Troux: The answer to the new budget reality

Troux the answer to the new budget reality

 

I had the very good fortune to be invited to take part in a happy hour with great food and good drinks with Troux after the Enterprise Architecture (EA) conference I attended yesterday. Throughout the last few years where it seems as if every quarter has been their biggest quarter, they’ve also managed to consistently be rated amongst the leaders in EA in periodicals and places such as Gartner. I really believe that this is going to be their year in the Federal space and that everything will start to click for many reasons.

The first reason is the idea of Troux On-Demand. Some things that every customer is faced with when acquiring these types of decisions support tools is the big capital investment needed upfront, the resources required to get things going, and the sense that it’s going to take a long while to get to value. These can all be seen as strong deterrents. What has changed this perception in the Federal space is this idea of Troux On-Demand, a cloud service within the Amazon Gov cloud that can essentially be turned on and combined with the accelerator programs that Troux has developed to allow organizations to get to value quickly, in 90 days, 120 days etc.

The combination of those things is going to create this really unique package for Federal that allows organizations to come in, identify areas where they can save money, root out redundancy, and all the other things that organizations are going to have to do to meet budget requirements. The budget climate has gotten to where there is simply no way to continue on doing things the way they have always been done.  A lot of organizations that we’re talking to are just looking at what they’ve got for funding and trying to figure out how they are going to continue to deliver on the mission.

At last night’s event there was this real sense that the combination of need and the evolution of the technology was going to create this incredible opportunity in the federal space for folks that have cracked the nut on how to deliver answers in that space quickly, relatively painlessly, and of course cost is always a factor. By being able to address something as a service, you’re able to reduce that huge front end expenditure with some of these tools. You can see pretty rapid adoption even in the federal space which is sometimes a little bit more conservative.  So I’ll be interested to see how it all plays out. We’ve developed some federal specific offerings around the idea of coming in and understanding the portfolio quickly so we’re very excited about what they put together. I think there’s going to be a lot of people that see this as how they are going to continue to meet the mission given even the extraordinary challenges that we are facing today.

 

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

Run your IT organization like a business

The current economic climate has put a particular emphasis on the efficiency and effectiveness of organizational projects and IT portfolios. Programs and projects that are unable to demonstrate a reasonable return on investment are being punished, and in many cases rightfully so. Unfortunately or fortunately, depending on your particular vantage point, management’s axe is falling on those whose outcome is not well defined, whose numbers don’t add up, or worse who simply have no numbers. As a firm believer in having well defined outcomes, business cases and aligning change initiatives, programs, projects and other organizational resources to strategy.  I think that this is probably a good thing. In the short term however, both evaluators and those being evaluated will need to work together to ensure that the unfortunate consequences of this new focus on the outcomes, alignment and return on investment are protected and advocated for by people with similar requirements and “desirements”. This will only work if those same people have comparable abilities to “market” their interests. This can be a serious problem for the organization as a whole if management doesn’t recognize that there may be a gap between perceived value and real value. One of the things that is fairly widely accepted in the business world is that you should be careful what you measure because what you measure will get done. The renewed focus on accountability and return on investment across many organizations is essentially a renewed emphasis on measuring based on these yardsticks. I believe that in the long run this will have enormous benefit for organizations that stick with it and evolve their project and portfolio management efforts in coordination with an overarching performance management program. In the short run it may cause enterprise problems by punishing organizations, programs and projects that are delivering results but aren’t able to enunciate their value. IT executives take note; this may be a major problem for you sooner rather than later. Most business executives are fluent in the business case and live and breathe return on investment, they may also have more access to experienced sales and marketing professionals. IT executives generally don’t have that same expertise on staff, or in their personal background. This is compounded by a real gap in understanding – how what they do actually does impact the business.
How well can you present the benefit the business gets from your resources? How much did it help them? What were the outcomes that resulted? Executives that aren’t able to answer these questions are going to lose the budget battles in tight economic times, they are also going to lose control of their portfolios over time to outside vendors that can better enunciate their value proposition. I’m not advocating that IT executives develop their own marketing department, but I do think that there are some real lessons that need to be learned by IT in order to ensure that their efforts are appreciated and that the organization as a whole gets the value it is supposed to from their technology organization. The following 3 steps will help the IT executive better communicate the value to the business.
Step One: Establish ongoing relationships and remember to take credit. This can be as simple as developing a systematic approach to gathering the fruits of your success in order to reflect some of that glory back to your unit as a key enabler. Did your team help bring on a critical new application that increased sales? Go to the business unit and get the numbers. Did you make some course corrections during the delivery to tailor the application for the business? Get a quote from someone. Think of it as an internal press release to help generate more business (funding) for your IT department. More importantly make gathering this type of feedback a part of every project’s execution. One of the biggest things most IT shops need to come to grips with in this new era is that they are no longer operating as monopolies within their organizations. The proliferation of options and changing expectations of stakeholders means that you are now in competition with a wide range of vendors for wallet share within your own organization. Those vendors will have marketing and sales teams, you need to counter this by building your internal communications practice, developing business side advocates and taking advantage of your domain expertise. I want to be very clear – I’m not advocating for a territorial IT department that pushes back on initiatives just because they use outside vendors. I’m suggesting that we are entering an era when internal IT departments can lose budget to outside vendors based on a lack of marketing rather than a lack of competitive offerings. I think this competitive environment is good in the long term and probably means that we will see successful internal IT departments that are much more tightly integrated with the business than ever before, because those that don’t will see their influence and footprint erode substantially as outside vendors that are willing to work closely with the business win more and more wallet share. Remember that you need to reach out to the business units regularly. Not just to let them know when the network is down but to let them know what you are doing to help support their initiatives and to provide opportunities for feedback.
Step Two: Establish a set of criteria for success that you can tie to the value proposition and the organizations values. Many of the measurements we are accustomed to in IT – from uptime to help ticket resolution – don’t clearly tie back to the bottom line. They are probably good to do, for example it is probably good for the corporate website to be up and running at all times, but what does that mean for the business? How many visitors does your site get? What do you know about those visitors? What percentage of your corporate revenue is dependent on the supply chain system running in your datacenters? If you process 65,000 transactions a month that account for 1/2 the corporate revenues related to a specific line of business and every outage of more than 2 minutes costs you thousands or tens of thousands of dollars, it provides context for “overhead” expenditures. Does the line of business you are supporting really understand what they are getting for their dollars if you are working on a fee basis? I spend a lot of time with business side executives that don’t understand what they are getting for the 7 million they spend every year on IT. The story IT tells has to be tied to the story of the business and its success, clearly aligned to the success of the business. If you can’t tell that story then something is probably wrong not just in how you are marketing yourself to the organization but in how you are executing your programs. You should be able to clearly work backwards from the strategic approaches of the business to best understand how each is enhanced by your technology offerings. If you aren’t sure how your programs are critical to executing the business you can be sure that the business is wondering the same and eventually that wonder will culminate in budget cutting or re-allocation. If your organization has a clear strategy coming from executive leadership, it is worth taking the time to align your internal strategies to that top-level strategy. Similarly for performance indicators, taking the time to align these ensures that you can clearly talk to how your efforts support the business.
Step Three: Start thinking like you are in business to support the business. This means developing the in house skill to develop business cases, strategic communications and relationships. Again, I’m not suggesting that you need to go out and get a sales and marketing staff, but the IT staff has to start thinking about things that used to be “business” stuff. Developing business side relationships are critical and will improve your performance over time. Spending time cultivating those relationships will not only ensure you have an advocate at budget time, but will ensure that you are responsive and are deserving of that advocacy. Don’t think of it as a sales job, think of it as requirements gathering. Great sales people are great at client side requirements. This is a skill worth building in your organization. No outside vendor should be able to beat your team in understanding your own organizations requirements, yet I have often heard from business executives that they decided to do something because vendor “X” really got their problem. How is this possible for an outside sales team? How could an outside team come in and beat you at understanding your own organizations requirements? If an outside vendor has the right technology to meet your business requirements you should be the first to realize it and should be the ones bringing the vendor to the business rather than evaluating it after the fact. Don’t depend on the business to drag you to their next set of requirements. One of the greatest competitive advantages your organization should have is an absolute lock down on domain expertise. To be successful and stay relevant you must exploit this to your fullest advantage. Identify and begin talking to your business customers about the technologies and solutions that are going to be changing the industry before the vendors of the same start talking to your business. This isn’t about shutting them out, because to be a successful IT organization you will need to bring in and adopt some of these same technologies in order to ensure the business is successful. It is about ensuring that you have the confidence of the business. Every time the business hears a pitch about something that a competitor is doing to save money, enhance productivity, etc. that you haven’t talked to first you lose credibility and eventually this will affect the performance of the organization as a whole.
Finally, I hope that the above isn’t taken as an approach to maintain control and budget over increasing performance. Quite the contrary, I believe that running the IT organization more like a business will significantly increase performance both within the IT organization itself and for the organization as a whole. At the core of this statement is a belief in competition and clarity, which I think are closely tied in this case. I think that as organizations demand more clarity and insight into what they are getting for their money that competition for those dollars will intensify between internal and external organizations. I believe that this is a good thing and that it will play a key role in driving the sort of business and technology partnership that is so often talked about but so rarely realized. I also believe that organizations are opening themselves up to making terrible mistakes if their internal executives do not prepare themselves to participate in a more competitive environment. The world is changing and as more technology savvy business people enter the working world, the unquestioned expertise in all things technology related will no longer be ceded to the IT department. Business executives who are comfortable with technology and who depend on highly sophisticated technology in their lives outside of work are going to bring with them a different set of expectations. These executives are going to be more likely to expect agility, more likely to be aware of other options, and increasingly likely to question the wisdom of the IT organization. In order to meet that challenge the IT organization is going to have to evolve if it expects to thrive. Part of that success is in thinking more like and acting more like a business that is competing for their own organizational dollars because, like it or not you are.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

Building Analytic Components, Part 1

Business Intelligence seems to be on the tips of many IT executives tongues these days. After the Cloud, Big Data, and Master Data Management; Business Intelligence has a prominent place in the pantheon of IT buzz words. The intent of business intelligence to me is quite simple, leverage the information available to the business to improve performance. This can take many forms, but at its core BI isn’t about making the dashboards, cool charts, or data warehouses. It is about helping the organization make better decisions. With that said I am going to walk through the process of designing a single business intelligence analysis component focused on IT Portfolio Management in two articles. The first article will describe the high level process of developing the analytic, and the second article will be a detailed dive into the development of a specific analytic component that will be used to manage investments within the portfolio. I will be using data from the Federal IT Spending dashboard which is publically available at http://www.itdashboard.gov/. Just because the data is from the public sector doesn’t make this example less relevant to the private sector.  IT investment portfolio characteristics like deviation from cost and schedule are broadly applicable across both the public and private sector, and the complex missions and comprehensive IT portfolios ofthe public sector can provide a rich point of reference particularly for very large (Fortune 500) private sector organizations.


Caption: IT Spending Dashboard
I think that with any analysis or reporting component it is important to start by identifying the stakeholder community that is being served. In this case, the analysis component under development will be used by IT Investment Managers and the senior executive team tasked with managing the organizational IT investment portfolio for performance and risk. In both the public and private sectors IT portfolio management is an often talked about but often difficult to execute practice. For large organizationsthe ability to manage competing organizational requirements, disparate technologies, uneven performance data, and complex portfolio composition issimply too difficult.  The portfolio ends up becoming largely managed on the basis of organizational politics and personalities. In order to effectively manage the IT investment portfolio of a large and complex organization there needs to be a data driven approach and analytics that are available and agreed upon by the entire organization. Developing these analytics and the comprehensive suite of informational requirements necessary to manage a complex organization required more space than I have in this article. My intent here is really to focus more on the process of tailoring analytics to meet stakeholder requirements rather than to focus too deeply on a particular problem faced by investment managers.  However, I think there will be some value for people interested in that particular specialty as well.

Whose needs are being serviced?

In the development of any serious analytic component the first thing we need to understand is the stakeholder community weare serving. In our case this community is tasked with managing the IT investment portfolios of large complex organizations. In order to better understand their informational requirements one of the first things I try to do is get a grasp on the informational inputs that they are currently using tomake decisions. This organizational reporting archeology work is revealing because it will often uncover vast differences in the information executives are using to make similar decisions. This is important to surface because one important benefit a BI effort can bring is more standardization to decision-making approaches and a more open evaluation of decision criteria. Another finding is that similar information is being developed for different report, for different executives by different groups.  This results in enormous wasted effort. This homework process sets the stage for the first big exercise in developing a better decision support system for our investment managers – the facilitated session.

Caption: Remember that all your stakeholders are different.
As a consultant I believe that these facilitated sessions are critical to the requirements gathering process and enable frank and open discussion of competing requirements. One of the most consistent things that I have found is that the information and analytics that are currently in use by an organization reflect a much smaller subset of the stakeholders than intended, often only the person who made the buy decision.  The second is that the stakeholders often have very different opinions on what the informational components of the analysis should be. One of the things I often do for my facilitated sessions is to create the giant wall of reporting.  Depending on the meeting space and the volume of reports that I have on hand, I will create an entire wall dedicated to the information that is currently being used to drive the decision making process. In the case of the investment portfolio management team, this will include reports related to individual investments as well as any dashboards, spreadsheets or analytics that are being used to support portfolio-wide decisions.  I will also have one of our team members develop a “core data” sheet that maps the various informational inputs being used across the current reports and analytics, along with some associated meta data regarding authoritative information sources, the process that creates the information, data refresh requirements and any obvious differences inreporting semantics. Finally, we will set up a whiteboard or flip chart board with some basic categories including columns for information that is relevant in the aggregate, information that is relevant at the discrete level, questions that we are trying to answer, and sources of data. Depending on the analysis weare trying to facilitate we may have more spaces available, but those are the basics. This set up process usually takes about two weeks depending on the size of the organization and complexity of the analysis we are trying to facilitate.  A lot of this is working through the homework processes associated with the existing decision-making and reporting artifacts.  Depending on the scope of the engagement this activity may be coming from a business process re-engineering effort or in the specific case of IT Investment Portfolio Management, we mayhave been asked in to supplement or review the process as a whole, which has implications for this process as well.
Important Factors in Understanding the IT InvestmentPortfolio
In any case, once the set up is complete and our homework is done it is time to bring in the stakeholders. I find that one of the first things that is useful is to attempt to provide some structure and scope to the exercise by focusing on the questions that need to be answered and the use cases for the analysis. One of the great benefits of this is providing a focus on the results and outcomes we are trying to achieve rather than simply organizing and reporting on the information that is available. One of the great problems I have found with BI initiatives is that they are often in large part driven by the information that is available rather than the information that would be useful to make decisions. I have never sat in a facilitated session that did not uncover some informational gap in the current decisions support scenario.  The group may discover that some of the data currently being developed and managed is not truly necessary in order to support decision-making. It iscritical that this be recorded and that the thin layer of information required to support decision making be explicit.  This way the resources that are being expended in the as-is state to support the existing decision making process can be re-allocated to meet other organizational needs. Too often reports and analysis components are added but nothing is ever removed. This is not just wasteful of resources, but it is actually harmful to the quality of the decisions that will be made. The world is a complex place for modern executives. The ability of business intelligence systems to not just provide the decision maker with relevant information but to remove informational clutter is critical to the overall quality of the decisions. Many teams are hesitant to remove analytics and reports because “somebody might be using them” or because “we spent so much time developing them.” These are not good reasons to continue maintaining these resources. This is not to say that these exercises should result in an entirely new set of reports and analytics. Maintaining legacy reporting is great as long as there is a real use case, in fact some of the best reports and analysis that will support your organization are probably sitting in spreadsheets on a few executives’ desks right now. These are usually cobbled together from several existing reporting systems by an executive’s staff and have been used to drive organizational meetings for years. Unfortunately, these spreadsheets and PowerPoint are rarely the things that survive a new BI initiative.  Instead, the reports they were cobbled together from in the old system are re-built in the new system and the need to cobble together the spreadsheet that actually drives decision making continues to need to be built every week or month.  Identifying the questions and use cases is critical because it enables the development of criteria for what stays and what goes, as well as setting boundaries around data requirements.
Developing the burning questions
Once you have come upon an initial set of questions and use cases you can begin to design analytic components to meet those requirements. In our investment manager example, one of the use cases is to identify under performing components of the investment portfolio. This enables earlier engagement by management to either increase the performance or terminate depending on a more detailed analysis. The task then becomes selecting from the larger portfolio those investments that may be at risk. In next weeks article I will provide adetailed step-by-step walkthrough of developing a meaningful analytic component for our IT Investment Manager. 

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.