Friday, July 29, 2011

So you want a Tablet?

If you follow the news about the tablet wars (and I do), you'll see that the battle is shaping up as the iPad vs. everyone else.  There are a host of challengers out there for Apple.  They include HP, Samsung, Dell, and many others.  So considering that the first iPad shipped in April of 2010, why are we still talking about the POTENTIAL for iPad challengers?  Why isn't there a true alternative like Coke vs. Pepsi, Dominos vs. PizzaHut, or Ford vs. Chevy?

The answer is a fairly straightforward one.  Apple knows what we want and is giving it to us.  The rest are still trying to market tablets in the same way they marketed PCs and laptops.

Here is something to consider:  Unless you are a hardcore gamer, when was the last time you cared about the type of processor, amount of memory, or graphics engine that was in your smartphone or tablet?  If you didn't automatically answer, "Huh?!?" to that question, you're still probably a member of the large majority who hasn't given much thought to those questions since about 2007-08.  There are very, very few people who own an iPad today who can tell you much about the technical "guts" of their tablet.

So let's compare an Apple commercial to one for the Samsung Galaxy or an HP whatever.  Apple is all about the EXPERIENCE of owning an iPad.  They focus on showing how pretty, how cool, and how much fun owning an iPad can be.  They show the millions of songs and apps you can get from the Apple iTunes store and how easy it is to buy and use them.  Best of all, Apple is very trendy with their marketing right down to the music they use. (How many people knew who 'Feist' was before that Apple ad in 2008?)  Apple knows that people buy their products because of the experience and only rarely for the tech specs.

Now let's look at some recent ads for the "other" guys.  Without naming names, what I see is a focus on the screen resolution, the processing power, the amount of memory, and the camera capabilities of their units.  Relevant, informative, and BOR-ring.  After 18 months these companies are still trying to market a tablet to us like it was a computer.  They are still missing the mark and that's why Apple is continuing to dominant the market and absolutely rake in the cash.

So you want a Tablet?  Odds are that you are going to buy it for the experience - how it makes you feel and how it makes others feel about you - rather than what's under the hood.

Friday, July 15, 2011

A quick thought on IT training budgets

The benefit of sending IT workers for training has never been easy for me to quantify.  After all, a significant amount of "effective" learning occurs on the job through daily work and partner interactions.  However, because technology changes so quickly new skills can sometimes only be learned through direct classroom time.

Another difficult aspect of creating a meaningful training program for IT workers is the subject of willingness.  While some workers are highly motivated to continually learn and advance their credentials through training, many others are very ambivalent. 

So what is the solution or happy medium?

Through experience I have come to the conclusion that there are several "averages" that work well for most situations.  They are:
  • Offer one (1) week of offsite training per year
  • Spend an average of $3,000 per worker (if you have an implemented ERP system) or $1,800 per worker if you do not have an ERP system
  • Require every employee to conduct a 30 minute report out to their teams on any class they attend
Several assumptions go into the components above.  First, I believe that effective training for complex IT systems can only occur away from the office.  If an employee is anywhere near a ringing phone or their everyday job, they simply cannot focus.  Second, a standard ERP training class lasts about a week and costs around $3,500.  Considering that some will attend training and others won't, an average of $3,000 is appropriate.  Third, requiring a report out ensures that the employee will (a) pay attention and (b) understand that the week out of the office is not a holiday.  You'll be surprised at how quickly you will separate the serious learners from the non-serious with the report out requirement.

If you want highly skilled, capable IT workers you will have to invest in their training.  These guidelines will help you develop your own approach.

Wednesday, July 13, 2011

Are you a Slave to your Master (Data Management)?

If you follow the trends in IT you'll know that right now the topic of Master Data Management is red hot.  So other than having more M&As in it than an annual report from Oracle or Microsoft, what makes this topic so interesting? 

When you think about what your company does, most likely your thoughts will turn to some type of relationship where you make and sell a product to your customer for which they pay you.  These products have characteristics - weight, cost, location, shelf life, etc. - and you track them inside some type of software application.  As you gain a new customer, you collect information on them - name, location, phone number, SSN, email address.  Again you store this information in some type of application or program.  These programs can be of a number of different types such as ERP packages, customer service applications, or sales/contact repositories.

The data you collect and store is constantly changing.  Products move through version cycles, people move, leads mature or fade.  As you update these records within your systems you do so to the "master records".  Or at least you hope you do.  When a change is made you naturally expect that one entry is all that is needed to complete the work.  After all, how wasteful and expensive would it be to have to go into, say, six different applications to perform the same customer address update?  Yet over time, as IT systems proliferate throughout a company it is exactly this redundancy that begins to occur.  Duplicate repositories of master records pop up as Sales, Operations, and Finance begin to use disparate systems to track the same master record types for different purposes.  As expected, the end state is a mess as different departments run reports on what is supposed to be the same data but the results just do not match.  A great example of this situation can arise out of reports that list customers of a given product.  The customer service department will pull a report of the "X Widget" family that shows a total of 112 customers while finance pulls a report of seemingly the same data and gets a total customer count of 97.  How maddening!

So what is master data management?  It is an emerging approach towards the creation of a single-point-of-truth (SPOT), or one repository that all applications in the entire IT portfolio interface with to add/change/update/delete master records.  This repository becomes the parent, or owner, of master data records such as customer and product information.  It is there and only there that master data can be stored.  In theory, this approach eliminates the disparity of master records throughout the company because no system, expect for the SPOT, is allowed to manage the information.

As I mentioned earlier, this field is emerging and that means the science behind excellent master data management is still under development.  But given the rising importance of IT and the intense need for "clean" data, the timing is ripe.

Tuesday, July 12, 2011

Guest Blog on PlanBox

I was asked by the site "planbox" to do some guest blogging on the topics of Agile project management.  Please go there and check out the site and my content!

Agile Project Management

Monday, July 11, 2011

IT Superstars - Who Needs 'Em?

The answer is - "We all do"

It is not an easy exercise to define what makes a stellar IT resource.  Because they come in all different flavors - awesome programmer, superstar analyst, omniscient DBA - there is no one stereotype.  Probably the best way I know to describe an IT "A" player is to say that they are the type of people that get things done.  I'm not talking about just showing up to work every day.  I'm talking about creating order from chaos, "operationalizing" vague goals, and solving crises in the middle of night.  All done with no excuses, just results.

All that I have said so far is not likely to come as a surprise.  But this next part will.  IT superstars are usually the hardest of all employees to manage.  They are often "problem children" who are difficult to satisfy, require constant attention, and continually stretch the rules.  While this may sound sensational, my over 20 years of observation of top IT performers has confirmed this truth over and over again.

As a CIO I have striven to build teams that can perform at the highest levels.  I've done this knowing that I will spend over half my time carefully leading and tending to these individuals.  Rare has been the day when I'm not mentally exhausted after creating/managing challenging goals, refereeing conflicts, giving meaningful praise, or managing strong emotions.  Contrary to many leadership books that I've read, top performers are not self-sustaining.  They are like hot rod cars - they are built to go turbo but need constant tuning and adjustment in order to run efficiently.  Ultimately these people will help create a world-class IT organization that can handle most any challenge, current and future.

So doesn't every leader in every organizational realize this truth?  Not by a long shot.  There are many IT leaders who believe that the best people to hire are what I refer to as "Honda Civics".  These types of employees are, as you would expect, very reliable and require very little in the way of maintenance and tuning.  You can hire a "Civic" and they will show up every day (for years or decades) and do their jobs with nary a complaint, hardly making a wave larger than a ripple.  But these people will rarely, if ever, rise above an average level or take your IT capabilities to a whole new level.

The importance of having a strong, adaptive IT organization has become quite apparent with the amount of automation that has occurred in the U.S. and throughout the world over the last decade.  We should all take a look at what our IT leaders are doing when it comes to talent acquisition and development.  If things are too smooth, if there is no "buzz" coming from that area then your company has probably hired a fleet of Civics.  Not a good situation to be in if you are looking for IT to be a prime facilitator in efforts to differentiate from the competition and evolve...

Wednesday, July 6, 2011

iPad in the Office?

The Apple iPad has been on the market for about 15 months now, long enough even for the second iteration (creatively called "iPad2").  From the first days of its release, there has been a buzz about what its place might be in the corporate environment.  Just this last quarter I have seen articles about the iPad replacing flight manuals in Alaska Airlines cockpits, finding its way on to the floor of the New York Stock Exchange, and even into some hospital operating rooms.  (Can you imagine a cardiologist searching for an app that does by-pass surgery??)

All of that is very interesting, but how will your company integrate the iPad into its own environment?

As you would expect, the answers to that question will vary widely.  But there are some specific integrations that will be common to the majority of companies embracing the iPad.

1. Email - A hallmark of the iPad is its wonderfully simple yet elegant email interface.  Since most companies use Microsoft Exchange, your IT department will use the "Webmail" functionality to import messages directly into your mail application.  Microsoft Webmail is the same tool that allows you to access your corporate email from any web browser.  The downside for your information security team is that you will also be able to integrate your own personal email (GMail, Yahoo, POP, IMAP, etc) into your iPad without breaking a sweat.

2.  Your own corporate desktop - There is a big trend today towards desktop virtualization.  Without giving you a long, technical explanation, desktop virtualization is basically moving the processing and storage functions of a PC into a large server in your corporate data center.  You still have a monitor, mouse, and keyboard, but you are connecting over the network to the data center for all of your dynamic computing.

There are a number of companies that create virutalization software, the most well known being Citrix and VMWare.  Citrix has built an app (downloadable from the App Store) called "Citrix Receiver".  This application takes your desktop image and puts it directly onto the iPad.  You could literally be working on your office PC, pick up your iPad and log into Receiver, and watch your image disappear on PC and re-appear on your iPad exactly as you had left it.

If you don't have a virtualized desktop, you can use an application called "Log Me In - Ignition".  It works very similar to Citrix Receiver but does not require any special changes within the data center.

3. Web Enabled Applications - If your company has created/deployed web based applications (you access them through a web browser), you'll have direct access to them through the Safari browser on the iPad.

4. App Store - Apple has recently started allowing companies to create applications that are specific to their own needs and store them within the App Store.  If employees need the programs, they can pull them down directly from the there while non-authorized personnel will never even know they are there.  As you might expect, the thought of putting corporate intellectual property on the App Store causes indigestion for more than a few IT professionals.  But given that there was NO way to deploy internal content previously, this is a big step.

There are many other ways that the iPad is used in the corporate, military, and healthcare environments.  The examples above should give you a good introduction of what your IT department is likely doing to make the device available to you.

Tuesday, July 5, 2011

The Fastest Way to Kill Your ERP Budget is...

Three Simple© words - "Time and Materials"

Having made a living in the consulting world, I love to work on projects where the engagement is "time and materials" as opposed to "fixed deliverables".  The former reflects an agreement with a consultant where s/he will work on your problems while charging you for the time worked and materials consumed.  The later reflects an arrangement where the consultant is paid for achieving pre-defined milestones on a project or some other endeavor.

To defend those on the consulting side, it is very difficult, especially on large ERP projects, to accurately price an entire project composed of fixed deliverables.  There are several reasons for this.  First, the client will almost assuredly try to squeeze out-of-scope items into the deliverables.  Not a good situation to be in where you, as the consultant, have to constantly be the "bad cop" enforcing the contract.  Second, the nature of ERP projects is that they are human engineering endeavors as much as they are system implementations.  They involve a great deal of diplomacy, change management, and adaptability.  One recalcitrant team refusing to meet their deadlines can throw a carefully planned project off schedule/budget by 20%.

On the flip side, if your contract does not hold your consultants accountable to produce X service by Y date, you are setting yourself up for failure.  The consultant is (usually) not your friend and they are in the business to make as much money for as many services as possible.  If you give an opening, don't be surprised if they take it.

So what's the best way to proceed? (I'm not going to address the topic of change requests here...)

Tell your consulting service provider up front that you are going to insist on a "fixed deliverable" contract.  Then have a frank and honest discussion about how to create a plan that addresses your need to ensure value for what you pay while giving them a reasonable chance of meeting your expectations.  Be prepared to be a little more generous that you might have originally planned, knowing that you are setting up a situation where your service providers rightfully assume their share of the risk.

Good contract negotiations are not about conflict - they are about creating the most optimal conditions to ensure the reasonable success of all parties.

Monday, July 4, 2011

SAP Middleware - Your Achilles Heel?

Staying on the topic of SAP - what is typically the most significant, long-lasting error made by most companies when they first implement the system?  The answer is middleware.  I'm guessing that a number of my readers do not really know what I'm talking about here.

When a company installs a large ERP (enterprise resource planning) software like SAP or Oracle, they also typically plan to interface a number of other non-ERP systems.  These could be custom built plant maintenance programs, specialized accounting packages, CRM applications, warehouse tracking systems, and hundreds of other possibilities.  Given everything that a system like SAP can do, it would be logical to assume that it has built in "hooks" for these other legacy applications, right?  WRONG.  Any software application not built by the ERP manufacturer requires a special "bolt on".

Can you ignore the need for middleware?  Yes, if you like to fire up your $60 million ERP program, while inviting the CEO, CFO, and Board to the launch party, and then watch absolutely nothing happen (except for a bunch of error messages).

Middleware is an essential requirement for ensuring that the ERP system that you are implementing is able to talk to the rest of your IT infrastructure.  A good middleware capability will ensure that you not only have a successful launch but that your SAP applications play well with the hundreds of other software programs that are likely powering your company.

If you haven't heard of middleware before and would like to know more, I would suggest researching two of the most prevalent solutions.  Probably the most popular package is IBM's "Websphere MQ" series.  SAP also makes their own flavor called "SAP Xi", also associated with "SAP Netweaver".  I wouldn't recommend spending a lot of time looking at the technical interworkings of the packages.  Rather, take a close look at the whitepapers and diagrams that show how the middleware packages make data flow between applications.

As always, if you have any questions please post them to the forum and I'll be happy to share what I know.

Sunday, July 3, 2011

Your SAP training program should learn from video-gaming!

Is your SAP training program working?  Probably NOT!

As a preface, I must say that I'm a huge fan of SAP.  It's one of the most wonderful systems ever devised and contributes greatly to the efficiency and profitability of businesses all over the world.  But at the same time, most people I know consider it one of the most difficult software programs to learn, let alone master.  Let me put it this way - you have a better chance of successfully hitting 100 straight drives on the fairway than you do mastering SAP.  Not good odds...

But why is that?  Why do companies spend hundreds of thousands of dollars trying to effectively train their workforces on a multi-million dollar system, only to fail?  The answer can be found in video games.

Most people don't realize that the video game industry brings in far more revenue each year than does the combined box office receipts of Hollywood.  There are all sorts of games - Madden Football, Halo, StarCraft, World of WarCraft - that are extremely difficult to master.  Yet people spend their own money to buy them and then go on to dedicate hundreds (if not thousands) of hours learning, studying, and blogging - all trying to get better.  You certainly don't see people going out of their way like this to learn SAP.

So what is the missing element?

It's actually two things: competition and a robust rewards system.  In all of these video games a person is rewarded for spending time and energy.  These rewards come in the form of (virtual) money, higher levels, better prizes, and a leg up on the competition.  Contrast this with an SAP training program that usually requires people to spend dozens of hours in front of a computer doing boring exercises with the ultimate reward of, possibly, a certificate.  Not much of an incentive.  It is hardly surprising then that most SAP training programs fail to provide much value because they offer little reward back to the student.

So that's all interesting, but what do we do about it? 

The answer is to involve Human Resources in the creation of a reward system that is built into your training program and ultimately your job descriptions.  Use financial, organizational, and recognition rewards in your training programs.  Define levels such as beginning, intermediate, experienced, and advanced  such that when someone attains them (you have to be able to define and test for each increment), they are recognized.  In the past I have built cash bonuses, organizational recognition, and role progression into the jobs of people I send to training.  The better people get at using SAP, the better they are in their jobs and the more valuable they become to the company.  I've even restricted promotions to senior level roles until people achieved "experienced" levels of proficiency.

In almost every case, when I attach specific, tangible rewards to my SAP training programs, their effectiveness usually triples.  Oddly enough, employee satisfaction also trends up in a significant way.  As humans we are built to compete.  Video game companies recognize this (and profit from it) and so should your company!

Friday, July 1, 2011

IT Budgeting - More than meets the eye

As a CIO, one of the most common issues I have to address is how and why IT spends the money it has allocated (and then some). In previous posts I alluded to the term "Black Hole", which is a common moniker that seems to get applied to IT spend.  Almost everyone at the manager level and above has either said or heard some variation of this statement:  "When it comes to money, IT is like a black hole.  We keep feeding money into it and it only wants more.  Where does it all go??"

In order to address that question, I have to describe what the difference is between an IT budget and one that is more "operational".  Let me do a little compare-and-contrast.

Similarities
As you might expect, there are parts of the IT budget that are common to all business units.

1. Salaries - Labor costs are a big part of IT.  But please remember that in this context I am talking about internal, or FTE, labor.
2. Recruiting/Training/Travel - Pretty self explanatory.  Even now in the depths of the recession/depression, IT unemployment is around 5%.  We are always recruiting.
3. Facilities & Overhead - IT has to pay for space, power, A/C, etc.

Differences
Here are some categories within the IT budget that other business units usually don't have to address. (I said, "usually")

1. Depreciation - I'll save you the long, technical/financial explanation.  Basically, whenever a company buys software, computers, hard drives, networking gear, memory, and other pieces found in the data center there is a purchase price.  However, in subsequent years all of that material is depreciated.  That means while there is no more acquisition cost, about 20% of the original purchase price is charged to IT's budget.  No cash is actually spent but that amount is treated as a debit against the budget.  To put it in perspective, one year I managed a budget of $82 million.  Of that total amount, $24 million of it was depreciation!  Imagine asking for that kind of money at the yearly board meeting knowing that there will be *nothing* to show for it.  Remember if you are not in IT and you're buying IT hardware, while you will likely never see it, IT is going to be absorbing the depreciation for it into its budget.

2. License Costs - this is similar to depreciation.  Put simply, if you buy a professional software license for $100, the software company is going to be charging you/the company about 22% of the purchase price every year to provide support.  This item provides patches, upgrades, and phone help if you need it.  Almost nobody that I've spoken to about software licenses understands the ongoing costs that occur after the purchase.  In fact, a lot of software companies will be VERY generous on the purchase price of their software just to get your company locked into long-term maintenance contracts.

3. Contract Labor - IT work is almost always very specialized: programming, data bases, enterprise systems, project management, training.  Typically, IT has between 15% to 60% additional headcount in contractors or consultants.  Almost everything within U.S. companies is computerized these days and IT must continually, although temporarily, augment its staff to ensure that the proper skill sets are available.  Every additional program, system, or server that is brought into the company adds a fractional need for extra head count.

4. R&D (also known as the "gadget group") - If your CIO and IT team is properly servicing your organization, they will be constantly experimenting with new technologies to either accept or reject them.  You may not know it, but that is how Blackberries, tablets, iPhones/iPads, cell phones, and laptop computers probably came into your company.  There is so much technology out there today that we are all being exposed to and the marketing makes us crave it.  We're told, "If you don't have X, you are being outpaced by your competition." (Also, you're just not cool..)

As a CIO I can tell you that it is very, very difficult to go to the CEO/CFO to ask for money to experiment.  Yet, the R&D function is critical to identifying tech that will help position the company for future success. So, unlike anything other regular business unit, a good IT group is always allocated money to R&D.

This list is not all-inclusive but should give you a better idea of why IT budgeting is not always easy to understand or appreciate. 

Einstein-ian Physics for Dummies

Ok, I promise I'm going to get back to my blog on IT Budgeting.  But I just had to make one last comment on astrophysics. 

Since I'm not a professional and don't play one on TV, take this one with a grain of salt.

Some (many) of you may have seen sci-fi shows like "Sliders" that had plotlines where the main characters crossed over into other, parallel universes.  I certainly enjoyed them because the possibilities were endless.  But let's take a look at one of the most famous equations of all time:


E=MC2

What it means is that all of the energy "E" in our universe is exactly and permanently equal to all of the matter in our universe multiplied by the speed of light squared.

So, if you happen to be a supremely lucky individual who ventures to another universe, remember this: Don't bring back anything.  Not a speck of dust, lunch (in your stomach), or breath in your lungs.  If you do, all of Einstein-ian physics will no longer be valid and the Earth will probably explode... :-)