Microsoft CEO Steve Ballmer made a case for the importance of people to a company's success.

When Microsoft CEO Steve Ballmer came to New York in mid-March with Microsoft’s new “People-Ready” marketing campaign, he was making a case for the importance of people to a company’s success, and the importance of software in making people productive.

Over the next year, Microsoft plans to launch more new software releases than it has in any previous year across the company’s whole range of products, from developer tools to a big new release of Office, and including significant innovations in Excel.

“The innovations that you'll see over these next 12 months are grounded in a basic view that successful businesses succeed based upon the quality and performance of their people… The best businesses work very hard to facilitate their people's success,” Ballmer said in New York. “How do you make sure people share common goals, and that they have a chance to coalesce as teams? How do you trust them and empower them? How do you give them the tools that they need to then work together and to drive against the directions that people share in common?”

Ballmer said the answer to all these questions is to give employees the tools that will enable them to succeed on their company’s behalf.

“Business is a never-ending cycle of discovering insights, figuring things out, making decisions, sharing goals, collaborating in teams, taking action, and we think a lot about the processes that facilitate that, but at the end of the day, business, it's…making that extra special decision, handling the exceptions in the operational process well,” Ballmer said.

Key Points of People-Ready Unified communications and collaboration Enterprise search The mobile work force Business intelligence Customer relationship management (CRM) Infrastructure

In an interview around the time of the People-Ready launch, Microsoft’s Jeff Raikes, president of the business division, contrasted Microsoft’s emphasis on people and software to what he described as the IBM approach.

“It’s a very different vision compared to IBM, which views people and IT as non-strategic assets to be outsourced and replaced by consultants,” said Raikes. “We believe that empowering people, as individuals and as teams, to help drive business outcomes will differentiate one company from another company,” he said. “Maybe it’s an investment advisor who made the difference between a child getting to go to college or not through his relationship with his client and the software that helped them make informed decisions quickly. For example, the actual product of financial services firms is the relationship between two people – advisor and client. Empowering a firm’s wealth-management advisors with great Microsoft software turns out to be one of the biggest ways to drive business success.”

Ballmer has heard the complaint that most people use only five percent of the features in Microsoft Office, but that doesn’t mean he is prepared to launch a version that dumps the other 95 percent. As people become more experienced in their jobs, and with technology, they will learn to use more of their software. The new release of Office and its integration with core applications such as the Microsoft SQL Server database and SAP will vastly increase the power of those knowledge worker tools by making them the user’s front end to the resources of the entire enterprise.

“Software is the one tool that can really keep pace with people,” said Ballmer. “It's an investment that has the flexibility and capacity to adapt as your people increase their capability.”

Software has not only facilitated different work processes, but it has also enabled new ways for working, he said.

 “Software can facilitate and support teamwork. Software can foster compliance in a world in which compliance is becoming increasingly important. Software is a tool that facilitates getting insight into what's really going on in the market,” said Ballmer. “Software lets you find information that you need to gain insight, to take action. It enables process excellence. And in this day and age, increasingly it helps people work more flexibly anywhere and anytime. To some that's a great advantage: I can work at a distance; I can live where I need to live; [If] I cannot make the trip I need to make, I can handle a problem or exception late at night. To some people it's just a chance to work more hours. The good, the bad, and the ugly, so to speak, you get it all. Software is flexible enough to support all of this kind of work operation. We think businesses need to empower the people in your company and you will empower the company.”

Back to the End User

For years Microsoft has been telling the financial services industry it is enterprise-ready.  Although the religious wars in the enterprise computing space continue, Microsoft has chalked up significant wins to prove its enterprise readiness: Lava Trading is achieving higher performance on Windows 2003 servers in an ASP model than some of its most sophisticated investment banking clients can achieve in-house; Townsend Analytics ran its operations on the beta version of SQL Server 2005; and Charles Schwab replaced its mainframes with Microsoft Windows Servers for its ticker plant.

So now Microsoft is back to talking about end-user computing. Sometimes speakers refer to the power that Microsoft brings to the desktop, but the term “desktop” sounds outdated now that many of these end users are using notebook computers and SmartPhones to link to information over wireless networks.

Microsoft's Jeff Raikes said research shows investing in people and software can help drive performance.

In its People-Ready campaign, Microsoft presents two pieces to the end-user story. The first is that even great software goes wasted or is unproductive if it is difficult to use. In areas of high turnover such as call centers, an application that requires three or four weeks training incurs a high cost over average employee tenure. So why not use a familiar front end, such as Outlook?

The second argument is that end-user software is no longer standalone, nor is it simply networked through email. Through SharePoint, Web services, the .NET Framework, integration with SQL Server, connectivity to an Excel model on a server, and Mendocino to reach SAP systems, that end user will now have access to a huge range of company resources for research, business intelligence, collaboration, and planning.

“We grew up with end-user computing,” said Ballmer. “While we have spent many decades also investing in the consumer, and in the enterprise, our heritage is in empowering these end users. The way we think about software design, people are at the center of the way we work. Only Microsoft software supports people, from the human interface into the data center and on into the Internet. There are other companies that will support people in one of those places, or maybe two, but I think it's very important, quite unique that we can do software that links that together. Because as your people are trying to do the things that I talked about, they have a variety of needs, some that are very personal, some that are very team-oriented, some that are very company-oriented, some that are multi-company oriented, and some that involve access to the entire world of information.”

Microsoft software is distinct, Ballmer added, because it is familiar and easy to use, widely used and supported, easy to integrate and connect with, and innovative.

In an interview in Forbes magazine, reporter Daniel Lyons noted that Ballmer didn’t seem as worried about Linux as he had a year or two ago. Ballmer responded that he always is concerned about competition, but he noted that Microsoft offers significant time-saving advantages over Linux.

“People value their time,” Ballmer said in the Forbes interview. “Our stuff does more, and they like that. Two, people value their time, and those [free] things tend to be clunky. Let's say you think you can save $50. And then you go and waste three hours. You tell me how quick that payback is. You can sketch that out at the enterprise level as much as you can at the individual end-user level.”

Raikes added that the People-Ready vision is consistent with the way Microsoft has invested in vertical industries, such as financial services, where it has added verticalized features into Microsoft products such as BizTalk Server Accelerators for SWIFT.

The Data Behind People-Ready

In support of the People-Ready initiative, Microsoft has done a lot of research with Keystone Strategy Inc. and Professor Marco Iansiti of the Harvard Business School, said Raikes. The research showed that businesses that invest in their people and end-user software as a strategic asset actually do a better job in driving their business performance than companies that don’t. Specifically, companies that invest the most in people and software get 23 percent more revenue per employee than companies that invest the least.

Keystone developed a tool that measures actual IT usage within the firm, called an IT Scorecard. The scorecard was based on a framework originally developed by a team at Microsoft that measured IT capability in five key areas: sales and marketing; finance; operations; employee productivity and collaboration; and IT infrastructure. It delivered some interesting conclusions to contradict studies that can’t find any correlation between IT spending and productivity. Among the findings:

• Firms with the top IT scores achieved superior growth, and on average the top firms slightly improved their profitability as a percent of sales. As a result, the top firms grew in total dollar terms on both the top and bottom lines.
• In each case study firm, the design and implementation of critical business processes is tightly integrated with the design and implementation of IT capabilities needed to manage these processes. This integration allows companies to achieve business processes scalability.
• IT clearly has a higher impact on services firms than product firms. The delta in sales growth between high performers (top quartile) and low performers (bottom quartile) in the services group is nearly three times that of the product firms. It is likely that the impact of IT on services firms is greater than product firms because services firms are less dependent on fixed production processes and preferred sourcing relationships for growth.
  

For more on the Keystone studies, see: www.microsoft.com/midsizebusiness/businesssummit/keystone.mspx

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http://www.microsoft.com/business/enterprise/itdrivesgrowth.mspx