From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Sometimes, innovation is in knowing what to take out as much as what to put in.

Case in point is Chrome, the new browser from Google. You would think the last thing the world needs is another browser, and you would be right if all that browser did was pile on more features.  Google again bucks the conventional wisdom with Chrome, however. It’s fast, simple and designed for the way people use the Web today rather than how they used it in a few years ago.

Google released the Chrome beta yesterday to immediate speculation that it’s the foundation for an Internet operating system.  The company vigorously denies these claims, but based on my own admittedly limited tests, I’d say Google’s protests ring hollow.  Chrome is clearly aimed at Microsoft’s jugular, and if it succeeds in gaining widespread adoption, it will hasten adoption of the whole software-as-a-service style of computing.

There is nothing particularly innovative about the Chrome interface, other than its stark simplicity and the clever way in which it integrates search and browsing history.  Simplicity comes from Chrome’s adherence to the Firefox interface and its minimalist features.  For example, the browser has no menu bar.

What blew me away about this early version of Chrome, though, is its speed. For starters, Chrome doesn’t burden users with the constant procession of warnings and dialog boxes that have made Internet Explorer almost unusable. That may change if Chrome becomes an object for hacker attacks, but for now, Google’s relative freedom from security threats and government scrutiny is a plus.

More importantly, Google has done some innovative work under the covers to enhance Chrome’s performance running AJAX applications. AJAX is the foundation of Web apps, but its surging popularity has caused some problems for users. That’s because programs written in JavaScript (the “J” in AJAX) seize control of the browser while they’re working. A single bad script can slow an entire computer to a crawl. Memory management limitations in Firefox have also hampered performance.

Chrome has several features to optimize JavaScript programs. In brief, Chrome allows each JavaScript program to inhabit a unique virtual machine and a unique thread.  This lessens the likelihood that one program can monopolize an entire session.  It also means that a crash in one browser window doesn’t take down the whole application.

There are also some innovations in memory management and garbage collection that speed performance.  You can satisfy your inner techie by reading an extensive sequence of technical explainers presented in cartoon format at www.google.com/googlebooks/Chrome/.

Google has a self-interest in optimizing AJAX, of course: that’s the way it delivers its Documents line of office applications. Chrome is clearly optimized to work well with Google Documents.  In my tests, a Google Document loaded faster than one launched with Microsoft Word or Excel.  While Google Documents still don’t approach Microsoft’s functionality, its open architecture has been a magnet for independent developers, who will quickly add features the core applications lack. Google also recently made it possible for word processing documents to run offline using its Gears plug-in. Taken together, Google Documents on Chrome are a much more compelling alternative to Microsoft Office than they have been in the past.

Google now enjoys the pole position on the Internet and has an impressive suite of applications with the capacity to run them offline. Chrome still requires Windows to run, but we can expect that barrier to fall soon. Microsoft is about to fight back with Internet Explorer 8, but previews suggest the browser won’t break a lot of new ground. I suspect throats are tightening a little in Redmond, Wash.

From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

The start of a week-long vacation has me in a somewhat festive mood today, so I thought I’d tell you about a new hobby I’ve been pursuing recently that’s also given me new insight into capacity of IT to transform lives.

About two years ago, my wife and I took up geocaching. It’s a global game that was enabled by the Clinton administration’s 2000 decision to open up the government’s network of global positioning satellites (GPS) to civilian use. Geocaching is basically a worldwide treasure hunt. Players use handheld GPS receivers to find containers placed by other enthusiasts in locations ranging from city street corners to remove mountaintops.

A classic cache hide in the base of a tree.

In its simplest form, players provide each other with nothing more than the GPS coordinates for the treasures, which are typically containers filled with trinkets. Geocaches can be as small as a pencil eraser or as large as a suitcase. When players locate one, they note their visit in a log book that’s kept in the container and also post their “find” on the geocaching.com website.

Global Craze

Geocaching has exploded in popularity. In January, 2005, there were about 141,000 geocaches hidden in the world. Today, there are more than 640,000, and a half million “finds” are logged each week. There are geocaches all around you. Nearly 1,000 have been placed within a 10-mile radius of Dallas-Fort Worth airport alone. My wife and I were so taken with this phenomenon that we started to write a book about it – Geocaching Secrets – that will be published in the spring.

One thing that’s captivated us about geocaching is transformative effect it has on the hobbyists who pursue it. We’ve spoken to several people who have logged more than 20,000 finds over the last eight years, or nearly 10 per day. Two years ago, one team spent months planning an attempt to find the most caches in a single day. They finished with over 300.

People report that geocaching has brought their families together, introduced them to dozens of new friends and led them to destinations that they never would have visited. One enthusiast credits the game with helping him shed 150 pounds and giving up smoking by using various vaporizers of all kinds. Several have said it saved their marriages. One disabled war veteran told me geocaching gavee him a reason to live at a time when he was seriously contemplating suicide.

It’s also brought people outdoors and introduced them to new worlds they never knew. In seeking caches within my local area, I’ve visited dozens of parks, nature preserves and cityscapes that I never knew existed. One recent excursion took my family on a discovery tour through the streets of lower Manhattan, with each stop relating to a different Revolutionary War event.

Platform for Innovation

Container hidden as a sprinkler head

I’ve been struck by the innovative spirit that this relatively simple idea has unleashed. The people who hide geocaches (some have stashed well over 1,000) come up with devilishly difficult tactics to disguise their treasures. One person specializes in hiding tiny containers inside of animal bones. Another constructs containers out of hollowed-out logs. Many others specialize in scrambling the geo-coordinates in elaborate puzzles and ciphers. One recent search directed my wife and me to watch a movie for a reference to obscure letters written by Benjamin Franklin. We then had to apply a cipher to the writings to zero in on individual words, the first letters of which spelled out the clue. That’s just the tip of the iceberg. Some cache owners devise riddles that would tax the skills of a mathematics Ph.D.

Educators use geocaching to teach their students about geology, mathematics and creative thinking. The Arkansas Parks Service stashed a cache in each of the state’s 52 parks this year in an effort to lure citizens into the outdoors. Hundreds of finds were reported in just the first two weeks.

Like the Internet, the geocaching community is entirely self-guided. There are no governing bodies and no formal leadership. The rules of the game are determined by the consensus of the players in a process that’s loosely democratic but without votes. Bad behavior is regulated by peer pressure.  People do the right thing in order to preserve the simple beauty of the game.

Geocaching is just one example of how technology unleashes creativity that changes people’s lives. It’s also a testament to how big ideas emerge when people are given tools and freedom to discard assumptions and invent new possibilities.

Reading a recent CIO Insight interview with Timothy Chou brought to mind an analogy to, of all things the early days of railroading.

Chou is the kind of futurist who makes the guardians of the conventional wisdom cringe: an industry veteran who understands the way things have always been done and who now tours the country arguing for radical change.

After spending 25 years selling IT products to CIOs, Chou joined Oracle in 1999 to launch the company’s fledgling software as a service (SaaS) business. The experience was transformative. In 2004, he penned a provocative book called The End of Software in which he argued that the compelling benefits of SaaS would sweep over the enterprise software industry. He’s now self-published a second book, Seven, that challenges CIOs and software vendors to understand how important IT infrastructure is to their businesses and to make some tough decisions about where to invest. The title refers to seven software business models ranging from traditional licensing at one extreme to Internet-only software businesses like Amazon and Google at the other.

In an interview with Paula Klein, Chou is careful not to lecture CIOs about the choices they should make, but it’s pretty clear where he stands: most of them should be aggressively moving to hand over much of their software and infrastructure to someone else. While CIOs are ideally positioned to understand the business tradeoffs (“Ask any CIO who has completed an ERP implementation, and he or she will tell you more about how the business really runs than anyone on the executive staff,” he says), the decision– is a political minefield where many CIOs still fear to tread.

Losing Control

One of the most often-cited reservations CIOs have about SaaS is that they lose control of their IT environment. Chou argues that this is a red herring. Most IT organizations aren’t particularly good at backup and recovery, for example, so the belief that they can do a better job than a commercial vendor is misplaced. “Many people think you have to pay more for reliability, but the opposite is true,” he says.” If you want to buy the most reliable car, don’t pick the $1 million handcrafted sports car; find a Toyota that’s been produced a million times.”

Addressing another common concern – that SaaS deprives IT organizations of the ability to customize their software environments – Chou argues that the tradeoff is usually worth it. Businesses, he says, “may have to forgo much of the customization that they’re used to in order to get simpler, cheaper, more reliable applications.”

His remarks reminded me of an insight I gained while on a recent visit to the Railroad Museum of Pennsylvania. There I learned that in the days before the railroads were built, it took Pennsylvania citizens two full weeks to travel from Philadelphia to Pittsburgh.  This forced communities to become self-sufficient because it was so difficult to obtain goods from the outside world.

The Triumph of Choice

Railroads ushered in the fruits of the Industrial Revolution, making it possible for mass produced goods to reach a wide audience. I’m sure that many people at the time mourned the loss of the local blacksmith, who crafted each horseshoe individually. Some probably chafed at the idea of molding their lives to the demands of a railroad timetable.

In the end, however, most people accepted the fact that low cost and wide selection was a reasonable alternative to expensive, customized goods.  And as much as we gripe about the tyranny of the airlines today, we appreciate the fact that they can get us from New York to San Francisco for less than $300.

The alternative to complete control is choice, and the power shift from seller to buyer has brought dramatic benefits, Chou argues. In the past, “Enterprise software vendors sold only $1 million products, and the only channel to buyers was a human,” he tells CIO Insight. “Today, the Internet provides a low-cost, diverse channel for information that can be used to educate anyone. Reference calls have been replaced with hundreds of online forums that let you understand a diverse set of experiences with a product.”

In other words, competition and the rules of the market create a healthy atmosphere for diversity, which increases choice. Buyers may not be able to get exactly what they need, but they can come pretty close. For most of them, that’s a pretty good trade-off.

From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Paul Barth likes to tell the story of a commercial wholesale bank that saw the opportunity to grow business and customer satisfaction by up-selling existing customers. Its sales force had traditionally been organized around product lines, but the bank knew that cross-selling was an unexploited opportunity. The question was what to sell to whom.

Sales management decided to pull all its customer information into one place to look for patterns. By targeting segments, the sales force could sell its products to the most likely buyers. Small businesses, for example, were good prospects for lines of credit.

Armed with these profiles, the bank retrained its sales force to sell a portfolio of products to different customer types.  The predictive data allowed reps to focus their energies on the customers who were most likely to buy. The result: sales to existing customers grew $200 million, product-per-customer ratios increased and customer satisfaction rose 50%.  All of this was achieved without expanding the product line.

Clean Data Yields Insight

This wasn’t an example of technology wizardry.  It was an example of clean, well-integrated data leading to a positive business outcome. By taking an integrated view of its customers, the bank was able to spot patterns and derive insights that led to smart business decisions.  Cost was minimal, upside was huge and the decisions resulted in a new annuity stream of increased business that lasted years beyond the original decision.

Data quality is an under-appreciated advantage.  For companies that apply the discipline and planning to address their data-quality needs and take an innovative approach to identifying new insights, the payoff is an order of magnitude of the cost.

Most large organizations have data quality problems that have resulted from years of acquisitions, stovepipe application development and error-prone data entry. Making sense of the mess looks like a huge job, but it can be done if you follow a disciplined process, suggests Barth, an MIT computer science Ph.D. who’s also co-founder of NewVantage Partners.

First, you need to step through all their critical data elements and decide what information is really strategic to the business. This process alone can winnow down tens of thousands of data elements to perhaps a few hundred.

Then establish consistent terminology. Barth cites one client that had six different definitions of “active customer.”  Everyone in the company needs to use the same language. A metadata repository can help standardize terms.

“Start to centralize where data is stored, how it’s provisioned and how people access and use it,” Barth recommends. Minimize copies. Each copy of production data creates complexity and the possibility of error.

Put in place a governance process for data quality that specifies rules about what levels of quality is acceptable. Create metrics by which to measure quality levels. Establish data ownership. One of the reasons companies have so many data problems is that no one owns the quality process. Ownership creates responsibility and discipline.

Get a handle on application development. Line-of-business owners shouldn’t be allowed to create rogue applications without central coordination. Many of these skunkworks projects use copied data because it’s more expedient than tapping into production databases.

Identify opportunities to create insights from data. This is the most critical step. Strategic opportunity comes from thinking up innovative ways to apply data analysis.

Annuity Benefits

Here’s one more example of the benefits of data quality. An acquisitive bank had to make decisions about closing and consolidating branches. These choices are usually made based on location, but some analytical thinkers at the bank had a better idea.  They built a database of customer transactions across the bank’s many channels, including branches, telephone banking and Web.  Then they looked at the behavior of customers across those profiles.

They discovered that customers who used multiple physical and electronic channels were less likely to leave the bank. That meant that branches that counted many of those high-value customers were actually better candidates for closure. Using this innovative approach to decision-making, the bank was able to close 50 branches and save $38 million annually without any revenue impact. That’s an annuity benefit that resulted from an innovative analysis of data the bank already had.

From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Over the last couple of entries, I’ve talked about the benefits of deploying social network technology internally for business benefit. While the benefits may be clear to you, chances are you have to get past the sticky process of selling the idea to management, who invariably ask the return on investment (ROI) question.

ROI is important but it’s also a smokescreen that executives can use to avoid spending money. Corporations invest in plenty of functions that have vague ROI, including human resources and training. Unfortunately, social networking projects don’t lend themselves to clean ROI calculations. The benefits of better communications, more productive collaboration and access to organizational knowledge don’t fit neatly into a spreadsheet.

If you’re stuck on ROI, point to the often-neglected “I” part of the equation: investment. The new of tools, many of which are open source, are often significantly less expensive than the proprietary programs they replace. Then ask managers to consider the cost of a sales opportunity lost because team members didn’t have access to relevant knowledge within the organization. Or look at turnover rates and ask what the value is of capturing the knowledge that those departing workers take with them.

The best way to justify social media investments is through examples. Every large organization has a few people who understand the transformative effects of technology and who are eager to try new things. Embrace these people as your allies, particularly if their organizations produce revenue. Enlist them to participate in a pilot project that applies social networking concepts and technologies to an existing process. Perhaps it’s replacing an over-engineered project management system with a wiki. Or maybe it’s adopting podcasts in lieu of staff-wide conference calls. Offer all the support you can to make the pilot work. The experiences of early adopters wills rapidly spread throughout the organization.

One key to successful adoption of any new technology is to eliminate alternatives. If people are told to use a wiki for collaboration, for example, but still have the option of communicating with colleagues by e-mail, they will choose the latter. People default to the path of least resistance, and that usually means sticking with what they know. You have to remove that option to demonstrate the effectiveness of an alternative solution. You can’t eliminate alternatives, but you’re sponsor can. That’s why choosing allies at the management level is so important.

A successful pilot project is a foundation for revisiting the ROI question. Interview project participants to document their impressions. Identify what they believe are the cost savings or revenue opportunities. Share these field experiences with the skeptics. Real-life stories are more convincing than formulas.

Supplement this with an internal public relations effort. Subscribe to RSS feeds of bloggers and publications that advocate for your position. Share expert opinions and published case studies with your internal decision-makers. Keep an eye out, in particular, for activities by your competitors. Don’t expect results overnight, but with time and repetition, you can wear down the critics.