Archive for the 'strategy' Category

27
Jun

The end of an era

By Don Ardonio 0 Comments
Categories: business, software and strategy

Today has been marked in my calendar for a long time. Today is the end of an era. Today is the last day of Bill Gates at Microsoft.

We all have an opinion on Microsoft and their products and strategies. I don’t care what camp you are in, if you’re totally pro or against Microsoft. There is one thing you can’t deny. Bill gates had a vision and shaped the IT industry.

He had a dream of "a computer on every desk and in every home". Looking at where we stand today, I personally think he overachieved. It’s not just a computer on every desk and in every home, it’s gone far beyond that. And if you want it or not, Bill gates and Microsoft have shaped a large part of this, for better and, most likely, also for worse.

I’m not going out on a "all hail" rant for Bill, but respect is definitely due.

07
May

(r)Evolution

By Don Ardonio 0 Comments
Categories: 2.0, personal and strategy

I came across this post and immediately felt a very familiar sense. It’s something I had been wondering about for a while.

I started noticing on events and various ad-hoc meets that a lot of the crowd I know is also on twitter, has a (couple of) weblog(s), is all hyped up about latest developments in the e-world, … and all in all are probably a bunch of early adopters.

If I compare that to the business reality I live in, I often find myself far away from those people on the technological front (I don’t work in a internet related business, for those who might wonder). In general, my colleagues represent the ‘average user’. What strikes me most about them (besides the fact they rely on internet exploder) is that they still consider the internet as this ‘out there’ thing that by definition has to be accessed through a browser, either on their desktop or on their mobile. Which to me indicates 2 points that need to change before the masses will be ready for things like twitter.

1. The internet is not a set of web pages. It’s a medium to transport digital content of any kind, that can be stored somewhere in that cloud.

2. Out of realizing point 1 follows that you don’t need (just) a browser to access that content. Which opens a lot of opportunities to work with this concept in innovative ways.

Given that people imho will eventually adopt these 2 things, there are interesting times ahead of us…

10
Apr

9 baby’s in 1 woman for a month

By Don Ardonio 0 Comments
Categories: business, management and strategy

Or at least something containing all those elements. This article is all about the question "Can 9 women deliver a baby in 1 month?". In this post and subsequent comments we already brought up that 9 women can’t deliver a baby in 1 month in a lot of cases. Somewhere I said that they may be able to deliver, if delivering a baby only took cpu power. I still stick to that statement, but want to expand a bit on it.

From an engineering point of view, the statement is ever so true. If 1 server can process 100 jobs every day, than 2 servers generally can process 200 jobs every day. (simplification, I know). So 9 women, 1 month, baby delivered.

From a business point of view, the first thing that comes to mind here is: does the return of adding that extra server really justify the investment. A story that makes it crystal clear.
A production plant for a car has an assembly line installed that produces 500 cars of one model every day and has been producing for the last 100 days. Installation of the assembly line cost 50.000k and took 20 days to install, test and be completely production ready. The lines are specific for one car and can’t be reconfigured. Every car sells for 1k. Recently, due to high demand of that model of car, they would need to produce 750 cars / day to fulfill market demand. The expectation is that this increased demand will last for 300 days, after that demand will drop to 500 again. Or put otherwise: there is a loss of 250k in potential revenue every day (or 75.000k over the 300 day period)

There are 3 options here (for simplicity sake). First one is: build another production line to produce the 250 extra cars / day. Option two is to slightly abuse (overclock, speed up, …) the existing line so it produces 565 cars / day. The last option is simply to ignore the higher demand, and keep producing 500 cars / day with the existing system, and work on a backorder. (and combination of the options are not possible)

Let’s do some maths for option 1. It takes 20 days to set up a new system, meaning you don’t get (20*250) 5.000k in revenue. After that you are able to build 750k cars / day, gaining you 250k extra income every day. In turn meaning that it would take 200 days before you paid for your assembly line and the 250k every day becomes bottom line profit. Summarized: installing the new machine cost you 55.000k (50.000 install + 5.000 in lost revenue) + 220 (20 install + 200 to repay the machine) working days before it makes you 250k/day profit. (to all you economical gurus out there, I know this is technically not entirely correct but I’m trying to get a point across). Since the expectation was that the increased demand would be 300 days you would effectively have profit for 80 days (300-220), it means you’ll get 20.000k (80*250) in bottom line profit and are stuck afterwards with an extra assembly line. Your main line would produce you a profit of (300*500) 150.000k.
Profit and result after 300 days: 170.000k + 1 unused line.

Now consider option 2. Your assembly line cost 50.000k and gets you 500k every day. So you’ll have payed it off after 100 days, in our example this means that your line brings in 500k to your bottom line every day. The speeding up of the line would cause the factory to be closed for 10 days but would get the production speed up to 565 / day. The only cost you’d have is a new software roll out on the robots.Some numbers.
Closing down for 10 days means missed profit of 5.000k (500k *10). However, it leaves you with 290 days (300 days of high demand - 10 for installation) of production at 65k extra profit per day. Or: an additional bottom line profit of 18.850k (65*290), and no unused machinery to take care off when the high demand is over. Your main line would make profit for 145.000k (290*500)
Profit and result after 300 days: 163.850k + nothing extra to maintain

Option 3 is easy on the maths side. You get 150.000k (500k * 300). Your machine was paid off, so all you get is the bottom line of 500 cars / day. 
Profit and result after 300 days: 150.000k + nothing extra to maintain

I would personally favor option 2. Even though there is less immediate gain, you are not stuck with costs associated to having that machinery around (even unused machinery still costs, in the sense that it takes space away for machinery that could be used). Which sounds like a better long term plan.

To go back to the 9 women theory, and the point of this article. Yes, 9 women can deliver a baby in 1 month in certain situations but (big caveat) you’re stuck with 9 women afterwards…