IOT: Why Do We Care

To Start With

Disruption has been the keyword in the technology landscape of lately and the kind of disruptions that we have witnessed in past 10 years have been much more than what human race has seen in past except for the World War II era. We have seen how this disruption have made computing so pervasive that we start and end our day with computing devices, that would have qualified to be called as Super Computers at one point of time in human history.

But after so much disruption, IoT promises to be another disruptive technology that have the potential of impacting every facet of our life and every facet of industry in long term. We have learned from our mistakes from internet era, and the evolution of IoT is cases based as of now. But before embarking on our journey to unfold the impact or potential impact of IoT, we have to understand why connected devices qualifies to be called disruptive technology.

It started with

We have seen over past few years that technology has focused on improving customer profiling, and generating meta-data to make it possible for suppliers to reach to their customers. In the process things have moved from creating all the beautiful arches at entrance of your shop to cost per click model. The cost of click has been largely the game of few large players that control search market, and e-commerce websites who have so painfully captured our buying behavior over months of purchases.

But this data driven approach doesn’t come free, and these players have offered some value proposition to end users. Be it efficient and relevant search or be it discounted products.

But invariably these platforms have captured information that has been shared by users consciously while taking some action or other. Whereas connected ecosystem offers an advantage that the information entry and capture becomes context based without explicit entry by the end user, and hence leads to better data quality.

Threat or Opportunity

There is no doubt that IoT is the biggest change that will impact all our lives going forward, and for various industries, be it e-Commerce, manufacturing or technology the impact of IoT will be the way these industries perceive this. For industries like digital marketing, IoT would require the digital marketing firms to adapt to new technology as the existing technology is going to be irrelevant in near future.

People will spend more time with small screens like wearable, and more time with the benefits from technology, rather than looking at the pretty interfaces. In such scenarios analytics will play increasing role in predicting when a certain purchase decision is about to come, and accordingly customer targeting is going to be precise

Well these are some specific scenarios, and I believe the best way to realize the impact of IoT would be discuss specific use cases in details, that I would touch upon later on. For the time being, lets wait, watch and predict.

The Blurring Lines of Media Entertainment Access……..

The technology world is taking its turn at an incredible speed, which is evident from the fact that the past without an iPhone is not too distant. From an iPhone to today the world has changed to such an extent that we have started demanding a lot from technology. From buying baby diapers online to books, we have seen a change in our buying habbits. But there is a bigger change that is happening, which is not evident at first glance. It is change in the consuming habbits.

By consuming habbits, the reference is towards the way we consume digital goods, and services. Be it movies, eBooks or music, our habbits are changing. We want all the information to be on our finger tips, be it a late night movie in our cozy home, or to catchup an episode of Boston Legal. The underlying effect of this change in consumption trend is the changing role of various devices be it television, mobile or tablet. The old age platform of entertainment like television, are moving towards new usecases and the elevance of digital television is losing its relevance due to inherent inflexible nature of content and content on demand is essentially taking baby steps towards capturing the eye-balls at home. Till now the reach of content on demand was limited to laptops, PCs and mobiles, but there is a major push towards taking it to the homes on a larger screen.

In this transformation the devices OEMs with limited control on content will probably restrict their engagement with customer to one time transactions, but the content providers see towards gaining windfall profits due to possiblity of becoming mainstream entertainment content provider on the primary screen at home. An example of this phenomena is Youtube which has seen net revenue CAGR of 50%(source: emarketer.com) from 2011 to 2015. With the acceptance and adaption of Smart displays, that can access internet, the revenue growth is poised to pickup, and video adverts which have been forte of television channels is going to face challenges from unexpected quarters. 

Online Content Providers	Satellite Channel Content
1.    Context Sensitive ads 2.    Captur statistics of ads exposure 3.    Limited capability to directly capture conversion 4.    Better market targeting	1.    No context sesitization 2.    No information about ads exposure 3.    No such capability 4.    Generic market targeting

The advantage that platforms like Youtube, and Dailymotion have as compare to television channels is that these platforms can serve the ads to users based upon users persona or context. These context sensitive advertisement will have higher probability of capturing the mind share of viewers. Further on a TV screen viewers might not be inclined to skip the ads as they do on laptops/PCs.  Companies like Google are trying to give momentum to this trend by products like Chromecast and Chromebit. With the direction towards IoT the context of user will be defined more accurately and the user targeting will become increasingly more specific to improve conversion rate.

This change in consumption habbits has multiple stakeholders playing their roles simultaneously, with each facing their set of opportunities and challenges. These stakeholders include end user device OEMs, content providers and advertisers. I will touch upon the opportunities and challenges for these players in coming articles in details. I have already touched upon the topic of how Google has invested on fortifying its position in an era of mobility with smart investments like Android. I Would really like to know your views on how you see the phenomena of blurring lines between various content sources going to unfold in future. 

Its Sales Time…… A Story of Industry Convergence

Well As all my previous articles talked about strategy that is 60,000 ft. above the ground thing, in my current analysis/observation/rant my focus is moving to 30,000 ft. above the ground things.

I have always been amazed by strategic actions companies take to fortify its core competencies. In this process their core competencies evolve and they tend to transgress on others ground. Google, has core competency in the domain of search. They always want that users never stray away from their websites, mails and operating systems. They paid a billion dollar every year to Apple to ensure that their search is the default search on apple devices. They paid a billion dollar to an operating system startup, and then gave away the mobile OS (Android) free of cost to all the companies that were struggling to put together a reliable software platform to compete with iOS. And today they have their applications on 85% of smart phones as default and more than 90% smart phones in total.

But as market never remains the same and continuous change is only constant thing. Samsung the biggest player in Android smart phone market plans to come with Taizen OS. Amazon modified the stock Android and made its own android for kindle devices and Amazon Fire phones. Apple that used to be pinnacle in terms of product prices is offering products like iPhone 5C to target price conscious customers. There seems to be paradigm shift where focus is on two things:

• 1.       Market Share
• 2.       Eco-system ownership

But why such a frenzy when everything is going fine for all the big players. And at that time Google’s Eric Schmidt’s stating that Amazon is their biggest competitor.

Well to understand all the crazy activities we have to understand one basic thing, everyone works to earn money. And digital world has two primary ways to earn money either sell advertising space or sell advertised product. So instead of writing it in thousand words a picture will save yours and my effort to be on same page.

So how do you want to earn money, that’s the question whose answer will tell you, why facebook wants facebook smartphone to click with masses. Why Amazon wants people to use Amazon Fire and why Google wants to own ecosystem.

If we take a broader look at smartphone market specifically, devices are becoming commodities but the money lies in Advertisement selling and online retail. If a company has strong grip on software ecosystem every device can be considered as a retail store in the hands of end user. They are end user who buys stuff online and are target for advertisers. Hence for all companies who want to make money they have to control the mobile ecosystem primarily software.

So where does it leave Samsung. Well the answer lies in Tizen.

ROLE OF HR IN MERGER & ACQUISITIONS

Introduction

he M&A activities are becoming the one of the most important activities in the life of an organization. There has been a paradigm shift in the role and kind of M&A taking place over years. The M&As throughout the 1960s were mainly due to unions between conglomerates, the 1980s and 1990s has witnessed an increase in M&As between firms of different sizes and different industry types.

The primary purpose of merging and acquiring new firms is to improve overall performance by achieving synergy. Synergy is defined as utilizing the combined resources of two firms more effectively than the utilization levels achieved by the firms individually.

The role of HR in managing and ensuring the success of any M&A activity can’t be ignored. The process involves various stages that matures along with the various stages in M&A activity. The process can be broadly represented as:

 Pre-merger stage

During an M&A activity we have to define what should be the approach towards the M&A. There can be many approaches with emphasis on different things like:

• Using one or the other culture

• Creating a culture that incorporates the strongest aspects of either culture
• Creating a completely new culture that does not use either culture as its base

The M&A can lead to four decisions that may require proper handling of the situation. These are:

1. Integration: It occurs when members of the acquired firm want to retain their independence & cultural identity. It leads to structural assimilation of two cultures, but little cultural and behavioural assimilation
2. Assimilation: In this process one group willingly adopts the identity and culture of the other. Thus the firm that adopts the culture of the other firm lose its independent identity.
3. Separation: This approach calls for minimum cultural exchanges between the two groups, and each will function independently. Both the firms retain theri identity and culture.
4. Deculturation: It occurs when the culture of both the firms are lost during the process.

The four options can be shown in the four quadrant, representing the value attached by the acquired firm to its culture?

Under these situations the role of HR can be represented as:

• Help to identify issues/planning using due diligence 
• Plan due diligence for people/organization cultural fit  
• Help to educate the “deal” team 
• Help to develop acquisition guidelines 
• Estimate people-related transaction and ongoing costs 
• Identify/assess cultural differences 
• Estimate people-related savings 
• Recommend HR policies and programs 
• Validate intangible assets 
• Assess costs of integrating hr systems 

During the merger stage

During merger employees should be provided training for smooth transition to cope up with the concept of constant change, to develop new relationships, and to engender the support of new managers.

The problems faced during this stage can take any of the following forms:

• Culture, image and identity are at stake in a cultural integration
• Employees will feel a great sense of loss
• Their pride and confidence may be shattered.

This may lead to mass exodus of the employees post merger from the company. The people affected by a merger or change of ownership become detached and cynical. Those who lose something in the cultural game tend to protect their situation and resist, trying to maintain the status quo while ensuring they are dispensable to the new organization.

It is not what is done, but rather how it is done that really matters. People crave to be treated with respect, to be identified with the new organization, to be accepted as members of the new team and to keep their status and prestige within the new organization. The most important way to execute a merger and change a culture successfully is to be open and honest with the employees. Thus the role of HR becomes to:

• Develop strategies for employee communications
• Design programs to retain key talent
• Plan and lead the integration effort 
• Develop total rewards strategy for new entity 
• Help new organization cope with change 
• Define organization blueprint and staffing plan 
• Monitor employee attitudes and engagement 
• Manage selection and placement process 
• Advise on productivity/workforce synergies 

Post-merger stage

In case the executives of organization consider themselves to lose in the process of merger, they may tend to go through a process called grieving. The process has the following stages:

1. Denial: In this stage executives might not accept that the merger could take place and expect that the offer will be withdrawn somehow.
2. Anger: In this stage the executives might feel angry with the acquiring firm or even at their fellow executives for allowing this.
3. Bargaining: At this stage executives might expect to develop propositions that their status quo will be maintained.
4. Acceptance: This is the stage of submission in which executives might think of accepting the changes taking place.

The post merger mindsets can be classified into three different categories:

• Ready: These are those employees who are excited and zealous regardless of the fact that there will be employees who will resent this positive outlook.
• Wanting: These are the employees who do not get the job they wanted and are now trying to figure out their course of action.
• Wrung Out: These are the extremely pessimistic employees. They always consider that the change is towards the worst. Conducting one-on-one interviews with them is one way to find out how each employee feels about the situation and perhaps to find ways to work through the situation.

The role of HR in this stage will be to:

• Align HR policies, programs, and practices with business practices
• Monitor progress of people-related synergies and
• Ensure workforce momentum is sustained
• Ensure incentive programs are designed to reward executives and key employees

HR should also encourage the new company’s leaders to do the following: 

• Recognize and reward behaviors that support the new culture 
• Consider cultural behaviors that support the new culture
• Align culture with the vision and business strategy of the combined organization
• Identify the desired culture and gain agreement from senior management and opinion leaders of both organizations 

This article was originally written by me for my college magazine. The original article can be found on: http://xlrisapphire.wordpress.com/2009/10/29/role-of-hr-in-merger-acquisitions/

References

Appelbaum, S. H. (2000). Anatomy of a merger: behavior of organizational factors and processes throughout the pre- during- post-stages (part 1).Management Decision , pp: 649-662.

Ivancevich, J. M. (1987). Executive Actions for Managing Human Resources before and after Acquisition. 0Academy of Management EXECUTIVE , pp.127-138.

Larsson, R. (1999). Integrating Strategic, Organizational and Human Resource perspective on Merger and Acquisition: A case survey of synergy realization.Organization Science, Vol. 10, No. 1 , pp. 1-26.

Ground is slipping below your feet....Planning the obsolescence

As they say success is a path not a destination, this is the reality that all firms are facing today. Take any market technology, oil, publishing, or automobile every sector is facing one breakthrough (read discovery) after another. Most of the time it is enabled by technology behind it. Take example of oil exploration in Canada, technology made it feasible and cost effective to extract oil in Canada and today it is poised to be the biggest oil reserve in world. So let alone Nokia's dominance in mobile phone market, even the dominance of Middle East as top oil supplier of world is not safe. But the biggest turmoil today is in the field of technology, which is not only shaking the biggest players in market but the fate of small failed players go unnoticed. Technology has stopped improving gradually; it is going ahead in leaps and bounds. It’s moving by making real dreams of innovators or evangelists. Not so long ago Nokia and Microsoft were dominant players in mobile and computing domain, with Apple being at best a niche player that was selling insanely successful music players (that too without speakers). But suddenly Nokia that was trying to take control of its ecosystem with acquisition of Symbian, found a rival from a different world different from its own. And today we can see how many players have taken lead and leap ahead of Nokia. But can a company avoid such a fate in first place. What went wrong?

Obsolescence Benefit Matrix

http://ericvansingel.com/evsprologue/
2011-03-12-damn-you-planned-obsolescence-ipad-2-drops/

I think the place it all went wrong was not planning obsolescence effectively. Every product has its life span or period of differentiation, and after that no matter how good the product is either someone will copy it or some better product will come in market to usurp it. Planning product obsolescence is not a new thought, it dates its roots back to 1950s when manufacturers would design products such that their life span is limited or product is made obsolete by a new design after a time period. Those were the days of depletion obsolescence where manufacturer will design a product to deplete after a time period and user is expected to replace the depleted product with a same new product. But today what we are facing is technology or systemic obsolescence where one product is made obsolete not by its depletion but by a newer product with new features, or new technology. Where obsolescence by depletion was in favor of manufacturer, obsolescence by technology requires manufacturer to be at forefront of new technology.

For a company to maintain its relevance in today’s' time it is important to plan obsolescence of its technology, or someone else will plan it. In this war no one is protagonist and no one is antagonist. It’s just a journey to come up with new technology, it’s just a journey to plan obsolescence, because if you wont someone else will.

Fortifying Core competencies

The average life span of a company in today’s world is less than 10 years, and every 10 years half of companies in fortune 500 gets knocked out of list, if not knocked out of business. So what large tech firms like Google, Apple, MS and Facebook are doing to stay in foray for longer.

Just having a look at portfolios of these companies we can say that they are trying a whole array of approaches to stay in business. If we look at MS its trait is perseverance. It has been knocked out of internet age multiple times. Google knocked MS out of search business. Yahoo took its share of email business. But MS persists and will persist because it has money and no other option.

Similar is the case with Yahoo. Google took over search business market and has grown as a large player in email service provider market. Again game of persistence is in full force for Yahoo. We just have to wait if it comes out with some differentiated product or feature before it runs out of money or not. But talking about internet age, where Yahoo has faltered and what Google has done right? It’s the strategy of fortifying competencies.

Despite plethora of products that comes out of Google every year, the dominant strategy of Google is clear, it wants to stay number one search company and hence entry point for everyone using internet. Lets look at how Google is trying not only to capture the largest market share in a market where it dominates more than 50% share, but it is trying to grow market. Let’s see how its different products help in doing that.

Chrome OS: Chrome OS is essentially laptop equivalent of Android OS, which provides basic functionality of OS. It relies on the fact that users must migrate from their current stand alone desktops with all the processing power to a network, where data and most of processing resides in cloud. User have to rely on internet and hence the potential user base for Google increase and yes the default search engine on Chrome OS is Google

Chrome browser: Chrome is a browser provided by Google and is based upon open source Firefox engine. But its importance lies in the fact that it helps controlling Google the ecosystem on desktop where its search engine is used. Thus removing dependence from any other company controlling the browser space.

Android: Google practically has been late starter on mobile platform. Probably its focus has been on Chrome OS as the next big thing on devices used by internet savvy generation. But the next technology wave as spearheaded by Apple has been mobile and tablets instead of net books. Thus two years after launch of first IPhone Android OS was Google’s attempt to own the ecosystem on mobile devices to provide search results. Today with more than 60% of smartphones running on Android, Google’s strategy can be described as success.

But why so many products, and so much investment just to ensure that customer comes to Google search from all different platforms. The answer can be found in the fact that Google pays apply USD 1Bn each year to ensure that it is default search on IPad and IPhones. Why not just invest these dollars in owning an ecosystem rather than paying a rent.

Well Google’s this strategy of fortifying the walls aims at ensuring that the company stays in future 500 list for longer than 10 years and stays as the leader in search business.

PS: The opinion and analysis shared above is based upon the events that are in public domain. Please share your thoughts on the same.