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Five Things
Niel NickolaisenCIO, 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. Purpose Alignment2. Complexity / Uncertainty Matrix3. IT Lean, Six Sigma4. Build a Model Not a Number5. 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.
Never Used 45%
Rarely Used 19%
Sometimes 16%
Often 13%Always 7%
Always or Often Used: 20%
Never or Rarely Used: 64%
Purpose Alignment
MarketDifferentiating
High
Low
Mission CriticalLow High
Partner Differentiating
Who Cares? Parity
In Practice
Achieve and MaintainParity, Mimic,Simplify
MarketDifferentiating
High
Low
Mission CriticalLow High
Do We TakeThis On?
Differentiate,Create
Who Cares?
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
MarketDifferentiating
High
Low
Mission CriticalLow High
WMSLegal StructureAccountingProduct DevelopmentCRM
Channel MgmtAnalytics
After
MarketDifferentiating
High
Low
Mission CriticalLow High
AnalyticsChannel MgmtProduct Mgmt
ERPCRMLegal Structure
“Proven products withno channel conflicts”
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
Project Complexity
Un
cer
tain
ty
Simple, young projects. Need agilityTight Teams
Dogs
Complex, mature marketNeed defined interfaces
Cows
BullsAgility to handle uncertaintyProcess definition to cope
with complexity
laissez faire
Colts
Low
Low
High
High
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
Process Variability
Standard
6 Sigma
3 Sigma
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
Analysis / Decision Process
Costs
Benefits ROI
How well do we know costs? Benefits? What is missing?How well is this working?
Traditional Approach
How About This?
Analysis / Decision Model
Costs
Benefits Phase Plan
Considerations
Phase plan includes what we need to learn in order to makethe next decision.
Purpose
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?
