Software // Enterprise Applications
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2/13/2013
01:31 PM
Chris Murphy
Chris Murphy
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P&G CIO: There's A Better Way To Create Software

Procter & Gamble CIO Filippo Passerini thinks cooperation among the likes of Disney, FedEx and Goldman Sachs could push software vendors to build more relevant analytics software --and build it faster.

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Procter & Gamble CIO Filippo Passerini is charming, polite, gracious -- and incurably impatient with the status quo. The current target of Passerini's dissatisfaction is the way in which software gets developed to meet the needs of businesses such as P&G.

Passerini describes business software development today as a "hub and spoke." The software vendor pitches what it's selling and what's possible with technology, then a would-be customer tells the vendor what they really need. FedEx, Boeing, BP, Disney, Goldman Sachs, GE -- they all go through the same exercise as P&G, one-on-one with the vendor.

Today, companies such as P&G have a screaming need for better analytics software to help them make sense of their growing mountains of data about sales, supply chains and customers. The conventional hub-and-spoke development model is still driving software innovation, but Passerini isn't confident it will produce the analytical software to meet future needs.

[ Big data has value that's often not reflected in the books. Read What's Your Big Data Worth? ]

"With the inflection point we are at, in a couple of years it will run out of steam," Passerini said at a P&G event at its Cincinnati headquarters that included those other big technology buyers as well as technology vendors. "The opportunity is now to do something dramatically different."

Passerini stopped short of proposing what replaces today's hub and spoke. "We don't have a solution," he said. "We don't have an answer. That's why we're here."

P&G has held a similar meeting each year showcasing the company's own technology, but this is the first year P&G brought in other big technology buyers and centered the meeting, called Goldmine, on one topic: analytics. P&G CEO Bob McDonald addressed attendees and set the need for better analytics: "We have to move business intelligence from the periphery of operations to the center of how business gets done."

Silicon Valley had better listen closely to what the likes of Passerini, FedEx CIO Rob Carter and Boeing CIO Kim Hammonds have to say about whether they need a different model for developing business software. Companies like them spend billions of dollars on IT every year. Venture capitalists and entrepreneurs are trend seekers, and the IPOs of enterprise IT companies such as Workday and Splunk have put more focus on business software.

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So, what might a new approach to software development look like? That's where you come in.

Collaborative Software Innovation?

Passerini, by design, didn't lay out a plan for how software development should change. He's trying to spark a discussion. He met privately with IT leaders at the meeting and said he thinks there's interest in exploring the idea.

So that leaves it up to us to envision a faster and more relevant way to develop software. Please share your ideas in the Comments section below.

Meanwhile, here are some of my thoughts on the challenges of a more collaborative software development process, to get things started:

Openness: A collaborative customer effort to spur new software ideas will still face the same question a company faces on its own: Which vendors should we work with most closely? Would a new model involve, say, six non-competing companies picking one analytics vendor to collaborate with? Or would this group come up with a set of needs and broadly publish them, to let big and small companies go after them?

One option is an open innovation platform -- this small group of CIOs publicly lays out their needs for big vendors and entrepreneurs alike to tackle. InnoCentive offers a marketplace for such ideas, and P&G is among the companies that have used it. But those innovation challenges tend toward R&D efforts.

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ChrisMurphy
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ChrisMurphy,
User Rank: Author
2/25/2013 | 4:01:40 PM
re: P&G CIO: There's A Better Way To Create Software
I received this comment via email, posting below with permission:

According to Eric von Hippel's "Democratizing Innovation" (MIT Press, 2006, open source), user-centered innovation provides the most rapid type of innovation: product breakthroughs as opposed to product evolution from the vendor. This argues for a new software product architecture. We (I'm a software designer) typically build closed systems, software with focused feature sets and limited configurability. To foster innovation, we should really build toolkits, not single-purpose end products. Software buyers would then enhance and tune the toolkit for their particular needs.

The IT people who are being consolidated out of a job would have something new to do.

Bayard Kohlhepp
Nexus Technologies Inc.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
2/18/2013 | 7:15:22 PM
re: P&G CIO: There's A Better Way To Create Software
It's definitely a big point of tension. But look at what Lee Patty is saying above -- develop for one market and then pivot. An investor might want to fund for an initial market, but an investor also wants growth, and that quickly turns to the potential in adjacent markets. And if a startup embraces lean startup ideas, maybe it doesn't even need that much funding for the initial vertical market -- they don't even bring in traditional investors until an expansion into adjacent industry markets.
ChrisMurphy
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ChrisMurphy,
User Rank: Author
2/18/2013 | 7:10:01 PM
re: P&G CIO: There's A Better Way To Create Software
Lee, very practical insights from someone who's out there innovating on new software for digital business. Lean principles and lean startup tactics need to be part of the answer to move faster, glad you brought that into the discussion.
Elang
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Elang,
User Rank: Apprentice
2/18/2013 | 1:12:28 PM
re: P&G CIO: There's A Better Way To Create Software
The dichotomy between Investors looking to invest in Software companies with a specific industry focus vs clients across industries looking to come together to figure out a common minimum requierment.. tough to break this impasse..
Lee Patty
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Lee Patty,
User Rank: Apprentice
2/16/2013 | 4:36:28 AM
re: P&G CIO: There's A Better Way To Create Software
Interesting for startup companies that are trying to validate product-market fit to have a customer fund or support their development. This is definitely a lean principle in that you're developing to a customer need and with possible customer funding. The risk for the startup is that you're technology becomes so specific to one customer's needs that you will need to pivot dramatically to find more of a mass appeal for the product. Not a bad problem to have though.
cbabcock
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cbabcock,
User Rank: Strategist
2/15/2013 | 1:01:35 AM
re: P&G CIO: There's A Better Way To Create Software
Software development is slowly but surely moving to the DevOps model, but the development environment and deployment environment need to be identical, or nearly identical. To me, that means future software development is going to take place on a developers' platform as a service where the output deploys smoothly to infrastructure as a service. There are many prototypes of this mdoel, including what Microsoft has done with Azure and VMware with Cloud Foundry. Still hard at this stage for enterprise to just throw a switch and adopt it.Charlie Babcock, InformationWeek
Mark Montgomery
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Mark Montgomery,
User Rank: Strategist
2/14/2013 | 8:22:23 PM
re: P&G CIO: There's A Better Way To Create Software
This is the comment I posted under link I found article from Heather Munroe-Vallis at LinkedIn--may be of interest.

"Very strong CIO with one of the better models we've observed, and have known several strong managers coming out of the P&G culture, but most of the market leaders are also among the most difficult to deal with for emerging companies that have the kind of solutions they are seeking --layers deep, many conflicts, too busy. It would be wise for any such org to test shop how their own orgs are dealing with incoming external innovation they themselves suggest they badly need. Some may be shocked with the results. .02 - MM"

I would add that the open innovation movement has been insulting to the stronger inventors and innovators. Turn the table around and ask which of these companies are willing to open up their inventions and innovations and distribution channels to competitors for free, after investing decades of time and money into solutions. I've dealt with most- the answer is none. So don't ask it of us unless you want the world's intellectual capital swinging against you.

In my own experience in attempting to deal with P&G, what I found from his own people was cognitive bias, a fair amount of hubris--not invented here syndrome was apparent, and completely mislabeled and misunderstood the system. It's not that the intellect didn't exist, it's that they were too busy with the wrong priorities for anything that important to them. The real question is would these companies see the solution they seek if it was delivered on a golden platter? The answer in other companies, including top tier VCs, media, and leading universities and most others has been no-- almost never. The public would be amazed at how much energy and education it takes to convince most cultures of what has already become obvious to those deep in the trenches. This is no doubt true in their business as well.

It's not a trivial issue -- many cultures with multi-billion$ USD IT budgets are considered not to be viable markets for the most innovative. This situation quite often results in a competitive advantage in others that turns markets over time. It's obvious to me at least that P&G understands this better than most--as does their CIO, but they obviously still struggle with it greatly. Large budgets does not necessarily a viable partner make, particularly if and when IP & IC are at risk.
Laurianne
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Laurianne,
User Rank: Author
2/14/2013 | 6:37:38 PM
re: P&G CIO: There's A Better Way To Create Software
What about the Salesforce.com Force.com model? What lessons can be applied here? That example certainly speaks to the "speed" challenge.

Laurianne McLaughlin
InformationWeek.com
Deirdre Blake
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Deirdre Blake,
User Rank: Apprentice
2/14/2013 | 4:20:00 PM
re: P&G CIO: There's A Better Way To Create Software
The development effort proposals Passerini is making are nothing new within the coding community, but the fact that large, non-tech-based businesses are interested in exploring and adopting such practices is definitely interesting. A good reference for more info on "non-traditional" software development processes is "Eight Papers for Project Managers"
http://is.gd/EKOGHT
John Foley
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John Foley,
User Rank: Apprentice
2/14/2013 | 3:14:56 PM
re: P&G CIO: There's A Better Way To Create Software
So you're throwing the ball in our court, Chris? I love that Filippo is challenging his peers and the tech community in this way. I'm thinking that some combination of platform-as-a-service (new model) and open source (long-established model) could be used to bring collaboration and speed to enterprise software development. That would leave room for established vendors and startups to be involved, as well as companies with industry-specific requirements to branch off in their own direction.
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