Home-Grown Software Gives Tesla, Facebook a Competitive Edge

May 23, 2014, 12:40 PM ET

Home-Grown Software Gives Tesla, Facebook a Competitive Edge

RACHAEL KING

Companies from Tesla Motors Inc.TSLA +1.18% to Facebook Inc.FB +1.37% are writing their own software for employees in key areas that give them competitive advantage. They’re foregoing – at least in part – commercially available software.

These efforts extend far beyond developing some mobile apps. Instead, they’re critical pieces of infrastructure that oversee manufacturing, content management or customer service.

“At Facebook, we want to differentiate the experience our customers have working with us,” Facebook CIO Tim Campos told CIO Journal. “We can’t be limited by what you can buy.”

Often, companies choose to write software in areas that are strategic and will give them an edge over the competition. “There is a new appreciation of software as a differentiator,” said Peter Burris, a research analyst at Forrester Research Inc.FORR +2.58%“Companies that are going to win will discover what customers want and translate that into software that is unique to them,” he said, adding that commercially available software still makes sense for tasks that don’t differentiate the business.

For example, CBS Interactive Inc. CIO Peter Yared built a custom content management system for its stable of websites including CBS News, TechRepublic and CNET. That system, which is now operating for some sites, supports mobile, tablet and Web content and has modern layout, social and search engine optimization features.

In order to free up funding for that project, Mr. Yared replaced proprietary software that didn’t offer any differentiation to the business with cloud services.

Tesla, on the other hand, needed better coordination between all its systems so it could deliver cars faster and provide better customer service. The electric car maker created a system called Warp that is a combination of e-commerce and back-end management software to handle manufacturing, workflow, suppliers and other tasks.The software is designed specifically for Tesla’s purposes without extra features that it doesn’t need, according to the company.

“It helps the company move really fast,” Tesla CIO Jay Vijayan told CIO Journal. Data now flows easily across the company, from the customer order process, through manufacturing and post-purchase customer service. It can be difficult to connect one system to another and move information across disparate systems, he said.

Companies that are working in emerging areas might simply find that there are no systems to buy to meet their needs. “If you’re trying to build a solution that connects wearables to your customer [management] solution, you’re going to have to do some building,” Narinder Singh, chief strategy officer at global consultancy Appirio, said, Wednesday, at the MIT Sloan CIO Symposium in Cambridge, Mass.

Facebook wanted software that would help salespeople engage with advertisers without requiring them to do a lot of data entry. To create that capability, Facebook software engineers spent more than a year completing its customer graph – or the relationships between brands, their parent companies and the people who work there.The new system runs on the Facebook platform and has been integrated with its previous platform from Salesforce.com Inc.CRM +0.26% Instead of Salesforce.com being the core, it’s now one element of the system, according to Facebook.

“We want our salespeople working with clients and not on data entry,” said Mr. Campos.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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