Transcript Five Things - Accelinnova

Five Things
Niel Nickolaisen
CIO, Headwaters, Inc.
Co-founder, Accelinnova
Introduction
• I suffer from impatience, consultant
fatigue, and career angst.
• I look for solutions I can implement
immediately, that do not require months
of consulting, and that add immediate
business value.
• Therefore, I present . . .
5 Things
• That are immediately implementable.
• Proven.
• Easy to explain (even to the CFO).
• That generate business value.
The Five Things
1.
2.
3.
4.
5.
Purpose Alignment
Complexity / Uncertainty Matrix
IT Lean, Six Sigma
Build a Model Not a Number
IT Customer Service
1. Do More Smart Stuff (and less stupid stuff)
• Example, ERP implementation.
• Legacy sequence of data entry was:
– Name, telephone, address.
• ERP sequence of data entry was:
– Name, address, telephone.
• “Requirement” was to customize ERP to
match legacy sequence.
The Test
• Was this customization “smart” or
“stupid”?
• This is not isolated:
– 2006 Standish Group indicates that 45%
of functionality is never used. Another 19%
is rarely used.
– Same reports shows IT projects return
$0.59 for every dollar spent.
Always or Often
Used: 20%
Always 7%
Often 13%
Sometimes
16%
Never Used
45%
Rarely Used
19%
Never or Rarely
Used: 64%
Purpose Alignment
High
Partner
Differentiating
Market
Differentiating
Who Cares?
Parity
Low
Low
Mission Critical
High
In Practice
High
Do We Take
This On?
Differentiate,
Create
Who Cares?
Achieve and
Maintain
Parity, Mimic,
Simplify
Market
Differentiating
Low
Low
Mission Critical
High
Example - ERP
• Consumer Packaged Goods company.
• Revenue from multiple channels (call
center, internet, wholesale specialty,
wholesale big box)
• Replacing legacy system (poor
transparency, multiple time data entry,
low automation).
Before
High
WMS
Legal Structure
Accounting
Product
Development
CRM
Market
Differentiating
Analytics
Channel Mgmt
Low
Low
Mission Critical
High
After
“Proven products with
no channel conflicts”
High
Analytics
Channel Mgmt
Product Mgmt
Market
Differentiating
ERP
CRM
Legal Structure
Low
Low
Mission Critical
High
Doing What Is Smart
• Reduced project timeline by 50% and cost by
40%.
• Provided additional benefits (streamlined,
simplified business processes).
• Delivered high impact results immediately.
• “Why do it any other way?”
• And, on-going decision filter for all business
decisions!
2. Plan For Complexity / Uncertainty
• Complexity driven by:
– Dependencies / integration.
– Team location, size, and maturity.
– Bigness and badness of project.
• Uncertainty driven by
– Dynamic market.
– New technology.
– Project duration.
• Formally assess these two dimensions.
Little Model
Uncertainty
High
Colts
Bulls
Simple, young projects.
Need agility
Tight Teams
Agility to handle uncertainty
Process definition to cope
with complexity
laissez faire
Dogs
Cows
Complex, mature market
Need defined interfaces
Low
Low
High
Project Complexity
Example - Practical Implications
• Big, Ugly Sales System
• How to reduce complexity / uncertainty.
– Use Purpose to simplify / standardize.
– Select (parity) proven technology.
– Reduce duration by breaking into phases.
– Guarantee access to expert users.
– Co-locate the team.
– Match the project manager to the project.
3. IT Lean Six Sigma
Lean = Deliver value by reducing waste.
The 7 forms of waste:
– Rework (pretty much everything I have done).
– Waiting (approvals and workflow).
– Over processing (remember, 64% of features and
functions are rarely, if ever, used).
– Inventory (30-40% shelf ware).
– Motion (poor access to expert users).
– Movement (Alistair Cockburn, “People won’t climb
stairs to get an answer).
– Over production (licensing).
The 5S Tool
• Sort
• Set in order
• Shine
• Standardize
• Sustain
Example - Before
Example - After
Applied to IT
• Sort what we use from what we have (COA with
25,000 accounts).
• Minimize exception handling:
– Who is going to use this feature / function?
– What do they want to accomplish with this feature /
function?
– How often do they need to accomplish this task?
– If they don’t have this feature or function, how will they
accomplish this task?
• System stratification and treatment (A/B/C)
• There are no “Mights” in 5S
Six Sigma
Standard
6 Sigma
3 Sigma
Process Variability
Applied to IT
Project scope = 60 days.
Actual = 50 day.
10 day variation. Why? What can we learn?
Standard SPAM filtering performance = 60 seconds.
Measured performance = 120 seconds.
Variance of 60 seconds. Why? Firmware not current.
Why not? No consistent process for applying
patches / updates. Why?
Stop the bleeding and find the knife.
4. Build A Model, Not A Number
Traditional Approach
Costs
Benefits
Analysis /
Decision Process
ROI
How well do we know costs? Benefits? What is missing?
How well is this working?
How About This?
Purpose
Costs
Benefits
Analysis /
Decision Model
Phase Plan
Considerations
Phase plan includes what we need to learn in order to make
the next decision.
In Practice
• Customer retention / loyalty program.
• No way to guess at benefits with most coming
well into the future. Big costs.
• But, potentially important considerations.
• Developed a model that:
– Included considerations
– Delivered interim value
– Improved knowledge about future phases.
• The hardest part: “We will make no decision
before its time.”
5. IT Customer Service
• Is it better to be right or helpful?
• Customer service basics:
– Communicate (the good and the bad) so
that customers can plan alternatives.
– Present options and let customers decide.
– Measure customer satisfaction.
Right or Helpful Example
• Username is first initial, middle initial,
first four of last name:
– nrnick@ . . .
• What to do with
– Brian K. Butterfield
Simple Questions
• Differentiating or parity?
• Dog, colt, bull, or cow?
• Does this generate waste?
• Do we need to decide that today?
• Are we being helpful or right?
Questions?
• More stuff available.
• Accelinnova.com
[email protected]