Modern IT Portfolio Management: Risk: System Definition

System Definitional Risk

One of the serious risks in Architect side is system definition. This is partitioned into completeness(e.g., maturity level [none to integrated], Validation level [none, author’s bench check……Simulation of requirements], and requirements freshness (i.e., things change, was what was needed specified and validated too long ago….).

 

 

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Modern IT Portfolio Management: Risk Modeling

Applied R&D for rating interdependency risk almost complete this morning.  Models will work well from my reengineering project at Microsoft.  In the DSM model I adapted NASA’s model that uses interdependency and technology maturity as primary factors.  Multiplying the scales for each factor yields isographic map of the range of risk which is translated back to a simple scalar range for presentation.

 

Interdependency Risk DSM Model

Structure in Threes: Process Value

About two decades ago I was fortunate enough to collaborate with several brilliant people in IBM working in manufacturing research.  One of them Dr. Arno Schmachpfeffer had coauthored a paper in the IBM Journal of Research call Integrated Manufacturing Modeling System.   One of the key aspects of the paper was a taxonomy of activities in a process.  I was struck by the simplicity of the taxonomy and the ability for it to catalog any process activity into one of four categories: Rest, Move, Make, and Verify.  After working with this taxonomy for a while using it to catalog activities I had previously created in IDEF0 for various BPR engagements I came up with several simple insights:

  1. Most business ventures derive their value through the execution of one of these activities. Example, a Product development firm creates most of its value through the make activity, a Consulting firm typically from verify activities and an Airline from move activities
  2. Extending that insight further one can determine the efficiency of a process by inventorying, classifying and analyzing the rations of the activities in the processes these firms use to create their value.  Thus comparing the ratio of the firm’s primary value creating activity to the quantity of other activities provides one the BPR equivalent to a Asset Efficiency Ratio in Finance

Throughout the years –as a personal research project– I had been inventorying, cataloging and analyzing processes I have been reengineering.  This past few months as I started to look into valuation of services and processes, the question has come up often.  How does one create a valuation for a process.  Initially I was looking for a hard formula based upon standard accounting practices.  However, after considerable applications of such concepts as Activity Based Costing (ABC) I came to the conclusion that the formula may be standardize but the actual value of the parameters would change.  That is one could use the ration of primary value add activities to non-value add activates to determine the allocation of value applied to each process.

While this is a simplistic approach it enables the Process Analyst and the Portfolio Manager to work together to determine the value of services through a hierarchy without having to get too detailed in data collection.  The next aspect of using this relative allocation approach is to add adjustments for non-value add activities that are required or mandated (e.g., safety and regulation compliance).  However a case can be made for calling such activities value add as they enable a firm to fulfill its mission and requirements.  Thus compliance and safety activities are feature requirements of a product or service and without meeting such do not perform as required.

This month’s agenda is to merge my activity ratio spreadsheet with the value portion of the IT Portfolio Management spreadsheet.

Structure in Threes: Positioning and Lessons not Learned

Had great discussion last night at Starbucks on Mercer Island with some former Microsoft Alumni.   One is at a Microsoft competitor now working at developing a competitive service to our mutual former employer’s.  The change in strategy at Microsoft has yielded a large shift in the Architecture domain enabling competitors to move in and eventually succeed.  My colleagues and I rather than sit around the table discussing what could have been are busy creating the future; spending several hours mapping out the landscape and what pieces need to be build or remodeled.  Sounds like Enterprise Architects at work.  However, unlike the paper mill approach that was being pushed we’ve been taking a more engineering design approach looking at how the methodologies we’ve each been developing yield implementable designs specific to client’s needs using modular componentry.

Discipline Maturity Lifecycle

I was wondering how much longer it would be before Enterprise Architecture would reach the next stage in its’ maturity.  I’ve been watching TOGAF, ZACHMAN, COBIT, ITIL, etc. for the past several years ideate and mature into a robust collection of heuristics waiting for the day these take the next step towards modularity. last night’s discussion inferred the time was rapidly approaching, both my colleagues began discussing their specific domains in context of creating a reusable component based approach.  That is to say having a set of design rules as to how to choose what components from a library or catalog of components to achieve design goals.  I was really pleased with the direction the discussion was talking.  Had I had my copy of Jon Lang’s Creating Architectural Theory –I leant it out to another peer at Microsoft this past month– I would have pointed out we’re finally making some progress.  However, that most likely would have confirmed in their eyes I was an academic (odd considering I spend more of my time building tools and applying these concepts than doing primary research in the area).

At different times during the conversation I was frantically searching for documents on my Windows Phone to point out some of the pieces I’ve already built or are in the process of building.  Unfortunately, this is where the promise doesn’t measure up to reality.  I could not get to my Office365 Small Business Online site or SkyDrive (it couldn’t recognize ANY or the Userids I entered).  Microsoft has a lot of work to do to get Services right before they can compete effectively with Amazon, Google, and Apple.  Sure individual components run, however, when combined in a system which is where the Services business is, they’re having challenges.  This systems approach is still elusive to the culture at Microsoft.  

We parted with a plan for a plan which could either mean this will result in just an nice academic discussion or that we will really start assembling a next generation of Architectural practice that will take one step closer to a engineering-like discipline rather than a artist colony debating about aesthetics of design.  In either event the discussion confirmed to me I am on the right track with ‘Structure in Threes” and creating the design methodology that enables using modular componentry at all levels of abstraction.

Intellectual Arbitrage Group: Website Redesign

intellectual Arbitrage Group’s Office365 Small Business Premium website V0.7

Spent a few minutes each day this week working on Intellectual Arbitrage Group’s new public website.

intelarbgrp-website-homeOffice365 Small Business Premium IAG Contact Up Page Design

It has taken a little while to get some time on my schedule to work this activity.  Like other small consulting firms,  Time to work on marketing, backoffice systems, and practice development is always in short supply when you don’t have a dedicated people working each task.  Fortunately, using most of the Office365 Small Business Premium templates means I can focus on content and customers instead of presentation.  Only wish it had more flexibility or useful help on how-to customize like WordPress.comto is very minimal.  While the library of SharePoint web parts is helpful, the flexibility of these parts is minimal or not very well supported by documentation.

IAG-Office365 Website WP Blog-Webpart

This past Sunday, I asked my DNS Hoster [ZoneEdit] to build new records to forward my URL and Mail over to my Office365 site.  Both Registrar [DomainPeople] and DNS name service [ZoneEdit] were very fast and responsive, I switched over to new services in less than two hours.  I only hope Microsoft can match that Service Level, though I didn’t see a clear Service Level Agreement (SLA) from Microsoft when I signed up.  But then again they are still new to Services.

Creating Workflow for Modern IT Portfolio Management

On this week’s agenda is building out the workflow for the IT Portfolio Management Practice.  Unlike how IBM, DMR, and Microsoft accomplish practice implementation, I plan on creating a semi-automated workflow using SharePoint, MS Access and Excel.  While using PowerPoint and Word templates may capture content and present it in a “pretty” way, it does nothing for ensuring the quality of the output.  That was one of the reasons I created B.A.S.E. years ago.  I had gotten disgusted back then with the quality of analysis peer consultants were performing, choosing to spend all their time on formatting.  I guess I shouldn’t complain about such, as it created a market for me back then; fixing all the poor engagements and projects these people performed.  I’ve see lots of “pretty” engagements go bad due to poor analysis and thinking which creates the ultimate consulting sin in my book; doing harm to the client.  Having a structured process and supporting system may not guarantee perfect results or avoidance of harm, but it sure reduces the probability and provides better visibility to detect such.

Office Remodel: Structure Wiring System

Finish rewiring structured wiring system for Home Office this afternoon.  Now just a little cleanup in the cabinet and pulling two CAT 5 cables to my writer’s desk on the far end of the office. [

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Homemade 18U server rack in progress…not too many offices have a server rack that looks like furniture.  Next week’s task is to upgrade and rebuild the four systems to 64-bit, look for a external raid case and new LED monitor.  The following week I expect to rebuild the software system and start loading applications.

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Customer Satisfaction Insights: IT Service Management (ITSM)

This morning’s activity has been an offshoot of the Business Model research I’ve been working on.  One of the possibilities of business models for Modern IT Portfolio Management is to create a “IT Service” as an addition to the advisory/consulting services that are under development.  Currently I have an inventory of tools in the form of database applications, spreadsheets and word templates that I’ve created over the years.  While I integrate these into a unified practice I continually think back to the consulting platform, B.A.S.E., I built decades ago. I had built it as a consultant’s workbench using MS Access V1, which operated much like SharePoint.  The tool has data collection forms, analysis functions, and reports that enabled a consultant to use interview and other collected information as input to multiple forms of analysis.  When I used it on several engagements it saved me days of collating, classifying, categorizing and sorting work enabling me to focus on analyzing,  developing insights, brainstorming, and recommendations for my customer which is the true added value they hire a consultant for**.

A case for customer focus in ITSM

Today the need for knowledge worker augmentation is even more critical as management becomes aware of the cost of information overload to staff.  Not only does it cause more stress on employees, but errors increase putting projects and companies at risk.  The ability to manage information effectively as opposed to just efficiently has become a critical success factor.  Corporations that fail to grasp that point are now suffering from these errors.  The recovery time for these is longer than just the remediation time of the error.  The costs go beyond that to reputation and trust.  Once a corporation has lost trust with its customers is takes much longer to regain.  Kotler points out that it cost more to acquire a new customer than retain and old.  I would profess it takes double the cost of acquiring a new customer to reacquire an old customer that has lost trust with the company, and in many cases may never be required.

ITSM Ecosystems

This bring me back to IT Service Management (ITSM).  The first point, any IT Service works in a market whether a captive or open -if the IT Service is offered to external to the firm customers.  While a captive market for IT Services appears to have less concerns, if the Service Manager and IT Executive Management look at the situation, they have more to be concerned about.  In a free market situation both customer and provider are free to goes their separate ways.  A customer can seek other providers, a provider can seek other customers.  In a captive market customer and provider are joined together.  However, if the customer is unhappy with the provider and proves the case to executive management that the service is not needed or the provider is not efficient and effective to the business; replacement or outsourcing becomes the order of the day.  The IT Service staff are gone with no prospects of finding a new customer as the virtual firm has been dissolved or they are no longer a part of it.

The second point, while researching IT Service Management implementations around the global recently, it became obvious that most IT Functions: 1)View ITSM as a operations, mainly help desk, concern separate for the rest of the function.  2) Do not see ITSM as a strategy to design, build and grow the business.  The first issue that ITSM is just helpdesk or operations suggests that IT organizations are still functioning as 1970s style product factories.  Mass production of products and a possible focus on as designed quality (i.e., did not vary from design specifications).  Product manufacturing companies that operate this way are shutting their doors every day.  Despite the disposable society orientation of the market today, if a customer finds fault with the product they’ll return it and by from a competitor.  These returns due to defects whether variance from design or various for from customer expectations –which is more important- cost the corporation significant funds.  The ITSM equivalent means line of business down time or line of business rework, either is likely to generate a complaint to the CxO suite.  The second issue, related to the first, using a systems engineering approach to design services is a new concept, but one that pays back several fold.  Looking at not only the technical aspects of service delivery but the entire surround of that service is going to provide a higher quality, more cist effective service that provides a better customer experience which in the end results in a request for more services.

Management Consulting Models

**As noted in most management consulting books, a small army of entry level consultants are typically assigned to an engagement to do this data collection and organizing.  While a productive way to onboard and develop consulting skills for new consultants, this often creates a bang/bust syndrome for the practice: Hire lots of new consultants for an engagement which results in a big bench (consultants waiting for work) at the end of the engagement.  Immediate manager doesn’t wish to lay off staff as it: 1) Indicates poor business planning or sales skills on his/her behalf  2) Lowers perceived prestige as there are less people assign to be managed.  If the firm does lay off and hire consultants in a repeated cycle it generates a poor image for the firm as well as a bad reputation with existing employees and potential candidates.