About the author, Stan Rambin... Software Designer and owner of LaData Software Development, has worked with computers since 1980. LaData provides services in Database Programming, Networking, Data Mining and Web Services. Also he is the webmaster at ailink.org, a forum and discussion site on Artificial Intelligence.
LaData Software Development
E-Mail the author at: email@example.com
Thursday, June 27, 2002
Corporate Management (not)
Today’s headlines are disturbing, but to some of us who worked for large corporations, not very surprising. As a Regional General Manager for an S & P 500 company that has now filed bankruptcy, I can tell you that in the late 1990’s, things were very crazy. I left that position after it became apparent that reasonable business decisions were no longer acceptable. Since 1999, I have often wondered what the outcome of so many short sighted decisions would be.
How could so many seemingly smart people make so many bad moves? Let’s look at what went wrong.
How should a business view its primary mission? Some criterion might be:
1. Share holder value. This came to mean the price of company stock, but shouldn’t some value be placed in longevity of earnings?
2. Employee satisfaction. In the short range bonuses are nice, but if they are paid in company stock and the company goes broke…
3. Customer Satisfaction. This item is tricky because ultimately, the customer bases his business on the presumption that his supplier will be around to support his products and continue to satisfy their demand.
4. Growth. Growth is important but not at the price of decreasing stability in the company.
If you look at most company mission statements, some combination of the above will be present. Yet, I believe the very list above is responsible for the corporate mess we see today. Each item if taken as a mandate, points to the immediate effort and results, as opposed to a long range view. Share holder value, not seen as the steady abet cyclical growth of history, but rather tomorrow’s stock price, forces the immediate profit over reoccurring success. Historical cooperate growth rates are generally in the 3% - 5% range. Even in times of boom, 20% rates are unusual with most large companys in the low double digits. So how did so many companies show 30% annual growth rates?
Just to look at one aspect of this resent insanity, look at growth in revenue. How do you grow a company? Well, you get more customers. You may open new locations to access new markets. But companys found a better way. How? Just buy another company. The problem is that in most cases, the company you buy either has some serious problems or else they won’t sell at a fair price. In most cases a fair price is 3 to 5 times annual earnings. Many acquisitions went for 20 times current earnings or even greater. Now if you pay 8% interest on your corporate bonds to borrow money, and your only getting a 5% return on the purchase, the bottom line decreases while the liabilities increase. Then the impact of merging staffs, understanding the new company’s business and the conflict of corporate cultures exacts a tariff on the old rosy scenario, so things start to go down hill. Next the powers that caused the problem, seeing their stock options in jeopardy, react by mandating more sales and decreasing costs. Good luck!
Middle management gets squeezed and poop rolls down hill to the little guy, the pressure increases, so much for employee satisfaction. The 401k is in the toilet, your wife wants to know why you never come home on time any more and your staff looks at you like they may storm the Bastille tomorrow. Sell, Sell, Sell. Oh, I almost forgot, the customer is not doing too good either. The double whammy of irate, overworked employees and decreases in services provided, may put customers off a mite.
So what does the upper management do? Simple, find some smuck to buy the company and the process repeats.
The problem is that Tactics completely replace Strategy. The tactics required to earn a profit this quarter wins out over the strategy required to be in business in ten years. Once this process begins, the company has to dig a new hole to cover up the old one. Digging these holes often involves creative accounting. For example if a company starts counting the inventory or accounts receivable of the acquired company and discovers that their due diligence wasn't diligent enough, they may decide on a moratorium on inventories. Hear no evil, see no... (Mine did). Perhaps the acquired company has a tiny bid of asbestos exposure it failed to mention, well the CEO that sold the board on the acquisition might find this somewhat embarassing, so we won't talk about it now (however, after 1500 trial lawyers file suit, it's too late).
If the company is very, very large, they may get the auditing firm to go along with these tactics. There you have it sports fans, the beginning of the end.
Wednesday, May 01, 2002
Notes on upcoming changes in approaches to web design.
The .NET system offered by Microsoft Corporation, consists of three major components:
First, their intention is to provide a more effective approach to multi-platform development. That is to say, from a programmers point of view, it will allow a program to be written in an environment where we can easily produce end products that run on operating systems like Linux, Solaris, Windows and OS-X. This allows less code changes when a product is revised.
The second objective is to present a more web oriented approach to general programming, such as providing a simple system for connecting databases for web commerce with traditional local network systems such as general accounting. This is accomplished through the use of XML code for databases and NET native code for active web pages.
Finally, Microsoft wants to leverage it's share of the business desktop PC market into a slice of enterprise software systems, much like Oracle and Sun Microsystems have today. This focus is not new, but their quest for the holy grail of computerdom seems in reach... .NET succeeds.
Our view of the high-end database business is that .NET may well move Microsoft into a major market share of this very profitable market. Other favorites include Linux and of course Oracle.
So what does this mean for your business? First, due the high cost of transferring code over to .NET compliant standards, many companys like LaData will make a slow change, focusing on new projects and migrating them first. We feel the move to .NET will be a gradual one and many will wait to see if competitors offer viable alternatives.
In the mean time, many components of the .NET system can be implemented. ASP or Active Server Pages, blending HTML, XML and scripting languages, improve the function and security of web-based commerce. By allowing the customers data to remain on local machines, page loading is much faster and exposure of customer data to repeated transfers over the web is greatly reduced.
Friday, April 12, 2002
In today’s software market, developments of stand-alone Window’s applications are almost a thing of the past. Even if you are willing to engage in the effort and expense, marketing is a nightmare. Only game apps and programs running under a web browser can garner enough interest to return the advertising investment required to make a significant impression on the buying public.
This leads us to the question of, “What programs can developers produce and expect to make money with?” The answer is specialty niche applications. Applications like front-end database access components or utilities like software firewalls. Then, there are the appliance application markets. Handheld units or digital phones may increasingly provide a software market. The question of concern is,” Will manufactures use proprietary code or firmware?” Looking at the dwindling revenues in most appliance businesses, they could generate an additional income stream producing and selling connectivity options to customers.
Producing code for database interface, using the multi-tiered model now in vogue will keep us all busy for years. Just looking at security issues in most mid-sized companies makes one realize the number of changes required to achieve a degree of safety. These changes are also a moving target. The iceberg of human ingenuity, as it applies to computer mischief, threatens to sink any who fail to react. Extending this metaphor to the limits, the technology ship may be huge and complex, but remember the Titanic…
In a recent web survey, the question posed was, “What do you see as the greatest problems faced by the internet.” The list of selections included about fifteen issues from which you were to pick three. My top picks were all related to security and privacy. Perhaps this is because of the time required to protect internet connections today. Tracing unauthorized attempted connections will lead you all over the world. These requests often come from China and Central Europe. Also, some cookies can cause information indigestion. Ad pop-ups and distributed computing applications pose threats to everyday processes. When I’m downloading on a machine with 256 MB memory, if the SETI screen saver activates, errors in the downloaded file force a restart. The reason for this problem is that SETI will use 100% of the CPU cycles available. I’ve tried different download agents, but they all get upset by SETI. So, I’ve learned to use a utility program to terminate SETI and not to merely exit the system tray icon (which allows it to pop up after seventy MB of downloading). This doesn’t bode well for ‘Brilliant’ and other companies looking to use distributed computing in the internet future.
The next big issue is how to make money on the internet. Obviously the business model of many dot-coms failed to produce profits. Internet advertising often doesn’t yield the desired response from the buying public. Will this change? Are the failures to motivate a true reflection of the internet interaction experience? Or perhaps shopping pleasure is somehow diminished over the internet. Can a change in advertising technique or a bundling of services improve customer response? Or perhaps the internet will only be a communication tool. Sort of like calling in a pizza, with search sites acting as high tech yellow pages. Even in that case it must offer some additional value in exchange for the delivery delay. Price, unique products or services and a cheerful experience can help, but can internet companies afford to offer these to customers?
Take the question of price. The first model of retail sales over the internet assumed that by eliminating the cost of ‘bricks and mortar’, pricing could offer an advantage. But if Barnes and Noble or Gateway still support ‘bricks and mortar’ stores, how can that produce an advantage in pricing? In fact, if local sales taxes are imposed on internet purchases, pricing may actually be higher on the net. Reversing that strategy, chain stores such as Wal-Mart might be able to add sales and let us bypass that wonderful ‘Wal-Mart shopping experience,’ using internet sales. So far these efforts are marginally successful at best.
So what does the internet do well (besides porn)? Education, global community, communication with others sharing common interests and an unlimited channel for expression are just some of the areas the internet excels in. Business services and support conducted over the net allow global communication and problem resolution. The decrease in cost of intra-company information collection and dissemination is astounding. These efficiencies are responsible for the growth in productivity that Alan Greenspan expounds with such vigor.
If you fly fish, surf, do macramé or paint, the internet offers instructions and channels to people of like interest. This helps provide a community effect on a global basis. Can you imagine the impact of instructions on making an electrical generator on a small third world community? What effects can it have on a child who is using a computer to learn about other cultures? She might even chat with someone from that country using the translating feature of the web browser.
Finally, you can actually do business over the web. The best type of this is business to business transactions. Emerging technologies involving such concepts as Active Server Pages, the .Net approach and parallel developments under various UNIX based operating systems will, in time, allow safe and effect use of the internet for business purchasing and information transfer. Once again, the emphasis is on improving productivity. Not so much by effect price comparisons, as by making transactions faster, safer and simpler. Transactions will have improved tracking visibility and simplify accounting processes; Once again leading to reduced operational cost and increased managerial transparencies. In the meantime, using virtual private networks with reasonable security allows low risk connections between companies.
Friday, March 22, 2002
Critics of the internet bust point out some very interesting items about recent industries woes, but if one can focus on another, earlier communication technology, the telephone, some parallels can be drawn.
Yes, one can view the telephone as a stand-alone instrument. By using a remote phone in every room you can speak with a family member even though there are closed doors between you. If the phone in question is a late model cellular or digital, you can play games on it. Not withstanding local uses, the telephone works best when networked with others.
In early business development, many, in fact almost all of hundreds of small telephone competitors went broke or consolidated in to larger companies (a trend which reversed for a while but now seems to repeat itself). Surely many early investors lost their connection, as well as their pants, before demand though competition in business customer service, made the telephone into the indispensable tool it is today.
Perhaps the real question one might ask would be, “what is the best future use of the computer.” Is it a communications tool, a data collection and processing tool, or maybe an educational device? One thing is certain, what ever we can think of using it for today, someone will come up with other uses tomorrow. By the way, what ever happened to the Gutenberg Co.? Didn’t they come up with a new communication tool awhile back?
Wednesday, March 20, 2002
It’s definitely a drizzly day in Dixie. Thunder booms and rain blows, but computers must slog on. Enough of the cliché-hoedown, over the past weekend I was reminded of one of my favorite books, “The Quark and the Jaguar” by Murray Gell-Mann. Mr. Gell-Mann appeared on the Screen Savers with Leo Laport recently and it reran over the weekend.
In “The Quark and the Jaguar”, Mr. Gell-Mann considers many of the questions facing the software programmer looking for solutions to unasked questions. That is to say, businesses often do not know all the questions to ask. In producing a Data Mining application, one the key questions to ask during the ‘How are things going’ interview is, “Do you know why your business _____ (grew, shrank, changed in someway)?” Question the answer in detail. Surprisingly most businesses fail to look for the underlying cause of these effects.
This is where Data Mining can contribute real value to a company. Are you growing because of something you are doing, something you’ve changed, or because of the environment for your type business? If you don’t know why your business is doing well, it will be were difficult to change if business falls off.
Changes in key people can certainly be important, so personnel changes over time must be included in evaluating cycles of growth/non-growth. Advertising and changes in advertising should be involved as well. In short, evaluation of historical data involves not only the changes in data directions, but why they occurred.
Business executives do not get up in the morning and decide to go in and cripple their business. Yet we all know of poor management decisions which have, over time, destroyed companies. One has to assume these decisions were made using inadequate predictive models, or else catastrophic errors in execution occurred. Data Mining, when correctly applied, can both improve predictive models and provide real time performance reporting.
It’s the big picture, well…at least sometimes; and don't ya just love those Jerry Garcia ties?
Monday, March 18, 2002
What a relief. After over a week of desperate effort, I've finally located the distributed scum ware taking control of my hard-drive. I used a combination of techniques to locate all the junk. A quick Visual Basic program to list and them print all processes helped but in order to really get down and get it done, I wrote a VB hack using The APIs, FtgRegisterIdleRoutine to get the I. D. and DeRegisterIdleRoutine to disable it. After identifying the idle routines (which will not show as a program) I had to manually go in and delete with wiping to kill the buggers. I may go ahead and add that functionality to the programs written and put it out as freeware. That’s how much I hate the spy-ware business.
If you think you might like a free copy, drop me an E-Mail at firstname.lastname@example.org. (By the way, there were 28 files identified by the process. This was the results of recent downloading of 'Free Programs', I promise, never, never to put that junk in any of my software.)
Friday, March 15, 2002
Last night, at around 2:00 on the morning, I found myself in the backyard sitting in a lawn chair and experiencing internet rage. The cause of this uncommon condition of frustration, aggravation and general unhappiness was the failure of a 71MB download failing after all 71 Megabytes had been downloaded. On my system, it takes around five hours for this large of a file to download and my ISP has a nasty habit of disconnecting me after three hours.
After the initial range had subsided, I reflected on the question of how we got to the point where program files were 71MB long. Certainly, it has not been so long since computers had hard drives of 40MB and couldn’t even hold one program of that size. These bloated and unwieldy space eaters continue to grow almost like Moore’s law. In fact, I might coin the phrase Stan’s law. Stan’s law would state that program size and memory requirements will double every 18 to 24 months. This growth is directly proportional to available memory and hard disk space. In other words, if you’ve got it, use it.
It wasn’t always that way. At one time, the sign of being a real hacker was to produce the 'Desired Results' in the smallest space possible, that is to say, using the fewest lines of code. I believe the original meaning of the word 'hacker', referred to a code writer who could hack it, that is to say, who had the ‘right stuff’. Now I sometimes wonder if accolades are given to the code writer or writers that burn the most disk drive space and use the most memory.
Sure, ten years ago none of us dared to dream of a system with a clock speed of two GHz. We also, didn’t dream of having programs that run close to 100MB. Even operating systems weren’t that large. When GUI’s arrived everything started sucking up space. One can point out the pretty borders, but our true performance hasn’t improved nearly as much as benchmarks indicate. In everyday practice Word doesn’t run any faster. I’m not even sure a mouse is faster than a good typist who knew WordPerfect keystroke commands.
Since I make my living using tools for Microsoft operating systems, this may be a little late to wake up to the problem. Incremental inflation; this ballooning isn’t new, and isn’t likely to change. Maybe I need to buy some more stock in EMC.
Now that I think about it... it was a beautiful night to sit outside.