LogoTechnology Management Associates, Inc., Serving Business Needs in the Global Marketplace

August, 1997, Volume 1, Issue 4


Joanne F. Gucwa MM CMC, Editor, jogucwa@techmanage.com
Global cooperation and friendship
Welcome to issue 4 of TECHMANAGE.COM, our periodic (we're becoming realists -- "monthly" is what we've been calling it since January!) e-mail newsletter addressing issues relating to the intelligent management of technology. We send it free of charge to subscribers on four continents. Our objective is to present to you practical information and resources on understanding and making the most efficient use of new and existing technology and management practices, particularly for business purposes.

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In this issue:


Our Web site's Brand New Look

I'm delighted to report that our Web site has a great new look! The same easy-to-navigate style now is even easier, thanks to the addition of a left-side navigation map and search engine on every page. We've added a bunch of new sections, including News, Consultant's Discussion Board and Newsletter Archives. Check us out and let us know what you think!


Slam Dunk Computer Camp Huge Success!

Craig Hodges, former Chicago Bull and Legendary Three-Point Shooter joined the Lurie Company (owner-manager of our building) and others in volunteering time and resources to providing disadvantaged children with basic computer skills along with the fundamentals of basketball.

This pilot program served about 40 kids each day on Aug. 5, 6 and 7 from 10:00 a.m. to 4:00 p.m. Free lunch and refreshments, T-shirts and the basketball clinic balanced the Internet, graphics and keyboarding focus of the technology sessions.

Nifty idea. Lawrence M. Cohn, General Manager of our building hopes this pilot program sparks the interest of other companies to contribute their time, talent and resources to projects such as this. For more information, send e-mail to expo@lurie.com or call 312-332-7878.


IMC Western Confab '97; Reno, Nevada. October 26-28

"Strike it Rich!; Mining for Opportunities" is the theme for this year's Western Confab presented by the Institute of Management Consultants. As the designated IMC "Tech Center Techie" I'm in the process of coordinating mini- presentations and acquiring the latest "tech toys" for demo and display at the Confab.

Consultants? Here's your chance to shine in front of your peers. Some of our Chicago sessions were standing-room only. If you've got technology skills (e.g. Internet, soft ware applications, hardware selection) you'd like to share with fellow consultants, please check out the topics at our Web site http://www.techmanage.com/news and let me know.

Vendors? This is YOUR chance to demo your latest wares to a highly-qualified, eager-to-learn group of about 400 professionals. We're looking for Internet access hardware and software, anything portable (we tend to travel a lot), presentation equipment...the tools that make our jobs easier. No hard sell, though. We're a pretty steely-eyed bunch. ;-)


Open Book

Net Gain - Expanding Markets Through Virtual Communications
John Hagel III, Arthur G. Armstrong, Boston: Harvard
Business School Press, 1997

Reviewed by Michael J. Gallagher

There is a lot of interest these days in "Making Money on the Internet." There is even more interest in how non- "Internet entrepreneurs" can or should take advantage of this new communications system -- to grow our own business, for instance, or to serve our customers better.

And there seems to be a lot of misinformation, or lack of information, at least in this writer's view -- which we might characterize in terms of exhortations to get involved -- do something -- because "It feels good."

If you are looking for more substantial advice, then you might check out this book. Not for a minute because it answers the big question completely, but because it does make an honest attempt to move the discussion in a con- structive direction.

The authors (McKinsey consultants) admit at the outset that their "Business model(s)" are incomplete. No one, in their view, has as yet figured out the optimal mix of resources, or the best way to employ them. The authors do not, for instance, suggest that the Internet is the whole answer. Rather, the "Net" they envision involves, or may ultimately involve conventional telephones, faxes, teleconferencing or video conferencing...whatever turns out to work.

Thus, getting yourself a Web Page is NOT what it is all about. What they propose that taking advantage of the "Net" (loosely defined) IS all about, is creating community of customers (or users) who interact not only with the host, but with EACH OTHER.

In a nutshell, that is the book's "Big idea." And the book develops it in several directions, some theoretical, some more practical. First of all, the Internet news groups and chat rooms provide working examples of members of groups interacting with each other -- as does the telephone network itself, for that matter, as long as you know everyone's phone number.

The authors suggest that any-to-any interconnection provides increasing returns to scale, in place of the diminishing returns of conventional economics. One way of explaining this is in terms of the growth of fax technology in the business world. When there is only one fax machine, the value of the "network" is about zero -- there is no one to fax to, no one to get faxes from. However, every machine added to the network opens up a potential path to each of the existing members, and a path from each of the existing members to the new member. Thus, as the network increases in size, the value of each "membership" increases, by an increasing amount. This is why the growth of faxing, to point to only one example, has been so rapid.

The increase, of course, may only be in potential. And it is here that the host comes in, of course. The job of our "Internet entrepreneur," call her what you will, becomes one of adding value not only to members' interactions with the host, but providing ways for members to provide value to each other. It should be clear that even if the amount of value in each inter-member connection is small, the multiplicative effect can, in theory, be vastly larger than that which the host alone can provide. And why the growth of such a network could be similarly, exponentially rapid.

In theory. As a practical matter, the authors are short on examples. One of the few they offer is that of a dialog between two customers in a chat room, comparing the benefits, etc. of the host's product as compared to competitors. Perhaps not a bad example, as far as it goes. For instance, it points up the importance of hosts' providing their guests more than just the host's point of view. (Think, for a moment, about the typical corporate "Home Page.")

I suppose what we are proposing here is violating one of the canons of advertising. But the authors contend, rightly, that customers inevitably know there are competing offerings, and their purchasing decisions inevitably involve such comparisons. Our (actual, by the way) discussion provides value both to the participants, and to the host, to the extent he can observe it. What better way, after all, to get customer feedback than from an objective discussion of this kind? Of course there are privacy issues! But I never said that the authors tied up all the loose ends, did I?

(There are, for the record, less controversial ways to expand customer value. One which is fairly well- established, in fact, is offering complementary products. For instance, an airline's home page might offer not only on-line reservations for air travel, but also for hotels and auto rental. A software company's page might include information on third-party add-ons or enhancements. But this is about as far as current thinking has gone.)

The high growth potential is one reason the authors suggest managers' attention to the emerging technologies is warranted. Once someone figures out how to do things right, in terms of his own goals or those of the company, things could happen fast.

And the classic "Switching costs" issue should also be noted. Once the "Virtual presence" of the successful provider is well-established, her customers will be bound not only to the host but to each other, and less likely to leave than they would if it were simply a question of one host or another. The flip side of this is that the power of customers to make, or break the host's marketing initiative is vastly increased. If another provider has established a satisfactory relationship with a prospective customer, that customer is not likely to be pried loose.

But in the end the book is relatively short on the "How to" side, focusing on the emerging "What." One area left to the reader to discover, is the authors' idea of ways in which separate networks may coalesce into larger and more powerful marketing engines. Sooner rather than later, of course. Despite its shortcomings, I find some real value here for marketing people, and anyone else responsible for the growth and survival of their business. The computer/ telecommunications revolution, by any name, is real; and even though most of us are, shall we say, not likely to become the next Microsoft, using these new tools is something most of us ought to know something about.



"Serving Two Masters"

This is a new feature as of our last edition, now re-named "Dilemmas." It's designed to stimulate conversation between and among fellow consultants, our clients and prospects, and others who wish to leap in.

Consultants, let's discuss what you would have done. You may post your comments and observations at our Web site by linking from http://www.techmanage.com/dilemmas or send me an e-mail, letting me know if you'd like it posted, if you can't get to our site.

We've talked quite a bit in the past about the value of consultant partnering, and we even practice what we preach. Here's a situation I was in a few months ago and one you've probably already encountered in some form or will sometime down the road.

"Serving Two Masters"

The situation:

A fellow consultant (not a CMC) asked me to assist with some Internet-based research for one of his clients. Although he and another contractor were responsible for the majority of the assignment, the consultant invited me to accompany them on the kick-off meeting with the client.

During the course of this meeting, the client asked if the report could also be submitted on disk in a database format (this was a customer satisfaction type of study). The consultant said "no, we will provide the information and analysis as a paper-based report." No question of expanding the scope of work (and therefore billings); just "no can do."

I was flabbergasted. He and I teamed on a previous assignment, where he was likewise lead consultant, and I had done exactly what the current client requested! About 200 phone interviews, 150 quantitative and narrative data points placed in a 6-table, query-able relational database.

Because it was not my client, I kept quiet during the meeting. As we walked to his car I reminded him that we did indeed have the capability, that clients are demanding files electronically nowadays, and that it would increase the fees by about 30%.

Nope. He just wouldn't do it.

Now, I felt bad for the client because he wasn't being well served. But there wasn't a thing I could do about it. The client was not mine, which the consultant made abundantly clear. Of course, I would never approach someone else's client, not even through the back door.

Although we had worked well together for several years on a half dozen assignments, this was no longer a good relationship. My peripheral responsibilities in this project was completed anyway, so I quickly returned all the client materials to the consultant and closed the book.

I hope you found something of value here that you can put to use directly or that might have stimulated some new ideas. Our Web site's always open, the fax machine (and coffee) is always on, and we check our e-mail frequently. Of course your phone calls, snail mail and visits are welcome as well. We'd be delighted to hear from you...anytime.

Technology Management Associates, Inc.
(312) 984-5050jogucwa@techmanage.com

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