Peace for Our Time



A phrase spoken on 30 September 1938 by
British Prime MinisterNeville Chamberlain in
his speech concerning the Munich Agreement and
the Anglo-German Declaration

An epic age-old battle is raging across the centuries, between good and evil, Microsoft/Windows users and Apple/OS X users, law enforcement and criminals, Java developers and .Net developers, blackhats and whitehats, emacs vs vi users, heavy metal fans and synth fans, orcs and humans, and so on and so forth ..

Fanatics on each side are entrenched in their legacy experience and convictions, preferences, tastes - making it impossible to see the other side of the argument, because it's of course just wrong.

In the project management context, this typically translates into choosing sides between methodology approach - waterfall, or agile - with the agile approach having lured throngs of followers to abandon the traditional waterfall methodologies for heretical beliefs in happier colleagues, Customers and outcomes working with Epics, Stories, Sprints and Stand-ups .. and securing Customer (or key stakeholder) involvement in reprioritization of requirements and scope.

Don't get me wrong - I sincerely believe that each method has its merits, it's just that the waterfall approach was better suited to the main bulk of projects I was involved in during my formative career years, thus making other approaches less comfortable.

I think most of you are familiar with the principles of the waterfall model, and perhaps even some of its origins going back to the very early days of software development, later to be adopted and refined by the US Department of Defense.

There's a plethora of sources online going into all kinds of variants, descriptions of the method etc - so this won't be a detailed walkthrough recapping such content.  Let's just agree that it typically outlines various stages in a sequential fashion where the completion of the preceding stages are prerequisites to starting the latter.

Example –

Preliminary Design, Detailed Design, Coding and Unit Testing, Integration, and Testing
 .. or ..
Requirements capture, Analysis, Design, Coding, Testing and Operations

With roots in the manufacturing and construction industries, the blueprint must be established before the assembly can begin etc.

A contrarian approach to the waterfall model, would be Scrum, considered to be one of the most successfully proclaimed and adopted agile methods.  It's iterative, incremental, and actually encourages the scope and prioritizations to change with time as the project moves along.  Quoting Wikipedia -"A key principle of Scrum is its recognition that during product development, the customers can change their minds about what they want and need .." This is quite different from the waterfall approach as e.g. changes to solution design discovered during testing would require replanning, re-"tooling", and reimplementation (you can tell already that it's costly) not to mention that it may trigger other changes due to dependencies in the solution.

We'll revisit the notion of actually involving the Customer continuously in the decision making- and planning process in a later post, but make no mistake - this is a key success factor regardless of methodology, it's more a matter of timing, setting expectations and communicating correctly.

With the peacekeeper hat on, one is obliged to say that both methods carry strengths, merit as well as weaknesses - so which one is the wiser choice?  None? - Both!

The "Pragmatic approach" in my view is to base the choice of method on the context at hand, and there's a simple perspective which can be applied to do it - "Goals and Methods matrix".  With roots in an academic paper from 1993 where Turner and Cochrane state that traditional definitions view a project as ..

- “a complex sequence of activities to deliver clearly defined objectives  ...  and the goals and the method of achieving them are well understood at the start of a project, or at least at the start of its execution stage”
(Turner & Cochrane, 1993: 93).

.. - and propose an alternative view; that a project should be categorized by the extent to which the goals are more or less clearly defined, together with the extent the method to achieve the identified outcomes (scope, deliverables) is known.

 

With such a categorization, it becomes a little easier to take a step out of the comfort zone and acknowledge that the favorite method may not be the tool best suited to the task.  Just imagine taking an agile approach to building a car for each new vehicle ordered (low production rate ..) or applying the waterfall model to exploratory research (let he who hasn't exceeded his budget cast the first stone ..)

Sometimes, even a mix between the two (usually described along the lines of a v-shaped spiral) might be the most productive strategy even though it may send chills down the spine of puritans.

At Enfo, we support our Customers with a similar approach when it comes to digitalization initiatives and capturing the value of innovation, which often take the shape of a technical solution implementation project in combination with an organizational change at the same time.  Changing the way you do business and interface with Your Customer can rarely be accomplished within the same organizational setup as the vehicle taking you to where you are today.  Hence the need to address both areas, which is likely to require slightly different choice of method.

The industry trend of viewing and categorizing investments through the "bi-modal lense" (fast/slow, marathon-runners – sprinters, ninja-samurai, innovation/operations) is also enabled through this method approach.

It's not a question of abandoning your faith, making a deal with Hitler, selling your soul to the Devil, or giving up on your principles - but - at the start of your next assignment, try to map out where your organization, project and goals fit in on the matrix and keep an open mind on how to approach the choice of project method thereafter.  Perhaps it’ll take us a step closer to peace for our time!

 

By Fredric Travaglia, Business Development Consultant @ Enfo

 https://www.youtube.com/watch?v=RnqAXuLZlaE

https://en.wikipedia.org/wiki/Waterfall_model
https://en.wikipedia.org/wiki/Scrum_(software_development)
Turner, J.R. and Cochrane, R.A. (1993) “Goals-and-methods matrix: coping with projects ill-defined goals and/or methods of achieving them”, International Journal of Project Management, vol.11, no. 2.
http://www.enfo.se/
http://www.enfo.se/Den-Digitala-Dimensionen
http://www.travaglia.se/2016/06/id-like-two-scoops-of-change-please.html
http://www.travaglia.se/2015/10/who-is-your-customer.html
http://www.travaglia.se/2015/11/let-trend-be-your-friend_24.html
http://www.gartner.com/it-glossary/bimodal/
http://www.thedigitaldimension.com/Posts/Video-Logs/2016/Innovation/Create-and-capture-value-in-the-digital-dimension

Which perception of reality do you live in?

In these days of much (well-deserved) ado about Nobel laureates, the very fabric of reality is highlighted mainly in the physics prize.

Business is sometimes described as a (black) art, but in many ways I'd propose that it's more akin to science.  Consider the following method described by renowned physicist Richard Feynman - when explaining how a scientific law is established (freely)

1. Guess the law

2. Compute the consequences of the guess accordingly and its implications
3. Compare computation results to experience or nature (observations)
4. If the law disagrees with observations, it is wrong (sic!)

Similarly, business reality - your scientific law - is what you measure in and adequately can confirm as correct in your business, the foundation for how to direct your investments, and base your decisions on.  Perhaps, at some point – even automate decisions on.

Fail to measure - measure correctly, and the right things - and you will fail to manage your business.

Recent events seeing flash drops in the stock (DJIA) and currency markets (Pound Sterling) give evidence of what can happen and go terribly wrong, when autonomous decision and trading systems act on incorrect data and algorithms.

The old management adage "You cannot manage what you do not measure" rings true in many ways.

(For physics aficionados; the fact proven through different experiments that when observed on the quantum level, reality doesn't seem to actually manifest before we attempt to measure (observe) it, is even more intricate.  Luckily, business operations aren't that capricious.)

Secondly, failing to connect incentives to the right and balanced set of measurements, will inevitably yield some very unproductive behavior from the employees in the organization.

One of my favorite examples - urban myth or not - is the software company who wanted to minimize the occurrence of bugs in their application suite, and ingeniously incentivized the R&D department through rewarding the discovery of bugs in the code / functionality.

-          Needless to say, as the cynics of you will have figured out at the start of the example, the number of bugs in the software didn't seem to go down, at all ..

How can one go about to accurately observe, measure, and direct ones business and organization?  Depending on its current state - it may be a lengthy journey, but there's ROI and reward to be had at every step along the way.  Though there may not be a pot of gold at the end of the journey (in reality it truly never ends, you just become better - as an organization, Customer, and supplier) there are some business benefits enabled in the process which are not only financial – it builds capabilities which enable business development, in a positively reinforcing upward spiral.  Similar to machine tooling; we can’t assemble a production line without a basic spanner or screwdriver at some point, and automation & robotics is a step further down the line of maturity, rapidly becoming a major driving competitive force regardless if you’re in the service or manufacturing business.

From an IT perspective, there’s a similar dependency between data, information, knowledge, tasks/activities, processes, and the level of accuracy and control that can be asserted over each component across the business.  With every step and level, small discrepancies can amount to major inconsistencies towards the end of the chain – making checks and balances, and (automated) mechanisms to confirm data accuracy over time extremely important.

It’s these building blocks that make up the digital dimension of your business, the Digital Customer Experience - harboring the potential of getting closer to- and gaining a better understanding of what your Customer really wants/needs, and leveraging that knowledge into market position or industry partnerships (or both). 

Speaking of automation - something tells me that we’ll struggle to explain to coming generations what came first – the 3D printer, or the 3D printer factory – but until we get there, let’s focus on the next step that can be improved in your business for starters.

A follow-up post will delve into the details of how a maturity ladder improving the information and process tooling may be approached and climbed step by step.  Keep an eye out for the latest updates!

By Fredric Travaglia, Business Development Consultant @ Enfo

 

P.S. On a side note Mr Feynmans life and adventures are brilliantly captured in two books anyone with a  slight interest in nature, reality, physics or just life will enjoy – The Pleasure of Finding Things Out, and Surely you’re joking Mr Feynman.  Regardless if it’s the ins and outs of your business, or the fabric of nature, they highlight – as the first title states – the pleasure of finding things out, because you can!

https://en.wikipedia.org/wiki/Richard_Feynman

https://www.youtube.com/watch?v=EYPapE-3FRw
https://en.wikipedia.org/wiki/2010_Flash_Crash
http://www.travaglia.se/2016/10/the-digital-customer-experience.html
http://www.travaglia.se/2015/10/who-is-your-customer.html
http://www.cnbc.com/2016/10/08/pound-sterling-flash-crash-needed-computers-but-a-human-was-probably-the-cause.html
http://www.thedigitaldimension.com
https://en.wikipedia.org/wiki/Surely_You%27re_Joking,_Mr._Feynman!

Avoiding the Great Extinction

Regardless of if you are in the manufacturing business, or if you operate in the service industry – competition is a constant, and the pursuit of alternative solutions and suppliers is never ending.  How can you avoid going the way of the Dodo, and stay competitive in business?

Looking at recent history, there are plenty of evident changes where lessons can be learned, and insights into what the differentiating factors may be to either avoid a similar fate, or benefit from the rolling trends and changes occurring.

Manufacturing has continued to migrate and become outsourced, off-shored, over the past 25 years

From textiles, to heavy manufacturing and high tech / electronics, the exodus is moving higher and higher in the value chain.

East and South Asia offer superior labor arbitrage unrivalled on local western markets when global free trade facilitates the transfer of manufactured goods and eliminates trade barriers.

In the pursuit of faster, better, cheaper (and redundant manufacturing capacity where import tariffs still apply) it's a race to the bottom on cost, when outputs and tooling (quality) are standardized

The latest example from a Nordic perspective is the telecom industry where practically all manufacturing is shut down (Nokia, Ericsson) regardless if it is handsets or network equipment.

Design, intellectual property and service (consumer, Customer) relationship resides with local market - together with higher steps in the value chain.  "Designed in Palo Alto, CA - Made in China", is the new black.

The IT and service industry is the current big wave leveraging commoditized outputs and economies of scale.  Callcenters, Customer services facilities, IT Services are under immense price pressure - HCL, Tata/TCS, Tech Mahindra .. the list of huge resource pools of standardized competencies is growing and becoming more complex and sophisticated by the hour.  The argument that it's only applicable for non-creative work is disappearing as rapidly as the budgets allocated to local suppliers.

 As if that wasn't enough to assimilate in existing business models, the hardware and capacity services is undergoing a silent revolution where Amazon (Web Services), Microsoft (Azure), IBM (Softlayer) are offering dollars' worth of hardware capacity on the dime through their massive datacenter investments (Microsoft, Google, Apple, Amazon), combined with extreme flexibility and service expansion "on the dial".  The incentive to invest in in-house server capacity and capabilities is rapidly diminishing, together with related management services, and local hosting services.

What countermeasures are available to local players on the market - what can you offer, what do you need to be and do to become indispensable, essential, to your Customers value creation and offering to their Customers?

To summarize –

1. Package and bundle competencies

2. Offer domain and industry expertise

3. Offer fixed price solutions – minimizing risk

4. Strive for partnership rather than vendor-supplier status

5. Offer Excellent Service

1. Packaging and service bundling of multi-discipline competencies

Like any manufacturing operation will prove, the more complex the output - the better the margin, as more value is packaged and provided to the Customer.  Lumber in a stack and nails in a box yield little margin, but prefab housing is good business.  It's the combination of basic skills, tooling, complex skills and experience that raises the yield in the value chain.

2. Domain and industry offering

Regardless of your industry and business, that is typically what you know best.  If you can get a Customer who's in the same business, you can guide them past all the paths they shouldn't be going down, based on your own experience.

The problem is that the players in your industry and business are most likely competition, rather than potential Customers – but most Customers are looking for something in addition to the bread and butter content of the core offering you provide together with the competition in your field.  Differentiating and leveraging the core offering with domain and industry specific offerings, providing solutions and value rather than just the nuts and bolts for DIY (the assembled table and a takeaway order for dinner rather than the flat pack assembly and directions to the grocery store)

3. Fixed price models

Coupled with taking out risk from the equation for the Customer, and thus offering fixed price for a delimited outcome – suppliers start to become enablers and business partners rather than just vendors.

4. Partnerships - ..

.. with the Customers - becoming part of their operation, winning and losing together, sharing risks and rewards.  Proactively engage and collaborate with their strategic business initiatives.
.. with frontline players who can complement your offerings with domain and industry specific expertise.

Mixing these factors, interfaces and values provided to the Customer – you become indispensable, a critical key component and success factor – to your Customer.

This makes your business incomparable to standardized, commoditized offerings, measured and priced in $/unit (Gb, hour, FTE ..) - making the wave of outsourcing, offshoring and detrimental price-race to the bottom irrelevant.

5. Offer Excellent Service

Realize, accept and act on the fact that the offering, the value, the services and the Customer relationships are only as good as yesterdays’ delivery, and that your competition is constantly looking to get an edge over what we already offer - so should you!

Piece of cake, right – you’re already doing this, or planning to do it?  Perhaps not, but more importantly – there has never been a more advantageous time to endeavor to do it, than now!

The opportunities and capabilities to collaborate closely, share information on Customer behavior, real-time forecasts, etc are unprecedented given the information technology tooling and platforms available.

The Digital Customer Experience, is yet another step towards building that close-knit, indispensable position in relation to your Customer, and obtaining information crucial to creating partnerships with co-suppliers of expertise and complementary value.  Take a step forward to create and capture value in the Digital Dimension!

By Fredric Travaglia, Business Development Consultant @ Enfo

http://www.reuters.com/article/us-nokia-legacy-idUSKCN0PQ17Z20150716

http://www.reuters.com/article/us-sweden-ericsson-idUSKCN11S0G9
https://www.engadget.com/2012/01/22/why-apples-products-are-designed-in-california-but-assembled/
http://www.winbeta.org/news/microsoft-spend-15-billion-building-data-centers-year
http://datacenterfrontier.com/cloud-wars-intensify-google-adds-more-data-centers/
http://www.datacenterknowledge.com/archives/2015/02/23/apple-spend-2b-two-massive-european-data-centers/
http://www.seattletimes.com/business/technology/amazon-microsoft-invest-billions-as-computing-shifts-to-cloud/
http://www.thedigitaldimension.com/Posts/Video-Logs/2016/Innovation/Create-and-capture-value-in-the-digital-dimension
http://www.thedigitaldimension.com/

The Digital Customer Experience

In the most recent issue of McKinsey Quarterly, McKinsey shares a great article (set of articles) on customer experience driven business strategy. The executive briefing “The CEO guide to Customer Experience” sets the scene with the leading question “What do my customers want?” – akin to a previous post on the Enfo blog.

I would strongly recommend reading the post or full report on the McKinsey site based on its important customer experience centric message alone, but one of the take-home points made is worthwhile exploring further from a digitalization perspective;

“Customers accustomed to the personalization and ease of dealing with digital natives such as Google and Amazon now expect the same kind of service from established players. Research shows that 25 percent of customers will defect after just one bad experience.”

Their research also shows that not only can a digital-first based approach offer higher potential customer satisfaction, it typically yields a more favorable customer experience whilst providing superior support to further understanding your customers’ needs and wants.

With an insight into your customers behavior and digital footprint, your business gains a first-mover advantage in anticipating the next set of customer requirements, and upcoming trends.

Additionally –

“.. For all the advantages of digital-first journeys, those journeys that are the most digitized across all the interactions lead to the greatest customer satisfaction”

So  - not only does it provide an excellent opportunity to understand your customer better, digitalization also yields higher customer satisfaction; a win-win.

Important to weigh in is of course that this is a single-business and industry piece of research – but we can see the signs of rapidly changing customer preferences and expectations of a blended, rapid-response part-digitalized reality everywhere –

-          In-car delivery of parcels, groceries etc through time-limited federated digital keys distributed to mobile devices

-          Mobile device based one-click shopping, same day delivery (not to mention the tangents of drone delivery by air or remote controlled “box on wheels”)

-          Payments, identity handling, context and location-based advertising .. the list goes on ..

Digitalization, augmented reality, Internet of Things, Big Data, machine learning and predictive analytics – are trending concepts and tools which can be leveraged to support your business providing you allow some leeway for innovation and investment - ..

.. so, how do you know what’s next & how to progress in the right direction?

<insert quick-fix panacea here>

-          .. actually, it’s likely that you never really do – but with a firm grasp of your existing business processes, information model and customer needs, there’s a very good chance you’ll stay ahead of the competition with good margins, when venturing out to provide a truly digital customer experience!

By Fredric Travaglia, Business Development Consultant @ Enfo
 

http://www.mckinsey.com/quarterly/overview
http://www.mckinsey.com/
http://www.enfo.se/Articles/Blog-Posts/Svenska/Vad-kunden-verkligen-ville-ha
http://www.mckinsey.com/business-functions/operations/our-insights/the-ceo-guide-to-customer-experience
https://www.thunderhead.com/the-cost-of-crappy-customer-experiences-infographic/
http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-four-pillars-of-distinctive-customer-journeys
http://www.travaglia.se/2015/10/who-is-your-customer.html
http://www.travaglia.se/2015/11/let-trend-be-your-friend_24.html

The Age of Regulation

'Tis the most wonderful time, of the year .. - but no, for those of you who assumed this post would be about Christmas preparations due to the Andy Williams classic reference, I have to let you down.

Instead, it's the time of the year when many of us stay up late into the night, racking our brains to establish the background for and specifics of the budget proposal for next year!

Nothing wrong with that - financial planning tends to weed out the 'nice-to-haves' from the mandatory initiatives and investments - and that is in part what this post is about.

"Failing to plan is planning to fail" (Alan Lakein) and 2017-2018 will see some major changes in the IT landscape for a lot of companies and businesses.

What are the major upcoming events on the horizon important to note already at this stage?

From a platform point of view, it's inevitable to highlight Windows 10.  If you and your organization aren't there already, it’s time to seriously consider tackling this change and head off the potential dangers (and costs) of having to handle it as a rush job towards the end of Windows lifecycle & support

Another tangible driver for this update is workstation lifecycle rollover vs next generation of Intel chipsets – with current information to hand, there’s no support for the Intel processor generation Kaby Lake and onwards on Windows 7 or Windows 8, Windows 10 is a mandatory component to obtain proper support and stable platform operations.

Looking ahead at 2018 from a business point of view, 2017 is only one year away from GDPR - Reform of EU data protection rules – as the directive is transposed into national legislation.

With experience from the investments required to handle the introduction of SOX and SOX2 which for many businesses is an absolute must – GDPR needs to be taken seriously, and will for example replace PUL (Personuppgiftslagen) in Sweden, making it practically mandatory to comply to stay in business.

The basics, on a high level, require –

-          Easy access for each employee to review the data stored for the individual

-          Reinforced requirements regarding approval to store personal information

-          Facilities and functionality to permanently move information on individual level between organizations
-          Facilities and functionality to permanently remove information on individual level
-          Incidents such as breaches must be reported within 72 hours

Failure to comply or violations against the directive incur penalties.  The penalties include fines and imprisonment for up to two years, in current legislation – and in the EU based version, the fines range up to 20MEUR or 4% of the global turnover of the company.  If in breach, no board, CEO or CIO will be left standing after unsuccessfully avoiding such crippling costs to the business.

NIS is yet another such EU based directive where both the organizational processes and measures need to be aligned with IT and supported by adequate systems to comply.  Again, breaches must be reported to the local authority, although the penalties involved are not at par with the GDPR scenario.

Due to the fast-moving, changing business landscape, the heightened risk levels with business moving online vs cyber security concerns and cross-border legislation – the age of regulation seems to be upon us, and we’re bound to be affected by similar directives more often in the near future.  There isn’t a good way of avoiding it whilst still staying in business, but there are a few short-cuts which make it a lot less costly and straining to the organization.  Know yourself (your business and your Customers), the ins and outs of the processes, dependencies, deviations – keep your house in order, and stay open to change.  With a smaller scope to analyze as implied and mandatory delta – “only the add-on change” compared to additional unknowns in your business operations - the smoother the change will be.

So, what will you wish for in your budget-stocking this year? 

Merry Budget Everyone!

By Fredric Travaglia, Business Development Consultant @ Enfo

https://support.microsoft.com/en-us/help/13853/windows-lifecycle-fact-sheet

http://www.pcworld.com/article/3112663/software/microsoft-made-em-do-it-the-latest-kaby-lake-zen-chips-will-support-only-windows-10.html  

http://www.techradar.com/news/computing-components/processors/kaby-lake-intel-core-processor-7th-gen-cpu-news-rumors-and-release-date-1325782
http://www.forbes.com/sites/brookecrothers/2016/08/31/microsoft-tickler-file-alert-intels-new-kaby-lake-chip-will-only-support-windows-10/#307efb1e64cc
http://ec.europa.eu/justice/data-protection/reform/files/regulation_oj_en.pdf
https://www.sec.gov/about/laws/soa2002.pdf
http://www.datainspektionen.se/fragor-och-svar/eus-dataskyddsreform/
http://www.nyteknik.se/nyheter/snart-maste-it-incidenter-rapporteras-6335912
https://ec.europa.eu/digital-single-market/en/news/directive-security-network-and-information-systems-nis-directive
http://www.travaglia.se/2016/06/id-like-two-scoops-of-change-please.html
http://www.enfogroup.com/Competence-Areas/Process-Innovation