Thomas Ballard

Last Saturday morning, I landed In Rome with my wife, ready to run the Marathon Sunday morning.

We had a simple plan. Collect the race number, drop our bags at the hotel, and buy my wife one of those new Swatch x Omega watches.

After lunch, we arrived at the Swatch store to find that the whole world had been queuing overnight.

Instead, we went for gelato.

While these watches were available globally in only a few stores; their website saw considerable increases in demand!

Their website kept going even though traffic, according to cloud flare, had increased 20000% in the last 24hrs.

What’s the point of all this, and what does it have to do with Technology value creation?

One of the biggest challenges for portco tech teams is technology performance at scale.

While occasionally, your website failing is a good thing.The value is in choosing how to deal with extraordinary events without worrying about what the underlying technology is doing.

Great PE firms run strategic technology performance programmes with their portco tech leaders to create the flexibility to do extraordinary things like Swatch.

How would you benchmark your pottos technology performance capabilities?

How would their tech platforms deal with a 20000% increase in demand?

What cool things will your technology programmes enable you to do?

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Thomas

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Early this morning, delivered to my house by a crane where all the parts you’d need to build a wooden deck in my garden.

I spent far too much time measuring, re-measuring, re-measuring with a friend, re-measuring with a family member, drawing a scale model of the deck before ordering parts needed.

Here are some pictures of the model if you are interested. Top picture. Base picture

You are probably thinking, nice pictures, but what does building a wooden deck and technology value creation have in common?

Here’s a short story based on first-hand experience. PortCo A decided that all current apps and data needed to be migrated to AWS. AWS pitched an approach to them, 12 months, lift and shift, we start tomorrow.

After six months, they had migrated 10% of their applications and data into AWS.

This 10% accounted for 30% of their total technology spend. Straight-line math would have seen them increase technology spending from $20m P.A to $60m P.A.

When they reassessed their position, they found that they already had 4x the capacity they would ever need in their data centre. This migration project was shelved after 12 months.

The message here, measure five times, cut once or twice.

Had Portco A spent more effort measuring, re-measuring, getting a second opinion, they might have saved themselves $10m, 12 months of project time and the time to hire a new technology leader.

Where do you see the next value step-change created for your portcos? Is it with cloud migrations, or it is somewhere else?

Keep leading; it matters.

Until next time

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Thomas

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Now that the Saharan dust has settled, we’re in for a heatwave here in England, at least for the next few months! A rare occurrence.

The other week, on the subject of heat, someone told me ‘the M&A market is so hot now’. If someone has to tell you something is hot, how hot is it?

We’re currently in a market where people are paying significant revenue multiples.

Typically, your portcos will be chasing these increased revenues aggressively; it’s considered sexier or perhaps more straightforward for firms to go after more revenue. With M&A, you can even buy yourself more revenue.

This might be OK for the growth investor, but surely, you can’t solve all your problems with revenue?

Rapid growth can often create structural technology challenges, compounded by M&A

These structural challenges can manifest themselves as bottlenecks in how applications function. Performance issues at scale. Slower or more complex product development cycles.

When you talk about revenue growth with your portco tech leaders. How do they react, what concerns do they have, what plans are they making?

Do they know the scaling limits of their systems today? Do they have well-defined non-functional requirements? Do they look at ways they can meet growth targets using technology?

Keep leading; it matters.

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Thomas

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Today it’s my Birthday, which means it’s almost time for the Formula 1 session to start.

Formula 1 is a great model for ultimate performance. Every car, driver, and team element is fine-tuned to be the best of the best.

2022 is the first year that a total budget cap will be used, alongside many new car designs and regulations.

The idea is to use the budget cap to bring the mega and minor teams closer together in performance. The goal is to drive innovation and competition.

If you are an F1 team, you can no longer throw money at your problems. Efficiency is the only way to go while delivering the ultimate performance when needed. F1 teams have jumped on this challenge, and each looked to solve this problem entirely differently.

When you think of budget planning with your portco, tech leaders. How would your portco tech teams react when budget restrictions are placed on them?

Do they jump at the opportunity? Do they challenge the cost gap? Do they look at ways they make you portco more efficient using technology?

Keep leading; it matters.

Until next time

Thomas

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This morning was up and on my mountain bike at 5:50 am, before Sunrise, the best time of the day for exercise.

Yesterday I’d decided to replace an axel on my rear wheel; 5 minutes into my ride, I’d realised it had failed.

Last weekend, I decided to replace my disc brake pads, a routine change, it failed; I noticed it was a problem when a Nun quickly overtook me on her pushbike!

You’re probably thinking, what does this have to do with Technology Value Creation?

When it comes to fixing my bike, I can do what I like. I can try, fail, or even take it to the mechanic.

You might recognise the similarities between this and how Tech leaders execute technology transformation programmes. Technology leaders are often tinkerers by nature, ‘Tinkering may be a great way to solve a problem, sometimes by accident’ (Castel, 2020).

https://www.psychologytoday.com/gb/blog/metacognition-and-the-mind/202004/tinkering-can-lead-creative-insight-and-innovation

The tinkering try, test, fail, and repeat method might eventually work for me and my bike. But it’s not a sustainable approach to value creation for enterprise technology programmes.

That’s probably why 84% of tech transformation fails.

And why operating partners avoid working with their technology leaders, with <30% of all value creation being tech-led.

Technology has become an essential element of value creation for those who know how to leverage it

Some things to consider.

How easy or difficult is it for someone to disrupt your business using technology? How much would disruption impact you? How can you make it even more complicated?

Opportunities to leverage technology can be both offensive and defensive.

Value creation that involves technology needs to reduce the friction of change.

Doing this right alongside other value creation strategies could mean a step-changes to EV.

Keep leading. It matters.

Thomas

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