Saturday, May 2, 2009
Wednesday, April 29, 2009
It'll be interesting to see if this settles into a Microsoft-Verizon vs. Apple-AT&T battle. If both articles are correct it's a different dynamic Verizon is setting up by partnering with both Microsoft and Apple. Perhaps that's the smarter move but in the era of exclusive deals it seems unlikely Microsoft or Apple would be all that pleased about the dual approach. I can't imagine they woudl be competing products, but we'll see what happens...
Monday, April 27, 2009
That is what is happening now, as Facebook is giving developers access to all of the data that is streamed and expects them to introduce apps that utilize a whole new realm of previously unavailable data.
As I started doing research about your company and the automotive industry in general I noticed that car innovations in the last decades have been focused on achieving car efficiencies and complying with environmental regulations. While Renault have spent a significant amount of money in research and development, on par with industry average, the results have been rather disappointing for the end consumer. In order for Renault to gain a significant competitive advantage in the auto industry I believe that it needs to change its design process and start putting the end consumer in the driver’s seat.
In the next lines I will develop my argument and explain what I mean by putting the consumer in the driver’s seat. The ideas that you will read might sound unrealistic at first, but you will realize that while they might be too futuristic for the present times, Renault has to invest in the future and change the ways the auto industry has operated since Ford created the production lines, Sloan announced GM mass customization and Toyota perfected the industry with its lean production system.
Why Renault, Why now
Renault is, without a doubt, one of the most significant players in the auto industry today. Its global positioning and access to world talent gives the company the minimum set of tools necessary to survive. However, in order to step ahead and differentiate, those attributes are not enough anymore and they will become less and less important as we move on. Renault’s history of innovation and futuristic design is a great foundation for the challenges ahead. Renault couldn’t be in a better position to set a precedent in the history of the automobile.
Now is the perfect time to invest. While Renault is doing so today in many different arenas, it seems to be doing so in the car of tomorrow but not on the car of the future. Green technologies, safety and efficiencies are mandatory investments today to survive, but I don’t see how any of these technologies are really revolutionizing the way we use and drive cars today.
Other car makers have started to do more for their customers, like GM’s OnStar, but that has not changed fundamentally the way we think about cars. Instead, it has simply broadened the spectrum of possibilities about what a car is and what can it do for its owner. Looking at history, cars are essentially the same as in the 1930’s, a compact steel mass with 4 wheels, an engine and a steering wheel. The panel provides drivers with basically the same information about speed, gas level, and total mileage, with some modernization, of course! I will grant here that the technologies that make the whole work are very different but the essence of the whole hasn’t changed much.
A massive amount of resources is being spent today in the development of a single technology, electric vehicles. So much could be gained if automakers could agree in one standard from the get-go and allocate the extra resources to the development of really revolutionizing technology. Renault could take the lead and start a major change.
The Driver of Tomorrow
Stop for a second to think. Do you believe 100 years from now people will drive cars the same way they do it today? The level of drivers’ sophistication and expectations will be completely different and companies will have to adapt to those user demands. Companies that don’t adapt will die and new players with innovative products and different ways of thinking will rise.
As an example, look at the kind of investment Honda is making today in brain machine interface technology. Simply imagine the possibilities and the impact of such technology in the automotive industry. Another breakthrough idea is self-driving cars. There has not being enough research and investment in this area, and especially big auto makers don’t seems to understand that this vision is not too far away.
The way I see it, there will be 2 well differentiated needs from the driver of tomorrow. First, the “urban driver”, that simply needs a way to get to and from home to the workplace. This need is very basic but important. People don’t want to get stuck wasting time in traffic and focus on driving. Instead, they want to use that time more productively by reading the news, connecting with other people (for work or personal affairs), read a book, etc. Public transportation is very inconvenient and people want the flexibility of having their own mean of transportation. In the future, I believe that “public transportation” will have a very different meaning.
Second, the “weekend driver”, that wants to enjoy driving in the open roads and have control over the automobile. However, the needs of this driver are completely different than today. This driver, even if s/he is in control of the car, s/he still wants easy access to road information, facilities and communication links with multiple other devices and people seamlessly.
Does this mean that each person will have 2 different cars? Maybe, I don’t have the answer and this is what Renault needs to figure out. The solution could be a vehicle that is able to adapt to the different needs.
Smart Roads, Smart Homes
We all know that movements towards a more integrated road system are on its way. Any vehicle will be able to exchange information with other vehicles in the road and with the road itself and the uses of this kind of technology are numerous. However, big auto makers don’t seem to see this as a priority and are delaying innovation. In the case of Renault, I have not found any information indicating that the company understands the need to change the type of innovation in which it invests.
Talking about interconnectivity, vehicles will not only be able to exchange information about the driving conditions, but they will connect with multiple devices at home, work and other locations. For example, a vehicle can retrieve food stock information from the house’s fridge, send the list of products to the supermarket while the driver is going out of work and going home. Smart homes will become more prevalent and cars will become part of the smart home interconnectivity.
Now the question is: can Renault do this alone? The answer is obviously no. I propose two approaches to take on this problem. First, Renault should forge new partnerships with a whole new set of players. Second, open the R&D lab.
In order to achieve high level of success and be a player in every sector of the market, Renault will have to create new links with players that it would not have imagined before. Let me start with an easy and obvious one, Microsoft. Microsoft Auto is helping to change the user experience in the cars by integrating seamlessly car functions with external devices.
Global telecommunication companies like Vodafone will also be of significant importance in the future. Vehicles will need to be connected all the time and exchange information with other devices (in and outside the car) nearby and faraway.
Other high tech companies like Sony, HP or IBM can help Renault to change the rules of the game. Rethinking new ways of satisfying drivers and integrating technologies that these companies already master well in their own domain should be adapted and incorporated in the vehicles of tomorrow.
If you think of data storage and processing, partnering with Google or Amazon could be a smart move from Renault. Renault doesn’t have to become an expert on things that already exist today and it doesn’t have to spend large amount of capital building infrastructure that can be accessed at a very low cost. Finally, with the advent of social networks, Renault could use Facebook or even Twitter to boost a new community of innovators working for Renault. This lead me to the last point: open design
As of today, car makers are very secretive about their new designs and innovations. A small group of people spend years in an R&D lab before any of those ideas see the light of the day in a commercial vehicle. Many of those ideas don’t even see the light of the day and die in the lab. The main reason? They were not needed in the first place or they are way too expensive to commercialize. As you see in the graph below, only 17% of the options in cars today are actually sold to consumers.
Figure 1 - Source: http://www.car-innovation.com/pdf/studie_car_innovation_2015.pdf (Page 16)
In my opinion, if Renault were to use the same resources it dedicates to R&D today to foster an external community to brainstorm ideas and collaborate, the return on investment of those resources could double, if not triple. This way Renault would have access to a large pool of talent at a lower rate. Even more, ideas could come directly from Renault customers (or any driver) without them being design experts. Sometimes the smarter idea doesn’t come from the expert in the field.
By adopting this approach, Renault would lose part of what makes its cars unique but it has a lot more to gain. Producing cars that exactly match the needs of its customers and include many more useful features than any competitor can be a clear competitive advantage. Renault wouldn’t even need to produce the car itself, it could outsource that part of the process and become just the hub of ideas and development of final products.
The goal of this memo is to start the conversation about the kind of investments Renault should make in the future and what should be the focus of the company in the years to come. Renault today masters the technologies of tomorrow, such as hybrid and electric cars and will be able to monetize those in the short term; I have no doubt about that. However, other auto makers are already thinking ahead and Renault needs to take an overarching vision of the auto industry. In the future, only the auto makers that are able to integrate with other technologies and think as cars in a completely different way, to the point of putting in danger their own business models, are the ones that will be able to reap the benefits of the change.
Mr. Mayor, your next CTO should be someone who not only manages IT for the city government, but also helps set strategic priorities and implement organizational change for all departments. The next wave of IT for the city is not simple re-engineering the way groups of people do business, it will be about re-engineering the way the entire city government works.
Even the General Service Administration has recognized the intersection of IT and strategic priorities. In a recent report they argued that the country needs to: 1) create an open technology environment, 2) treat data as a national asset, and 3) foster a culture and framework for collaboration.
Swimming in Data
Cities collect massive amounts of data on their citizens and businesses. However, today much of this information remains in data silos, inaccessible to other government entities and the public at large. As both bandwidth and processing power increase, the ability to send much of this data over networks is getting easier.
Once upon a time, cutting edge things like posting land records and ordering duplicate drivers licenses online are now par for the course. Today's cutting edge cities are using this power to streamline complex approval processes, like the city of Brampton has done. Some governments are even employing agile methods to reduce the time to design and deliver. The sheer scale increases in processing power and network bandwidth are opening more and more doors. This will allow cities to set up more one-stop-shops, interact with citizens more online, and reduce frustrations and runarounds. In fact, Consolidation and Shared services are the top two priorities for state CIOs today.
Mashups represent one way of sharing and consolidating services. Mashups publish data and allow the community to create links between data as it suits their needs. Mashups are fast, flexible and provide rich information. Yet, they require a lot of granularity. Many powerful ideas came out of DC's own mashup contest. Imagine how much more could be accomplished if more data were made available.
Yet, mashups require some way of linking two pieces of information, so when it comes to individual people red flags go up. For a time, social security numbers were a de-facto national ID number that could be used to link data on individuals. Civil libertarians are concerned about the idea of a centralized ID number, in light of identity theft and the possibility that other sensitive information about a person could be released. Today the Federal government is revisiting the Federal ID mandate due in part to lack of funding and concerns from civil libertarians. Even still, governments need to find ways to make their databases interoperable while addressing privacy concerns.
Concerns surrounding privacy and security are justifiable and the mayor and CTO are going to have to work together to help define comprehensive rules. It seems that no data is truly safe in light of recent hackers' success in breaching pentagon war planes. Yet almost all records that the government maintains today are digitized in disparate databases. Keeping such information in a less-structured format does not make it more secure. In fact most of it is probably less secure than if it were subject to a comprehensive set of security rules.
So, is it important enough to risk political capital and wade into a morass of privacy issues? Yes. DC has a choice, it can help shape public issue life-cycle or it can wait and have a set of rules thrust upon it once the federal government and other states have set them. Many people have already begun to search for ways of both meeting privacy concerns and publishing valuable information. This isn't just a technology issue, it is a political issue that requires heavy involvement of the political establishment.
The next CTO should establish a working group to outline comprehensive guidelines for working with confidential records. Such a group should include some of the civil libertarians who are opposed to the creation of a national ID, elected officials, and of course technologists. The group will work to ensure that only the right people have access to confidential information.
Once government databases can talk to each other more effectively, governments can aggregate data, make it anonymous, and publish it for study. Civil society can help answer some of the most pressing questions and in some cases, using data that spans decades: How can we reduce the amount of government services a person will need over their lifetime? What predictive factors are there for certain undesirable activities such as crime, bankruptcy or even chronic diseases? We have much of this information today, but it isn't accessible. By studying such data we can contribute to a virtuous cycle by finding better ways of investing in people, developing their self sufficiency, and preventing some from ever falling ill. Otherwise, we will remain behind the curve, doling out cash when people get sick, wind up bankrupt or worse, after a crime has been committed.
Cities will also be able to build better predictive economic models. How much can we expect to collect in taxes from an individual (NPV of a taxpayer)? What programs will increase that person’s earning-power? If economic growth decreases, how much money will the city need to cope with increases in support payments such as unemployment and welfare? Which individuals are more likely to lose their jobs? Which individuals are more likely to lose their homes? What can be done to help them in advance? What neighborhoods are more likely to see an increase in crime?
We are just scratching the surface of such questions today. Having the answers to these questions represents a shift from reactive government to proactive government. And as we begun this post, governments that can be proactive will be able to support virtuous economic cycles. It will also allow government to help people to help other people.
Because the value of physical and social networks is high (proportional to the square of the number of participants) cities must not overlook the power of their own residents. Social networking sites like Facebook and Twitter may be a powerful tool to reshape the culture of cities and drive the decisions of business and social services.
Today, the District government relies on third-party organizations to supply services such as education, drug treatment and mental health. In the future, cities will be able to facilitate peer to peer networks to increase the quality of support and decrease the burden on government coffers. For example, Chicago uses a peer to peer network to monitor elderly during inclement weather. Similar efforts are in use to help those living with certain diseases, mental health illnesses, survivors of violent crimes and so forth.
Social networks also help industries to congregate, just as many pharmaceuticals have recently relocated around New York, Pennsylvania and New Jersey. It isn’t enough today to make an attempt to attract knowledge workers, all cities are making similar attempts. The District must target specific knowledge workers who can benefit from being closer to people with similar interests and work experience, as well as being integrated into DC’s current fabric of workers.
Social networking is also being used by law enforcement to publicize the activities of criminals and monitor the activities of high-school children. Police and neighborhood activists can coordinate to increase the amount of information on neighborhood crimes while limiting access to appropriate levels. This requires close coordination in addition to the ability to maintain confidential records.
Given the increasing prominence of social networking, perhaps the government should investigate the possibility of building an open-source government social networking platform to get more value out of the data in current silos. Then, just like Facebook, developers could write miniature applications to enhance performance. Such a system would undoubtedly prove more reliable and more comprehensive way of organization information than many of the methods we use today.
Earlier we discussed how state CIO priorities are consolidation and shared services. This is going to require government agencies to open up even more than before. Resistance to change, especially sweeping changes, is often enough to derail such an undertaking. It isn't simply the technology of change that will be daunting; it is the internal politics of change too. Undoubtedly, workers will feel that their jobs and livelihood will be threatened, in some cases rightly and in some cases not.
To counter this resistance, the Mayor and CTO will need to coordinate closely. The next CTO is going to have to be skilled at establishing a vision for non-IT staff, negotiating with key agents, and building a guiding coalition. The District is going to need to step up spending on retraining staff for new roles. The greatest issues facing the CTO stem from the politics that have arisen because of the technology available today. If the CTO sees his role as battling civil libertarians then he will be doomed to failure. The CTO will need to see himself as a coalition builder who can lead a fractured group uncertain of its own destination.
Mr. Mayor, I hope this post has been useful for you. I've included a lot of links to relevant articles.
I hope that when you select your next CTO, you will choose someone who has the soft skills to succeed in addition to the technical skills. The next CTO will need your support to set strategic priorities and implement organizational change for all departments. You should work closely with the CTO to create groups that can tackle divisive issues such as a universal ID number. Remember, the next wave of IT for the city is not simple re-engineering the way groups of people do business, it will be about re-engineering the way the entire city government works.
PS, the posting below was for class discussion.
Thursday, April 23, 2009
Given that revenues stem from income taxes, corporate taxes, sales taxes, property taxes (based on home values), and fees the core competence of a government is its ability to bolster the local economy.
Therefore, this paper will examine how Moore’s Law, Metcalfe’s Law and Bandwidth law can reinforce a positive or negative feedback loop in a city economy. I believe that four of the items in the exhibit have the potential to revolutionize the way that city governments perform.
Cities collect massive amounts of data on their citizens and businesses. Such information include licensures, use of services, location, payment of taxes, qualifications for and receipt of city services. However, today much of this information remains in data silo’s, inaccessible to other government entities and even public researchers seeking to find solutions to problems facing cities. As both bandwidth and processing power increase, the ability to send much of this data over networks is also enhanced, provided that such information can be linked together.
For a time, social security numbers were a de-facto national id number. Governments are going to increasingly search for ways to make their databases interoperable. This will allow them to set up more one-stop shops and reduce frustrations and runarounds.
Once such linkages are created, governments can aggregate data, make it anonymous, and publish it for study. Society at large can help governments answer some of their most pressing questions and in some cases, using data that spans decades. How can we reduce the amount of government services a person will need over their lifetime? What predictive factors are there for certain undesirable activities (crime, bankruptcy…).
Cities will be able to facilitate peer to peer networks to decrease the burden on government coffers. Today, Chicago uses a peer to peer network to monitor elderly during inclement weather. Similar efforts are in use to help those living with certain diseases, mental health illnesses, survivors of violent crimes and so forth. Social networking is also being used by federal agencies to monitor the activities of criminals. Police and neighborhood activists can coordinate to increase the amount of information on neighborhood crimes while limiting access to appropriate levels. Further, social networks can be used to enforce compliance
Cities will be able to develop predictive economic models. How much can we expect to collect in taxes from an individual (NPV of a taxpayer)? What programs will increase that person’s earning-power? If economic growth decreases, how much money will the city need to cope with increases in support payments such as unemployment and welfare? Which individuals are more likely to lose their jobs? Which of them are more likely to lose their homes? What can be done to help them in advance? What neighborhoods are more likely to see an increase in crime?
Based on Scott and Prof Venkat’s comments, I have expanded my thinking away from the consumer a bit to include other ways a grocery chain can adopt its business model. Although I still think technological changes at the consumer level could have a greater immediate impact to Shaw’s profitability, it’s true that utilizing technology to develop new ways to expand the normal “sell food” business model of grocery stores has very significant longer term potential as well.
I plan to discuss what Shaws can do on a consumer level to get up to speed and even push boundaries in terms of technology, while also exploring what B2B side services can be enabled by technology improvements throughout the value chain.
I've previously mentioned many consumer technology related ideas. On the business side, I have a number of ideas related to Shaw's role of data capturere and retailer of other's goods.
For example, take the shopping data that Shaw's collects. if Shaws were to open or sell access to real-time customer shopping data, companies could add extra value to the shopping experience through coupons and suggestions that influence other products to be purchased. This would give the food suppliers a truly dynamic way to interact with customers and is an example of one of the ancillary revenue streams that Scott and Prof Venkat suggested. Additional examples could include allowing other retail partners access to information such as letting Weber cross sell grill equipment to people who buy lots of hamburgers, etc... At the core, Shaws knows food and retail, and should not deviate too far from their strength, however, creating value through the data they already collect (or will collect once their technology is updated) could be an intersting way to expand the business model. There is one example - I'm working on developing other ideas and ways they can expand their B2B offerings and create value.