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In last week’s post, I wrote about organizations that fail to secure the requisite resources while undertaking major information management (IM) initiatives. In today’s post, I’ll extend the discussion to another source of resource-based problems on these projects: money.
Penny-Wise, Pound Foolish
When it comes finding the right resource for an IM initiative, many organizations are cautious with small amounts of money but careless with larger amounts. While attempting to procure independent contractors or full-time consultants/vendors, many focus exclusively on hourly rates. (This is particularly true if third parties such as recruiters or consulting firms are involved. These companies often attempt to pressure the consultant or subcontractor into taking the lowest possible rates.)
Focusing on hourly rates alone is one of the cardinal sins made by organizations during IM and IT initiatives. Such myopia misses the big picture and ignores the very important concept of Total Cost of Ownership (TCO).
Now, this is hardly rocket science. A consultant or subcontractor with superior skills might–and probably does–charge a premium rate. However, highly skilled individuals can often accomplish their work in far fewer hours than their lesser-skilled counterparts.
An Example
Consider the following fictitious example. Griffin, Inc. is a major manufacturer of toys. Over the years, the company’s data and systems have become increasingly segregated. Orders are often incorrect, delayed, or shipped to the wrong location due to inaccurate customer information in its cauldron of systems. Management is starting to realize that this problem isn’t going away; it’s getting worse.
Griffin has decided that enough is enough. It will begin a major IM project with the ultimate intent of consolidating and purifying its data. For this, it needs help. The hiring manager, Peter, has the resumes of two candidates:
Brian charges $125/hour for his services. He has extensive programming, data analysis, and general business experience. He can interpret requirements that are anything but iron-clad.
Stewie charges $90/hr his services. While no newbie, he just doesn’t bring the same skills to the table as Brian.
Pressed for money, Peter tries to get Brian to come down to Stewie’s rate. Brian has some flexibility but ultimately won’t come close to $90/hr. Peter goes with Stewie, thinking that he’s ultimately saving money.
But is he?
Stewie is no fool, but he’s simply not in Brian’s class. He struggles trying to make logical inferences. He doesn’t have the same tools in his bag as Brian. Stewie is unaware of existing frameworks that mitigate project risk and allow for smoother transitions, such as MIKE20.
Against this backdrop, it ultimately takes Stewie about six months to complete the project. He bills Griffin for 1,000 hours of his time. Brian could have performed the work in half that time. Consider the following TCOs of each:
Brian’s TCO is $62,500 (500 hours * $125/hr)
Stewie’s TCO is $90,000 (1,00 hours * $90/hr)
Also consider potential travel expenses and the fact that Stewie needed to engage Griffin employees for three extra months, taking them away from their day jobs. Also, what about the issues that Brian would have found?
Simon Says
Look, money matters in any economy, much less this one. There’s always a temptation for organizations to make do with “adequate” resources. Sometimes paying more on an hourly basis results in a lower TCO; highly-skilled resources often more than justify their premiums. Don’t dismiss resources simply because they initially appear to be too expensive in the near-term. Ask yourself if actually they’re cheaper in the long-term.
As I familiarize myself more and more with the MIKE2.0 framework, it’s obvious to me that it’s highly contingent upon collaboration. In general, collaboration can be a very good thing. Sometimes, however, something is lost among all of the buzz about collaboration, Web 2.0, and Enterprise 2.0. In particular, I’m talking about the increased difficulty involved on “community” projects.
In a series of posts, I’ll make the case against collaboration. For today, I’ll address some of the benefits of minimizing the number participants on information management projects.
Disclaimers
Now, don’t get me wrong here. I’m a big believer that the whole can well exceed the sum of its parts. Further, many–if not most–large IT endeavors cannot be handled by one person, no matter how talented. Let’s not forget that many organizations may not employ an individual capable of being the single point of contact. Finally, even “one” were possible, it’s typically not desirable. A defection of employee exit can cripple a project of this ilk.
With these caveats out of the way, let’s talk why collaboration might not make sense for your particular IT or information management (IM) project.
Understanding
In my post a few weeks ago, I wrote about how my current project entails an application fraught with superfluous complexity. While the details aren’t terribly important, suffice it to say that my client’s current app is about a two on a scale of one to ten. Its replacement is about an eight.
Mitigating this complexity, however, is the fact that I am primarily dealing with one person at my new client. Let’s call her Kayla. She’s a smart and seasoned professional who knows the following:
the old application
her organization’s policies
the data
the culture and the key players
Long story short: Since Kayla is stepping up to the plate, I can spend most of my time ensuring that she gets it. In turn, she’ll work with end users after I depart. While I am working with others at her company, she’s made it clear that everything should go through her. She’s not being territorial; she just knows how everyone and everything works there. Like me, she wants the project to be successful and making sure that she’s the “super user” is the best way to accomplish that goal.
Communication, Responsiveness, and Clarity
One of the biggest issues continually haunting IT projects has nothing to do with information or technology. That’s right. Communication issues are the bane of many data and system migrations and have been for quite some time. Long, essentially pointless email chains often confuse, rather than convey. We’ve all been there. Everyone’s copied because of fear of excluding someone from the loop. Or maybe it’s death by meeting. Regardless of the medium, we’re left wondering what on earth we’re trying to do.
Fortunately, I don’t have to deal with these headaches on my current gig. I know that I can send an email to Kayla or call her up to get an answer to a policy, data, or system question. No large email chains or meetings required.
Accountability
Now, I tend to approach the notion of accountability from the vantage point of a consultant. I love the increased accountability of dealing with a single person. Stop me if this sounds familiar: On past projects, I have had to junk or significantly rework documents, custom reports, mini applications, or system configuration because Person A made a decision that Person B was supposed to make. (Obviously, the “authority” issue is highly related to the previously mentioned communications one.)
Again, I really enjoy being held accountable by one person–and concurrently being able to hold her accountable. It’s one of the main reasons that my current project will, in all likelihood, come in ahead of schedule and under budget. I’ll be the last person to take credit for this. Yes, some of this is my doing, but I can only be as good, efficient, and effective as my clients let me. I can say without fear of accurate contradiction that I’d feel worse about the project if I had to ensure that everyone was at Kayla’s level. They don’t seem to have the same skill set and they sure haven’t participated in the project to the same extent that Kayla has.
Simon Says
It’s rarely a wise idea to staff projects with a single person. From a risk mitigation standpoint, I can think of few more foolish decisions than to concentrate all knowledge and power in the hands of one person, no matter how benevolent, loyal, or sharing. People win lotteries and quit jobs for all sorts of reasons, even in a bad economy.
At the same time, however, it’s important to consider the potential limitations and drawbacks of collaboration. Ask yourself if the potential drawbacks are worth its benefits.
I’m very pleased to be joining Mike 2.0 as a featured contributor. Considering that I’ve written two books, maintain my own blog, and write for a number of other technology sites and publications, it’s safe to say that I have no shortage of opinions on different technology, data, BI, and management issues–the very topics that Mike 2.0 addresses. In other words, based on what I have seen and continue to see as a consultant, it won’t be hard for me to write a weekly post that I hope you find interesting.
OK, enough with the introductions. This week I was reminded about the reasons that the future of open source software is so promising. To be sure, I’ve got OS religion.
So, why am I so bullish on OS? Well, many reasons that will become apparent as you read my posts each week. Allow me to start off with a story from this past week.
Background
My new client (Acme Industries) runs a well-known ERP. (The name of the client and application aren’t really relevant for the purposes of this post). They had some challenges on a previous version of the app’s time and attendance (T&A) application but figured out ways to work around them. About four years ago, the vendor announced the eventual decommission date for the T&A app after introducing it in the mid 1990’s. Beset by current economic conditions, Acme was not in a position to spend $50,000 or so on the forced upgrade. Yet, faced with running an “unsupported” application, management finally agreed to make the plunge.
Last week I conducted training to Acme end users on the new application. They were justifiably curious about whether the vendor’s new app (call it Absence Management [AM]) would address the often manual process of managing employee vacation and sick balances. While AM’s automation trumps that of its predecessor, attendees in my class could not believe the amount of setup involved in AM to enable that automation. For example, to decrement employee balances, no fewer than nine steps are required in the new application. What’s worse, all of that setup still meant that retroactive changes will probably need to be calculated manually.
Ouch.
Now, I’m no newbie to the scene. I’ve been working with enterprise apps long enough (nearly 15 years) to know that no vendor is going to please everyone. I realize the following:
There is no such thing as perfect software.
Enterprise software is usually complicated to some degree because enterprises and government regulations mandate a certain level of complexity.
Some app changes are more visible to end users than others. Back-end changes to database schema, table indexes, or batch processing are often invisible to everyday folks. However, everybody notices changes to GUIs.
For every client that finds a new application or version cumbersome, there’s another that welcomes it with open arms. Translation: you’ll never make everyone happy.
It’s completely unreasonable to expect major software vendors to support antiquated versions of applications run by two percent of their client bases.
So, what did I tell Acme’s end users? I’m an independent technology consultant and can call a spade a spade. I agreed with Acme’s folks because, in my view, the squeeze of the upgrade probably wasn’t worth the juice. Of course, they really don’t have a choice.
My experience this week reminded me of this video on enterprise software vendors and their often questionable tactics:
Lessons
What does this little yarn say about open source? Quite a bit. Imagine a scenario in which organizations can decide if and when they want to upgrade. Imagine clients not being beholden to vendor decommission dates and threats of being unsupported. Imagine having the flexibility to adopt only desired features. Imagine not paying support on shelfware. Imagine actually achieving lower TCO in the process. Sound too good to be true? It isn’t.
Now, don’t get me wrong. Open source is no panacea and, I’d argue, it’s not right for every organization, every type of app, and every industry. But the days of OS exclusively as a tool for geeks in dark rooms have come to an end. As long as stories like Acme’s continue to proliferate, more people will realize this.
Over the past few years I’ve talked quite a bit about collaborative governance (or governance 2.0). I’m starting to see this more often in organizations as ways to improve communications, measurement, solution techniques and accountability. The conceptual architecture of a system to support this approach is shown below:
Illustrative User Story: Data management change control
The user in this case are reporting analysts responsible for developing and running crucial analysis for the capital markets group.
In the current environment, users of downstream analytical and reporting systems often face issues due to changes in upstream systems of record In the new environment, better communications and use of the metadata repository will have help prevent data change control issues.
1. Once an issue is found, data stewards communicate with the business and technical teams to resolve it. Communications are available in a discussion system for others to find.
2. Clear business reporting makes it easy for data stewards and business leaders to see when issues have occurred and their impacts
3. The Data Quality system flags the error, which triggers a workflow request for a Data Stewardship process
4. Responsible data stewards receive the notification and address the issue
5., Issues are logged in a defect management system and is tracked by data stewards
Well thought through online strategies can do so much more than deliver high quality web sites for internal and external users. They can dramatically improve some of your business fundamentals. There are few things more fundamental than the quality of your data.
When people think of data quality they often focus first on customer data. One of the best ways to ensure that customer data is right is to provide a way for your own customers to update their details online. On its own, this is an important capability, but to be really effective it needs to be linked to something that the customer regularly does on the web, such as reviewing their accounts, orders or other interactions with your organisation. Truly effective businesses make updating customer details part of every interaction and available to all stakeholders in the customer, effectively building a Facebook-like facility for their customers identifying relationships (friends), preferences and activities.
Apart from enhanced customer service, it is worth remembering that it is much harder to maintain a fraudulent identify when you are connected through multiple relationships and you have to maintain an exponential number of fronts.
Business data includes much more than just customer details. Online collaboration both inside and outside the enterprise can enhance almost all data in some way. One of the most common problems businesses face is maintaining an accurate understanding of the definition of complex business terminology. Every organisation develops their own language and expects staff, customers and business partners to understand it. Worse, few maintain a dictionary of this language.
Consider creating such a dictionary, with components that are visible internally, other parts to business partners and a relevant subset to the world in general. To really leverage the power of the web, make this dictionary readily updatable (even using a wiki). While open to misuse, it is unlikely that internal staff or business partners who are easily traced will deliberately abuse the privilege. Online communities have shown that complex topics attract genuinely interested contributors who can often provide a better explanation to their peers that you could hope to publish either from an insight or simple labour perspective.
Finally having learnt to use the web to better maintain customer data and your data dictionary, it rapidly becomes obvious that many datasets would be candidates to be open to a wider community for monitoring, comment or even enhancement. Consider lists of branches, community contacts and products. In the last case, suppliers sometimes make changes which flow through your supply chain without being updated in online catalogues.
If there is one thing we’ve learnt, the fear that we feel about opening our content up for collaboration is often disproportionate to the real risk of misuse. If you succumb to this fear without carefully considering what you are worried about, then you’ll miss out on the power that the crowd can bring to our business.
Readers interested in these concepts should read further about the intersection of Enterprise 2.0 and Information Management in MIKE2.0, in particular the MIKE2.0 Enterprise 2.0 Solution Offering.
How healthy is your collaborative community? Well, measure it! You will have seen that we have introduced more analytics and activity portlets to omCollab, which you can find on the Hometab.
You can also check out the wiki statistics of MIKE2.0 via the following links:
The UK Cabinet Office just completed an innovative competition called ‘Show Us A Better Way’. The government produces massive amounts of data on crime, on health, on education. This competition is looking for innovative ways to use this information, e.g. in mashups, and to release more value to the public.
The MIKE2.0 community also submitted a proposal, based on our experience with setting up MIKE2.0 and using omCollab:
After months of hard work it’s finally here: omCollab, the Enterprise 2.0 collaboration platform that powers MIKE2.0 and our BearingPoint internal collaboration site. We have packaged up Mediawiki, Wordpress and omBookmarks (a fork of Scuttle) into a single collaboration platform that can be used to host powerful online communities on the web or inside organisations. It’s a comprehensive collaboration platform which combines the following features in one single, integrated platform:
We have released omCollab to the open source community because we want to build the world’s most powerful open source Enterprise 2.0 platform. We will continue to invest time and effort to improve omCollab as it powers MIKE2.0, the open source methodology for Enterprise Information Management. We hope that we can get the open source community engaged to help contribute to omCollab.
If you want to know where we are going, what features we are planning to build and maybe offer your help to achieve this, please check out the omCollab roadmap.
Finally, if you just want to check out omCollab for yourself or maybe even power your online community with it, go to the omCollab download and installation page
“It’s an unrealistic expectation for information to be right all the time”. Wow, that’s a statement, especially if coming from a high-level executive from a major information management company, namely Chris Livesey, IBM Information Management Director of UK, Ireland and South Africa, as heard at the Information on Demand conference last week in London. Is it really possible that the largest vendor of IM software and solutions is admitting that it can’t get information right? … yes and it’s probably a smart move. Information management is complex and its complexity increases with the size of the corporation. Large enterprises have a myriad of systems creating, storing, sharing and destroying information and all what Chris is saying is that it is unrealistic to think you can fix the issues in such a complex systems with a couple of IM projects or programme. And clients will thank and respenct him for this honesty…
Chris also went on to discuss what is on IBM’s IM agenda. It’s split in an “application agenda” and an “information agenda”, with the former including the good old SCM, CRM and ERP solutions and the latter the more recent and more innovative areas of customers profitability, dynamic supply chain, multi-channel marketing etc.
The expected revenue and growth for the respective areas highlight how IBM is carving up the market between these two agendas. And as usual, these would be important hints for the management and technology consultants, systems integrators and the likes on where to put their money.
IBM is delivering these solutions with “open standards and flexible architectures to enable Information on Demand” and presents (as expected) a formidable stack of software products to deliver this vision.
What suprised me was that there was no talk of collaboration, user interaction, knowledge sharing or even a word about Enterprise2.0?! IBM has an equally impressive product set for collaboration (Lotus Instant Messaging, Lotus Team Workplace, Lotus Notes, Lotus Quickr etc.). This should be included in their IM vision, not only for sales and monetary reason, but also for completeness of what IM can deliver to clients. Enterprise 2.0 and Collaboration and Communities of Interest are on MIKE2.0’s agenda.
Web 2.0 is a collection of standards, technologies and techniques. While there are some differences in approach between Web 2.0 and Enterprise 2.0, most of the elements are the same. Many industries can benefit from an Enterprise 2.0 approach and an objective comparison model is a good way to explain the benefits to a business community. Refer to this post on FastForward to get a best understanding of this model and how it can be applied.
For more detail, refer the following links on MIKE2.0:
