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On-Demand Application Integration for Agile Business Strategy Rick Dove Interim Executive, Change Management Paradigm Shift International [email protected] Rick Dove • Interim Exec/Change Mgmnt: - CIO at Silterra, 1999-2002 - President at ProMetal, 2002-2003 • Carnegie Mellon: BSEE, UC Berkeley: unfinished PhD in Computer Science • 30+ years of start-ups and turnarounds • Co-founder of Agile Enterprise concept in '91 at Lehigh Univ. • Author: "Response Ability: the Language, Structure, and Culture of Agile Enterprise", Wiley, 2001. • Book WIP: "Value Propositioning: Talent of Champions" • Lives on Lama Mountain, Taos, New Mexico, at 8200 feet ......Land of Enchantment. • www.parshift.com Photo: Brian Zick Note • I'll just skim thru some slides in your proceedings. They are there for the record, and would take too long in detail, but they set the stage. • I'll focus on a few, to clarify issues of On Demand learned at Silterra, adding a few that speak to higher level purpose, results, and lessons learned. • I'll be here the entire conference if you want to discuss what I don't cover now. Background • October 1999 (dot.com bubbling, semi-slump ending) • Silterra is a start-up semiconductor foundry in Malaysia, with interim USA top management and ex-pat process experts • Funded mainly by government designated sources • Mixed Cultures: 60% Malay, 30% Chinese, 10% Indian • CEO has a vision for a preemptive modern-day competitor... Goal: Build a uniquely superior foundry business Strat: Best practices + Agile IT infrastructure under logistics • CIO (interim exec) is writing book on systems agility... Goal: Meet CEO's goals with Agile Systems design principles Strat: Design differentiation strategy and apply principles Opportunity New company: No operating culture, performance metrics, or infrastructure legacy. + New technology: Internet. Broadband. PDAs. XML. Enterprise IT. eBusiness. + New environment: More uncertain, connected, knowledgeable. Faster. Always changing. + New customer expectations: Personal attention. Immediate response. Self service. Lots of information. = New Opportunity to design a company fit to the new environment, and focused on new values Guiding Concepts InfoTech must not dictate or limit corporate capability • Remove the ERP/Technology lock-in • Provide freedom to use best tools • Enable fast insert of new technology in support of strategy InfoTech must exploit new electronic connectivity opportunity • Real-time visibility of all enterprise activity and information • Everyone wired for immediate self-service • Dashboards and "agents" to bring focus on desired information • Assist and structure key management processes • Quick connections to information trading partners InfoTech shifts from financial reporting to enterprise infrastructure • View as a logistics service, not as a financial function • Distribute control and responsibility to the users Refined Objectives Supporting strategy with best-fit tools is enabled rather than inhibited Switching/upgrading to new technology and applications is enabled rather than inhibited. Accommodating custom electronic "partner" relationships is enabled rather than inhibited. Integrating new plants, facilities, mergers, and acquisitions is enabled rather than inhibited. All information is accessible electronically to those authorized to see it. Electronic "dashboards" will provide real-time vision and monitoring of operational and strategic activities. Provide competitive advantage through enterprise visibility, adaptability, and technology Rules of Engagement Get the best plans and designs and technologies possible, wherever they may be found. For implementation and evolution, employ internal and local resources whenever possible, else transfer responsibility to local resources as fast as possible. Build internal spec/test/management/operating capability, and outsource implementation projects (locally). View and install IT as a logistics function. Organize strategic, tactical, and distributed elements. Make up the rules as you go along, and refine them until they work. ERP/HRM Implementation (To show metric results of a process designed with agile principles) Wish ERP in 12 mos working Imp=80% of license cost Budget $10 Million (5+5) Typical Imp 24-36 mos 200-300% $15-25 Million Actual with OSFM 12 mos working 75-85% $9 Million HRM (PS) in 6 mos 12-18 mos 5 mos HOW?? – – – – – – – Unique approach to integration methodology and management Adherence to methodology (ie, effective management) BSAs utilizing MBW tool to develop business processes BSAs taking responsibility for integrating ERP with users Bus/XML architecture connecting ERP with HRM Expertise to help integrate ERP with CIM (Triniti) Expertise in agile system design/implementation (Dove/Guglielmo) BSA = Business Systems Analyst MBW = Management by Wire (application from www.ecgsoft.com) General Approach • • • • • • • Establish Goals Develop Strategic Themes Build Differentiation Strategy Identify Phase 1 and 2 Activities Set Objectives Based on Dynamic Responsiveness Employ Agile Design Principles Embed Change Proficiency in the Culture Tools: Consistent Principles and Concept Representation • Porter Strategic Differentiation (theme/activity dependency web) • Balanced Score Card (BSC) with 4-Tier Strategy Map • Response Situation Analysis (8 change domains) • RRS Architecture (10 design principles) • Agile Security Framework (12 design principles) BSC Strategy Map Financial goals are attained because we deliver value to customers Lowest Cost Highest Quality Profitable Growth Premier Service which comes from Process key internal processes Process Mastery Transparency (core competencies) which are based on knowledge and knowledgeable people Competency Discipline Competitive Tech Process Development Culture Innovation What comes out the top is caused by what's at the bottom. Goal Linkage - Cause & Effect Financial goals are attained because we deliver value to customers Lowest Cost Highest Quality Profitable Growth Premier Service which comes from Process key internal processes Process Mastery Transparency (core competencies) which are based on knowledge and knowledgeable people Competency Discipline Competitive Tech Process Development Culture Innovation What comes out the top is caused by what's at the bottom. Initial IT projects target most-in-need enabling areas. Differentiation Strategy • A set of interacting activities which makes us – different than our competitors, – valuable to our customers, and – difficult to copy. • Important because competition on operational efficiency alone – converges on common capabilities and – results in decreasing profits • An activity web is a tool for – building a differentiation strategy and – communicating a differentiation strategy Lines show mutual dependencies Strategy comes from activity interaction Cultural Engineering Mgmnt IT Infrastruct. Mgmnt IT Adaptation Mgmnt Service Interaction Mgmnt Strategy Devel'ment Mgmnt Talent Relationship Mgmnt Customer Satisfaction Mgmnt Strategy Delivery Mgmnt Leadership Service Agile Systems Mgmnt Customer Compatible Transparent Process Devel'ment Mgmnt Production Mastery Mgmnt Mix and Capacity Mgmnt Security Evolution Mgmnt - Strategic Themes - Agile Activities – Initial - Agile Activities - Later Best Value Trustworthy Reliable Activity Web Differentiation Strategy Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility 8 Key Activities consists of Knowledge Management Response Ability activities are activities are Service Integration Mgmnt apps are Strategy Delivery Mgmnt apps are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyStaff MyProjects MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by Response Situation Analysis Proactive/Reactive Analysis Framework achieved with architecture that is Reusable Reconfigurable Scalable Response-Ability Design Principles Agile Strategy Concept Linkage Cultural Engineering Mgmnt IT Adaptation Mgmnt IT Infrastruct. Mgmnt Strategy Devel'ment Mgmnt Service Interaction Mgmnt Customer Satisfaction Mgmnt Strategy Delivery Mgmnt Leadership Service Talent Activity: Relationship Mgmnt Goal: StrategyAgile Delivery Management (MyProjects) Customer Systems Real-time transparency of strategy Transparent implementation activity Mgmnt Compatible Objectives:Process Web interaction with all strategy implementation activity Devel'ment Respond faster to strategy changes and project difficulties Mgmnt Build and maintain management discipline and culture Best Production Tie resource Mix and deployment Trustworthyto strategic goals Value Mastery Capacity Mgmnt Increase success rate of strategies Mgmnt Manage the achievement of Reliable goals and objectives effectively Security Evolution Mgmnt Activity: Strategy Delivery Management (MyProjects) • Web interaction/dashboard for all strategy implementation activity • Project definition, strategic value, approval, real-time monitoring • Resource application, scheduling, conflicts (internal data analysis) • Justification dynamics monitoring, conflicts (external data analysis) • Cultural Dev: BSC, RS Analysis, RRS Design, Personal Performance Real-time X-Ray of All Strategy Implementation Activity My Projects ProjectProject Project Project Project Project Project Project ProjectProject Project Project Project Project Project Project Dynamic External Factors • Customers • Technology • Market Cycles • Competition • etc Dynamic Internal Factors Strategies • Knowledge • People • Infrastructure • Resources • etc Performance Metrics Process Organization Information Cultural Engineering Mgmnt IT Adaptation Mgmnt Strategy Devel'ment Mgmnt Talent Activity: Relationship Mgmnt Goal: IT Infrastruct. Mgmnt Service Interaction Mgmnt Customer Satisfaction Mgmnt Strategy Delivery Mgmnt Leadership Service Customer Satisfaction Management Agile Customer satisfaction Systems Real-time view of customer activity and info Transparent Mgmnt Compatible Objectives:Process Web interaction with all ops/eng/service information Devel'ment Self-service access to information and knowledge Mgmnt User customizable reports and data formatting Best alerts Production User customizable Mix and event monitoring and Trustworthy Value Mastery Capacity Mgmnt Individualized security-level and access control Mgmnt Management of service event resolution and quality Reliable Security Quickly accommodate new features and new technology Evolution Mgmnt Help reduce service costs by 50% MyFab Serves Everybody Customers Engineering Data Bases Access Analytical Data Oracle FIN, OSFM, etc Load And Oracle Data CADET+ Manufact'ing Web Access Web Access Service Management Oracle CRM APS, Etc Feature Prototyper Epicentric Apps Web Access Web Access Pre-Release Features Direct Access Collaborative Analysis Planning Web Access Execs, Etc Web Access Document Search User & Security Validation & Retreival DataPower Document Control Sales/Mkt Web Access MyFab Portal Access Oracle APIs Engineering Web Access Security Data Base Finance Customer Eng'ring Penetrates Like X-Ray into All Customer Satisfaction Activity Customers Engineering Data Bases Access Analytical Data Oracle FIN, OSFM, etc Load And Oracle Data CADET+ Manufact'ing Web Access Web Access Service Management Oracle CRM APS, Etc Feature Prototyper Epicentric Apps Web Access Web Access Pre-Release Features Direct Access Collaborative Analysis Planning Web Access Execs, Etc Web Access Document Search User & Security Validation & Retreival DataPower Document Control Sales/Mkt Web Access MyFab Portal Access Oracle APIs Engineering Web Access Security Data Base Finance Customer Eng'ring Intelligent Transparency Customers Engineering Data Bases Web Access Manufact'ing Access Analytical Data . . . . . . . Web . . Access Oracle FIN, Load And Oracle . .Data . . . . . . . . . Web . . . Access .. Engineering OSFM, etc . . . . . . . . . . . . . . . . . . . . ...................... Service Management . . . .. . . . . . . . Access CADET+ Sales/Mkt . . . . . . . . . . . . Web . . . . . . . . . .MyFab . . . . . . . . . . . . . . . Web Access Access Oracle APIs Portal . . . . . . . . . . . .. . . . . . . . . . . . . Oracle CRM Pre-Release Features Planning . . . . . . . . . . . . . . . . . . . . . . . Web . Access APS, Etc . . . . . . . . . . . . . . . . . Access . . . . .Web Direct Access .................... Feature Execs, Etc Collaborative . . . . . . . . . . . .Web . . .Access . Prototyper Analysis ......... Epicentric Document Search User & Security Finance Validation & Retreival Apps DataPower Document Control Security Data Base Customer Eng'ring Intelligent Transparency Customers Engineering Data Bases Access Analytical Data Oracle FIN, OSFM, etc Load And Oracle Data CADET+ Manufact'ing Web Access Web Access Service Management Oracle CRM APS, Etc Feature Prototyper Epicentric Apps Web Access Web Access Pre-Release Features Direct Access Collaborative Analysis Planning Web Access Execs, Etc Web Access Document Search User & Security Validation & Retreival DataPower Document Control Sales/Mkt Web Access MyFab Portal Access Oracle APIs Engineering Web Access Security Data Base Finance Customer Eng'ring Cultural Engineering Mgmnt IT Adaptation Mgmnt IT Infrastruct. Mgmnt Strategy Devel'ment Mgmnt Service Interaction Mgmnt Customer Satisfaction Mgmnt Strategy Delivery Mgmnt Leadership Service Activity: Customer Service Interaction Management Talent Agile Relationship Goal: Faster, cheaper, better customer interaction Customer Systems Mgmnt Transparent Mgmnt Compatible Objectives: Faster access to more useful data and knowledge Process Faster resolution of problems and opportunities Devel'ment Mgmnt Reduced elapsed time/cost of new-business prototypes cost of customer satisfaction activity Best Production Reduced Mix and Trustworthy Mastery Build higher Capacity value relationships with Value lower service costs Mgmnt Mgmnt Security Evolution Mgmnt Reliable Order Wafers MyFab IT Infrastructure MyStaff Facilitation Infrastructure Activity: Customer Service Interaction Management (MyStaff) • Rolling-responsibility service-centric operating strategy. • No customer-service department, per se, everybody services. • Employees show best-interest initiative and initiate service contact. • Customer has access to anyone, and to any information (must earn the right) • Video access to production floor work-in-process and process operators • Mi casa, su casa!!! Customer access by phone/web/email/pager/PDA/etc 7x24 Rolling Responsibility, Decisions, and Best-Interest Initiative Customer Guide Facilitates Utilization Customer serviced directly by responsible person Cultural Engineering Mgmnt IT Adaptation Mgmnt IT Infrastruct. Mgmnt Strategy Devel'ment Mgmnt Service Interaction Mgmnt Customer Satisfaction Mgmnt Strategy Delivery Mgmnt Leadership Service Talent Activity: Relationship Mgmnt Goal: IT Infrastructure Management Agile Customer Systems Support new business process/strategy quickly/effectively Transparent Mgmnt Compatible Objectives:Process Highly adaptable enterprise IT architecture Devel'ment Bring new IT applications into the system quickly Mgmnt Replace old IT applications without disruption Best sources quickly Production Incorporate Mix and new business-units and data Trustworthy Value Mastery Capacity Mgmnt EnableMgmnt a multi-vendor enterprise IT system Security Evolution Mgmnt Reliable Activity: IT Infrastructure Management • Bus-Centric Plug-and-Play Component Architecture • MyBus* and MyETL* Infrastructure Components (* MyBus/MyETL: Tuesday 9:45 presentation by Gene Guglielmo) MyFab Oracle 11i Aps Oracle ERP dB Adexa Planner People Soft My Projects Other Apps Other dBases XML Enterprise Bus Fab #1 Fab #n A&T #1 A&T #n A&T = Assembly and Test Plant Like Component Stereo... Loosely-Coupled Components Facilitate Upgrade and System Change Cultural Engineering Mgmnt IT Infrastruct. Mgmnt IT Adaptation Mgmnt Strategy Devel'ment Mgmnt Service Interaction Mgmnt Customer Satisfaction Mgmnt Strategy Delivery Mgmnt Leadership Service Talent Activity: Relationship Mgmnt Goal: IT Adaptation Management Agile Customer Transparent Faster,Systems cheaper, better implementation of IT projects Mgmnt Compatible Objectives:Process Reduce cost/time due to mismatch of skills and technology Devel'ment Gain best-fit current technology solutions Mgmnt Eliminate need for scarce development-staff resources Best Production Provide Mixon-time, and Trustworthy on-budget, on-spec controlled results Value Mastery Mgmnt Capacity Mgmnt Security Evolution Mgmnt Reliable Full Functionality • Procedures • Work Flow • Rules • Data Definitions Full Functionality • Software • Hardware Spec • Training • Implementation Full Functionality • Software • Hardware Spec • Training • Implementation Full Functionality • Software • Hardware Spec • Training • Implementation Develop Business Rules and Data Defs Configure ERP Applications Configure Database Configure/Build Bus Adaptors Days 0-60 Days 0-60 Days 0-15 60 days bsa bsa bsa bsa V1 ……..V1 V2 ……..V2 V3 ……..V3 61-120 bsa V1…….. bsa V1 61-120 dba V2…….. dba V2 16-30 IfT V3…….. IfT V3 bsa 121-180 bsa …….. bsa V1 V1 121-180 dba …….. dba V2 V2 31-45 IfT …….. IfT V3 V3 Step A Step B Step C Step D B-Rules Mgr bsa bsa bsa 3-Phases Template Alpha Beta • Encapsulation of projects promotes plugable • Implementation strategy “encapsulates” each team, encapsulation of functional components. making them solely/totally responsible for functionality. bsa = business systems analyst, V1/V2/V3 = different vendors, dba = database administrator, IfT = IT infrastructure technician. © 2001, Response Ability: The language, Structure, and Culture of the Agile Enterprise, Rick Dove, Wiley Agile Implementation Process Activity: IT Adaptation Management • Process-management approach to IT development Steering Committee Budget Owner Program Manager IT Project Manager IT Support Resources IT Infrastructure Operations BSA Outside Development Resources Develop Architecture and Design Develop Business Rules and Specs Manage Outsourced Development Conduct Testing and User Training ssa bsa Days 0-90 Days 60-90 ssa 120 days ssa bsa 60 days bsa Prog. Mgr Proj. Mgr ssa ssa ssa ssa ssa bsa bsa 91-180 bsa bsa bsa ……..V2 V2 bsa V2…….. bsa V2 181-270 bsa V2 ……..bsa V2 COTS (ERP) Project Example V3 ……..V3 3-Phases Template 150-180 IT V3…….. IT V3 Alpha 240-270 IT ……..IT V3 V3 Beta Steering Committee Budget Owner Program Manager IT Project Manager IT Support Resources IT Infrastructure Operations BSA Outside Development Resources Develop Architecture and Design Develop Business Rules and Specs Manage Outsourced Development Conduct Testing and User Training ssa bsa Days 0-90 Days 60-90 ssa 120 days ssa bsa 60 days bsa Prog. Mgr Proj. Mgr ssa ssa ssa ssa ssa bsa bsa 91-180 bsa bsa bsa ……..V2 V2 bsa V2…….. bsa V2 181-270 bsa V2 ……..bsa V2 V3 ……..V3 3-Phases Template 150-180 IT V3…….. IT V3 Alpha 240-270 IT ……..IT V3 V3 Beta Cultural Engineering Mgmnt Activity: Talent Relationship Management IT expertise Service Goal: IT Utilize outside effectivelyCustomer and seamlessly Strategy Infrastruct. Satisfaction Adaptation Interaction Delivery Objectives: Obtain and apply specialty expertise rapidly Mgmnt Mgmnt Mgmnt Mgmnt Mgmnt Maximize productivity Effective knowledge transfer and diffusion Strategy Leadership Devel'ment Employee-like behavior (loyalty, trust, urgency, etc) Service Mgmnt Talent Relationship Mgmnt Agile Systems Mgmnt Customer Compatible Transparent Process Devel'ment Mgmnt Production Mastery Mgmnt Mix and Capacity Mgmnt Best Value Trustworthy Security Evolution Mgmnt Reliable Activity: Security Evolution Management Cultural Engineering Goal: Multi-tiered Customer-Selectable Leadership Security Mgmnt Objectives: Assumption of entry (no faith in perimeter defenses) Early intrusion and tamper detection Partitioned vulnerability/intrusion containment IT Customer IT Service Strategy Effective damage control and rapid recovery Delivery Infrastruct. Satisfaction Adaptation Interaction Mgmnt Mgmnt Mgmnt Enlightened Mgmnt perimeter Mgmnt and insider defense shields Anticipatory defenses and high agility Strategy Accommodate any customer security requirement Leadership Devel'ment Service Mgmnt Talent Relationship Mgmnt Agile Systems Mgmnt Customer Compatible Transparent Process Devel'ment Mgmnt Production Mastery Mgmnt Mix and Capacity Mgmnt Best Value Trustworthy Security Evolution Mgmnt Reliable Activity: Security Evolution Management Agile Security Reactive Principles Proactive Principles Detection – Detect intrusion and damage quickly Vulnerability Anticipation – Identify/fix vulnerabilities before exploitation, sense indirect indicators of exploitation Containment – Minimize potential Prudence – Correct vulnerabilities damage scope before exploitation Mitigation – Minimize potential damage magnitude Transformation – Change randomly the elements/nature of security system Assessment – Understand what has been damaged and how Recovery – Repair damage quickly Threat/Risk Anticipation – Identify and counter threats and risks before exploitation Migration – Continuous upgrade of security strategy and components Accountability (Reactive) – Identify the perpetrators forensically, after damage Accountability (Proactive) – Identify perpetrators with traps, glass houses, disinformation, etc, before damage © 2004, Rick Dove, paper-in-process: Agile Security: New Principles For A New Age Cultural Engineering Mgmnt Activity: Agile Systems Management Goal: Systems designed to accommodate change IT for creating/maintaining Customer IT Develop skills Service Objectives: adaptable systems Strategy Infrastruct. Satisfaction Adaptation Interaction Delivery IT systems Mgmnt Mgmnt Mgmnt Highly adaptable Mgmnt Mgmnt Rapid production process creation Readily employed external expertise Strategy Leadership Devel'ment Delivery commitments unaffected Service by the unexpected Mgmnt Talent Relationship Mgmnt Agile Systems Mgmnt Customer Compatible Transparent Process Devel'ment Mgmnt Production Mastery Mgmnt Mix and Capacity Mgmnt Best Value Trustworthy Security Evolution Mgmnt Reliable Activity: Agile Systems Management Use Response Situation Analysis to define objectives: Proactive Reactive ▪ Creation ▪ Correction ▪ Improvement ▪ Variation ▪ Migration ▪ Expansion ▪ Modification ▪ Reconfiguration Use Reusable/Reconfigurable/Scalable (RRS) principles to design systems: ▪ Encapsulated Modularity ▪ Evolving Framework ▪ Plug Compatibility ▪ Redundancy/Diversity ▪ Facilitated Reuse ▪ Elastic Capacity ▪ Peer-Peer Interaction ▪ Distributed Control/Information ▪ Deferred Commitment ▪ Self Organization Designate management responsibilities for maintenance of system... ▪ Frameworks ▪ Components ▪ Configurations ▪ Component Inventories Lines show key dependencies Strategy comes from activity interaction Cultural Engineering Mgmnt IT Infrastruct. Mgmnt IT Adaptation Mgmnt Service Interaction Mgmnt Strategy Devel'ment Mgmnt Talent Relationship Mgmnt Customer Satisfaction Mgmnt Strategy Delivery Mgmnt Leadership Service Agile Systems Mgmnt Customer Compatible Transparent Process Devel'ment Mgmnt Production Mastery Mgmnt Mix and Capacity Mgmnt Security Evolution Mgmnt - Strategic Themes - Agile Activities – Initial - Agile Activities - Later Best Value Trustworthy Reliable Activity Web Differentiation Strategy Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are activities are Service Integration Mgmnt apps are Strategy Delivery Mgmnt apps are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyStaff MyProjects MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by Response Situation Analysis Proactive/Reactive Analysis Framework achieved with architecture that is Reusable Reconfigurable Scalable Response-Ability Design Principles Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are activities are Service Integration Mgmnt apps are Strategy Delivery Mgmnt apps are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyStaff MyProjects MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by with proactive domains of Modification Migration Improvement Creation Response Situation Analysis achieved with architecture that is Reusable Reconfigurable Scalable with reactive domains of Correction Variation Response-Ability Design Principles Expansion Reconfiguration AGILITY IS CHANGE PROFICIENCY IN EIGHT CHANGE DOMAINS Proactive Change: – Creation Build New Capability. – Improvement Continuous, Daily Incremental Upgrade. – Migration Transformation of Basic Concepts. – Modification Add/Delete Unique Capability. Reactive Change: – Correction Failure Corrections and Alternatives. – Variation Real-Time Operating Change. – Expansion Increase/Decrease Existing Capability. – Reconfiguration Change Relationships Among Modules. Infrastructure Requirements – A Response Situation Analysis [Response Ability Metrics: c=cost, t=time, q=quality, s=scope] – Creating (acquiring) sufficiently experienced personnel resources [c,t,q,s] – Creating new customer/supplier/partner bus-link hook-up [t,q,s] – Creating business acquisition bus-link hook-up [t,q,s] – Creating an interface to a new application [t,c,s] – Creation effective interface documentation [c,q] – Improvement of interface performance [t,s] – Retention of sufficiently experienced personnel resources [t,c,q,s] – Migration to NT and COM/DCOM, etc [c,q] – Addition of new fab [q,s] – Addition of new customer/supplier/partner data interface [t,s] – Addition of new industry data standard [t,s] – Fixing an interface bug that surfaces later in time (author gone) [t,q] – Diagnosing/testing/debugging new/reconfigured interfaces [t] – Increase greatly the number of interfaced applications [s] – Reconfiguration of an interface for an application upgrade/change [c,t,q,s] – Replacing the bus vendor [c,t,s] – ... MyFab: RS Analysis – – – – – – – – – – – – – – – Addition/change of application/feature modules Addition/change of data sources Potentially large internal and external user base Changing web server platforms Availability/affordability of development/maintenance resources Security of MyFab system must lead and conform to any customer Data interface link and protocol variety accommodates any customer Uninterrupted service (DDOS immune, hot manual procedures, ...) Scalability of web service volume Device variation: Browsers and various PDA types Tracked item migration (lots→ wafers→ dies→ finished goods) Accommodate special customer needs Migration to COTS components from initial custom development Customer customizable reports, presentations, alerts ... Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are activities are Service Integration Mgmnt apps are Strategy Delivery Mgmnt apps are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyStaff MyProjects MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by with proactive domains of Modification Migration Improvement Creation Response Situation Analysis achieved with architecture that is Reusable Reconfigurable Scalable with reactive domains of Correction Variation Response-Ability Design Principles Expansion Reconfiguration Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are activities are Service Integration Mgmnt apps are Strategy Delivery Mgmnt apps are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyStaff MyProjects MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by with proactive domains of Modification Migration Improvement Creation Response Situation Analysis achieved with architecture that is with reactive domains of Correction Reusable Reconfigurable Scalable Variation Expansion Reconfiguration based on principles of Deferred Commitment Redundancy/ Diversity Plug Compatibility Facilitated Reuse SelfContained Units Evolvable Framework Elastic Capacity Self Organization Distributed Ctrl & Info Peer-Peer Interaction Business Systems System Stereo System of Components A group of components sharing a common interaction framework Company of Divisions and serving a common purpose. Framework Chain of Suppliers A set of standards constraining and enabling the interactions of compatible system components. Practice of Procedures Component A separable system sub-unit with a self-contained capability/purpose/identity, and capable of interaction with other components. Cell of Workstations © 2001, Response Ability: The language, Structure, and Culture of the Agile Enterprise, Rick Dove, Wiley Team of People Framework Examples Chaordic1 Ordered Lego Lego Lego Model Lego Glue Chaotic Lego Erector Set Note: 1 Dee Hock coined the word chaord for organisms, organizations, and systems which harmoniously exhibit characteristics of both order and chaos. The Birth of the Chaordic Century: Out of Control and Into Order, Chaordic Alliance, 1997, www.chaordic.org. © 2001, Response Ability: The language, Structure, and Culture of the Agile Enterprise, Rick Dove, Wiley Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are activities are Service Integration Mgmnt apps are Strategy Delivery Mgmnt apps are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyStaff MyProjects MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by with proactive domains of Modification Migration Improvement Creation Response Situation Analysis achieved with architecture that is with reactive domains of Correction Reusable Reconfigurable Scalable Variation Expansion Reconfiguration based on principles of Deferred Commitment Redundancy/ Diversity Plug Compatibility Facilitated Reuse SelfContained Units Evolvable Framework Elastic Capacity Self Organization Distributed Ctrl & Info Peer-Peer Interaction Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are Service Strategy Integration Delivery Mgmnt Mgmnt apps Cultural apps are Engineering are Mgmnt apps MyStaff are MyProjects activities are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by with proactive domains of Modification Migration Improvement Creation Response Situation Analysis achieved with architecture that is with reactive domains of Correction Reusable Reconfigurable Scalable Variation Expansion Reconfiguration based on principles of Deferred Commitment Redundancy/ Diversity Plug Compatibility Facilitated Reuse SelfContained Units Evolvable Framework Elastic Capacity Self Organization Distributed Ctrl & Info Peer-Peer Interaction Activity: Cultural Engineering Management • Two dashboard-like applications channel cultural development MyProjects Objective: Enable, enforce, and constrain the creation and evolution of a management discipline and culture that values projects for: – contribution to corporate goals, – personal accountability, – clearly stated responsibilities, – performance goals and metrics, – frequent and open re-evaluation of progress and plans, and – the meeting of commitments. MyStaff Objective: Enable, enforce, and constrain the creation and evolution of a service discipline and culture that values: – open information and knowledge sharing, – initiative, – responsibility, – accountability, and – constant improvement. Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are Service Strategy Integration Delivery Mgmnt Mgmnt apps Cultural apps are Engineering are Mgmnt apps MyStaff are MyProjects activities are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by with proactive domains of Modification Migration Improvement Creation Response Situation Analysis achieved with architecture that is with reactive domains of Correction Reusable Reconfigurable Scalable Variation Expansion Reconfiguration based on principles of Deferred Commitment Redundancy/ Diversity Plug Compatibility Facilitated Reuse SelfContained Units Evolvable Framework Elastic Capacity Self Organization Distributed Ctrl & Info Peer-Peer Interaction Note: Relationships flow downward in concept maps unless an arrowhead is present. Agility Agile Strategy Concepts consists of Knowledge Management Response Ability activities are Service Strategy Integration Delivery Mgmnt Mgmnt apps Cultural apps are Engineering are Mgmnt apps MyStaff are MyProjects Realsearch Collaborative Learning Modification Migration activities are Customer Satisfaction Mgmnt apps are IT Infrastructure Mgmnt apps are IT Adaptation Mgmnt apps are Talent Relationship Mgmnt apps are Adaptable Systems Mgmnt apps are Security Evolution Mgmnt apps are MyFab MyBus & MyETL Culture & Process Outsource Support Culture & Training Principles & New Vision with objectives defined by with proactive domains of Improvement Creation Response Situation Analysis achieved with architecture that is with reactive domains of Correction Reusable Reconfigurable Scalable Variation Expansion Reconfiguration based on principles of Deferred Commitment Redundancy/ Diversity Plug Compatibility Facilitated Reuse SelfContained Units Evolvable Framework Elastic Capacity Self Organization Distributed Ctrl & Info Peer-Peer Interaction Activity: Realsearch Collaborative Learning Realsearch, a form of Action Learning Real People • Knowledge Development • Knowledge Capture • Insight Development • Knowledge Transfer Real Problems Real Time Issue-Focused Principle-Based Structured Workshops Knowledge Packaged for Transfer The Detail and Discipline Available at Amazon.com $70+ Available here at $60 Chap 8 Silterra IT infrastructure 3 Proactive/reactive principles 4 RS analysis process 5 RRS principles 7 RRS design process 10 Realsearch process • Discovery workshops analyzed cases. • Found underlying RRS principles. • Then applied principles to a design, solving a problem for workshop host. • This process is called Realsearch: Real people solving Real problems in Real time Successes That will probably stick: • ERP/HRM implementation procedure (integration responsibility model) • Agile IT infrastructure • On-Demand application integration That will probably be lost: • Access to comprehensive information On-Demand • Differentiated eBusiness strategy and implementation • Business manager responsibility for IT • Agile business engineering office • MyStaff concept of employee involvement (but IT support stays) That were planned but will probably not be implemented • MyProjects: strategy implementation management/transparency • Agile-culture development and maintenance • Agile security strategy Hindsight Observations Value propositioning insufficiently addressed for execs – CEO vision was articulated, but not bought into by others – Benefits of agile vision neither appreciated, nor taught Major attention focus conflict – Production focused on plant/process construction (Herculean) – Sales/Marketing focused on getting orders (Herculean) – Other areas struggling with OJT and cultural conflicts Unresolved responsibility gaps – Copy Exact MES untouchable, sacred, isolationist – Unresolved data-integrity conflict between ERP and MES – Unresolved ownership of eBusiness strategy & proj mgmnt Unresolved cultural conflicts – Serious intercultural cold war and gang politics – Resentment of US mgmnt, impatience for power transition – Competency and performance not appreciated concepts Unsustainable implementation and strategy – Mandate to hire local IT, but insufficient capabilities available Hindsight Lessons Value propositioning for main decision should never stop – People will not listen until they are ready – Individual focus discovers and utilizes individual's values Success constraints should be addressed with separate and continuous value propositioning – Do not assume problems are understood, make the case – Start-ups do not have forgiving time frames Responsibility voids and conflicts must be resolved early – IT cannot get cooperation w/o business mgr's commitment Cultural engineering should start early – Soft stuff is hard part, and cannot be postponed – Mismatch here is guaranteed rejection with time There is no substitute for competency and talent – Plan sustainability up front and act early Hindsight Lessons Strategic Value Proposition Work Needed • Agile security strategy and architecture • Internal responsibility for IT integration • Business management commitment to agility • Access to information by employees and customers • Business management responsibility for IT tools • Business engineering responsibility Misperception Logic Misperception Plous: Behavioral Psychology of Decision Making is caused by Relationship flow is downward unless arrowhead present. Context Dependence Perception Creation Memory Bias determined by determined by Selective Perception Cognitive Dissonance Hindsight Bias forces believing Consistency Past Event may use Contrast Effect making Comparison with Specific Reference Primacy Effect Recency Effect Halo Effect meaning making Last Perception Associated Perceptions meaning First Perception will be conform to conforms to Hopes was Expectations Dominate Perception with Self Image Predictable Reconstruction of Event from Partial Memory filled in with by changing Old Perceptions Other Information Inferred Details drawn from results in Biased Knowledge © 2004, Rick Dove, Value Propositioning: Talent of Champions Associated Memories Individual Decision Logic Kaheman & Tvarsky: Prospect Theory Individual Decision Behavior reflects valuation as: Relationship flow is downward unless arrowhead present. Non-Linear with Psychological Bias Relative unless shaped as looks like Ruiness Outcome "S" Curve Value Gain Initial Gains/Losses Dominate Losses Loom Larger effect is effect is Diminishing Incremental Values results in results in results in results in Over Weighted Low Prob Under Weighted High Prob Over Weighted Certainty Under Valued Increases to Status Quo shaped by Loss Formulation Dependent Steeper Negative Values Simplified which biases Knowledge Dependent by if DM has Elimination Hopes and Expectations if Chunking Probabilities sets neutral Not point of Significant Perception as Loss or Gain High Knowledge Low Knowledge perceptions of Low High High Low Probability Probability Probability Probability Gain Loss Gain Loss results in results in Loss Averse Behavior Risk Seeking Behavior results in Risk Averse Behavior results in Simplification results in Under Weighted Prob results in Over Weighted Prob Probability (Prob) is the subjective likelihood, assumed by a Decision Maker, that a proposed benefit will deliver as promised. © 2004, Rick Dove, Propositioning: Talent of Champions Relationship flow is downward unless arrowhead present. Group Decision Logic Group Decision Behavior involves Objective Setting Perception Creation includes Value Propositions Attention Focus Simple Patterns Unresolved Conflict Performance Targets Objective List based on based on Past Objectives Past Performance Cyert & March: Behavioral Theory of the Firm Simon: Administrative Behavior Performance of Others interpreting Training and Experience Amount of Org Slack Standard Rules Candidate Solutions based on selected by Search Process Past Experience determined by Who's Searching Similarity to Current Solution Group Members based on from Influenced by Decision Psychology Choice DM's Objectives © 2004, Rick Dove, Value Propositioning: Talent of Champions avoids uncertainty by Past Org Slack Mitigating Conflict by Acceptable Level Rules Sequential Attention Short Term Negotiated View Predictability results in results in results in results in Lowest Commonality Postponing Some Objectives Contract Terms "Satisficing" Valuation Problem Perception On "On Demand" • • • • Term is associated with a solution, not a problem or objective Term has no standard definition, used many different ways Term implies broad meaning but is used narrowly Term is applied to vendor strategies • We would all benefit from solution-independent definition and objectives Next ... Agile / On-Demand IT - Flesh out design principles for generic application and apply to specific focus-problem designs - Discovery workshop groups will do this - Deliverable: white paper on design principles and application - Five workshop host-sites wanted, with real focus-problem - Ten at-large participants wanted Agile Security - Flesh out design principles for generic application and apply to specific focus-problem designs - Discovery workshop groups will do this - Deliverable: white paper on design principles and application - Five workshop host-sites wanted, with real focus-problem - Ten at-large participants wanted Value Propositioning - Technology and decision-making behavior mix poorly - New book-in-process addresses this - Good and bad examples wanted - Pre-pub evaluation readers wanted More Enterprise On Demand • Gene Guglielmo: Tuesday at 9:45 – Bridging The Legacy IT Gap • Ralph Hodgson: Tuesday 4:45 - Solution Envisioning, Foundation for eBusiness Components • Jack Ring: Wednesday at 9:45 - Managing On Demand: Doctor Heal Thyself