Transition and Transformation or Transformation and Transition

Not having blogged for a long time, I managed to get a few spare moments on the bus ride home and tried to use it for sharing my thoughts; so here we go….please note these represent my personal views and not of my organization.

For the past couple of years I have been involved in number of Business Transformations (that has involved some form of Shared Services) and Technology outsourcing through Managed Services. In both these instances I have seen stakeholders grapple with the above question of should they transform to standardized processes and then transition or transition it into a controlled environment and then transform it within that environment.

What I have seen in traditional outsourcing or BPO models is that the vendors will come in and promise standardized processes and then transition the current environment into their control. They will then try and attempt to transform the client's processes to standardized way of working within that environment. They do manage to offer some savings through labor arbitrage in the first couple of months but the quality of service takes a beating.

Couple of factors do work against the vendors favor as the customer on the client side is still used to the high touch, low process adherence and high tacit knowledge kind of service. After taking couple of beating either the vendor reverts to what the client wants or beats the client into submission and force them to accept the low quality of service (BTW all these observations are anecdotal and not based on any factual data). Both way efficiency gains promised through adoption of standard services evaporate and neither party wins. As the client also compensates on their end by adding more resources and any gains from labor arbitrage quickly disappear. After a few years of difficult marriage they decide to call a divorce and go to find other partners and the journey starts all over again.

Recently a new kid on the block called "anything as a Service" is trying to change the game. I am talking about true "as a service" players who offer commoditized and standardized Easily Repeatable Processes (ERP J) run on commodity infrastructure leveraged on a global scale (BTW I am not talking about cloud washed legacy stuff). On these platforms you are not able to change the core process but are forced to adopt them. Then in order to uses these platforms you are forced to transform your processes before you transition (or start using them). If done properly adopting "as a service" model properly can provide sustainable advantage to both the client and the vendor provided neither party blinks during transformation.

Forrester in their Tech Market outlook for Asia Pacific observed following in Australia "Cloud-enabled services are replacing traditional outsourcing contracts…Forrester has witnessed a number of clients like AMP that have started migrating out of traditional contracts and moving workloads to cloud-based services. This shift will continue to accelerate in 2014". It looks like some clients have woken up to the challenges of traditional managed services and are fast transforming their processes and transitioning them to "as a service" model.

The benefits might appear to be tantalizing, transformation is hard; trust me I have been through four of them and it was not easy. One CFO I worked with told me mid-way through the process "If I had known this was going to be this hard I would have never started the process".

Often organizations are not able to standardize completely and land somewhere in the middle (due to variety of reasons); in this scenario they need some kind of translators who can bridge the gap. Now you see the rise of another set of service providers called brokers who do the heavy lifting of the translation and hide the complexity (BTW they do lot more than this). Some call them Services Integrators…..

Changing the way IT works and provides service

I recently came across couple of articles in the economist which made me think that use of technology is becoming so pervasive in our day to day lives that people are forgetting the boundaries. One article talks about how 3D printing is changing the world of manufacturing and challenging the existing norms on factory placement (BTW this is not new technology as I had played with this technology nearly 15 years ago and back then it was called Stereolithography and HPM was the first company in Australia to use it in ager). The other talks about how software is used to predict how and when civil war or unrest can happen.

Both these cases show a world that requires a new breed of people who can walk the grey area between Business and IT comfortably. A breed that can comfortably have the discussion with senior business stakeholders about revenue leakage through not invoking CPI increases in the contract. And then turn around to work with technologist to identify solutions that can scan existing contracts to extract metadata related to CPI increases and then integrate the same with customer information in CRM.

Question then becomes are we training and creating enough of these grey zone walkers within our organisations or do we leave this to accidental outcomes of the right person at the right time for innovative examples of solution below.

Extract from Economist below:

The third industrial revolution

The digitisation of manufacturing will transform the way goods are made—and change the politics of jobs too.

THE first industrial revolution began in Britain in the late 18th century, with the mechanisation of the textile industry. Tasks previously done laboriously by hand in hundreds of weavers’ cottages were brought together in a single cotton mill, and the factory was born. The second industrial revolution came in the early 20th century, when Henry Ford mastered the moving assembly line and ushered in the age of mass production. The first two industrial revolutions made people richer and more urban. Now a third revolution is under way. Manufacturing is going digital. As this week’s special report argues, this could change not just business, but much else besides.

A number of remarkable technologies are converging: clever software, novel materials, more dexterous robots, new processes (notably three-dimensional printing) and a whole range of web-based services. The factory of the past was based on cranking out zillions of identical products: Ford famously said that car-buyers could have any colour they liked, as long as it was black. But the cost of producing much smaller batches of a wider variety, with each product tailored precisely to each customer’s whims, is falling. The factory of the future will focus on mass customisation—and may look more like those weavers’ cottages than Ford’s assembly line.

The science of civil war What makes heroic strife

FOR the past decade or so, generals commanding the world’s most advanced armies have been able to rely on accurate forecasts of the outcomes of conventional battles. Given data on weather and terrain, and the combatants’ numbers, weaponry, positions, training and level of morale, computer programs such as the Tactical Numerical Deterministic Model, designed by the Dupuy Institute in Washington, DC, can predict who will win, how quickly and with how many casualties.

Guerrilla warfare, however, is harder to model than open battle of this sort, and the civil insurrection that often precedes it is harder still. Which, from the generals’ point of view, is a pity, because such conflict is the dominant form of strife these days. The reason for the difficulty is that the fuel of popular uprisings is not hardware, but social factors of a type that computer programmers find it difficult to capture in their algorithms. Analysing the emotional temperature of postings on Facebook and Twitter, or the telephone traffic between groups of villages, is always going to be a harder task than analysing physics-based data like a tank’s firing range or an army’s stocks of ammunition and fuel.

Harder, but not impossible. For in the war-games rooms and think-tanks of the rich world’s military powers, bright minds are working on the problem of how to model insurrection and irregular warfare. Slowly but surely they are succeeding, and in the process they are helping politicians and armies to a better understanding of the nature of rebellion.

48 best free software downloads from Microsoft | News | TechRadar UK

 

48 best free software downloads from Microsoft | News | TechRadar UK

Magic Quadrant for Application Infrastructure for Back-End Application Integration Projects

Looks like Microsoft BizTalk has finally made it into the leader quadrant; and leads by a hefty margin as well. What is interesting the Gartner commentary on the  vendors who were dropped as it certaily reflects consolidation in the market as smaller players were acquired by bigger ones.

BEA Systems: The company was acquired on 1 July 2008 by Oracle (see "Oracle's Post-BEA Middleware Road Map: Product Recommendations for Users").

Cape Clear Software: The company was acquired in February 2008 by Workday, a company offering HR applications through a SaaS model. Cape Clear's middleware technology is used by Workday in the context of its SaaS offering, but it is not sold anymore to user organizations (see "Workday Buys ESB Vendor to Offer Integration as a Service").

Iona Technologies: The company was acquired in July 2008 by Progress Software. Iona's middleware technology (Artix and Fuse) is in the process of being integrated into Progress' product lines (see "Progress Acquires Iona to Strengthen Presence in AIM Market").

PolarLake: The company refocused its strategy around offering specific integration solutions for the financial services market.

WebMethods: The company was acquired in June 2007 by Software AG. Software AG retained webMethods' products and branding.

Magic Quadrant for Application Infrastructure for Back-End Application Integration Projects

What language does your business speak?

In my work often I am asked to go in and setup Enterprise Architecture within organisation or help existing Architecture function. The sponsors of these projects tend to be CIO or Managers of Strategy and Architecture. In most of these engagements over past few years I have seen a consistent message being repeated over and over again.  "We need Enterprise Architecture and there is no need for you to speak to the business while developing one." Some time they may have a sound reason; such as they have done lots of workshops with business already and don't want to repeat it or they have Business Process Improvement team in place who can supply most of the information.

It is when they make statements like "We can tell you all you need to know about the business; as our operational/business people don't know what they are doing" or words to that effect.  It does surprise me in this day and age when most CIO's priority is greater Business to IT alignment they or their direct report can practice such disdain for a part of the organisation they are supposed to serve.

In my opinion some of this arrogance can be attributed to lack of common communication language and view point. Let me explain viewpoint before I delve into language issues.

IT like finance, human resources and other shared services interact with the entire organisation (wide viewpoint) rather than a department at a time. Business people working within a department want what is best for their department (narrow viewpoint). While shared services people who interact with multiple departments see the duplication of effort going on and feel frustrated by in-efficiency. All this can be eliminated by proper governance and management structure, the key here is trying to educate an average business user that their organisation is system with inter-connected parts. Now to the language question.

Most IT people like to live in a world of jargons, in which they find great comfort as it to some extent provides them with sense of belonging. IT is not alone in this sin; Defense Forces take great pride in conjuring up acronyms the length of a sentence that no sane person can ever hope to interpret. To some respect it is their way of weeding out anyone "not in the know" out of the conversation. IT Departments practice the same art quite effectively in confusing and bamboozling their business counterparts. Business on their part have held technology at an arm’s length and tolerated it as a necessary evil. There is rising awareness among business leaders on the strategic importance of IT and the impact it can have if used properly on bottom line growth.

Business deals in language of numbers; business scenario planning which then leads to business strategy is based on financial models. These complex financial models tend to answer questions like "should we expand into Asia what will be the impact on product development, sales staff and so on..". IT on the other hand tends to more visual and use complex diagrams (network diagrams, use cases diagrams, component diagrams..) to communicate their message. When most business people look at these diagrams they can’t comprehend how what the IT people are showing them will impact their bottom line growth or top line growth. The only way out of this debacle is for IT to understand and have the ability to present their models in numbers. Match IT investment decisions to organisations internal rate of return and so on.

Un-fortunately this trend has yet to catch-on, at least in Australia I see job adds for Enterprise Architects which calls out for experience in Microsoft .NET, Java, SAN technologies or MPLS networking. Never ever ask for the ability to read balance sheet or retain the ability to do financial modeling to match IT investment program to organisational investment parameters (it will be too much to expect business to learn IT's visual communication techniques as they are the clients IT is expected to serve). Till such time we will always have some form of divide between business and IT. I would like to close by saying there is a little ray of sunshine out there. Sometime back while speaking at BTELL conference I met Chris Pots who calls himself IT investment strategist rather than an Enterprise Architect, he shares some of the views expressed above.

Being Inspired

Sometime back one of my ex-colleagues Arjan Dewan recommended a book titled "Inspiration" by Dr. Wayne W. Dyer. I not a great fan of self help books, hence approached the book with some trepidation.  Reading the book I came across following passage from an ancient Vedantic text by Patanjali penned around 2000 years back; it describes is almost the same as what most programmers experience as being in the zone.

"When you are inspired by some great purpose, some extraordinary project, all your thoughts break their bonds, your mind transcends limitations, your consciousness expands in every direction, and you find yourself in a new, great and wonderful world. Dormant forces, faculties and talents become alive, and you discover yourself to be a greater person by far than you ever dreamed yourself to be." 

I have experienced this feeling sometime back, waiting to be inspired again..................

Changing of the guard

For the past couple of years everyone from Gartner to Harvard Business Review has been talking about corporate agility, where lack of the same can kill organisations. Following In the IT press SOA has been promised at the panacea for all the ills and somehow delivering the ultimate agility to the organisations. All this hype got me thinking about why there is so much demand for agile organisations.

From an Organizational history point of view large organisations (from banks to car manufacturers) where able to mass produce goods at a higher quality and lower price point than there smaller competitors (mom and pop shops). For many years this was a great thing and lots of small businesses either became bigger or absorbed into lager organisations and some went belly up.

With the advent of Internet, and efficient global logistics (UPS, FedEx and so on) cost of advertising and distribution dropped and world became flatter. Consumers got fed up with mass produced items (there are only so many IKEA coffee tables you could buy) and started to look for customize products. They wanted something different, something tailored to their needs (home loans tailored to their needs, furniture customized to their flat). An entire market emerged to satisfy this trend and slowly it is becoming the norm rather than the exception. In such a market large organisations are asked to produce items with greater variety and lower quantity per batch. Such a shift does require some fundamental shift in thinking and many organisations have successfully made the transition.

In such a rapidly changing environment large organisations finding there huge investment in IT infrastructure preventing them to move rapidly. IT investment which once was a competitive advantage for these organisations is proving to be a disadvantage, smaller competition with no legacy infrastructure or lumbering mainframes to support are able to adapt to the changing consumers needs at a much faster rate. The question that emerges is what value IT really adds to an organisation’s revenue or profitability. McKinsey recently did a study in Europe where they looked how much value IT spends was adding to the bottom line of the organisations. The graphics below is straight out of their report and I am including it without their permission for which I apologize.

 

From the study two things were found;

• IT spending varied between 10 to 30 percent of operating costs.
• Higher levels of IT spending didn't increase the effectiveness or efficiency of the business (banks that appear to get the most business value from IT spend up to 40 percent less than the weakest performers).

The four quadrants above represented following aspects of IT spend.

• Effective business enablers, achieve the greatest business efficiency and effectiveness, from a relatively low level of IT spending.
• High IT spenders pay out about 13% of their operating revenue on IT but don’t see the desired impact on business efficiency and effectiveness.
• Heavy IT transformers, spend about 15 % of their operating revenue on IT, mainly for specific business transformation projects.
• Efficient IT executors spend just 10% of their operating revenue on IT but haven't achieved a high level of operating efficiency.

The above study if definitely interesting as I then wanted to compare how Australian Banks would fare in such a scenario, banks are interesting as they are quite intensive users of IT and have made significant investment in the same for past couple of years.

The challenge was finding the right information as I did not know anyone in the banking industry. The journey started by gathering publicly available information I.e. Annual Report which outlined how much they spent of IT or Communications. Mind you as I am no Balance Sheet expert, I may have well got my figures mixed up (at least I would have them consistently mixed up). Following graph is a summary of what I found.

The above figures are based on 2005 annual reports and represent a total IT spend of AUD $3.5 Billion of AUD $24.4 Billion operating expense. One thing that emerges is Australians don’t spend nearly as much compared to their European Competition. Commonwealth Bank and Westpac both have large outsourcing models in place, hence have a limited discretionary spending. Bank of Queensland may appear to be out there, which could be due to their large BPO contract which gets added in as an IT cost. A word of caution at this point please do not fall into the simplistic metrics trap as the figures don't really represent business value being added by IT, I am using it as a mechanism to compare entities and if their size has any relation to money they spend on IT.

If we look at the above numbers from an innovation perspective it appears large IT spend does not guarantee innovation. Smaller players like Bendigo Bank are able to offer services like two factor authentication for their web client while the bigger ends are still struggling. In the last couple of months innovation has become the buzz word and everyone is looking to IT for innovative ideas that will transform the business.

The question then emerges is innovation the domain of big players with huge R&D budgets or can smaller players outmaneuver their bigger rivals. History has proved otherwise smaller startup have been able to innovate and bring new products to market and capture a bigger slice of the market. Other have been able to open up totally new markets where none existed before Google and YouTube are prime example. If smaller players can be more adaptive and innovative  will it change the model of corporations as we know it. Will this mean we are going to see smaller more nimble players banding together and forming virtual entities yet retaining their autonomous sub parts? ...........till next time.

Companies get the systems they deserve

Over the past couple of years working with various clients in Australia, Eurpoe and US I often came accross organisations whose applications were siloed and in total mess. During these times I did often wonder how did they get there, understanding that is partly the way to help them get out of it. Recently I came accross following quote and I think in few lines it aptly sums up the issue. Challenge is how do you fix something as fundamental as this.

Jim Crookes, Chief Architect at BT has observed,
“Companies get the systems they deserve. A company's systems estate is a result of its culture, organizational history, and its funding structures. Coherent, well integrated systems will only ever exist in companies that value coherence and integrated service.”

My first Word 2007 Blog post

This is a test blog to see if I can publish from right inside Word 2007 Beta.

Excellent Enterprise Architecture Books

For past few weeks I have had the pleasure of working with Adrian (he is a Principle in Architecture and Strategy Team), during this time we have had numerous discussions about what should make an Enterprise Architecture. Surprisingly we have been in violent agreement all the time. He shares the same view as me EA is more that IT it should encompass all aspects of an organisation including manual tasks. Often when we focus too much on IT aspect is when we miss the flow on effects manual tasks have on IT dependent processes.

Adrian being more experienced than I am (having been Chief Architect for 3G at Vodafone in UK), has written a simple book on the EA framework that he has developed during his career. I would recommend it to anyone considering some light reading on the topic.

Book Details:
"An Enterprise Architecture Development Framework: The Business Case, Framework and Best Practices for Building Your Enterprise Architecture" : by Adrian Grigoriu
Link: http://www.amazon.com/gp/product/1412086655/sr=1-1/qid=1154835650/ref=sr_1_1/104-0229407-0975133?ie=UTF8&s=books

Some changes for good in my life

I have been silent for a long time on this blog and it has been due to some personal reasons. Most of you who knew me professionally were aware that I was working as National Lead Architect for Volante Software Solutions in Sydney. Volante became target of a hostile takeover by Commander Communications and they won after a protracted period. At this point I thought it may not be a bad idea to explore greener pastures.

Couple of months back I got a firm offer from Oakton to join their Enterprise Strategy and Architecture team as an Enterprise Architect. I did accept the offer and for past one month have been working with them. Having said that I am still passionate about technology and Microsoft .NET so will continue to blog about that including SOA, and some new areas around Business Architecture, Application Architecture, Information Architecture and what ever else that catches my fancy :-) .

Agile dev end of life, Waterfall is back

For all the SCRUM and Agile people out there, Waterfall is back have a look at this conf and meet all like minded people. http://www.waterfall2006.com/

One of the guys at work sent me the link after I had been pestering everyone why Agile is so cool....

:-)

I found the following really funny and will resonate with all Architects.

"If designs are ruined by execution details, then we should divorce designs from execution. Implementation is harmful to designs! Implementation ruins the elegance, beauty, and symmetry of designs. The problem is execution; and so it is execution that must be eliminated. As a community of designers we need to insist that our designs remain unexecutable!"

Every thought what would happen if Amazon and Google were to merge

This is an old movie but a classic it looks at how we bloggers are changing the world, what would happen if Google and Amazon were to merge and become one company how will Microsoft respond. What will happen to all of us the bloggers......in 2014.

Have a look at this http://mccd.udc.es/orihuela/epic/ might change your perspective at things.

I remember at the last Code Camp in Wagga Wagga someone (an un-named person :-) ) said, "I don't buy books any more, prefer to read blogs instead" think about that after seeing this movie....I am already seeing in my profession what I call Bloggitechture (Software Architecture by blogs ).


By now I think I have pissed of quite a few people so let me stop now.

Ever wondered how much your blog is worth

This one is worth B$1,297.49 there is a web site which calculates what blogs are worth. Mine is way lower than Frank's which is worth a princely amount of B$19,216.04. You can check your blog rating out on this page http://www.blogshares.com/ . This is the trading history of Franks blog
http://www.blogshares.com/newgraph.php?type=price&large=true&blog=http://blogs.msdn.com/frankarr/

Future Shock and our daily lives

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For those who know me, will know my fascination for the book Future Shock written by Alvin Toffler. He was recently in Sydney Australia and said the following in his interview with Australian Financial Review.
"The issue is not jobs but creating value, creating something that someone else needs," he says. "Whether you get that through a regular, paid job, whether you do that as a freelancer, or whether you do that as a group that forms itself for a purpose and then folds up its tent."

Everyday we worry about the fact where our next job is going to come from, how will Indian outsourcing engine will effect us. Yet we continue along creating value for our customers and employers hence remaining employed. Fundamentaly I think the day we stop creating value will be the day we slowly start moveing towards unemployment.

His other thought that interested me the most was "It a period in which wealth is now mobile and we can reverse the tyranny of distance because value is so often based on intangibles and weightless products. ". Which is so true did I write a kilo of code today :-) or how many kilos of software did Microsoft ship this month.

Anyway I am eagerly waiting for his new book "Next May, Toffler publishes his latest book, Revolutionary Wealth (Alfred A. Knopf), about the way we are making money and will continue to make money in the knowledge economy. " April 25th to be precise.
http://www.amazon.com/gp/product/0375401741/103-2029315-9912650?vi=ossnet-20&n=283155
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Found a solution architect

Remember sometime back I had blogged about the fact I was looking for a Solutions Architect, well after a long and hard search finally found someone, it came as a pleasant surprise to find out he blogs as well ( Out of personal experience I can tell you this it is quite hard to find the right person you just have to keep your standards up and persevere). Check out Arons blog http://ruskydotnet.blogspot.com/ he is cool and passionate about .NET, in some respects I think a bit more than me.

Welcome aboard Aaron.