June, 2016

  • June 28, 2016
  • Denis-PombriantThe great thing about the software world that I spend so much time in is that it is very much a meritocracy, imperfect to be sure, but a place where merit is usually rewarded. That’s why the controversy over the Brits voting to leave the European Union seems so strange.

    In CRM terms, the decision to leave the EU looks a lot like dissatisfied customers taking a walk. I just wrote a book about customer loyalty and the whole Brexit looks like a riff on the movie, “How to lose a guy in ten days” with Kate Hudson and Matthew McConaughey. Everything looked so good at the beginning and watching it all go south was sometimes funny but also sad.

    If the EU could manage to find ways to alienate its constituents it didn’t miss many opportunities. In the vendor world could you imagine the same kinds of behavior? Over controlling, micro-managing, killing economies for the sin of over-spending, enabling chaotic borders, ignoring people’s feelings, and many other things drove the voting. At the end of the day, the vote wasn’t even close.

    CRM was developed precisely to help businesses to avoid the beaucratization that can leave customers out in the cold. Its many modules are designed to capture customer data, analyze it, and help vendors to make important decisions about what to do next—all in an effort to retain customers and keep them engaged. CRM is about proactive personalization and contextual interaction, two things in short supply in the EU.

    The Britons who voted to leave the union were not engaged in the European project. They’d spent the quarter century after the Maastricht Treaty absorbing the almost daily reality of big brother decision-making that too many didn’t think benefitted them.

    Unfortunately, another aspect of life with CRM might have contributed in some small way to the vote to leave. I am referring to the understanding, honed by increasing reliance on subscriptions, that one can unsubscribe from a vendor and move on whenever the mood strikes whether or not the mood is justified. No muss, no fuss, no need to consider the aftershocks to the vendor. Unfortunately, we’ve increasingly become accustomed to chasing the newest thing that coruscates with effulgence.

    But what works at a micro-economic level can be absolutely toxic when attempted on the macro plane. Governments are supposed to last and treaties are assumed to as well; they are the foundational elements on which we base decisions about the rest of our lives. They are never written in such stark terms as the GAAP accounting standards but those standards are a good example.*

    What’s most frustrating about the Brexit is that so much has gone on for so long and the channels of redress are so narrow that the only seeming solution was the vote that occurred last week. But as I’ve written before it seems there is, or should be, a pony in that pile of manure and there is.

    The EU was best when it did least. It was an economic union, a trading paradigm that enabled small countries to bypass the red tape inherent in national currencies and far too many border crossings each with their own rules. Computers can handle that work today and as for the rest of the EU? It would be nice if the EU members accepted that they’d overbuilt their union edifice, that what’s needed is less political union and simply more friction free commerce.

    On another level, I sense a business opportunity for CRM that dwarfs anything yet seen. For several years, the vendor community has been heads-down focusing on the consumerization of its software. Making the software that mediates relationships with customers as intuitive and friendly as possible is part of what drives the digitization wave.

    But a criticism of digitization has always been, for what purpose? The answer that is coming into view seems to be CRM for constituents rather than customers. Government outreach to citizens is too often bare-bones and decrepit. But what if we applied CRM ideas and technologies to government? No doubt there would be naysayers but I think their foot dragging would be in the service of a status quo that benefits too few and no longer works. It would be obvious and these naysayers could be discounted.

    A CRM approach to government means incorporating all of the social, mobile, and analytic capacities we now have but on a grander scale. It means asking for more citizen participation in communities while promising better response and outreach. Importantly people could vote with CRM raising participation rates. I know this would scare a lot of politicians who depend on low turnout and sometimes even suppression, but there it is.

    This political season is full of charlatans who are too in a hurry to knock things down and who haven’t a clue what to replace the old structures with. This is it: bring government into the 21st century using CRM technologies and ideas so that we never have a Brexit situation ever again.


    • The Four Basic Assumptions of Accounting
    • Economic or Separate Entity: The company is treated as a separate economic entity for accounting purposes, even if it isn’t a separate legal entity.
    • Monetary Unit: The only business transactions recorded are those in financial terms (dollars and cents in the U.S.).
    • Time Period: Financial reports cover a specific period of time.
    • Going concern: Financial reporting assumes, unless otherwise known, that the business will continue operating indefinitely.

    Thanks to Carol Wiley, Accountingedu contributing writer http://www.accountingedu.org/gaap.html


    Published: 7 years ago

    europe-map-countries-capital-high-resolutionResults of the recent UK referendum on leaving the European Union will be playing out for many months to come. How it plays out, and the shape of the ultimate result, are still very much undecided. Already hypotheses about thwarting the apparent “will of the people” are gaining currency and, as an American with at best tangential understanding of the situation, I am nonetheless willing to offer some ideas.

    Cameron’s duty

    In noble style David Cameron fell on his sword after the vote by announcing his resignation effective possibly by October. This is exactly the wrong course for a bunch of reasons. First, I was surprised to learn that the referendum was non-binding. True believers will no doubt say it’s the will of the people and must be obeyed. But I refer them to my mother who often told me, if everybody else was jumping off the Brooklyn Bridge would you jump too?

    In truth, the referendum was the result of a self-seeking and narcissistic politician who threw the country under the bus to assure party unity and his own re-election. Much of politics today is cynical, and crass and aside Donald Trump’s pronouncements on any given day, Cameron’s Faustian bargain might become the poster child narcissism by a sitting elected official.

    If Cameron was really so dead set against leaving the union then he should realize that at the moment he is playing, or at least could play, with house money. The result of the vote has encouraged factions in at least in France and the Netherlands to seek their own plebiscite. This can’t be good for Europe for if either of these countries were to also fall to the siren song of ditching the EU, it could start a stampede for the exit. At some no far off point all that might be left of the EU would be Portugal, Ireland, Italy, Greece, and Spain plus their banker and not-so-benevolent overlord, Germany. Oh, and I almost forgot, the useless Euro which can be seen as a primary reason for the breakup.

    Cameron’s duty in all this is simply to prevent it by sticking whatever body part is needed into the dyke while emergency repairs are made. With nothing to lose, Cameron should not resign but push as far as possible against implementing Article 50 (all 261 words of it) risking a vote of no confidence. Under the circumstances losing a confidence vote is the only acceptable reason for the Camerons to evacuate 10 Downing Street.

    Fixing it

    The electorate have every reason for being mad at the direction of life under the EU though some of the effects are more closely linked to secular economic fluctuations than bad politics. But the approach is all wrong, it smacks of hyper consumer culture in which fickle consumers ditch perfectly good and useful products in pursuit of the brilliant and coruscating. When did we become a global culture that couldn’t fix anything?

    We became that culture when we stopped listening to the other side, when we began demonizing them in quasi-religious terms. Can an opponent be truly evil? Perhaps but such designations should be reserved for the few times in a century when a Hitler, Mussolini, or Stalin emerges.

    The current tiff over the EU more resembles A Swift essay on Lilliputians, Brobdignagians, Houyhnhnms, Big Endians and Little Endians. The Endians are a particularly interesting dichotomy. According to Swift they fought over whether boiled eggs should be broken from the pointed end or the more blunt end first. It was Swift’s way of showing distain for the polarized politics of his day.

    I don’t know what to do about this dynamic other than to promote a culture of listening, to talk about the problem and to find common ground if in nothing else than in our universal exhaustion with the bickering.

    A parallel

    History does indeed rhyme as Twain observed. Though it never repeats precisely, if you place a large number of humans in relatively similar circumstances you should expect similar results. Consider the American and French Revolutions with their different and for some dire consequences or even Berlin and all of Eastern Europe circa 1989.

    A less bloody but instructive example for today comes from America’s first decade. The Articles of Confederation, America’s first governing document, like the Maastricht Treaty, failed to organize a central government that had the power to be, well, a government. There was no national currency, taxes were a hodgepodge in which states tried to gain revenue from outside through tariffs. This zero-sum game was a real drag on trade. There were other deficiencies too, enough to cause regular people to unite in making changes.

    The articles were created in November 1777 and remained in effect throughout the Revolution until they were replaced by the federal constitution. In 1786 The Virginia Legislature suggested all states send delegates to a convention in Annapolis, MD to discuss ways to reduce interstate conflict and that was the beginning of the process that led to the constitution.

    In the process the delegates determined that a completely new constitution was needed, one with the centralized power to be a government but which still devolved all but essential power back to the people and the states.

    We know how the story ends. By 1789 a constitution was in place and a viable number of states had accepted its terms, albeit with ten of the best amendments one could ask for.

    My point is simply that the various nations of Europe really do have more in common than not but they need a modus vivendi. Dissolution of the current over-built structure was only a matter of time once the European constitution unraveled in successive votes by the French and the Dutch in 2005. Without a constitution there is little more than a trading block with too much overhead so eliminate it.

    Negotiating the UK’s departure (problematic in that Scotland for one is not having it) would look a lot like renegotiating Maastricht anyhow and not a lot different from ditching the Articles for something better.

    While some have suggested that the divorce should be made to look as difficult and painful as possible to discourage others from doing the same, we should keep in mind that some and perhaps many on the EU side of the negotiations might have sympathies with the plaintiffs. That said, a negotiated split might begin to look a lot like a renegotiation of the terms of union anyhow.

    In my last post I suggested that technology could play a role in smoothing some rough edges. I’d go further now to say that a trading union is all that was initially envisioned and all that’s really needed to help prevent another European war, which people in the middle of the twentieth century wanted desperately. There are trading blocks like NAFTA, and the WTO that reduce barriers to trade without entangling themselves in a new currency, a constitution, or an overbuilt bureaucracy. That seems to be enough. There hasn’t been even a battle between the U.S. and Canada since the Revolution, or with Mexico since 1848 (and there won’t be, Trump willing).

    While we’re at it, note the differences between the American Constitution adopted to form “a more perfect union” and the bloated promise of Maastricht’s “ever closer union.” How can any sane person agree to that? Were they not aware of the hyperbole involved? The role of asymptotes in math? Ever closer is quantifiable and so gives free license to bureaucrats whereas more perfect is purely subjective.

    If the original premise of a united Europe was that countries that traded together would be hard pressed to take up arms against one another, then let’s have some of that and forget about sitting around the campfire singing Kumbaya. That’s Cameron’s brief for now, not this ridiculous slinking off at the first sign of difficulty. David Cameron, you broke it, now you have a moral obligation to fix it. Get going.

    Published: 7 years ago

    2d7c08db-9d87-43ce-921f-513acca86f7e-2060x1236I was not a fan of the British exit from the European Union (Brexit) but as the returns are broadcast around the world, I think I understand it—at least as well as a man who owns a hammer understands the world’s problems.

    Before the ink was dry on the enabling legislation, the Maastricht Treaty (a.k.a the Treaty on European Union or TEU), it was already obsolete. It was no secret that the idea of a united Europe would serve as a damper on Europe’s repeated bloodletting of which the twentieth century’s two world wars were a mere sample. But this thinking was merely a good example of fighting, or in this case preventing, the last war.

    The big need that Maastricht provided a solution for was commerce. The 28, and soon to be 27, member states each had their own currencies and doing business in such a fractionalized area presented big challenges while wasting significant sums of money, time, and other resources simply to overcome the friction inherent in continental trade. The same was true for moving people around with all the passport and border friction.

    The overhead of having to support all of the functions of a nation-state also represented significant costs especially for smaller countries. For instance, Denmark has a population of about six million, nearly the same as my native Massachusetts yet I can’t imagine how my state could afford a small defense force, its own currency, and border patrol, along with shouldering the significant costs of running embassies around the world. Also, some of the western states have populations in the half million range; though they might be large in area they couldn’t support the functions of a nation-state either. So I empathize especially with smaller European countries, for them joining a larger union made sense.

    A common market serves the original need nicely but the project immediately ran into scope creep, that tendency for a project founded on a good idea to expand until it is more bother than it is worth. Maastricht was like that. On top of a simplified trading system leaders added a political structure and constitution (that was rejected) and a common currency that could only be maintained by micromanaging otherwise sovereign nations’ economies. The common currency worked well in good times but when economics took a nosedive many of the weakest members of the currency union such as Portugal, Ireland, Italy, Greece, and Spain among others found they were like small sea creatures washed up on a beach by high tide.

    “Europe” the designation people like to use to signify the post Maastricht continental outlook, simply took on too much. It was unreasonable to think that the ancient countries that make up the union—many tracing their origins to the Roman Empire—could unite and become what many called a United States of Europe. The union is now foundering on its currency but also on its nonsensical insistence on porous borders that freely enable anyone from one part of the continent to move elsewhere.

    You can’t blame individuals for wanting to find a better life, but it should have been seen that the path of least resistance for people in poor or unstable circumstances is to move instead of attempting to overcome what for many was centuries of mismanagement, corruption, and discrimination. The Syrian diaspora is all the proof you need.

    So what does this have to do with technology?

    Very simply by the time of Maastricht, good, fast, cheap, and reliable technology was already in place helping to sort out some of the thorniest issues in trade and exchange and it has only gotten better. The European solution was and still is not to form a physical union but to form a better virtual one—there should be an app for that.

    For example, there really is no need for the Euro as a circulating currency and frankly the world would be better off if it became a reserve currency only. There are only a few reserve currencies in the world today the U.S. dollar is predominant but there can be room for another. If Europe went back to sovereign currencies like francs and guilders and lira, every country would be free to inflate its currency as needed greatly reducing the real problem of how Portugal or Greece would pay back their Euro debts. Inflation would make a currency less valuable and thus it would purchase fewer Euros but as a matter of practical internal or national economics national currencies could do much to get economies running again if they had their own currencies again. This is not just me talking, it’s based on concepts developed by people like J.M. Keynes.

    There are apps for this and for many other things that Maastricht attempted to fix and if the apps don’t exist they can be made. Purchasing with smartphones and plastic instead of cash would take care of nasty exchange rate issues in that back end servers would do the conversions. Crossing borders could be as simple as implementing national or even international biometric identification systems like those currently used at airports.

    True, the free flow of people across borders would slow but that has not proved to be an unmitigated good thing for the host countries anyhow. Forced to stay home there is no telling what creative solutions local populations and the international community might develop for seemingly intractable problems. If this sounds cruel it is not intended to be, it is simple a realization that moving a population across international borders doesn’t solve that population’s problems, it simply moves them.

    So my point is that Maastricht can be replaced with modern technology and I’d venture that if it had happened ten years later or if technology had matured sooner it might never have been implemented. Applying technology is a market-based solution that, of its nature, would solve some, but not all, of the problems Maastricht tried to undo—remember the scope creep issue.

    Maastricht should not be seen as a failure. It was a bold experiment in self-governance that didn’t work well enough. The United States went through a similar episode after the Revolution. Our first government was organized under the Articles of Confederation, which lasted from 1777 to 1789 when the current constitution went into effect. Maastricht has lasted twice as long.

    In business as in almost any other human endeavor success is measured by how fast and how well you fix your mistakes. Maastricht was a good attempt but it has been overtaken by events and technology’s inexorable march. Time to pivot.

    Published: 7 years ago

    Denis-PombriantI am having a flashback to the latter decades of the 20th century when manufacturing was all about making things smaller. There was a running joke about sending things to Japan to get shrunk but I don’t recall it. I do remember a meme that said if car production had followed a curve anything like the one in Moore’s Law that you could get a Rolls Royce for a buck and change though.

    We’ve seen the phenomenal shrinkage of most hardware devices in the last decades. Computer rooms now fit in your pocket or even on a wrist and headphones rest inside the ear as the economy careens toward zero marginal cost for most things. It hasn’t all been good or bad it just is—I am not in the camp that complains that our jobs are decamping for lower cost places. News flash, that’s what always happens in a capitalist system as innovations commoditize. The question isn’t how do we protect old jobs, that’s a fool’s errand. The trick is to invent new ones.

    A friend has a book coming out soon for which he asked me to write a few pages on this phenomenon. I chose color TV. You might scratch your head at that because today everybody knows that TV comes from the Far East. But in the 1990s there was a great commotion about the Japanese stealing our TV industry just because they’d invested in glassblowing in a big way that enabled them to make big picture tubes that were reliable and affordable.

    Back then some business people might have gotten up in the morning fretting about how to make picture tubes but that was then. When the TV business went west we did what we always do in such situations. We invented other things like the World Wide Web, mobile devices, and we scaled up venture capital so that it is practically equal to one of the top 20 economies on the planet. We also invented LCDs and plasma and there are some Nobel Prizes in the bottom of some American closets for those efforts but they’re mostly made in the Far East today too. What are we up to? Among other things we’re curing cancer, experimenting with nanotechnology, building the IoT, and lots of other cool stuff, thank you very much.

    This long-winded intro is intended to position Salesforce’s latest announcement—App Cloud Mobile—in context. Essentially they’ve taken all of the functionality that started life as a desktop developer’s platform and shrunk it down to your palm. The offering includes a no-code environment with Salesforce’s Lightning capabilities as well as the clicks and code development capabilities of Force and Heroku.

    It’s all in keeping with some broad trends to inspire 100 million new people to learn app development, to better position information in the heart of business decisions, and to change the paradigm of wasteful business practices to one that respects information and derives better margins from smarter practices rather than inflation.

    There’s a lot to the announcement and I direct you to the company’s video for more information here. And a Gartner report here. All this is great news for businesses of all kinds and their customers but we can’t overlook the commoditizing influence tools like this provide. As I’ve alluded to before, we are already deep into the commoditization of IT and tools like this simply accelerate the trend. Just as in TV days we need to identify higher value add for basic technologies. I suspect for IT and app development we will immediately need to develop the intellectual tools not to develop apps faster but to identify the right apps to build.

    Introductions like App Cloud Mobile bring these realities into sharp focus. It’s up to us to figure out how to optimize what we have and it’s quite a bit.




    Published: 7 years ago

    thx-entranceSalesforce held its first event just for software developers in San Francisco last week, TrailheaDX. Previously, the company relied on special sessions such as at Dreamforce to educate developers but Salesforce’s declared intention to train up to 100 million developers in its Salesforce Lightning development environment dictated taking additional action.

    The numbers vary but estimates of the number of professional developers working in the industry ranges from 100,000 to perhaps 20 million. It’s Salesforce’s dual contention that the world needs more people skilled in the development arts and that anyone should be able to learn them. The analogy they make is to products like Excel and PowerPoint, specialized applications that enable workers to support their business efforts. In the future, application development will be as essential as being able to manipulate a spreadsheet.

    The comparison is apt provided that application development tools can be made as easy as using Microsoft Office products. But therein lies the rub. Application development is orders of magnitude more complex than using Office products. However, this must be balanced by the realization that not every Office user is a power-user able to write spreadsheet macros or design slides with animation. Apparently realizing this, Salesforce has developed a three-level strategy for developing working apps without any coding, with some minimal code use, and with a highly customized approach to code.

    Trailhead is Salesforce’s highly automated and self-paced education program that enables people with no IT experience to go as far as they want to achieve any of the three levels of application development proficiency. Within the program, users are rewarded with badges, much like you’d expect in any gamified process, whenever they acquire new skills. This gamification will be key to the program’s success as well as to the success of the individuals receiving the training.

    Salesforce is aiming at traditional developers but also at people whose backgrounds are far afield from information technology. The company sees its role as empowering people to attain employment skills that, for example, enable Salesforce administrators to customize their instances of CRM but also to build solutions that capture and manage important business data within specific processes. Historically, a lot of this kind of development has been done in spreadsheets or the data has been stored in paper files. With Trailhead training, Salesforce hopes to give many more people the skills to build such solutions.

    The training is broken down into logical units focusing on things like defining objects and writing code as well as using a series of drag and drop tools that serve to reduce the need to code to a minimum. Simple solutions based on existing or simple data structures can be defined using drag and drop tools and as complexity increases so does the need to write a few lines of code.

    As I look at the offering it occurs to me that greater complexity corresponds to inventing new business processes, which I believe is the whole point of having these tools in the first place. Enabling business users in this way means providing them with the agility to innovate existing business processes or to develop new ones. It’s often the ability to innovate around information that provides differentiation today so I see this capability as becoming essential.

    Salesforce no doubt sees things in a similar way because the company also announced a new $50 million venture fund for its investment arm, Salesforce Ventures. The company had already announced a $100 million fund, which has been well subscribed. But it also feels that there is more opportunity for people who acquire programming skills through Trailhead not only to develop apps but also to start companies.

    As a strategy this is impressive. Not only is Salesforce willing to train people (for free) in app development it is also willing to help found new companies. Today Salesforce is giving revenue guidance for its current fiscal year at more than $8 billion. For the company to continue its growth it will need to sell more generic seats of its platform services in addition to selling its conventional CRM, i.e. Sales Cloud, Marketing Cloud, and Service Cloud (there are other clouds like Wave Analytics but we’re not naming all of them here). Training more developers is a logical way to make that happen. Already, selling development seats is Salesforce’s third most successful business garnering well over $1 billion in revenues.

    Trailhead is a new approach. Using e-learning students can train at their own pace in their own spaces without needing to attend formal classes. The ability to take an online test to certify a particular skill level and receive badges (there are about 130 badges to earn) lends credibility to the training rigor and makes graduates employable.

    My only reservation about this approach and the goal of 100 million trained developers is that it will lead to the Über-ization of software development. When code is so easy to write that anyone can do it, we’ll see a commoditizing effect and a gradual decline in wages for developers. This won’t happen for a while but it can’t be helped because commoditization is a natural part of a successful economic trend. Right now there’s money to be made in application build-out and this condition will last for many years. It’s always best to be early in a trend.


    Published: 7 years ago