M Institute

Does green beer work?

The amber liquid is turning green - just check out Stella and Adnams. But does green beer make sense? M Institute co-founder Jyoti Banerjee investigates the inside story and discovers how one medium enterprise company is reaping business benefits from green beer. 

Less glass. Less CO2 emissions. 

The latest advertisement hoarding from Stella Artois features the beer company’s new lightweight bottle. As the Stella ad claims, “every one of our 250 million lightweight bottles contains less glass to help reduce CO2 emissions.”   

I think it’s great when household names like Stella believe in sustainability to such an extent that they can focus an entire ad campaign on just this one message of lightweight bottles. Customers today like to know that their supplier has done what is possible to reduce the environmental impacts related to their purchases. 

So well done, Stella, for taking the trouble to lower the weight of your highest selling bottle by 7%. Apart from the citizenship aspect, this sort of environmental initiative makes great business sense too. A lighter bottle is cheaper to transport and needs less energy to make. 

When I saw the Stella ad, I was reminded of another beer company that had made some serious inroads into improving its environmental performance: Adnams. Now Adnams is a much smaller business than Stella – in fact, it’s clearly in the medium enterprise camp with revenues around £50m annually. Adnams was the first to bring out carbon-neutral beer, an altogether deeper initiative than making lighter glass bottles. Every aspect of the company’s processes had to be re-assessed to make East Green, the world’s first carbon-neutral beer. 

Here’s what I learned about the business end of sustainable beer production, listening to Andy Wood, managing director of Adnams, talk about East Green: 

A medium enterprise guide to Windows 7

Does Windows 7 deliver the goods for business? M Institute co-founder Jyoti Banerjee checks out Microsoft's latest operating system.

In our home, October 22 has been the focus of anticipation for some weeks now. Our eldest becomes a teenager that day, and so the days have been filled with a count-down, and many lists of things to do in the build-up and during the day itself, with friends, and with family. Well, the day is finally upon us – may the celebrations begin. But little does my daughter know that this day has been awaited with much anticipation by a slightly larger group of people than her family and friends. In fact, thousands upon thousands have been waiting for this day: a hundred thousand Microsoft employees and the millions more that share the Windows ecosystem, as October 22 ushers in the official launch of Windows 7.

For many in Microsoft, Windows Vista tarnished the brand of the software giant’s most valuable product. Although Vista sought to deliver a new architecture for operating systems that addressed growing security concerns among PC users, the end-result was poor performance on many PCs and numerous security features that annoyed the very users they were supposed to protect. The word on the street was to stick with XP. Although Vista sold in the millions, the vast majority of the Windows installed base, consumer or business, never moved from Windows XP.

Will anything change with Windows 7?

The answer is yes, and here are some reasons why.

Online security for M enterprises

Do medium enterprises need to worry about online security in the same way as large companies do? M Institute invited Martin Mackay, vice president EMEA for Verisign, to lay out the case for security within medium organisations.

Every day, people are finding new reasons to go online to access goods and services, not least because of the convenience and choice transacting online offers. Unfortunately, this growing dependence on online business hasn’t gone unnoticed by opportunists.

Identity theft and online fraud are on the rise. Scams such as account takeover, phishing, spyware and viruses are rife and growing more sophisticated. The most recent figures from the Anti-Phishing Working Group show that the number of unique keyloggers and crime-oriented malicious applications rose to an all-time high in July 2008, reaching 1,519.

In April 2009, Gartner reported a 40% increase on phishing attacks from the previous year, whereby e-criminals use convincing fake emails or web pages to trick consumers into handing over an array of sensitive personal information, including user names, passwords, and credit card numbers. The price can be dear, with Gartner reporting the average loss per attack to be $351. In addition to monetary costs, companies targeted in phishing attacks also suffer immeasurable brand damage.

Given the current threat landscape, an effective online security strategy is essential for any business, no matter what size. That’s not to say that security strategies come with a ‘one-size-fits-all’ tag, and medium-size businesses should look to address security issues in a way that addresses their own specific challenges and requirements.

Medium-size businesses may not have the same budgets as very large enterprises, but they do have a similar need to protect their own Intellectual Property and any personal information customers choose to entrust to them. If you are a medium-sized online retailer, for example, you need to reassure customers that when they hand over their cash online, credit card details and personal information is secured and will remain in safe hands.

Despite the fact that a mid-market company might not be as well known as a larger brand, protecting your reputation is just as critical. Medium-size businesses rely heavily on repeat customers. In order to grow, it’s essential to build up a loyal customer following which will continue to choose your products or services again and again. Mid-market companies need to earn customers' trust and confidence to be successful, particularly during tough economic times when consumers are jittery and the competition just a click away.

Action stations

So what is a medium-size business to do? Several may worry that they don’t have the cash to implement a security program. That doesn’t have to be the case – the current financial crisis has meant that projects are under extra scrutiny, but not necessarily being abandoned. The board will closely examine projects to ensure they demonstrate clear ROI and deliver immediate benefits to the business. Effective security solutions not only protect your customers and safeguard the information that your business holds, but encourage trust and loyalty. If a customer is confident that they are safe when transacting with you, they are much more likely to hand over personal information and cash.

Recent research by YouGov has shown that companies which clearly demonstrate their online security credentials are more likely to be recommended to others by brand ‘promoters’. This means that implementing security solutions can help mid-tier businesses achieve coveted ‘word of mouth’ recommendations, drive increased business and directly impact the bottom line.

The proof is in the pudding. Many mid-size companies have recently managed to reassure customers that their data is in perfectly safe hands when transacting online, and seen sales climb as a result. One way they’ve achieved this, for example, is by implementing Extended Validation (EV) SSL Certificates. These certificates provide an easy and reliable way to verify that a website is genuine and a secure environment for customers making a purchase. Also known as the ‘green address bar’, it visibly shows that the organisation owning the web site has been authenticated as the legal entity it claims to be, using one of the most rigorous industry standards. The green address bar also confirms that any information provided by the customer as part of any transaction will be encrypted on its journey to the company’s website. Direct Line Holidays is one example of a mid-market business which has invested in this kind of technology. For them, implementing EV SSL led to an 8 per cent increase in conversion to sale rates.

Top tips

Here are my five top tips on how medium-size businesses can protect themselves online and increase consumer trust:

1. Put customers and convenience first. Businesses too often enhance their security systems without first taking into account the potential impact those changes will have on the customer experience. That’s a big mistake, as hard-to-use sites or complicated security layers will cut down on the popularity of cost-efficient online services.

2. Invest in a symbol of trust to show users that your website is secure. Consumers react well to visual cues – marks such as a green address bar and padlock icon guarantee that a website is safe. Online shoppers are encouraged never buy anything without first checking that these icons are present.

3. Look beyond the password. Simple login names and passwords are no longer enough to protect businesses and their customers. Enhanced validation (EV SSL) and strong authentication technologies, including tokens which display a one-time password generated for every transaction or which send a password to your mobile phone via SMS, offer businesses a user-friendly way to make it difficult for fraudsters to seize sensitive information.

4. Know when customers are at risk. Companies should develop detailed profiles of each customer’s typical online behaviour, such as transaction amounts, time spent online, and frequency of funds transfers. Using advanced fraud detection technologies and services, they can monitor customers’ activities against those profiles and be alerted immediately when potential fraudulent behaviour occurs.

5. Stay one step ahead. Any business looking to secure its online operations must be prepared to be bold and stay one step ahead of the fraudsters. Adopting EV SSL Certificates or strong authentication help, but these should be part of a multi-layered approach to online security that everyone with a vested interest must be aware of and prepared to act upon.

IT decisions in crunchy times

Accountancy Age's Rachel Fielding recently interviewed a panel of experts on a webcast, asking what impact tightening financial reins will have on IT spending. Paul Druckman, chairman of M Institute, was part of the panel and here are some of his comments answering the question "What role can FDs take in IT investment decisions?"

The economic turmoil has tilted the balance and the finance director (FD) is becoming much more involved in IT investment than this time last year. Good FDs think strategically about IT rather than just through efficiencies and that has been one of the failings historically.

There is a different style of IT project evolving. People are looking for the cash implications to be less onerous on the business, but that doesn’t mean that they are shelving projects. The projects that are likely to fail are where the organisation doesn’t understand the change that is going to happen. People are starting to understand that projects impinge right across the business and you can’t just bring in external consultants to do that work in the business.

Trepidation and quiet confidence

Medium-sized businesses’ ability to deploy game-changing IT will help them withstand the recession, as delegates at Information Age’s IT for the M Business conference discovered. M Institute co-hosted the conference and listened in on the discussion.

Information Age's Pete Swabey reports that the current economic crisis will hit medium businesses the hardest. He came to this view listening to the proceedings at the recent IT for the M Business conference. Swabey says, "They have neither the agility of small businesses, which can change tack at the drop of a hat, nor the economies of scale of corporations, many of whom have the cash to sit tight and weather the storm."

As M Institute has often noted, medium businesses (unlike their smaller brethren) are prepared to invest in sophisticated IT, and have a real appreciation of what IT can do to enable the business to scale efficiently. But unlike large organisations, Swabey notes that "mid-sized business don’t have the luxury of getting it wrong or experimenting: IT projects need to be 100% tied to the achievement of business goals, with an intense focus on payback and benefits."

Perceptive processes: making sense of business as it will be

Businesses are getting better and better at providing technology to support "doing" processes. But what happens when managers need to undertake "thinking" processes, asks M Institute co-founder Jyoti Banerjee? In answering the question, Jyoti proposes that we recognise a distinct group of business processes that he calls perceptive processes.

There are many different kinds of processes in an organisation. Traditionally, processes have been divided into two categories: transactional or non-transactional. Although that is helpful in terms of identifying which processes need to dealt with by computerised transaction-processing systems, the distinction seems incomplete in an era when almost all processes can be handled by computers.

It is still useful, though, to distinguish between different types of processes. This paper suggests that all kinds of processes in an organisation may be categorised into two different types: 
* Learned processes
* Perceptive processes

These two modes of processes are rather analogous to the distinction that psychologists make between experiential cognition and reflective cognition in human thinking. To put it differently, this categorisation separates "doing"€processes from "thinking" processes.

Modernising business processes

Formalising what may previously have been ad-hoc business processes is a key issue when differentiating medium-sized organisations from small ones. Yet figuring out which processes need to be formalised or modernised, and in what priority, is a difficult task for leaders of medium organisations. M Institute co-founder Jyoti Banerjee checks out the options.

Processes new and old
Companies that want to exercise a competitive edge in the market, whether by launching an e-commerce channel or being first to market with a new product, have found that they are dependent on the state of their business processes if they want to succeed. Typically, their business processes are a mix of new and old, with only brand-new well-financed companies having the luxury of fully modern processes. Good processes do not guarantee success, though bad processes will certainly guarantee failure.

Modernising business processes research paper

Formalising what may previously have been ad-hoc business processes is a key issue when differentiating medium-sized organisations from small ones. Yet figuring out which processes need to be formalised or modernised, and in what priority, is a difficult task for leaders of medium organisations.

Modernising business processes is a new white paper from M Institute that seeks to provide some fresh thinking on the business process challenges that medium organisations face so that they are better equipped to make the judgements on how to develop and grow in a way that takes advantage of their growing maturity in the exploitation of technology, innovation and new opportunities in the business landscape.

To grow or not to grow - that's an IT question

Durham Business School and Microsoft (both partners of M Institute) have collaborated on a piece of research that has an important finding: growing companies make greater use of IT to meet their key business challenges compared to companies that are declining. M Institute co-founder Jyoti Banerjee investigates.

The research, carried out among 401 businesses with up to 100 employees, does not attempt to distinguish cause from effect. But it does claim that growing companies are more likely to invest in IT in order to better manage customer data, better manage business processes, comply with regulation, and access business information when out of the office.

Although much of the report is focused on analysing the different size cohorts, its writers, Bill Snaith and Ian Stone of Durham, have done an interesting thing in maintaining a constant thread in the report which analyses the research findings by growth performance. Compared to declining companies, growing companies are more likely to:
* Use more diversified sources for IT advice
* Have more software and arguably more sophisticated systems 
* Have more appreciation that IT can (and has) delivered benefits to their business and how it might help them overcome challenges
* Talk about IT in terms of what it can do for employees, and so have a people-centric attitude to IT
* Display greater willingness to spend more on IT in future to generate competitive advantage and growth

Business process outsourcing for midmarket companies

Nobody can be a specialist in everything: hence the growth in outsourcing of standard business processes. So far business process outsourcing (BPO) has been dominated by large enterprises. Now M enterprises are moving to exploit its benefits.

Growing maturity of the BPO market is enabling medium enterprises to take advantage of new opportunities. Phil Fersht, at the time vice president of the BPO Group at Everest Research Institute, lays out the case for how BPO works for medium enterprises.

Empowering medium enterprise - a guide for policy-makers

A new research study, from M Institute, sets out challenges facing medium organisations and asks policy-makers to respond.

The UK government wants to see Britain as the best place in the world to start and grow a business. Yet most of its attention is on policies and measures aimed at starting businesses. A new research study from M Institute, Empowering Medium Enterprise: A guide for policy-makers, seeks to focus government attention on the challenges facing medium businesses, and the actions government can take to support their continued economic growth performance.

The research, released October 2006, was carried out by M Institute, and received support from Microsoft and the Institute of Chartered Accountants in England & Wales (ICAEW).

Key themes emerging from the research study:
• Medium business is very different from large or small business
• Medium enterprise growth is held back by certain economic factors

 

Outsourcing business processes for M enterprises

Nobody can be a specialist in everything: hence the growth in outsourcing of standard business processes. So far business process outsourcing (BPO) has been dominated by large enterprises. Now M enterprises are moving to exploit its benefits.

Growing maturity of the BPO market is enabling medium enterprises to take advantage of new opportunities. I asked Phil Fersht, a former colleague of mine, to define BPO and explain its workings for M organizations. Phil is vice president of the BPO Group at Everest Research Institute, and is well-regarded around the world for his expertise in the matter. Over to you, Phil.

Software joinery at work

Bill Gates calls the gap between personal productivity and business application software the "last mile" in productivity. M Institute co-founder Jyoti Banerjee has been waiting fifteen years for this bridge to be crossed.

I have learned (and continue to learn) a new way of working. Through the use of portable computing, mobile connectivity and the Internet, my working life has been transformed – and so has the organisation of the rest of my life. And I am not alone in this, because every single one of you reading this blog will have a similar story to tell.

However, the organisations we work in, with few exceptions, still work in the same way as they used to ten years ago. Business processes may have got automated along the way, but the engagement between person and process has not changed as much as the changes in personal productivity.

Although I have talked much about this for the past five years, I have felt this was largely a lonely crusade. Frankly, nobody seemed to care much about the gap between person and process.

This week my crusade acquired a very big gun. Bill Gates, no less, speaking at the Convergence 2006 event in Munich, trained his rather punchier firepower on what he calls the “last mile of productivity,” which he describes as the gap between personal productivity software and back-end business systems. Gates’ phraseology may be borrowed from telecoms, and his ambition is certainly shared with every other vendor that has used an Excel link as a fig leaf to paper over the disconnect between personal productivity software and the software that runs the enterprise.

Should M organisations be listening to Nick Carr?

Nicholas Carr wants companies to spend less on IT. M Institute co-founder Jyoti Banerjee ponders that advice on behalf of medium enterprises.

At last week's London debate with Bob McDowell of Microsoft, Nicholas Carr restated his well-known perspective: IT does not add strategic value to an organisation, so companies should spend less on it, and business leaders should intentionally choose to be IT followers, not leaders.

What was different about this debate from many similar ones was the focus applied to medium organisations. Carr's usual analysis is based on large enterprises But does this approach work for medium enterprises as well?

My instinct is that Carr's ideas work better for medium enterprises than they do for larger organisations.

Typical medium enterprises don't have the budget, bandwidth or business practice to justify expensive investments in what Carr calls distinctive technologies. Instead, they prefer their tech to be low, and their infrastructure commoditised.

Of course, there are at least three caveats that are worth pointing out.

Carr refines "IT does not matter" argument

At the recent Effective IT conference in London, industry sceptic Nicholas Carr kicked off proceedings with amodified version of the attack on IT in his book, IT does not matter. Jyoti Banerjee assesses whether the new version stacks up in the light of current IT experience.

It was the Nobel Prize-winning economist from MIT, Robert Solow, who quipped that you could see computers everywhere except in the productivity statistics. In writing his book, Nicholas Carr was simply following in Solow's distinguished footsteps by attacking the value business has got from the massive investments it has made in IT. His argument was that IT does not provide competitive advantage to a business as there is little or no differentiation in the bulk of the technologies used by modern businesses.

Those for and against the argument have had a field day in the IT press, with both sides claiming victory through case studies and stats that prove their point and disprove the opposition. With Carr given the opportunity to rehearse his arguments in front of an audience of IT professionals in London, it was clear that the heat has not gone out of the debate, though one wishes for a little more light all around.

To differentiate or not

Let's explore the debate a little further. One could ask whether it matters that 70-80% of all IT is undifferentiated. After all, the implication could well be that at least 20-30% of all IT is strongly differentiated. Although the two statements are two sides of the same coin, they actually present quite different arguments.