January 2010 Archives

Register for our monthly newsletter, and download "Creating Strategic Differentiation with Information Technology" - a diagnostic for IT executives - by John Hagel III.

Here's what John says to frame the discussion:

IT alone cannot create strategic differentiation - it is only an enabler. IT creates options that must be effectively exploited through focused business initiatives.

Nick Carr is right: competitors can copy virtually any individual business initiative leveraging information technology. This has three implications:

1. Companies must aggressively measure return on IT investment - companies often over-estimate the differentiation available from IT investment and under-estimate the investment
required

2. Building institutional capability for continued initiatives is the only real source of sustainable advantage

3. Since individual initiatives provide only fleeting advantage at best, it is helpful to define a longer-term strategic direction that can provide a context for waves of initiatives that reinforce each other and accelerate movement towards longer-term areas of opportunity

The document is made up of diagnostic questions in four key sections, to help you think through how to create strategic differentiation with IT:

I. Do you know where you are going?

II. Are you achieving as much impact as possible?

III. How do you define success?

IV. What is required to move even faster?

Don't just sit there - sign up for our newsletter, and download your copy now. >>

There has been a fuss here in the UK over a new TV advert from McDonalds, where they quite incorrectly claim that a "bob" is a pound. Now, I have never understood why foreigners had a problem with our previous monetary system -

• A farthing was a 1/4d
• A ha'penny was 1/2d
• A penny was a penny = 1d
• A thrupenny bit was three pence = 3d
• A tanner was sixpence = 6d
  
• A bob was a shilling, which = 12d
• Two bob was called a florin
• Half a crown was 2/6 = 2 shillings and six pence
• A crown was 5 shillings
• A ten bob note was ten shillings = half a pound
• A quid was, and still is a pound
• A fiver was/is five pounds
• A tenner was/is ten pounds
• A pony is £25
• A monkey is £500

Now, where's the problem in all of that?

Of course, we then succumbed to International pressure and the fact that people find counting to ten easier (no wonder the youth of today need calculators to do any maths), and introduced decimal (boring) currency.

Which all leads me to Internationalisation - and please note that I spell it the International way. If you think it is spelt with a "Z", you are probably American, and hence for us International folk, wrong!!! The number of presentations I have been to where the presenter proudly put up a slide saying "Internationalization" and wondered why the International part of the audience immediately stopped listening / threw rotten tomatoes is way more than ten (or even twelve).

The serious point of this artice is that if you are going to do business in another country, then get an expert to check your spelling / grammar / advertising / messages because otherwise you will simply cause offence. Similarly if you are supplying computer services to different departments / areas of the business, wouldn't it be sensible to have some understanding of those areas in the IT department, or if you can't stretch that far then access to some people you can call on for advice / input / testing / review etc. ? BSM is about understanding and communication flowing both ways between IT and the business, and not being dictated to (either way) by people who don't understand the local patois. 

 

By Bill Keyworth and Annie Shum

A fantastic BSM article appeared last week (1/18) in InfoWorld entitled "Run IT As a Business - Why That's a Train Wreck Waiting to Happen."  The author, Bob Lewis, identified the futility of IT organizations continuing down the same broken path that is not connecting IT with their business counterparts ...yet he sees too few IT executives who are willing to initiate the necessary BSM changes.  One of Bob's central messages to IT is that "no one inside your company is your customer."  Fairly basic principle ...but highly compelling to initiate change in the way IT performs their labors.

Bob provides some outstanding examples of IT executives that struggle with providing the "same old ...same old" IT services to business people who can't see the benefit of paying what they perceive as premium prices for products and services that they see advertised elsewhere for a fraction of the cost; or who fixate on short term deliverables that are "good enough" but don't address the company's strategic business opportunity for the longer term; or who won't document requirements in a way that ensures IT can deliver on expectations.   In these cases, IT consistently finds itself in a defeatist catch-up mode.

The article provides some common-sense advocacy that running "IT as a business" ensures that IT doesn't satisfy corporate business needs.  It's an interesting twist to the dichotomy of how BSM is perceived by IT versus how BSM should be positioned and executed by IT.  Bob concludes with a vision on what an IT organization actually does and looks like when it is integral to the business community, and not an add-on cost center that depletes profits.  Again... great BSM article!

The recent Dilbert strip might be too close to reality for many IT shops that have difficulty in justifying their IT management initiatives in a way that has any meaning or relevance to their business counterparts.   Given the highly reactive nature of many IT organizations, the tendency to put "lipstick on the pig" is pervasive and unfortunate.  Moving to more predictive and proactive BSM activites would be a worthwhile alternative ...to say the least. 

The idea that IT operates on behalf of the business has been around since the time the first international business machines appeared on the horizon. In the early days, it was simply using machine speed and power to complete data acquisition and analysis tasks that much more efficiently or effectively than could be done manually. The concept hasn't changed all that much. But, the technology and potential for contribution has grown as mechanical technologies gave way to the 'smart' and integrated technologies of today.

In the 21st century, business was awash with data ...data that is collected, sliced, diced and presented in a multiplicity of ways. But, somehow the really big payoff remained just out of reach. Clearly, the problem isn't the amount of or access to data. The problem was in the lack of timely, cost effective aggregation and analysis presented as business consumable information.

The first decade of the 21st century, we experienced a beneficial convergence of infrastructure capabilities, architectural implementation and a new understanding between IT and business. Changes in technology, data architectures, maturity in use of the technology combined with a drop in the cost of computing and its support infrastructure to provide the capability to collect, correlate and analyze massive amounts of data from sources and in ways that were previously inconceivable.

The fulfillment of BSM lies in its ability to bridge the communications gap between business and IT operations. That gap has consistently hindered the transformation of IT's data collection and processing powers to services that will seamlessly operate to support and enable successful enterprise operations. It isn't simply a matter of mindlessly adding instrumentation to collect more and more data. It's about improving data quality by identifying and eliminating irrelevancies. It's about improving the quality of communication and cooperation to effectively leverage existing resources. And, it's about focusing on representing the beneficial impact of technology on the measures of business success.

Check out Partners in Health >>

I want to share this blog  from Audrey Rasmussen of Ptak, Noel & Associates originally posted at http://ptaknoel.com/blog/

Today, HP and Microsoft announced a major expansion of their Global Strategic Alliance, which appears to go well beyond the casual indstry partnerships that sometimes arise between IT vendors. This is both an offensive and defensive move for HP and Microsoft, as they prepare to battle for their share of the future BSM market and emerging initiatives like cloud computing. As BSM continues to evolve upwards toward the "business" with increasing focus and interest in business services, and with cloud computing looming on the horizon, vendors are positioning themselves for the major changes that are coming in the future. This expanded HP-Microsoft alliance reveals these vendors' serious intention to compete in the evolving BSM and cloud computing markets. This alliance involves joint investment, development and collaboration in several areas:

• Citing easy deployment of infrastructure technology solutions with built-in management, HP and Microsoft announced turnkey integrated technology stack solutions that are delivered on HP hardware with pre-configured and integrated software, including Windows server software with Hyper-V, HP and Microsoft systems management software, and selected applications. Initially, HP and Microsoft announced technology stack solutions for Microsoft SQL, Microsoft Exchange applications, and Virtualization.

• Joint development efforts to integrate HP and Microsoft System Management solutions, including HP Business Technology Optimization, HP Insight Manager, Microsoft System Center and Microsoft Hyper-V Server software.

• Joint unified communications and collaboration solutions.        

• Joint marketing and sales efforts to sell these HP-Microsoft solutions. The sales effort includes both HP and Microsoft direct sales, as well as HP and Microsoft channel partners. 

• HP and Microsoft Services provide customers with additional help through their service offerings.  Leveraging HP and Microsoft's infrastructure-oriented services, up through HP's strategic consulting. 

The HP-Microsoft alliance makes sense for both companies on several fronts. The integrated technology stacks will essentially deliver pre-loaded and pre-configured hardware and software for server, storage, networking and application packages.  The alliance also enables both companies to compete with broader solutions that they wouldn't be able to deliver on their own.

• Anticipating the changes that the emerging cloud computing paradigm will bring about, if and when IT organizations begin adopting it, HP and Microsoft are positioning their integrated stack solutions for the short term and long term. Easy to deploy solutions that users can implement now, as well as easily adding more as their needs grow, could become their customers' "standards" which bodes well for both vendors. If they are convenient, easy to deploy, and save a lot of IT time and headache, the commoditization of the technology stack may move further up the stack, and customers may not care as much about what individual components are in the stack if they work well together.
  
  The initial solutions announced by HP-Microsoft can easily be deployed in data centers today, as well as for private or public clouds when companies begin to implement them.       

• Preparing for the coming battle for mind share and wallet share of the BSM and cloud computing market, each of these vendors face formidable competitors (i.e. IBM and Oracle) with war chests full of hardware, software, and services assets that could outmaneuver HP or Microsoft individually, but the combined solutions and efforts of HP and Microsoft could compete more effectively. For example, HP's server and storage hardware will enable the HP/Microsoft solution to compete with IBM and Oracle/Sun bundled hardware solutions. On the other hand, Microsoft's web server software enables HP/Microsoft to compete with bundled solutions that include IBM's WebSphere and Oracle's WebLogic .

Although there are good reasons for the HP and Microsoft alliance, there are many questions that arise from such an alliance. How they navigate these issues could spell success or failure for this alliance.  Remember, these two companies have been partners but they have also been competitors in systems management. How will they handle and rationalize the functional overlaps of the two companies' system management solutions? And how does that play out for their system management solutions that have competed with each other in the past?

HP and Microsoft also have existing partnerships with each other's competitors. How will this affect HP's partnership with VMware? And how will this affect Microsoft's relationships with other hardware vendors?

With this move, HP and Microsoft are positioning themselves as competitors for the BSM and cloud computing showdown. It's shaping up to be a battle of the titans. Although predicting who the winner will be is premature, this will definitely be an interesting space to watch. So tighten your seatbelts and prepare for an interesting ride.   

(Co-authored with Jasmine Noel) Cloud computing makes CA's acquisition of Oblicore interesting because cloud services without serious level contracts (....or a BSM orientation) are an enterprise disaster waiting to happen. Cloud Service providers (be they public, private or hybrid) will need business service management solutions capable of delivering against business-oriented SLAs. Cloud service users will need such solutions to help them make a wise choices from a confusing array of options.

The problem is two-fold, first Cloud implementations transform monolithic IT service delivery into a dynamic supply-chain with volatile interdependencies, interactions and impacts between each link. SLAs will be required that can identify, track, measure and report on each segment of the chain. CA has been working on this aspect of the problem under the Spectrum Service Assurance moniker.

Second, there is the translation of business oriented contract terms and requirements into a meaningful and measurable metrics that apply in a Cloud-environment. It will require a combination of creative modeling, impact analysis and metric identification and definition that relate business needs to infrastructure implementation...or a BSM type bridge between the business and IT gap. Oblicore focused its efforts on this aspect of the problem.

If CA can integrate Oblicore's technology with its Service Assurance efforts with minimal fuss then the results should be a very interesting BSM solution to these Cloud services problems.

Read the full commentary at http://ptaknoel.com/research-analysis/commentaries/ca-acquires-oblicore/

Since 1994 the Standish Group “Chaos” reports have been regularly mentioned in various posts in software and IT blogs. The following figure from the 2002 study is quite representative of the data provided in the Standish annual surveys of the state of software projects:



The January/February 2010 issue of IEEE Software features an article entitled The Rise and Fall of the Chaos Report Figures. The authors - J. Laurenz Eveleens and Chris Verhoef of the VU University, Amsterdam - give the following summary of their findings:

In 1994, Standish published the Chaos report that showed a shocking 16 percent project success. This and renewed figures by Standish are often used to indicate that project management of application software development is in trouble. However, Standish’s definitions have four major problems. First, they’re misleading because they’re based solely on estimation accuracy of cost, time, and functionality. Second, their estimation accuracy measure is one-sided, leading to unrealistic success rates. Third, steering on their definitions perverts good estimation practice. Fourth, the resulting figures are meaningless because they average numbers with an unknown bias, numbers that are introduced by different underlying estimation processes. The authors of this article applied Standish’s definitions to their own extensive data consisting of 5,457 forecasts of 1,211 real-world projects, totaling hundreds of millions of Euros. The Standish figures didn’t reflect the reality of the case studies at all.

I will leave it to the reader to draw his/her conclusion with respect to the differences between the Standish Group and the authors. I would, however, quote Jim Highsmith’s deep insight on the value system within its context we measure performance. The following excerpt is from Agile Project Management: Creating Innovative Products:

It we are ultimately to gain the full range of benefits of agile methods, if we are ultimately to grow truly agile, innovative organizations, then, as these stories show, we will have to alter our performance management systems…. We have to be as innovative with our measurement systems as we are with our development methodology.

See pp. 335-358 of Jim’s book for details on transforming performance management systems. His bottom line is elusively simple:

The Standish data are NOT a good indicator of poor software development performance. However, they ARE an indicator of systemic failure of our planning and measurement processes.

Jim refers to the standard definition of  project “success” - one time, on budget, all specified features. His focus is usually on software development. I would contend, however, that his good counsel is much broader. IMHO it applies to any IT project.

 

See the press release for details on the acquisition of Phurnace by BMC. This acquisition is in perfect accord with the vision articulated in BSM Review on the subject Agile Business Service Management.