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Wednesday, September 24, 2014

Alignment & misalignment of IT with business strategy

Louie Wong

March 25, 2010

Alignment & misalignment of IT with business strategy

It is true that most of the current organizations are relying on IT services to process their daily operational and business processes. However, on the other hand, some of these organizations do not fully enjoy the benefit of these IT services as intended. To a great extend, this is dependent on the alignment between the party who provides these IT services and the party who are using these services. The degree of alignment or misalignment defer from company to company. The degree of misalignment is normally higher and commonly found among smaller companies as in the SME. On the other hand, MNC will normally have a higher degree of alignment between the providers and the users of these IT services.


Fundamentally lack of communication

Business managers seldom communicate with IT managers and, vice versa. Business managers may always believe in their inept of technical activities. And IT managers assert that it is natural if they do not have notion of business and investment planning.

Improper management of IT skills

There are no opportunities for cross-functional training of IT skill. Job transfers between IT and business do not occur. Tasks can only be performed by dedicated personnel, and resulting in high turnover.

Implicit plans and strategies

Most of the time, IT department does not participate in planning of business strategies. Business managers figure out the whole plan without explicitly conveying their conclusion to IT department. Analogously, IT managers implement their technical procedures based on their own criteria.

Inconsistency of business goal

Due to the absence of Communication Bridge between business and IT managers, their business goals are fundamentally inconsistent and expansion of business might be thwarted.

Ignorant of expertise of the other side

Not all business personnel are IT literate and technology-savvy. Business and IT managers are not willing to touch the area of expertise which is not belonging to them. Such a fact is also similarly happening to IT personnel.


Mature understanding of each others
Business and IT managers communicate in both and effective ways. They have a wise co-ordination between them as every task is expected to be accomplished systematically in MNC.

IT skills are well managed

Job transfers and cross-functional training are possible with the business entity of MNC. Every personnel are given opportunity to undergo various types of skill and knowledge training programme.

Group brainstorming session

Steering personnel such as both business and IT managers are always involved in planning of business strategies and investment directions. These kinds of activities included product and branding design, marketing survey, and so forth.

Cultivation of identical conviction

Through face-to-face discussion, business managers are usually be able to tell what approaches are effective and needed in solving business problems. Similarly, IT department will be able to figure out feasible applications or systems for their end users if they know well and completely comprehend the requirements.

Knowledge-sharing willingness

There is a norm in MNC is that both business and IT managers are encouraged to share their knowledge and experiences, exchange enlightened opinions with one another. Business managers who are IT literate and technology-savvy could easily evaluate the abilities and flexibilities of the designed system. In addition, IT managers influence how effectively other people can or do use their systems and applications.

IPv6 addresses – how many is that in numbers? - Our Latest Discovery

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Tongue twister: The number of possible IPv6 addresses read out loud

IPv6 can theoretically hold 2^128 IP addresses. As you're probably aware of, that's a huge number:

2^128 =340,282,366,920,938,463,463,374,607,431,768,211,456

Have you ever wondered how you would actually SAY that number if you had to read it out loud? A cool thing with Wolfram Alpha is that it will spell out numbers for you, making it possible for us to find this out without too much of a headache. Here's the text version of the number:

340 undecillion, 282 decillion, 366 nonillion, 920 octillion, 938 septillion, 463 sextillion, 463 quintillion, 374 quadrillion, 607 trillion, 431 billion, 768 million, 211 thousand and 456

Read it out loud really fast. A bit of a mouthful… 

Don’t wait-and-see to be gst compliant, companies urged – BorneoPost Online | Borneo , Malaysia, Sarawak Daily News

Don't wait-and-see to be gst compliant, companies urged

Posted on July 16, 2014, Wednesday

KUALA LUMPUR: With the goods and services tax (GST) to be implemented on April 1, 2015, the clear message to all companies is to start preparing early.

The sooner they start, particularly in incorporating GST-compliant software and training, they can avoid bottleneck situations most likely to happen closer to the implementation date.

As the recently-concluded National GST Conference 2014 organised by Malaysia's national news agency Bernama and Tax Advisory and Management Sdn Bhd (TAMS), showed, many companies and businesses are still vague about the GST.

With the effective date of implementation less than nine months away, one can assume that time is running out, more so since most firms seem to be adopting a "wait-and-see" mindset in preparing themselves.

Obviously, the state of readiness among companies is far from satisfactory, but the lack of understanding is an unacceptable explanation for avoiding to prepare.

Some participants admit being far from ready and certain companies said they are unwilling to make a major conversion ahead of the Budget 2015 announcement.

It is true that concerted efforts at all levels, especially from the government and its agencies – particularly the Royal Malaysian Customs Department – is needed to ensure businesses are adequately prepared.

But companies themselves need to play a more proactive role in seeking information and assistance.

This is because the GST will affect all businesses, whether they sell goods or provide a service and their state of preperation matters.

It will also impact all parts of operations starting from the IT system, procurement, sales and marketing, the price setting department, supplier and customer relationships to cash flow.

TAMS' executive director Yong Poh Chye said normally it takes about 18 months for companies to prepare for the GST, but they now had only nine months to do so.

Time is running out and they have to redouble efforts to ensure their businesses are GST-compliant by the time of implementation, he said.

Yong explained that companies needed to train their staff on the GST, acquire GST-compliant accounting software and commence trial runs by January 2015.

At present, he said only 50 per cent of companies in the country were GST ready.

"Many businesses are unaware that they need to upgrade their accounting software to comply with the GST," Yong added.

Such software upgrades cannot be done at the last minute, as extensive preparation and training is required.

There is plenty of assistance being given by the government to ease this conversion process, especially for small and medium scale enterprises (SMEs).

The government allocated RM150 million under the Budget 2014 to assist SMEs in purchasing the GST compliant accounting software or for upgrades, to be GST compliant.

This includes encouraging SMEs to use an effective and efficient accounting system as well as increase the GST compliance rate.

Financial assistance is also provided by SME Corp Malaysia in the form of a GST eVoucher worth RM1,000.

In addition to the allocation to purchase the GST software, the government is also providing training grants worth RM100 million to businesses to send their employees for training in 2014 and 2015 on the new tax regime.

This includes an accelerated capital allowance until the year of assessment 2015 for the cost of purchasing ICT equipment and software, tax deduction on expenses incurred for training in accounting and ICT related to GST for the years of assessment 2014 and 2015.

Others incentives are a reduction in the corporate tax rate from 20 per cent to 19 per cent from 2016 for small businesses and tax deduction for secretarial fees and tax filing fee from 2015.

It is estimated that almost 25 per cent of SMEs (around 160,000 businesses) will find themselves embracing the GST at the registration threshold value set at above RM500,000 a year.

SMEs with annual sales of less than RM500,000 are advised to evaluate and volunteer to be in the GST system, which will bring many advantages over the longer term.

The GST at six per cent is aimed at enhancing the efficiency of the tax collection system. — Bernama

Malaysia to Implement Goods and Services Tax on 1 April 2015 | CFO innovation ASIA


By Dezan Shira & Associates | Monday, September 22, 2014 - 14:28

The Malaysian government has announced that on April 1, 2015 it will implement a Goods and Services Tax (GST) of six percent. The new GST will replace the current sales and service tax regime.

GST is defined as a multi-stage tax payable by all the intermediaries in the production and distribution chain, with the tax burden ultimately borne by the end consumer. GST is a much broader tax than a sales and service tax; it operates on a negative concept, and all goods and services are therefore subject to GST unless specifically exempted. 

Businesses should note that services provided by a foreign service provider to Malaysian entities will also be subject to GST. The Royal Malaysian Customs Department will be the agency in charge of administering the GST.

Businesses will have to shoulder increased responsibility for ensuring compliance with GST. Therefore, in order to prepare themselves for the implementation of GST, foreign businesses should take the following actions:

Review commercial contracts
Review internal supplies
Update accounting systems
Retrain employees so that they can deal with GST
Ensure a clear understanding of the relevant conditions for qualifying for a GST rebate

The new GST has proven to be a controversial issue in many areas of Malaysia. There has been criticism from government opposition and civil society groups, who believe that the GST will place too much stress on much of the population who are already struggling with high levels of debt and little or no savings.

The Malaysian government has admitted that the GST will result in a nominal increase in prices, but does not expect consumers to be too adversely affected since they are only required to pay tax on goods and services used. Additionally, the government hopes to offset any adverse reaction to the GST by imposing a lower income tax rate and a RM300 increase to the Bantuan Rakyat 1Malaysia (BR1M) financial aid to low income households.

The government is also warning businesses not to raise their prices in reaction to the GST. Businesses that do raise prices could find themselves subject to the Price Control and Profiteering Act.

Monday, September 22, 2014

Chasing McDonald’s: How Finance Helps Drive Jollibee’s Dramatic Growth | CFO innovation ASIA

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Jack Ma: If you’re still poor at 35, you deserve it!

jack ma

Jack Ma: If you're still poor at 35, you deserve it!

You are poor because you have no ambition.
Jack Ma: Before I founded Alibaba, I invited 24 friends to my house to discuss the business opportunity. After discussing for a full two hours, they were still confused — I have to say that I may not have put myself across in a clear manner manner then. The verdict: 23 out of the 24 people in the room told me to drop the idea, for a multitude of reasons, such as: 'you do not know anything about the internet, and more prominently, you do not have the start-up capital for this' etc etc.
There was only one friend (who was working in a bank then) who told me, "If you want to do it, just try it. If things don't work out the way you expected it to, you can always revert back to what you were doing before." I pondered upon this for one night, and by the next morning, I decided I would do it anyway, even if all of the 24 people opposed the idea.
Jack Ma founding members
When I first started Alibaba, I was immediately met with strong opposition from family and friends. Looking back, I realised that the biggest driving force for me then was not my confidence in the Internet and the potential it held, but more of this:  "No matter what one does, regardless of failure or success, the experience is a form of success in itself." You have got to keep trying, and if it doesn't work, you always can revert back to what you were doing before. 
As with this quote by T.E. Lawrence – "All men dream: but not equally. Those who dream in the dark recesses of the night awake in the day to find all was vanity. But the dreamers of day are dangerous men, for they may act their dreams with open eyes, and make it possible."
jack ma serious
Jack Ma: People lose out in life because of these 4 reasons:
  1. Being myopic to opportunity
  2. Looking down on opportunities
  3. Lacking understanding
  4. Failing to act quickly enough
You are poor, because you have no ambition.
Ambition is living a life of great ideals; a magnificent goal in life that must be realised.
In this world, there are things that are deemed unfathomable, but there is nothing in this world that cannot be done. The depth of one's ambition determines the potential of one' future.
The Story of Juliet Wu Shihong – one of China's first-generation professional managers, who gained success by working her way up the ranks from a cleaner, a nurse, a marketing executive, through self-education and learning on the job.
Juliet Wu Shihong
She had been the general manager for the world's most famous multinational IT groups' Chinese branches (Microsoft 1985-1998; IBM 1998-1999). She is also China's first successful international corporate executive to join the executive team of a domestic private firm. Wu was seen as a symbol of the new generation of business executives that China has produced in its economic reform and opening-up.
When Wu started off in a big company working from the lowest ranks, her daily job was to pour tea and sweep floors. Once, because she forgot her staff pass, the company's guard stopped her at the door and denied her entry. She explained to the guard that she was indeed one of the company's employees, and that she had merely left the building for a short while to purchase office supplies.
Despite her pleas, the guard still did not allow to enter. As she stood at the gate, she watched as those of similar age to her, but smartly dressed in business attire walking through without having to show their passes.
She asked the guard, "Why are these people allowed through without producing a pass?" The guard dismissed her coldly nonetheless.
That was the turning point for Wu – she felt great shame, her self-esteem trampled on.
She looked at herself, dressed in shabby clothes and pushing a dirty push cart. Looking back at those dressed in smart attire, her heart felt a deep ache from the sudden realization of the sorrow and grief from being discriminated. From that moment, she vowed never to allow herself to be shamed like this again, and to become world-famous.
Since then, she used every opportunity to enrich herself. Every day, she was the first to arrive at work, and the last one to leave. She made every second count, spending her time learning the ropes. Her efforts soon paid off; she was made a sales representative, and quickly progressed to being the regional general manager of this multinational company in China. Wu did not possess strong academic qualifications, and was revered as the 'Queen of Part-timers'. Subsequently, she assumed the position of GM of IBM China. This is the Wu Shihong, the heroine in China's business circle.
Juliet Wu Shihong
If not for the incident, Wu Shihong would not have had the ambition to become rich, and her life would have taken a very different path then.
  • You are poor because you do not have the desire to become successful.
  • You are poor because you lack foresight.
  • You are poor because you cannot overcome your cowardice.
  • You are poor because you lack the courage and determination.
  • With ambition you can overcome all inferiority and maximise your potential!
  • With ambition you can persevere, continuously learn new things and strive for perfection.
  • With ambition you can defy all odds, and create miracles when others daren't.
No matter how poor your family is, do not doubt your own abilities and lose sight of your ambition.
  • When your family deems you worthless, no one will pity you.
  • When your parents do not have money to pay the medical bills, no one will pity you.
  • When you are beaten by your competitors, no one will pity you.
  • When your loved ones abandon you, no one will pity you.
  • When you have not accomplished anything by the time you are 35, no one will pity you.
Go big, or go home. Otherwise, you're wasting your youth.
The article is originally published in Chinese, and is translated into English. If you think this was helpful, feel free to share it with your friends.
About Jack Ma: Jack Ma is a Chinese Internet entrepreneur. He is the Executive Chairman of Alibaba Group, a family of highly successful Internet-based businesses. He is also the first mainland Chinese entrepreneur to appear on the cover of Forbes Magazine and ranks as one of the world's billionaires.Ma was named the Financial Times' 2013 Person of the Year because he personifies the Chinese internet, referring to him as the "godfather of China's scrappy entrepreneurial spirit.".

Friday, September 19, 2014

Uber launches completely cashless uberTAXI app in Singapore

Uber launches completely cashless uberTAXI app in Singapore

Zafirah Salim | Sept. 18, 2014

Transport service provider Uber has decided to open up the Uber platform to taxis in Singapore with its recent launch of uberTAXI.

The launch of this new service will allow cab riders in Singapore easy access to Singapore's fleet of taxi. In addition, it also helps drivers find more customers efficiently, increasing their utilisation and earnings each day, while reducing carbon emission because they are not circling the streets looking for customers.

uberTAXI, like all services on the Uber platform, is completely cashless, enabling users to book and pay directly through the Uber app. Customers can simply select the TAXI option in-app, take a ride, and their card will be charged automatically. Trip details will then be emailed directly to the customer, boosting the convenience factor.

According to the company, uberTAXI pricing will follow the same fare rates set out by the Land Transport Authority (LTA). uberTAXI will also offer a five-minute waiting time for customers, and the meter will start at the time passenger enters the taxi.

A unique feature of this service is that users will receive a photo, license plate as well as phone number of the driver so that they can safely identify and contact them. Users can also share their location and estimated time of arrival with their friends using uberTAXI's "Share my ETA" feature.

"In addition to uberX and UberExec, we also know taxis are well loved here. By partnering with the best taxis in the city, we are bringing yet another safe, reliable and seamless option to move around Singapore. This is why we are offering the new taxi choice to Singaporeans - the same Uber convenience, reliability and quality riders know and love," said Mike Brown, Regional General Manager of Uber.

To commemorate this launch, Uber is offering a 25 percent discount on all rides on uberTAXI until September 30, 2014.

Six Degrees of Separation: Fact or Fiction?

Six Degrees of Separation: Fact or Fiction?

Six Degrees of Separation: Fact or Fiction?
Most people have heard of the "six degrees of separation" theory -- the idea that everyone in the world is separated from everyone else by six links. But is t...
Preview by Yahoo
Dec. 12, 2006
Most people have heard of the "six degrees of separation" theory -- the idea that everyone in the world is separated from everyone else by six links.
But is the notion just a pop culture myth or a fact of life?
See how "Primetime's" experiment played out on "Basic Instincts: The Human Chain" Wednesday, Dec. 13 at 10 p.m. ET.
"Primetime" resolved to find out by conducting a groundbreaking social experiment. With the help of Columbia University professor Duncan Watts, "Primetime" created a test that pitted real people against each other in a race to see who could connect themselves to a random third individual the fastest, and do it in an unusual way.

It's a Small World After All

For a number of years, Watts has studied Network Theory, the scientific field that examines how networks form and how they work in society. Network Theory covers many subjects, including how people interact socially, how diseases spread, how people find jobs, and even how aspects of the World Wide Web operate.
"You may think that you're sort of locked away in your little part of the world," Watts said. "In fact, you're not. Everyone is connected in some way or another."
As widespread as the notion of six degrees has become since it was hatched in the 1960s and has since become the subject of a play and movie, there has been very little effort to try to prove whether the hypothesis is true. Watts himself has led one of the most significant experiments, Columbia's Small World Project.
The Small World Project is carried out online. In the experiment, each participant, or "searcher," is assigned a random "target," one of 18 people around the world. Their job is to link to this person via e-mail. But there's a catch -- they can't just send an e-mail directly to the target, they must connect by creating a human chain.
First, the participant e-mails someone they know. They ask that person to continue the links by e-mailing someone else they know. The hope is to eventually send an e-mail to someone who knows the target personally, completing the chain.
Some 60,000 people from 170 countries have taken part in the experiment. Of the hundreds of chains that have been completed, Watts says the average number of links has been six, supporting the six degrees of separation theory.
But Watts admits there are built-in biases to his work. First, it may be true the majority of most people who participate in the Small World Project are of the same social class, and some say it's easy to connect the searcher with the target if both are college educated or middle class.

Expanding the Experiment

The "Primetime" experiment went beyond the previous limits. With Watts' help, "Primetime" set up the test so that the participants would not just be strangers, but would literally come from different worlds.
To see if people could connect across class, race, economics and geography, "Primetime" started out by locating volunteers who would be at opposite ends of the social spectrum.
Kristina Stewart Ward is the editor of Hampton Style magazine, which chronicles the lives of the rich and famous people who congregate in New York's high society summer playground. She has a home in the Hamptons herself as well as on Manhattan's fashionable Upper East Side.
Darren Schick grew up in a small town in Pennsylvania but now also lives in Manhattan, where he sells expensive china and crystal stemware to some of the nation's top retailers.
When Ward and Schick met for the experiment, "Primetime" told them that they were about to compete. Both were going to try to connect with someone they had never met.
But connecting to that person didn't mean finding them -- that would have been too easy. The challenge was to link up by creating a human chain of contacts that ended with their "target," a man named Petey Pierre.

The Improbable Target

Pierre lives in Bedford Stuyvesant, also known as Bed-Stuy, a neighborhood of Brooklyn that has little in common with the areas Ward and Schick call home. In a region ripe with economic depression, Pierre has been trying to make a name for himself as an amateur boxer.
"Primetime" showed a picture of Pierre to Ward and Schick and asked them a simple question: Do you know this man? Both said no.
"Primetime" showed Pierre a picture of the two people who were about to start searching for him. Though Pierre said Schick "looks like a Spanish guy from 'The Young and the Restless,'" and Ward "is all right looking," he had never them either.
Asked if he thought Ward and Schick could connect with him just by building a chain of their friends and acquaintances, Pierre shot back, "No way, I think it's impossible. It's like 100 degrees of separation right there."
But Ward and Schick were much more optimistic. Each felt sure they could accomplish the task.
According to "Primetime's" rules, the winner of the contest would be the person who connected to Pierre in the fewest number of steps. Was six degrees all that separated them? Were the links fewer or much more? Or was a connection established at all?
What played out in the experiment took both Ward and Schick through surprising twists and turns.

The Biggest Mistakes I See on Resumes, and How to Correct Them

Laszlo Bock

Laszlo BockInfluencer

SVP, People Operations at Google

The Biggest Mistakes I See on Resumes, and How to Correct Them

Sep 17 2014
I've sent out hundreds of resumes over my career, applying for just about every kind of job. I've personally reviewed more than 20,000 resumes. And at Google we sometimes get more than 50,000 resumes in a single week.
I have seen A LOT of resumes.
Some are brilliant, most are just ok, many are disasters. The toughest part is that for 15 years, I've continued to see the same mistakes made again and again by candidates, any one of which can eliminate them from consideration for a job. What's most depressing is that I can tell from the resumes that many of these are good, even great, people. But in a fiercely competitive labor market, hiring managers don't need to compromise on quality. All it takes is one small mistake and a manager will reject an otherwise interesting candidate.
I know this is well-worn ground on LinkedIn, but I'm starting here because -- I promise you -- more than half of you have at least one of these mistakes on your resume. And I'd much rather see folks win jobs than get passed over.
In the interest of helping more candidates make it past that first resume screen, here are the five biggest mistakes I see on resumes.
Mistake 1: Typos. This one seems obvious, but it happens again and again. A 2013 CareerBuilder survey found that 58% of resumes have typos.
In fact, people who tweak their resumes the most carefully can be especially vulnerable to this kind of error, because they often result from going back again and again to fine tune your resume just one last time. And in doing so, a subject and verb suddenly don't match up, or a period is left in the wrong place, or a set of dates gets knocked out of alignment. I see this in MBA resumes all the time. Typos are deadly because employers interpret them as a lack of detail-orientation, as a failure to care about quality. The fix?
Read your resume from bottom to top: reversing the normal order helps you focus on each line in isolation. Or have someone else proofread closely for you.
Mistake 2: Length. A good rule of thumb is one page of resume for every ten years of work experience. Hard to fit it all in, right? But a three or four or ten page resume simply won't get read closely. As Blaise Pascal wrote, "I would have written you a shorter letter, but I did not have the time." A crisp, focused resume demonstrates an ability to synthesize, prioritize, and convey the most important information about you. Think about it this way: the *sole* purpose of a resume is to get you an interview. That's it. It's not to convince a hiring manager to say "yes" to you (that's what the interview is for) or to tell your life's story (that's what a patient spouse is for). Your resume is a tool that gets you to that first interview. Once you're in the room, the resume doesn't matter much. So cut back your resume. It's too long.
Mistake 3: Formatting. Unless you're applying for a job such as a designer or artist, your focus should be on making your resume clean and legible. At least ten point font. At least half-inch margins. White paper, black ink. Consistent spacing between lines, columns aligned, your name and contact information on every page. If you can, look at it in both Google Docs and Word, and then attach it to an email and open it as a preview. Formatting can get garbled when moving across platforms. Saving it as a PDF is a good way to go.
Mistake 4: Confidential information. I once received a resume from an applicant working at a top-three consulting firm. This firm had a strict confidentiality policy: client names were never to be shared. On the resume, the candidate wrote: "Consulted to a major software company in Redmond, Washington." Rejected! There's an inherent conflict between your employer's needs (keep business secrets confidential) and your needs (show how awesome I am so I can get a better job). So candidates often find ways to honor the letter of their confidentiality agreements but not the spirit. It's a mistake. While this candidate didn't mention Microsoft specifically, any reviewer knew that's what he meant. In a very rough audit, we found that at least 5-10% of resumes reveal confidential information. Which tells me, as an employer, that I should never hire those candidates ... unless I want my own trade secrets emailed to my competitors.
The New York Times test is helpful here: if you wouldn't want to see it on the home page of the NYT with your name attached (or if your boss wouldn't!), don't put it on your resume.
Mistake 5: Lies. This breaks my heart. Putting a lie on your resume is never, ever, ever, worth it. Everyone, up to and including CEOs, gets fired for this. (Google "CEO fired for lying on resume" and see.) People lie about their degrees (three credits shy of a college degree is not a degree), GPAs (I've seen hundreds of people "accidentally" round their GPAs up, but never have I seen one accidentally rounded down -- never), and where they went to school (sorry, but employers don't view a degree granted online for "life experience" as the same as UCLA or Seton Hall). People lie about how long they were at companies, how big their teams were, and their sales results, always goofing in their favor.
There are three big problems with lying: (1) You can easily get busted. The Internet, reference checks, and people who worked at your company in the past can all reveal your fraud. (2) Lies follow you forever. Fib on your resume and 15 years later get a big promotion and are discovered? Fired. And try explaining that in your next interview. (3) Our Moms taught us better. Seriously.
So this is how to mess up your resume. Don't do it! Hiring managers are looking for the best people they can find, but the majority of us all but guarantee that we'll get rejected.
The good news is that -- precisely because most resumes have these kinds of mistakes -- avoiding them makes you stand out.
In a future post, I'll expand beyond what not to do, and cover the things you *should* be doing to make your resume stand out from the stack.

Larry Ellison Steps Down: Succession Done Well

Josh Bersin

Josh BersinInfluencer

Principal and Founder, Bersin by Deloitte

Larry Ellison Steps Down: Succession Done Well

Founders always have a very hard time giving up their roles as CEO.
Look at pioneering technology founders like Bill Gates of Microsoft, Andy Grove of Intel, Larry Page and Sergey Brin of Google and Mark Zuckerberg of Facebook. Each held (or still hold) onto their companies as long as they possibly can.
Why? Because successful founders define their identity around their company and often single handedly create the culture, product strategy, and marketing vision that drives success. I have personal experience in this area, so I completely understand the dynamic.
This week one of the most iconic and successful CEOs in our time, Larry Ellison, announced his decision to step down from his direct operational role running Oracle. For those of us who have been in the technology industry for years, the story of Oracle is amazing.
This company started as a small scrappy pioneer in the relational database industry back in 1977 (before relational databases were really popular). The company popularized the use of SQL for mainstream programmers and as the database industry exploded with growth, won the "database wars" against Sybase, IBM, Ingres, and Informix in the 1980s. Under Ellison's leadership, Oracle built an entire ecosystem of Oracle tools, professional developers, and applications over the years. From the very early days, Oracle essentially invented the "multi-platform" database and developed strong relationships with every major hardware manufacturer in computing (eventually acquiring Sun, one of its best partners). Ellison learned quickly that in addition to having a good product, the company needed to "own a market" by running on every platform imaginable.
As the database industry become bigger and Oracle's growth slowed, he aggressively moved the company into business application software, eventually buying a slew of applications companies to make Oracle one of the world's leaders in business software. As I followed Oracle over the years (as both a competitor, software executive, and analyst) I always marveled at Ellison's ability to spot a trend and then jump into a market when it became big, popular, and ready for global growth. Today Oracle is dominant in almost every major business software category and the company never slows down in its relentless efforts to own a market segment and penetrate large corporate accounts.
Over these 30+ years Ellison has always been a smart, aggressive, and somewhat controversial leader. Analysts believed Oracle was behind on the cloud, until Ellison made a series of announcements (Oracle 8i, 9i, 10i) which convinced the world that Oracle's products were no made for the web. While Oracle is not always first to market as technology changes, the company is an amazingly fast follower and Ellison has an amazing ability to rapidly push the company into new markets right as these markets become large. In my particular marketplace, Oracle went from a relatively small player in Human Capital software to suddenly becoming the #1 market share player through the acquisition of PeopleSoft and Taleo over the last ten years.
Ellison's decision to acquire Sun, Siebel, BEA Systems, and many other companies demonstrates his ability to deeply understand technology markets and pounce when the time is right, even when Oracle itself may not be able to innovate fast enough. In many ways Ellison's strategy has always been "if we can't develop software to be #1 in the market, we will buy the #1 in the market." This has worked again and again.
I remember meeting Ellison in the 1980s when I worked for IBM and saw his charisma up close. At that particular time IBM was rapidly growing its business in distributed unix computing systems and badly wanted Oracle to port its product to IBM's version of Unix, called AIX. Ellison painted such a compelling picture of Oracle 7 (it didn't really exist yet) to the IBM executives that IBM decided to invest heavily in Oracle and later developed a strong business partnership to help Oracle port its software to the IBM platform.
The interesting thing about this relationship is that for many years IBM and Oracle competed aggressively in the database industry, so while one part of IBM was partnering with Ellison, another part considered him a tremendous rival. IBM scientists were some of the original inventors of the SQL language and IBM executives always felt that they deserved the right to that market. Oracle did a much better job of building the right products, porting to multiple platforms, and aggressively marketing and selling the database - leaving IBM as a small player in the relational database industry.
I had the opportunity to work for one of Oracle's bitter rivals in the early 1990s (Sybase) and we always worried that Oracle would eventually "figure out" what we were doing. When they finally did, Oracle quickly and aggressively started to outsell us (pushing a story that "Sybase couldn't scale") and eventually forced Sybase to shift its product strategy away from enterprise database toward mobile and middleware products. While I never knew how much Ellison was involved, I'm sure he was beating the drum behind the scene and knew that Sybase represented an existential threat, firing up his competitive energy. Despite our best efforts to beat Oracle in the database market with new and better technology, Sybase lost that battle and eventually the war. Now SAP (who owns Sybase) can fight the battle by investing in Hana and Sybase to compete with Sun and Oracle.
Ellison's tremendously strong technology background and deep understanding of enterprise software makes him hard to beat -- and most of his competitors have either gone out of business or simply become part of Oracle after an acquisition.
This announcement is significant for several reasons. First, of course, it means that Larry Ellison will be less involved in the day-to-day operations of Oracle. But more significantly, it shows that Oracle is now mature enough and smart enough to build a long term succession plan for Ellison himself. Mark Hurd and Safra Catz, both of whom have worked for Oracle for many years now, are running the company -- and Ellison is going to play the role of chief technology officer. This puts Larry where he fits best: watching the product strategy, observing market trends, and pushing Oracle to aggressively move when the time is right.
In many ways this is the end of an era. If Ellison truly decides to step away from the company, a new breed of software leader(s) will have to emerge, and Oracle has plenty of people to take his place. To me, as someone who has grown up across the bay from Oracle and still works closely with Oracle in the human capital market, I expect the company will continue to thrive. While Oracle has plenty of challenges (as does every technology company), he has taken the time to groom new operational leaders to take his place. He has been an exceptional leader and we have all watched him grow and evolve as Oracle continued to grow.
For business people, the lessons show that sometimes strong multi-functional founders can thrive for many years. So while many companies try to replace founders at some time, in Oracle's case Ellison has been instrumental in the company's success for decades. For HR and other people, the story shows that even the strongest CEOs need a succession plan, and it often takes years to develop and groom successors that can succeed. In this case Ellison has been friends with Mark Hurd for many years and it would not be suprising to hear that this transition has been in the works for a long time.
I personally have always found Oracle to be an impressive, trend-setting company, despite its sometimes overly aggressive sales and marketing approach. The company's products are eminent around the world in almost every market, and we hope that Oracle's success continues through this transition. There are a lot of lessons to learn and stories to be told, and now that Ellison is in the chairman role it will be interesting to see how the new top executives evolve Oracle as the market for enterprise software gets hotter than ever in the cloud. SAP, Workday, Salesforce, and dozens of other fast-growing vendors now have young, aggressive leaders - Oracle is now ready to do the same.
About the Author: Josh Bersin is the founder and Principal of Bersin by Deloitte, Deloitte Consulting LLP, a leading research and advisory firm focused on corporate leadership, talent, learning, and the intersection between work and life. Josh is a published author on Forbes, a LinkedIn Influencer, and has appeared on Bloomberg, NPR, and the Wall Street Journal, and speaks at industry conferences and to corporate HR departments around the world. You can contact Josh on twitter at@josh_bersin and follow him at . Josh's personal blog is at .