IT projects without a goal

I see a lot of IT projects that are undertaken without a clear goal and this gets reflected in the failures. A good example is the recent cancellation of an SAP implementation by Select Comfort hotels.

During periods of slow sales or recession, a company should be focused on improving productivity or reducing costs. Implementation of new software should be based on increased sales, improved productivity or reduced costs. In this case, Select Comfort is cancelling an SAP implementation to save money. This is contrary to what they should be doing, if the original purpose was valid.

As described in the referenced BLOG entry and original announcement, the SAP implementation didn't seem to have a business goal. There were no identified problems with the original ORACLE system and no defined need for the conversion.

If Select Comfort had a measurable goal, they wouldn't have cancelled it during a slow period. They would have intensified their efforts.

Software reduces business productivity

People buy software to improve their business performance, but software initially decreases business productivity. Can a business afford this reduced productivity? During peak periods, maybe you can't.

Whether you currently use software to help you run your business or not, your initial step in introducing new software will be unfamiliar. You will start with a learning curve, learning how to do what you used to do easily. This will slow you down. At very least, you will have to make conscious decisions about day to day tasks. This will slow you down.

Adding to this productivity problem will be the complexity of the software. Most businesses use a very small part of a software product, probably less than 10%. With all of these features and functions, you will have to find your way through all of the features that you don't want, to find the one that does the job that you want. You often will try a feature that does the job, but another feature will let you do it more easily.

Adding to that complexity is the training. With all of these features and functions, it is impossible for a software supplier to train you on all of the features, so they restrict this training to the most common ones, or the ones that they think you will probably use. However, since they haven't worked with you to understand you business, they don't know what you need or how you will use it. Since most businesses don't have the time nor the money to provide extensive training, most organizations opt for the one shot deal, what I call "firehose training". The supplier provides their training program in a one or two day course. Since the training is out of context, little of it is remembered.

The net result is lower productivity, often for months, until people learn to become more comfortable with the software, starting to do activities subconsciously. Some will then experiment with new functions. In most cases, it will take months or years to become comfortable with the software. Some people will never experiment and never uncover the functions that could make them more productive.



talk about learning curve, complexity, training problems.

Surviving the recession: Lean thinking

During a recession, most organizations focus on reducing costs. Much of this focus is broadly based, looking at cutting costs, where the numbers are really big. In many cases, the approach is to cut staff, because fewer staff are needed to handle the volume of sales.

Many of these cost reductions cut to the bone. That is, they cut costs in areas which hurt them and make recovery of the business more difficult during a recovering economy.

All businesses waste their resources during peak times. The focus is on sales and growing and not on saving money. Work is done in the most "responsive" way to support customers, without proper planning. This waste builds up and a recession is an opportune time to focus on this waste.

In an article "Surviving the Recession: It's back to basics", the writer recommends the following:

• Develop a deeper understanding of your current and prospective customers (Don't cancel your CRM project!).
• Work to improve operational clarity (document your business processes and ensure all your staff have an end-to-end view!).
• As clarity improves, look at ways to reduce waste.
• As the economy recovers, look at your business strategy.

You will come out of the recession with an improved operation, better able to compete. The quoted article is based on Lean thinking.

Computer systems reliability and business impact.

An article on computer systems reliability from ZDNET Asia quotes statistics from Freeform Dynamics that shows the impact on business from what they call software resiliency. This means the system's ability to recover from software failures.

Some of the statistics include:

• 24% of organizations suffer from a software failure once per week.
• In addition, 34% suffer from a software failure once per month.
• Even worse, 20% of organizations suffer from financial or legal issues once per quarter.

These problems cause major business impact. In most cases, these problems can be prevented by planning for systems to be resilient. Yet organizations focus on new business functions, creating more dependence on these systems, and seldom plan for resilient systems. They assume that systems will work and react to failures.

Despite significant improvements in computer systems over the years, systems continue to fail. These failures can be prevented by proper planning, or at least the impact of these failures minimized.

Many technical support staff enjoy diagnosing problems and become very good at it. However, the business suffers while they react. Until business owners and managers insist on software reliability and understand the impact to their business, things will not improve.

The original article can be found here.

Organizational silos -why do they exist

Organizational silos are a big source of waste in most organizations, large and small.

This question was asked on Linkedin and thought it was worthwhile posting here.

Do you want to buy technology or upgrade your business?

Software companies sell software as a business solution. Are small businesses getting a business solution, or are they just getting software packaged that way?

When a business owner or manager looks for software, they are trying to solve a business problem. They are seldom looking for new software. Look at software as a way to upgrade your business.

What many businesses get insteadare a series of problems that they must deal with. Hopefully they overcome most of these, and recover to achieve a good return on thei investment. However, the cost are often much more than they need to be, due to a lack of planning for business outcomes, a lack of awareness of technology and a lack of experience with technology projects.

Lean is the way for business startups

We have seen many articles about the Lean manufacturing process started by Toyota.

What is just starting to gain traction is using the Lean priciples in non-manufacturing processes. Think of a business process in the same fashion as you would a manufacturing process. It is simply a bunch of activities put together to create a defined result.

There are two major differences between a manufacturing process and an office process.

1. A manufacturing process uses machines to perform the activities. An office process typically uses people, supported by software.
2. Waste is typically obvious in a manufacturing process. You find it in poor quality products, in wasted materials, etc. In an office environment, you find it in two places: Wasted time and bad data. You don't see wasted time; it doesn't accumulate. You don't see bad data until you try to make decisions; you end up with wasted time.

While some large companies are staring to use Lean principles in the office, it is seldom looked at in small businesses.

I thought the following article was interesting because it talked about Lean in new business startups.