Project management is an area of expertise that has undergone some significant development in the last decade. A business project can have a far-reaching effect on the business and result in either tremendous improvement in the businesses ability to function in the marketplace or a significant setback to that business entity.
The idea of a formalized project management approach has been around for quite some time. So it was not uncommon for any manager to find themselves learning the discipline of a structured project management system. That project methodology takes any given business or IT project through the same standardized steps from conception through implementation. Those steps would include…
* Project definition
* Needs analysis and requirements definition.
* Cost benefit analysis.
* Project scope.
* Project schedule and budget.
* Detailed specifications
* Development
* Testing
* Training
* Deployment
By utilizing a standardized process of doing all projects the same way, using the same reporting methods and tools, there is an economy of skills in that the project leaders and team members become adept at navigating these steps. Further, by using the same systems and criteria, a scale of evaluation as to the effectiveness of the system is developed so the ability of project teams to do well over time improves.
It was natural that this standardized method would become codified and finally developed into a well-developed system that could that molds all projects to a single standard. By developing an industry wide method that requires strict training and adherence to the same terms, tool sets and definitions of success, the “intuitive” nature of judging project effectiveness is reduced. And so “the Project Management Method” was developed whereby project managers can undergo strenuous and exacting training in a standardized method that would be enforced via certification across the whole of the business community.
Whether or not the PMM represents a curse or a blessing to the business world depends to a large extent on individual applications of the method and measurements and observations on whether the method itself introduces efficiency to the process of project management or just another layer of bureaucracy.
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There are some strong positives to utilizing a methodology that is standardized at an industry level. Those project managers who have gone through the certification process can be depended on to implement that system the same way in each business setting. As such, the process of finding qualified project managers becomes simplified because the certification process alone communicates to the business that it can expect the PMM system to be implemented correctly.
By putting into place an external method of certification and measurement of excellence, the project manager career begins to take a high level of professionalism similar to in the legal and medical fields. So the PMM movement represents a maturing of the IT and project management disciplines as they move toward greater levels of accountability and control.
The dangers come in implementation of the PMM methodology on a project by project basis. In order for a PMM certified manager to live by his credentials, all projects must conform to a standard mold. The unique nature of each project may not easily fit into the PMM process of systematization.
In addition, the PMM system is heavily dependent on a large amount of meetings to document that the project is adhering to standards and a methodical documentation process from which there is little room for variation or accommodation. The PMM is a complex methodology so the tool sets that must be used to track the process can be expensive and difficult to use.
The outcome is that the introduction of the PMM system can cause the actual business objectives of the project to take on a secondary priority to the high standards of PMM itself. Project leaders working under the requirements of the PMM can become more accountable to the methodology itself and lose sight of what is good for the business or what is efficient in terms of getting the project completed.
There is very little room for creativity or individual judgment within the confines of the PMM and that is problematic because the nature of business problems have historically depended on the judgment and creative problem solving skills of middle management. By dominating the project process with the needs of the PMM methodology, excessive cost is introduced as well as cumbersome requirements that do not benefit the business or the project itself.
Tuesday
The Explosion of Cell Phone Limitation Technologies
It is no secret that the explosion of functionality the world of cellular communications is nothing short of phenomenal. Scarcely a month goes by when something new is added what people can do with their cell phones. Now cell phones can take pictures, keep your calendar, let you send text messages or emails, surf the internet and do virtually everything except make the toast and burp the baby. But along with the technological revolution in what cell phones can do, there is another quieter revolution that has as its objective the opposite goal, to stop cell phones from doing what they can do.
It stands to reason when a technology as pervasive as cell phone communications enables virtually every man, woman and child to communicate to virtually anyone virtually anywhere that at some point there would be a need for some controls. That need has become more and more compelling when it comes to certain types of facilities where it is not only undesirable for cell phones to be operative but in some cases downright dangerous. Some outstanding examples of where you do NOT want cell phones operational are…
The problem with securing a building from cell phone operation is that putting up a sign that cell phones should be in use is not getting the job done. The phones can still be on and used as a homing device or create disruption to sensitive equipment. So to be effective, the facility needs to have cell phone blocking technology in place to stop the operation of every cell phone that comes inside that facility for the time it is there and then returns operation to that device as soon as it passes out of the facility area.
This is a tough challenge and the technologies that have been developed for the most part bring as many problems as they solve. There are basically three solutions to the problem.
1. Alarming. A device is put in place that can detect the signals coming from user’s cell phones. When the signal is detected, alarms go off to alert the user that the cell phone should be disabled. The problem is that this is not that much better than a sign on the wall informing people that cell phones are not allowed. It depends on compliance and the user can easily turn the phone right back on once inside.
2. Disruption. Otherwise known as jamming simply sends out a disruptive signal to jam the cell phone while in the facility. Jamming is destructive to machinery, dangerous to people and animals and in many countries, illegal to use.
3. Distraction. This approach detects the signal that the cell phone is sending to the tower to be recognized and sends a false signal back to the phone so it is distracted and thinks it is in communication with the tower when it is in fact off line. No calls can come to the phone because the tower doesn’t know its there and no calls can be made because the phone isn’t actually on line.
It stands to reason when a technology as pervasive as cell phone communications enables virtually every man, woman and child to communicate to virtually anyone virtually anywhere that at some point there would be a need for some controls. That need has become more and more compelling when it comes to certain types of facilities where it is not only undesirable for cell phones to be operative but in some cases downright dangerous. Some outstanding examples of where you do NOT want cell phones operational are…
- Prisons where inmates can use them to plan illegal activities.
- Federal buildings to protect classified areas and to restrict terrorist activity.
- Religious buildings such as mosques where cell phones can disrupt the ceremonies.
- Banks and financial institutions where cell phones could be used for robberies or for terrorism.
- Theaters and music halls where you want cell phones turned off during the performance.
- Hospitals or airplanes where the operation of cell phones can disrupt machinery.
The problem with securing a building from cell phone operation is that putting up a sign that cell phones should be in use is not getting the job done. The phones can still be on and used as a homing device or create disruption to sensitive equipment. So to be effective, the facility needs to have cell phone blocking technology in place to stop the operation of every cell phone that comes inside that facility for the time it is there and then returns operation to that device as soon as it passes out of the facility area.
This is a tough challenge and the technologies that have been developed for the most part bring as many problems as they solve. There are basically three solutions to the problem.
1. Alarming. A device is put in place that can detect the signals coming from user’s cell phones. When the signal is detected, alarms go off to alert the user that the cell phone should be disabled. The problem is that this is not that much better than a sign on the wall informing people that cell phones are not allowed. It depends on compliance and the user can easily turn the phone right back on once inside.
2. Disruption. Otherwise known as jamming simply sends out a disruptive signal to jam the cell phone while in the facility. Jamming is destructive to machinery, dangerous to people and animals and in many countries, illegal to use.
3. Distraction. This approach detects the signal that the cell phone is sending to the tower to be recognized and sends a false signal back to the phone so it is distracted and thinks it is in communication with the tower when it is in fact off line. No calls can come to the phone because the tower doesn’t know its there and no calls can be made because the phone isn’t actually on line.
Monday
The Ups and Downs of the Oil Market
There is a public mythology concerning the oil markets that has been fueled by a sharp rise in oil prices in the last few years. That perception is that the oil companies whose job it is to acquire the raw materials to make petroleum products, including gasoline for transportation, are the source of the rising prices. It is easy for the public to pin the blame on big business.
The truth is that those on the inside of the oil business know full well that the oil business is tremendously cyclical. That means that the old adage, “whatever goes up must come down” definitely applies to the oil markets domestically and around the world. The current high prices are more a reflection of problems with refineries and with supply due to tension in the Middle East than it does with the profit objectives of the oil companies involved. In truth, oil companies have to cope with sweeping shifts in supply and demand and it impacts how they plan their economic futures as much or more than it affects the average consumer.
This upswing in the price of gas is not the first time the oil business has seen huge profits and gains in their returns. And anyone who has been in the oil business for a few decades knows full well that the current high profitability economy which is benefiting oil companies tremendously will turn the other direction at some point. Just as there is a shortage due to problems with repairs or temporary shut downs at the nation’s refineries, there will come a time when all refineries are producing at full capacity and there will be a glut on the market which will drive prices down.
Similarly just as oil shortages dominate the market and are on the minds of consumers because of Middle East tension, oil supplies can shift dramatically. A new discovery in Asia, The Soviet Union, Europe, South America or off shore in America can suddenly send a glut of supply into the market that will send the price of crude oil plummeting and with it, gas prices worldwide.
This is not just pie in the sky forecasting but an industry trend in the oil business that is supported by years of experience, research and tracking by the businesses most impacted by sudden supply and demand turns in the markets, those big oil companies. The oil business is so used to the roller coaster nature of the market that even though the market is good now for the oil companies, they are already preparing for the next downturn and how they will survive when supply exceeds demand and prices drop leaving them with big adjustments to make in how they do business.
As with any smart manager of a business or investor for that matter, diversification is the way to prepare a strategy for handling volatile markets like we see in the oil business. And that has been a cornerstone of the strategies that have kept the oil companies able to ride the ups and downs their industry undergoes on these huge swings in supply, demand and profitability. While the oil industry is enjoying unprecedented prosperity now, there is coming a time when they will see their profits drop and they will have to brace for a downturn of unknown length and survive it until the next swing of the pendulum back out.
Even now, you can bet that every big oil company in the world is already investing heavily in diversified business interests that can generate revenue to keep the company afloat when oil revenues are not as lucrative as they are now. Those investments will be in real estate, the stock market and even in far flung unrelated industries such as retail or the entertainment industry. The more diversified a company can get, the more prepared they are to ride out the roller coaster oil market.
And this shrewd business practice is a good signal to those who are investors in the oil industry as well. Just as the companies who are fattening up our portfolios now are strong investments, we should know that the downturn is coming and diversify while times are good. Then we can ride out the next oil slump just as handily as the companies that live or die by the oil markets do year in and year out.
The truth is that those on the inside of the oil business know full well that the oil business is tremendously cyclical. That means that the old adage, “whatever goes up must come down” definitely applies to the oil markets domestically and around the world. The current high prices are more a reflection of problems with refineries and with supply due to tension in the Middle East than it does with the profit objectives of the oil companies involved. In truth, oil companies have to cope with sweeping shifts in supply and demand and it impacts how they plan their economic futures as much or more than it affects the average consumer.
This upswing in the price of gas is not the first time the oil business has seen huge profits and gains in their returns. And anyone who has been in the oil business for a few decades knows full well that the current high profitability economy which is benefiting oil companies tremendously will turn the other direction at some point. Just as there is a shortage due to problems with repairs or temporary shut downs at the nation’s refineries, there will come a time when all refineries are producing at full capacity and there will be a glut on the market which will drive prices down.
Similarly just as oil shortages dominate the market and are on the minds of consumers because of Middle East tension, oil supplies can shift dramatically. A new discovery in Asia, The Soviet Union, Europe, South America or off shore in America can suddenly send a glut of supply into the market that will send the price of crude oil plummeting and with it, gas prices worldwide.
This is not just pie in the sky forecasting but an industry trend in the oil business that is supported by years of experience, research and tracking by the businesses most impacted by sudden supply and demand turns in the markets, those big oil companies. The oil business is so used to the roller coaster nature of the market that even though the market is good now for the oil companies, they are already preparing for the next downturn and how they will survive when supply exceeds demand and prices drop leaving them with big adjustments to make in how they do business.
As with any smart manager of a business or investor for that matter, diversification is the way to prepare a strategy for handling volatile markets like we see in the oil business. And that has been a cornerstone of the strategies that have kept the oil companies able to ride the ups and downs their industry undergoes on these huge swings in supply, demand and profitability. While the oil industry is enjoying unprecedented prosperity now, there is coming a time when they will see their profits drop and they will have to brace for a downturn of unknown length and survive it until the next swing of the pendulum back out.
Even now, you can bet that every big oil company in the world is already investing heavily in diversified business interests that can generate revenue to keep the company afloat when oil revenues are not as lucrative as they are now. Those investments will be in real estate, the stock market and even in far flung unrelated industries such as retail or the entertainment industry. The more diversified a company can get, the more prepared they are to ride out the roller coaster oil market.
And this shrewd business practice is a good signal to those who are investors in the oil industry as well. Just as the companies who are fattening up our portfolios now are strong investments, we should know that the downturn is coming and diversify while times are good. Then we can ride out the next oil slump just as handily as the companies that live or die by the oil markets do year in and year out.
Sunday
Finding the Perfect AD Agency
A good Ad agency can take a business and propel its success forward in ways that few other business partners can do. If the business is one that will benefit from promotion or advertising, the right AD agency bring to the table the talent, the creativity and the resources to put together just the right advertising campaign and then to deploy it in a way that is a perfect fit for the business’s marketing objectives and for the market that the business serves.
But for every success story of how an AD agency took a business to the next level of success, there are plenty of horror stories of terrible advertising campaigns. A bad advertising strategy not only fail to escalate the sales and success of the business, it may damage the business in the eyes of the consumer and cause damage that could take years to fix.
There comes a time in the life of any business when the decision is made to either employ the business’s first AD agency or to change agencies to find one that can fit the marketing objectives of the company. To be sure that this process results in one of those success stories and not one of those horror tales, some precautions are in order such as…
By doing some planning up front and being ready when you begin to bring AD agencies in to discuss your goals, you will vastly improve your chances of selecting the right firm. And by finding the right AD agency, you vastly improve the success your advertising will bring to the company which can be a tremendous boost to the corporate profitability.
But for every success story of how an AD agency took a business to the next level of success, there are plenty of horror stories of terrible advertising campaigns. A bad advertising strategy not only fail to escalate the sales and success of the business, it may damage the business in the eyes of the consumer and cause damage that could take years to fix.
There comes a time in the life of any business when the decision is made to either employ the business’s first AD agency or to change agencies to find one that can fit the marketing objectives of the company. To be sure that this process results in one of those success stories and not one of those horror tales, some precautions are in order such as…
- Nail down the company’s marketing objectives before you meet with candidate agencies. Don’t allow the AD agency to dictate what your marketing goals are. By taking charge of what you want before you begin the process, the chances of finding just the right agency are vastly improved.
- Put together a review committee for the search process of finding the right agency. This team is well informed about the company objectives and the marketing goals that lead to the decision to bring an AD agency on. They can be kept together throughout the selection process so you have wisdom from many different parts of the company management structure to guide the process.
- Nail down the budget for the project before you put the invitations out to AD agencies to bid on your business. If you know exactly how much you can spend, that will help in the selection of the right agency and in setting their limitations early in the relationship.
- Establish the schedule of how long you have find an AD agency and then the time frame they have to put a campaign together, get it approved, produced and activated so the outcome is in sync with the company objectives. If you have a major product announcement coming along, the time to start finding an AD agency is months before the week when the product goes public. By timing the project so adequate time is allowed for each step, you don’t rush the process and end up with an inferior promotion which will result in unsatisfactory results.
- Make sure the AD agencies you invite to bid on the business understand your business, what you do, the product to be promoted, your market and your business image. They should also be aware of previous marketing efforts that were done by the business. If the previous efforts were successful, there may be a strong tie in to the next promotion that would work well. If that last promotion was bad or needs major improvement, the AD agency should know that so they can steer clear of the same mistakes.
By doing some planning up front and being ready when you begin to bring AD agencies in to discuss your goals, you will vastly improve your chances of selecting the right firm. And by finding the right AD agency, you vastly improve the success your advertising will bring to the company which can be a tremendous boost to the corporate profitability.
Saturday
Virtual Staffing
When we say something is “virtual” in modern terminology, we are almost always talking about something related to the internet. So Virtual Dating is dating using the internet. “Virtual” does not mean something that does not exist. But it implies you are replacing a normal physical entity with a real but for the most part unseen entity that lives online.
The trend in strategic business planning is to incorporate an aggressive “virtual marketing” plan with your traditional plans. So it makes sense that eventually the move to virtual resources would reach human resources with the availability of virtual employees.
In the last two or three years, virtual employment has taken off and become a very real resource for businesses wishing to tap into valuable experience and subject matter expertise that cannot be found locally. Agencies such as Team Double Click and Rent-A-Coder provide an army of ready to work professionals that can step in and get a job done quickly and efficiently for an employer.
The obvious first application of virtual workers is to subcontract to an online employment agency certain task specific projects that have a short beginning, middle and end. Building a new function into a web page is a good example of a project that can be packaged into an understandable project and signed over to a virtual consultant to perform the work and return to the online employer. The handling agencies collect funds via escrow so neither the employer or the consultant are at risk and the handling company claims a percentage of the fee as part of their pay for facilitating the partnership. Everybody wins.
But the concept of virtual employment is going beyond providing another variation on outsourcing to a consultant. Many virtual employment agencies provide administrative assistants, sales support and many other functions normally associated with a full time employee but those services are done “virtually”. A virtual office manager can have calls routed to his or her remote phone, emails redirected and conduct office meetings and negotiations with vendors via email or instant messaging. Using these modern tools, a virtual assistant can provide almost every function an on site assistant might be able to do but do so at a lower cost to the employer.
The virtual employment trend in business has obvious benefits for businesses that are in need of qualified help. It opens the door to recruitment sources that can supplement the local talent pool. Many times virtual staffing agencies may have on their “employee roles” people with a specialized background or skill. The agency is skilled at defining exactly what their client businesses need and matching up the right virtual employee to the job so the business has the right skill sets where they need them, when they need them and only for as long as they need them.
In addition to the benefits that virtual employment has for businesses to fill needs for skilled workers, it’s an excellent resource for talented workers who want to make a contribution to the business world on their own terms. Virtual workers almost universally work at home or where they chose to work. Often the work is task based with a deadline so the worker can select the hours that fits their family and personal schedules best. And, like working for a temp agency, the employee can build a resume with the agency that improves the quality of work they get over time.
Virtual staffing is a trend that has been a success for all involved as it has matured in the last few years. We can look for this twenty first century methodology for bringing in talented workers to continue to grow as more and more businesses get comfortable with staffing their employee ranks “virtually”.
The trend in strategic business planning is to incorporate an aggressive “virtual marketing” plan with your traditional plans. So it makes sense that eventually the move to virtual resources would reach human resources with the availability of virtual employees.
In the last two or three years, virtual employment has taken off and become a very real resource for businesses wishing to tap into valuable experience and subject matter expertise that cannot be found locally. Agencies such as Team Double Click and Rent-A-Coder provide an army of ready to work professionals that can step in and get a job done quickly and efficiently for an employer.
The obvious first application of virtual workers is to subcontract to an online employment agency certain task specific projects that have a short beginning, middle and end. Building a new function into a web page is a good example of a project that can be packaged into an understandable project and signed over to a virtual consultant to perform the work and return to the online employer. The handling agencies collect funds via escrow so neither the employer or the consultant are at risk and the handling company claims a percentage of the fee as part of their pay for facilitating the partnership. Everybody wins.
But the concept of virtual employment is going beyond providing another variation on outsourcing to a consultant. Many virtual employment agencies provide administrative assistants, sales support and many other functions normally associated with a full time employee but those services are done “virtually”. A virtual office manager can have calls routed to his or her remote phone, emails redirected and conduct office meetings and negotiations with vendors via email or instant messaging. Using these modern tools, a virtual assistant can provide almost every function an on site assistant might be able to do but do so at a lower cost to the employer.
The virtual employment trend in business has obvious benefits for businesses that are in need of qualified help. It opens the door to recruitment sources that can supplement the local talent pool. Many times virtual staffing agencies may have on their “employee roles” people with a specialized background or skill. The agency is skilled at defining exactly what their client businesses need and matching up the right virtual employee to the job so the business has the right skill sets where they need them, when they need them and only for as long as they need them.
In addition to the benefits that virtual employment has for businesses to fill needs for skilled workers, it’s an excellent resource for talented workers who want to make a contribution to the business world on their own terms. Virtual workers almost universally work at home or where they chose to work. Often the work is task based with a deadline so the worker can select the hours that fits their family and personal schedules best. And, like working for a temp agency, the employee can build a resume with the agency that improves the quality of work they get over time.
Virtual staffing is a trend that has been a success for all involved as it has matured in the last few years. We can look for this twenty first century methodology for bringing in talented workers to continue to grow as more and more businesses get comfortable with staffing their employee ranks “virtually”.
Friday
What Does Google Know?
It wasn’t that long ago that a tremendous scare went through the internet community. The issue had to do with the huge amount of data that can be collected on individuals using search engines online. This large body of information naturally drew the attention of the Homeland Security agencies who are charged with the job of finding out all they can about potential sleeper cells of terrorism in this country.
The stand off came when the government began to demand access to the search records of all users of the major search engines. When this upcoming struggle for privacy began to come to a head, many of us who depend on search engines for both personal and business research began to get that “big brother is watching” feeling.
It’s a tough compromise. We know that our government must have the ability to find and put a stop to security risks that might result in another disaster like September 11th 2001. But at the same time, Americans are tremendously protective of their liberties, their privacy and their right to be left alone by the government.
Of all of the search engines who were in the spotlight during that struggle, Google’s resistance to allowing undue invasion of privacy of their customers stood out as an act of courage in a difficult confrontation. It turned out that Homeland Security really wasn’t becoming “big brother” and was simply researching how to use statistical data to possibly find terrorist patterns in search engine usage. But many of us remember that while Yahoo and others knuckled under quickly, it was Google who stood up and protected user information rather than immediately turn it over to Uncle Sam.
This stand reflects a long established business ethic that Google has maintained to be protective of the data it collects about users of its search tools. That protective nature has more benefits than just building our confidence that Google is a safe tool for all of us to use. Google indeed has at its disposal a tremendous library of personal information on anyone using its search tools. And as the dominant search engine in the industry, this potential includes just about anyone who accesses the internet.
The information that can be collected from you and I as we use the internet can tell an interested party a lot about your interests, what kind of business you are in, your religious views and your political affiliations. Powerful analytical tools are available to take large volumes of search information and translate that into profiles that would be of great interest to the government and to marketers who would love to be able to target specific populations for sales.
For Google, this information has significant value to them as they fine tune their search engine methodologies. They can methodically analyze this data to draw conclusions about how their search tools are working and how they should update the formulas that drive those tools to be more in step with how the internet audience is using cyberspace. Yes, this is taking advantage of their already dominant position to secure that position and make their toolset even more capable of staying ahead of the game. But we really cannot fault Google for using this data in that way. That is just good business.
It turns out then that Google’s protective posture when it comes to that massive database of search information serves their purposes extremely well. If they can keep this mountain of very specific data secure and proprietary, it represents a trade secret of tremendous value to Google to help them maintain their market superiority for a long time to come.
This is a case of the needs of the market serving the public good well. For as Google protects our search information so only it can benefit from such knowledge, they also are protecting our privacy from the prying eyes of overenthusiastic government agencies, hackers, marketing campaigns and even the terrorists who could use that information for insidious purposes. Therefore we can be thankful that Google jealously guards this data for its own uses because in the process, they are protecting us along the way.
The stand off came when the government began to demand access to the search records of all users of the major search engines. When this upcoming struggle for privacy began to come to a head, many of us who depend on search engines for both personal and business research began to get that “big brother is watching” feeling.
It’s a tough compromise. We know that our government must have the ability to find and put a stop to security risks that might result in another disaster like September 11th 2001. But at the same time, Americans are tremendously protective of their liberties, their privacy and their right to be left alone by the government.
Of all of the search engines who were in the spotlight during that struggle, Google’s resistance to allowing undue invasion of privacy of their customers stood out as an act of courage in a difficult confrontation. It turned out that Homeland Security really wasn’t becoming “big brother” and was simply researching how to use statistical data to possibly find terrorist patterns in search engine usage. But many of us remember that while Yahoo and others knuckled under quickly, it was Google who stood up and protected user information rather than immediately turn it over to Uncle Sam.
This stand reflects a long established business ethic that Google has maintained to be protective of the data it collects about users of its search tools. That protective nature has more benefits than just building our confidence that Google is a safe tool for all of us to use. Google indeed has at its disposal a tremendous library of personal information on anyone using its search tools. And as the dominant search engine in the industry, this potential includes just about anyone who accesses the internet.
The information that can be collected from you and I as we use the internet can tell an interested party a lot about your interests, what kind of business you are in, your religious views and your political affiliations. Powerful analytical tools are available to take large volumes of search information and translate that into profiles that would be of great interest to the government and to marketers who would love to be able to target specific populations for sales.
For Google, this information has significant value to them as they fine tune their search engine methodologies. They can methodically analyze this data to draw conclusions about how their search tools are working and how they should update the formulas that drive those tools to be more in step with how the internet audience is using cyberspace. Yes, this is taking advantage of their already dominant position to secure that position and make their toolset even more capable of staying ahead of the game. But we really cannot fault Google for using this data in that way. That is just good business.
It turns out then that Google’s protective posture when it comes to that massive database of search information serves their purposes extremely well. If they can keep this mountain of very specific data secure and proprietary, it represents a trade secret of tremendous value to Google to help them maintain their market superiority for a long time to come.
This is a case of the needs of the market serving the public good well. For as Google protects our search information so only it can benefit from such knowledge, they also are protecting our privacy from the prying eyes of overenthusiastic government agencies, hackers, marketing campaigns and even the terrorists who could use that information for insidious purposes. Therefore we can be thankful that Google jealously guards this data for its own uses because in the process, they are protecting us along the way.
Thursday
The Proliferation of Banks
The proliferation of branches of banks in most American cities has become so epidemic that it is hard not to notice the dominance of this kind of business on any street corner in your town. In many cases, a busy intersection which might be used for retail operations such as fast food restaurants, cleaners, gas stations and quick stop stores has been taken over by banks. In some cases you will see three of the four corners of a popular intersection in town occupied by different bank branches.
It makes you wonder, just how many banks do we need in town and why are the banking institutions spending so much money to put branches in virtually every location that has open space? It is a business trend that gets your attention and it makes you wonder what is driving this bank explosion. After all, in many cases there are not more customers for those banks. You have to wonder how banks can cost justify such expansion when the growth of bank branches is not even in step with population growth in a given community.
The phenomenon has become more profound in the last ten years than ever before. And much of it has to do with changes in how banks are regulated and the financial objectives that these branches are targeting, financial objectives that bring big money to the banking institutions spreading all over town.
· Regulatory Changes. The rules for how many branches a bank can own and where they can open them have changed significantly in the last decade. Now banks can open branches inside grocery stores and at a greater density than before. And this has set off the growth war of branch banking that we notice going on all over town.
· An explosion of services. Along with a freeing up of the branch banking laws, commercial banks can offer many more services than ever before. While we think of banks in terms of checking and savings accounts only, if you walk into the bank, you will be buried with offers for a huge variety of financial services including varieties of investment services and different forms of credit arrangements. And these services are huge money makers for your local banker.
· How banks really make their money. Obviously banks don’t make much money just keeping your checking account working correctly. But using checking as a loss leader, banks can capture your business to offer credit services and investment vehicles that yield them much higher returns on the use of your funds. Further, the fees that can be applied for overdraft accounts and other fee based services are a pure profit mechanism for banks.
· Visibility counts. Each new customer a bank lands takes revenue out of competitor’s banks. And if they can capture your banking business, the money you store in your accounts is available for loans and interest they can realize by using your money while it is in their care. So they want to be visible to assure you think of them first when it is time to open a new account.
This trend is not likely to change any time soon. The competition in the banking industry is fierce and bankers are aggressive business people. So we should expect them to continue to work hard to capture the consumers business and make themselves available to consumers to steal your business away from competing banks. And while it might be troubling to see every street corner filled with bank branches, its part of the market system that makes our economy strong. And that is a good thing.
It makes you wonder, just how many banks do we need in town and why are the banking institutions spending so much money to put branches in virtually every location that has open space? It is a business trend that gets your attention and it makes you wonder what is driving this bank explosion. After all, in many cases there are not more customers for those banks. You have to wonder how banks can cost justify such expansion when the growth of bank branches is not even in step with population growth in a given community.
The phenomenon has become more profound in the last ten years than ever before. And much of it has to do with changes in how banks are regulated and the financial objectives that these branches are targeting, financial objectives that bring big money to the banking institutions spreading all over town.
· Regulatory Changes. The rules for how many branches a bank can own and where they can open them have changed significantly in the last decade. Now banks can open branches inside grocery stores and at a greater density than before. And this has set off the growth war of branch banking that we notice going on all over town.
· An explosion of services. Along with a freeing up of the branch banking laws, commercial banks can offer many more services than ever before. While we think of banks in terms of checking and savings accounts only, if you walk into the bank, you will be buried with offers for a huge variety of financial services including varieties of investment services and different forms of credit arrangements. And these services are huge money makers for your local banker.
· How banks really make their money. Obviously banks don’t make much money just keeping your checking account working correctly. But using checking as a loss leader, banks can capture your business to offer credit services and investment vehicles that yield them much higher returns on the use of your funds. Further, the fees that can be applied for overdraft accounts and other fee based services are a pure profit mechanism for banks.
· Visibility counts. Each new customer a bank lands takes revenue out of competitor’s banks. And if they can capture your banking business, the money you store in your accounts is available for loans and interest they can realize by using your money while it is in their care. So they want to be visible to assure you think of them first when it is time to open a new account.
This trend is not likely to change any time soon. The competition in the banking industry is fierce and bankers are aggressive business people. So we should expect them to continue to work hard to capture the consumers business and make themselves available to consumers to steal your business away from competing banks. And while it might be troubling to see every street corner filled with bank branches, its part of the market system that makes our economy strong. And that is a good thing.
Wednesday
Will DRM Save the Music Industry?
Without a doubt the single most influential agent of change in business trends in the last ten to twenty years has been the internet. There is virtually no business segment or market that has gone unchanged by this powerful force. But of all of the various businesses impacted by cyberspace, the music industry has to the one that has seen the most dramatic change and the greatest challenge to keep up, adapt and survive an onslaught of change unprecedented in its history.
The first major challenge that cyberspace brought to the music business was a complete shift to how music would be sold to music fans worldwide. In what can only be described as an avalanche, the music buying public virtually abandoned conventional record stores and retail outlets and took the majority of their music purchasing business online. But this mass influx of business could not be tracked to any one web site that was executing the revolution. Because of a revolution in how bands and Indie record labels do business online, the music audience followed and began buying their CDs and even concert tickets directly from artists or record labels online and getting those products instantly via downloads.
But as drastic as the market changes this paradigm shift in consumer behavior represented, it was nothing compared to what the internet had in store for the music world. The next wave of change represented a threat to the music business so serious that it had the potential of putting the music industry out of business forever. When music consumers began to share digital music electronically over the internet using file sharing software such as Kazaa, Limeware and BitTorrent, suddenly it was possible for a music customer to access all the music they wanted for free by simply downloading this music from another internet user’s computer.
The plummet in music sales as result of these two forces was drastic and traumatic to the music world in general. At first, the music business executives were at a loss of exactly how to go about stopping the widespread file-sharing phenomenon. They tried to shut down the software services that provided the networks to users with lawsuits and other punitive actions. These litigations took a long time and cost a huge amount of money and all the while the flood of free music going out over the internet continued to increase. Worse of all, when they did slow down one file sharing network, it seemed many more cropped up to replace it which began to look like a nightmare scenario of constant lawsuits against a never-ending and constantly growing enemy.
Public pleas to the music loving public were another attempt to appeal to the conscience of the music world that if artists could not get paid, there would be no more new music. But the opposite seemed to be the case. As more and more Indie musicians began to capitalize on file sharing and using it as a method of marketing, the quantity and quality of good music only seemed to increase in this new music marketplace.
The final attempt seemed to be this technology called DRM. DRM is a digital “lock” that would be required to go on every piece of music released on the internet. Music with DRM would not be playable except to customers who had a legal right to use it. At first, this seemed like a viable solution. But even DRM didn’t stop the flood of lost revenue through file sharing. And hackers seemed more than happy to learn to undo any technical locks the music industry could come up with.
So as we move into the last half of the first decade of this century, the music industry is learning to work with this new music marketplace rather than fight it. And by learning lessons from the Indie labels and how to serve customers in a digital world, there seems to be a new solution on the way but one that is dictated on the customer’s terms rather on the terms of the big music labels. Somehow, that seems like it is the way it should have been all along.
The first major challenge that cyberspace brought to the music business was a complete shift to how music would be sold to music fans worldwide. In what can only be described as an avalanche, the music buying public virtually abandoned conventional record stores and retail outlets and took the majority of their music purchasing business online. But this mass influx of business could not be tracked to any one web site that was executing the revolution. Because of a revolution in how bands and Indie record labels do business online, the music audience followed and began buying their CDs and even concert tickets directly from artists or record labels online and getting those products instantly via downloads.
But as drastic as the market changes this paradigm shift in consumer behavior represented, it was nothing compared to what the internet had in store for the music world. The next wave of change represented a threat to the music business so serious that it had the potential of putting the music industry out of business forever. When music consumers began to share digital music electronically over the internet using file sharing software such as Kazaa, Limeware and BitTorrent, suddenly it was possible for a music customer to access all the music they wanted for free by simply downloading this music from another internet user’s computer.
The plummet in music sales as result of these two forces was drastic and traumatic to the music world in general. At first, the music business executives were at a loss of exactly how to go about stopping the widespread file-sharing phenomenon. They tried to shut down the software services that provided the networks to users with lawsuits and other punitive actions. These litigations took a long time and cost a huge amount of money and all the while the flood of free music going out over the internet continued to increase. Worse of all, when they did slow down one file sharing network, it seemed many more cropped up to replace it which began to look like a nightmare scenario of constant lawsuits against a never-ending and constantly growing enemy.
Public pleas to the music loving public were another attempt to appeal to the conscience of the music world that if artists could not get paid, there would be no more new music. But the opposite seemed to be the case. As more and more Indie musicians began to capitalize on file sharing and using it as a method of marketing, the quantity and quality of good music only seemed to increase in this new music marketplace.
The final attempt seemed to be this technology called DRM. DRM is a digital “lock” that would be required to go on every piece of music released on the internet. Music with DRM would not be playable except to customers who had a legal right to use it. At first, this seemed like a viable solution. But even DRM didn’t stop the flood of lost revenue through file sharing. And hackers seemed more than happy to learn to undo any technical locks the music industry could come up with.
So as we move into the last half of the first decade of this century, the music industry is learning to work with this new music marketplace rather than fight it. And by learning lessons from the Indie labels and how to serve customers in a digital world, there seems to be a new solution on the way but one that is dictated on the customer’s terms rather on the terms of the big music labels. Somehow, that seems like it is the way it should have been all along.
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