Iran: From Zero to Trading Hero?

With the lifting of economic sanctions, Iran could well be THE global market growth story of the coming year

It isn’t often that a large and mature economy opens for business with half the world in one fell swoop. But that’s exactly what occurred, following the lifting of sanctions, on the Islamic Republic of Iran.

Only the Saudi Arabian economy is currently bigger in the Middle East and North Africa (MENA) region, and Iran, with a population of some 80 million, almost two-thirds of whom are under 30, is poised to challenge for the number one spot in the coming years.

First Steps

Tehran Honorary Consul for Ireland in Iran Alireza Feizollahi says that a path is now being beaten to Iran’s door.

“Right now, if you want to book a hotel in Tehran, it’s almost impossible. Trade delegations are coming here every week from all over the world,” Feizollahi says. But he cautions that this is a highly regulated country and companies must carefully study the market to see how they can be successful.

Sean Davis, Enterprise Ireland’s Manager for the MENA region, has been closely following developments in Iran’s $400 billion economy. He points to a very real hunger in the Iranian business community for new technology and innovation to fuel economic development.

“Iran has been on the side lines of global growth for some time, and there is a huge appetite to redress that. All around, you get the sense of people driven to capitalise on the new opportunities.”

Given the closed nature of the economy in recent times, primary research, in the form of market visits and relationship building, is highly recommended. Davis stresses that preparation and planning are very important on every front, from securing the necessary business visa to identifying the best way to utilise your time there.

“Though English is commonly spoken, it doesn’t predominate. You won’t be able to use your ATM or credit cards, and Tehran is a very large and very busy city, and by no means cheap. Packing a short itinerary with meetings that criss-cross the city isn’t going to be a runner,” he warns.

Enterprise Ireland supported a number of exploratory visits, with sectors such as healthcare, aviation, agri-tech, education, ICT, financial services and fintech, all in the mix. Fintech is likely to be among the more immediate opportunities given that the country’s financial services sector requires considerable investment and upgrading as it reconnects with its peers across the globe.

For clients, Davis recommends the first step is to contact Enterprise Ireland itself. “We are building a contact base of people Irish companies can reach out to, who will help suggest meetings and allow them to hit the ground running.”

Search for Quality

Dr Amir Kordvani, a senior associate with international law firm Clyde & Co, advises on sectoral investments across the Middle East and recently undertook a detailed look at the potential Iran offers to companies across the business spectrum. “What Iranian businesses are looking for, and it will be a requirement to any procurement proposal, is to show that you are bringing the very latest know-how and technology to the country. They are not interested in something from 10 years ago,” he says.

Irish companies are frequently warned of long sales cycles when they enter a new market, but Kordvani’s view is that Iran could represent something of an exception. “It really depends on how strong you are in the area you are operating. However, generally, Iranians are very commercially minded, value strong relationships and are very frank and open, so it doesn’t take that long to build trust from that perspective.”

A final, but important, piece of advice is to recognise that, whatever field you operate in, the value of quality customer service as a differentiator cannot be overstated. “In the past, customer service has been very poor in Iran,” Dr Kordvani says.

“If you want to lead and exploit your opportunity, then you should prioritise your customer service and your after-sales support as much as the quality of your product. Companies that can do that will be very well rewarded in this market.”

Guest Blog: Ireland’s International Traders Remain Optimistic for 2016

Commenting on HSBC’s 2016 Trade Confidence Survey, CEO of HSBC Ireland, Alan Duffy, says that Irish businesses remain optimistic about trade prospects but have more confidence in the local than the global outlook.

It is a measure of how far we have come as an economy that HSBC’s 2016 Trade Confidence Survey of 24 global markets saw Ireland at the top end of the rankings for positivity around its local economic outlook.

We have all seen that the combination of wage restraint during the crisis years and the exchange rate effects of the ECB’s programme of Quantitative Easing have both provided a lift to Irish competitiveness.

Whilst the outlook was inevitably moderate as the value of the euro eventually normalised, an economic recovery in advanced economies across the world likely helped sustain a robust performance for Ireland’s export sector. In particular, Irish exporters are well positioned to benefit from solid performances by the UK and US.

Longer term, Irish exports will benefit from growing levels of disposable income in emerging markets, and China will likely become one of our top export destinations in decades to come. In the near term, the advanced economies of Western Europe and the United States continue to be our biggest sources of export demand. As such, Ireland is relatively well placed to withstand any headwinds coming from a slowdown in emerging markets.

Despite these positives, overall exporter optimism had actually eased somewhat in Ireland. This was reflective of reduced optimism in the performance of the global economy. Irish companies expected the global economy to worsen slightly during that period. This slip in confidence levels reflected the deterioration in the global trade environment. World trade growth had slowed sharply that year, with import volumes in leading emerging markets, such as China, Russia and Brazil, weakening significantly.

However, the recent downturn appeared more cyclical than structural in nature. As many of these economies benefit from strong economic fundamentals, they are likely to be an important driver of global economic growth and trade over the medium term.

Perhaps aligned to such caution over the global economy, currency and commodity price volatility had emerged as the top financial risks anticipated by Irish companies. With this in mind, many were looking at strategies to overcome these risks such as negotiating better terms with trade partners and internal cost cutting.

Across Europe, stronger competition is the single most dominant challenge for businesses trading internationally. In line with rising cost pressures and anecdotal reports that companies are reaching the limit on the amount of cost increases they are able to swallow before passing them onto consumers, the emergence of competitors who compete solely on price is outlined as the biggest challenge, with the majority of Irish firms also highlighting it as their main worry.

With such competition becoming a concern, differentiation becomes increasingly important. That is why many Irish corporates are focusing on improving customer satisfaction and employee skill sets as their main objectives for the next six months.

Starting To Export – How to Get Export Ready

The progression from mainly operating in the Irish market to exporting is one of the most transformative and challenging transitions many companies make. Here, co-founders of Monsoon Consulting, Dublin Bharat Sharma and Stephen Kenealy, explain how Enterprise Ireland’s Get Export Ready programme helped them embark on that journey.

What does the company do?

We are one of the leading digital agencies in Ireland offering content and ecommerce solutions that are built on the open source Drupal and Magento content management platforms.

How long have you been exporting?

We’ve been exporting since taking an office in the UK in February 2014.

What was the pivotal point that made you look at exporting?

We were looking at enterprise-level projects, and the Irish market was limited in size, so we decided early on we should attempt to break into the UK market.

What changes did the business have to make to become ‘export-ready’?

We needed to become certified solutions partners in the two technology stacks we work on so that when we were going into pitches against UK firms, we’d be operating on a level playing field. We achieved certification with Magento and are now one of just 17 partners at our level across the UK and Ireland, and the only one here with it. We also became an Acquia enterprise level partner [Acquia makes a popular version of Drupal] and are currently in the process of getting all our developers certified.

Are you targeting any other markets currently?

At the moment it’s just a case of trying the UK and It’s just been a case of trying the UK and seeing where it goes from there. Obviously, the European market would be a target for us on a more long-term basis but we need to get traction in the UK market first to demonstrate a capability there and then to go out further. In terms of the two technologies we focus on, most of the market for these is driven and controlled from the UK and so we need to expand our footprint there and can then hopefully scale from there elsewhere in Europe. In hindsight, focusing on the UK market early in the piece, has proved beneficial as the UK works its way towards Brexit.

What routes to market do you use?
We have channel partnerships that we’ve established with both Acquia and Magento, and they have been good lead generation providers. We’ve also become close allies with service providers who are not our direct competition, but who complement our solutions so there’s a good reference network with them. We also realised early on that opportunities wouldn’t just fall from trees simply because we’d opened up an office in the UK so we engaged with Enterprise Ireland on a sales mentoring programme and that’s been a really great help to us. We are also looking to partner with a company over in England for more lead generation opportunities and we’ve spent a lot of time ourselves flying in and out of London, which has helped us get traction there.

What changes did your business have to make to become export ready?

We invested in some areas such as expanding our team. To support this, we also signed a big lease for an office near Clonskeagh where people can more easily collaborate and together. With the help of Enterprise Ireland, we’ve also looked at how we can fundamentally improve the way we do business and have embraced lean principles in our processes, which has led to a performance and productivity boost of up to 50%.

What advice would you give other would-be exporters?

Don’t take your eye off cash flow or off your existing clients in Ireland.

Any mistakes you’ve made you’d care to share?

I think we charged into the UK expecting things to take off immediately on the basis that we’d been successful in Ireland. If you can get some key references from operational stuff you’re doing here before breaking into the UK and can establish a go-to-market strategy ahead of time, it will serve you well. We didn’t do enough of this early on and it made it difficult to get in the door.

How would you like to see the opportunity you have evolve?

We aim to be one of the largest and most successful e-commerce and content agencies in Europe.

Start-Up Story: Initiafy – Hitting the Big Time in The Big Apple

Having established in the UK, launching in the US was the next logical step for software start-up Initiafy. Its two founders share the company’s story to date with John Stanley.

After a number of years working in construction, mainly overseas, Seán Fennell return to Ireland some six years ago to join a company specialising in Health & Safety and online learning. There he met his future business partner, Julie Currid.

“We both saw the same problem repeated, over and over again,” Fennell recalls. “Using conventional approaches, organisations struggled when they tried to induct a large numbers of contractors or temporary staff in a short space of time.”

So in April 2012, the two took the plunge, setting up Induction Manager (since rebranded as Initiafy) to provide an online “employee onboarding” tool. This enables organisations to pre-induct employees online before they arrive for work. “We saw the opportunity to improve day one for the frequently overlooked workforce – contractors, temp staff, seasonal workers – and even for visitors,” Currid says.

Platform development was outsourced to a software company with offices in Ireland and Poland, and, within eight weeks, they had the designs they needed to begin selling. Their initial focus was on chasing the potential reference sites they would need to gain credibility and to stimulate investor interest.

Target Market

“Traction is the new IP,” Fennell says. “Our target market is medium to large companies, so while we do have some Irish customers, we put a huge amount of effort into the UK from the outset.”

Within 18 months, they had recruited over 30 customers, including such high profile ones as Pfizer and British Gas. Adobe adopted it for all its inductions in the Middle East and Europe, while Sodexo, ranked fifth in Fortune magazine’s list of ‘Most Admired Companies’, used it to induct thousands of event contractors for Royal Ascot Week.

On the back of this success, the founders raised €400,000 in October 2013 from Enterprise Ireland, private investors and the Cork-based Boole Investment Syndicate. This seed funding allowed it to move into an office in Dublin’s Temple Bar, hire its first staff and begin to drive revenues

The founders began looking seriously at the US market last year. In November 2014, they raised €1 million from ACT Venture Capital, Delta Partners and the well-known Irish businessman Leslie Buckley. This stage-two funding paved the way for the recruitment of a vice president of global sales and the opening of a New York office.

“We got some initial stage orders to validate our US growth plans, and 50 per cent of our business in Q1 this year came from the US,” Fennell says. “Deal sizes are so much bigger there, and it’s English speaking. It’s a natural step for a software company such as ours to go from the UK to the US.”

Having started out in an Enterprise Ireland incubation space in the New York office, Initiafy found WeWork, a company that provides office space in 14 different locations in that city as well as in other cities around the world. “There’s a strong collaborative culture within WeWork; it’s more like a community, and there’s huge flexibility – you can choose the amount of space you need and switch between locations from month to month. It’s a little more expensive that Regus, for example, but the benefits are absolutely huge,” Currid enthuses.

Lessons Learnt

One lesson from the first fundraising was that they hired too slow, she adds, which meant the full impact of those hires was not reflected in the second round valuation of the company. “So we hired our first three sales people a month before the second round funding, which was needed to pay their salaries, actually arrived. It was very much a bootstrapping approach, but effective.”

“We wanted people who would hit the ground running in the US. We felt that experienced US sales people might be more assertive than we’re used to here in Ireland, but in the US environment that’s what would be expected. Given the nature of our product, we looked for people who are as methodical and structured as they are good communicators. The results to date vindicate our decision to hire US people to sell to US customers.”

In other respects, the company has been successful in replicating its original ethos State-side. “We’ve managed to bring across the culture we have in Ireland to the US. Wherever they are, everyone’s involved in our sales meetings which are held on Google Hangouts. We also run competitions and celebrations across the group. We do everything we can to eliminate geographical barriers between team members.”

Fennell says that “As we build and develop out the product, we do need to continue to improve it, and we are investing a lot in R&D – and doing a lot of listening to our customers. We have plans for exciting further developments but they are all within the existing platform. There’s no unique custom building involved.”

How a Startup Can Sell to Corporates

Brightflag was started out of frustration. I was building and selling software to help law firms be more efficient, but something wasn’t right. I noticed that no matter how good we made the software, no matter how much implementation and training we would put in place, the law firms we were trying to help never seemed to see a significant difference.

What I came to realise was that there was something wrong with the large law firm model – it didn’t want to be efficient. And why would they when they charged by the hour?

My co-founder Alex also had experience of this problem but from the other side of the fence. He had spent years working in one of Ireland’s largest law firms and was experiencing the same frustrations from the inside.

We started Brightflag (formerly called Legalshine) to address this problem – not from the perspective of the law firms but for the large corporates who can spend hundreds of millions every year with these large firms.

We built a tool to help them analyse their legal costs and help them uncover the inefficiencies in their spending. It used new language technologies to ‘read’ the narrative on a legal bill, understand what the lawyers did and then employ market data to determine if the resources used were fair or not.

It’s been a difficult but rewarding journey, and we are only getting started. We’ve now got a number of large corporates as customers – which is unusual for a startup at our stage.

One of our first customers was a large bank, companies with which it typically takes a year or more to make a sale. What we are doing is hugely valuable to a bank, because they spend so much on legal fees every year.

Surprisingly Easy

Despite being a startup, we found that getting a foot in the door with a large organisation was surprisingly easy.

We mined our own networks to get introductions to senior people in large organisations, and when we couldn’t make a connection we simply approached them directly. I’ve found that as long as you have a clear and compelling proposition, they will always take the meeting.

We got initial meetings very readily because we told them they could reduce their legal spend by over 10% with our software. This was attractive and easily understood. The real trick, of course, is backing up the claims.

We went through rigorous initial trial periods with all our large clients to prove that the software really did what we said it would – and that it delivered value way beyond what it cost. Some of our clients are now saving hundreds of thousands of euro annually, a real sign there are huge inefficiencies in the legal system.

Keeping the Lights On

The other big challenge with a startup is keeping the lights on before the revenue starts coming in.

In November, we raised a large round of funding from Enterprise Ireland and other great investors in Dublin and the US. That’s allowed us to scale up our team and launch in New York.

Before that it was a constant battle to manage our cash and make sure we could deliver an excellent product for blue-chip customers with a very small team.

We now have 12 people between Dublin and New York, and we have tens of millions of legal spend going through our platform. We’re making a big dent in the industry and for us it’s only the start.

Now that we’re on solid ground, we’re moving to the next stage of growth and the challenges are different – growing the company in the US and the UK, hiring talented people and managing a larger team.

And still it all stems from those initial frustrations Alex and I saw from working in the industry – that’s what drives us on to keep going.

Ian Nolan is CEO of Brightflag, an Enterprise Ireland-supported high-potential startup.

Read the original article on www.fora.ie

Come In Houston –
We have Products

Irish companies have a strong record winning business with the European Space Agency. Claire O’Connell reports there are growing opportunities to replicate this success in the US

Revenue from the global space industry was estimated at $322.7 billion in 2014. Driven by frontiers as varied as harnessing data from the International Space Station to the move towards low-Earth orbit satellites set to provide ‘internet for the planet’, commercial space is growing, particularly in the US.

Located close to the heartland of this burgeoning sector, the team at Enterprise Ireland’s new office in Austin, Texas, has been busy forging contacts with representatives from the likes of NASA, Teledyne Brown Engineering, PlanetIQ and Firefly

Senior market adviser Randy Bounds believes that a better understanding of US satellite market and manufacturing supply chain could create opportunities for Irish companies, even those not currently working in the space sector.

NASA on Partner Search

At the Johnson Space Center in Houston, Texas, NASA’s Partnership Development Office has identified 27 technology areas where it is actively seeking to establish co-operative-development (co-dev) projects. Technologies include energy production management and storage, risk-analysis software and inflatable structures – but the list is far from exhaustive, according to Partnership Manager Mark Dillard.

“We have a technology roadmap that has hundreds of different technologies and areas where we would see a shortfall or there is a big technology gap we want to close, and we have cherry-picked 27 as a starting point,” he explains. “But a technology doesn’t have to be on the list for us to be interested.”

Commercial Players Looking Beyond Space Sector

In the past, space was a very specific market with very specific technologies,” says Tony McDonald, who deals with European Space Agency programmes at Enterprise Ireland. “But in the past five years or so, it has moved more to the commercial arena, and this trend changes the whole dynamic.”

With that comes the need for more flexible solutions that can be delivered to the market quickly, and the resulting direction of travel means that technologies developed for use on Earth can now have greater applications in the space sector, and vice versa.

Harnessing Data from The ISS

The move for Alabama-headquartered Teledyne Brown Engineering to a more commercial focus in space involves what Vice President for Global Commercial Space John Horack describes as ‘the world’s most technologically advanced coffee table’.”

About one metre squared, the stable platform is designed for use on the International Space Station to hold up to four separate instruments for gathering data about the Earth below.

Teledyne Brown is now interested in talking to potential partners who could use the platform itself to test or run equipment, or who could use the data that on-board instruments generate. “Whether it is an academic, social scientific or commercial activity, we are very eager to find good quality partners,” says Horack.

Firefly, co-founded by US-based Irish entrepreneur PJ King, is another commercial space-sector player looking for collaboration partners. Billed as the ‘Ryanair of satellite launch’, the company is developing dedicated launch vehicles for small satellites.

Firefly is interested in talking to companies with materials expertise that could suit their needs: “Rockets need to be lightweight and materials design is a tricky and important part of that,” says King.

Low Earth Orbit Satellites

Another new area opening up possible opportunities is the concept of ‘megaconstellations’ of hundreds or even thousands of small, low Earth orbit satellites being harnessed to revolutionise data acquisition from space and ultimately deliver high-speed ‘Internet for the Planet’. Bounds says that big names, including Googlespace, SpaceX and Virgin Galactic, are investing in this potentially disruptive technology. For Irish suppliers, he adds, the economics become a whole lot more attractive if they are supplying components for an order for hundreds of satellites rather than a single unit.

Aiming for an orbit a little below the International Space Station, PlanetiQ wants to deploy suite of small satellites to capture precise information about the Earth’s temperature. “We are looking to be the world’s first commercial satellite network for weather applications,” explains president and CEO Anne Miglarese.

We Have the Technology

Back at home, Enterprise Ireland’s Tony McDonald has seen numerous Irish companies apply their technologies in space, including Enbio, which has developed protective pigments for coating spacecraft, and Radisens Diagnostics, which is working with the ESA to develop a blood-testing device for use by astronauts on board the International Space Station.

Developing technologies for the space sector can involve clearing relatively high hurdles to ensure that the resulting products or services are reliable and robust, he notes. However, lower-hanging fruit may now become an option for Irish companies through the emergence of the megaconstellations of low Earth orbit satellites concept. The move to high-volume, lower cost and faster turnover of satellites will mean more business in the supply chain, and the data, positioning information and communications the satellites provide could also generate useful downstream applications.

“The expanding niche of satellites offers a growing opportunity not just for traditional space companies, but companies in remote monitoring and even in terrestrial communications systems, who might be able to incorporate a satellite into their communications as well, or for networks that need to be resilient, such as emergency services,” says McDonald. “I think there are all sorts of exciting opportunities there when people put those systems together.”

For more information, contact randy.bounds@enterprise-ireland.com or tony.mcdonald@enterprise-ireland.com

Top 10 Tips for Exporting to Europe

The European Union is the wealthiest consumer market in the world, add in the likes of Switzerland, Norway, Turkey and the CIS; and the argument for exporting to our nearest neighbours gets even more compelling.

As one of Europe’s most developed economies with best-in-class offerings in Agri, health, construction and ICT; the potential for Irish exporters to exploit the opportunity to reach a market of close to 750 million people is unquestioned.

One

While Europe is too big and diverse to treat as a single market, it is possible to use one country as a base to target near neighbours. For instance, while the EU offers barrier-free access to 28 countries, the European Free Trade Association brings Iceland, Liechtenstein, Norway and Switzerland into the Single market.

Beyond the European Union, differing currencies, diplomatic relations, and levels of economic development mean that exporters would be well advised to consider developing European export markets on a country-by-country basis. However, it is worth bearing in mind that a presence in one country can act as a springboard to neighbours or countries with historic links. For instance, CRH opened its new business service centre in Hungary from which it manages its operations in Austria, Hungary and Slovakia.

Two

It goes without saying that research is vital before deciding upon a market. But when there are 47 countries to choose from offering widely different sectoral opportunities, it is doubly important. Look at headline economic figures such as GDP, growth projections, national and household debt, household income, demographics, etc.

Look at the political situation. Is the country stable, is there corruption, are there protected sectors? What is the situation for setting up an office are there laws that require local partnering for foreign businesses? It is also important to research culture and tradition – from a broad perspective and from a business point of view. This will give you an idea of the receptiveness and viability of a market as well as suggesting how long it could take before you can start selling. It will also tell you whether you should – or are permitted – to sell directly; or use a distributor or sales agent without setting up an office.

This is particularly important for less well-publicised countries such as those outside the EU, where there can be substantial variation. Enterprise Ireland has offices throughout Europe that can advise on the nuances of each market.

Three

Always consider how your company might be a particularly good fit in a particular business culture. For example, the Nordic markets are often early adopters of new technologies and comfortable partnering with early-stage companies and may therefore be suitable for a company at high potential start-up stage.

Four

A local presence is always advisable. While markets might be geographically close, scale cannot be achieved through regular visits. Establishing an in-country office with local staff or a strong partnership is usually the best approach. Your senior management team also need to be fully committed to your market and present as a much as possible.

Five

Have a plan for marketing your product taking into account the need for localisation of marketing collateral, website, social media channels etc. Although English is widely spoken in Europe, having your marketing and communications in the language relevant to your market will help you reach the widest possible market.

Six

Take into account geographic size. Large countries like Russia are best approached by developing a regional market to begin with and then rolling out further as you become more established.

Seven

Conversely, you may have the capacity to manage two new markets simultaneously. It is not uncommon for exporters to enter Benelux countries in whole or in part simultaneously – sometimes in conjunction with, or directed from, France or Germany.

Eight

Don’t forget about currency value, it affects your bottom line. The UK is not the only country susceptible to significant fluctuations in the value of their currency. Get advice on hedging, think hard about your pricing strategy and consider contractual arrangements with your in-market customers in which they share in any major adverse change to the euro value of your payment.

Nine

When entering a new market ensure you have budgeted to absorb the cost of establishing your presence. This can take some time, depending on the market. For example, Germany has slower decision-making times, while Switzerland, the Nordics or Benelux tend to conduct business more expeditiously.

Ten

Get legal advice. Whether in the EU or otherwise, every country has different legislation governing employment, contracts (sales, rental, buyer agreements etc.) company registration, tax liability, transport, etc. Levies and duties may apply for countries outside the EU which usually entails additional documentation.

Marina Donohoe is Enterprise Ireland Director for the UK and Northern Europe

This article originally appeared in the Sunday Business Post

Thought Leadership Interview: Why the right culture can increase your company’s survival odds

Charles O’Reilly, professor of organisational behaviour at Stanford University, says that for Irish SMEs, staying alive is all about having the right corporate culture.

In interview with Donal Nugent.

Here’s a worrying statistic for entrepreneurs and business leaders. Humans might have worked out how to live longer. But the organisations and businesses that we create are having ever-decreasing lifespans. “Some data suggests that about 50 years ago, the average life expectancy of companies in the Standard and Poor’s 500 was 90 years. Today, it’s 12 years,” says Charles O’Reilly, professor of organisational behaviour at Stanford University.

A frequent visitor to Ireland in recent years, O’Reilly has worked closely with Enterprise Ireland on a number of education programmes, and he believes that improving the survivability of Irish SMEs starts with getting company culture right.

“We collected data from 60 smaller companies working with Enterprise Ireland and looked at their revenue growth from 2010 to 2014,” O’Reilly explains. “What we found is that companies with strong, strategically aligned cultures are, in terms of revenue, growing at three times the rate of those that don’t have strong strategically aligned cultures.”

Rise and fall

The history of the technology sector is, of course, littered with stories of giants that stumbled from success to obsolescence through a few wrong turns and missed cues. The fate of those who refuse to see what is staring them in the face is no better exemplified than by the case of Kodak.

“In 1993, Kodak and its then rival Fujifilm were almost identical in terms of size,” O’Reilly says. “Fujifilm, however, could see its market was starting to go into decline and began to ask itself what its core capability was and how it could apply that elsewhere. The answer was surface chemistry, and that company is now a $23bn corporation active in healthcare and functional materials.

“For Kodak, even though it had developed the first digital camera, the idea that it would make money from anything other than film was anathema to it, and it is, today, a bankrupt firm that’s probably going to disappear in the next five years.”

The simple but stark lesson for every company, big or small, O’Reilly argues, is in the need to pay close attention to your business culture: unless it promotes adaptability, where you are actively preparing for future transitions and shifts, your business’s success is entirely contingent on the current technology or product curve it is following.

Creating the right business culture

So how can founders and CEOs embed survivability? O’Reilly has identified four key levers to creating the right business culture, which he says can help ensure companies adapt and flourish in the long term.

Charles O’Reilly

The four key levers to creating a culture of adaptability are:

1. Signalling from senior management: Senior managers have an important role in actively and consistently sending messages about what is really important to the business.

2. Getting people involved: When people are involved, when they are listened to, when their opinions are asked for, they have a sense of ownership over what they do.

3. Having very clear illustrations about what’s important to a company: “If you look at very strongly cultured companies, they are ‘vivid’. They are very good at using images to illustrate what their culture is,” O’Reilly explains.

4. Rewarding desired behaviour and recognising that this has far more to do with honouring employees than increasing financial remuneration: “I think we who teach in business schools sometimes over emphasise the importance of money,” O’Reilly explains. “We all want to be paid equitably, but if you look at why people leave a job, it is usually to do with a bad boss, or not being valued or not getting challenging work, so non-monetary incentives are exceedingly powerful. They require time and attention, but they don’t cost anything to implement and, when you show an employee that you honour people in the business for doing something extraordinary, that is a really strong signal of what’s important to the company.”

5. In all of this, fortunately, there is an upside to being small. “Because of their size, SMEs can pivot and adapt more easily than large companies, and changes can be implemented much more rapidly,” O’Reilly says. “But here’s the problem: once an organisation finds a product-market fit and begins to grow, what often happens is that management becomes much more concerned with scaling the business, operational details and infrastructure. They tend not to think about organisational culture at this point. But then, when the world begins to change, the very culture that has made them successful can become inertia and hold them hostage to the past.”

For any business confronting the intense pace of change of the tech sector, organisational ambidexterity is, he feels, not a “nice to have” but a core dimension of its strategy. “You’ve got to be successful in your mature business, whatever that is, and that’s all about incremental improvements, staying close to customers and driving cost out, but you also have to be able to explore into the future and look at where you will find new business streams.”

Get smart!

When is a bin not a bin? When it is also an advertising hoarding, a Wi-Fi hotspot and an environmental monitoring station. Welcome to the world of the smart city, where ICT is creating multipurpose infrastructure with inbuilt features, making it easier and cheaper to manage.

Smart cities have been defined as cities that aim to achieve high levels of sustainability, economic development and quality of life through investment in physical capital (infrastructure), human capital, social capital and ICT. A more hard-nosed way of looking at smart cities is in terms of the commercial opportunities they offer ICT product and service providers.

Nevertheless, technology, and the internet of things (IoT), in particular, does provide a means for improving the efficiency of our cities and urban spaces. Dublin City Council’s ‘smart bin’ initiative is a case in point. ‘Smart bins’ are solar-powered rubbish bins producing the energy required to power internal compactors that reduce the volume of rubbish. As a result, bins are emptied three times less often. An additional smart bit is that, when they are full, the bins send an alert to head office letting them know.

These types of bins were first trialled in Dun Laoghaire, using bins manufactured by Massachusetts-firm Bigbelly. However, a key Bigbelly component, the antennae, was provided by Taoglas, an Enniscorthy-based firm that is a world leader in antenna design and manufacture.

Taoglas produces a myriad of antennae because different methods of wireless communication are needed for different applications and locations – such is IoT. For example, Taoglas’s 5-in-1 Storm product, typically used on police and emergency vehicles, houses two LTE MIMO antennae, two Wi-Fi MIMO antennae and one GPS antenna. Not only do officers remain in radio communication with their dispatch, their dispatchers can view the live, or recorded, video feed from the vehicles’ onboard cameras and from the cameras worn on the officers’ person. HQ also has live access to data about the officers’ and vehicles’ performance. In the case of the officers, they can track heart rates and whether the officers are standing, seated or prone, and, in the case of the vehicles, they can see where they are located, how they are being driven and when they next need a service.

Another Irish company is involved in the technology behind some of these smart police vehicles. Dublin-based Davra Networks is a world leader in the development of IoT application enablement platforms, a platform-service that allows IoT developers to easily deploy and scale their applications.

Davra’s CEO Paul Glynn says IoT is about “people connecting things that they never connected before”. He explains that by networking assets, by whatever means, Wi-Fi, cellular, satellite or via a low-power WAN such as Sigfox, it becomes easier to manage those assets individually or as a whole, “to solve management headaches be it in a factory, a power supply or a smart city”.

An example of IoT everywhere is Wembley Park in London, a massive 85-acre urban regeneration project. As well as being billed as “the UK’s biggest buy-to-let building scheme”, Wembley Park is hailed as “the world’s best connected mini-city”, with Irish firm Magnet Networks, a specialist in FTTP (fibre-to-the-premises), providing homes and businesses with broadband connection speeds ranging from 100MB to 2GB.

Building contractors aren’t especially interested in FTTP until they hear that it can reduce their M&E (mechanical and electrical) cabling costs by up to 65%, says Magnet’s CEO Mark Kellett.

“Because you can run multiple services on the fibre, you don’t need copper cable for the phone, cable for the temperature and humidity controls, cable for the TV and CAT5 cable for PC connectivity. It also means you only need one satellite dish for the whole building – and only one satellite box.

We are learning from each phase of the project. For example, the builders spent too much money on connection points in the first set of apartments because students don’t want to plug their laptops and devices into the wall. As long as they have three-bar Wi-Fi, they are happy.”

Wembley Park is built around Wembley Stadium and Wembley Arena (now officially the SSE Arena), and it is also home to the London Designer Outlet (LDO), an 85-store shopping centre that Kellett describes as ‘Kildare Village on steroids.’ This is an example of a physical and economic investment to create a smart city environment, as the student residents have a source of weekend employment in the LDO. There is also part-time employment available when events are held in Wembley Stadium or the SSE Arena.

There is smart city ICT aplenty there too. “There is a number plate recognition system in the car park, so from the DVLA database, we know who each car belongs to and where each car owner lives,” says Kellett. “That has a security application but we can also make a good guess as to a visitor’s spending-power, based on their address. And, if a visitor logs on to our free Wi-Fi, we will have some access to their browsing history, so we can direct them, via their smartphones, towards special offers they might be interested in. We can also follow them as they travel through the London Designer Outlet or past the shops on the way to the Wembley Stadium and see where they stop and what they are looking at. There are a number of Irish companies who are very good at tracking how people travel through a retail space, and we are working with them on that.”

“The Internet of Things is very like what we used to call ‘M2M’ or machine to-machine communication, with one small difference,” says Glynn. “With M2M, data is siloed; with IoT, you are using multiple sources of data. A good example is in fleet management where with, say, a refrigerated truck, you have one solution, such as Fleetmatics providing GPS information and telematics. You have another solution, GreenRoad, providing data on driver behaviour. Another solution, Blue Tree, is monitoring the refrigeration in the trailer, and all the pallets in the trailer are tracked using RFID. In the world of M2M, each of these solutions works separately. With IoT, you put a network on the vehicle, using a Cisco or a Dell router, and you collect the data from all those sources, and you use them together to work more intelligently.

“Also, you don’t need to send all the data into the cloud on the network all of the time. For instance, the onboard computers fitted on most car engines since 1996 produce more than 25,000 data points every minute. You don’t want to be sending all that over the network continuously. You need the system to send the data when it needs to be sent. We are involved with a connected light rail system in San Diego and a heavy rail system in New Jersey. Vibration levels are one of the things that need to be monitored: if the vibrations go beyond a certain threshold, an alert is sent to the operator. But the threshold varies according to the ambient temperature: the colder it is, the lower the vibration threshold before an alert is sent.”

In the smart city sphere, Glynn sees IoT opportunities galore, especially in the areas of transport, energy and security.

“One of the big issues is who is going to pay for it and, secondly, will you be able to get various parties to share their data,” he says. “In some countries, you can force people to share their data, in other places you can’t.” Because Dubai’s smart city initiative is being driven by the country’s ruler, it is on track to have the world’s smartest city by 2020 (including connected police cars enabled by Davra Networks).”

“Cities in Europe are a bit behind that,” says Glynn, but he points to some very European initiatives that are already bearing fruit. “In Croatia, they have fitted all their manholes with sensors, so they know when they are being lifted when an authorised person isn’t present. As a result, they have become very good at tackling the growing problem of copper cable theft.”

“There are great opportunities for those who will develop IoT apps and it is something that is becoming easier to do. A developer can use our ConnecThing AEP platform for free with up to three devices to help them get their ideas beyond the proof-of-concept stage. Once an app has been tried and tested, it might be sold by our 65,000 reseller and system integrator partners. For example, we have a revenue share with the developer of a smart healthcare app that is sold per hospital bed and is now doing very well in the United States.”

Brendan Carroll, CEO at EpiSensor, a Corkbased specialist in the Industrial Internet of Things (IIOT) space, says that the sector is a particularly good one for smaller companies.

“Traditionally, when a company was having an IT upgrade or having a LAN installed, all the work would be done by a single large supplier, an integrator like Siemens or Honeywell or Schneider Electric. In IoT, a lot of the solutions are made up of layers of different technologies from different companies, so that creates huge opportunities.”

Enterprise Ireland development adviser Robert Bushnell believes that the IoT will become so ubiquitous, people will stop using the term.

“There was a time when people talked about digital cameras and digital music but no one uses the term digital anymore,” he says.

Glynn agrees, “It’s like e-commerce: it’s everywhere now and nobody uses that term.”

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