Thursday, May 07, 2009

Open Text to Acquire Vignette: Is Open Text Itself Next?

Open Text has acquired Vignette yesterday for $310 million paying $8 in cash and 0.1447 Open Text shares for every VIGN share - Vignette has 23.1 million shares (for an approximate value of $12.70 per VIGN share).  On my blog posting dated January 31st, I mentioned Open Text as one of the likely candidates to take Vignette out:http://hakanakbas.blogspot.com/2009/01/is-vignette-preparing-for-sale.html

As Open Text already has a WCM solution with RedDot, according to Gartner Magic Quadrant for the the Enterprise Content Management space, it is already listed as a market leader along with IBM, EMC, Oracle and of course Microsoft. In the Gartner report Vignette is cited as having a solid customer base as a positive; Open Text continues to consolidate the industry by taking out another pure-play competitor and buying an affordable maintenance revenue stream.

Financially, Open Text’s proposed acquisition of Vignette makes sense, but I would question the strategic rationale of buying a company that appears to be in decline as they have been losing customers for years, something that's unlikely to change under Open Text, which will have its hands full with not only integrating the two product platforms but also stabilizing the revenue decline. Open Text has a long history of adding revenue through acquisitions; The formula is simple: buy cheap and cut costs at the acquired firm. Time will tell if Open Text can't repeat the formula with Vignette.  The deal values Vignette at about one time enterprise value to sales. By contrast, Autonomy’s recent acquisition of Interwoven valued Interwoven at two times EV to sales (see my blog post:http://hakanakbas.blogspot.com/2009/01/autonomy-buys-interwoven-for-775m-who_30.html)

Open Text can also use Vignette's $143 million in cash and short-term investments to help fund the acquisition.  Yesterday’s announcement comes about a month after Open Text acquired Toronto-based Vizible, a privately held maker of digital media interface products. Last fall, Open Text acquired Captaris Inc. in an all-cash deal worth $131 million. Captaris provides software that allows companies to manage documents electronically. 

Open Text is the only remaining public ECM vendor, following years of consolidation in the space. The ECM market has been consolidating for years and OTEX is the last independent vendor standing. If SAP or Oracle have sights on this portion of the enterprise software market Open Text is the only pure-play ECM vendor, and hence that makes it an acquisition candidate. In my opinion, SAP will outbid any other competitor as they would have too much to lose given the long standing partnership and jointly developed solutions particularly in Europe.  SAP CEO following the Business Object acquisition last year pointed out that they could look at ECM next.

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Tuesday, May 05, 2009

Business Action for Water – Assessment of the Fifth World Water Forum held in Istanbul in March 2009

Water is a very important issue for business. Without water, there is no business. Without business, there can be no employment, no economy, and no well-being for people or society.

The Fifth World Water Forum was a successful event. It brought together many water stakeholders, including business, to examine water, which is an under-recognised challenge for the future of all societies. For the first time it embodied a UN-style political process. Heads of state, ministers, parliamentarians and local governments were able to discuss their challenges and policies among themselves and with experts and stakeholders from all backgrounds. Business worked actively to play its part.

The business community raised six core themes at the Fifth World Water Forum: urgency, opportunity, necessity, connectivity, collaboration and complexity. More information on these issues is provided below.

Urgency

Water may be forgotten in the current financial crisis but it is an essential element for recovery, poverty alleviation, health and a secure future. Governments need to give safe water and its distribution a much higher priority. A key message from Angel Gurria, secretary general of the Organisation for Economic Co-operation and Development (OECD), was that water must be going beyond just water ministers to include finance ministers and prime ministers.

Similarly “Businesses need to give water higher priority beyond engineers to include finance directors and chief executives. Water is everybody's business and needs a holistic approach, ” added Bjorn von Euler, director corporate philanthropy of ITT.

“The ministers highlighted the importance of sanitation and wastewater collection, treatment and reuse. The realisation of this commitment must be one of society's most urgent obligations” said Cesar Seara advisor to the president of CAB Ambiental from Brazil.

There is an urgent need for clear policies and principles for sustainable water management. Countries should be investing in water infrastructure as part of their economic stimulus efforts. Clear strategic water principles will help countries and business invest in infrastructure that will ensure a sustainable future for all societies.

Opportunity

Grow differently is an expression we often hear relating to carbon emissions in developing countries, but it should apply to water too. According to the latest figures released by the OECD, about half the world's population — 3.9 billion people — could be living in water-stressed areas by 2030, where health and sanitation, food and livelihoods are at risk.

In low-income countries, we must muster the political will to take action collectively to preserve water resources, provide stable economic environments that will attract investment and build sound, locally adapted infrastructure.

In high-income countries, we must find ways to use our water resources more efficiently and continue to invest in innovation.

Unlike carbon emissions and climate change, where we are struggling to make up for lost time, with water there is an opportunity to be proactive in adapting and mitigating the problems now. In doing so, businesses have the opportunity to enter markets with strong growth potential to the benefit of the whole of society.

The current global economic crisis has shown the importance of adhering to sound economic and ethical principles including the conservation of our limited natural resources. Water, a permanently renewable resource if managed properly, must be given a central role in this approach.

Necessity

Business stresses that these things will only happen if certain necessities are faced. These include:

Data: The data needed to plan and manage water resources is seriously lacking and its quality deteriorating. This is due to lack of international coordination and falling investment. The technology to capture and analyse data is improving rapidly, but the efforts by governments to work together to use it are declining. This trend needs to be reversed immediately.

Value: The true importance and full value of water is still largely ignored. This vital resource needs to be recognised more strongly by politicians, business people and stakeholders from civil society alike. Much stronger commitment is needed to facing the water challenge now, while it can still be resolved.

Finance: Realistic financial flows, achieved by mobilising a combination of tariffs, taxes and transfers will lead to long-term sustainability of water services in agriculture, industry and domestic use. The financial viability of water service operations is a precondition to the objective of providing solidarity support for the poor.

Connectivity – water, energy, food, and climate change

The Water Forum highlighted the connectivity between water, energy, food and climate change. Many experts at the forum showed how water, energy and food all interact with each other. Global changes like urbanisation and climate change affect them all. Looking for holistic solutions is essential.

“Water, energy and climate change are inextricably linked we must ensure that we address all three in a holistic way. They are pieces of the same puzzle and therefore it is not practical to look at them in isolation,” said Joppe Cramwinckel, of Shell International Exploration and Production.

“Energy, food and ecosystem security is linked to water security – food security depends on efficient land and water use,” said. Juan Gonzalez-Valero, head of corporate responsibility of Syngenta International AG.

Climate change shows itself through water: disastrous floods, droughts and extreme storms. Reducing the impacts of water-related disasters is an important challenge arising from this connectivity. Pre-emptive risk management is a key to coping with disasters, especially with respect to climate adaptation. “ The adaptation measures include, for example, building defences, improved spatial planning, building regulations and risk transfer and insurance against some of the more extreme weather events,” said David Bresch, director, head sustainability & emerging risk management of Swiss Reinsurance Company.

Collaboration

Impact is achieved most efficiently through collaboration, a fact illustrated by the many public-private partnerships announced during the forum. Companies need to work with governments, NGOs, professional associations – and even competitors – to create real and lasting change. The developed world needs to work with the developing world to build local and regional businesses to provide transfer of knowledge adapted to local situations.

No single organization can tackle every water issue at once. Building on the idea that collaboration is key, we need to figure out where we can each add the most value. For example, one company can contribute to the energy side of the water equation through its technology that lowers energy costs, another by developing products that use less water. This idea becomes even more critical in the current economic climate. More than ever we must channel our resources and expertise more definitively, with clearer goals and more focused action.

Complexity

While water in itself is simple, finding solutions to the challenges it presents is complex. Water has to provide many different functions for different people under constantly changing circumstances. Today's drought often ends in tomorrow's flood. Over-simplification of complex issues can hinder progress rather than help it.

A case in point, illustrated by the reporting of the forum, is the right to water and sanitation. Business supports this and recognises the complexity. The ministerial round-table discussions on this topic should be seen as constructive progress towards a solution that needs to reconcile many different requirements in a balanced way.

Conclusion

Water is rising rapidly up the scale of issues at last. It still needs to be given more priority as the Istanbul forum has shown. The international business community will continue to support the efforts of governments in effectively managing and providing water to their countries.

Business Action for Water (BAW) is a partnership that brings together a comprehensive network of businesses from around the world drawn from many sectors and regions. Its aim is to profile business and industry as positive stakeholders to achieve the goals, commitments, and conclusions of the 5th World Water Forum.

BAW, comprised of the International Chamber of Commerce (ICC) with its local branch ICC Turkey and TOBB (the Union of Chambers and Commodity Exchanges of Turkey) , the World Business Council for Sustainable Development (WBCSD) with the local support from its regional network partner (TBCSD ), Aquafed, the International Federation of Private Water Operators, TUSIAD ( Turkish Industrialists' and Businessmen's Association) and the Business and Industry Advisory Committee to the OECD (BIAC), ensured that the voice of business is heard at the forum, the world's largest gathering of water experts.

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Don't Give Up Sustainability Now Or You'll Pay Later

Bruno Berthon and Eric Lowitt 04.20.09 Forbes.com

Most people who run companies know that sustainability is good for business. Yet right now, when they are closely scrutinizing all investment programs, they're looking especially hard at environmental sustainability initiatives that focus on carbon activities.

Curtailing such investments is a mistake, we believe, because sustainability is closely aligned with critical moves companies need to make in a downturn--moves like doing more with less, returning to basics and investing prudently. We recommend, on the basis of what we've learned from our researches and consulting, that companies follow five low-cost sustainability principles to gain an edge in the troubled economy.

Consider which of two proposals you would fund right now--one that promises a 30% return on investment with an 80% likelihood of success, or one that promises a 40% return with a 60% likelihood of success. Which would you greenlight?

During more stable economic times, most executives would go for the second proposal. Today, however, you're more likely to take the surer bet. That's the way companies are thinking about their investments now. Practices like synthesizing high returns by pooling subprime mortgage assets are giving way to safer initiatives based on good sense and prudence.

Sustainability is central to this more thoughtful approach. After all, sustainability means conducting activities smartly and efficiently in ways that are economic, renewable and repeatable. More and more companies are realizing that integrating sustainability into their core processes can help them survive or even thrive during the downturn.

At Accenture, the global management-consulting, outsourcing and technology company, we've found that five low-cost sustainability actions correlate well with the five dimensions we associate with high-performance businesses. They involve growth, profitability, positioning for the future, longevity and consistency.

Growth: Go where the money is

There is at least one place where even now companies are capturing the type of growth that the investment community craves: the expanding market for sustainable products and services. In fact, some companies are finding energy offerings to be their primary source of stabilizing growth. General Electric's main bright spot these days is its GE Energy unit, which reported $38 billion in revenue in fiscal 2008, up 26% from the year before; the company as a whole grew 6% over the same period.

Governments worldwide are creating growth opportunities by preparing stimulus packages to jump-start their economies. They're investing in greening their infrastructures as a critical part of those packages, opening up significant opportunities for companies that can offer green solutions. In the U.S., the Obama administration is dedicating $150 billion to green infrastructure investments over the next 10 years.

Companies like Johnson Controls are already tapping in. In December 2008, Johnson Controls was chosen as one of several businesses the Department of Energy will employ to improve the energy efficiency of federal buildings, a program that the government is reportedly pumping $80 billion into.

The government's support for the creation of a "smart grid" also offers significant opportunity. The smart grid will enhance environmental sustainability by giving consumers ways to conserve energy, tap renewable energy sources and use plug-in hybrid electric vehicles. Progressive energy companies are creating teams from across their operations to get the scale and scope they will need to help build the smart grid.

For instance, Xcel Energy, a U.S. electric and natural gas company, is leading the development of a SmartGridCity project to develop the U.S.'s first local smart grid, in Boulder, Colo. Xcel Energy is using smart-grid technologies to achieve greater operational and energy efficiency, turn more to renewable energy sources and improve its overall business performance. And the smart grid opportunity isn't limited to energy companies; Accenture has helped support Xcel Energy's SmartGridCity efforts by serving as the project manager for the integration and management of data flow, as well as electricity transmission and distribution and customer marketing programs.

Profitability: Align cost reduction with sustainability

As many companies have learned the hard way, the profit margins in providing public sector services can be quite low. But more and more firms are finding that when they reduce environmental effects they reduce operating costs too. As David Abney, chief operating officer at UPS, recently noted in an article in Modern Materials Handling, "I can't speak for companies that are holding on for dear life in this economy, but in our case the economy is making us hungrier and more eager to find ways to conserve energy and reduce waste. It saves us real dollars if we can operate more efficiently."

Companies are saving significantly by lowering their energy consumption, their use of excess packaging materials and their reliance on virgin materials. In a 2008 interview with the Climate Group, a spokesperson for BT (formerly British Telecom) observed that it had signed the world's largest electricity contract in 2004, locking in pre-spike energy prices, and had subsequently launched a number of efficiency-improvement programs. As a result, the company is saving an estimated $300 million a year.

Getting rid of excess materials in packaging can definitely help with both one's environmental footprint and one's operating expenses. Wal-Mart has been working to reduce the size of its packages by 5% between 2008 and 2012. The company estimates this will save $3.4 billion over the next five years.

Positioning for the future: Partner to manage intangible assets

In this difficult environment, companies are sharpening their focus on risk management, in part because risk management is so closely linked with reputation. The trick to risk management, as events in the financial sector show, is to manage both the risks you know and the risks you don't yet know. Unfortunately, sustainability initiatives can bring about new risks.

Today's liquidity crunch has placed a premium on certainty; companies can't afford risks that may not pay off. The solution here is connectivity--developing relationships with whoever has the credibility and expertise you need to stay on top of your risks.

More and more companies are linking up with stakeholders and competitors alike to enhance their sustainability actions, to influence the direction of public debate about sustainability and to prepare themselves for forthcoming environmental regulations. These relationships require nominal financial investments, and companies across all industries can pursue them. Companies can derive many benefits in particular from relationships with non-governmental organizations, especially drawing on them for their sustainability expertise and sterling reputations.

A growing number of companies are partnering with competitors and other organizations to try to shape future environmental regulations. For example, businesses as diverse as Marsh (insurance), Pepsi (beverages) and Rio Tinto (natural resources) have joined the United States Climate Action Partnership, a cross-industry alliance that is calling for a government-mandated carbon cap-and-trade system to curb greenhouse gas emissions.

Companies have long known that they can do more working together than individually. Kellogg has partnered with Kimberly-Clark and the supply-chain management company TDG to share truck space in shipments to retailers. The partnership is saving 30,000 gallons of diesel fuel and reducing greenhouse gas emissions by 380 metric tons a year.

Longevity: Ensure your relevance in a sustainability-conscious world

When historians and economists look back at the present moment, they'll probably marvel at the staggering number of stalwart businesses that failed--and they'll say the fault lay in those companies' outdated strategies. After all, even in good times companies need to continuously renew their strategies to keep up.

Generally speaking, there are two ways to stay current: through innovation and through acquisition. The downturn gives companies seeking to capitalize on demand for sustainability-related products and services an opportunity to acquire quality assets at below-market prices. With market capitalizations across the board down between 30% and 40% in 2008 and another 10% in January 2009, the opportunity to acquire sustainability-related assets (as well as other kinds of assets) remains great.

Consistency: Win the loyalty of consumers and employees

The global investment community rewards consistency and hates surprises. We believe sustainability can play into that, helping companies attract and retain customers and boost employee engagement to ensure predictable results season after season.

Consumers' worries about climate change have not been diminished by the economic situation, according to Accenture's annual End-Consumer Observatory on Climate Change. Our research last year took place in the midst of the credit crisis, and the results exhibited a remarkable degree of consistency between 2007 and 2008. More than 80% of respondents both years said they were either somewhat or extremely concerned about climate change, and a similar proportion thought it would certainly or probably affect their lives directly.

This continuing concern translates into continued consumer demand for green products, practices and services. Consumers may not be ready or able to pay more for green, but they clearly differentiate between green and non-green. They will punish poor performers and reward good ones, if not now, then later, when the economy recovers.

Clorox is a company that prepared for--and has benefited from--this trend. Its three sustainability-focused brands--Brita, Burt's Bees and Green Works--are also its three fastest growing. Clorox is one of a handful of leading companies that are differentiating themselves by focusing not just on their own sustainability needs but also on their customers' environmental agendas.

Conclusion

Sustainability, like most other business imperatives, requires up-front investment before it can yield real benefits. At a time when liquidity is constrained for everyone, figuring out where and when to invest in it is critical.

Over the long term, the companies most likely to succeed will have increased their ability to gather market information about sustainability. They also will have reached out, through partnerships and acquisitions in particular, to keep alert and ready to innovate in the right way fast, and at the right time.

You can read the article at: 

http://www.forbes.com/2009/04/20/sustainability-profits-growth-leadership-citizenship-future.html

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Sunday, May 03, 2009

The Age of Pandemics

The threat of deadly new viruses is on the rise due to population growth, climate change and increased contact between humans and animals. What the world needs to do to prepare.

In 1967, the US surgeon general, William Stewart, famously said, "The time has come to close the book on infectious diseases. We have basically wiped out infection in the United States." This premature victory declaration, perhaps based on early public health victories over 19th-century infectious diseases, has entered the lore of epidemiologists who know that, if anything, the time has come to open the book to a new and dangerous chapter on 21st-century communicable diseases.

Indeed, to the epidemiological community, the Influenza Pandemic of 2009 is one of the most widely anticipated diseases in history. Epidemiologists have been shouting from rooftops that a pandemic (or, a world-wide epidemic) of influenza is overdue, and that it is not a matter of "if" but "when." The current pathogen creating the threat is actually a mixture of viral genetic elements from all over the globe that have sorted, shifted, sorted, shifted, drifted and recombined to form this worrisome virus.

No one knows if the 2009 swine flu will behave like the 1918 Spanish flu that killed 50 million to 100 million world-wide, or like the 1957 Asian flu and 1968 Hong Kong flu that killed far fewer. This 2009 flu may weaken and lose its virulence, or strengthen and gain virulence -- we just do not know.

Here's the good news: Compared with a few years ago, the world is somewhat better prepared to deal with pandemic influenza. There have been training meetings, table-top exercises, dry runs and preparedness drills at virtually every level of government and civil society. World Health Organization member states have agreed on a set of regulations that require all members to report the status of diseases of global significance within their borders. We have two effective antiviral drugs, at least for the time being. There have been some breakthroughs to reduce the time required to get effective vaccines into the field, and there is even a small chance that last year's seasonal vaccine will help protect lives from H1N1. In the U.S. at least, influenza surveillance has improved.

Here's the bad news: Today, we remain underprepared for any pandemic or major outbreak, whether it comes from newly emerging infectious diseases, bioterror attack or laboratory accident. We do not have the best general disease surveillance systems or "surge" capacity in our hospitals and health-care facilities. We do not have enough beds, respirators or seasoned public-health staff (many of whom, because of the financial meltdown, ironically got pink slips from their state and county health departments days or even hours before WHO declared we are at a Phase 5 alert, one step short of its highest global level). We not only need to retain the public-health people we have, we quickly need to train a new generation of 21st-century workers who know both the old diseases and have mastered the computer and other digital technologies and genomic advances to keep them ahead of the newest emerging threats.

And there is worse news: The 2009 swine flu will not be the last and may not be the worst pandemic that we will face in the coming years. Indeed, we might be entering an Age of Pandemics.

In our lifetimes, or our children's lifetimes, we will face a broad array of dangerous emerging 21st-century diseases, man-made or natural, brand-new or old, newly resistant to our current vaccines and antiviral drugs. You can bet on it.

One of the top scientists in the world did bet on it. A few years ago, Lord Martin Rees, who holds three of the most distinguished titles in the scientific world (Astronomer Royal; Master of Trinity College, Cambridge; and head of the 350-year-old Royal Society, London) offered a $1,000 wager that bioterror or bioerror would unleash a catastrophic event claiming one million lives in the next two decades. Lord Rees said: "There's real concern about whether our civilization can be safeguarded without us sacrificing too much in terms of privacy, diversity and individualism."

Risks from bioterror are unpredictable, of course, but I think it's fair to say that world-wide access to infectious agents and basic biological know-how has grown more rapidly than even the exponential growth of computing power. According to Moore's law, the number of transistors on a chip doubles in 18 to 24 months -- or, said another way, the "the bang for the buck" in computers doubles in less than two years.

The technologies supporting bioterror have exploded even faster than computing power. The cost of genomic sequencing, as one example of a supporting technology, has gone down from the nearly $1 billion it cost for the first full human DNA sequences to the low thousands for consumers in the coming years. Genetic engineering of viruses is much less complex and far less expensive than sequencing human DNA. Bioterror weapons are cheap and do not need huge labs or government support. They are the poor man's WMD.

Naturally occurring diseases with pandemic potential are much more ubiquitous and more certain to occur. Over the last decades, we have seen more than three dozen new infectious diseases appear, some of which could kill millions of people with one or two unlucky gene mutations or one or two unfavorable environmental changes. The risks of pandemics only increase as the human population grows, the world loses greenbelts, uninhabited land disappears and more humans hunt and eat wild animals.

Most pathogenic viruses that affect humans have originated in animals and jumped to humans; for that reason, we call them "zoonoses." They account for 60% of all infectious diseases, and 75% of all emerging infections.

Some of these diseases are well-known: bird flu, SARS, HIV/AIDS, West Nile, Monkey-pox and Ebola. Some are brand-new, like the arenavirus that was first found only a few months ago when it caused a handful of deaths in Africa and was genetically sequenced and identified by Ian Lipkin at Columbia University. He believes there may be as many as one million viruses that remain to be discovered.

Why are more new viruses with pandemic potential jumping from their traditional animal hosts to humans now? If I had to choose a single word answer it would be: "modernity." If I had two more words, I would add "human irresponsibility." And of course so much of this peril is made much worse by the Great Exacerbator -- climate change and global warming.

Increasingly, humans push every conceivable barrier, and we now occupy more land that was historically the province of animals then ever before. More humans come in contact with animals and their viruses because there is less rain forest, jungle and wild lands separating them. Partly driven by poverty and lack of access to other food sources, Africans last year consumed nearly 700 million wild animals, about two billion kilograms of "bush meat." Scientists like Nathan Wolfe of the Global Viral Forecasting Initiative are taking matching blood specimens from the bush-meat hunters and the animals they kill, in an attempt to predict which virus will jump next.

If sub-Saharan Africa is the hotspot for blood-borne diseases, the Mekong area bounded by China, Myanmar, Laos, Thailand and Cambodia is the hotspot for respiratory diseases like SARS or pandemic bird flu. In these countries, the issue is not poverty but relative prosperity that has led to increased raising of cattle and chickens, and increased meat consumption. In China, the numbers of chickens raised for food has increased 1,000-fold over the past few decades. In parts of Southeast Asia, humans and chickens -- and pigs -- live so close together, exchanging viruses, it looks almost like a science experiment.

As climate change causes sea levels to rise and aquifers to dip dangerously into salty water, agricultural lands yield fewer calories of food per acre. That leads farmers to cut down jungle, creating deforested areas which once served as barriers to the zoonotic viruses that each day have more opportunities to jump from bats and rodents and monkeys and civet cats to humans. As temperatures rise and seashores change, animals head inland and to higher ground, moving into heavily populated human areas. Soon there will be human climate refugees on the move into land once thought inhabitable. All of these changes increase the potential for humans and animals to exchange new viruses.

I chair the National Biosurveillance Advisory Subcommittee, created by a presidential directive in 2008, comprising some of the smartest and most dedicated public health professionals I have ever met. We've been working to understand our national capability to respond to these emerging threats. Our first report will be released shortly. I can't prerelease it, but its contents will come as no surprise. We are concerned that the nation and the world do not have adequate "early warning" or bio-surveillance capabilities. We are recommending that governments need far better early warning systems for potential pandemics and other epidemic threats. We are also emphasizing that public health be restored to a position of respect and be given resources commensurate with its duty to protect us all from these and other threats to our health.

In the 1970s I had the great good fortune that my first job out of medical school was to be the junior-most member of the WHO's smallpox-eradication program in India. I was, in Silicon Valley terms, the third or fourth "hire" for the team that would create history and eradicate smallpox from India and South Asia. I stayed in India for nearly a decade and went back at the end of the program to turn off the lights and document this amazing success story, the only disease in history to be eradicated.

Smallpox killed 500 million people in the 20th century alone. The global smallpox program cost $150 million total in 1965 dollars; each year, in addition to lives saved from ending this terrible disease, the U.S. reaps economic benefits exceeding $2 billion from eliminating routine vaccination and the handful of very serious adverse consequences, including three or four vaccine-caused deaths, airport checkpoints (remember those little yellow cards?) and the loss of time away from work and school.

In analyzing the effect of loss of travel and trade in addition to the health-care costs of a possible bird-flu pandemic, Bank of Montreal chief economist Sherry Cooper estimated the global costs of a "mild" pandemic to be 2% of global GDP, which in 2005 dollars was $1.1 trillion. There is a stark contrast between savings in lives and treasure from investing in public health and prevention, increasing training programs, funding the research that leads to better vaccines, more lab capacity, improved antivirals and early warning systems -- and the human and economic costs of not acting in time. The business community should be at the front of the line, advocating for prevention and public health, one of the history's best investments by any criteria.

There is hope for some good news on that front: Another disease may soon join be checked off the list of human scourges. Because of the dedicated staff of WHO and Unicef, and the generosity of Rotary International, the Bill and Melinda Gates Foundation and others, polio, with only 1,500 cases in the world last year, may soon follow smallpox into the dustbin of history. The Carter Center has also brought Guinea worm close to its demise as well.

That is either one, two or three diseases that could be ticked off the list of humanity's worst afflictions, with great savings in lives, health and wealth. Reducing the number of terrible forms of suffering is what we all want, but I fear that if we don't take seriously the factors that could make the next decade the Age of Pandemics, we will start moving backward, adding lethal diseases to that list -- instead of subtracting them.

 Read this article at: http://online.wsj.com/article/SB124121965740478983.html

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Thursday, April 30, 2009

Document management: A hidden source of value

All copier and printers vendors of yesterday had to remake themselves into document-centric consulting and outsourcing services providers; I helped Xerox, an undisputed market leader at the time, create and commercialize a whole new set of services offerings which is now copied by every competitor in the industry.  Xerox Global Services has created a new market segment called Office Document Advisory services which is showcased in the latest McKinsey study below.

While this is important for document output vendors such as Xerox, Canon, Ricoh, Konica/Minolta and others to stay afloat, it is only a matter of time they get folded into a bigger player that brings network infrastructure, appliances and services together such as IBM, HP, Oracle etc.

Situation

Managing the flow of documents is an immense, complex, and critical task for many sectors, particularly financial services, government, long-distance marketing, and publishing. The rising tide includes printed and electronic documents sent to customers (bills, marketing brochures) and those received from them (insurance claims, changes in personal information), as well as internal documents for employees.

Most organizations handle documents in scattered units that manage output services: the design, composition, and production of documents for physical and electronic distribution. The units also manage input services: receiving, sorting, and storing incoming documents. A typical global financial institution might spend 0.5 percent of its revenues on print and document services—a significant sum.

Recently, a big insurance company looking for savings to finance growth decided to target document operations. Spending was high and evidence of waste widespread. In some locations, under a third of all marketing brochures reached designated customers; the rest sat in storage for years. Fragmented communications hurt the company’s brand image—logos, for example, were printed in different sizes and colors.

Top executives thought an integrated document-management strategy could cut costs and improve operations significantly. An analysis revealed that over three years these costs might fall by up to €150 million ($215 million)—a third of the total. The analysis also revealed the potential for significant image and branding improvements.

Complication

Before the company could begin rationalizing the system and making improvements, it faced a major obstacle: document service units, each with a different operating model, were dispersed across more than 30 nations. At the same time, several local executives, worrying that the centralization of print and document services would diminish the agility and quality of local marketing campaigns, were reluctant to relinquish control over a function that directly touched important customers.

Resolution

To reform the system, the company established a document advisory function, which received umbrella authority over a wide range of tasks. It assumed end-to-end responsibility for all document processes: printing, composition, archiving, and supplier management, as well as traditional and electronic distribution. Its broader mission was to create value across the chain of operations in a number of ways: managing demand for documents more effectively, ensuring that designs followed cost guidelines, standardizing processes, promoting electronic distribution, and establishing more individualized marketing communications.

To meet this mandate, the document advisory function established national teams, typically comprising five members, that included people with several areas of expertise: artistic skills and the ability to align practices with the new corporate norms, the technical skills needed to understand IT processes and tools, and basic managerial and leadership skills. While these teams reported to the local COO, the corporate center set their incentives and goals—for example, targets for paper consumption or the expected use of electronic documents. A leader of each team served on the group’s governance body and was responsible for sharing knowledge and encouraging best practices. Simply by following a directive to standardize the weight and format of paper for client communications, one country operation cut production costs by 10 percent.

The local reporting structure helped to mitigate country executives’ concerns about ceding too much control over document operations. Higher-level coordination and goal setting allowed the company to standardize practices and realize broad economies.

Ultimately, the document advisory function enabled the company to achieve its cost reduction target of €150 million over a three-year period. What’s more, the new approach required relatively little investment—about €15 million over three years—since the company relied principally on managerial and organizational initiatives.

Implications

An integrated document services strategy can realize significant savings for many organizations operating across a vast spectrum of industries (exhibit). Given the current challenging environment, this strategy will suit many companies looking for significant cost reductions but under pressure to minimize investment. The structure also produces value beyond the tangible cost savings. Branding, for example, becomes more effective when companies standardize the visual identity and language of their marketing. US customer communications in financial services are highly regulated, so better document management may reduce compliance risks too.

Organizations can also improve the customer experience by using document services to individualize communications. And one company, acting on the advisory function’s advice, attached marketing communications to its clients’ transaction documents. By reducing paper consumption and increasing electronic communications, the company met its customer commitments while “greening” operations. 

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Wednesday, April 15, 2009

Krizde Değer Yaratmak: Strateji, Pazarlama ve İş Geliştirme Taktikleri - 6. Liderlik Zirvesi – 16 Nisan 2009

6. Liderlik zirvesinin değerli katilimcilari, sizler gibi seçkin bir topluluğa hitap ediyor olmaktan büyük multuluk duyuyorum.

Icinde bulundugumuz küresel ekonomik krizi hepimiz hissediyoruz, ABD de mortgage krizi olarak 2007 de baslayan bu kriz 2. dünya savaşından sonraki en siddetli küresel durgunluga nüşmüş durumda. Bugunlerde sık sık tartisiyoruz bu kriz ne zaman bitecek, teget mi gecti diyerek….Hükümette hafta başında 2009 büyüme beklentilerini %3.5 küçülme ile değiştirdi ve işşizliğin %15.5 a çıktığı açıklandı.

Peki nedir bu kriz ve iyi bir lider olarak bu krizi nasıl yönetmeliyiz?

Nassim Talebin Siyah Kuğu adlı kitabını okuyanlariniz bilirler….Siyah kuğular ilk olarak Avustralyada keşfedilmişlerdir.  Bundan once Eski Dunyada yasayanlar dunyadaki butun kuğularin bembeyaz oldugundan emindiler. Siyah kugular insanoglunun salt kendi tecrube ve gozlemlerinden ogrenmesinin aslinda ne kadar yanlis ve eksik olabileceginin anlamli bir kanitidir. Sadece tek bir gozlem, yillar boyunca milyonlarca beyaz kuğuya bakmakla edindigimiz tum kuğular beyazdir ezberini bir kerede bozmuştur.

Hitlerin iş basina gelmesi ve 2. dunya savasinın çıkması, Sovyetler Birliginin yikilmasi, Internetin bulasici bir virus gibi yayilmasi, ABD deki 11 Eylul olaylari hep birer siyah kuğudur….Yani gerceklesme olasiligi cok dusuk olan ancak etkisi cok buyuk ve de insanoglunun yok varsaydigi olaylardır….Kanımca bu krizde bir siyah kuğudur, yani yepyeni bir dünya düzeni, yepyeni bir iş düzenidir.

Bu yeni duzende artik iyi bir lider ve yonetici olmak icin gecmiste bizi basarili yapmış reflekslerimizin artik geçerli olmadığını anlamalıyız.  Dikiz aynasina bakip yolumuzu çizemeyiz. Geçmiş tecrübelerimizi yok sayip yenilerini edinebilmek icin kendimizi daha iyi tanimak ve ekibimizi bu yeni dünyada başari getirebilecek yaratıcı, empatik, katılımcı, ve sanatçı ozelliklerle seçmeliyiz. Kısacası artık kendi geleceğimizi kendimiz yaratacağız….

Krizin ne zaman biteceğini tahmin etmeye çalışıp Siyah Kugularin varligini inkar etmek yerine, cok senaryolu bir gelecek hayal etmek zorundayiz. İçinde yüzdüğümüz firtinali sulardan  kurtulmak icin kullanabileceğimiz ne yazık ki bir haritamız yok.  Yapabilecegimiz en iyi şey dinamik senaryo planlamasi yapmak suretiyle çok senaryolu bir geleceğe sürekli hazırlıklı olmaktır.

Şirketinizde bir “Erken Uyarı Sistemi kurup, sektörlerinizdeki çok sayıda trend ve göstergeyi detaylı takip edebilmeli ve buna farkli görüş ve yorumları katmalısınız. Bu göstergeleri takip ederken artik en uc noktalardaki sonuclarida dikkate almak zorundayız. Ornegin 8 ay once su anda Ingiltere deki tum bankalara devlet tarafindan el konacagi senaryosuna %2-3 olasilik tanirdiniz. Ancak bu olağanüstü senaryo bugün İngiltere de olağan bankacilik sistemi haline gelmiştir. Çok senaryolu geleceği planlamak şirket ve ekipleriniz için zor ve uzun bir sureç olacaktır. 

Ayrıca, sahada tedarikçiler, müşteriler ve rakiplerinizin performanslarınıda yakından izlemelisiniz.  Son 6 ayda gördük ki en güçlü denilen sirketler bile otomotiv , tekstil, bankacılık, hava taşımacılığı gib sektörlerde batmıştır. Gerektiğinde zorlanan tedarikcilerinize alternatifler bulabilmeli, en önemli muşterilerinize esnek odeme planları önerebilmeli, iflasin eşiğindeki müşterilerinizden alacaklarinizi gerekirse daha çabuk tahsil edebilmelisiniz.

Pazarlama ve satış fonksiyonlarınıda,bu yeni düzende artik siyah kuğuların varligini icsellestirerek yönetmeliyiz. Müşterilerinizin ihtiyac ve taleplerinde beklenmedik ve kalici kayislar olacaktır. Buna göre pazarlama ve satis bütçenizi nereye ve nasıl yatıracağınıza radikal olarak yeniden bakmalısınız. Bu dönemde müşterinizin sürekli aklında, kalbinde ve cebinde olmalısınız.

Tüketiciye odaklı, yani B2C işlerinizde mevcut musteri segmentlerinize yeniden bakmalısınız; Kriz her sektorde işsizliği farkli derecede etkilemiş olacağı için her müşterinizin satin alma gücüde değişecektir.  Bu durum pazarlama önceliklerinizi ve segment karlılığınızı değiştirebilir. Yine müşteriler kredi kartıyla borçlanmak yerine daha çok biriktirmeyi tercih etmeye başladıklarında, promosyon ve fiyatlama yaklaşımınızı gözden geçirmelisiniz. Örnegin, Sabancı Grubu olarak kendi B2C işlerimizdeki trendlere baktiğımızda, müşterilerin iki uca doğru kaydigini görüyoruz.  Ultra-Ucuz ve Ultra-Guvenli.  Perakendecilikte artik ulusal markalardan mağaza private label markalarına, yani daha ucuza kalıcı olduğunu düşündüğümüz bir yöneliş var. Öte yandan krizde plasma TV, cep telefonu gibi alışverlerde müşteriler ultra-güven duydukları marka perakendecilerden alışverişi tercih ediyorlar.

İş müşterilerine odaklı yani B2B islerinizde ise, müşterilerinizin risklerini yakından takip etmeli, krizde zorlanan müşterilerinize alternatifler ararken, en değerli müşterilerinize de destek olmalisiniz.  Yine acenta ve benzer dağıtım kanallarinizın stok ve nakit yönetimi konularında yanında olmalısınız.

Artık iyi bir pazarlamaci olmak icin cok daha yaratici olmak zorundayiz. Ekibinizde krizde baskın bir yönetim tarzı yerine, tam tersine yaratıcılığı daha da çok tesvik edin, onlardan yeni fikirler, yeni çözümler, yeni iş modelleri talep edin.

         Musterinizin yanından en son siz ayrılın.

         Musterinizin aklina, kalbine ve cebine hitap eden marka ve tecrubeler yaratin ve bunlari soysal, ahlaki, ekonomik ve cevresel degerler uzerine insa edin. Krizde bile markanıza yatırım yapmaya devam edin, müşterinize güven verin.

Kriz zamani ortaklasa çalışma zamanıdır. Imkanlarinizi birlestirerek yeni ekonomik firsatlar yaratmaya odaklanmalısınız. Hayatta kalmak için artık şirketlerinizde en iyi bildiğinizi, daha ekonomik, daha hızlı ve daha iyi yapmak zorundasınız.

En iyi yaptığınızı tamamlayacak, sürdürülebilir değer yaratan ortaklıklar kurun. Ne yazık ki konumum itibariyle tecrübe ediyorum ki ülkemizde gerek yerel şirketler arasındaki gerekse yabancı-yerli ortaklıklar kolay ve kalıcı olmamaktadır. Bunun önemli sebepleri arasında kültürel farklar, etik anlayış, yanlış beklentiler, aile ve kurumsal şirket farklarıni sayabiliriz.  Daha en başından aynen evlilikte olduğu gibi partnerinizi iyi tanıyın, niye evlenmek istediğinizi ve bu evliliğin ne kadar sürmesini istediğinizi bilin.

İş sektörlerinizde, iflaslara bağlı konsolidasyon veya şirket birleşmelerini daha sık yaşayacaksınız.  Nakit akımınızı ve sermayenizi güçlü tutup, sektörünüzdeki yerel ve küresel fırsatları sürekli takip edin.  Rakiplerinizi yakından izleyin. En zorda olan şirketler hangileridir?  Bu şirketlerin hangi işleri sizin için değer yaratabilir?  Onları nasıl satmaya ikna edebilirsiniz?

Mc Kinsey danışmanlık şirketinin  en büyük 200 global şirketle yaptığı en son araştırmaya göre, kriz dönmelerinde şirketlerin – organik büyüme, şirket satışı, şirket alma – gibi stratejik adımlarından, paydaşlar için en çok ekonomik değer yaratanının, etkin bir satın alma stratejisi izlemek olduğu ortaya çıkmıştır.   Hatırlarsanız ekonominin en parlak olduğu yıllarda Türkiye de önemli miktarda şirket ve varlık satışları gördük. Yine bu araştırmaya göre, iyi ekonomik koşullarda yapılan şirket/varlık satışlarının bile, kriz ortamındaki satın almalar kadar değer yaratmadığı görülmüştür.  Demek ki “Krizde büyüme olmaz sadece kemer sıkmalıyız” ezberide bozulmuştur….

Son olarak, içinde bulunduğumuz tüm olumsuz koşullara rağmen, hiç süphem yok ki yakın gelecekte işlerinizde yepyeni fırsatlar yakalayacaksınız;  Müşterilerinizin tercihleri değiştikçe, rakipleriniz tökezledikçe, hükümetler kriz yönetiminden ekonomiyi canlandırmaya yöneldikçe, önümüzdeki yıllarda yeni iş modelleri, yeni sektör liderleri ve dinamikleri yaratılacak. Bu krizle ilgili emin olduğum tek şey, er yada geç sona ereceğidir.

Hayatımda en sevdiğim sözlerden biriside şudur: “Bazı şirketler geleceği yaratır, bazı şirketler geleceği seyreder, bazı şirketler geleceği merak eder.” Kriz sona erdiğinde bu şirketlerden hangisi olmak istiyorsunuz? ….

Geleceği yaratacak olan bir şirket olmak için:

Sakin olun, stratejik ve uzun soluklu düşünün. Esnek olun, kendizi iyi taniyin.

Kriz sanki hic bitmeyecekmiş gibi cok senaryolu geleceğinizi tartışıp, daima hazırlıklı kalın. Tek bir gelecek olmadigini bilin ve gecmisle ilgili ezberinizi çöpe atın.

Müşterilerinizin aklinda, kalbinde ve cebinde ne var, ne yok en iyi siz bilin, yanından en son siz ayrılın.

Zamanin ortaklasa calisma zamani oldugunu bilip güçlerinizi birlestirin.  Sektörünüzdeki ortaklık ve birleşme fırsatlarını, yaratıcı ve yapıcı düşünüp değerlendirin.

Tesekkur ederim.

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