For a lot of companies, cost reduction is a focus in profitability. For retail merchandisers, cost reduction is a major focus, because while there isn't much control over the per unit margin, there is a lot of control over how much is spent to sell the product.
Online retailers, like Amzaon, are really part software company. We build, deploy, and operate a lot of software. Since we're a 24x7 retail website, every minute that customers can't find and buy product is lost revenue. That means we have a lot of energy applied to ensuring that the website is running in top form all the time.
When cutting costs, there are a number of different avenues to focus on. When I worked for Aetna, pencils were metered and carefully handed out. At one company I have worked for, Ibuprophen was removed for a while from the first-aid stations as a cost-saving measure. Pencils and Ibuprophen don't move the needle. Staff reduction does move the needle. Unfortunately, after you layoff your workforce, your ability to do much of anything is supremely hindered. You may be able to keep your operation running, but forget innovation.
Instead of cutting staff, a better focus would be to focus hard on reducing operational cost and generally increasing productivity. We've been focusing a lot on reducing the cost of operations at Amazon and the result is that we have more developers spending time on developing (and golly, the stock price is up too, go figure). If you consider developers as fixed costs and their value add is new stuff, by increasing the amount of time they have to work on new stuff, you increase their efficiency. By reducing operational cost you get more value from your staff.
What's hard about reducing operational cost is that you usually have to dedicate a good chunk of said staff to that task. By doing that you don't build new features with those folks. So you are basically taking a hit up front to get your house in order. While it can be a bitter bill to swallow -- that you let yourself get so far gone -- the net results are marvelous.
Software developers tend to feel a sense of ownership for their software and services and nobody likes owning some custy, junky, crappy software that always dies and just generally "sucks"! Nobody! Having a smooth running system that doesn't wake people in the middle of the night and handles your peak transactional volume well is something to be proud of and makes you feel good about your job. When your developers are feeling good about their jobs, they tend to germinate ideas at a higher rate and the ideas tend to be better as well. And then... then... since the developers are busy spending all their time fighting fires, they actually have time to explore these cool new features which makes the website that much better.
Reducing operational cost is not something you can usually do in a month or three. It requires a long term commitment AND it requires a culture shift to build software in an operational friendly form -- which also makes it take a little longer to build. The value there is that you spend the extra time in software, up-front, once vs the death of a thousand cuts as you spend countless hours over time dealing with software that is hard to manage.
Spend a little now or spend a lot later.
Saturday, August 4, 2007
Saturday, July 21, 2007
Technology
It dawned on me the other day that keys are on the way out. Car keys. House keys. No more keys on your keyring.
It's been progressive and started with cars. First an (assumedly) RFID chip was embedded in car keys to prevent popping out the locking mechanism. The car won't actually start -- it will crank but not start -- without that RFID chip in close vicinity.
This has been taken a step further on a number of high end vehicles such as Corvette, Mercedes, Lexus, Infinity, and Porsche. All you need is to have the RFID chip in your pocket and the car will start. No keys in the ignition. Just a push button starter. It's only a matter of time now for this to make its way down to the mid-priced and then the rest of the car market.
This is very cool by the way. Not having to fish keys out of your pocket when you are jumping into your car with hands full on a rainy day (not that it ever rains in Seattle). Not having to have keys in your pocket at all. As an aside, my wife's new Subaru Outback has the biggest key I have ever seen and then it still has a great big keyfob remote attached. There is no way I have room for that in my pocket.
The other thing that will happen over time is that the keyfobs themselves will get smaller too. For those of you who dig the idea of embedded chips in your skin that you can wave around to make stuff happen, that'd be just as possible for your ride but you'll always need some kind of remote control available for remote lock.
What will be really exciting is when those RFID "keys" will be general enough to be used for more stuff that just your car -- like your house.
It's been progressive and started with cars. First an (assumedly) RFID chip was embedded in car keys to prevent popping out the locking mechanism. The car won't actually start -- it will crank but not start -- without that RFID chip in close vicinity.
This has been taken a step further on a number of high end vehicles such as Corvette, Mercedes, Lexus, Infinity, and Porsche. All you need is to have the RFID chip in your pocket and the car will start. No keys in the ignition. Just a push button starter. It's only a matter of time now for this to make its way down to the mid-priced and then the rest of the car market.
This is very cool by the way. Not having to fish keys out of your pocket when you are jumping into your car with hands full on a rainy day (not that it ever rains in Seattle). Not having to have keys in your pocket at all. As an aside, my wife's new Subaru Outback has the biggest key I have ever seen and then it still has a great big keyfob remote attached. There is no way I have room for that in my pocket.
The other thing that will happen over time is that the keyfobs themselves will get smaller too. For those of you who dig the idea of embedded chips in your skin that you can wave around to make stuff happen, that'd be just as possible for your ride but you'll always need some kind of remote control available for remote lock.
What will be really exciting is when those RFID "keys" will be general enough to be used for more stuff that just your car -- like your house.
Monday, June 25, 2007
Kids and Sticks
We went to an appreciation picnic this past weekend for my boy's second grade teacher. Even knowing how much kids like sticks, we parents were surprized when we saw them drag this branch out of the bushes. Normally I'd be worried about this but the branch was heavy enough that they needed at least 4 kids to carry the thing. They were so slow with it that they couldn't chase anybody down. They tried of course but were too slow and uncoordinated. Once they figured out how how to up-end the thing -- like a flagpole -- then we had to intervene. That would hurt, getting squished by that big branch falling down.
Sunday, June 24, 2007
Technology
Cell phones are technolgoy that we take for granted. Yet 15 years ago they were still very expensive and rare. Once the prices came down on both the hardware and the service, the super-fast adoption rate is a key indicator of the chell phone's "just right" technology. In case you remember what cell phones used to look like, here's a nice retrospective image set from msn.com. It was only about 10 - 12 years ago that phones got to the order of small that we know them today and that was still bigger than what we'd consider average today.
I would go a step farther to say that cell phones really turned out to be an enabling technology. The wide-ranging wireless network that cell phones are based on has grown and expanded to support an increasing volume of data transaction as well. This trend will clearly continue and cell phone like personal devices -- will be everywhere had by everyone.
They clearly still have a ways to go with the interface but they are getting better. I think the Apple iPhone is the start of the next generation of personal devices. I do have to say however that I like the current form factor of the small flip-phone and don't like the form-factor of the iPhone for being a phone. As a UMPC, the form factor is interesting and the multi-touch display is definitely trend setting.
I would go a step farther to say that cell phones really turned out to be an enabling technology. The wide-ranging wireless network that cell phones are based on has grown and expanded to support an increasing volume of data transaction as well. This trend will clearly continue and cell phone like personal devices -- will be everywhere had by everyone.
They clearly still have a ways to go with the interface but they are getting better. I think the Apple iPhone is the start of the next generation of personal devices. I do have to say however that I like the current form factor of the small flip-phone and don't like the form-factor of the iPhone for being a phone. As a UMPC, the form factor is interesting and the multi-touch display is definitely trend setting.
Saturday, June 16, 2007
Technology
Add-on GPS units are another example of technology that just makes sense and provides such a valuable service that it's easy to become dependant upon it.
Earlier this week I went up to Redmond for an after work Microsoft Playtest. Since traffic can be highly variable I choose to potentially be hungry instead of late. I got there with enough time to spare to find food. Fortunately, I had my trusty GPS with me and asked it to tell me what food was nearby. It couldn't've been easier to get food and get back in far less time than had I just started driving around looking for stuff. I'd've definitely got lost. After the Playtest was over, I needed some fuel, so score another one for the GPS.
While GPS units are still pricey, these are definitely going to go the route of power windows and anti-lock brakes -- eventually coming standard on every car. The touch screens are easy to use and while the quality of the user interfaces can vary, they're all easy enough to use. The real value here (besides the core functionality) is the built-in database of businesses. That are many other pluses but being able to do things like hit the button for 'GAS' and have it show you all the gas stations near by, closest ones first, is an awesome use of personal technology.
Subscribe to:
Posts (Atom)