What To Expect in 2011 Outsourcing…

Posted on March 28, 2011 by Chris Niccolls

Without getting too philosophical about it, what’s next depends on what’s already happened at your firm. Since every firm is in a different place, from those who are just dipping their toes for the first time to those who have a very developed model, let’s focus our answers on firms with more developed models. Let’s say, for example, that we’re looking at firms that have been outsourcing for at least five years and have off shored or near shored just about everything that makes sense. Does that sound like your firm? If so, what can you expect from this sort of mature model in 2011?

If you’ve done everything right, you may have already hit the best blended rate that you can expect. Why? Well, if you’ve placed the right resources in the right location, and you negotiated aggressively when you signed your last contract, there’s not a lot of room left for obvious big savings. With the economy appearing to improve, it’s unlikely that there is a much lower bottom to your prices if you negotiated your last contract in the last 2-3 years. Given the 10-15 % annual inflation in India, if anything you are going to be faced with strong arguments for price increases as you negotiate your next contract. There might still be room for some slight downward pressure, but overall you’ve probably pretty much seen the lowest offshore price. Unless your offshore location had a particularly high local labor cost, say Canada or Australia, and you plan to move your operations  to a lower cost location. But if you’ve been working in a lower cost location for several years, and have built up expertise and intellectual property, is the incremental value of making this move worth the effort? It might be, but it’s not as obvious a solution as your first outsourcing project. If you don’t have a very detailed set of metrics on this operation, it may not be possible to determine how long it’s going to take to pay back the cost of relocating your operation. Even if you can keep your offshore costs flat, the encouraging economy of 2011 is likely to raise the cost of your domestic/in-house team as they press for raises and promotions.

Does that mean that departments with mature outsourced models have no alternatives for managing costs? Not at all! But it does mean that price negotiation and jiggering locations are not where you should focus. There may still be some minor savings, but you’re not going to move the needle very much. You need to look elsewhere; in this case the “elsewhere” is productivity. Take a look at each of your locations: in-house, near-shore, offshore. Regardless of the price you pay per hour at each location, are you getting the same level of productivity?  How do you know? Have you run real comparisons between all of your locations… without “making allowances” for lower cost labor? I’ve found that many firms make too many allowances for local labor markets, making fewer demands of off shore and near shore. Unfortunately, lower expectations often lead to lower productivity. In the very early days of running a new location, when it is still in training mode, it makes sense to limit expectations about productivity; however, if the location (much like a new shift) has not caught up years later, then it’s a false comparison to look at the price per hour and say that offshore (or anywhere else) is less expensive. Brining every location up to the same level of expertise needs to be part of your planning process. Some locations may never attain full expertise, and that’s OK if it is a clearly understood assumption in the value proposition. It’s also OK for a location to take 5 or 10 years to reach full expertise, if that’s what it takes. But you need to clearly define the limits, or perceived limits, of each location, and then decide if each location is performing to its full capacity. Once you fully understand this, you may change your opinions on what is the right mix of locations (which may bring significant savings), or you may be able to produce more at each location… reducing or avoiding costs as you grow.

Obviously, there is a lot more to be said on this subject.  And we will take this up again tomorrow and dig a little deeper into how you can get more productivity from each of your locations and how to maintain or reduce your costs. But for today… that my Niccolls worth!

Posted in Best Practices, Common Sense Contracting, Decision Making, Delivering Services, Improvement, Continuous or Not | Tagged , , , , , , , , , , , | Leave a comment

overload, Overload, OVERLOAD…

Posted on March 25, 2011 by Chris Niccolls

The term that best defines this week is: Information Overload! Earthquakes, Tsunami’s, Nuclear leaks in Japan, Fault lines under US Nuclear reactors, New war in Libya, Ongoing war in  Afghanistan, Stock market roller coaster, Economy getting better/worse, Growth of the Deficit, Godzilla advancing on Tokyo, President of Yemen giving up power… uh, Godzilla? OK, maybe not Godzilla. At least not this week! There’s just too much news to process. In the old days, this information was delivered in the morning paper or on the evening news. Now it’s 24×7 from your favorite news site, magnified through Blogs, Facebook and Twitter. A few weeks ago Newsweek’s cover story was, “BrainFreeze”, which explains how we all shut down when we have too much information, or too many decisions to make. Sound familiar?

But we’re not just being bombarded with information about the larger world, as managers we have to deal with all the information from the firms we work for. A lot of the news we’re hearing is about the economy, or may affect the recovery. Except for COO’s, most operational managers don’t need to worry about detailed economic forecasts. However, we live in unusual times. The economy collapsed, and is coming back. Clearly work levels are rising, and there are many more signs of improvement. Most of the managers I’ve spoken to have seen signs of growth, or have been given new responsibilities, but they have also been told to hold back on new head count, or that they simply will not get more head count. Which is pretty typical when we hit the upswing in an economic cycle. First we don’t act fast enough when the economy drops, then we continue to reduce (or freeze) staff for too long, and then we hold off on new hires until we start to see serious cracks in our services. Clearly, none of us want to see our services damaged; then again, if everyone else is in a hiring freeze no one wants to be the first to ask for an exception. Normally, we would look upward in our management structure for some signs, for some insight on when we might see some change in policy. Unfortunately, Brainfreeze doesn’t just apply to line managers; it affects everyone right up to the C-Suite. 

How do we overcome Brainfreeze? My best advice is to create focus. It looks like we are at a turning point;  new staff may be needed, or after a couple of years without raises or bonuses, replacement staff may be required when existing staff departs for new jobs. You could be called upon to build your department very quickly. Consider what you think will be the right trigger points: Utilization exceeding “X”%, number of missed deadlines rising by “Y”%, queue of projects exceeding “Z” weeks, whatever makes sense to you. Then, start talking to the people who can authorize headcount, or can at least carry your request to the next management level. Give a monthly update to your management on when you think you will hit the cracking point. It doesn’t mean that you will get what you want, when you want it, but the better you can articulate your needs, the better you can build support for your position. If you are confronted by authorizers in the grip of Brainfreeze, continuous enforcement of your position makes sure that no one is surprised. You can reduce resistance by increasing familiarity. If you have authorizers that actively oppose your arguments for new staff, it’s better to know that sooner rather than later. This allows you to rethink and reshape your arguments until they are accepted.

When the economy shifts, corporate hiring policy is usually behind the economic curve.  But if you start thinking through your arguments, and aligning those arguments with the people who can approve your request, you can shorten the time gap between when you need something and when it gets approved. And that’s my Niccolls worth for today!

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Get off of my Cloud (computing)? Ummm… which IS my Cloud?

Posted on March 24, 2011 by Chris Niccolls

Cloud computing is certainly getting a lot of attention lately. It’s definitely a big thing, but it’s not a new thing. I’ve said before (and YES, I’m going to say it again) it’s really just the old “Mainframe with a smart terminal” model. However, it is different in that the Cloud brings together many different assets, with many different owners. If there is anything new to the model, it is the question of trust and reliability. When PC’s began their rise in corporations 30 years ago, many IT departments were horrified. The Mainframes and other systems in corporations were far more secure; PC’s were just too open: too little security, too many hardware manufacturers and software developers. It was just too much to keep track of and ensure that everything works the way you expect. With the cloud, you need to depend on services, sites and systems that you do not physically control. Even if you do negotiate a deal with a Cloud service that gives you everything you need, how do you know that the service is working according to your agreement?

Moving into the Cloud means revisiting a lot of the security and compliance issues that you worked out years ago. At least this time, the PC is a mature technology and the Cloud is offering products that at least claim to address security issues. However, the problem is that the Cloud is going to be made up of a lot of other devices, such as iPads and other slates, a smattering of hybrid data devices (hyper smart watches and computer enabled devices) and smart phones…. especially smart phones. In 2011 more smart phones will be sold than computers. And every one of these 300 million or more smart  phones are going to join the Cloud. That’s a big problem for IT, but it’s also going to be a big problem for other departments. Specifically, your Legal department.

In the Post-Cloud world, what will happen when you have to produce documentation in a lawsuit? You would identify the users, collect some hard drives, round-up the servers, copy the data… same as today. But what about those pesky smart phones? Certainly your executives are sending corporate emails over their phones, maybe instant messages and other texting as well. What about junior executives?  Being brought up with Twitter and Facebook, they probably combine personal messages with corporate communications on their phones… even if they are provided by the firm. If these are corporate phones… making them that much more discoverable… everyone might have had enough training to know that they are not to blog about clients. What about secretaries? A secretaries’ phone probably isn’t company owned, so it should be excluded from the discovery process, right?  Even if it’s taken to work every day, and the boss regularly sends work related texts to his secretary? Let’s recap.

  1. The Cloud: Time to deal with old problems all over again. Maybe even rethinking fundamental security issues, such as…
  2. Executives: Get some extra training ready! They need to understand the risks of mixing personal and corporate communications.
  3. Junior Executives: A generation younger than upper management, they are more technically savvy and more deeply embedded into social networks. They blog, they tweet, and they were brought up to share the most trivial details of their lives. Will they resist the urge to use social media to spread details about work? Maybe, but not on their own! Start developing a re-education boot camp for these users. Be sure to develop concrete rules that makes it absolutely clear that social networking CANNOT feed off of details of work at the office. For regulated industries like Investment Banking, think about adding a boot camp to the Analyst and Associate on boarding programs!
  4. Secretaries, admins and other support: This is going to be challenging! Did you know that a recent smart phone feature is “tethering”? A tethered phone becomes a wireless hub, inside of your corporation but completely outside of your control. You may already have dozens, and soon hundreds of these new networks inside your facilities. How responsible are you for the data traveling over these networks if they are working on your property, under your employees control? I can’t even imagine what new security busting features are under development! And if your admins are spending their time (during lunch?) to update their personal blog and they happen to mention some amusing details about what a client or executive did today… does this action add this phone to the discovery process? Lots to think about!

This is early thinking, and there isn’t enough precedent to guide us, but you can expect these questions will come up repeatedly.  Think about the many millions of social network users out there, some of which must work for your firm. What are they spending all of their time talking about? What are they using for content to fill the millions of blogs and billions of tweets? Answers to this question will, over time, cause ever larger parts of your cloud to be included in the forensic process for every lawsuit your company is involved in. Pretty scary, but… that’s my Niccolls worth for today!

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Too Smart Phones…

Posted on March 23, 2011 by Chris Niccolls

News alert: Smartphones are getting smarter and more powerful!  Hmmm… not new news? How about this one, “Cloud computing is becoming more popular!” Did I hear someone snoring out there? OK, we’ve all heard these stories for so long now that it is wearing a bit thin. Or so I thought until recently. When you look at the very latest phones, and their accessories, smartphones have crossed the invisible line between gadget and something more. Or maybe something less; a tiny but capable PC.

You can argue endlessly, as some people have, that THE smartphone is an iPhone, an Android or maybe some less known product. Given how quickly every manufacturer rolls out copy-cat features, it really doesn’t matter which phone is best. High-end phones have 1 GHz or faster processors, delivering PC-like performance (or at least netbook performance). The Thunderbolt is the new performance champion with dual-processors, nearly a GB of RAM and the latest Android operating system. Impressive, but the Motorola Atrix provides similar features plus some special accessories, such as a docking station that turns the Atrix into a laptop. Can it replace a dedicated laptop? I’ll leave it to the tech Blogs to answer that question, but I’ll bet that a new laptop hybrid with a non-standard operating system will need to work out some teething problems before it’s ready for the mainstream. Still, big winner or just an also-ran, the Atrix will move along the convergence between smartphones and PCs.

Another event moving along this convergence is the growing acceptance of the “Cloud”. Scrape off all the hype, and Cloud computing looks like 1980’s style mainframe computing. Take a smart-terminal (screen, keyboard, limited processor/memory)  on one end and one or more timesharing computers (for processing and permanent storage) on the other end, and Presto… a mainframe network! That’s pretty much the Cloud model. Granted, the Cloud is more random due to its less defined structure… and ownership!… but underneath it all, it’s pretty much the same model. A smartphone diminutive size and 4G connectivity mean you’re connected to the cloud all the time from just about anywhere. That’s a very compelling argument for the smart-phone as your main terminal.

And there’s another familiar element. The move from the Mainframe to the PC network was the last really big corporate computing change.  It was difficult, expensive and took most firms a decade to accomplish. If the next big change is the move to the Cloud with who knows what type of equipment, it will probably take as much time, effort and money and the move to PCs. So, if you don’t yet have a plan for smartphones you need to start thinking about one. With as many smartphones being sold as computers, you’re probably paying for the foundation elements of the Cloud right now, although it may be part of your official budget. How well you understand what your users are doing with their smartphones, and how that will lead you into the Cloud, will tell you just how expensive and difficult this big change will be. And that’s my Niccolls worth for today…

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The New Ownership Of Book & Subscriptions

Posted on March 21, 2011 by Chris Niccolls

Corporate libraries have undergone a huge shift over the last couple of decades. The paper based library had to re-invent itself as a digital resource. For years now, information that used to be the domain of the library not only went digital but also physically left the library and landed on individual desktops, and more recently on cell phones, iPads and Kindles. A lot of this digital content cost you no more than your time to register with whatever service you needed. Now the New York Times is changing the game… which is hardly unexpected. The Times was one of the earliest “important” publications to go digital, and has had the most corporate impact for Fortune 500 firms due to their large circulation and the extensive number of executives with paper subscriptions.  Just about everyone I know now reads the free electronic version of the Times at least once or twice a week, if not every day. All that may change over the next couple of weeks as the Times moves to an (almost) all paid digital model.

It was inevitable that as more and more services became digital, especially the best of these services, that traditional media firms have got to make their digital services… paid services. We’ve all seen stories about the decline of print media. The decline has not just been in terms of readership of their print services, but in revenue as well. New services that started out as digital have been charging for years, and now it’s time for the free services to catch up. IPad, Nook and Kindle sales run into the millions and smartphones have begun delivering true 4G performance; it increasingly makes sense as an end user to spend more time using digital services. While this is one of the more important milestones of the move to digital, I find that I am instead particularly annoyed by a smaller, less important story.  

About a week ago, Harper Collins put a limit on the life of an e-book. Now when you buy one of their e-books, after it’s been read 26 times… “POOF” it’s gone. There’s not much that you’re going to read 26 times, except maybe an atlas, a dictionary or a cookbook. This is really aimed at public libraries, where a digital book could live on forever. But should a book disintegrate when you read it 26 times? It seems to me that there are physical books that have been checked out hundreds of times and are still in one piece. Alternatively, do publishers think of e-books as being more like their low-end products, like a paperback? The paperback revolution back in the 50’s and 60’s used the paperback as a way to sell a lot of materials cheaply, in a more or less disposable form. If e-books are the new paperback, I’m not sure what this reveals about the industry’s thinking, but it doesn’t seem to be particularly flattering.

If you run a corporate library, the plans made by Harper Collins may not interest you… at least not yet. However, this does feel like a significant shift. For years, traditional media providers have been giving us incentives and making encouraging gestures so that we move to digital. But now we’re seeing scattered signs of pullback and disincentives. Years ago you were a pioneer when you used digital media, and it felt good to be a pioneer. But now we’re just part of the crowd, the settlers who have grown comfortable with what we have. Unfortunately, just about the time you’ve settled into your space on the digital frontier, it’s time for the taxman to show up. And the taxman matters. How many digital Times (and other free media) subscribers do you have? Will they want the corporation to pick up the charge, if they start getting a bill? Like many organizations you probably outsourced the management of your subscription services long ago, not only maximizing subscription discounts but also letting someone else deal with your CFO’s missing copy of the Wall Street Journal. Will subscription services be an effective solution as more subscriptions turn digital? Will your e-subscriptions be offered as large a group discount as your paper subscriptions? Alternatively, do you have more to gain by forming a new alliance with your own IT department, so you can tackle the next call from a C-Suite officer with problems reading a news story on their Android phone?    

No real answers today, just a lot of questions about the next round of the digital revolution. And that’s my Niccolls worth for today!

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Yes, THAT Butterfly Effect…

Posted on March 18, 2011 by Chris Niccolls

My childhood image of Japan is forever tied to the giant monster movies of the 60’s and 70’s, chief of which was Godzilla. Sure, everyone remembers Godzilla, rising menacingly out of Tokyo Bay, but there were many other less memorable characters. New villains were regularly marched onto the screen so that Godzilla had something to stomp on, but only one character kept coming back. A giant butterfly. OK technically (I’m told) a moth… which explains the name, Mothra… but it sure looked like a butterfly to me. While other giant monsters usually appeared so that they could destroy Japan, Mothra was played Japan’s defender. The first time I first heard the term “Butterfly effect” (a small change in one place can have a big effect far, far away) I instantly thought of Mothra. For giant changes I thought you needed a giant butterfly. Appropriate, when you think of the events in Japan today.

Not surprisingly, the radiation leak in Japan’s Fukushima Dai-ichi reactor is driving change around the world.  China, Venezuela and other countries are frantically buying iodine salt, which may prevent some symptoms of radiation sickness (if taken before exposure). Korea installed radiation detection equipment to catch anyone carrying contamination from Japan. Germany is considering a nuclear-free energy policy. Look at some of the other issues in play: will atomic power lose all support as a “Green” technology, can China and India continue their roles in globalization without an aggressive nuclear policy, if nuclear is further de-emphasized how will existing electrical capacity be replaced? No pun intended, but these are truly seismic issues that will take years to resolve and could change again if there is another incident.

The big issues will percolate for years, but smaller issues… the ones that will have the most obvious  impact on you…  are moving much faster. Let’s go back to the radiation detectors in Korea. This looks like something entirely new, which is understandable. Someone (we may never know who) took the initiative, got the equipment, and put a process in place overnight. But what level of radiation is being monitored, what can the detector track, and how accurate are the readings? Over the last decade US airports have unified their security policies, and other countries are following the US template. Just a few weeks ago domestic airports were focused full body scanners and privacy issues. Now every regulator and airport manager must be thinking about radiation contamination. Airports with heavy international traffic or that are located near Japanese communities are going to feel a lot of pressure to at least think about radiation issues. It’s probably not needed, and new procedures won’t endanger anyone, but any new rules or scans will make congested airports even more difficult to deal with. We really are asking a lot from airport personnel; I don’t know if they have room on their plate for any more responsibilities.

One other area that some of you should consider is the distribution of nuclear reactors. China has 13 reactors with 27 under construction; India has 20 reactors with 9 under construction. That means the two top outsourcing countries in the world are also the countries with the most aggressive nuclear power policies. Does it matter to you? Should this be part of your risk assessment when you renew or add new offshore sites? What are the risks? All of Japan is inside the Pacific Seismic Belt, the “Ring of Fire”; this is the most active earthquake zone in the world. The Earthquake/Tsunami/Reactor combination in Japan is much less likely anywhere else. Should you look at the age of the plant, the design of the reactor, or the firm that built it as the real risk factor? This certainly raises the level of complexity for choosing a site! Anyway, we’re all going to be following the events in Japan to see how this turns out and… that’s my Niccolls worth for today!

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A Moment for Japan…

Posted on March 17, 2011 by Chris Niccolls

Rather than the normal discussions of corporate issues, I thought that today we would pause for a moment and just offer our best wishes to colleagues, friends and family in Japan.

It’s difficult for us to really understand the level of devastation the combination of earthquake and Tsunami have created. Compound this with the ongoing leaks and potential disaster at a nuclear power plant, and you have a truly unique and overwhelming disaster relief problem. However, the disaster in Japan has yet another dimension that has received very little press. Japan has the most elderly population in the world. In the US about 12% of our population is over 65, but in Japan it’s 30%. While there have been scattered stories about the elderly survivors, there has been little to explain how this factors into the current disaster and will affect the future economy of Japan as these retirees pay to rebuild their homes and lives.  

Just one last word for today. If you want to contribute to the efforts in Japan, please think about how you want to donate. We need to remember that Japan is a wealthy country. They have very well-funded disaster funds, and the government is spending billions of dollars on aid. There are real problems getting aid into the area due to the damaged roads and radiation concerns. And there are always issues of deciding what needs to be done and in what order. But money is not a problem, at least not at this time. From the Haiti crisis, we learned that funds created for a specific disaster are often very restricted, usually because we want it to be specific.  When we donate for a specific cause, we want some assurance that this is where our money will be spent. When a disaster suddenly strikes in a new location, your fund may not be able accessible for this effort. Instead, the conditions of your donation may require that the money is spent on something far less essential. If you are planning on donating, please give this some thought. Do you want the money to be spent in Japan, or do you want it to be spent where that charity believes the need is the greatest.

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Build vs. Buy: Transparent Operations Build Better Products!

Posted on March 16, 2011 by Chris Niccolls

Yesterday we looked at the old “Build vs. Buy” question, “When does it make sense to have an internal department develop a product/service, and when does it make sense to use an outside product/service?” We left off saying that a modified Request for Proposal (RFP) process could measure internal competencies, which would guide you in making the build/buy decision. We began to ask, “What happens if you work with (or if you are) a reluctant department that does not want to be ‘rated’ by someone else?” So our subject today is, “Why does it make sense to be TRANSPARENT?”

More and more, groups are being told that they must report on their services or improve their services or develop a continuous improvement program. All of these programs require transparency: making the working of your organization measurable and reportable. If you are already on this path, you know that there are days when it doesn’t feel like a step forward. But as you continue to move along this path, you can see that transparent organizations are easier to manage, because it’s easier to set real goals.  Soon, “make things better”, becomes “reduce late deliveries by 5%”.  And you really know what you’re good at and where you need to improve. It can be scary to have your services rated, and worse yet, to allow the RFP process to inject potential competitors into your environment. But there are other things that are even scarier… like having projects that fail, dealing with angry clients, and having clients who aren’t actively mad at you but aren’t supporters… these are all much worse!

When I talk to colleagues, and we commiserate about the projects from hell we’re stuck with, these are often ones we didn’t want or were just barely able to do. We all fall into this trap at one time or another. You know you shouldn’t take on this project, but it has to be done and you don’t see any alternatives. You may even see using outside services as an indication of weakness. So, against your better judgment you take on projects that are going to fail, or at best results in poor customer satisfaction. If service groups work with Procurement (they usually run RFPs) you can quickly develop a measure of your competencies. See if you think this reflects your true capabilities. In areas where you have almost no capability, but have requests to provide services, identify outside providers, at least for now. Where you have some capabilities, but have significant shortfalls, develop a short term strategy for using outside providers, until you can strengthen these areas.

You can reduce the number of poorly performing projects, may be able to reduce costs, and have more time to focus on your core capabilities. It really is worth it, so give it some thought! And that’s my Niccolls worth for today!

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Build vs. Buy: How To Decide?

Posted on March 15, 2011 by Chris Niccolls

Some management issues are eternal and come up over and over again, with no real answer.  The underlying issues change over time and from one situation to another. But they are important questions, so they never go away. For example, I was recently asked, “When should you create a product / service internally and when should you buy a commercial product or hire outside experts?” Hmmm… the old build or buy question. For a smaller company, this isn’t that difficult a question because they only have a limited number of service departments. Smaller firms regularly need to bring in expertise because they cannot afford to sustain certain fundamental services. A large firm can (and usually does) have at least some capabilities in every service area.

World spanning firms have significant legal departments, a large IT organizations, facilities managers and architects, very complex HR services, etc. Aside from the question of internal capabilities, there are also other legitimate reasons to default to internal development such as: client confidentiality and protection of proprietary processes. In many cases it appears that internal development is cost effective, but internal service often do not include all costs or may not even know what their costs are (ex. Not every department  is directly charged for the space they use). There are also other untested assumptions. An outside vendor may deliver a product late (but may be penalized), or may go over budget (but may not be paid for all overages). Internally, penalties for these areas would not make sense. With so many untested assumptions and unwritten criteria for new projects, internal vs. external comparisons will never be totally fair and balanced. Until all of these assumptions are explained, documented, and quantified, it’s difficult to even define what fair and balanced means.

What’s the solution? The simplest solution may lie in a process you’re already using… the Request for Proposal (RFP). If you’re not familiar with this it is a document to gather information from several potential vendors or service providers. The RFP clearly lays out project details (eliminate any confusion over what you’re asking for), requests specific details (ex.: one-time cost for travel, ongoing cost for management, licensing fees, etc.), is reviewed internally by multiple departments, and provides an unbiased (as much as possible) score for each candidate. Your firm may already issue RFP’s. Usually, due to their high number of projects, IT departments have the most RFP experience, but RFP’s are moving into every group and all types of firms. But RFP’s have two problems. They tend to require a lot of resources and all of the untested assumptions we spoke about create a faulty filter for the build vs. buy decision. You can fix this by performing an assessment of capabilities.      

Essentially, this is still an RFP but instead of asking questions about a specific project, it asks more general questions to understand a candidate’s ability to perform different types of work. Applied internally, this tells you when a given department is the best option for a “build” solution. It also gives you a chance to get agreement on some of the unwritten rules. For example, if an application for confidential work should be performed internally… what is confidential, and who defines it (legal, IT, compliance, corporate security, etc.)? With more of the unwritten rules spelled out, build vs. buy becomes a lot more logical and easy to determine. Here’s a summary (and a bit of an expansion) on how to do this:

  1. Identify groups with many build vs. buy decisions.
  2. Determine the area of competency you are ranking.  
    1. Ex.: Web development vs. database management
    2. Ex.: Managing existing space vs. procuring new space
    3. Ex.: Internal e-discovery vs. outsourcing e-discovery
    4. Review the criteria for the “RFP” with each group
    5. Develop a “capabilities” RFP
      1. Include outside groups for comparison
      2. Ask a few quantifiable questions, to rank cost/time/etc.
      3. Review and score the responses
      4. Rank the capabilities of groups to deal with each area of competence
      5. Review and finalize the results with each group
      6. Apply to the next build / buy decision

See… not too difficult. What was that? You think this might work for other firms but that you might have some resistance in your organization? How can you get buy in to this process? That’s a really excellent question! And I have what I hope is a really excellent answer. In tomorrow’s post…. Because that’s my Niccolls worth for today!

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Projects Of The Living Dead!

Posted on March 14, 2011 by Chris Niccolls

I just can’t take another vampire movie. When did Vampires stop being spirits of the damned and become moody teenagers? True, hanging out with the cast of Twilight is pretty close to being damned, but without the pleasant brimstone aroma therapy. Give me a Zombie any day.  Zombies are reliable… ambling shuffle, limited vocabulary, and a strictly low-carb diet. Plus if you wade into a room full of Zombies with nothing more than a winning smile and a baseball bat, your odds of getting out alive are pretty good. So it’s good practice for your next IT project status meeting.

Lets be polite! The Zombies I’m talking about are the projects. Every year healthy projects turn into shambling Zombies. They’re as good as dead, yet they still wander around, killing programmer hours, taking over servers and gorging on your budget. When a Zombie causes racks up enough damage, you probably get a team together to put it down … but by then new Zombies area ready to take their place. Don’t wait until you have to start picking body parts off the board room floor, know your Zombies early on and take ‘em down as soon as possible. But how do you tell the difference between genuine Zombies and projects with temporary problems?

Remember, you’ve got a huge amount to gain. Out of your entire project budget, let’s say that 5-10% of the budget could be Zombies. If you could cut in half the time it takes to recognize the Zombies and kill them, you could free up 2 or 3 % of your budget, maybe more. Of course, you don’t want to go off on a hunt and kill off all of your C-Suite’s pet projects… that would be a real horror movie! You want to be sure that your Zombie is real. How can you be sure? Simple, you put together your own Zombie hunting guide. Here’s what you need to do:

  1. Draw up a list of all of your projects for the last 2-3 years.
  2. When was the start day (when was the project approved)?
  3. When was the end date (when did the project “go live” or get canceled)?
  4. Which went over budget?
  5. Which missed their going live deadline?
  6. Who was the project sponsor (who requested the project)?
  7. Which projects were poorly attended by the sponsor?
  8. After specifications were agreed to, how many changes were made?
  9. Perhaps a few other tracking  ideas come to mind?

Do a little analysis and compare your known Zombies to successful projects. When did projects start to go Zombie? Once they became Zombies, just how many resources did they kill (did their unholy rampage last for a month, a year, longer?). Come up with your numbers on the cost of each Zombie, and then go through your project list. How many potential Zombies do you have? What will they cost? Unlike the guy in every Zombie movie that runs around telling everyone, “The Zombies are coming!”, start meeting with project sponsors and other managers to proactively review projects in danger of going Zombie. You may even be able to save projects that are on the Zombie path, due ot a lack of client time or direction. Either way, a solid process for tracking and killing Zombies will cut unneeded budget expenses and increase the number of successful project. What are you waiting for?  Grab your favorite implement of destuction and start swinging! That’s my Niccolls worth for the day!

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