Amazon, my literary wife and some thoughts on global applications

Our house is full of books. They are everywhere as “she who must be obeyed” explains here.

A good number of these have been bought via Amazon. Living in Germany, it makes buying english books a breeze.  Amazon.de shipping costs are reasonable, especially if one buys in volume (bad pun). However, we find that we search in co.uk or .com, because the experience is better, more reviews more selection etc, and then order on .de.

My good lady’s site has developed into the Ladenburg review of books, far eclipsing my readership, and a challenge to the NYRB. In order to feed this book consumption, I’ve been thinking about doing the amazon affiliate thing.  Charlotte needs convincing that it is easy to do, and won’t impact the integrity of her blog, but the lure of more books may convince her.

I read Werner Vogel, the  Amazon CTO’s blog. It is a great read, and a fascinating look inside a very innovative company. I learn stuff there. (I digress)

So I have had a little play around with this affiliate thing.

I have a problem. We are in Germany, and our readers are all over the place. Amazon doesn’t have a global version, just lots of country versions (.com,.fr,co.uk,.de…). Why is this a problem?

I didnt buy IT doesnt Matter via Roughtype, because I would have had to pay shipping from the US, and Jason Wood has a great bookroll, but again it only takes me to the .com site.

 In order to serve our readerships, it seems that I would need to set up at least a .com and a .co.uk and .de  affiliate, and somehow provide you a link to whichever works best. This would be really messy. 

I would like to set up an affiliate with Amazon, and depending where you are, Amazon would invoice in the right currency, handle the taxes, and ship from the cheapest location. With the current set up this seems impossible to do this.

Amazon would have no way of knowing that the Thomas Otter in .de is the same as the one as on co.uk.

Amazon’s architecture is not global, the country versions seem to be copies of the us one, with very little integration. This must be costly to run and maintain. We can learn a lot from Amazon online retail and SOA, but it looks as if they could learn from us boring boring ERP guys in Walldorf about global architectures.

This is what I’m reading at the moment: Social Theory and Philosophy for Information Systems, by Mingers and Willcocks. Maybe that is why I’m in a bad mood.

And I understand from the wordpress.com site, that they dont allow ads, except for Scoble, so this would mean changing host too..hmmm.

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I don’t work for a Dinosaur – a response to Peter Rip.

Reading what VC’s think is a good idea, I recommend it, especially for us corporate sorts. I read Peter Rip’s post on enterprise 2.0 via Charlie Wood this morning, and there are a couple of things that I’d like to pick up on.

I agree with a lot of what he says…for instance:

Enterprise 2.0 is not just web 2.0.  As Zoli once commented “Web 2.0, collaboration is great, it has it’s place in the Enterprise, but so do those “ugly complex” transactional systems.  Don’t try to run your supply chain on a wiki”

Enterprise 2.0 is a meaningful and significant space.

The Gartner coverage of enterprise 2.0 is not their best work

Some users will play a greater role in “building” their “own” applications.

Web 2.0 companies are unlikely to be the dominant Enterprise 2.0 players

Where I disagree.

1. Dispense with the sociology. Over the last 150 years, lots of clever minds have studied how people organise themselves, and understanding the corporation is a significant component of that research. Naive assumptions about sociology is precisely why many KM projects fail.  Over-simplifying organisation development and sociology is just plain dumb. We need more sociology in software not less.

I don’t think LAMP, Rails etc is the defining factor. Collaboration in the workplace is not about a particular technology, the plumbing, as McAfee rightly calls it. Today these may be the primary tools used to build “2.0” applications, but they aren’t the only ones.  The need to collaborate will be around long after we expire. It is unlikely that LAMP etc will. 

2. I’m really really sick and tired of SAP being called a Dinosaur. Just because we don’t drop everything and jump on every bandwagon going through town we are labelled Dinosaurs. Dinosaurs are extinct but SAP is definitely not, the business is growing, anad has a P/E ratio that implies that the market thinks it will continue growing.

I’ll take a bet that SAP will embrace enterprise 2.0, and do a damn good job, and make serious revenue with it. The internal adoption of enterprise 2.0 via wiki projects is rocketing, and this will have a huge impact on the way we think about enterprise applications. Spend some time in SDN, and you will see what I mean.

In every major technology and application wave over the last 30 years, SAP has thrived and grown stronger. It may not be the first, but when it gets something figured out, then things really happen. Look at the switch from mainframe to client-server, Unix, NT, the B2B bubble, Globalisation, CRM, Supply chain, HR, BI and now SOA. I don’t  know why “2.0” will be any different, if we continue to apply our best minds to the challenge, work with the best customer base and partners in the world and keep our Schumpeter mantra (Kagermann quotes him a lot).  What Plattner said 9 years ago still stands here in starship enterprisey.

”The challenge is to permanently question ourselves, to be awake, to be agile, to learn,” says Plattner. ”When you see you have to do something, you have to react quickly and not fight it.”

The metaphor of dinosaur and meteor is not a bad one. Most of the time though, SAP is the meteor.

3. Spreadsheets. The only people I know who like spreadsheets are accountants. Writing macros is up there with getting telesales calls in the middle of reading  children’s bedtime stories in my book.

4. In some industries and jobs, user built applications will thrive, but I don’t see major mission critical core processes moving this way anytime soon. Most people who work in enterprises think of O’Reilly is a pub rather than a publisher.

I think the role of the process owner is vital. I see process owners taking a much greater ownership of the process design, being more application aware, and demanding more from their IT department and their vendors.  Lets call this enterprise 1.5…..see the examples from Technidata in environmental product compliance (EPC). I wont call this a mashup, but it is a significant process centric application that leverages multi datasources, open apis…..

Go ahead and write SAP off in the Enterprise 2.0 space. But it is a big rock if it lands on you.

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My bicycle doesn’t need middleware

Some of you (well 4 people) have requested that I write something about my bicycle, as that is the subtitle of this blog. For those of you expecting something extolling the praises of SAP here, you will be disappointed. When it comes to bicycles, I’m very much a best of breed guy. Each little bit is from a specialist vendor, but somehow it all fits together perfectly. Without any middleware. (unless you try mix shimano and campag)

Bicycles arent software….

I took this photo on the way down the grossglockner alpine road earlier this summer. (see the story here)

The first question normal people normally ask is what make is your bike?  Well that depends which bit you are talking about. The bike was put together by a friend of mine, Juergen, who used to build bikes and race them, but now has a normal day job as he has a mortgage to pay. He has a cellar workshop that would embarass most bike shops.  

The frame is carbon fibre, and weighs 980 grammes. We don’t know what make the frame is, as it was built as a prototype for a trade show. (Almost all carbon bikes are built in the same two factories in Taiwan and China) There is a long post waiting to be written on globalisation and cycling components but that will need to wait….

The fork is from Merlin, an American firm, it is also carbon. (I’m not sure what it weighs)

The brakes are  Campagnolo record and the rest of the groupset is campag chorus (11-23 10 speed cassette), with the exception of the crankset, which is from FSA, and is a compact carbon (34-50)

The stem and handlebars are from a German firm called Syntace. The stem is a F99, which is one of the lightest stems on the market. It weighs less than 100 grammes. Considering this is the thing that helps steer the bike, that is light.

The wheelset is also from Campagnolo, the neutron. This is their mid-priced low profile wheel and weighs about 1750 grammes for the pair. We replaced the standard quick-release skewers with tune titanium skewers. (Tune is a small German firm that specialise in ultra lightweight parts. the skewer is the only thing from them I can afford..)

The seat post is from use alien, a small UK firm. in weighs 166 grammes, and has been used to win the TdFrance king of the mountains twice. (not me, some skinny french bloke)

The pedals are from time, a french company.

The saddle is from Selle Italia and weighs 140 grammes, (SLR carbonio) It looks uncomfortable to those used to paddled sofa saddles, but it is actually suprising comfy, despite zero padding.

The bottecages were another minor extravagance, also carbon, and weighing  26 grammes. These are from an American firm Bontrager 

The bike weighs just over 7 kgs, which is very respectable, considering that the wheels are relatively heavy. Actually if I had the funds I’d buy a pair of lightweights! both wheels together weigh less than a kg!. (again a small German firm.) My other concern is that if you have mega fancy wheels it motivates other folks to ride past you, and then you feel really slow, as despite all the technology it does, eventually, depend on the legs and lungs. Sig describes this phenomenon rather well. This happened to me quite a lot in Italy last week too.

If anyone is at all interested, I will do the money no object dream bicycle post another day.

This weekend I will be venturing out on Sunday into the Odenwald, my local hilly bit,  as I need train for the charity ride up Mont Ventoux (see wiki) in aid of warchild. We have about 5 people riding (Sig and Hamish have blogs), but we would like more. The wiki will explain how you, dear reader can join us, or-and donate to a worthy cause.

THE must read enterprise software website

Check out Strassmann  Many of you will have heard of him, but see his awesome bio.

I’ve read lots of his stuff in drips and drabs over the years, but I stumbled across his website and I have been meaning to draw it to the attention of my merry readers for sometime. It is a treasure trove of sensible stuff. Links to videos, lecture notes and articles, not just excerpts, but meaty stuff that you need to pause and think about.  

He picks up on a number of topics that interest me;

1. What are employees worth? Valuing people. This lecture is a must watch for any accountant or HR person interesting in valuing intangibles or Human Capital Management.

2. Anyone interested in ROI should check out The Business Value of Computers , the tooth to tail ratio and Six rules for finding IT value  – this links rather nicely to Andrew McAfee’s post on the business case.

3. He has recently written about the cost of dirty data, and he provides a model to help you calculate these costs.  In his piece on How to Transform your Business, He talks about the need for data standardisation. This made me think back to Carr’s post on Bastard Apps where he quotes from Merrill about the challenges of the enterprise mashup. Carr also mentions the term data pollution. He goes further and helps you get a grasp on the implications of data pollution and its real cost.

The first step in business transformation:
enterprisewide standardization of data. That calls for the declaration of a Metadata directory as the template for defining data that can circulate within a firm’s information systems. The policy and implementation of an enforceable metadata  directory likely will be resisted by bureaucrats, who see this as a threat to their indispensability. It will not be welcomed by systems developers, contractors and vendors, who prefer to concentrate on upgrading software as a technologically more interesting—and profitable—task 

 In global HR projects, one of the toughest jobs is metadata standardisation. Just agreeing what simple terms like “manager” actually mean are often fraught with all the problems he mentions. This has little to do the application, but is vital to project success.

Often people building and deploying applications focus on the fields and the attributes of the application, but what is important for people using the systems is not the fields, it is the data. Fields are just an means to an end. Clean, accurate data is what is important. Data you can trust.  

An SAP spin

One of the things SAP gets criticised for is the excessive set up costs and the number of switches and tables and rules the application has, and often this is a fair comment.

But one of the powerful things that SAP does, especially in the ERP application, is to make it difficult to enter polluted data. Complex business rule validation is one of SAP’s greatest strengths. SAP integration mantra helps drive this thinking too. SAP makes it almost impossible to book HR costs against a cost centre that doesn’t exist in Finance  because there is one single cost centre table. SAP tends to view freeformat fields with suspicion. We love a pull-down table. This can increase application complexity,  but it does wonders for data quality.  

With the move into MDM, I think we are on the way to providing the meta-data repository of standards that Strassmann talks about. MDM is something I need to spend a lot more time understanding as its impact on global systems projects is growing rapidly.

Business applications are only as useful as the quality of data that is in them.

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appExchange….

Has received much coverage and hype, I thought I’d have a more detailed look, especially after reading Jeff’s post on the SFDC cult, and James Governor’schat with Niels about CRM.

There is lots in the CRM space. I’d expect this, with folks like Charlie building cool stuff and talking up a storm However, the HR and finance apps sections at appExchange are thinner than a Kate Moss look alike competition but I’ll watch with interest to see if it grows.

A few years ago we talked a bit about iview studio here at SAP. I’d forgotten all about it until Jeremiah reminded me the other day. So I went to have a look at what was there. It took me a while to find it in the overgrown garden that is SAP’s web presence but I was pleasantly surprised to find buried in the depths of SDN, the IVIEW studio.  In standard SAP style some genius has renamed it Portal Content Portfolio, but anyway….

Have a look.

 here is a list of business packages from third parties this year.

Jul 31, 2006 Business Package for Rapidtrade 60.1 (Certified)
Jul 19, 2006 Business Package for ALPHATAX by TCSL 60.1 (Certified)
Jul 19, 2006 Business Package for Mechatronic Integration by ILC PROSTEP 60.1 (Certified)
Jul 19, 2006 Business Package for SLM by Digital Fuel 60.1 (Certified)
Jun 20, 2006 Business Package for Content Management by PIRONET NDH 60.1 (Certified)
Jun 20, 2006 Business Package for Voice Application Management by VoiceObjects 60.1 (Certified)
Jun 20, 2006 Business Package for festivalWEB by 3CgmbH 60.1 (Certified)
Jun 20, 2006 Business Package for EMI Mobile Messenger 60.1 (Certified)
Jun 20, 2006 Business Package for Content Management by Imperia 60.1 (Certified)
May 29, 2006 Business Package for Financial Aid Self Service by Sigma Systems 60.1 (Certified)
May 29, 2006 Business Package for Cost Management by aPriori 60.1 (Certified)
May 29, 2006 Business Package for Manufacturing Data Exchange (MDX/PM) by Yokogawa 60.1 (Certified)
May 8, 2006 Business Package for biz²ScanServer Monitoring by inPuncto 60.1 (Certified)
May 8, 2006 Business Package for Integration by Tyringekonsult 60.1 (Certified)
May 8, 2006 Business Package for Beo Atlas 60.1 (Certified)
May 8, 2006 Business Package for Cognos 8 BI 60.1 (Certified)
Apr 3, 2006 Business Package for Citrix application integration 60.1 (Certified)
Apr 3, 2006 Business Package for Stellent Content Server by Benmark 60.1 (Certified)
Mar 13, 2006 Business Package for ITP/OnLine Server by Aia Software 60.1 (Certified)
Mar 13, 2006 Business Package for jFLOW4NW! 1.0 by jCOM1 60.1 (Certified)
Mar 13, 2006 Business Package for Human Workflow System (HWS) by Rapidigm 60.1 (Certified)
Feb 22, 2006 Business Package for Asset Management by Emex 60.1 (Certified)
Feb 20, 2006 Business Package for Solumina PLM Portal by iBASEt 60.1 (Certified)
Feb 20, 2006 Business Package for LABS/Q by iCD 60.1 (Certified)
Feb 20, 2006 Business Package for GBS Mobile Business by GBS-IT 60.1 (Certified)
Feb 20, 2006 Business Package for Electronic Book of Knowledge (EBoK) by pumacy 60.1 (Certified)
Feb 20, 2006 Business Package for GK/Retail Integration Framework 60.1 (Certified)
Feb 20, 2006 Business Package for Predictive and Descriptive Analytics by KXEN 60.1 (Certified)
Feb 20, 2006 Business Package for Replenishment Planning & Optimization by SmartOps 60.1 (Certified)
Feb 20, 2006 Business Package for it x-change EDIFACT by itelligence 60.1 (Certified)
Feb 20, 2006 Business Package for Adaptive Structural Forecasting by SmartOps 60.1 (Certified)
Feb 13, 2006 Business Package for My Favorite Links by Sweetlets 60.2 (Certified)
Feb 13, 2006 Business Package for Issue Management by Sweetlets 60.1 (Certified)
Feb 13, 2006 Business Package for World Times by Sweetlets 60.1 (Certified)
Feb 10, 2006 Business Package for Supplier Cockpit by All for One 60.1 (Certified)
Feb 10, 2006 Business Package for EP Security by BeSeQure 60.1 (Certified)
Feb 10, 2006 Business Package for Service Provisioning by IP VALUE 60.1 (Certified)
Feb 10, 2006 Business Package for cuDetect by Circle Unlimited 60.1 (Certified)
Feb 10, 2006 Business Package for Data Transformation by ETL Solutions 60.1 (Certified)
Feb 10, 2006 Business Package for Interactive Document Processing by INVARIS 60.1 (Certified)
Jan 31, 2006 Business Package for EP OrgChart by KCT Data 60.1 (Certified)
Jan 31, 2006 Business Package for Secure Authentication by SecurIntegration 60.2 (Certified)
Jan 30, 2006 Business Package for ProGvs by Hartter 60.1 (Certified)
Jan 30, 2006 Business Package for JKassa by Hartter 60.1 (Certified)
Jan 25, 2006 Business Package for Retail Simulation by Dacos Software 60.1 (Certified)
Jan 25, 2006 Business Package for SPEC2000XML by WARP IT 60.1 (Certified)
Jan 25, 2006 Business Package for C² by 2MoRO 60.1 (Certified)
Jan 19, 2006 Business Package for EBP Link by MOSAIC 60.1 (Certified)
Jan 19, 2006 Business Package for Demand Driven Enterprise Planning by Demantra 60.1 (Certified)
Jan 17, 2006 Business Package for Ba-PRO Business Assurance 60.1 (Certified)
Jan 17, 2006 Business Package for Maximo Work Orders by MRO Software 60.1 (Certified)
Jan 17, 2006 Business Package for Enterprise Identity and Access Management Solution by HCL 60.1 (Certified)
Jan 16, 2006 Business Package for e-Purchase Requisition by A-gape 60.1 (Certified)
Jan 11, 2006 Business Package for NPsuite HR/EPM by NCI 60.1 (Certified)
Jan 11, 2006 Business Package for cuIndex by Circle Unlimited 60.1 (Certified)
Jan 9, 2006 Business Package for Enterprise SOX Compliance Solution by HCL 60.1 (Certified)
Jan 9, 2006 Business Package for Enterprise Manufacturing Intelligence by Pertinence 60.1 (Certified)
Jan 9, 2006 Business Package for Libra Invoice Workflow 1.3 60.1 (Certified)
Jan 9, 2006 Business Package for Business Monitor for Order-To-Invoice-Process by IDS Scheer 60.1 (Certified)
Jan 9, 2006 Business Package for Rex CPI XI Configuration Testing 60.1 (Certified)
Jan 9, 2006 Business Package for Panorama Proactive Analytics 60.1 (Certified)
Jan 9, 2006 Business Package for Enterprise Connector by resolvtech 60.1 (Certified)
Jan 9, 2006 Business Package for Resource Ageing by iGate 60.1 (Certified)
Jan 9, 2006 Repository Manager for Lotus Domino by CONET Solutions 60.1 (Certified)
Jan 9, 2006 Business Package for Consultant 1.10 by Companio 60.1 (Certified)
Jan 9, 2006 Business Package for Mobile Business Solution by DATA MIGRATION 60.1 (Certified)
Jan 9, 2006 Business Package for TrustBroker™ Adapter by CyberSafe Limited 60.1 (Certified)
Jan 1, 2006 Business Package for Service Planning and Optimization by MCA Solutions 60.1 (Certified)
Jan 1, 2006 Business Package for Discoverant KnowledgeNet by Aegis 60.1 (Certified)

I wish we would market what we have better. I wonder how many other gems lie buried in the holds of starship enterprisey? The list above is just the business packages that add content to the enterprise portal, not all the third party certified apps that talk to SAP. Not to mention all the stuff that is going on that SAP doesn’t even know about.  Have a look at the vast list of companies building SAP related applications, certified or powered by Netweaver (see search here)  but I reckon that is not even the first chapter of a very big book.

In the HR space for instance, check out the  products from Epiuse for idea management, Arinso’s peoplesoft integrator, and Pecaso’s clone and test. Guys like these have been building applications that add value to the SAP ecosystem for years, yet I don’t find these apps when I search for them in the databases mentioned above, even though I know these significant applications exist and have, many live reference customers, (in some casees several 100)

AppExchange is clever marketing and has a very slick 2.0 kind of look and feel, but now they need to get people building serious applications, beyond the salesforce automation comfort zone.  

We have the opposite problem at SAP, there are lots of great applications that run with SAP, some built with SAP technologies, others not, and 10000’s of them certified and tested. There is a great support model for certification and integration, and SDN is growing heaps. We just haven’t got them into a great looking site that is easy to find and search, and has lots of cool screen prints and reviews. 

Or I am missing something?

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From my head to paper…RFID and the long and winding

I have been plodding away at my PhD for some time. In between work, family, the bicycle and this blog, I have been reading and thinking about compliance and enterprise applications for the past 3 years or so.  That must change, as unless I start writing something soon, I will have forgotten all the stuff I have read and thought. I need to write it down so that I can inflict it on others….

In an attempt to kick start this process, I’m presenting at the GikII Workshop, which is part of the VI World Computer Law Conference and led by Lilian Edwards, a leading computer law academic.  Lilian has an entertaining blog on computer law stuff, that is a no mean feat.  She links to the House of Lords discussion on pervasive computing at Kim Cameron’s identity blog, another good read.

Lord Campbell of Alloway: My Lords, will the Minister explain what pervasive computing is?

Lord Sainsbury of Turville: Yes, my Lords. This is an interesting subject. Some microprocessors now have in-built communication facilities. The most obvious example of that is radio identification. I do not suppose that the noble Lord ever goes to the back of his local supermarket, but if he did he would see that packages that are brought in have an identification code that can be read electronically without taking the goods off the pallet. That is done by radio communication and is an enormous step forward in efficiency. The same principle applies to smart keys; one can open a car door from a range of three feet with a smart key, using the same technology.

Note that is Lord Sainsbury speaking, I wonder if he is any relation?

If you read the whole discussion though, you will see that despite the formal lingo and funky dress code, these Lords are bang on the money….compare that to that Senator Stevens….

Back to the long and winding.. My simple method for self motivation is to set yourself up for ridicule.  By the first week of September I need to articulate my thoughts into something vaguely coherent, or I will be pelted by the academic tomato. If you’d like to attend, the details are available here.  The rest of the agenda looks really interesting, including a talk on open source killer robots.

If there are any privacy gurus out there, please drop me a note. You guys tend to be quite hard to find.

Business case for lobbying and the SOX-Enron of 1720..

Businesses lobbying government has always seemed a bit odd to me. Is there a link between all that talking to politicians and company success? Well, one of my research feeds from SSRN picked up two fascinating papers that are well worth a read, but here are the abstracts and a couple of quotes if you are too busy for academic papers.

One, by Goldman, Rocholl and So, from the University of North Carolina.  

In countries with a weak legal system and a high level of corruption it may not be surprising to find that political connectedness is valuable to a corporation. This paper explores whether political connectedness is also important in the U.S., which has the most developed financial markets in the world as well as a very strong legal system. The paper uses an original data set on the political connections of board members of S&P500 companies to sort companies into those connected to the Republican Party and those connected to the Democratic Party. An analysis of the stock price response of these companies to the Republican win in the 2000 Presidential Election finds that companies connected to the Republican Party increase in value while companies connected to the Democratic Party decrease in value. In addition, the paper finds that the announcement of the nomination to the board of politically connected directors results in a positive abnormal stock return. The analysis further suggests that the above effects are more pronounced for the larger corporations. Finally, using an additional (indirect) measure of political connectedness based on political contributions by corporations prior to the 2000 election lends further support to these results. 

If you need a business case for lobbying and having an old politician on your board, I guess this is it. Silly me, thinking that share prices were a reflection of future discounted cash flows. As the paper notes,

First, following the announcement of the Republican win, the return difference between companies classified as having a Republican board and those classified as having a Democratic board is positive. Furthermore, the announcement returns are positive for the Republican portfolio and negative for the Democratic portfolio. These results are reconfirmed when using an alternative definition of connectedness based on political contributions and in addition they remain robust after controlling for several firm characteristics as well as for industry effects.

Secondly, following the announcement of the nomination to the board of a politically connected individual, there is on average a positive and significant stock price response.

The second paper (a lecture) by Painter from the University of Minnesota goes back a bit further and looks two major bits of financial history, the South Sea Bubble and the the US National Bank saga.

 This lecture addresses a phenomenon that arises repeatedly in history: concurrent and interrelated corruption in the political system and in business that puts political and business establishments on the defensive. When corruption from business spills over into government, the story is likely to end with politicians seeking to cover for their own actions or to elevate themselves on an ethical pedestal above their peers. Resulting legislative action – hostile to business and driven by self serving political considerations in the wake of scandal – is often not well thought out, and may hinder economic growth and stability.

The lecture discusses two examples of this phenomenon in England and the United States respectively. First, the South Sea Bubble of 1720 – during which many Members of Parliament took bribes in South Sea Company stock and traded in the stock on inside information – was followed by Parliament’s draconian restriction in the Bubble Act on transferability of shares for over 100 years thereafter. Second, there were two attempts at the end of the Eighteenth and the first half of the Nineteenth Century to establish a permanent Bank of the United States modeled on the Bank of England. This undertaking was championed by Federalist and Whig politicians who, while they may have sought economic stability, also encouraged speculation in government securities on inside information, and bribery by the Bank of Members of Congress. The debate over the Bank was in part a debate over corruption that came with it. The First Bank of the United States was opposed and eventually allowed to expire by Jeffersonian Democrats and the Second Bank was attacked, and then pushed out of business, by President Jackson. Congress failed to establish a national bank until the Wilson Administration in 1913, two and a quarter centuries after establishment of the Bank of England.

The lecture concludes that corruption of government by business is not only bad for government, but in the long run bad for business. Business sometimes overreaches in  influencing government officials, but at the risk of a backlash in which politicians – in self righteous indignation or in order to cover up for their own actions – embrace harsh anti-business policies, regardless of whether those policies are in the national economic interest.

Pointer goes on to note in the lecture. (excuse the long quote)

Modern parallels do come to mind. Some might think of Enron, Worldcom and the Sarbanes-Oxley Act. As a current White House employee, I will not say more about these scandals beyond what I said before I entered government service. I reviewed former SEC Chairman Arthur Levitt’s book in 2003.While I disagreed with some of Levitt’s substantive views on securities law, I shared his concern that accounting firms – including Arthur Anderson while it audited Enron’s books — undermined the SEC’s independence by making an end run to Congress to complain about proposed SEC rules. Levitt pointed out that campaign contributions were a significant part of the strategy

Enron and Worldcom embarrassed government and business. There is considerable speculation about whether Congress overreacted. If so, the Enron/Worldcom fiasco would fit into the broader phenomenon I discuss in today. Harsh legislative action follows political backlash when business exerts excessive influence on government. Legislative action taken in an atmosphere of moral indignation does not necessarily rid the political system or the economy of corruption, but may leave a body of corporate law, or a banking system, or a capital market that is weaker than what existed before.

I could quote the whole paper but go and download it from SSRN instead. It is probably the most interesting thing about SOX you will read.

I’ll almost finish with a poem from Alexander Pope

At length corruption, like a general flood,
Did deluge all, and avarice creeping on,
Spread, like a low-born mist, and hid the sun.
Statesmen and patriots plied alike the stocks,
Peeress and butler shared alike the box;
And judges jobbed, and bishops bit the town,
And mighty dukes packed cards for half-a-crown:
Britain was sunk in lucre’s sordid charms. 

And I’ll finish with a quote from Marx.

Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce.

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Back at starship enterprisey…Walldorf

I surivived the Giro delle Dolomiti last week, but I won’t be giving up my day job to become a professional cyclist. My family would starve if I did. (I’ll do a cycling post later for those interested in gear ratios, heart rates, calories, recovery drinks, and how to cope with being dropped by people who would normally be offered a seat in the lifeboat first)

I havent posted in 10 days or so, and I have had very little internet or blog access. Well, I tried to read a couple of blogs via the blackberry, but riding the 27kms up Stelvio was less painful. (I like to say slower, but that wouldn’t be fair to the blackberry)

So I fired up newsgator this morning, and the first thing I read was a gem from Andrew McAfee on business cases. He points to the recent Kaplan and Norton book, Strategy Maps, which I suppose I ought to add to my reading list. Measuring the intangible has always struck me as something of an oxymoron, because the moment you measure it, then it starts to have tangible properties. (bit like Heisenberg etc)

I especially liked this paragraph

Across the hundreds of quantitative IT business cases I’ve seen, I’d estimate that the average ROI figure was about 100%.  This brings up an obvious question, which I asked to every business case author that I could find:  “If this ROI figure is at all accurate, why are companies spending money on anything else except IT?  If there really are all these 100% ROI projects out there, doesn’t Finance 101 say that companies should immediately start lots of them, and not stop until the marginal return is less than the return from traditional investments like advertising, R&D, capacity expansion, etc.?”  

I remember someone from marketing being upset with an ROI study at SAB Miller  because the number was too low…

The ROI of 24% coupled with a payback period of 6.64 years proves SAB Limited’s investment to be quite sound. More specifically, the improved analytics and real-time delivery of people-related information has helped SAB Limited in its global growth endeavors.

I wasn’t.

The number seemed credible to me. 

I would love my own little investments to have an ROI like that.

 This is a through ROI analysis based on a strong Gartner methodology. (James, I can link to it though)  The report is well worth reading.

SAB Miller is a very successful company, and I wish I had bought their shares rather than just their product in my youth.

The report goes on to state:

The implementation of mySAP ERP HCM has been an enabler to SAB Limited’s strategy by providing more accurate information and analytics; however, the HR team at SAB Limited is truly responsible for the superior human capital management practices and people-focus that is engrained into the culture. The end result is a firm that can not only state that its people are its competitive advantage, but can also back up the claim with analytical data

This backs up a lot of what Andrew was on about with cause and effect chains. The system alone is not the ROI, it is the improved process and the people that make the ROI.  ROI claims of many 100’s  percent are rarely credible. If they were, hedge funds would be financing IT projects.

The report also picks up on a couple of themes that I have been on about before, HR processes and the importance of HR analytics. (see my post at the human Captalist..)

The most useful thing about an ROI study is not the numbers though. It is the discipline needed to actually measure what it is you do now, then change, and then measure again. This is the same discipline that has made SAB one of the world’s most successful companies.

 

 

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