Datasource Precedents
1 day ago
Friday, December 16, 2005
Big Changes
I don't talk about my employer on this blog, but I did want to mention I'm changing employers. It is a very scary and exciting time for me. I have confidence that my new employer will be a great fit for me and will give me a number of challenges and plenty of opportunity for advancement. However, I will be sad to leave my current employer, the company has been good to me and I have a ton of friends I am leaving behind.
Saturday, December 10, 2005
Crossroads
Two companies, in different industries, stand at the crossroads. Both have chosen to make a continual investment in IT in order to beat their competitors. Both believe strongly in their long term plan. I think one will succeed and one will fail. However, until now I didn't know why I thought that; it was just intuition. I don't mind basing a decision on intuition, but I want to explore the decision afterwards to find out what the answer should have been.
In the case of the two companies it was in the IT strategies themselves. One IT strategy requires the continual purchase of depreciating stock. The other IT strategy requires the continual creation of appreciating assets. Both require heavy, year over year investments. The first model, due to depreciation, is actually an anti-strategy. Since your assets are always depreciating, it becomes easy for your competitors to catch up and eventually pass you. However, the second model eliminates the ability for your competitors to catch up because your assets are always appreciating.
Therefore, when contemplating the effect of an IT investment in your company, do your best to ensure that the outcome of the investment will be an appreciating asset instead of a depreciating one.
In the case of the two companies it was in the IT strategies themselves. One IT strategy requires the continual purchase of depreciating stock. The other IT strategy requires the continual creation of appreciating assets. Both require heavy, year over year investments. The first model, due to depreciation, is actually an anti-strategy. Since your assets are always depreciating, it becomes easy for your competitors to catch up and eventually pass you. However, the second model eliminates the ability for your competitors to catch up because your assets are always appreciating.
Therefore, when contemplating the effect of an IT investment in your company, do your best to ensure that the outcome of the investment will be an appreciating asset instead of a depreciating one.
Saturday, December 03, 2005
Comparing companies
I've recently been studying companies in an attempt to determine the best company to work for. One of the most interesting things that I discovered was that it varies depending on your risk/reward tolerance. To better represent these differences, I broke down companies into a number of different categories, or tiers. Companies across tiers cannot be compared because they have a different risk/reward structure that appeals to different people. Instead, only companies intra-tier can be compared to find a "best".
Tier A - These are start-ups. They are usually in someone's basement or spare room. They have a HUGE risk and can go boom or bust. Most often, they don't even last a year. They require long hours and the ability to live a few weeks without a paycheck.
Tier B - These are larger private companies. They either have not or do not want to go public. However, they are also more established so that the risk is not as large, but the reward is not as large either. They still require long hours, but can be very rewarding financially and socially.
Tier C - These are fairly new public companies; those that have gone public in the last 3 years or so. They still have the chance of doing great things, but much of the initial gain is gone. In addition, their beurocracy is starting to take shape and the system will disolve into process over the next few years. The risk is still there, as public companies can disolve or be bought out in their early, formative years. However, the risk is less than a Tier A and many Tier B companies.
Tier D - These are stable public companies. Usually these companies have a global name and produce hundreds of millions, if not billions, of dollars of revenue. The company is process laden and hierarchical. The ability to make money is diminished to a much smaller chance and the risk is very small as well compared to the other tiers.
Tier E - Government jobs. The reward is your salary and pension. The risk varies, but is often low. Typically, it is a process laden (burdensome) job and nothing more.
Each tier is attractive to different people. There is no point in comparing across tiers except to find the tier you want to work in. Once that is done, you should seek out companies in that tier and compare them. Are they market saturated? How is their health insurance? Is their stock going up or down? What is their pay rate? How many different things can you work on? What are the chances of movement, both with technology or people? Do they value the same things you value? Do you respect their leader?
All of these questions need to be answered in order to lead you to the right company for you, but don't get caught up in comparing cross tiers, for that way lies madness!
Tier A - These are start-ups. They are usually in someone's basement or spare room. They have a HUGE risk and can go boom or bust. Most often, they don't even last a year. They require long hours and the ability to live a few weeks without a paycheck.
Tier B - These are larger private companies. They either have not or do not want to go public. However, they are also more established so that the risk is not as large, but the reward is not as large either. They still require long hours, but can be very rewarding financially and socially.
Tier C - These are fairly new public companies; those that have gone public in the last 3 years or so. They still have the chance of doing great things, but much of the initial gain is gone. In addition, their beurocracy is starting to take shape and the system will disolve into process over the next few years. The risk is still there, as public companies can disolve or be bought out in their early, formative years. However, the risk is less than a Tier A and many Tier B companies.
Tier D - These are stable public companies. Usually these companies have a global name and produce hundreds of millions, if not billions, of dollars of revenue. The company is process laden and hierarchical. The ability to make money is diminished to a much smaller chance and the risk is very small as well compared to the other tiers.
Tier E - Government jobs. The reward is your salary and pension. The risk varies, but is often low. Typically, it is a process laden (burdensome) job and nothing more.
Each tier is attractive to different people. There is no point in comparing across tiers except to find the tier you want to work in. Once that is done, you should seek out companies in that tier and compare them. Are they market saturated? How is their health insurance? Is their stock going up or down? What is their pay rate? How many different things can you work on? What are the chances of movement, both with technology or people? Do they value the same things you value? Do you respect their leader?
All of these questions need to be answered in order to lead you to the right company for you, but don't get caught up in comparing cross tiers, for that way lies madness!
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