Information Professionals

Is the IT Industry corrupted or just ignorant

2011-10-06T10:51:00.000+10:00

For the last year, the topic of kickbacks and let's say, under the table payments, has been getting much more attention. This is great news for our industry.

The most recent news came courtesy of Accenture in this news here on CIO.com. But it would seem reasonable to assume that this is not an isolated case. In addition to Accenture being named, Computer Sciences, IBM, PricewaterhouseCoopers, HP, Sun, EMC and Cisco have all been named in this article. Given the number of companies involved, this would seem to be an industry issue, rather than an isolated company issue.

In defense of their claims, the above organisations have referred to "Alliance Agreements", which presumably define the payment of kickbacks or incentives for organisations to recommend one software or hardware product over another.

So why should this be a good or bad thing for the industry. Well the simple fact is that the industry does lack credibility. We have many ugly project failures and many non IT executives cannot see the value in the money they spend on IT investments. Meanwhile the biggest players in the industry are recommending each other to ensure new business stays within their Alliance. Is this helping the industry be more successful and deliver better results?

This article from ZDnet makes an important distinction between an integrator and a consultant. It says that an Integrator could take commissions and referral fees and not disclose them, and that consultants should not.

However, this distinction is getting blurred when "Integrators" are providing consulting advice on what software to use, even having "consultancy practices", and some big consultants have "integration" or "implementation" or "transformation" practices. And when clients are not familiar enough with the market, the technology or their own business to know (or argue) a better case then they are at the mercy of the advice they get, whatever basis this advice is made on.

The ZDnet article states "how can a consultant or systems integrator even pretend to be providing impartial advice and counsel to clients that are selecting new software or hardware if their employer benefits from steering the business to one provider over another."

Tony West, assistant attorney general for the Department of Justice's Civil Division, said in a statement quoted here, "Kickbacks and bid rigging undermine the integrity of the federal procurement process. At a time when we're looking for ways to reduce our public spending, it is especially important to ensure that government contractors play by the rules and don't waste precious taxpayer dollars."

US based ERP consulting firm, Panorama, has talked about the challenge for clients in getting effective advice when the industry is littered with these types of referal agreements. You can read about their views here and here.

They suggest that clients ask their suppliers three questions:

1. Do you sell ERP software?
2. Do you receive any financial kickbacks or have any financial ties to one or more software vendors?
3. Do you have a staff of consultants that focuses on one or more software packages?

If the answer to any of these questions is yes, then you may need to consider the quality of advice you are receiving and look elsewhere. It is highly likely that the advice will be tarnished by kickbacks and financial incentives. You may still need a systems integrator but be cautious about the quality of the advice you receive.

I can confirm that Information Professionals can make a very clear answer to each of these and that answer is a definitive NO. And we are happy to guarantee that.

Plus see:
HP Agrees to pay $55M to settle Gov't Fraud Charges
Kickback allegations include technology contracts

Why Change?....Success Criteria # 3

2011-07-31T20:34:00.001+10:00

In Success Criteria #2, I linked culture to organisational performance in delivering projects mentioning that "an organisation always gets the project they deserve". But also when the project team exhibits great leadership they can overcome this. We will therefore talk about leadership and team composition, but before doing so there is another more important criteria.

That is asking the question of why change anything in the first place? Knowing why, helps define what the change is trying to achieve? It could be a simple technology change like a desktop rollout or it could be something much more transofrmational. Even with a desktop rollout there can a lot of reasons why this is being done and this changes the approach and the outcomes. Is it a defined upgrade due to end of life or is there other reasons, such as a new enterprise capability that requires new desktops? Is data and applications being migrated or accomodated in the new environment or discarded? Will this have impact upon operations? Is there variations to specifications allowed for specific needs by some users/managers? Who pays for these?

I have only scraped the surface with questions. The answers will define what outcomes the team is supposed to deliver. Is it a low cost, tightly constrained project or is it allowed to consider value judgements that may cost more but bring some benefits.

Why are these questions important? All projects make trade-offs, some make them more explicitly than others. If a project is not making trade-offs between time, cost, quality and benefits then it has a very loose direction, it is not finely tuned nor highly defined. It is like saying just run over there and see how you go, versus you are about to run in the 100 metres on that track on this time and day. To do things well, what you are doing needs to be clear, as do your objectives. You cant do something well, when what you are supposed to be doing is vague. Yet some projects are very unclear. In fact, it would seem purposefully so. Not having clear objectives means you can't fail...well perhaps that is the view by some.

Not having clear objectives also means you can never succeed. and this forms Success Criteria #3, have a clear mission.

What changes will the OGC demise bring?

2011-05-10T21:17:00.000+10:00

After last year's first step of moving the OGC, its pieces have now been split up and the OGC as an entity in its own right has now officially ended. This was confirmed in mid-April. What does this mean for everyone that uses the many methodologies produced by OGC (all trademarked to Office of Government Commerce), such as PRINCE2, MSP, Gateway, M_o_R and the increasing numbers of others.

Well to start with, what is clear is that everything that the old OGC used to do is being scrutinised. It seems unlikely that they would get rid of things that generate revenue, and in most cases, it would seem that the training and accreditation programs supporting the methodologies would generate significant royalty revenue at the very least. But just because they are revenue earning doesn't mean they will be maintained. We see governments close down activities that earn money all the time if it doesn't fit within their priorities.

So with formal confirmation of the OGC being split up less than one month old, it is probably too early to know exactly what the future will hold. However, so far, it seems the only thing that is under threat is the Gateway Hubs. This may have an impact on some government bodies in Australia, although in some cases, they themselves have started moving away from a strict interpretation of Gateway, and adding more pragmatism into their gating/governance frameworks. Of course we encourage this approach in all methods, and while strict methodology purists may frown upon it, some of us have the experience to go with the methods to know what actually works. As a result, the retirement of Gateway Hubs may not be a huge impact.

Also worth considering is that supplier risk is always a consideration in any procurement and in the adoption of any standards. When relying on another government department for supply, supplier risk is probably not considered so seriously by most, after all, aren't all governments going to be around forever. Of course governments themselves are, but how long will they support a particular initiative, well that can be anyone's guess.

Success Criteria # 2 - Talking about Behaviour

2011-05-04T08:10:00.000+10:00

Criteria # 1 was about risk management. We all do risk management to some degree. Let's face it, that is the only reason a project starts. How many projects have you started because you didn't want to change something that was likely to happen in the future? None I suggest.

Whether you use risk management explicitly or not, future risks (or opportunities) are likely to be the very reason why you are embarking upon any change. You are doing risk management, well in part anyway, even if not all of it.

But even if you were to establish some stronger risk management standards, what gets in the way of organisations who have risk management but still fail to successfully change the way they operate is culture.

Consider how many policies, processes, standards etc your organisation has or doesn't have. Which ones get used, how often and how? This is defined by culture. Most organisations today have a defined risk management standard or policy. Corporate governance dictates it. Yet the difference between those that use it and use it well and those who don't depends on culture.

Sometimes risks are managed, but some risks are not spoken about. That is defined by culture. Sometimes there are areas of sensitivity to management or to corporate history that some in the company cannot face or face constructively. This is culture. Sometimes valid risks are escalated by a team to management but ignored or rejected and not dealt with. This is culture. Sometimes risk management is seen as not relevant or important because operational priorities are the only things that get interest and traction. That is culture.

What every successful team realises though, is that whatever the culture of the organisation, they must stand up for what they need to do to be successful. They must create their own culture, as a variation to the organisation at large. In other words they must lead. They must lead the change. And the bigger the change, the bigger the leadership must be.

A colleague has a saying that "an organisation always gets the project they deserve". To some degree that is true because a project is a part of an organisation, and organisational behaviour is defined by culture. But there are exceptions to that rule, and those exceptions are when the team exhibits great leadership and redefines the culture that they operate to, and shows the organisation how to do that well. Of course it may be a short period of time, but that can be enough to successfully implement its outcomes.

Starting with Success Criteria #1

2011-04-26T01:04:00.002+10:00

This post represents my first blog in a while and a fresh commitment to blog more regularly. See Making a Fresh Start for that post.

To restart here, I have recapped on Success Criteria #1, Risk Management. That sounds boring doesn't it! Well perhaps so. But let's get real about what we are doing when we implement changes to a business. Aren't we creating a new future? Risk Management is about doing things today to create a future state tomorrrow, or to avoid a different future state. Given we are implementing changes to create a new future state of the business, then it makes sense that risk management should be a key capability. However it is often not the case.

When we look at programs and projects that are implementing change, one of the first things we look for is whether risk management is being practiced. If it is we know that the team is looking far enough ahead and doing today what's required to manage any future challenges they expect to encounter. If they are doing that, this it is good.

If they are not doing that, we consider whether they are doing Issue Management. If so, the team are at least identifying, categorising and prioritising tasks for those challenges they are facing today. This is OK but not as good. Lastly, if they are not doing either of these then they are scrambling to cope with every issue as and when it arrives. The team is therefore in a reactive mode. It is impossible to be high performing in this mode. The team may feel busy and may feel like they are making progress, which they are, but they will never be more than mediocre.

Making changes to any business encounters problems. That much is normal. How you deal with them is what varies. Issue Management gets the team triaging problems, Risk Management gets the team ahead of the curve and gives it and the organisation the best chance of success. This is why this is the Number One Success Criteria.

I'll cover # 2 of 5 in my next post.

Brisbane Office Closure

2011-01-13T11:04:00.000+10:00

With the current flood conditions in Brisbane, and the shutdown of the Brisbane CBD, our Brisbane office is closed this week. We plan to reopen on Monday 17th January subject to access, services and utilities being available.

E-mail and mobile phone communications are still in operation.

How many change programs can we deal with?

2010-07-21T17:26:00.000+10:00

Have you noticed how we have so many more projects, change programs, new initiatives and strategies in our organisations today? Have you noticed that so many more people are Project Managers...all demanding some attention and resource?

The 2000's was the decade of Project Management I beleive. We now have so many PMs, and almost as many projects to go with them. That means we probably have more focus on objectives that we did in business in the 90's. But the dowside can be that in the face of limited resource, where do we put our attention, where do we direct our energy?

We may have more focus on objectives but less clarity on which ones are important. This blunts the edge of gaining effective change, when we are spread so thin doing a lot of things in mediocre ways.

I sometime write for a Singapore based magazine called Walk Your Talk. I wrote an article on this very subject and some ways of dealing with it. The article is available from our website.

You can access the full article here. I hope you enjoy.

Professional Family Tree

2010-07-19T20:42:00.002+10:00

Queensland Health and the consultants being called in to assist highlights one small professional family tree of what is bound to be many. See this blog for more info.

Was this job too much for KPMG

2010-07-10T14:53:00.000+10:00

The world of big business can be a little scary I suppose. In the case of Queensland Health's payroll debacle, you have two of the biggest IT companies in the world in SAP and IBM.

Not even they could stop what happened from happening. But what was surprising for me was the Stage 2 KPMG report into Queensland Health.

It seemed to be written by someone who is a little scared about offending anyone, perhaps concerned about any legal ramifications or impact on relationships or perhaps concerned about stating a view.

It starts with two pages of Scope, then 3 pages of Approach, then 3 and a half pages of Observations, half of which was dedicated to areas for future investigation. It then capped it all off with 2 pages of Disclaimers. The Disclaimers are of the same volume as the Observations.

KPMG can do great work, but don't count this piece of public record as one of them, this is far from saying anything other than "let's be cautious".

Managing the health of process and technology change #1

2010-07-06T15:08:00.075+10:00

I have held back from commenting for a little while now, but it has been over three months and the story continues with recriminations and reports. Of course, I am referring to the Queensland Health payroll situation. I will focus on just one aspect of it, the number one and often repeated error of our top five oversights associated with major failures of this type.

This error is the biggest threat to successfully adopting process and technology system change, such as Payoll implementations. That error is in not recognising the organisational risk at stake. Let's face it, for a payroll implementation the major risks should be clear, i.e. not paying your hard working staff.

So given the troubles that have been encountered let's start with the management of risk. Apparently, as reported in The Courier Mail on the 14th April, there was some debate over whether a memo made its way to the Minister in charge of the Health portfolio. There have been many questions about what advice was provided to whom as you would expect. But this kind of misses the point.

Whether the memo got there or not shouldn't matter. For all large organisations, changing payroll is a high risk activity. It should be so high that those in charge should be obtaining the necessary assurances to ensure it is under control, not waiting to be told if it is not. This is where too many process and technology change programs go awry...poor recognition of the organisational risk at stake by those at the more senior levels. No this is not "an IT thing" this is, as in most "IT" these days, a business thing.

We must assume that the Minister and significant others knew of the project. After all, it would have likely required Cabinet approval. And with a change to a payroll system that pays approximately 1/3 of the Queensland public service it should rank high on the risk profile.

As such it should have resulted in pro-active verification from the executives and stakeholders, with specific questions being asked and specific standards being defined, not a call me if you need me approach. The QAO report defines some of these standards such as governance, testing etc. The lack of them, while being tangible, is a symptom of not understanding the risk, rather than the root cause of these situations.

Maybe I am going out on a limb here but I really don't think so. This remains an industry wide issue. There are way too many "failures" still happening with regularity, and too many senior business (and government)players who still think of these situations as an "IT thing" instead of a major risk to the success of their business, for anyone in this latest situation to feel singled out. They have too many friends from those who have preceded their path to feel that way.

Seth Godin...more than just marketing

2010-07-04T10:45:00.000+10:00

Seth Godin is one of my favourite marketing and business writers. I love this recent blog which some may feel has nothing to do with marketing, but really has everything to do with it and with business. Seth writes:

The difference between running and managing a project

If you choose to manage a project, it's pretty safe. As the manager, you report. You report on what's happening, you chronicle the results, you are the middleman.
If you choose to run a project, on the other hand, you're on the hook. It's an active engagement, bending the status quo to your will, ensuring that you ship.
Running a project requires a level of commitment that's absent from someone who is managing one. Who would you rather hire, a manager or a runner?

In my experience, organisations rarely deliver a result by managing a project, it takes people running them to deliver results. And if you can't deliver a result you can't create a good reputation, a good brand or a good business...that is marketing 101.

Go Harvey Go...Harvey Norman GOt it right

2010-06-01T11:35:00.000+10:00

It was pleasing to see the recent announcement at CeBIT by Harvey Norman's Chief Operating Officer, Mr John Slack-Smith, that Harvey Norman would be pushing ahead with a new enterprise solution. It was also somewhat predictable that they would receive some questions for not pursuing an on-line strategy as reported in MIS Australia. In my view they have got their priorities spot on.

It reminded me of the press criticism that SAP received for not following everyone else into the dot com bubble. Of course history now shows that SAP came out of the dot com bubble stronger and more dominant then ever, because they stuck to their strengths and avoided the hype.

Harvey Norman has grown solidly, has grown internationally and with acquisitions in recent years. The core of their business is in delivering great service, great range, cost effectively. To do this they need to manage their supply chain well. A new integrated system will help with that. Once they get their internal systems better able to perform, then they can leverage that into improved customer experiences, and that may ultimately mean providing online options. So they have definitely got their priorities right.

What I really like about this set of priorities by Harvey Norman is the recognition of risks in doing this scale of change. Some may feel that its easy to put up a web site and take online orders. Well perhaps if you are doing a few orders a week and operating from your spare room. But with 10,000s of transactions at stake, multiple suppliers and a well founded reputation at stake, then it takes a bit more than a web site. There is a lot of process and technology complexity to manage here.

So it is this risk that is clearly appreciated by the Harvey Norman executive in their decision. This is step one in any program of work of this nature; understanding the risk at all levels of the organisation. Then plan accordingly. Congratulations Harvey Norman and team, you are leading Australia in retailing expertise, and perhaps about to lead in managing process and technology change. Go Harvey Go!

The Problem with Change Managers

2010-02-18T09:04:00.002+10:00

OK, to start with let me declare that I love Change Managers. I work with many of them, I consider some to be good friends, and I see them as having a crucial role to play in all businesses and especially in projects where change is being made (which is most projects). Many Change Managers have been crucial business colleagues in the past and some remain so today.

But what I do find with some Change Managers is that they get into Change Management because they want to change the world, or at least talk about it. And sometimes some of them want to change the world because that is probably a whole lot easier than changing themselves. They must figure that it will be easier to focus on “that” problem rather than “this” one. This reminds me of an anonymous story that I love. It goes something like this:

There was an old man on his deathbed, and he was talking to his son. And he said:

“You know son, when I was young, I wanted to change the world. I soon realised I couldn’t achieve that so I decided to change my country. I struggled with that too so I tried to change our town. I failed at that so I wanted to change our family. I haven’t managed to do that so I focused on changing myself. I am now too old to do any of those things except that I have managed to change myself. But now that I have changed myself, I now realise that if I could have started with me, I could have changed us as a family, I then could have gone on to change our town, and perhaps tackle changing the country, and who knows I may have been able to change the world too. But the lesson, son, is that it should have always started with me, and so anything you want to do should start with you.”

I was recently asked to conduct a workshop at a Change Management professional body training programme. It was small event, but a new and promising professional organisation so I agreed. There were around 30 participants, and three breakout sessions where participants could choose one of four workshops at each breakout period. I was asked to facilitate one workshop at one of these breakout periods. I showed up having prepared a topic of interest to the expected audience. The topic discussed personal styles and the diverse needs of modern day projects (you can see the material here).

I had two people attend. They were keen and motivated, which was excellent, but what happened to everyone else? The law of averages suggested that I could expect perhaps 7 or 8. Thirty people had a total of 90 workshop selections they could make during the course of the program, yet only 2 attended the only opportunity to cover Project Management. This was less than a 3% interest.

There is probably several reasons for this, but I do believe it largely relates to one. One chap came up to our table as we were about to start. We all got excited thinking we had a third participant. He said, no we are just short of a chair next door. And then he said “ what do I need to know about gantt charts anyway” as he walked off. There you have it, Project Management, in the eyes of Change Managers, is just about Gantt charts.

The unfortunate aspect for Change Managers with this observation is that they believe they know what Project Management is and they don’t need to know any more. Whether they believe it is about gantt charts or some other thing, they have just created distance between Project Managers and themselves because they believe they already know all there is to know about Project Management, when clearly they do not.

Project Management was one of eight competencies this new professional organisation has as part of its competency standard. And all of these change managers would work in projects, and many would regularly report to Project and Program Managers. Yet less than 3% had an interest in learning more about it.

Perhaps it is understandable that Change Managers would stereotype Project Managers as merely Gantt chart gurus. Of course Change Managers themselves have been stereo typed for many years. They are the tree huggers, the ones who keep telling us how its all about the people, as they complain about a stakeholder who wont see things their way. But of course, having had many long and successful business relationships with Change Managers, I know that those views are really not constructive, and nor do I believe them either for that matter.

The key point to remember here is that Change Management is a profession that should be about building bridges between people. And the best way to do this is to find common ground between interested parties, not digging trenches and placing others in them. This is not the way to deliver change outcomes. Learning from others, understanding their perspectives and helping them find a path that suits them is the work of Change Management. And this starts with moving yourself closer to other parties, not further away by thinking you know all there is to know of them.

Of course many Change Managers are great at what they do, but if you are a Change Manager, for the sake of your own profession and your own success (and I haven’t yet mentioned your responsibilities to your clients or employers) please take note...Project Management is as much about gantt charts as Change Management is about using Outlook to schedule a conversation.

And if that doesn’t make sense then maybe you are in the wrong profession.

Unified Communications Freebie

2010-01-07T12:13:00.000+10:00

Happy 2010 to everyone. Last year I posted an article on Unified Communication. SmartCompany and Avaya are offering a free copy of the UC for Dummies book if this is of interest to anyone. You can find it at Smart Company. Hope you enjoy.

Coming through coming through…. IT to the rescue

2009-10-06T19:12:00.006+10:00

To boost profitability, we can cut IT costs, as it’s easy to lop off a little fat there. Apparently IT also generates 2% or more of the carbon footprint so if we cut their costs we save carbon too. But hang on, by spending more on IT can’t we boost a company’s profit and lower carbon use across the enterprise? With the right attitude yes. Let’s check out some examples.

A recent study indicated that companies with a true focus on sustainability are more profitable and more resilient than their peers. The study conducted by A.T. Kearney, a global management consulting firm , found that of 99 firms on the Dow Jones Sustainability Index, in 16 of the 18 industries examined, those businesses with a commitment to sustainability outperformed industry peers over three- and six-month periods by 10 percent and 15 percent respectively.

At Wal-Mart, they are implementing strategies and technologies in their new stores and their vehicle fleet that will cut greenhouse gas emissions significantly—they hope to see a 25 percent improvement in their fleet in three years and a 20 percent boost in store efficiencies in the next seven years. By using technologies that measure and report energy consumption from top to bottom, CFOs and other managerial personnel possess the information they require for determining the true business cost of energy. This information can then drive decisions about future investments for lowering energy consumption and reducing operating expenses.

Using green IT strategies, companies can improve energy consumption on the production side as well. Working with Toyota to help them reach their 5-Year Environment Plan in their vehicle production strategies, Fujitsu and Toyota developed a Green IT vision statement that guided their company in optimising infrastructure, managing energy use, and monitoring the lifecycle of IT assets. IT was a major contributor to meeting these goals.

As part of overall sustainability plans, green IT can help businesses achieve environmental goals on three key fronts: immediate reduction in operational expenses, informing long-term infrastructure investments, and guiding business policy and procedural improvements. It is this latter one that has most impact across the enterprise, but also most management maturity.

It comes down to strength of leadership. When an IT department develops green purchasing and waste management policies for everything from paper to e-waste, it sets a green example for other departments to emulate. Sun Microsystems, for instance, adopted plans for green purchasing and energy savings that would result in a fast ROI. Their Finance department was quickly brought on board for the project, and eventually word of their improvements spread. Today, the company is looking to reduce overall energy used in manufacturing its products.

Can IT rescue the company, well perhaps not. Can the contribution from IT be leveraged into improvements across the enterprise, yes. And could cost cutting of IT blindly prevent this from happening, quite possibly.

For more information about this topic try The Truth About Green Business

Unified Communications … Unifying the World or not

2009-10-05T12:02:00.009+10:00

One of the technology forecasters' latest claimed “winners” is Unified Communications (UC). A recent report published by Research and Markets predicts that the UC market in Australia will grow at a compound annual growth rate of 16.1% between 2007 and 2013.

Like many “new” technologies, particular integration technologies such as this one, it lacks a clear definition. Vendors may try to define it, and perhaps label every sluggish selling piece of kit they have as a part of the UC revolution. This can create confusion.

The intent, at least, of UC is to integrate several different communication systems (voice, messaging, video, mobility, data, conferencing and presence management) onto a single integrated platform.

Integrating all this communications could create a new wave of investment, but what are the benefits for:
End Users – UC can provide flexibility for meeting best fit to users’ communications preferences. In practical terms this means that one login will provide an end user with the option to communicate through a host of options (e.g. fixed line, VOIP, email, SMS, instant messaging, videoconferencing etc.). This can also means a unified inbox and outbox, hence simplifying the management of our messaging and the associated task management and follow up, collaboration etc.
Management – UC (properly implemented) can deliver many of the outcomes that managers tend to dream about: Improved leverage of existing infrastructure, increased efficiency through streamlined/integrated business processes resulting in cost savings.
IT Department – The main benefits from the perspective of IT (in addition to the Management viewpoints above) are in the areas of control, security and reporting through its integrated platform.

Thinking about jumping in? Just like all new technologies requiring systems integration expertise, be sure to tread carefully. Business benefits first, then smart sourcing and well constructed contracts. After all no-one likes being at the hands of one or more systems integrator/product providers who have promised the dream, and are now giving you a broken sleep.
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For more information on the Research and Markets report find it here.

Computer Economics produced a report on this issue entitled Unified Communications Adoption May Become Inevitable. An overview of this report can be accessed here.

And finally for anyone game to get basic instruction Unified Communications For Dummies

The High Road or the Low Road

2009-10-05T11:41:00.011+10:00

Many Australian managers are very downbeat about the long term survival prospects of their businesses and are concerned about the impact of short term thinking on organisational health. This is the central conclusion of a wide ranging survey conducted by the Australian Institute of Management.

The Institute surveyed 1200 executives (including business owners, middle managers, CEO’s and board members) on issues related to organisational health and survival. The resulting report, entitled Corporate Endurance, finds that:

51% of respondents associated with private enterprises believe that short term profit goals are having a key influence on business performance
15% of board members and CEO’s are not convinced that their businesses will still be around in five year’s time
On a more positive note, many respondents named environmental sustainability as a key emerging focus area for their businesses

These findings underline the conflict between long term investment and short term protitability. And with increasing corporate reporting regulations and the strength of media (meaning news spreads fast), bad news about short term results spreads fast and hits hard.

‘Short Termism’ is a topic covered within “Managing for the Long Run” by Danny Miller and Isabelle Le-Bretton Miller. They introduce the ‘Four C’s’, the traits that they have observed in 40 companies that have led national markets for two decades or more.

Continuity: Being around for the long term is part of their core cultures. This was evident in their approach to training, apprenticeships and the development of business strategies
Community: Invest in employee loyalty by building a community centred on strong values achieved through mentoring programmes and employee friendly policies
Connection: Focus on win-win external relationships, treating customers, suppliers and partners in ways that will create long term mutually beneficial relationships
Command: Active, intelligent and proactive governance, and managers and boards should have the ‘freedom, knowledge and incentives’ to invest for the long term

For those who have read or followed Branson, you will know that his is one of a number of private companies that ditched their public shareholdings and took back ownership in favour of not having to explain long term business decisions to those who don’t get it.
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A fuller discussion of AIM’s Corporate Endurance survey can be found here

Danny Miller and Isabelle Le-Bretton Miller book is Managing For The Long Run (Harvard Business School Press, 2005) is based on their experience with 40 companies (most of whom started out as family businesses) that achieved long term market leadership.

An executive summary of the Miller’s research project can be found here

Your a CIO because your Career Is Over

2009-10-05T10:30:00.007+10:00

It seems that many companies would be well advised to install revolving doors on the offices of Chief Information Officers (CIO’s). The March 2009 survey by CIO Magazine found that 24% of the 265 companies surveyed asked their previous CIO to leave due to ‘poor performance’.

This means that CIO’s shared ‘top spot’ with Chief Financial Officers for being most likely to be dismissed on performance related grounds.

The way in which the survey results were framed is obviously open to interpretation and debate since ‘poor performance’ can mean radically different things in different contexts. It can even mean ‘Did not agree with the new CEO’s strategic direction’ in some cases. This does not, however, take away from the fact that there is a widely shared perception that becoming a CIO is somewhat of a mixed blessing as you might soon be heading for the exit.

There are obviously many complex reasons behind this game of ‘corporate musical chairs’, but I believe that the (relatively) old maxim that ‘Business does not understand IT and IT does not understand business’ is perhaps worth quoting here. It is unfortunately often the case that CIO’s are fired on the basis of ‘unrealised miracles’ that were eagerly expected by a management team that did not understand what IT can and cannot do. IT departments can, on the other hand, also often be ‘blamed’ for not clearly making the business case for certain innovations.

This is obviously not the place to try and plot a ‘CIO Survival Strategy’ but I do think that there are a few basic things that CIO’s should keep in mind as they navigate the treacherous seas of corporate politics. These include the following:

Constantly Market IT’s role (and other's roles)
Make the business case (not the technical case)
Maintain Balance (beware the golden bullet and the next best thing)

We can explore these in some detail at another time. Suffice to say, the IT department remains one of the most changing and at times most vexed portfolio of all, still waiting to be understood by the vast majority of business executives.
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A more detailed discussion of the research on CIO turnover by CIO Magazine can be found here

Some suggestions for increasing ‘CIO Longevity’ can be found here

And more here

And here too

And for one of the better new texts, see Peter Weill's IT Savvy: What Top Executives Must Know to Go from Pain to Gain

Your Corporate War Footing: Lessons from Grandma

2009-04-28T14:27:00.006+10:00

There are many management texts around that leverage from wartime battle strategies and do so in a powerful way. Most are about gaining new territory, beating the competition, out-thinking the opposition.

No management books that come to mind focus on survival as a core capability. Talk of survival doesn’t hold the glamour and glory of victory, but in times like today, it is, well, kind of important.

Let’s face it, thousands of managers all over the world are making tough choices to ensure the survival of their organisations. The Australian Bureau of Statistics reports that the unemployment rate jumped by almost 1.5% from March 2008 – March 2009. At around 6% some economists are even predicting a 10% future! This is purely driven by organisational cost-cutting (i.e. survival) strategies. But how many of these cost cutting strategies are truly strategic, versus being operational or reactive choices.

And who could blame managers. They have hardly been prepared for moments like this. Few management texts cover it, and I don’t see it covered in business schools. Seth Godin’s recent blog post about car specs (we buy based on accelerating power not stopping power) applies equally here. We are all trained at how to scale up, but poorly trained at how to scale down…rapidly, efficiently, effectively.

Wartime history does provide an excellent guide. And it is no wonder, for it is war, and all its horror, that has created so much innovation. During wartime, leaders make tough choices. Some of these choices involve radical downscaling to channel resources to where it is needed most. Here are the principles they apply:

Survival is paramount: Direct all resources directly towards victory and towards survival. Leaders in war economies know that ensuring all school classrooms get a new paint job every year will be irrelevant if the war is lost. They invest resources elsewhere even if it causes some temporary hardship. Being in an economic winter means that we maintain only the basic functions for survival. Think of a bear in hibernation.

Do not destroy capacity: Most wartime planners know to take the long view by making choices that accelerate a return to normality at the end of hostilities. This means that they would generally try to:

Prevent the destruction of civilian infrastructure (rail lines, roads,
power)
Shutdown important, but non-essential, national projects in a way that they can be resumed with least effort
Retain the skills and knowledge of key people by temporarily redeploying them elsewhere. (For example, redeploy an engineer to rebuild destroyed bridges, not send him in as a soldier - he will then be available and ready to rebuild the nation once the war is over). At the end of our economic winter, there will be spring. Growth will return, and we want to enjoy that growth, not be hampered by destruction at our own hands.

Investigate new ways of doing things: War is a gold-mine of innovation. The necessity breeds it, the urgency to find new ways. A huge amount of the everyday objects around us started life in a military lab somewhere. But you say that a lack of resources in a cost-cutting environment prevents it? Yet that is the very constraint that breeds it.

OK, maybe it is not as bad as a war right now. Although for some it could be close. There are, however, some striking parallels and therefore some lessons. In summary:

Strategise for survival: Ensure all your choices contribute to staying afloat.

Plan for recovery: Do your best not to destroy vital infrastructure or deplete your human resource to such an extent that recovery will be almost impossible.

Innovate: Find cheaper and more efficient ways to perform core functions

Oh and the last point, maybe you shouldn’t talk about adopting wartime strategies, it might freak out your colleagues and team. But you do need to get them on board. The picture above, is a picture of a once famous WWII poster and slogan: “Better pot luck with Churchill today than humble pie with Hitler tomorrow!”. It motivated, at a time of scarcity, for citizens to play their part too. As it is through them where that innovation will be born.

Is the economy turning corporate decisions from green to grey

2009-04-14T11:29:00.002+10:00

Since the economic meltdown started, one question has been: Is this the end of the green agenda, at least in the short-term? And will environmental stewardship be considered a luxury we can no longer afford?

A recent survey by IBM and Info-Tech reported that many mid-sized organizations around the world are buying into green IT despite falling bottom lines and falling stock prices. Another survey by Cisco identified that one-third of all businesses with green plans intend to move forward with them. So can environmental sustainability be good for the bottom line?

The driving force behind continued—and even increasing—green IT investments is the need to control costs by improving energy efficiencies. This is the first-tier greening strategy that most organisations should do, without excuse, as they can save money. The IBM paper looked at 11 possible green IT initiatives, with the most popular being storage consolidation, remote conferencing, and telecommuting.

It doesn’t surprise to see that these three initiatives can result in immediate bottom line savings. Plus they create a smaller carbon footprint through lower electricity bills, reduced consumables costs, decreased current and future operational expenses. Plus they may even attract rebates and incentives from local governments and utilities.

The examples in these reports hold true elsewhere. Data centre experts at the March 2009 Green: Net conference in San Francisco, encouraged increasing server utilization to improve energy efficiency by more than 200 percent. And companies such as Cisco are still pushing ahead with products to dramatically impact CIO’s bottom lines. Its new Unified Computing System (launched March 16, 2009) is said to reduce data centre capital expenditures by 20 percent.

There may be other benefits of “the downturn”. As investors look for safe growth options for their money, buying into technologies that improve efficiencies and pay big returns may be a good option in the current climate (economic and environmental). While relatively modest, CoolIT Systems, recently received $5.1 million in funding to expand development of its liquid cooling system.

There will continue to be uncertainty ahead, despite the optimistic view of green IT’s future. This is particularly so once we get beyond the first-tier changes, which provide both immediate and parallel cost and green improvements. Beyond this first-tier the payback may not be so immediate. And with company acquisitions such as IBM’s potential takeover of Sun Microsystems, we are yet to see the end of the economic fallout and any reshuffling of the corporate world that lay ahead.

So, my advice is to stay tuned, but in the mean-time, get those costs down, and while you do it, let the world know how green you are becoming. Now that has to be good for business.

IT Credibility -2.0

2009-04-01T10:35:00.003+10:00

Many of us are familiar with the boom bust era of the dot.coms. Unfortunately it was a step in the erosion of business credibility for the IT sector. That credibility is starting to return, although it could be dragged down again should a repeat of the internet bubble play out in the months and years ahead.

According the The Economist, while the technologies have changed, and these internet or dot.com businesses are now called Web 2.0 businesses, their business models seem to be treading a well worn path.

That path involves the provision of free services, eventually resulting in attracting enough advertising revenue and then profitability. Of course the provision of free services is a great way of building a following and market share, and crossing the chasm, made famous by Geoffrey Moore’s 1991 publication. It can take some time for this profitability to kick in and so an apt saying within these organisations may be “We may lose a bit on every sale, but we make it up with volume”. The truth for many, is that the profitability never comes in time.

As market share grows, so does the promise and investor confidence, share prices follow upwards until eventually many a business comes tumbling down. So what, if anything, will stop a repeat performance for Web 2.0?

Some Silicon Valley insiders believe that the dot.com bubble burst, not because of inherent problems with business models, but because of the limited reach of the (broadband) internet. Start-ups were not able to reach the critical mass of subscribers that would have led to sufficient advertising volume. This broadband penetration problem has largely been solved since the late nineties (in the developed world at least). This has led to innovative ways of using the web, with interactivity and interaction and businesses such as social networking sites (Facebook, MySpace, LinkedIn, Bebo, Twitter etc.), video sharing sites (Youtube), links and bookmarking sites (Digg, Reddit, Delicious, StumbleUpon) and a variety of blogging platforms. Collectively this new generation of websites are sometimes known as Web 2.0.

However, almost all Web 2.0 sites share their business models with their dot.com forebearers. Almost all of them (with the exception of Wikipedia which has opted for a donation based model) hope to eventually move into profitability on the back of paid advertising. Many have failed along this path, with the one shining light being Google.

So other than broadband penetration, has anything else changed. For instance, have advertising purchasing habits changed? Classic advertising allows purchasers to go to the big end of town and buy the best slots in the biggest rating TV channel/newspaper/radio/magazine that fits within your broad geographical based target market.

The internet affords so many more purchasing options for advertisers, and allows a more targeted approach to advertising. Purchasing of internet advertising occurs best on a micro basis that can target a range of demographic and psychographic attributes. An “old school” macro approach rarely works well. Does this make the purchasing process more complex?...of course, more work?…yes, and if you are good at it, more effective?…absolutely.

Some argue that once the current generation of advertising purchasers move on, and they release those big dollar advertising budgets to those who understand the new world then the true value of internet advertising will be uncovered.

An advertising revenue plus subscription model has worked for TV. In fact it is the only model that really does work for these media companies. So perhaps it is the right model for internet based media businesses too, and the question is not one of if, only of when.

Looking at successes, many internet and Web 2.0 businesses, or business extensions have succeeded. In Australia, Wotif is a great success. On-line hotel and airline booking is a regular part of our lives, as is internet based banking. These and many others are succeeding in creating new value. So it is not all internet or Web 2.0 businesses that we are talking about here, only media based companies. And much of the Web 2.0 hype is based around media organisations, trying to grapple with new media. And on top of that the media industry itself has always been prone to new heights and depths in the market.

So whether this is the right time or not for some of these models only time will tell. At least share prices are not climbing at dot.com bubble rate, and the volume of over-rated plays in the market is a lot less. But if you are purchasing services from these organisations, then perhaps consider spreading your risk to manage the downside should that come.

Want to make savings but not leap onto a cloud…try this.

2009-02-17T14:58:00.005+10:00

When it comes to business, we can all get trapped in a mindset that says, to do more, you need more. What if that wasn’t the case, when some things could come for free.

What about the green agenda? It currently has some of the bigger vendors telling us about their emerging green products, and the new things we could buy. But in an economic winter, is that wise. Why not use your energy to do things which save money, and improve your green credentials at the same time.

Power management is often spoken of, but how about data centre cooling, which occupies upwards of half of a typical energy bill. With operating expenses so high, this expense often outstrips the cost of IT equipment, with the average annual operating cost for a single midrange server hovering just below AUS$3,000 (for cooling and power).

But trapped into scarcity thinking, many continue to believe that upgrading a data centre to reduce the cooling expenses is too costly, with long returns on investment. The big boys in all things hardware like IBM and HP estimate that improvements in energy consumption between 15 and 40 percent can be achieved through system upgrades with paybacks between six months and two years. Even still this does require upfront investment, and so this keeps companies holding firmly to their wallets.

Thankfully, with new technologies and some simple changes, you can cut the amount of energy you’re using to cool your data centre with minimal upfront costs. These ideas won’t cost you much, but they’ll lower your energy bills making them a great investment of your team’s time.

If you don’t care for technical detail skim over the dot point and pass this to your CIO. If you want the detail, read on.

Maintain an efficient HVAC system: Improper air flow in your HVAC system can increase cooling costs by up to 15 percent, so an efficiently-functioning HVAC system can have a surprising effect on cooling costs. With a regular, routine maintenance schedule, you’ll save money every month. To keep your system running smoothly, clean and replace air filters, clean evaporator coils, shade your air conditioner, and ensure the condenser coils are unblocked.

Turn down the cool: Contrary to popular belief, servers do not have to be kept exactly between 13 and 16 degrees Celsius (°C). In recent tests conducted by Sun Microsystems and others, it was discovered that servers can actually tolerate much higher temperatures and levels of humidity than originally thought. So go ahead and turn the thermostat settings on your HVAC system up. Consumer Reports estimates that for every half of a degree Centigrade you raise your thermostat setting you shave three percent off your cooling costs. Big players like Google, Microsoft, and HP are even getting in on the savings. Google recommends nudging temperatures from 21°C to 26°C. By inching their thermostat by just 1-2°C, Microsoft realized annual energy savings of approximately AUS$380,000 in one Silicon Valley data centre. Following a similar change, HP hopes to reap the equivalent of AUS$12 million in annual energy savings. So the potential, even for smaller organizations, is pretty significant.

Ensure air flow is efficient: By this we mean to keep hot and cold air separate. Some very practical changes—like making sure the hot air from one server isn’t blowing directly into the air intake of another server—can drastically cut cooling costs by keeping the two air systems apart. Configure your room layouts to minimize mixing of hot and cold air, and then install barriers to further prevent this from occurring: blanking panels in server cabinets and aisle barriers are two options.

Monitor energy consumption: Knowing how much energy your data centre uses—for running the HVAC and powering the equipment—can go a long way to reducing your overall power consumption. To make the task of monitoring hassle-free, put a Direct Digital Control (DDC) system to work. With the information provided by your DDC, you’ll be able to reduce energy consumption today and predict what you’ll need to keep running in the future.

Use variable frequency drives on air handling units: By adjusting the rotational speed of your cooling fans with a variable frequency drive (VFD) system, you’re more accurately able to match cooling needs to actual demands. Slowing the speed during low-demand periods dramatically reduces energy requirements and can achieve a payback period of less than 16 months with a 50 percent reduction in power consumption.
Shut off unused equipment: If you’ve got idle servers or cooling units, turn them off! It’s a simple solution that can quickly reduce your energy costs.

There is always bigger adjustments you can make, but these cost-effective options will get you saving quickly for a very low investment. Your costs will go down, and your carbon emissions along with them.

And if workload pressure has come off your team, what better way to use those available skills, than applying it into long term savings that can impact on your bottom line within the week.

Seeing through the fog…errh I mean cloud

2009-02-11T07:40:00.007+10:00

Spotting trends is hard to do with the distraction of the ‘doom and gloom’ in the media at the moment. It can create a fog of what is really going on around us. But if we step out of the fog for a while, we may spot a fresh breeze that could change the patterns in the way ICT is used by business and individuals, and that is the continuing rise of ‘Cloud Computing’.

In you haven’t heard of the term, go to the Microsoft or IBM sites. If these heavyweights are driving the market towards cloud computing then we better pay attention. And while some may say that their sales literature creates its own haze, this is not what we are talking about. Cloud computing requires a complete rethink of the way computers are used in business (and in our personal lives). At its most basic cloud computing can be defined as the use of the internet (the ‘cloud’) to satisfy most, if not all, of your information technology and data management needs. This means, for example, that businesses will no longer purchase a vast array of local software running on local hardware (PCs and servers) but they will instead buy internet based services that perform the same tasks. Software as a Service (SaaS) offerings such as Salesforce.com have been initial steps in this direction.

Cloud computing aims to make use of the current combination of faster processing speeds, faster networks and reduced digital storage costs to deliver ‘supercomputing for the rest of us’. It does this by shifting computing power from a local computer that, powerful as it may be, is limited in speed and efficiency compared to a server farm that may number in the thousands. These economies of scale create savings, including energy and therefore greenhouse gas savings.
The main benefits of this approach are:

Stability: The implications of local computer problems or crashes are minimised as data processing and storage take place remotely. Of course network reliability remains crucial.

Speed: In crude terms cloud computing moves us from one machine working on a problem to possibly thousands doing so. This means that complex modelling and calculations (e.g. financial risk analysis, medical profiling etc.) can be done in a fraction of the time.

Accessibility: Many cloud based programmes are browser-based, meaning that you need only a web browser to access them wherever you are in the world. Some also provide phone based interfaces.

Cost: Cloud computing systems have very low start up costs as you can normally start with a low cost, perhaps even single user subscription and then expand from there. It is therefore perfectly suited to smaller business without the capital to fund upfront purchases, but may wish to scale up rapidly in the future. It is this cost efficiency factor that translates directly into Green outcomes too.

The main cloud that hangs over cloud computing (sorry about that I couldn’t resist) is with security, privacy and ease of access. Many managers may not want crucial business information stored on a server outside of their own enterprise. Security lapses and downtime for critical business processes do impact heavily and will remain a crucial issue. Supplier performance and commercial considerations will count for much. There is already one legal dispute that I am aware of underway for a cloud based supplier that entered receivership resulting in questions over data ownership with one of their clients. The resulting business disruption can be imagined quite easily.

The reason why this is important is that the rise in cloud computing will lead to more than a shake-up in the IT Department; it could have profound implications on just about every aspect of running a business. Most significant among these are:

Standardisation: Having all employees log on to cloud based applications wherever they are in an organisation, or the world, means that it will become easier to develop similar (and ultimately familiar) standards and systems across an organisation.

Collaboration: ‘Seamless Virtual Collaboration’ has always been one of the promises of the internet age. Cloud computing brings this ideal much closer by providing the essential backbone for such collaboration to take place.

Does the move towards a flatter and more open world have a chance of being mirrored inside the slower moving hierarchical structures of global corporates and government organisations via cloud computing….perhaps? It certainly has the potential to support that change.

It remains to be seen whether cloud computing will live up to the current hype surrounding it. What is clear, however, is that having a cloud computing strategy in place could be a very smart move for the year(s) to come.

So if you can see through the fog of doom and gloom to the cloud above, this may very well help to reduce costs and increase adaptability, at a time when we are seeing out our economic winter and preparing for our next spring.

Economic Downturn: Who’s walking and who’s wounded…early views

2009-01-18T23:46:00.003+10:00

It maybe too early to ‘post mortem’ the spate of job losses over the past few months, especially since it is not clear whether we’ve ‘hit bottom’ but it is possible to discern some general trends. Chief among these is the perception that ‘Generation Y’ (generally considered to be those born in the 1980’s and 1990’s) is going to have a tougher time than most.

A recent survey, conducted by the Young Emerging Professionals Initiative (YEP) of Spectrum Knowledge and the University of California Fullerton, showed that the Boomer and X generations have some very negative perceptions about the performance of Y’s in the workplace. These include:

Members of Generation Y are looking for instant gratification and therefore struggle to stick with projects over the long term.

Members of Generation Y feel entitled to job benefits that they have not yet earned.

Members of Generation Y are unwilling to ‘pay their dues’ in the workplace
(The full text of the ‘Gen Y Perceptions Study’ can be downloaded here)

It should be stressed that these points are perceptions and that most Generation Y workers would probably disagree. However, perceptions can create realities and we are starting to see something that is looking suspiciously like revenge!

Several Australian newspapers are reporting that Y’s are being targeted for redundancy ahead of their Boomer and X’er counterparts. It is difficult to determine, beyond anecdotal evidence, whether this is really the case but it does raise interesting issues about how perceptions can actually have ‘real life’ consequences in the workplace. It is clear that at least some managers are thinking about using the current uncertainty to have a go at Generation Y’s perceived lack of commitment and loyalty. This is clearly borne out in the some of the articles discussing the issue. Business Day minces no words with its headline “Less Loyal gen Ys in firing line!” An interviewee in The Australian weighs in with: “…an employer isn't going to make a commitment to you in tough times if you weren't prepared to make a commitment to the employer in good times.”

The trend (if it is indeed what it is) towards the reaffirmation of ‘traditional’ business values could have interesting implications in the field of change management. This also raises questions regarding recruitment practices, and workforce planning. It is perhaps up to every manager to decide whether this is a good thing, but it seems that the move towards the much heralded ‘Brave New World of Business’ supposedly spearheaded by Generation Y is not going to happen without at least some resistance.

Perhaps that new office design with the beanbags and foosball table should go on hold...at least for this quarter!

Benchmarking Australia’s IT Use

2008-07-10T15:11:00.000+10:00

Australia is ranked 7^th and 14^th in two recent reports on its effective use of information technology.

Consistently in front of Australia in both reports are the US, Sweden, Switzerland and Finland. Some note was made of the Nordic countries and Korea for their recent efforts.

The domestically perceived weakness of the broadband infrastructure, the associated industry haggles in telecommunications and the ongoing concerns over the quality of secondary and tertiary education may be impediments to moving up the scale.

The two published reports, one from the London School of Economics(i) and the other by the World Economic Forum(ii), assess countries according to their ‘connectivity', i.e. the extent to which a country's effective use of ICT is set in relation to its overall economic performance.

Of emerging interest is a ranking of how IT equipment is being dealt with after the end of its useful life. Our next news item profiles on one aspect of Green IT, how IT Equipment is being disposed of globally and how Australia ranks in this regard.

(i) Call to arms for governments worldwide to improve connectivity / Sandra Rossi. - In: Computerworld. - 1 February 2008.

(ii) UK relegated from ICT premier league / David Meyer. - In: ZDNet Australia. - 11 April 2008.

No More Technology in IT Department

2008-05-04T15:03:00.000+10:00

Gartner looks into the future, or tries to define it, again. In “Traditional IT department to disappear in radical five year transition”, Gartner proposes that successful IT organisations will divide into at least two parts with one focused on technology sourcing and delivery while the other will focus on architecture and change. Their names may change from IT departments to process or innovation departments.

Previously we pointed to an article on Gartner’s vision of the future of organisational IT, which speculated that in five years time, commoditisation of products and services will lead to the demise of the technical functions of that unit of the business. Its focus will turn towards processes and innovation instead. Google sees the need for IT personnel to embrace this development or end up being pushed into obsolescence. According to Google, the responsibility of the company’s IT people will be “coaching users as to the best tools to choose to enhance their performance on the job”. Sounds something like “governance”?

Following on from the above, at Gartner’s ITXPO, advice was that the consumerisation of IT is now to “cause significant disruption in the technology sector”. The response to that was to be found in encouraging corporate IT to become innovative ("The IT Revolution Needs You",2007). Subsequently, it was speculated that commoditisation of products and services threatens the subsistence of the entirely technical functions of corporate IT (see above). More precisely, Gartner has now identified 14 delivery models that have to be taken into consideration, which will transform the IT industry. In effect, these will, in many areas, supplant the traditional lifecycle of systems and applications, where the user "owned" at least part of the infrastructure, and retained “risk and responsibility for the overall design and management”. These “alternative” delivery models are meant to bypass the corporate IT function, and soon may be mainstream.

Dispute Over Extent of IT Legal Disputes

2008-04-14T14:57:00.000+10:00

A new survey into the scope and frequency of legal disputes over IT-related contracts in Australia has raised some debate, with Gartner contradicting the findings and recommendations in the Australian IT of 25 September 2007.

The survey in question had been launched jointly by the Australian Computer Society (ACS), the Project Management Institute (PMI), and The Institute of Arbitrators and Mediators Australia (IAMA) mid last year. Furthermore, the investigation was backed up by a host of other concerned industry groups: Australian Corporate Lawyers’ Association (ACLA), Australian Information Industry Association (AIIA), Software Queensland, Multimedia Victoria (MMV) and The Australian Telecommunications Users Group (ATUG), and has apparently been seconded by the Commonwealth Minister for Communications, Information Technology and the Arts.

IAMA is promoting Alternative Dispute Resolution for the ICT industry and its clients through a special interest group. Some results of that survey have been published in the first newsletter of this IAMA SIG earlier this year. According to the Australian IT of 27 September an “Alternative Dispute Resolution (ADR) strategy aimed at the ICT industry jointly developed by the ACS and IAMA” has been launched last week. The strategy’s desirability was stressed by an IAMA representative pointing out that arbitration was more common, for example, in the UK and the US, where mediators had also statutory powers. The survey had been responded to by 400 companies, reporting 1,200 contracts out of which half resulted in some dispute. The proportion of those conflicts that escalated to formal arbitration was considered very high by the IAMA, especially since in one third of those cases the legal costs exceeded half a million dollars. Both poor project management and insufficient contracts are to be blamed for the severity of these quarrels.

Gartner’s view on the matter was entirely different, despite its research having looked at a different sample, i.e. companies from the Asia-Pacific region, and a different scope, i.e. technology sourcing. They said that only 3 per cent of contracts ended up in legal disputes, and that this was mainly due to alleged breach of software licence agreements. And of course, arbitration had been recommended by Gartner to their clients for ages already.

Disputes over intellectual property violations in relation to software seem to be rather rare. In contrast, Information Professionals’ own litigation support experience is that cases generally result from a combination of poor project management and/or insufficient contracts, consistent with the IAMA findings.

Heresy From Olde World of Banking

2008-03-10T14:53:00.000+10:00

Technology in the financial industry would normally bring about thinking of mainframe computers, large projects, Basel II and well structured governance, however, that is being challenged. At the Technology & Innovation – the Future of Banking & Financial Services Conference in October, new Suncorp CIO, Jeff Smith outlined his view of IT governance. He believes that, applied to projects, it is overemphasised and hence in the end counterproductive. Structuring projects in a linear fashion with phases, gateways and sign-offs should be abandoned. Instead, by applying what is called agile methods, smaller teams should be working within short timeframes, undisturbed during that period. At the end of a month the work would be reviewed, corrections applied, or possibly cancelled if its value cannot be demonstrated. He also claimed that banks were becoming “more agile organisations” conducting more and more projects of six months duration only. These limited projects would aim to retain as much intellectual capital as possible in the company, strictly minimising outsourcing or offshoring of development and functions. As could be expected, the title of his keynote speech began with the words “Transformational change …”.

Innovation, Organisations and IT - New Views

2008-02-25T14:42:00.001+10:00

Most organisations are continuously challenged, seeking to stay ahead through innovation. In his new book, the “The future of management”, Gary Hamel says that 20th century management thinking and practices are no longer appropriate for modern day challenges. He declares that the problem of management in the 19th and 20th centuries, efficiency, has been resolved for the most part. Efficiency is based on conformity and compliance with standards, guidelines and protocols, and as such may not generate innovation. Hamel holds that wealth is being created through innovation. Innovation requires “diversity in thought and action” rather than executing processes in a uniform fashion over and over again. In this sense, Hamel defines the task of management as amplifying individual capabilities, and aggregating them for accomplishing complex undertakings. Thus, managers are called to foster adaptability—build systems that change by themselves; innovation—bring forth the resourcefulness of people; and engagement—sustain conditions under which people can bring their capabilities to bear. Hamel thinks that information technologies, especially the communicative and collaborative applications labeled as web 2.0 will be instrumental and crucial in this context. Nonetheless, he blames the IT functions in enterprises to be obstacles to utilising technology for innovation; many IT managers are unwilling to change priorities and respond due to work overload, and changes are always put under the rigid and mandated requirements of security and controls.

Carried by similar considerations, but aiming at adaptability or agility in government, are the arguments put forward by the Victorian State Services authority in cooperation with a UK think tank. Here, the authors have become critical with the efficiency drive of the recent government reform wave of the New Public Management. They propose, similar to Hamel, to reshape organisations by “reducing hierarchy, increasing autonomy and encouraging diversity” for establishing the conditions for agility. Agility for government is made up of an outward-oriented culture, alignment of systems and policy, an adaptable workforce, timely and effective decision-making, and productive information use. The proponents of agile government are however critical regarding the function of ICT. They acknowledge the peril of information overload on the one hand, while decisions will often have to be based on incomplete information, on the other. The authors emphasise that government is inherently different from private business. Hence, agility needs to be seen within the constraints of their political-administrative environment. Governments are accountable, need to consider results across agencies and beyond, retain stability during change, and have to determine when to act and how.

Against these broad deliberations, advice given to IT managers by a company called Intelligent Business Research Services (IBRS), pales through its rather conservative view of affairs. Though the report cautions against the assumption that IT administrative systems will not bring strategic advantage, it does not seem to encourage variety and novelty. The ten exemplary features of CIOs highlighted in the report are: “focusing on core business and IT issues, having strong execution skills, attaining business intimacy, taking a long-term view, being cautiously experimental, discouraging unnecessary technology diversity, being product and service-oriented, building strong teams, using strategic vendors and scoring vendors’ performance”.

Is Gary Hamel right in his verdict of the IT organisation, or is it futile to expect visionaries and engineers to find common ground?

Gartner Symposium ITxpo - November 2007

2008-02-18T09:54:00.004+10:00

Gartner Symposium ITxpo (Sydney 20-23 November 2007), held annually is touted as “the single most trusted source of knowledge and advice in the technology world”. Press coverage posted diverse views. We summarise some key points here.

Disruptive discontinuities and altered identities

According to Gartner, dramatic shifts will occur in the near future (up to 2011) which have been termed “Disruptive Discontinuities”, driving new ways for acquiring and overseeing information technology. They are likely to question the business models of suppliers, as well as the ways in which technology is used by their clients. In particular:

Software as a service (SaaS) allows business units to detach themselves from the central IT department
Web 2.0 proposes new ways of communication and collaboration, and may change ways of doing business
“Global-class systems”, i.e., massive platforms that deploy applications well beyond the enterprise
Consumerisation means that experiences from the private and leisure use of information technology are being transferred into the enterprise, along with corresponding demands and expectations on IT departments.
Open source software underpins each of the other four discontinuities.

These discontinuities should be integrated into the enterprise by:

The central IT function not be catering for the organisation entirely; due to the availability of services over the internet, policies and governance principles should be reassessed.
Senior IT staff should forget about their affiliation with technology and identify themselves with their vertical industry.
Adopting web 2.0 technologies into the organisation for experimenting with new forms of communication and value creation.
Empowering users to explore web-based applications for potential innovation
Differentiating users according to their responsibilities and requirements to amplify their individual effectiveness.
The IT unit to focus on its core capabilities, while users assume responsibility for applications accessed over the web. IT managers should follow this direction, or face obliteration.

Economy and government

Gartner analysts branched into economics and policy advice, firstly with the view that APAC (Asia-Pacific), is supposed to sustain its momentum of economic growth, unaffected by developments to the contrary in the United States and Europe. IT budgets in Asia are to increase during the next three years at a rate of nine per cent per annum. On the other hand, Australia’s prospects for growth are forecast to deteriorate, since it is based on the resources boom and not on productivity and innovation.Secondly, Gartner recommended that whole-of-government CIOs in Australia have the same status as in the United States. This would make government CIOs affiliated with the government in office, comparable to secretaries, and in case of a change of government would have to move on. Gartner proposes that government CIOs should become CIO 2.0. This encompasses diverse roles, such as “venture capitalist, economist and political visionary”. Instead of being a manager of supporting infrastructure, the CIO would mediate the department’s requirements with external suppliers, while projects would not be owned by the IT function, but by the business units within a department. The CIO 2.0 might also have been devised as a remedy for procurement challenges. In the past governments have been regarded as homogenous, while they actually are an assemblage of vertical industries leading to departments adopting applications that did not fit them. This has lead to Gartner predicting that “70 percent of whole-of-government integrations will fail by 2010”.

Web 2.0 and Security 3.0

Analysts warned IT managers not to prevent users from accessing web 2.0 applications. Applying zero tolerance on security, meant foregoing opportunities to new ways of operating and resulting in high costs protecting against threats that are not of material consequence. Nowadays, security should be understood by business units rather than IT, and viewed as a managed risk. The alternative approach is now labelled as Security 3.0. Security delivered against any potential threat is difficult and costly yet this is typical. Security 3.0 entails determining acceptable risks and looking beyond the current state by anticipating future threats. It is suggested that this would allow security professionals to stay further ahead in the security “arms race”, where each time a defence has been implemented this is soon being cancelled out by a new means of attack.

TaaS and software prices

Companies’ budgets are said to be under attack by software providers with shrewd licensing and discounting tactics. Veiled behind the offer of a considerable discount on the initial purchase price, usage rights are vague, which may affect licensing costs adversely for the client. Then, companies may be locked into paying ongoing maintenance and support fees, as well as mandatory upgrade cycles with additional charges. However, conditions are supposedly to change for the better within the next ten years. Stronger bargaining positions for the purchaser emerge from business process outsourcing, software-as-a-service, open source software, and the supply of maintenance by third parties, plus competition by new companies from India, China and Brazil. By 2011, a significant portion of IT products is predicted to be sold as a service. This mode of delivery, re-badged by Gartner as technology as a service (TaaS), will upset present market conditions.

Take away

Other themes touched on were Green IT, the emergence and impact of the virtual generation, or Generation V, in particular communication and consumption patterns, as well as the agendas of CIOs for the next three years. This included joining the Business Intelligence bandwagon, which recently attracted attention through acquisition by major developers. So, in summary, what did attendees receive? Firstly, new or altered “terms”, such as ‘TaaS’ instead of SaaS, and the category of ‘global class systems’! Secondly, there was some ‘vendor’ bashing. Thirdly, a name for self promotion, the ‘Government CIO 2.0’, which has been borrowed from a briefing by Deloitte. ‘Security 3.0’ appears to be a daring proposition, and it remains to be seen whether it will gain acceptance. Still, with all this versioning going on—Web 2.0, CIO 2.0, Security 3.0—presenters failed to mention the big one: Bubble 2.0.