Wednesday, July 29, 2020

How Lucrative is United's Mileage Plus?

Because United is using its Mileage Plus as collateral for financing, they had to reveal the financial details and, according to an article in Crain's Chicago Business, it's very lucrative.

Mileage Plus sells miles for about 2 cents each to partners (like credit card issuers) and 1 cent each to the airline itself (which issues them to travelers).  It then costs about a cent when travelers redeem miles for tickets.

The bottom line is that, last year, Mileage Plus posted a $1.8 billion profit, for a profit margin of 34%—compared to 16% for the airline overall.

This is further proof that selling intangible and virtual goods is more lucrative than selling physical goods.

© 2020 Praveen Puri

How Social Distancing is Actually Helping Hollywood Get Better Data

Movie and TV writers and producers are relying ever more on data to help develop plots and concepts.  Their offerings have to compete in a world of streaming, You Tube, Twitter, and Instagram.
Consumers have more opportunities to go down "rabbit holes" of specialized content.

Before Covid, they were reluctant to stream pilots and samples in people's homes, for fear of piracy.  Instead, they relied on recruiting people from shopping malls, casinos, etc. and transporting them to theaters.

Now, they have to rely on streaming, and they are finding that companies like Pilotly and MarketCast can actually measure many more data points, with a larger, much more diverse test audience, that is distributed geographically.

It's another example of how working remotely actually has advantages over in-person.

© 2020 Praveen Puri

GE's Digital Failure A Lesson in IT Strategy and The Importance of Strategic Simplicity®

The Wall Street Journal recently printed an excerpt from the book "Lights Out: Pride Delusion, and the Fall of General Electric" that focused on their struggles to create Predix—envisioned as the Big Data, Internet of Things platform that would make GE "the digital company of the future".

What went wrong:

1. GE engineers are experts in their machines and customer needs, but they could have partnered with a large software vendor who knows building large software infrastructure, instead of going it alone.

2. Instead of building the first iteration with a small software team, and then scaling up as needed, they hired an army of people and poured money on them.

They "...smothered it with cash. But without a coherent strategy and well-thought-out processes, the product development path was a wasteful one..."

3. Amazon and Microsoft already have well-established cloud infrastructure.  Rather than use it, and leverage their years and billions of dollars in investment, GE tried to develop its own data centers.

4. GE's tiny sensors in their machines produce a lot of data, but they used different coding and operated on different systems.  This made integrating them on one platform a complex nightmare.

These four lessons highlight that money and resources are no substitute for well-designed strategy and processes.

© 2020 Praveen Puri

Disruptive Innovation Always Creates Jobs

The Wall Street Journal reported that, according to Michael Mandel, chief economic strategist at the Progressive Policy Institute, "when you include all jobs in fulfillment, delivery, and related roles, e-commerce has created more jobs between 2007 and January 2020 than bricks-and-mortar retailers lost."

© 2020 Praveen Puri

Sunday, July 26, 2020

My Quote on Ideas

"Either implement your new ideas immediately or throw them away!  Ideas and intentions decay exponentially."

- Praveen Puri

© 2020 Praveen Puri

Wednesday, July 22, 2020

How to Deal with Paralysis by Analysis

"Paralysis by Analysis" is a real threat to effective business leadership.  In today's VUCA world, being able to make quick decisions, and take definite action, is a must.

There is a simple way to prevent "Paralysis by Analysis": eliminate some options as fast as possible.

In other words, even before starting a formal analysis, if a quick-and-dirty glance shows that a particular option is about the same as some other option, then don't even consider it—just drop it.

© 2020 Praveen Puri

Sunday, July 19, 2020

Examples of Strategic Simplicity® Success

Here are some recent examples of Strategic Simplicity® success in business:

1. The GM of a plastics manufacturer told me that, whenever there was a new custom order, it took 2 weeks to place it into the system, and involved 11 handoffs. Now, it's down to 4 days and 7 handoffs—and they want to cut it down even more.

2. Mattel supported 150 types of red for their toy designers.  Now, they've streamlined their supply chain by eliminating 1/3 of the reds—and are working to eliminate other color options.

© 2020 Praveen Puri

Friday, July 17, 2020

Skilled Developers Aren't Fungible

It angers me just thinking about it: "We want our developers to be fungible".

A large bank I worked with wanted all its software developers to be cross-trained to the point where they were fungible, and could easily be substituted for each other.

"Fungible" is used in finance to mean financial instruments that are so equivalent that they can be used to offset each other. For example, if you could buy a silver contract on a NY exchange, and you can get out of the position by selling a silver contract on the Hong Kong exchange, then the two contracts are considered fungible. The regulators and clearing houses consider them equivalent.

But you can't turn a whole bunch of skilled software engineers, working on different projects, into complete commodities that can replace each other at the drop of a hat.

© 2020 Praveen Puri

Wednesday, July 15, 2020

The Six Sigma Fallacy in IT

"Six Sigma" was originally created for manufacturing, to eliminate defects.

The original proponents, like GE, never applied it to the engineering and design depts, where innovation and original thinking were required to create.

That's the big fallacy in applying it to software—what developers do is engineering.  The equivalent of "manufacturing" in software is "copy" or "cut and paste", which don't have defects.

© 2020 Praveen Puri

Friday, July 3, 2020

2020 PMO Impact Summit Teaser Video

I'm speaking 2020 PMO Impact Virtual Summit in September.

My topic is "IT Strategy and Project Management Success Using the Strategic Simplicity® Framework".

 You can register and find out more at:

© 2020 Praveen Puri