How do you know when the gap is too big to jump?

SnakeRiverCanyonArrowEver watched a motorcycle jump?  Ever wonder how guys like Evel Knievel knew how far they could go? How fast they could make the jump?  How to tune that motorcycle so it would support repeated efforts to break and rebreak records?  Was the cycle the secret to success or was it more a matter of mind over matter, training and instinct?

Many businesses face the same challenges as they try to accelerate the pace of change, embarking on transformation initiatives that often demand that their people bridge frighteningly huge current-to-target state gaps. The price of failure is as catastrophic to a business as those motorcycle jumps are to the daredevils who attempt them.

Is technology the secret to success? Methodology? Only partly so — Objective measures of the size of the gap (a catalog of differences between the current and target states of process, technology, data, and business model) will only get you so far. Project phases can be designed to address this, and the classic stuff of project management can certainly help. I call this the hard science side of the equation.

However, for both the intrepid cyclist and the daring leader of an audacious business transformation, success is both an art and a science.  Just as a jumper has to factor in the strength of crosswinds, the nuances of posture and the internal state of mind, transformation leaders need to address the following questions, which speak to the art of success:

  • Does your organization have a framework in place to foster change (communication, collaboration tools; a training framework)
  • Is there a formal framework for facilitating alignment among stakeholders with different needs?
  • What is the state of employee engagement at your company? Who is burned out, checked out, counting down the clock to retirement? And who is revved up and raring to go?
  • Are there wounded bodies still littering the canyon from your last attempt to jump a big gap?
  • Do you have realistic expectations of the business input required to support a technology-driven transformation? Do you have a backfill strategy?
  • Have you defined success in business terms, or are you just eager to “put in a new system?”

When considering anything unprecedented or record breaking, don’t put all your faith in science—and don’t devalue the many human factors that are very much a part of the art of success.

Are eCommerce prices getting too dynamic?

This holiday season I was looking for a specific toy as a gift. I did a price comparison and found it had the lowest price at the Toys R’ Us site. When I went back to make the purchase just 2 hours later, the price has jumped up by 50%. Now I had to do my comparison all over again. That was frustrating to say the least.

This is the latest example of Dynamic Pricing. It’s been around for a while but mostly in scarcity driven industries like airlines and hospitality / entertainment. Here the rules of the game are clear, inventory is limited, it has an expiration date, securing a sale in advance has benefits and discounters can help you sell last minute excess inventory.

Now back to our dynamic pricing for $50 toys, other than a few highly desirable toys before Christmas, this is not a scarcity market. Special sale, timed sales, loyalty coupons and all these dynamic promotions are confusing enough but serve a purpose. Not being able to do a simple price comparison and place an order is annoying and will impact the buying decision. If there is always the possibility of a lower price just around the corner, then let’s wait.

Target had recently announced that it will begin price matching for all products, even against amazon but details on implementation are a bit fuzzy.

As dynamic pricing gets more widely used and noticed by consumers, how will they react?

Here are a few suggestions for retailers considering or implementing dynamic pricing strategies:

  • If the products you sell are of a limited quantity, knowing how many are there (at this price) is very helpful. What Orbitz does for example (only 3 tickets left at this price!) gives the consumer valuable information and an incentive to act fast.
  • If a price is reduced for a period of time, let the consumer know for how long it will stay at this price. Again, enables decision making.
  • Shop with confidence. While guarantees against future discounts are problematic, consider offering this to members of your loyalty club. The same way a great sales associate will tell you a sale is starting next week and he will hold the items for you so you can pick them up at the lower price, rewarding the best customers with price assurance and advance knowledge of sales will go a long way.
  • If you are putting an item below the competition, make it known. Consumers may doubt it but if they check and found it is true it will build trust.
  • Try not to put items that are dynamically priced into an email. Since you have no control over when the consumer will read the email, they may be viewing pricing that are no longer correct.
  • Feed the aggregators and comparison sites as soon as changes are made.

The key theme here is that dynamic pricing can be great if the buyers are given enough confidence and information to make decisions. Otherwise it may just make the the consumer even more hesitant to click the “Buy” button.

Will you be able to see the Black Swan?

Pity this poor project manager. He never saw the black swan coming.

Couldn’t see it through his magic green colored glasses.

However, projects do not suddenly overrun their budgets by 200% without any warning signs along the way. The following project managment traits are among those that are likely to lead to the epic project failures known as black swans.

  • Logging more new issues than we are closing every week, but the status is still green.
  • Never challenging task owners who keep saying they will have it next week, let’s just slip the due date and keep the status green.
  • Calling the strategy tasks done so we can start logging some effort as complete against all these development tasks, so we can still say we are status green, and % complete is aligned to % budget consumed.
  • Let’s get a conditional signoff on the requirements doc so we can start development as planned on Monday, and stay status green.
  • We’re running out of budget so let’s not provide any training materials, and just give the users a walk through, so we can keep the budget status green.
  • We have a few process workarounds to define, but let’s go live as planned so we can keep the status green.
  • Key stakeholders are unavailable, but let’s change the design anyway so we can stay on schedule and keep the status green. 
  • We’re burning the midnight oil cranking out code, and we need input on a design workaround, but no one is available, so let’s make a unilateral decision so we can keep on schedule and keep the status green. 

While its true that sometimes heroic effort can keep a project on track, it usually takes more than optimism. The true mark of good project management is not  keeping status green in the face of evidence to the contrary, but early identification and escalation of risks so that the executive sponsors and steering committee can make adjustments to scope, budget and timeline in a way that facilitates the path to success.

Time to Remodel the Kitchen?

Although determining full and realistic corporate valuation is a task I’ll leave to people of sterner stuff than I (since Facebook went public, not many could begin to speculate on the bigger picture of even small enterprise valuation), I’ve recently been working with a few clients whom have reminded me of why one sometimes needs to remodel.

Nowadays, information technology is often seen as a means to an end. It’s a necessary evil. It’s overhead to your real business. You joined the technological revolution, and your competitors who didn’t, well… sunk. Or… you entered the market with the proper technology in place, and, seatbelt fastened, have taken your place in the market. Good for you. You’ve got this… right?

I’m a software system architect. I envision and build out information technology. I often like to model ideas around analogies to communicate them, because it takes the tech jargon out of it. Now that I’ve painted the picture, let’s think about what’s cooking behind the office doors.

It’s been said that the kitchen is the heart of the home. When it comes to the enterprise (big and small) your company’s production might get done in the shop, but sooner or later, everyone gets fed business processes, which are often cooked in the kitchen of technology. In fact, technology is often so integral to what many companies do nowadays that it’s usually hard to tell where, in your technology stack, business and production processes begin. Indeed, processes all cycle back around, and they almost certainly end with information technology again.

Truly, we’ve come a long way since the ’70s, when implementing any form of “revolutionary” information technology was the basis of a competitive advantage. Nowadays, if you don’t have information technology in the process somewhere, you’re probably only toying with a hobby. It’s not news. Technology graduated from a revolutionary competitive advantage to the realm of commoditized overhead well over a decade ago.

Ok… ok… You have the obligatory kitchen in your home. So what?

If you think of the kitchen in your home as commoditized overhead, you probably are missing out on the even bigger value an update could bring you at appraisal time. Like a home assessment, due diligence as part of corporate valuation will turn up the rusty mouse traps behind the avocado refridgerator and under the porcelain sink:

  • Still rocking 2000 Server with ActiveX?
  • Cold Fusion skills are becoming a specialty, probably not a good talent pool in the area, might be expensive to find resources to maintain those components.
  • Did you say you can spell iSeries? Great, can you administer it?
  • No one’s even touched the SharePoint Team Services server since it was installed by folks from overseas.
  • The community that supported your Open Source components… dried up?
  • Cloud SLAs, Serviceability?
  • Compliance?
  • Disaster Management?
  • Scalability?
  • Security?
  • Documentation…?
    • Don’t even go there.

As you can see… “Everything but the kitchen sink” no longer applies. The kitchen sink is transparently accounted for as well. A well designed information technology infrastructure needs to go beyond hardware and software. It considers redundancy/disaster management, security, operating conditions, such as room to operate and grow, and of course, if there are any undue risks or burdens placed on particular technologies, vendors, or even employees. Full valuation goes further, looking outside the walls to cloud providers and social media outlets. Finally, no inspection would be complete without a look at compliance, of course.

If your information technology does not serve your investors’ needs, your CEO’s needs, your VP of Marketing and Sales’ needs, as well as production’s… but most importantly your customers’, your information technology is detracting from the valuation of your company.

If the work has been done, due diligence will show off the working utility, maintainability, security, scalability, and superior added value of the well-designed enterprise IT infrastructure refresh.

To elaborate on that, a good information technology infrastructure provides a superior customer experience no matter how a customer chooses to interact with your company. Whether it’s at the concierge’s counter, in the drive-through, at a kiosk, on the phone, at your reseller’s office, in a browser or mobile app, your customers should be satisfied with their experience.

Don’t stop with simply tossing dated appliances and replacing them. Really think about how the technologies work together, and how people work with them. This is key… if you take replacement appliances off the shelf and simply plug them in, you are (at best) merely keeping up with your competitors. If you want the full value add, you need to specialize. You need to bend the components to your processes. It’s not just what you’ve got.  It’s how you use it.  It’s the critical difference between overhead and advantage.

Maybe the Augmented Reality Kitchen won’t provide a good return on investment (yet), but… there’s probably a lot that will.

Are you Paralyzed by a Hoard of Big Data?

Lured by the promise of big data benefits, many organizations are leveraging cheap storage to hoard vast amounts of structured and unstructured data. Without a clear framework for big data governance and use, businesses run the risk of becoming paralyzed under an unorganized jumble of data, much of which has become stale and past its expiration date. Stale data is toxic to your business – it could lead you into taking the wrong action based on data that is no longer relevant.

You know there’s valuable stuff in there, but the thought of wading through all THAT to find it stops you dead in your tracks.  There goes your goal of business process improvement, which according to a recent Informatica survey, most businesses cite as their number one Big Data Initiative goal.

Just as the individual hoarder often requires a professional organizer to help them pare the hoard and institute acquisition and retention rules for preventing hoard-induced paralysis in the future, organizations should seek outside help when they find themselves unable to turn their data hoard into actionable information.

An effective big data strategy needs to include the following components:

  1. An appropriate toolset for analyzing big data and making it actionable by the right people. Avoid building an ivory tower big data bureaucracy, and remember, insight has to turn into action.
  2. A clear and flexible framework, such as social master data management, for integrating big data with enterprise applications, one that can quickly leverage new sources of information about your customers and your market.
  3. Information lifecycle management rules and practices, so that insight and action will be taken based on relevant, as opposed to stale  information.
  4. Consideration of how the enterprise application portfolio might need to be refined to maximize the availability and relevance of big data. In today’s world, that will involve grappling with the flow of information between cloud and internally hosted applications as well.
  5. Comprehensive data security framework that defines who is entitled to use the data, change the data and delete the data, as well as encryption requirements as well as any required upgrades in network security.

Get the picture? Your big data strategy isn’t just a data strategy. It has to be a comprehensive technology-process-people strategy.

All of these elements, should of course, be considered when building your big data business case, and estimating return on investment.

Is the 1-9-90 rule for social participation dead?

It has long been an axiom that getting people to participate in online communities is hard, and the 1/9/90 rule helped explain why. 1% will be die-hard content creators, 9% will participate and 90% will be passive consumers and sit on the sidelines.

A recent BBC study claims the old rules are dead and that a whopping 77% of adults should be considered participators in some capacity. Interestingly, GigaOm pounced and claimed the old rules still apply.

I think the BBC research is on to something and that the online participation patterns have changed. Few of the things may have contributed:

  • Consolidation: social networks such as Facebook and Twitter consolidate for us updates and posts from multiple communities and allow us to respond directly from there. You no longer need to go and check on 7 different communities to see what is going on.
  • Ease of content creation and sharing especially from mobile devices. Probably too easy if you ask me. if you allow it, your phone will post your location, the pictures you take and more without even asking. The success of Instagram is just one example. Being connected 100% of the time allows us to interact 100% of the day.
  • We are not anonymous anymore. It has been a slow change but if the late 90’s were about virtual identities and avatars, now we interact as real people. It may look like a small change but the whole nature of online interaction shifted from an outlet to interactions we wanted to have outside of our normal (and sometimes restrictive) social circle to where now most of the online interaction is with our social circle. More and more the online communities and social networks augment and extend our real relationships with people and brands.
  • While some people who came to the party felt a bit out of place and stayed close to the wall for a while. After some time you realize that keeping to yourself in a social setting is not very nice and that people actually notice. If you are part of the community, participation is now expected.

So if the BBC is right and we should be expecting more participation what does it mean for businesses?

Business social participation may still be closer to the old rules because they do not reflect a close knit social group but as more people become comfortable in sharing it will start to have an impact.

Internally, collaboration and social networking with colleagues will eventually follow the same pattern of heightened participation if you allow the same enablers. Aggregate and consolidate activities and updates so they are easy to access, make it easy to respond to them and embed interaction and sharing everywhere in internal web applications, sites, tools etc. Making sharing a social norm may not be too far off.

Externally, in addition to the brand enthusiasts and deal seekers there is now a potential in making a lot more people participants

  • Think about creating content that people would want to share. Too many websites and social media sites focus on the marketing side “what we have to sell”. Cool or useful things to do with the product or that are just related to the category will more easily be viral.
  • Many websites have added sharing and likes to their pages but few take it to the level of actually allowing specific questions or comments through social networks on content or products.
  • Think mobile sharing. From QR codes in trade show booths to special coupons for scanning or photographing in the store. Even my dentist has a promotion for getting free whitening pen if you scan a code and like him on Facebook. Brilliant.

Big Data + Small Process Thinking = Disappointing Results

Big data is in the news this week.  In a recent Forbes article describing the hidden opportunities of big data, Albert Pimentel Chief Sales and Marketing officer at Seagate quoted Mark Dean, an IBM fellow and director of the Almaden Research Center as saying, “Computation is not the hard part anymore.”  As with most big technology transformations, one of the hardest parts is always getting the process and people part right.

Big data has the potential to position businesses to outperform their competitors, as described in a recent McKinsey article that dubs big data the next frontier for innovation, competition, and productivity.  As businesses race to implement big data technology, there are some serious business process transformations that need to take place to fully leverage the investment in any big data initiative.

In the Big Data-driven approach to business transformation, the most important business processes are those that relate to Customer Experience Management across all fronts:

  • Manage customer loyalty
  • Manage customer value
  • Manage customer relationships
  • Manage customer feedback

These processes cross the more  traditional high level process siloes of “Manage Sales, Manage Marketing, Manage Customer Service, ” which were usually organized along departmental lines.

What actions will be taken based on the actionable intelligence that big data provides? Initiatives across departmental siloes must be closely orchestrated or the customer experience will become chaotic and confusing. Marketing campaigns have to be coordinated with activities across all customer facing roles in the organization. Effective enterprise program management is critical to this successful coordination. Marketing has to be thought of less as a department and more as a shared business responsibility.

When trying to leverage big data, it’s important to step back and answer critical questions before moving forward on multiple fronts:

  • What strategies and processes do you use to influence customer behavior on your website, in your retail outlets, at virtual and real time events? Are they working synergistically, or are they are crossed purposes?
  • What change management principles do you apply to shift customer attitudes towards your company, your employees, your products? Are you fully leveraging the power of third party change agents, or only applying  traditional, direct influence measures?
  • Are our processes too rigid to allow us to be a world-class, big data-driven organization? Should we concentrate on defining broad strokes strategies instead?

At the end of the day, the most successful businesses will be those that harness the power of big data and big process thinking to outrun the competition. More food for thought on the intersection of big data and big process can be found at:

Crowdsourcing BPM?

One reason that global business process improvement and organizational change management initiatives fail is that they are driven from the perspective of a single business unit, usually the one closest to headquarters where the project sponsors are. Until recently, the other alternative was to painstakingly audit the similarities and differences across multiple business units in multiple locations, and piece together something that meets everyone’s needs.

As an alternative, the Center of Excellence for a particular process area can provide a light framework that prevents crowdsources input from across the organization.  The RACI chart is a great tool for setting some crowdsourcing boundaries, and safeguarding against anarchy. The goal of any Center of Excellence in a particular area like Supply Chain, Finance, IT or Customer Service, is to develop reliable, predictable, repeatable performance, no matter who is doing the work or where in the world it is being done.

Many businesses already crowdsource input from their customers with a variety of survey methods and incentives, but many still struggle with how to effectively pull together and act on the input from their global employee base.

With the adoption of collaboration tools such as Microsoft Sharepoint, and Microsoft Lync, process and organizational change initiatives can be driven from a single center of process excellence, but they can crowdsource improvement input across multiple process owners, process participants, and what we have always called the “process customers” – those who receive the value added outputs of any discrete business process.

The toolset provides broad opportunities for both synchronous and asynchronous collaboration.

  • Use Lync within your organization for scheduled voice/video meetings that allow collaborative authoring of process documentation.
  • To bridge the difference in timezones and keep the ball rolling between these sessions, Sharepoint offers rich capabilities for collaboration on working documents and drawings, which can then be officially published to the broader audience by the Center of Excellence.
vanilla

No one likes plain vanilla anymore

More and more businesses are seeing the sense of trying to adhere to “plain vanilla” implementations of packaged software applications, without customization to the application code. It’s cheaper on the implementation side, and certainly cheaper to upgrade uncustomized package applications.

This guiding principle is often articulated in the kickoff slides, and all the key stakeholders and executive sponsors nod in agreement.

Here’s what usually happens next.

Analysis begins. Implementation team business analysts work with designated subject matter experts (SMEs) to gather the business requirements that will be used to configure the application.  They are adamant that their job must be performed exactly as it is performed right now. The SMEs are like ravenous foodies, seeking to outdo each other with requests for  ever more exotic ice cream flavors of the day, while your plain vanilla implementation is melting away, because no one really likes plain vanilla anymore.

How can you get this under control?  Intervene early and police ruthlessly during the analysis phase. Add the following expectation-setting statements to your kick-off slides, right after you articulate your plain vanilla guiding principle:

  1.  All customization requests must be reviewed and approved by the steering committee.
  2. Potential process workarounds will be explored before any customization requests can be approved.
  3. There may be more business process changes than there are customizations to this application.
  4. We will provide training on both new business processes and new procedures for working with the new software.

Statement 4 becomes a difficulty if you have not assigned responsibility or budgeted for the effort involved in documenting new business processes, and building and delivering the process training. This is typically not part of the scope of the software implementation vendor’s responsibility.

To prepare for adherence to the full set of guiding principles, you need to develop internal business process/change management capability, or budget  for outside help in support of any major system implementation. Failure to do so puts the success of your software implementation project at significant risk.

Last piece of advice: at your go-live party, serve two flavors of ice cream.

Plain vanilla for the team(s) who favored the process workaround route. If they were really good, give them a choice of toppings. For the others, give them exactly what they craved. They’ll fall into line on the next implementation.

Policy 360

Is Legacy Modernization Just Procrastination?

There is no doubt that replacement of core systems for insurers has been very popular over the past six years or so.  With the advancements in technology enabling vendors to provide solutions that are configurable, and more easily maintained with “plug and play” technologies that can be upgraded by less technical resources, insurers are taking advantage and moving in to new lines of business and new territories, expanding their footprint.  It allows many small and mid-size insurers to better compete with the leviathans who once staved off competition due to their enormous IT staffs.

But many of these insurers have been in business for scores of years, and have successfully relied on their older technology.  Does the advancement in technology along with ubiquitous connectivity mean that the mainframes and older technology systems just have to go?  Does just refacing the green screens with new web-based user interfaces mean that the carriers that do so are just procrastinating and putting off the inevitable?

A recent blog in Tech Digest posed that question to which I would reply, “Why?  If it ain’t broke, don’t fix it.”  With the horrible economy, many people who need a bigger house aren’t dumping the one they have and buying another, they simply add-on.  The core systems within a carrier are very similar.  If the system you have now works well for its use and if you want to expand in to new lines, you don’t need to rip out that old system and pay for an expensive funeral, just add-on and integrate.  This will start your company down the path to more flexibility which can be supported by a system that is specifically designed to bring all your information into one place – Policy360 based on CRM.

Utilizing a system designed to bring data together from multiple sources allows you to keep your existing technology, leverage the capabilities of new systems, and present and manage that information in a much more accessible and user friendly manner.

Is plastic surgery on your legacy systems really just putting off the inevitable?  Or is presenting a fresh look that sees into the future allowing you to keep costs down while expanding service and capabilities.