Trending technology and disruptive innovation

Innovation is the commercialization of an invention. Our society is based on innovation, technological advances and the adoption of these technologies. There have been many theories and models used to analyze innovation over the years. The Austrian economist Joseph Schumpeter pioneered innovation management in the 1930's. He theorized on how the capitalist system was affected by market innovation. His book "Capitalism, Socialism, and Democracy" spawned increased awareness into this theory.

Over the next six decades, more analyses and models surfaced which refined his theories. Incremental vs. Radical Innovation, the Henderson-Clark Model, and the Abernathy-Utterback Model (to name a few) led to the 1997 best-seller "The Innovator's Dilemma" written by Harvard Business School professor, Clayton Christensen. Christensen studied how innovation can lead to a disruption in the marketplace that can either benefit the incumbent (sustaining innovation: improving an existing product) or allow new competitors to gain a foothold in an existing market (disruptive innovation: An alternative, usually cheaper, that brings new customers to the marketplace).

We were tasked with researching a trending technology and applying one of these models. I chose energy storage based on a professional document written by the McKinsey Global Institute (MGI). Scientists have been working on energy storage since the 1700’s (approximately a century before electricity became widely used). Today the technology has grown leaps and bounds since its inception. lithium-ion (Li-ion) batteries have become the mainstay in electric and hybrid vehicles, and mobile electronic devices. Advances in energy storage could bring the cost of electric-powered vehicles (EV) down to a more competitive price point against its internal combustion (ICE) brethren. It could also allow electricity to be offered to remote parts of the emerging world and increase the efficiencies of existing power grids in industrialized society. Energy storage systems convert electricity into a form that can be stored and converted back into electrical energy for later use, providing energy on demand.

The traditional ICE automotive industry stands to be disrupted by breakthroughs in energy storage. Major advancements in battery component technologies are expected to increase storage capacities by 2025. Next generation cathodes (the positive terminal on the battery) incorporate a “layered-layered” structure which will increase chemical efficiencies within the battery as well as voltage outputs. Cell capacity could increase by 30-50%. Total cost of ownership is expected to drop from $560 kWh (in 2011) to $165 kWh. Also, more efficient production processes will lead to the reduction in cost to manufacture EV cars. Based on these efficiencies, future EV cars could have a break-even point with their ICE counterparts when gas prices are at $2.85/gallon. Given these factors, the potential economic impact in the automotive industry could be approximately $415 billion up from the current $20 billion market.

I used Christensen’s Disruptive Innovation model to analyze energy storage. I feel that once the energy storage costs drop and performance levels increase to eclipse the efficiencies of ICE vehicles, customers will flock to the reduced total cost of ownership that will be realized from an EV. It will be a “low end disruption”, because the shift will occur as the improvements are proven to the mass consumer.

Our grandchildren’s generation could very well be the last generation to utilize ICE technology in their daily-driven vehicles. All we have to do is embrace the technology and shift our confidence in proven energy storage technologies to those of the EV.

MIST 7500 - Fall 2013; D1 Connecting business and IS/IT

 The internet has been in a transition for the last 10 years to a more interactive entity. The term Web 2.0 was coined by Darcy DiNucci in 1999 and popularized by Tim O’Reilly at a web conference in 2004. The advent of cloud computing and web connectivity has reduced business costs, opened collaboration efforts around the globe, offered more resources, and improved supply chains (to name a few). The emergence of “digital firms” has allowed for greater flexibility in organizations and management and accomplishing core business processes. Companies have been shifting their financial resources to improve on their information systems because they can see a quicker return on investment.

Here are six strategic business objectives:

• Operational excellence – improving operations to increase profitability.
• New products and services – New technology-based tools like tablet computing.
• Customer and supplier intimacy – Customer-focused services that bring return business.
• Improved decision making – More accurate information available so management can make informed decisions.
• Competitive advantage – Offering better products and services for less.
• Survival – Maintaining or increasing market share in an uncertain world.

What are information systems?
They are a set of components that are interrelated. They collect, process and store data that is distributed into a meaningful format (called information) for business decision-makers. It makes sense out of a multitude of confusing data. Some enterprise-level systems that are currently in use:

• TPS: Transaction Processing System – Transactional tool like “Square”.
• CRM: Customer Relations Management – Records customer information like “SalesForce”.
• SCM: Supply Chain Management system – Records supply chain information like “Logility Voyager Solutions”.
• ERP: Enterprise Resource Planning – Integrates all company stakeholders and the systems like “SAP”.
• BPM: Business Process Management – Allows employees to document, automate and improve processes like “Process Maker”.
• BI: Business Intelligence system – Cost effective analytics and reporting systems like “JasperSoft”.

We also looked at a software package that connects our existing business models to the infrastructure side of business. It is called ArchiMate. It allows managers to identify key activities and resources that support the business model. It also highlights assets that might not be properly utilized. This modeling software breaks down the model into three distinct "layers".

• Business Layer - The business model
• Application Layer - The software and applications that are used in the business
• Technology Layer - The hardware infrastructure of the business

There are many systems that help companies and their stakeholders succeed in the market today. Finding the tools that work best for your organization is the challenge as businesses move into the “Web 2.0” era.

MIST 7500 - Fall 2013; C3 - Internet Future

I watched videos of Vint Cerf, Tim Berners-Lee (both insiders of the design and implementation of the internet as we know it) and Kevin Kelly (Founder and Editor of Wired Magazine) as they discussed their visions of the future and the internet. All three endorsed cloud computing as the future storage protocol of computer systems, and the integration of data into our daily lives (roughly called “The One”). All things will be linked together by data. We will be identified by this data and able to use it to advance our society. It will be one big “open source society”.

Vint Cerf also touched on sensor networks and the role they will play in this future lifestyle. The mundane tasks of daily life will be automated by pre-determined settings. Households will be more efficient because of this. He thinks this will allow people to focus on other aspects of life and society.

These videos were very informative. All three men have a similar macro-vision of data and society in the future. I can see where integration of big data would simplify our lives. We would have accurate data at our fingertips. I do have some concerns with this “open source lifestyle”. To allow strangers to become intimate with our personal information poses a multitude of security and safety risks. In our current society and internet, criminals steal identities and anything of value with the click of a mouse. In general, people will have to become more enlightened and less savage for this future society to work.

*Image taken from Tim Berner-Lee presentation @ TED 2009.

Until next time...

MIST 7500 - Fall 2013; C1 - Internet History

The Internet started in the late 1960’s as a way for government researchers to share information. Computers in the '60s were large and bulky. In order to make use of information stored in any one computer, one had to travel to the site of the computer. Another catalyst in the formation of the Internet was the Soviet Union's launch of the Sputnik satellite and the discovery of missiles in Cuba. This spurred the U.S. Department of Defense to consider ways information could still be transmitted across the country even after a nuclear attack. This eventually led to the formation of ARPANET (Advanced Research Projects Agency Network), the network that ultimately evolved into what we now know as the Internet. ARPANET was a great success but membership was limited to certain academic and research organizations who had contracts with the Department of Defense. In response to this, other networks were created to provide information sharing. Protocols were standardized so that computers of any platform and location could integrate into the internet. The networks and users expanded exponentially until ARPANET was no longer needed. It was decommissioned in 1983. Over the last 30 years, the internet has grown and changed our lives.

We are no longer using the internet as a “tool”. With the advances over the past decade, we as a society are merging with the internet. It is becoming a part of us and our daily lives.

My top five internet events that shaped the internet

• First connection (circa 1969) – ARPANET (Advanced Research Projects Agency Network) connects the computers of UCLA and Stanford Research Institute’s Augmentation Research Center (Advanced Research Projects Agency Network). The transmission was done using a 300 baud rate modem.

• Protocol standardization (circa 1983) – TCP/IP (Transmission Control Protocol and Internet Protocol) allowed for computers of any type and location to connect together. This protocol is the merging of the original TCP and IP protocols that allow the computers at each end of the network to control the flow of packets (rather than the previous protocol of the main computer controlling it). The Department of Defense adopted this protocol and made it the industry standard by 1985 through seminars with the computing industry.

• Websites and web browsers (circa 1994) – Up until the mid-1990’s, most users of the internet were computer engineers, government employees, or university students. They connected via dial-up modems to iRC’s (Internet Relay Chat) and BBS’s (Bulletin Boards) which were text-based message boards/meeting places. When Mosaic was introduced to “the masses”, it allowed users to expand on their internet experience, and view webpages that offered unique content and images.

• Application development (circa 2000) – The creation of server-side technologies (ASP, PHP, etc.) and client-side (Java, JavaScript, ActiveX, etc.) empowered businesses to overcome the limitations of HTML and allowed webpages to become interactive and customizable.

• High-speed internet hardware (circa 21st century) – Advances in the hardware that carries data packets across the networks, has allowed us to become “part of the internet”. Modems have given way to routers and smart switches that can monitor internet traffic and make adjustments to maximize throughput. When TCP/IP was first invented, modems carried data at a baud rate of 300 bits/second. By comparison, today’s smart switches routers can carry data at speeds of 450 Mbits/second and beyond.

Until next time...

MIST 7500 - Fall 2013; B3 - Business Strategy Models

For the final assignment of week two, we had to analyze our fantasy business model from week one. We had many options to use for the analysis. I was torn between Porter's Five Forces Model or a SWOT Analysis. I felt the Five Forces Model was more fitting for my company.

Once the analysis was complete, we were instructed to create a video presentation or screencast discussing our results. Click on the link below to see my screencast.

OR CLICK HERE

I hope you enjoyed the video. Check back soon. Until next time...

MIST 7500 - Fall 2013; B1 - Business Strategy Models

In this week's class, we expanded on business modeling and how it can be used to formulate/analyze a business strategy.

Based on the authored works of John Hagel and Marc Singer, they believe companies are comprised of three different segments.

1. Customer Relationship Management - The business segment that finds customers and tries to maintain them.
2. Product Innovation Business - The segment that creates new products or services.
3. Infrastructure Management - The management of essential operational components such as policies, operational processes, HR, etc.

These three components are very different in their initiative and scope of operation. At times they can be incompatible.

They expanded on the modeling aspect and determined that through their research, they are seeing five business model patterns emerge:

• Unbundling - Shedding off all the "extras" while maintaining the primary business. (Ex. Telecom companies spinning off their maintenance and service departments to independent contractors.)
• The Long Tail - Offering extended product lines to diversify the business and expand the customer base. (Ex. Netflix offering 1000's of Indy/European films that wouldn't have been exported to other countries many years ago.)
• Multi-Sided Platform - Mutual collaboration between separate companies. (Ex. Nintendo Wii brings together game players and developers on their gaming platform.)
• Free - Offering free products and supplementing revenues from a less-traditional source. (Ex. Trial versions that let you test software, before you buy.)
• Open Business Model - Allowing collaboration from many sources to improve products. (Ex. Linux is an open source operation system, with thousands of programmers around the world making improvements.)

Finally, we wrapped up the night with Porter's Five Forces. This is a simple yet effective format to determine the strengths and weaknesses of an industry from a company perspective. Each force is then rated as high, medium, or low threat. A high threat means it is easy to break into the industry and be successful, such as techy/IT businesses. A low threat means it is hard to break into the industry. There could be no room for growth, or government regulations that prohibit "easy" entry, such as the automotive industry.

Porter's Five Forces

1. Threat of New Entry
2. Buyer Power
3. Supplier Power
4. Threat of Substitution
5. Competitive Rivalry

Porter later added a sixth force: Business Complementors. These can be positive (Hulu and the major networks) or negative (government intervention and activist groups).
A simple diagram illustrating the five forces model (taken from simpletemplates.com).

 

A lot of useful information that can help businesses determine their opportunities for success. That is all for now. Until next time...

MIST 7500 - Fall 2013; A3.1 - business modeling current employer

In this installment, we were tasked with creating a business model that reflects our current employer. I used BMFiddle's {bmfiddle.com}business model canvas tool. My current employer manufactures steel building products for the commercial and residential construction industry. We are the industry leader in maintaining high standards of quality and safe building construction. Here is the link to my business model canvas.

https://bmfiddle.com/f/#/r73D4

Feel free to check it out and let me know if you have any questions! Until next time...