Posts Tagged ‘data center trust’

The role of Key Performance Indicators (KPIs) in the organization is to provide internal and external clients with actionable metrics in easily accessible, customizable formats they can use to increase the effectiveness and efficiency of their operations. What differentiates KPIs from the wealth of metrics that can be generated from any business is that they are key leading and lagging indicators that can be used to reflect the strategic performance of the organization.

In selecting your KPIs it is important not to be tempted to label as KPIs the “top 40” metrics but rather generally at the top level you should limit yourself to the top 1-3 KPIs per strategic objective. These should only include those metrics that are essential to the success of the organization. In addition, each department will have their own contributing KPIs. The departmental KPIs should be selected so that they can be rolled up in support of the overall strategic goals.

The effectiveness of KPIs can be directly related to the care with which they are defined and implemented. Critical questions to consider when developing your KPIs include:

  1. How does this measure contribute to the strategic goals?
  2. Is it quantifiable?
  3. Is the data currently available?
  4. Can current performance, benchmarks, and target values be defined?
  5. How will it be used as a management tool?
  6. What is the high level plan for the establishment of reporting?
  7. Is there an outline for how continuous improvement activities will be implemented?
  8. Has a cascading plan to all levels of the organization been developed?

A brief discussion of the detailed considerations for each of the above questions is included to assist with the process of initiating a KPI program.

  •  How does this measure contribute to strategic goals? –  The success of using KPIs will be dependent on how effective they are at contributing to a better understanding of what drives the success of the organization. Keep in mind that KPIs will differ based on the type of organization and its goals. For example, a non-profit organization such as a school or a hospital will have different fiscal KPIs than a publically traded company. Each KPI should reflect the mission and goals of the organization.
  • Is it quantifiable? – A common mistake in developing KPIs is to take too general a statement such as “Improve customer service” as a KPI. To be effective it needs to be specific and measurable so “improve customer service satisfaction scores or increase customer repeat order rates” would be more appropriate measures.
  • Is the data currently available? – Another factor to be considered is whether the data to be used for each potential KPI is currently available. The expense of gathering additional data including system changes should be weighed against the value that the measure will provide.
  • Can current performance, benchmarks, and target values be defined? – To be effective a KPI must define a clear target so success can be determined. Industry benchmarks can often be useful in setting these targets. For example, an IT department may have as a target 99.999% availability of key systems. Meeting this target in turn will enhance customer satisfaction, ordering functions, etc. and support the other strategic objectives.
  • How will it be used as a management tool? – A clear understanding of how this KPI will be used, how improvement opportunities will be developed, and consequences for deteriorating performance should all be clearly mapped out before implementation.
  • What is the high level plan for reporting? – Publishing and reporting of KPIs is critical to monitoring progress. Formats for reports should be customized by role and function so that executives will see a summary view while department heads would have a much richer set of detailed metrics. Consideration should be given to the mix between dashboards, scorecards, detailed reports, and self-service tools for ad hoc analysis.
  • Is there an outline for continuous improvement activities? – A process improvement process allows the KPI values to be used to identify where focus should be placed to enhance performance.
  • Has a cascading plan been developed? – Each level of the organization needs to understand how their operations support the overall strategic goals. Cascading the KPIs clearly delineates their contributions and their opportunities for improvement.

Implementing a well thought out and comprehensive set of KPIs is the first step to a more proactively performance- based operation. This program will provide all levels of the organization clear targets and objectives with the ultimate goal of materially contributing to the success of the organization.

5 Steps to Sound Growth for Small Businesses

by Matthew Carmen on July 4, 2011

Over the last several months, I have mostly written about the financial, strategic and operational needs of mid-sized and large companies.  What about small business?  Companies with, say, 10-150 employees…what in these areas can best serve them?  Of course there are the obvious: the ability to track expenditures, report on company spend, rudimentary budgeting, payroll, etc. Certainly these are very important, but really, the owners and stakeholders of the small business should be able to handle this on their own – or with minimal help.   The most important need for small business owners is to work with someone well-versed in things financial, who can offer a growing business the ability to formulate strategy and then develop sound finance processes, procedures and who can offer the right tools to turn strategy into practice.  In this way, the finance person participates in the growth of the business and helps take the company to the next level.

This resource discussed above is the hardest to articulate to small business clients.  They usually want someone to tell them how much they are spending, on what, and how they can spend less on the same services.  These are important questions, but somewhat short-sighted.  What the client should be asking, (and I like to ask questions to get them thinking this way) is:  How can I get my company to the next level?  The proverbial next level of course means something different for each company: it may be $10 million in sales for one, higher margins for another, or opening up new markets for another still. Regardless, I’ve found that there are 5 key steps that must take place in order to reach ‘next level’ status:

  1. Decide what the next level is, specifically.  What is the direction in which your company wants to go?  There will be some type of desired growth, what is it?  Does this growth match the company’s mission and values?  Formulating your goal is most important; if the goal is unclear, there is no way that a strategy can help achieve that goal.  Sure, some goals are reached anyhow simply by dumb luck, but as you probably guessed, it is not a scalable process.
  2. Develop a strategy to reach a clear goal.  This takes true leadership from within.  Once a goal is formulated, a well-thought-out strategy or detailed plan is needed to get there.  What will it cost to reach our goal? What skills are required (marketing, product development, operations, etc)?  How much time with this endeavor take?  Once these large questions are answered, a program or project management team should be able to take over and develop a detailed plan of action.
  3. Plan of action. The program team in a small company (usually 1 or 2 people) will need to develop the timeline for the actions that need to take place, and who will actually perform the work.  This program team may be made up of internal employees or outside contractors/consultants.  There are many tools which help in this area as well, including Microsoft Project and others, that can help organize tasks and timing.  Once a plan is developed and approved, the real work starts.
  4. Communication:  The plan and assignment of roles must be clearly communicated to the entire organization.  This serves multiple purposes: it lets those that will be involved understand their roles and what their expectations are, and it also lets those not involved know what the future state of the organization will look like. Finally, it lets management know how they should start planning for future roles in a fashion that will evolve along with company goals.  Expectations of everyone will change during this process, typically for the better.
  5. Reporting and Tracking:  This step entails reporting on the progress of the strategic implementation.  The best tools for this are a balanced scorecard and separate financial reports.  A balanced scorecard will track the inner workings of the strategic implementation – what is going on at the operational, leadership and learning levels, how the organization is changing and ensuring it is on track to meet goals on time.  The financial reporting piece will let leadership know if they are spending what was approved and in the right areas.  Analysis of both these reporting mechanisms will allow for operational changes as the external environment changes (competition, products, legal, etc.)

The process is finished once the project goals are met.  (Have the new systems been put into production, etc.?) Now the claims made by the new strategy need to be monitored closely, and the results examined likewise.  Is there progress being made towards our goal?  If yes, is this progress happening as planned? Faster? Slower? Perhaps the new systems now in place allow for amending goals upward, or results in better returns on investment. If so, what a great problem to have, right?  Continued reporting and vision are also required – and once new goals are established, the process should ideally begin anew.

So you see, the finance person at a small company must wear many more hats than his/her counterpart in larger organizations.  In the scenarios above, there is a good chance that the finance person will also serve as the program manager for the strategic implementation, or at least play a key roll in that implementation.  The risks are often greater for a small company, but the rewards for the company can be greater as well – and isn’t that what owning a business is all about?

Does your company’s leadership think that having a robust Business Intelligence function is only viable for large corporations? Think again. In today’s global world, with information shared in the blink of an eye it is imperative that all companies know their numbers and manage by them. The information that a Business Intelligence (BI) function can provide can mean the difference between growth and competitive decline. Utilizing BI has been proven to result in significant competitive advantages both for small companies as well as large corporations.

Business Intelligence Planning

Initiating a Business Intelligence function in your company does not need to be excessively expensive but does require careful planning. There are five key steps in developing a plan for a BI function that, if followed, increase your chance for success. The level of complexity required for these steps is dependent on the size and complexity of your organization. Small companies can rapidly design a BI program to accelerate the process with the help of a consultant with BI experience.

The five steps are:

  1. Evaluate the company’s  strategic objectives for critical success factors;
  2. Design the Performance Measurement Blueprint;
  3. Perform a Gap Analysis;
  4. Develop Key Performance Indicators (KPIs); and
  5. Develop the high level plan for Reporting – Scorecards, Dashboards, Reports

It is important to involve top management early in this process. Their support will be critical to getting funding for the BI program once the analysis has been done.  Depending on the company culture however a draft of a proposal detailing the potential costs and benefits early on may be beneficial. A clear demonstration of the need for a BI program can facilitate its approval and funding.

It is always best to start the planning process with an evaluation of the company’s strategic objectives. To maximize the probability of success, any BI program should be aligned to the mission, vision, and the strategic objectives of the organization. Another critical success factor is documenting the benefits of a BI program up front in order to garner the support of top management or ownership.

Once you have determined how to align to the strategic objectives take a look at what are the expected levels of performance in order to meet or exceed these objectives. Determine any dependencies between objectives in this review. This will help you determine where you can expect cost savings and cost avoidances. An initial draft of non-tangible benefits should be developed at this time. Common benefits include improving quality, improving customer retention, gaining market share, reducing costs, meeting regulatory requirements, and fostering continuous improvement and innovation.

The next two steps are to identify the high level requirements for data collection and to perform a gap analysis. The gap analysis will identify any gaps in current capabilities to measure, analyze, and present the elements of the performance plan.  From there you can start to develop the KPIs that are needed to track performance. The last step of the planning process is to determine the high level plan for what reporting components will be needed. Generally scorecards and reports will be needed for managers and staff while dashboards will be needed for management.

Before you can complete the proposal for establishing a BI program you will need to determine the expected costs and benefits for presentation to management. This involves determining how the program will be designed. There are several options to consider in developing your capabilities for initiating a BI function. Each option will have different costs, timelines, and pros and cons associated with it.

The most popular options for launching a BI program are:

  1. Outsourcing a portion or the entire function;
  2. Purchasing a package through one of the many BI vendors; or
  3. Starting small with an in-house team.

The costs and the benefits for each of these options should be included in the BI program proposal. For a small company the third option is often the best initial choice due to the lower cost. However the cost of outsourcing and vendor packages can often be competitive and can decrease the time to adoption.

With all aspects of the BI plan identified the last step is to put them together in a proposal that clearly shows the associated costs and the benefits of having a BI program. The most compelling benefit in today’s increasingly competitive environment is to gain the advantages that an analytically focused strategy can give to your company’s success regardless of its size.

Budget Season! Time to Start Thinking about 2012

by Matthew Carmen on May 23, 2011

Well here we are in May. 2011 seems to be flying by – the year is almost half over, and in the corporate world you know what that means:

Time to start planning for 2012.

This is that time of the year everyone dislikes. For operations and the overall business, it is essentially time away from what they want to focus on, and for the finance teams, it is that time when they find themselves refereeing battles between operations and business for the finite amount of dollars.  All in all, this time of the year is where the challenges of the year ahead are discussed, strategized around, and hopefully addressed.

The three distinct groups – business, operations, and finance teams, each play a role in ensuring a successful budgeting and planning season.  In the case of the business, each area – whether a business unit, product line or service; needs to have its strategy fully developed by the executive team and communicated to all levels of the business.  By doing this, each person – from the lowest level all the way up – will know:

  • What the corporate strategy is, going forward,
  • How their work will help move the company towards the goal, and
  • It will provide management teams the direction in which to plan programs and projects.

By establishing a clear direction across the board, the business will be able to have conversations with the operational areas (such as IT) to make sure that the needs of the business are top priority for everyone.

No Personal Agendas

In my experiences, which have taken place in each of the three distinct areas, one thing has always been paramount to success, “Don’t come to the negotiations with a personal agenda”.  The more emotion that is brought to the table, the longer and more drawn out the negotiations become, and feelings are hurt at the end of the process.  Many times these feelings carry forward and the working relationships between people, groups and departments can be irreparably harmed.  This definitely does not help the long-term growth of a company.

The IT Operations View

In the case of the IT operations groups, this time of year is typically focused on two major things;

  1. The planning of programs and projects that benefit the business, and
  2. The planning of the IT organization.

In the case of the second point, IT has to weigh the benefits to the business versus the needs of the IT organization.  This means that with a finite amount of budget dollars available, the IT department needs to find the right mix of dollars for the benefit of the business while having enough budget to make sure the IT department is able to do the things it needs to do to ensure the business survives long term.  This internal IT spend will likely include: disaster recovery, continued infrastructure modernization, replacement systems for facilities, server and storage growth and refresh, etc.  These areas of spend need to be voiced to the business and discussions need to take place at this time of year, at times, the business seems to forget that ongoing operations need to be sustained and this costs money. May and June are critical communication months in the budgeting and planning season.  Communicating now means that once the finance team is ready to open the budgeting tool, usually right after the July 4th holiday, the whole budgeting project goes more smoothly.

The Finance Team View

The finance team always hopes for a smooth budget season.  Depending on the work they do in these early stages of the process, this smooth season is possible.  At this time of the year, the finance team needs to make sure that its message is communicated as well.  The finance team needs to make sure that all of the business and operational groups know and understand the process by which the budget will happen, what the key dates are, what the budgeting system will include and what business and operations will need to add to it.  These are all very important, the more the business and operational groups understand about what they are responsible to do at this point and throughout the whole budgeting process, the easier it becomes for everyone.

Another area that the finance team needs to be working on at this point is the final testing for its budgeting system.  Changes to the system from previous years may have been done due to upgraded equipment and upgrades in software functionality.  If a completely new system has been implemented (Hyperion and Cognos-TM1 are the two largest systems currently in use by midsized and large companies), the work becomes even more challenging.  Lastly, on the finance side of the budgeting triangle, training the usage of the system must be planned for.  All planning sessions need to be calendared, and anyone who will use the system including: cost center managers, department managers, executives and financial representation should be included in the training. (Either a complete training on a new system, or in the case of the use of the same system, a refresher course will be needed as well as complete training for new users.)

Plan Ahead for Success

Just like most endeavors, the more work that is put into the early phases of the annual planning exercise, the easier it become to achieve success.  The easier the complete budgeting process is, the less evasive to all areas involved it is.  Remember, for most people involved, the budget process is an addition to their “regular” job.  Remember, throughout the whole process, nothing is personal, it is all about moving the business forward…the right way.  Lastly, there are professionals, like myself, that can help with anything from questions to process and system integration.  We are here to help and make your business grow.

The Amazon Outage: 3 ways to avoid disaster

by Marc Watley on May 9, 2011

Even if your business doesn’t run on Amazon’s infamous on-demand IT services, you’ve no doubt heard about the recent failure in their Virginia datacenter. As I originally began writing this post – 48 hours after the outage occurred – scores of widely-used social media services like Foursquare and Quora were still down in addition to many other businesses. Exactly. No fun. (My music-tinged brain immediately conjured up images of red-faced, smoking-headed CIOs, syncopated to Adam Freeland’s “We Want Your Soul“, “…No simcard. No disco. No photo. Not here.”) Imagine being responsible for IT at one of these companies during the outage? Yeesh. Hats off to you guys for getting back online so quickly.

Now then, nearly two weeks post ze outage, the question remains on many a CIOs mind: what to do to prevent being affected by future outages? Are Amazon’s and other on-demand services going away? Of course not – their services are simply too valuable for today’s business. Spare-room-based startups and established shops alike use (and will continue to use) these services. The Economist reported in a recent article: “…the global market for cloud services could grow from $41 billion last year to $241 billion by 2020.” That said, options do exist to prevent exploding noggins and grey hairs during an outage. Perhaps not necessarily drag-and-drop simple, but not insurmountable either.  A few suggestions to ponder:

Amazon. Now with fewer calories.

One option to consider would be to migrate your core web services from Amazon EBS (their storage service around which the outage occurred) and diversify to other Amazon services – or to alternative services providers, perhaps keeping some services active at Amazon. Michael Krigsman wrote an excellent article for ZDNet about the outage, offering insight from a CIO perspective and sharing how some Amazon customers escaped calamity by employing diversification strategies.

Move. If you wanna.

You may love the low prices, but I’m sure it wasn’t just me who was reminded of the tried-and-true adage “you get what you pay for” when the outage occurred. (Though in fairness to Amazon, and as has been noted in numerous articles regarding the outage, these types of incidents are actually quite rare.) A rather obvious option would be to consider making a move away from Amazon altogether. This may be something you’ve been thinking about anyhow, and if so, be sure to spend the time and investigate your options. (BTW, if your concerns are specifically around storage strategy and exploring alternatives to Amazon EBS, I’d invite you to chat with my good mates over at P1 Technologies.)

Disaster Recovery

Needless to say, this is the option folks know but don’t really want to hear (and I know you knew I’d be going here). Why? Disaster recovery (DR) is neither a quick or simple initiative, as you likely know. It takes many many hours of planning and asking tough questions – principal among which is, naturally, how long can I afford to be down? The answer to this question – understanding your Maximum Tolerable Downtime or MTD – is an important one: if you’re running, say, a social media, gaming, or music service and using on-demand datacenter services, uptime is more than critical – it’s everything. Even a brief outage would mean disaster…hours of downtime might mean irreversible business failure. No users. No ads. No traffic. Not here. If you haven’t yet gone down the DR road, now would be a fantastic time to begin. And by now I mean right now.

The moral of the story here is that datacenter outages – while very infrequent with trusted players like Amazon, Verizon’s Terremark, Rackspace, and others – do and will occur. The key is to be prepared well in advance so that the effect on your business is minimal to none; have a sound strategy and diversify your core datacenter services. Spend time investigating options. Plan, plan, and plan some more, and be sure to have DR initiatives in place. And as I always say, don’t be afraid to ask for help, especially from professionals who can walk you down the road to smart recovery.

What..still here? Daylight’s a-burnin’ my friends!

3 Keys to Successful Integration Projects

by Matthew Carmen on April 11, 2011

Integration Projects

When a company goes through a merger, acquisition, purchase of a business unit, a strategic partnership, etc, there are activities that need to take place to make multiple entities into one cohesive unit.  These activities include: reaching the stated financial goals of the combined new business through operational and departmental combination, the selection of ongoing IT systems, and cost cutting initiatives.  All of these tasks, that create the new company, are integration projects within the larger program.

According to research done by the consulting company NGTO, over 50% of mergers are considered failures and 60-70% of these failures are due to significant misses regarding financial goals tied to the merger.  For public companies – and these are the mergers that people hear and read about – the financial goals are the key.  The true goal of a company is to grow shareholder value, be those shareholders stockholders in a public company or partners in a private entity.  If shareholder value is not improved by acquisition or merger, then what truly was the point?

Further research done by my own firm Datacenter Trust shows that when failure occurs, it is most often due to the stoppage of the integration process after reaching a portion of the total goal; say the merger of business units or reaching the financial goal set by the companies upon announcement of a deal.  By stopping the integration process, the new entity never reaches the strategic state that it set out to accomplish through merger.  Without reaching this state, optimal shareholder value is either not attained (as happens in most cases) or takes much longer and is more costly than was originally estimated.

Mitigating Integration Failure

As a financial professional with nearly two decades of integration experience, I would love to tell you that all the keys to success are based on dollars saved vs. dollars spent, but this sadly would be a lie. If I said all integration projects are successful, this too would be untrue. What I can tell you is that communication is the largest factor in a successful integration project.  Communication is followed closely by understanding – meaning that the people who will be doing the work must understand what the future state of the new organization is meant to look like.  Finally, there is program management – empowering the community that will perform the integration projects while having clear leadership and participation from the executive suite to ensure the program is aligned with the overall strategic vision. Now, lets look at these 3 a bit more closely:

Communication

I cannot stress enough that communication is the largest factor in the mitigation of integration failure.  The executive leadership of the company must ensure that the execution team understands the goal and the look and feel of the future state organization.  Leadership also must make it clear that they are willing and active participants in the program being developed.  Leadership must serve as the sounding board and approvers of each project so as to ensure the entire integration program stays aligned with the evolving strategic vision.  Without communication, there is zero chance of successfully integrating the new organization as advertised to stockholders, employees and the public at large.

Understanding

Understanding is an offshoot of communication.  I would argue that if the execution team as a whole does not completely understand the job at hand, then the notion of communication was unsuccessful.  Also, there cannot be any weak links in the execution team; everyone from the project managers to the network and database administrators must fully understand how their role will ultimately lead to success.  Without understanding, members of the execution team will invoke their own decision rules (e.g. loudest demands, squeakiest wheel, bosses whim, least risk to job, easiest activity, etc.)  Allowing this type of behavior is asking for trouble.  Integration initiatives have a finite amount of time to be completed and must be with the utmost skill and timeliness.

Program Management

Finally we come to program management; the company needs to get the best program and project managers available for integration.  This might even mean going outside the company to contract with consultants specializing in these types of integration projects.  As stated above, the project needs to be completed on time, on budget, and most importantly it must succeed in meeting the goals.  Setting up a ‘program office’ to manage integration properly is an imperative.  The program office manages expectations both up the corporate ladder to the executive suite and down to all areas of the execution team.  Management of the individual project managers is an important area of the program office as well.  With a limited amount of resources, each member of the execution team needs to manage his/her time down to the minute (remember, these team members have regular jobs as well) as the ongoing operations of the company need to take place on a continuing basis.

Countless other activities will help an integration initiative to succeed, but those I’ve covered here are the main three.  In the end, there are many intangibles that come up on a minute-by-minute basis during the project engagement.  The real key is to keep in mind that great people always lead to better results:  Empower the execution team while managing the alignment of integration and the new corporate strategy, ask for external help if needed, ensure leadership is fully engaged, and you’ll be on the path to success.

Business Intelligence in a Wiki World!

by Linda Williams on March 28, 2011

The role of the Business Intelligence (BI) function within the organization has become critical to thriving in today’s evolving business environment.   The ultimate purpose of Business Intelligence is to provide management with analytical insights that can be used to improve business performance and competitive position. Analytics provided by the BI department while intended to focus the organization on their core operations and progress toward aligning to their strategic objectives, increasingly can be the impetus for transformational change.

A review of top companies in their industries clearly shows that they all mange their performance using some sort of BI techniques.   The standard tools of BI are based upon gathering actionable metrics that can be used to increase the effectiveness and efficiency of their operations. This data is analyzed and compiled into reports including dashboards, scorecards, and predictive models. As an added service in  more evolved companies, the BI team generally provides consulting on metrics to propose ways to help make better decisions about operations and suggest improvement initiatives.

Often the development of these insights is closely guarded within the company to ensure at least a temporary advantage in the marketplace. The intent is that analytical capabilities will provide them the edge of a first mover as they develop new markets or approaches for their business.

The Problem

This advantage does not last for long in today’s connected world.

The basic analytical tools of BI however are well known in the public domain. Implementing basic BI has become not a luxury but a standard cost of doing business. Books such as Competing on Analytics give many examples of the types of analytics that can be collected and analyzed. There is also a tremendous amount of open information on BI and Key Performance Indicators (KPIs) on the web. Companies can use this information to identify enhancements to their current analysis through their own review of wikis and blogs and even competitors websites.

The Dilemma

The dilemma of what to hold close and what to open up is increasingly becoming a key decision point in a BI project’s lifecycle. The discussions weigh the pros and cons of when it is best to foster creativity through opening up their research to collaboration and when Intellectual Property (IP) should be preserved.  Often the decisions are not clear cut and there may be lively discussions between the BI team and the executive team around what is the best approach for this situation. At the heart of these discussions is whether competitive advantage would be better served by keeping their intent secret, for the short term, or whether in the interest of speed and expertise it would be better to tap into the wiki community.

Wikis

The overall purpose of Wikis is to provide a place to share content, ideas, links, and collaborate on information, technical documentation, or the development of new ideas. The Wiki world in contrast to the traditional BI world thrives on openness and transparency. Some of the key advantages of the wiki approach are:

  1. The potential to leverage the talents within the wider community;
  2. A reduction in the time to innovation; and
  3. The ability to incorporate social purposes that may go beyond the core competency of the company. An example is using external assistance in developing approaches to help the organization move into to being “green”.

Clearly there are compelling advantages to be gained by developing analytic dimensions with the help of the larger wiki community. Precedents for using this approach are also becoming more common. Some well-known examples of advances made by opening up IP include: the development of Linux; Netflix’s contest to develop an algorithm for customer preferences; and Google’s opening up application development for the Android. In each case the advantages of using the wiki world to enhance what may have been considered to be IP was outweighed by the benefits of collaboration.

Final Thoughts…

Secrecy in all areas of analytical review is no longer possible or even preferable in a world that is increasingly transparent with the pervasive use of social media by today’s employees who are mobile, connected, and less likely than previous generations to remain in one job for long periods. There are significant advantages to a business in tapping into the networked intelligence to speed up problem solving or make breakthroughs. These benefits may in some cases outweigh the potential risk of the competition using the same information or approach. The final decision however cannot be rote but must rest with the complexity of the use and the expertise of internal resources to meet that need.

Not that one would be able to tell the difference, but I’m writing this article while flying back to San Francisco from a great week of meetings in New York, and I’m absolutely convinced of two things:

  1. Lugging a laptop around from meeting to meeting is overrated; and
  2. The iPad makes it ridiculously easy to be just as productive on the road. (Oh and 3, as if it weren’t blatantly obvious to anyone who’s flown them: Virgin America = love.) By the time this article publishes, the iPad2 will be shipping, which will present a faster, lighter, longer-lasting experience.

Informal survey time: This flight is just about full, and looks like half of my fellow passengers are using some type of mobile device: iSomethings, Androids, and iPads. (Sorry Motorola, love the Xoom but none spotted around this nightclub-in-the-sky.) I counted maybe four or five laptops, and about 8 iPads.

The time of the tablet has clearly arrived.

Now anyone who has or does carry a laptop with them, you are with me on this, right? Seriously, it’s 2011 and the average laptop is still heavy (6lbs!). The exception might be the MacBook Air 1.86Mhz – a slick machine for sure, but make a move in that direction and $1,600 will need to make a move from your wallet. For less than half this cost you can have a fairly nicely-loaded iPad2 3G.

Now before you drop this post like a hot skillet and rush off to the Apple Store, you need to know a few things. The iPad is indeed quite cool, but a full-fledged laptop it isn’t, so some sacrifice is definitely necessary. Making the iPad your primary road machine requires having some proverbial ducks lined up first:

  1. Email.  The good news here is that the native Mail app works nicely for just about all email needs. The only drawback is that if you’re a Salesforce user, you’re out of luck for a mail-to-Salesforce sync with the iPad.
  2. Documents & spreadsheets. There is currently no MS Office for iPad. Sad, I know. However there are workarounds for working with documents and sheets: Google Docs works pretty well with iPad, and Safari’s use of HTML5 caches your work in case of a connection interruption. Also, apps like Citrix Receiver (for Xen users) and LogMeIn Ignition will connect you to your laptop or other machine back at the office.  I understand that Apple’s own iWork for iPad app is pretty good, though apparently has limitations if you need to convert to MS Office formats.
  3. Presentations. Keynote for iPad allows you to create all the decks you need, or better yet edit existing PowerPoint files. Since most meetings tend to be between two or three people, presenting from the iPad itself is a great, intimate way to talk someone through your deck. For formal presentations, just use the A/V dongle and you’re all set. Need to drop some Photoshopped goodness into your deck? There’s an app for that.
  4. Backoffice apps. Of course while on the road you’ll need to stay connected; your business juice running back in your datacenter.  Salesforce and most other CRM apps are web-based, so you’re already covered here. Connecting to your company’s systems is possible using the native Cisco and other supported VPN protocols. Datacenter providers are themselves releasing server management apps for the iPad. Rackspace, for example, just released an updated version of their feature-packed admin app for iPad, and I’d expect Terremark and the other major players to follow suit.
  5. File management. Storage space is key here, and since there (still) is no support for SD cards with the iPad2, I’d recommend getting the 64GB version. Given almost ubiquitous WiFi or 3G, both Dropbox and Google Docs are two smart ways to manage and backup files from the iPad.

If you happen not to be an Apple or iPad fan, I’d still recommend considering a tablet versus a laptop as your ‘road dog’. (Motorola Xoom is the best of this bunch at the moment, IMHO.) The light weight, size, decent-sized screen, and connectivity to your datacenter and business applications presents a compelling case for replacing that heavy old laptop. Your shoulders will thank you, too!

I’ve spent many years as a consultant helping companies analyze their business to improve performance and reduce costs, Clients large and small often ask questions regarding outsourcing/managed-sourcing. They’ve often read case study after case study showing how companies of their size/in their industry have shown real cost savings from their IT outsourcing programs, but their own initiative seems to be lacking in some fashion, often experiencing cost overruns and sub-par service levels.

I always come back with the same answer – A question:  Did you have the right information to make this business changing decision, and did you enter into your agreement from a position of strength?  The prospective client’s answer is usually slightly defensive, wondering why I’m questioning that company’s decision-making ability.  Which essentially I am – clearly something is amiss. At this point, the wheels are in motion and a serious conversation about how the agreement was entered into can take place.  This conversation is meant to figure out what has gone wrong and how it can be fixed.

Here are the main points where an outsourcing agreement can go wrong:

  1. Is the true cost of IT known and understood?
  2. Was proper due diligence performed and a business case developed?
  3. Did you open negotiations to multiple companies so as to get the best deal for your enterprise?
  4. Are you enforcing the contract?
  5. Has your company had any changes that would affect your agreement.

If these five questions can be answered, your company will be well ahead of the game and can facilitate changes that will help resolve the issues you may be experiencing. Lets look at these a bit more:

Understanding the true cost of IT

Many companies think they understand the true cost of IT, but most don’t.  It’s not just what is in the budget, it’s what isn’t as well.  Since every employee is part of the larger family, things are often done in a way that wouldn’t necessarily be the case with an outsource company.  For example, IT support staff would likely service a broken computer while they happen to be in that particular location to fix something else; an outsource company won’t (and unless on-site, can’t) do that.  There are hundreds of other “off book” examples (an ad-hoc server repair in the datacenter without a ticket being called into the help desk, perhaps) that, once outsourced, will no longer occur.  These are true costs of doing business that are challenging to foresee and don’t always get accounted for internally, however with an outsourced vendor these types of activities become chargeable events. In a large organization, this can lead to millions of dollars in additional outsourcing costs.

Performing Due Diligence to get the best deal possible

Knowing the true cost is the first step in the due diligence process.  Other things need to occur, including:

  • Prioritizing which functions should be run internally and which should be run by experts that can drive costs out of the equation
  • An understanding of which parts of the labor force will be affected either by being re-tasked to the outsourced vendor running the operations or being relieved of their positions entirely
  • Service levels need to be agreed to internally; and
  • Building a business case that supports the initiative, this includes noting all assumptions so as to be able to go back and audit.  By doing this, the company knows what is expected and then study the agreement forensically to uncover why the initiative is not proceeding as planned.

Handling Negotiations to Secure the “best” deal possible

Each company has their own process by which they procure goods and services.  The key questions to ask here are:

  • Were your company’s policies and procedures followed?
  • Were RFI’s and RFP’s constructed properly and submitted to all viable vendors?
  • Did your company negotiate purely on price, and were factors such as the Service Levels (mentioned above) taken into consideration?
  • Did you do research on the providers, talk to their current clients, etc to make sure they were the right fit for your needs?

All of these questions need to be given consideration up front, or you’ll risk the likelihood of compromised service down the road.

Enforcing the agreement with the selected vendor

This is key. Your company, when entering an outsource agreement, must establish a structure to allow for monitoring of the agreement and related SLAs. Is the vendor living up to their end of the agreement? If no, are steps being taken to alleviate the issues?  If you are not monitoring your agreement, you are as much at fault as the vendor for any perceived failures.  The agreement and the activity associated with it need to be continually monitored, and analyzed.

Knowing the changes in business conditions that might affect your outsourcing agreement

These business conditions can take many forms, and some affect all business – the current downturn in the economy, for example.  Perhaps your company may not have grown at the rate assumed in your business case and therefore in your negotiations with your chosen outsource vendor.  Other condition changes to consider include mergers and acquisitions, perhaps you are using more computing power then you estimated and did not take into consideration when purchasing another company.  Have you come out with an incredible new product that has driven growth within your organization? This is a good affect, but one that may not have been included in the portion of the new products business case that deals with internal costs such as IT, manufacturing and supply chain management.  All of these reasons and many others can affect the actual agreement, therefore it’s a must that your agreement be continually monitored as I noted earlier.

Conclusion

Several reasons can result in your company essentially leaving dollars and services on the table with respect to outsourcing.  There’s no such thing as too much thought when evaluating an outsourcing initiative.  If you need help, there are many experts available to you who can provide guidance and help develop a sound strategy tailored to your organization. Whatever your size or complexity of project, we’re here to help.

7 Key Strategies for designing an Analysis based Company

by Linda Williams on February 16, 2011

In today’s fast changing environment being an analysis based company is critical to survival and profitability. Different industries will have different needs for analysis but there are some key components of an analytical strategy that are foundational to the majority of businesses. Here are the top 7 strategies for designing an Analytical Strategy:

  1. Taking an existing business model and innovating against it: Some of the most successful companies over the last decade have been innovators in their space: Netflix, Google, Amazon, Apple, and Priceline. Each took an existing model and made compelling technological and structural changes. This model can be used by other sectors to take advantage of emerging trends and technologies.
  2. Keeping aware of changes in the technical environment and quickly growing your offerings to take advantage of newly emerging trends: The pace of technological change has been steadily increasing and businesses that miss these trends miss opportunities to thrive. For example, Netflix moved from postal delivery of movies to downloads on laptops and WII based systems and now is moving into offering content on iPhones and iPads. Its competitors are scrambling to catch up as evidenced by Blockbuster’s recent filing for bankruptcy.
  3. Developing an easy interface for customers, customizable to their interests: Customers have come to expect near instant response to changing orders, tracking, and complaints. Using technology is part of this equation but it should also include value- added services such as presenting relevant suggestions on what else they may find valuable either in products or shipping options. This is seen in the use by Amazon and Netflix of making recommendations or suggestions for new orders given past orders.
  4. Focusing on listening to the customer to develop and improve your service; capitalize on complaints customers have with your competitors: One of the key differentiators for companies is their real (or perceived) focus on the customer. People have come to expect superior service and are quick to go to a competitor when they don’t get it. It is critical to develop robust customer service capabilities for handling questions, complaints, and surveying customers on speed of delivery. Social media blogs are now an expected forum for customers to use to exchange ideas and suggestions.
  5. Offering a variety of service plans/products at several price points: This feature was a key to Netflix’s initial strategy which was to get customers to try their new delivery service – who can’t afford $4.99 per month. Then there is a simple upgrade plan with many levels that is flexible to meet anyone’s needs. Again, the pricing plans are very customer focused. This same approach could be used for pricing services for a support service giving various price points each with a higher level of services.
  6. Designing logistics so as to ensure cost effective, fast delivery: Logistics are pivotal to any business providing a product especially as the business expands internationally. Any product business must be able to deliver their goods/services in a timeframe that not only meets their customer’s needs but exceeds them.
  7. Having a data-driven culture that supports your strategy, direction, and profitability: Successful companies rely on using data-driven information to strengthen their product offerings and emerge ahead of the competition. This includes being able to identify top purchasers based on profitability, sales by market segment, or potential. Having a robust marketing analytics program has now become indispensible to providing valuable insight to drive the company’s strategy, direction, and profitability.

In summary, the increasingly competitive environment makes it critical to gain the advantages that an analytically focused strategy can give to your company’s success