Don Kim

Growth of the Freelance "Homepreneur"

noreply@blogger.com (Don Kim) — Tue, 27 Oct 2009 04:50:00 +0000

Having owned two retail business, I was quite intrigued by this article I ran into about the rise of the "Homepreneur" or home entrepreneurs. It states that these home based businesses occupy more than 50% of all the businesses in the US and employ more people than venture backed companies. Not surprisingly, much of this outgrowth is attributable to the rise of networked technologies:

You can trace the rise of home-based businesses to the early days of telecommuting in the 1980s and the mass adoption of the Internet in the 1990s. Cloud computing,online collaboration, and smartphones have accelerated the trend, and recent research clarifies the economic significance of companies like Labuda's.

In addition to the ease of setting up such businesses, is the lower operating costs involved as the article points out. Though I think this would be most applicable to home based businesses that provide business and professional services, rather than one that sells products as you would still need to keep inventory on hand and the shipping costs and logistics may require the costs of renting space for storage.

Though I think this article would generate a lot of enthusiasm for those longing to leave the corporate world and strike out and own their own business, the reality is that you would most likely need to establish yourself first and furthermore, if you're going to sell business and professional services to large companies, then you're going to need to work in one to gain the necessary experience, knowledge and wisdom to have companies pay you for your expertise. It might be best to work in a large company and build the foundations of your home based business on the side part time. Plus you will really need to work on a consistent campaign to market yourself and build your personal brand. This post on HBP articulates this pretty well.

In any event, if this trend were to continue which it seems it will, the implications on the future of the workforce will be enormous. It will accelerate the adoption of Web 2.0 technologies such as social networking and collaboration tools, and technology infrastructure such as cloud computing as if it weren't fast enough already. Work will become much more projectized and companies both large, medium and small will be forced to bid and compete for resources, much like it is done on sites like guru.com, elance and rent-a-coder, etc.

In this world, everyone will be forced to conduct work in a more entrepreneurial fashion and though there will be many benefits, it may widen the gap between the have and the have not's.

US Maintaining the Lead in High-Tech Innovation?

noreply@blogger.com (Don Kim) — Tue, 20 Oct 2009 03:55:00 +0000

This post on HBR seems to indicate that the consensus view of the declining lead of the US to be on the cutting edge of high tech innovations and product development may be premature. As the author outlines:

Between 1995 and 2005, the U.S. maintained about a 40% global share in knowledge-intensive services and about a 35% global share in high-tech industries, keeping the lead in four of them. Indeed, despite the high value of the dollar and the rapid growth of emerging markets between 1995 and 2005, the U.S. increased its global share in all but the aerospace industry. The U.S. share in communications equipment increased by more than 20 percentage points as Japan's share plummeted, and the U.S. doubled its share in computers and office equipment, although it was overtaken by China in 2003. These are the two sectors that encompass most of the products and companies that are the focus of the Pisano and Shih analysis.

The increase in China's share in computers and office machinery — from 2% in 1995 to 46% in 2005 — was remarkable, but it is not a sign that China has gained on the U.S. in innovative capacity in this sector or others. China's exports of high-tech products turn out to be not very high tech and not very Chinese: 80%-90% of China's high-tech exports come from firms that are partially or wholly foreign-owned — in many cases by American or Japanese companies — and 95% are processing exports, the high-tech components of which are produced elsewhere and imported into China. China accounts for about 35% of the value added in its exports — and considerably less in many of its high-tech exports sold under the brand names of U.S. high-tech companies like Apple, Microsoft, and HP.

While it may be the case that the US still leads in many of the innovations of high tech R&D and product development, I don't see how it can maintain this lead forever. At some point these Asian countries will start to compete in not just low cost manufacturing and labor, but in high end R&D and cutting edge product development and even innovative new business processes and management techniques, another area where the US still seems to lead.

I think this is where the US will need to undergo an extensive process of "creative destruction" as advocated by Joseph Schumpeter. It will not be pretty, nor will it be easy, but necessary if the US is to maintain the lead in high tech innovation.

PMBOK 4th edition: A first look

noreply@blogger.com (Don Kim) — Tue, 23 Jun 2009 04:27:00 +0000

The 4th edition of the PMBOK was released earlier this year, given that quite a considerable number of people worldwide visit my PMP prep page I took it upon myself to both purchase and read the guide to update the site. I've been quite busy both professionally and personally so I have not had a chance to review it with any level of detail till recently. On a first reading it seems pretty much the same as the 3rd edition with some minor changes to the ITTOs in the process areas and knowledge groups. I have a page here that outlines and summarizes the changes: PMBOK4 vs PMBOK3

Rather than give a detailed summary, I found a pretty good one on the PM Docs website. Like previous versions and with any worldwide recognized standard/methodology you will find both supports and detractors of the standard. I found a pretty fiery one here by James T Brown who runs a commercial PM consulting site and is kind of ironic given that the company is a PMI registered provider:

My opinion is that the PMBOK® is as out of control as your most nightmarish stakeholder. Always changing things… hoping to make it better… when in fact they have seem to add complexity with little or no additional value. As Voltaire stated "The perfect is the enemy of the good."

Project Management is nothing but structured organized common sense!

Here is the problem…if you try to document every single common sense thing and every factor or process that contributes to the successful execution of common sense the result is gobbledygook! Does gobbledygook rhyme with PMBOK®? It is tough to define gobbledygook but you know it when you see it! Judgment cannot be legislated with bureaucracy; there are too many variables and circumstances.

The real challenge in project management is not identifying the common sense things to do, but having the individual or organizational discipline to do the common sense thing.

It is not a standard if it is always changing!

PMI is calling something a standard and then they change it. Maybe they should consider using WIP for Work in Progress instead of standard. If the PMBOK® were an 8 ounce cup every three or four years the world would have to revise all the recipes to comply with their new definition of a cup. More importantly, PMI is at risk of devaluing the PMP certification because now you have project managers certified on different sets of terms. When an organization hires a newly certified PMP based on the fourth edition of the PMBOK® they may not know the term triple constraint. A standard doesn't have to be perfect, but a standard must be a standard to effectively serve its purpose!

PMBOK® Huggers Beware!

Before we get discouraged let's remember that most of humankind's greatest project management achievements happened before the PMBOK® existed. The principles of successful project management are timeless and if you know them and use them you will be successful regardless of whether the PMBOK® chooses to include it or what the PMBOK® chooses to call it.

While I can understand his sentiment and do agree that the standard at times feels as though too much complexity has been added that don't seem to add direct value, I will hold to what I posted before about the rationale for getting a PMP certification:

Aside from these ideological battles, from a practical point of view, it will benefit a project manager more than harm him/her to get it and for the investment of around $1,200-2500 I definitely think it is worth it. Many PM jobs highly recommend and even require this designation, and if that helps you get a better paying job then the investment is worth it in my opinion. In addition, the certification has recently acquired ISO certification which is a world wide standardizing body and is the first certification to acquire it, which should help solidify the certification's global as well as domestic standing.

The good news is that the 4th edition has incorporated many improvements which allows the profession of project management to evolve best practices and standards consistent with the proactive cycle of continuous development and improvement needed in today's fast paced world.

Yet another top 10 PM trends list for 2009

noreply@blogger.com (Don Kim) — Fri, 23 Jan 2009 04:40:00 +0000

Well it is 2009 and a lot has changed since last year, especially in the economic climate that we now occupy, and for those in the profession of project management it is inevitable that you will be effected by it as well as try and prognosticate on the future trends you may encounter. And sure enough, ESI International which is a consultancy and training company for all things project management related, published it's Top 10 Project Management Trends for 2009 which are outlined below:

1. The Sandwich Generation: Middle Managers’ Emerging Role in Change

Seventy-five percent of all change management programs fail because of a lack of employee support. Today’s economy will force organizations to confront the important roles middle managers play in the success of change efforts. Middle managers’ roles will shift from simple messenger of directives ‘from above’ to creating a positive environment to enable change, accountability and ownership of change initiatives, achieving the full benefits of change and ensuring return on investment.

2. Navigating Virtual Teams through Change

As budgets tighten, the role of virtual teams will grow along with the demand for the skill sets to manage them, especially through change. Powerful communication, key management strategies and new rules of engagement will be required to manage virtual teams as organizations seek to effectively shift with the turbulent global economy.

3. Sharper Distinctions Between Project and Program Management

Many global organizations have managed programs with the same methods used to manage projects, with predictably disappointing results. Programs are not merely “bigger” projects, and program managers aren’t simply professionals who are one step up on the organizational ladder. This year will see an increase in the understanding of the cardinal differences between projects and programs and the utilization of strategies to boost program managers’ effectiveness and increase program success.

4. Leveraging Communities of Practice To Hone Skills

The number and importance of project management communities of practice will increase significantly in 2009. These informal communities will be highly prized for the lack of bureaucracy that increase the sharing and use of best practices, enabling increased dialogue to overcome challenges and growing future leaders.

5. Strategic Selling of the Project Management Office

Although the project management office has gained wide acceptance, it still needs buy-in at the senior executive level. 2009 will see an increase in the importance of quantifying the PMO’s value and how to present that data to the CFO to ensure funding in what promises to be highly competitive arena for organizational resources.

6. Back to Basics for Successful Project Portfolio Management

More than any year in recent history, 2009 will be a critical year for ensuring project success. Project managers will increase their emphasis on the basics, taking a first-things-first approach and address fundamentals such as gaining and sustaining executive commitment, addressing gaps in the alignment of organizational strategy and projects, project selection, and efficient measurement process while leveraging existing resources to increase project success.

7. Right-sizing Staff with Demand Driven Resource Management

The adoption of Demand Driven Resource Management will increase significantly in 2009. Its ability to right-size internal staff and draw on outside contractors when demand requires will be viewed as an essential cost containment approach leading to greater organizational performance and efficiency.

8. Improved Requirements Metrics

The economic need to accurately assess and evaluate the organizational and cost impact of project requirements will bring a greater role for requirements management and development. Also known as business analysis, RMD’s ability to provide quality metrics that project and portfolio managers can use to assess the economic, performance and feasibility value of each project component will become essential to organizations successfully maximizing the ROI of their projects.

9. People Will Come Before Technology

Organizations will increase their demands for smart third-party guidance that ensures technology investments deliver enhanced performance. This will result in greater recognition of the critical role people play, leading to increased recognition that employees need the right skills and knowledge before applying processes for consistency and adding technology to deliver increased efficiencies.

10. Risk Management for Governance

In 2009, many organizations will say goodbye to the ‘one number’ method for project outcomes and embrace a quantifiable range of potential results on which to base decisions. Recognizing that best governance hinges on the availability of quality information at the project level, education and leadership in risk management and best practices permeate organizations wanting to optimize project forecasting to deliver more effective governance.

I can't help but to feel that you could look at a similar list 5 or even 10 years ago and see the same projected trends. Though I don't have evidence for it, my assumption is that there is more recognition throughout companies of the importance of these 10 initiatives if you had measured and collected the information and compared it with the past. Sadly, I would think that the progress of these 10 trends would not be as progressive.

Of particular interest to me is change and demand resource management, as well as risk management and governance. Many companies just don't get these right.

Top 15 highest paying IT certifications

noreply@blogger.com (Don Kim) — Fri, 21 Nov 2008 19:28:00 +0000

I got directed to this link from Erika Flora's blog, which is based on a ZDNET Tech Republic survey which outlines the top 15 IT certifications you can get right now:

PMP (approx. $101k)
CAPM
ITIL Foundation
CISSP
CCIE
CCVP
ITIL Master
MSCD
CCNP
Red Hat Certified Engineer
MCITP (Enterprise)
CCSP
MCAD
MCITP (Database)
MCDBA (approx. $76K)

One major issue I have with these results is that it lists the CAPM as #2, and from what I understand it has had very little traction and seems unlikely that it would supercede the other certifications. Another minor issue is that the PMP certification is not a IT specific one, as project management can be and is utitilized accross industies and company departments. Otherwise, I would not be surprised to know that PMPs involved in IT get the best pay, since most who get the certification are experienced project managers.

Application of the Cloud

noreply@blogger.com (Don Kim) — Thu, 20 Nov 2008 11:20:00 +0000

My previous post was on managing projects in the Cloud and though from a business perspective it makes sense to adopt this infrastructure (or rather non-infrastructure or disembodied infrastructure) to contain costs and receive software as a service, one of the main impediments to adopting this wholeheartedly is in my opinion the security concern. Many companies have sensitive data and if an organization is held against measures such as HIPPA, then it is even more imprative to keep you data centers secure.

An article in CIO magazine highlights how Bechtel seems to have found a practical way to adopt clould computing to manage the security concern and in addition, cherry pick the most effective aspects of it from the four current leaders in the cloud, namely Google, Amazon, YouTube and SalesForce.com:

If you could build your IT systems and operation from scratch today, would you recreate what you have? That's the question Geir Ramleth, CIO of construction giant Bechtel, asked himself three years ago.

The question — and the industry benchmarking exercise that followed — prompted Bechtel to transform its IT department and model it after Internet frontrunners Amazon.com, Google, Salesforce.com and YouTube. After all, these companies have exploited the latest in network design and server and storage virtualization to reach new levels of efficiency in their IT operations. Ramleth wanted to mimic these approaches as Bechtel turned itself into a software-as-a-service provider for internal users, subcontractors and business partners.

After researching the Internet's strongest brands, Bechtel scrapped its existing data centers and built three facilities with the latest in server and storage virtualization. Bechtel also designed a Gigabit Ethernet network with hubs at Internet exchange points that it is managing itself instead of using carriers. Now, Bechtel is slashing its portfolio of software applications to simplify operations, as well as the user experience.

Dubbed the Project Services Network, Bechtel's new strategy applies the SaaS computing model internally to provide IT services to 30,000 users, including 20,000 employees and eventually 10,000 subcontractors and other business partners.

We operate "as a service provider to a set of customers that are our own [construction] projects," Ramleth says. "Until we can find business applications and SaaS models for our industry, we will have to do it ourselves, but we would like to operate with the same thinking and operating models as [SaaS providers] do."

This is probably the most practical solution for the current situation and is probably the only viable one for the next 5 to 10 years, until the future state of ubiquitous clould computing can overcome its security, reliability and data ownership issues.

In additon, it was smart for Bechtel to look at the major players out there and adopt the best of what they have a mimic it in their implementation. Google for their server infrastructure, YouTube for the WAN, Amazon for their virtualization, and SalesForce.com for the SaaS application model. But the best take away from this article was the statement by the CIO, that "what we learned is that you have to standardize like crazy and simplify the environment." Simplification and standardization is the key in making this work.

Managing projects in the "Cloud"

noreply@blogger.com (Don Kim) — Wed, 29 Oct 2008 00:54:00 +0000

The current issue of the Economist has a special report on Corporate IT and the central theme of the articles is the recent rise of cloud computing and its effects on the governance and management of IT initiatives in the corporate world:

Computing is taking on yet another new shape. It is becoming more centralised again as some of the activity moves into data centres. But more importantly, it is turning into what has come to be called a “cloud”, or collections of clouds. Computing power will become more and more disembodied and will be consumed where and when it is needed.
The rise of the cloud is more than just another platform shift that gets geeks excited. It will undoubtedly transform the information technology (IT) industry, but it will also profoundly change the way people work and companies operate. It will allow digital technology to penetrate every nook and cranny of the economy and of society, creating some tricky political problems along the way.

Because of the dot com bubble of the late 90s, I'm very skeptical to even cynical of such hyperbolie, but in this case I think a majority of the hype is justifed. The key term from the quote above is "disembodied", which is a pretty good way of describing the cloud. Terms such as decentralized, fragmented, and dispirate was and is still used to describe the networks which comprise the internet, but a more stronger term such as disembodied would need to be used to describe clould computing as it allows you to grab a software service from a totally abstracted layer that conceals a very complex infrastructure of data centers and virtualized storage technologies.

The image below from Wikipedia provides a pretty simplified pictorial of this architecture:

In addition, it list the key charactersitics of the Cloud:

Capital expenditure minimized and thus low barrier to entry as infrastructure is owned by the provider and does not need to be purchased for one-time or infrequent intensive computing tasks. Services are typically being available to or specifically targeting retail consumers and small businesses.
Device and location independence^[25] which enables users to access systems regardless of location or what device they are using (eg PC, mobile).
Multitenancy enabling sharing of resources (and costs) among a large pool of users, allowing for:
- Centralization of infrastructure in areas with lower costs (eg real estate, electricity)
- Peak-load capacity increases (users need not engineer for highest possible load levels)
- Utilization and efficiency improvements for systems that are often only 10-20% utilized.^[21]
Performance is monitored and consistent but can be affected by insufficient bandwidth or high network load.
Reliability by way of multiple redundant sites, which makes it suitable for business continuity and disaster recovery,^[26] however IT and business managers are able to do little when an outage hits them.^[27] Historical data on cloud outages is tracked in the Cloud Computing Incidents Database.^[28]
Scalability which meets changing user demands (e.g. Flash Crowds) quickly, without having to engineer for peak loads. Massive scalability and large user bases are common but not an absolute requirement.
Security which typically improves due to centralization of data, increased security-focused resources, etc. but which raises concerns about loss of control over certain sensitive data. Accesses are typically logged but accessing the audit logs themselves can be difficult or impossible.
Sustainability through improved resource utilisation, more efficient systems and carbon neutrality.^[29]

So from a business point of view, you can view cloud computing as a broad array of web-based services aimed at allowing users to obtain a wide range of functional capabilities on a 'pay-as-you-go' basis that previously required tremendous hardware/software investments and professional skills to acquire. Cloud computing is the realization of the earlier ideals of utility computing without the technical complexities or complicated deployment worries. Therefore, in a nutshell, cloud computing seems to promise limitless computing power and storage space via the internet.

I have no doubt that some day this type of ubiquitous computing availability and services will come about. A tremendous amount has changed since that decade or so when the internet became a truly viable commercial technology. It has no doubt experienced bumps along the way, but there are utility services we enjoy today such as electricity, water and gas that we can acquire without having to think much about it and the downtimes are nearly non-existent, but I'm sure at the beginning had reliability and quality issues.

The Economist articles points out the potential problems to watch for such as reliability, security and ownership of data and information. These are very valid and obvious concerns to me, but one that concerns me the most as person who manages multiple projects that almost always have a IT component to them, is that before cloud computing resolves the common issues of reliability, security, etc. and becomes as ubiquitous and easy to use as utility services, there will be that ramp up curve wherein companies that adopt the cloud and tires to resolve all these issues makes a person like me who has to manage these projects get gravely effected by it.

Furthermore, even without cloud computing, there was a problem of too much software being built and/or purchased by companies looking to automate every process for cost savings or competitive advantage. This came at a very big cost in terms of infrastructure and application investments and caused huge project overruns that delivered applications that brought very little or no value to business. Cloud computing will help with the cost for infrastructure and application implementation, but in many ways the ease with which companies would be able to pick, purchase and use software services will cause more delays and little value, and though cost may be saved in the short run, time will be lost and in business, time is money.

Project managers will have no choice but to adopt a more agile approach, but for many companies such as the one I work for, there is still a need to comply with regulatory agencies such as HIPAA and SOX, which require a process and audit trail to be followed. Its hard enough now to balance these competing needs, I see the adoption of cloud computing with the potential to exacerbate this problem even further.

So while cloud computing promises much, there needs to be a healthy skepticism in one's evaluation of it's benefits.

Oracle acquires Primavera

noreply@blogger.com (Don Kim) — Wed, 15 Oct 2008 09:13:00 +0000

Ran into this press release from Oracle announcing the acquisition of Primavera, one of the major players in the enterprise PPM solution space:

On October 8, 2008, Oracle announced it has entered into an agreement to acquire Primavera Software, Inc., a leading provider of Project Portfolio Management (PPM) solutions for project-intensive industries. The transaction is subject to customary closing conditions and is expected to close in the second half of 2008. Until the deal closes, each company will continue to operate independently.
Primavera offers best-in-class solutions focused on the mission critical PPM requirements of key vertical industries including engineering and construction, public sector, aerospace and defense, utilities, oil and gas, manufacturing and high tech, and IT and services. Primavera helps more than 5,000 global customers and over 2.5 million users propose, prioritize, select, plan, manage, and control complex projects.

Primavera's PPM products, together with Oracle's project financials, human resources, supply chain management, product lifecycle management, business intelligence, and infrastructure software are expected to provide the first, comprehensive Enterprise Project Portfolio Management solution. This solution is expected to help companies optimize resources and the supply chain, reduce costs, manage changes, meet delivery dates, and ultimately make better decisions, all by using real-time data.

This is interesting news to me since I manage a similar PPM product for my company, and it indicates the growth of this enterprise software space and the starting of its consolidation.

Niku was acquired by CA and reanamed CA Clarity, Primavera by Oracle, so the next logical aquisition might be Planview by SAP?

Tech habits of the millennial generation

noreply@blogger.com (Don Kim) — Tue, 30 Sep 2008 09:44:00 +0000

Came across this interesting post for business technology writer Nicholas Carr, which indicates some interesting statistics on the computing habits of college freshman at Amherst college:

Clive Thompson recently pointed to a post in which Amherst College's IT director provided some stats about the school's new freshman class. The students' tech habits are pretty much what you'd expect - everyone's on Facebook, no one has a landline, laptops have almost entirely supplanted desktops, and the Mac's beating the PC.
What I found most striking, though, were the stats on email. About 180,000 emails are received each day at the school (which has around 1,600 students), and 94% of those emails are spam. The storage required for the emails received last year equaled the total storage required for all the emails received in the preceding five years combined. And 95% of email storage now goes to holding email attachments rather than the messages themselves. Email has become everyone's personal data warehouse.

With the management of email systems growing increasingly onerous, it's hardly a surprise that a lot of colleges are choosing to offload those systems to Google and other cloud providers.

As a upper end Gen-X'er, I pretty much follow the same trends as well, with the exception of replacing my PC based laptop with a Mac, as I find the Mac's powerbook an elegant laptop, but overpriced and am too lazy and un-interested now in trying to figure out how to keep my Windows based files compatible with a Mac. There was once a time I found such pursuites interesting, but no longer.

Without exception, I agree with the explosion of email and the use of it as a personal data warehousing tool. This is especially the case in corporate America where memo, documents, files, images, etc. are stored on people's email readers and most if not all corporate workers spend an inordinate amount of time organizing and categorizing emails to keep as a reference database.

It's become the virtual file folder, but one which grows expoentially beyond the largest physical file folders one could think about, and I think managing and retreiving what we need from it is mainly wasted energy and time. I use gmail for my personal email, and though I like the searchability of it, I can't say having all the gigabites of storage has made my life any more efficient or effective. Actually it seems the contrary for the most part.

Can IT be run like a business?

noreply@blogger.com (Don Kim) — Tue, 19 Aug 2008 02:38:00 +0000

With the economy in a downturn, the continual decreasing costs of technology and the hype around internet technology and the exuberant spending of the late 90s now a distant memory, there has been a push to treat the IT department like a business. In some cases, the idea of treating IT as a business unit in and of itself, to treating IT as a portfolio of investments much like stock and mutual fund portfolios, has been thrown around.

In my opinion, these viewpoints came about due to several factors, such as the fear of outsourcing, diminishing returns and competitive advantage, and the fact that IT has not always (and some could argue for the most part) created real business value from an organizational as well as end user perspective. I think it is this last case that really justifies the notion of running IT like a business or at the very least with the business value as it's main driver. But while a great idea (and yet to be implemented in many companies), I think some careful thought has to be done before deciding to turn IT department as another arm of the finance department. I think first of all, you would have to evaluate your company's core competencies and decide if the model of running the IT department as a generator of investments and revenue that will need to keep an eye on things like cash flow and earnings would truly benefit the company. As this CIO article points out:

However, alongside the benefits of running the IT department like a business, there are also risks and pitfalls. The most damaging to the CIO's longer-term strategy is any attempt to run the department as a separate business rather than just running it in a more businesslike way.
There's a world of difference between running the IT department "like" a business, and trying to run it "as" one. It's amazing how one word can fundamentally alter strategy. Running IT like a business means adopting a businesslike mindset, processes and financial disciplines. Running it as a business means competing for revenue and investment in an open market, and going bankrupt if you run out of cash to cover your liabilities.
What happens if a CIO attempts to run her department as a business? Colleagues in other departments will perceive that the IT department wants to be treated like a supplier. If the CIO's chosen business is primarily to be a provider of operational IT services, then that what is her "customers" expect her to concentrate on. In that case, contributing to corporate and business strategies will be a heroic, uphill battle rather than the IT department's core contribution to the enterprise. The prevalence of heroic how-we-in-IT-contributed-to-strategy stories in the media offers us insight into how much IT's strategic contribution is currently considered exceptional, rather than its stock-in-trade.
The IT department might find another pitfall if it tries too hard to run itself as a business. The company's business units will be reluctant to fund any material investment by IT in anything that looks like branding, marketing, selling or upgrading the management systems that support the IT department's own productivity. Why should they? One of the primary cost advantages of an internal department is that it doesn't require all the capabilities a real supplier needs to compete in the open market. So the CIO is caught. She has placed herself in competition with bona fide external suppliers but without access to the investment that they have in order to compete as an equal.
In the long term, the IT department will find itself in a corner from which escape becomes ever more difficult. It lacks the means to compete with real IT suppliers and has separated itself from the business that it is meant to be part of. It wants to be taken seriously in the world of strategy, yet its primary business is operational. This is when taking "IT department as a business" too far seriously undermines the next generation strategy for IT.

In my opinion, the majority of IT departments do not build technology and services to end user customers, but is really just another component of the organization needed to keep the operations running day to day. If this is the operating model and core competency of the IT organization, then it must fulfill its obligation to upgrade, maintain and support IT services and have the cost of these services measured against the benefits derived from them. Any department within a company must fulfill this obligation otherwise the will find themselves downsized or reorganized. It probably stems from the love/hate relationship most non-IT departments have with IT that IT is always being asked to justify its existence to business, and is always the first department to experience cuts, downsizing and outsourcing.

On the other hand, if a company's core competency and operating model require a close alignment with IT and strategic initiatives, then adopting a PPM methodology with respect to the selection and prioritization of IT initiatives and projects becomes critical. You would then need to measure these initiatives and projects against the avaialbility of financial, human and technical capacity and allocate them appropriately. In a sense, you are managing IT like a stock portfolio:

The concept of portfolio management comes from the financial investment world. The idea is to manage corporate IT projects like financial portfolios, balancing riskier projects with safer "blue chip" technology investments, then constantly monitor the whole shebang to make sure that the risk/reward ratio never gets out of whack.
Portfolio management not only saves money, but it can help CIOs truly integrate business goals into the IT project planning process.

But probably the more important consideration would be the leadership within IT and their ability to accurately align the core competency, organizational culture, and management agenda with IT investments in a strategic manner:

Unless the company is already an expert customer of IT, its people will need strategic leadership from trusted colleagues who do not have a vested interest in supplying technology services. If the IT department is behaving as a business supplying operational IT services, then who can everyone trust to provide the strategic leadership that the next generation of IT strategy demands?
A CIO who is trying to run the IT department as if it were a separate business will need to rethink her operating model. What have others done in such circumstances? They have divided their department's activities into two groups: core capabilities and services. Core capabilities are those IT-related activities that the company must have in-house and that make the company an expert customer of technology. Services are the activities that the company can choose to either keep in-house or outsource. Naturally, the CIO's own activities should be included under core capabilities rather than services.
Having divided her IT department's activities into these two categories, the CIO can benchmark her company's core IT-related capabilities against the models that other innovative companies are using. In particular, the company should excel at true enterprise architecture (not just its technology components) and investing in business change. Together, these are the engine of strategic investment and value creation, both for IT and everything else. And they should be supported by robust sourcing to spend that investment wisely.

Of course it always boils down to something as fundamental as having good leadership, but given the widely held perception of IT as just another cost center, the short tenure of CIOs, and the inability of most corporations to properly execute project and portfolio management, that it will be some time and take a great leader to break this cycle.

Government waste in IT

noreply@blogger.com (Don Kim) — Wed, 13 Aug 2008 02:59:00 +0000

In my current profession of managing projects, cost overruns and delays are notoriously common so it should be no surprise that I run into this article about the billions that are wasted in IT projects for the government. It was based on a study released by the GAO which I actually downloaded and read and found what was revealed to be quite interesting. It states right off the bat that:

OMB and federal agencies have identified approximately 413 IT projects—totaling at least $25.2 billion in expenditures for fiscal year 2008—as being poorly planned, poorly performing, or both. Specifically, through the Management Watch List process, OMB determined that 352 projects (totaling about $23.4 billion) are poorly planned. In addition, agencies reported that 87 of their high-risk projects (totaling about $4.8 billion) were poorly performing. Twenty-six projects (totaling about $3 billion) are considered both poorly planned and poorly performing...

In our rebaselining review, we project that 48 percent of the federal government’s major IT projects have been rebaselined for several reasons, including changes in project goals and changes in funding. Of those rebaselined projects, 51 percent were rebaselined at least twice, and about 11 percent were rebaselined 4 times or more. In addition, while the major agencies had all established rebaselining policies, these policies were not comprehensive. Specifically, none of the policies were fully consistent with best practices, including describing a process for developing a new baseline and requiring the validation of the new baseline.

The study outlines the cause of these problems relating to such things as being unable to properly prioritize projects and portfolios, not getting executive sponsorship and not having the proper project management processes in place. Hmm, I don't see how this is really different from what I see in the private sector so it should be no surprise to see these problems so prevalent in the gigantic and bureaucratic government sector.

I found some of the comments on the article not only illuminating, but quite entertaining:

"Why Do Government IT Projects Fail"

By: Tom Ryan
at: 08-04-08 @ 11:32 am EST

Why Do Government IT Projects Fail? I have been involved with a few Local and Federal projects from both the agency side and the contractor side.

Failure for many of the agencies begin even before the RFP is sent out for bidding. The lack of documentation, skilled professionals, and understanding of the the total impact of a project plays a huge hindrance on the scoping and bidding process. Once the process has begun and a vendor is chosen is when all havoc breaks loose.

First and foremost, when working with the government, be prepared to go over budget just from meeting. They have meetings than meeting about the previous meeting. Than 8 hours of your day is in meetings, leaving you only 4 to 6 hours to work afterwards. Once everything is laid out on paper, and the project is about to begin, than the scope creep begins. Because of the scope creep, then legal has to approve the new changes (Lawyers work at a slow pace when reviewing contract changes). While thoose changes are going on, you have 50 consultants sitting around doing nothing. (50 times 2000 dollars a day adds up rapidly).

Now from the contracted company side. No one has 50 people sitting on the sidelines waiting for work. So their is a huge head hunter search for people to work on the project. Sometimes people are imported in on Visas depending on the classification of the work they are doing.

The next issue is the different skillsets you may encounter and the different mindsets. Some work harder and faster than others. Some complain too much. Personalities clash.

Then you have the project managers that lack the experience and promise to over deliver. This causes the top professionals to overwork themselves and get burned out to try and appease what the Project Manager promised to deliver.

Then comes the other scenario. Some projects are just TOO BIG. A company is never going to say NO to a project that is too big and far out of their capabilities. I have seen a few cases where a project is so big, all the network hardware and software was deprecated twice before the project was completed. Big projects will always fail because technologies change too rapidly.

"Licensure, anyone?"

By: John Dyer
at: 08-04-08 @ 1:00 pm EST

I own an IT consultancy that has served more than 100 clients since 1986. Most of our clients have been companies with revenue exceeding $100 Million. I regret to say that the incompetence I have witnessed over the years makes me wonder how our country will maintain its position as a world economic power.

I believe that a core issue affecting performance in IT is the lack of a credible credentialing authority, lack of uniform standards for IT curricula, lack of licensing for IT professionals and finally, lack of adjudication and peer review processes.

As it stands today, anyone can hang out a shingle declaring themselves to be an IT professional. The customer has no way of telling the difference: Anyone who knows 50 things more about computers than themselves looks like a genius.

What else could we expect to come from this setting? The industry is plagued by an army of pretenders and consequently IT runs on square wheels.

That said, not everyone can be a cabinet maker: Were it not for carpenters of average ability, we'd all be living outside. In the construction business, however, only licensed engineers get to work on critical load calculations. In IT, anybody can do it. Shame on us!

The benefits of a "Freeconomics" model

noreply@blogger.com (Don Kim) — Mon, 04 Aug 2008 02:59:00 +0000

Back in 2004, I remember reading that bittorrent accounted for 35% of all internet traffic and some recent statistics claim that it is actually 70%. My own observation would be that is probably around 50% on average, but I would not be surprised if it was higher when some popular new game, movie or music collection and hovered towards that 70%. Regardless, when you consider all the stuff that people do on the internet and all the business transactions that go on it as well, that's a freaking lot of bandwidth dedicated to pirating digital content!

Therefore, and not surprisingly, there has been a sentiment arguing not to fight it (much like the music industry tried to do in vain) since that is a losing battle, and instead to adopt a economic model based on free or "freeconomics". The open source software movement was an initiative started in the late 90s that attempted to capture this market, and aside from the dot com bubble of the late 90s and insane overvaluations given to some open soruce companies, phenomenons such as Linux, Mozilla, etc. have proven viable business model based on free. But what I'm particularly after, is first, a set of guidelines or framework for how to profit from this "free" distribution model and second, how to know if I'm on the right track.

A blog I just read seem to give a guideline to my first requirement. It is by Chris Anderson who popularized the notion of long tail economics, and he proposes using a time/money formula:

At some point in your life, you will wake up and discover that you have more money than time. And you will then realize that you should start doing things differently, which means not walking four blocks to find an ATM that doesn't charge a fee, driving for miles to find cheaper gas, or painting your own house.
This same calculus is the foundation of a big part of the "freemium" economy. We see it a lot in free-to-play online games, such as Maple Story, where you can buy things like "teleportation stones" to let you get from one place to another without a long slog or wait for a bus. Most of these paid digital assets don't make you a better player, but they do allow you to become a better player faster.

If you're a kid, you probably have more time than money. That's the force behind MP3 file trading, which is kind of a hassle and but is free (albeit illegal, of course!). As Steve Jobs famously pointed out, if you download music from peer-to-peer services, fixing the messy metadata as you go, the time it takes to avoid paying means you're working for less than minimum wage. Nevertheless, that works if you you're time-rich and money-poor. Free is the right price for you.

But as you get older, the equation reverses and $0.99 here and there no longer seems like a big deal. You migrate into a paying customer, the premium user in the freemium equation.

This makes logical sense to me, as when you get older and acquire more disposable income, paradoxically, the less time you have since in order to make that money you have to invest much of your time into your career or business (something I'm all too familiar with), so you will trade money for time.

Thus, what I take from this that you have to give something away free on your site to the point where eventually you gain enough of an audience in the proper demographics of "having more money than time" crowd of course, so that eventually they pay for a more premium version of what you have to offer and/or drive more traffic to you site and get ad revenue.

He summarizes his points and it seems to correspond to what I just outlined:

Build a community around free information and advice on a particular topic.
With that community's help, design some products that people want, and return the favor by making the products free in raw form.
Let those with more money than time/skill/risk-tolerance buy the more polished version of those products. (That may turn out to be almost everyone)
Do it again and again, building a 40% margin into the products to pay the bills.

The second of my requirements is outlined quite well in an article by the Economist:

For every song that is bought legally, in shops or online, around 20 songs are illegally downloaded, according to BigChampagne, a firm based in Beverly Hills, California, that compiles and sells statistics about file-sharing. Its customers can find out how many times, and where, a song has been illicitly downloaded, for example, what the figure was five weeks ago, what other music its fans like, and so on...

Many music executives were reluctant to take advantage of file-sharing statistics because of the trouble the technology has caused in the industry, says Eric Garland, BigChampagne’s boss. TV stations and film studios, by contrast, are “sprinting through the stages of grief”—and coming to terms with the reality that details of the illegal use of their material can, in fact, be very useful indeed.

Since you cannot stop piracy, you might as well gauge what files are being downloaded and in what quantities and use that information as marketing statistics to see where add on or peripheral items or services can be exploited for profit. What this means for someone attempting to model their online business on free, is to be vigilant and disciplined about monitoring what gets downloaded and/or generates the most popularity.

So what we have here is both demand and supply side frameworks for a freeconomics model: On the demand side, create demand ironically, by giving away content for free so as to build that customer base willing to pay. A kind of "carrot and stick" model. On the supply side, monitor and measure which items (or ideas if you're trying to sell something like articles or a book) get downloaded or the get the most "hits" and target those so you make sure you have enough supply people are willing to pay for.

In essense, give something away to use as adversting and marketing, then figure out at which point you can start charging people for a more premium version of what you were giving away free. When you think about it, it's pretty much basic markting 101. I guess the big difference these days is that the internet has made this easier and more possible for practically anyone willing to invest time, effort and a little bit of investment to start such a venture, and probably most for industries such as the music, movie and other media and content based ones, where previously high profitable items such as CDs and DVDs are now no longer profitable and adjusting their mindsets is quite difficult.

Social networking sites suck for business

noreply@blogger.com (Don Kim) — Fri, 25 Jul 2008 23:33:00 +0000

Funny claim in a Harvard Business School online forum, where Paul Michelman claims “why I'm dropping you as a Facebook Friend” due to his lack of being able to make real business connections via Facebook. Thus he proclaims, “I'm ready to sever my ‘business’ ties and limit my Facebook use to exclusively personal correspondence. Not only will it keep out a lot of noise, but it will solve another pressing problem: keeping my inappropriate friends, and the even more inappropriate friends of friends, at a safer distance from my professional associates.”

Facebook really is, as it claim to fame signifies, one of the largest “social networking” sites. You would expect then, that most people who inhabit that site are there for mostly social reasons.

But there has been a trend recently, to use Web 2.0 social networking tools for business related networking, and one of the most popular and one which I use regularly is LinkedIn. Like anything else, after the initial excitement of meeting business contacts you have not seen in a while, you start adding lots of contacts after which you start to question whether any of it is worthwhile. As another blogger Ann All states:

I had dinner with a friend the other night, a busy and successful freelance writer who specializes in coverage of the restaurant and food industry. We were talking about networking sites, and he admitted, “I’ve got 100 people in my LinkedIn network, but I don’t know what to do with them.” Another editor here tried using LinkedIn to round up sources for a story she was working on. Most of the suggestions turned out to be dead ends. She got some interesting leads, though few related to the story in question.

Earlier in her blog, she alluded to the fact that this experience is no different than when she attends trades shows or conferences, she can leave with handfuls of business cards, only to throw away most of them. I’ve experience similar things, but unlike the expectations of the authors above, I had no illusions that joining a site like LinkedIn would provide lots of quality connections, or any real quality connections for that matter.

But it’s like anything else in life, the amount of genuine effort you put into something will generally provide a genuine return back. From my own observations, most people I see put up a shallow profile and just try to add as many connections as possible. I think there are 4 effective ways to use an online business networking site:

If its mainly business contacts you are looking for, then join a business only networking site and think carefully how you will set up your profile and the image you want to portray. The better the image is that aligns to what you do and offer, the better the chances are that someone or company will contact you looking for a fit. Its all part of that “Personal Branding” thing.
You will need to engage actively in the site. For example, LinkedIn has a Q&A section where you can pose questions categorized by industry interest, and again, you will need to give thoughtful, well articulated and genuine answers and pose relevant and timely questions so that people both in and outside your network become responsive.
LinkedIn and especially other networking sites such as Plaxo have an aggregating feature, where you can link your other online presences such as blogs, business websites, etc. to it, that will be effective in both directing others to informative and interesting sites and links to learn more about you, and those sites and links can direct people back to your social networking site.
If you meet a potential business contact offline, follow up and link to them online and visa versa. Then follow up.

But even if you were to do this regularly, I do realize that it will be on rare occasions that you will meet that quality business contact. It's just the way it is, and is very similar to the mass mailing advertisements that I used to do when I owned a retail business. The ROI on those were typical less than 1%, but the hope was that of that 1%, you would acquire a few high quality customers who would become future long term customers. In addition, there was a common held notion that it takes on average, about 10-15 exposures by a potential customer such that the next time they need some service or product provided by you, that they'll think of visiting your establishment.

My feeling is that this personal banding of yourself via business networking sites is of a similar ROI, and at least anecdotally, my return has followed a similar pattern I experienced running my retail business. The main difference between the two, was that for retail marketing it was mostly a matter of cost (how much and how often was I willing to pay to do mass mailing), whereas with personal business branding, it is really a matter of time (how much and how often am I willing to participate online). But all in all and as they say, the principles of marketing remain the same... you gotta do it and you gotta do it often.

But I would also like to add that your results will vary.

The dumbing down effect of the internet

noreply@blogger.com (Don Kim) — Fri, 18 Jul 2008 19:07:00 +0000

Ever since the rise of the internet from the early 90s as the most profound new medium for information exchange, much has been touted on the benefits for human beings, such as it being a more efficient means of communications, the democratization of ideas, having all the information at one's fingertips, etc... all true, yet like all things in life, you can have too much of a good thing. A couple of articles I just read seem to confirm this.

One was from the Economist, titled "Great minds think (too) much alike" which argues that the abundance and ease with which scientist can acquire scientific papers and journals, has in fact, narrowed or "dumbed down" to put it bluntly scientific research and knowledge:

Why this should be so remains unclear. It does not seem to have anything to do with economics. The same effect applied whether or not a journal had to be paid for. One explanation could be that indexing works by titles and authors alone, as happened with printed journals, forced readers to cast at least a cursory glance at work not immediately related to their own—or even that the mere act of flicking through a paper volume may have thrown up unexpected gems. This may have led people to make broader comparisons and to integrate more past results into their research.

It is not yet clear whether this change is for good or ill. Electronic searching means that no relevant paper is likely to go unread, but narrowing the definition of “relevance” risks reducing the cross-fertilisation of ideas that sometimes leads to big, unexpected advances. As a wag once put it, an expert is someone who knows more and more about less and less until, eventually, he knows everything about nothing. It would be ironic if that is the sort of expertise that the world wide web is creating.

I think the over specialization of knowledge in the scientific areas has been a trend and concern well before the advent of the internet phenomenon, and it goes beyond the sciences, as this was one of the main reasons I choose not to pursue a doctorate in Philosophy after graduating college, but the ubiquity and efficiency of data via the net, is accelerating this narrowing of knowledge.

Nicholas Carr, a well known business and technology writer infamous for proclaiming that the IT department was dead, yet again boldly states that it is due to the efficiencies of search engines like Google that is making us stupid:

For more than a decade now, I’ve been spending a lot of time online, searching and surfing and sometimes adding to the great databases of the Internet. The Web has been a godsend to me as a writer. Research that once required days in the stacks or periodical rooms of libraries can now be done in minutes. A few Google searches, some quick clicks on hyperlinks, and I’ve got the telltale fact or pithy quote I was after. Even when I’m not working, I’m as likely as not to be foraging in the Web’s info-thickets—reading and writing e-mails, scanning headlines and blog posts, watching videos and listening to podcasts, or just tripping from link to link to link. (Unlike footnotes, to which they’re sometimes likened, hyperlinks don’t merely point to related works; they propel you toward them.)

For me, as for others, the Net is becoming a universal medium, the conduit for most of the information that flows through my eyes and ears and into my mind. The advantages of having immediate access to such an incredibly rich store of information are many, and they’ve been widely described and duly applauded. “The perfect recall of silicon memory,” Wired’s Clive Thompson has written, “can be an enormous boon to thinking.” But that boon comes at a price. As the media theorist Marshall McLuhan pointed out in the 1960s, media are not just passive channels of information. They supply the stuff of thought, but they also shape the process of thought. And what the Net seems to be doing is chipping away my capacity for concentration and contemplation. My mind now expects to take in information the way the Net distributes it: in a swiftly moving stream of particles. Once I was a scuba diver in the sea of words. Now I zip along the surface like a guy on a Jet Ski.

Carr is arguing that not only has the internet caused a change in the way we access information, but that it is also effecting and shaping our thought process. There is some merit to this, as the scientific studies I have read and the one he cites in his article does show how new technological mediums change both at the individual psychological level as well as culturally the way we think and the influences thereof. On an anecdotal note, I do see the younger generation being extremely distracted with ever shortening attention spans and what I like to refer to as the "Twitter Crowd". It has gotten to the point where companies now are hiring consultants to learn how to manage these Millennials.

Nevertheless, with every new technological breakthrough, there are always those who want to warn us of the impending doom to humankind such technologies create, and even Carr acknowledges that "those who dismiss critics of the Internet as Luddites or nostalgists will be proved correct", but I do think it is imperative to be mindful of the conclusion of his article, "as we come to rely on computers to mediate our understanding of the world, it is our own intelligence that flattens into artificial intelligence".

That's basically the key dealing with all this new deluge of information that we are now bombarded with, is that you need to put more of an effort to manage this information, or get managed by it!

Socilialized Captitalism

noreply@blogger.com (Don Kim) — Sun, 13 Jul 2008 13:35:00 +0000

Read this very interesting post by Robert Reich, one of the only few modern political figures I really admire, who defines the notion of "socialized capitalism" and proposes to end it as follows:

Socialized capitalism of the sort the Fed and the Treasury are now practicing, consisting of private gains and public losses, is untenable. On the other hand, it's also true that giant Wall Street investments banks as well as Fannie Mae and Freddie Mac are too big to fail. How to reconcile these conflicting principles?

Here's a modest proposal: When taxpayers insure a giant entity against loss -- as we now are with Freddie, Fannie, and Wall Street investment banks -- those entities must agree that:

(1) for the duration of the bailout, their top executives cannot receive total annual compensation higher than that received by the President of the United States, and

(2) the government gets five percent of their current valuation as shares of stock (roughly representing the benefit to their shareholders of the federal insurance) -- so that if and when the entities become profitable again, taxpayers are compensated for the risk they've taken on.

Most striking to me is that while we like to think of ourselves as living under a free-market economy, when the government intervenes like it does above, we are in reality a quasi hybrid socialist-capitalist country. And history indicates that we gravitate towards the socialist when the economy is bad like it is now, and capitalist when times are good.

I guess on a positive note, it shows America's ability to be dynamic and elastic with its monetary and economic policies as the climate dictates, but as it stands now, I do like Mr. Reich's proposals, especially the second one!

30 Days of Outsourcing in India

noreply@blogger.com (Don Kim) — Sat, 05 Jul 2008 15:38:00 +0000

Very interesting and compelling videos on the phenomenon of outsourcing from a FX series called "30 Days":

Part 1:

Part 2:

The site describes his situation pretty well:

Morgan Spurlock's volunteer, a successful computer programmer who lost his lucrative job to outsourcing, travels to India to try to get it back.

Will he discover the secret of India's success? Or that sending jobs overseas is an unstable gamble?

In the 1980s American corporations realised they could manufacture their goods cheaper in a foreign country and millions of American factory workers were left unemployed.

In the 1990s it was the turn of the white-collar worker, as the advent of the internet allowed companies to fire expensive American employees and hire foreign franchises to run key parts of their businesses. This is outsourcing.

With its well-educated, English-speaking workforce, India is fast becoming the destination of choice for outsourced jobs in technology and customer services.

Typically, one imagines sweatshop like environments and poor disheveled Indians toiling away in a third world country slaving away stealing jobs from America, but the video does a pretty good job of dispelling such a prejudicial notion, and giving a fair and compelling glimpse into the realities of the outsourcing of white collar jobs from the United States.

The Business of Contradictions

noreply@blogger.com (Don Kim) — Mon, 30 Jun 2008 01:45:00 +0000

Found this very interesting link by Jeff Sutherland, famed Scrum co-founder and trainer who I took my certification class from, on a paper published by Harvard Business Review. The paper is titled “The Contradictions That Drive Toyota’s Success”. One of the paper’s authors is Hirotaka Takeuchi who co-wrote another famous paper in HBR that was the inspiration and impetus for the Scrum project management movement and which I wrote about before.

As the paper states:

Quite simply, TPS is a “hard” innovation that allows the company to keep improving the way it manufactures vehicles; in addition, Toyota has mastered a “soft” innovation that relates to corporate culture. The company succeeds, we believe, because it creates contradictions and paradoxes in many aspects of organizational life. Employees have to operate in a culture where they constantly grapple with challenges and problems and must come up with fresh ideas. That’s why Toyota constantly gets better. The hard and the soft innovations work in tandem. Like two wheels on a shaft that bear equal weight, together they move the company forward. Toyota’s culture of contradictions plays as important a role in its success as TPS does, but rivals and experts have so far overlooked it.

Toyota believes that efficiency alone cannot guarantee success. Make no mistake: No company practices Taylorism better than Toyota does. What’s different is that the company views employees not just as pairs of hands but as knowledge workers who accumulate chie—the wisdom of experience—on the company’s front lines. Toyota therefore invests heavily in people and organizational capabilities, and it garners ideas from everyone and everywhere: the shop floor, the office, the field.

At the same time, studies of human cognition show that when people grapple with opposing insights, they understand the different aspects of an issue and come up with effective solutions. So Toyota deliberately fosters contradictory viewpoints within the organization and challenges employees to find solutions by transcending differences rather than resorting to compromises. This culture of tensions generates innovative ideas that Toyota implements to pull ahead of competitors, both incrementally and radically.

I think much of Toyota’s ability to understand and overcome contradictions is due to the cultural roots of Eastern thinking, which really never viewed contradictions like the West did starting with the Greek thinkers like Aristotle. His legacy of the “Law of the Excluded Middle” permeated the whole of Western thinking and much of the reductionist, logical system on which the sciences and systematic process thinking that industry still drives on.

The Japanese on the other hand do not view contradictions as things to avoid, but rather like the Yin and Yang, as just different manifestations or phenomenon of the natural world which when viewed as a whole, is really just a unity of oppositions. Thus, this thought process would enable the company culture of Toyota to embrace, temper and balance opposing contradictory forces.

The paper found 6 ways Toyota unifies contradictory tendencies:

Toyota moves slowly, yet it takes big leaps.
Toyota grows steadily, yet it is a paranoid company.
Toyota’s operations are efficient, but it uses employees’ time in seemingly wasteful ways.
Toyota is frugal, but it splurges on key areas.
Toyota insists internal communications be simple, yet it builds complex social networks.
Toyota has a strict hierarchy, but it gives employees freedom to push back.

Traditional Western management practices would consider a company running under such an ideological platform as a badly managed company, but that's exactly why Toyota succeeds, because embracing and unifying such contradictory tendencies acknowledges first, that contradictions are a natural way of life (which it is), and that second, adopting such a mindset would allow a corporation to manage their organization in a more dynamic and fluid way. This will prevent complacency and continuously challenge an organization to push it self, whereas “most enterprises stop growing because they stick to processes and practices their past successes have generated.”

But one may mistake such a notion as giving a company license to dispense with all systematic and rigorous processes in favor of chaos, when on the contrary companies “must teach employees how to deal with problems rigorously and systematically, or they won’t be able to harness the power of contradictions”. Again, that’s to embrace, temper and manage the rigorous process and creative fluidity.

Summary of Toyota’s approach:

Three Forces of Expansion

Three forces of expansion lead the company to instigate change and improvement

Impossible goals
Local customization
Experimentation

Three Forces of Integration

Three forces of integration stabilize the company’s expansion and transformation

Values from the founders
Up-and-in people management
Open communication

Characteristics of Toyota Executives

Willingness to listen and learn from others
Enthusiasm for constantly making improvements
Comfort with working in teams
Ability to take action quickly to solve a problem

Interactive Innovation

noreply@blogger.com (Don Kim) — Thu, 26 Jun 2008 14:39:00 +0000

In a previous post, I had written about the notion of having to measure innovation. Innovation is typically viewed as being a highly fluid, creative and dynamic process, yet when done within a corporate R&D department, there is a need to place some quantitative metrics so as to be able to forecast whether an innovation that materializes has a chance of commercial success.

Yet upon reading the June edition of PM Network, which is monthly magazine published by the PMI geared toward the field of project management, the main feature article was on the 5 most important business trends anyone in the field of PM, or any business for that matter, needs to be aware of. The one that caught my particular eye was the trend of "Interactive Innovation". The claim is that the traditional R&D centers of corporations will become passe, as the so-called "crowd-sourcing" (I would also place the trend of "smart-sourcing" here as well) and social networking platforms of the new Web 2.0 ideologies take root.

As the article elaborates:

Tapping into that customer collective delivers powerful information to companies about market perception of their products—and where the Next Big Thing might be. In a survey conducted in December 2007 by the Marketing Executives Networking Group, 62 percent of the respondents reported using crowdsourcing to help them shape the future of their products. And while the majority of those surveyed rated crowdsourcing and consumer collaboration as an effective or highly effective approach to new product and service development, only 11 percent rated internal research and development staff this way.

Not so long ago, crowdsourcing was considered on the fringe, but these days it’s officially mainstream. U.S. computer manufacturing giant Dell, for example, uses its IdeaStorm website to identify new concepts and gauge consumer response to them.

Though I do tire of some of the hype and hyperbolie of the way in which Web 2.0 will change everything again (remember the dot-com hype and crash of the late 90s?), this is a real trend that will impact how companies do product and market research and it is going straight from a command and control structure of the industrial and maufacturing era to completely decentralized, collaborative and fractured information and concept driven era that we are now immersed in.

Thus what we have now is the need to balance the need to measure, predict and manage innovation, yet allow for the collaborative, dynamic and fractured nature in which it is now in part and will probably entirely be done in the future. It will be like one big, open sourced, multi-player interactive game of innovation that will be played between customers and companies for the benefit of all.

The Business of Constraints

noreply@blogger.com (Don Kim) — Fri, 20 Jun 2008 02:39:00 +0000

Found a very interesting YouTube video that does a good job of outlining the Critical Chain theory:

I mostly know Critical Chain from the perspective of Critical Chain Project Management (CCPM) or Critical Chain Method (CCM) which is typically considered the Betamax of traditional Critical Path Method (CPM) that is used as a project management methodology to build a schedule. CPM is a feature which allows a project manager to create predecessor and successor tasks to determine the longest path of his/her schedule, thus making it a "critical" path. Pretty much all the project scheduling software out there has this feature.

One of the big flaws of this approach is that it assumes you are able to apply as many resources to the path to keep your project on time, when in reality nearly all project managers work in a resource constrained environment. An alternative method created by Eliyahu M. Goldratt known as Critical Chain Method utilizes resource buffers, and monitors project progress and health by monitoring the consumption rate of the buffers rather than individual task performance of the schedule. This does not dispense with CPM, as if the assumption is that there are unlimited resources, CCM becomes perfectly aligned directly with CPM.

At the heart of this approach is the notion of "constraints" and is in fact a derivative of Goldratt's main management theory known as the "Theory of Constraints" (TOC) introduced in his very famous book The Goal: A Process of Ongoing Improvement published in 1984. As this Wikipedia except explains, "according to TOC, every organization has - at any given point in time - at least one constraint which limits the system's performance relative to its goal (see Liebig's law of the minimum). These constraints can be broadly classified as either an internal constraint or a market constraint. In order to manage the performance of the system, the constraint must be identified and managed correctly (according to the Five Focusing Steps below). Over time the constraint may change (e.g., because the previous constraint was managed successfully, or because of a changing environment) and the analysis starts anew."

It is a very common sense approach to identifying the constraints which prohibit a business from achieving its goal. Nearly every business pursuit has constraints that have to be mitigated in order to reach its goal, but what Goldratt's TOC provides is the application of scientific principles, logical reasoning and a systems based approach which is needed by very large organizations with complex organizational interdependencies. TOC breaks down this approach to 5 fundamental principles:

0. (Step Zero) Articulate the goal of the organization. Frequently, this is something like, "Make money now and in the future."

1. Identify the constraint (the thing that prevents the organization from obtaining more of the goal)

2. Decide how to exploit the constraint (make sure the constraint is doing things that the constraint uniquely does, and not doing things that it should not do)

3. Subordinate all other processes to above decision (align all other processes to the decision made above)

4. Elevate the constraint (if required, permanently increase capacity of the constraint; "buy more")

5. If, as a result of these steps, the constraint has moved, return to Step 1. Don't let inertia become the constraint.

Though originally developed to streamline and optimize the operations of the manufacturing, project and supply chain industries, it has been utilized by service industries such as marketing, sales and finance. I need to study more on this topic, but my initial perspective is that this technique is more suited for environments with tangible outputs such as a manufacturing plant, but might be more harder to apply such reductionist rigor to a field such as marketing and sales, unless it was applied to measure a specific quantitative result such as for example, a marketing project to measure the conversion rate of a new campaign targeted to steal market share from competitor, and the constraints overcome to obtain that goal.

In any event, I definitely think this is a process improvement methodology that will profit from more study and investigation on my part.

Innovation Metrics

noreply@blogger.com (Don Kim) — Thu, 12 Jun 2008 10:53:00 +0000

Very interesting blog on the principle of measuring innovation. We typically associate innovation as a highly creative, on the fly dynamic process that invokes the notion of a person with a light bulb going off in their heads, because they have just come across a major epiphany. The reality of course, is that it can take years of hard persistent work to reach a point where such an epiphany bears fruition. Read any history text or biography of historical geniuses such as Einstein, Edison, etc., and you will see this pattern throughout.

Much in the same way, the author of the blog positions the notion that companies need to apply this kind of historical archiving of innovative ideas, so that some kind of rigorous, quantitative metric could be applied to measure both the predictive likelihood of the ideas potential, tools and processes to apply to the idea so as to be realized, and quantitative measures to gauge its progress. Its a basic Input/Output model:

Input metrics

Number of ideas generated
Resources allocated to innovation - people and budget

Process Metrics

Average time from idea approval to implementation
Number of ideas approved and number implemented
Stage-gate pass rates
Value of the innovation pipeline

Output metrics

Number of new products or services launched
Revenue from new products or services
ROI on innovation spend
Market Perception
Number of new customers

And of course, this has strong ties to project and product release and management cycles, as each of those ideas would typically be launched through a project/product development life cycle. In fact, that input, process and output technique is the very same technique advocated by PMI's PMBOK in it's Input, Tools & Techniques, and Output model for managing projects.

Some may argue that applying such rigor to innovation may stifle the creativity needed to generate such innovative ideas, but that is to misunderstand the purpose of these metrics, for as the blog states, "By choosing and applying a small number of metrics appropriate for your business you can add innovation to your balanced scorecard and give it the high level attention that it needs if you are to succeed".

Microsoft Project owns 80% of the IT PM space

noreply@blogger.com (Don Kim) — Sun, 01 Jun 2008 01:39:00 +0000

This Projects@Work article suggest that Microsoft Project is the de facto leader in the marketplace for project management software:

Microsoft is "the de facto leader" in the North American IT project management software space, with 80 per cent of respondents to a recent survey by IT analyst firm Info-Tech Research Group indicating they rely on Microsoft Project to manage IT programs in their enterprise...

The 2008 Info-Tech study, which surveyed more than 250 senior IT managers in companies located in the U.S. and Canada, found that IT departments have few viable options to move away from Microsoft software. The closest competitor is CA Clarity, with a mere 1.3 per cent of organizations turning to their software for Project Management support.

"Most companies want to start out with a tool for managing basic requirements such as schedules, time/task reporting, and resource allocation," Colasanti said. "Microsoft's competitors in the project management software space promote their more advanced portfolio management tools, which is overkill for the some 75 per cent of companies that are not yet mature in their project management discipline. More advanced tools are daunting for these organizations since there is no process in place to support them."

That last sentence is the most telling, and is one for which I agree with, since you have to have a pretty mature process in place before you adopt such levels of sophistication in your choice of toolsets. But it's the classic "chicken and egg" problem, since you want to make sure the tool you purchase will have the necessary features available to implement a PPM system, but on the other hand, you may scare off and defeat the process of rolling out a PPM system if your tool is too complicated and advanced for your organization or is rolled out badly, which is typically the case.

But Microsoft as always, knows how to cater to mediocrity since as one of the PMs interviewed in the article sums up well, "I have never even seen another project planner. So really it's just been the tool that's been everywhere which I have then adopted." This is not meant as a pejorative statement against Microsoft or the PMs who use it, since given that Project is typically bundled with Office and has a similar look and feel to that suite of applications, it is natural for PMs to use it and is a testament to Microsoft's product placement and marketing strategy. Even then, MS Project's features and functionality has grown through each iteration, and there are even whole organizations devoted to the learning and use of MS Project since to use it effectively requires a fair learning curve.

Regardless, I think the best approach is to start with very basic features and gradually roll out more advanced capabilities in tandem with building out the processes, procedures and project management capabilities in an incremental and iterative fashion, as the article states, "since project management is an evolving discipline and it takes time for an organization to mature, vendors need tools that match this process evolution. Once an organization has matured its process, it will then look to that same vendor for a more advanced project management tool that includes portfolio management". Therefore, depending on the size of your organization and the future anticipated needs, it might be best to go with a more capable PPM software vendor such as Planview, Primavera, Clarity, etc. and start small and build up.

Whereas if you start with a more simple tool such as MS Project or Excel, it may be harder to move your organization away from it. I'm currently experiencing this with my own work to roll out Planview across my organization.

Scrum PPM: Agile principles applied to Project and Portfolio Management

noreply@blogger.com (Don Kim) — Sun, 25 May 2008 17:57:00 +0000

Here's a good video on how to incorporate a Cost/Benefit Analysis (CBA) to an Agile development process:

As I have just recently acquired my ScrumMaster certification from a workshop presented by none other than the co-founder of Scrum, Jeff Sutherland, I am now trying to find a way to realize the full benefits of Agile/Scrum especially as it applies to fields outside of software development that it derived its roots from and is closely associated with.

One area in particular that I am especially interested in applying Scrum to is PPM and portfolio management and optimization in particular. I ran across this article on Scrum Alliance and it outlines the basics of what I have in mind:

Treating your project portfolio like a backlog of stories means you are able to say, “no” to projects earlier, releasing resources to other projects. That’s good; but what’s better is that, instead of a black or white world, where projects are being canceled or not, you have more options. Consider these scenarios.
A portfolio manager realizes after two iterations that Project A will not return the promised marketing forecasts. The project’s priority drops and its resources are freed for other more lucrative projects. The project’s achievements, though, are stored; the project has simply been moved into the agile portfolio—returned to the backlog, so to speak.

The originally proposed features list for Project B is 80 percent complete. The project is far beyond delivery date and the competition has announced an impending release whose features are similar to the ones that have been completed to date. The portfolio manager decides to stop the project

Project C is a proposal that initially sounded very promising and relatively easy. After only one iteration, though, reality has proven the feasibility study wrong. Rather than waste any more time, executive management decides to cancel the project and remove it from the agile portfolio entirely.

Notice how in all of these scenarios, there was no stigma attached to modifying, delaying, or canceling a project. “No” has lost its sting. Because the investment in each project was minimal, the cost of returning it to the backlog or changing its parameters was also minimal. That’s powerful. That’s agile.

Johanna Rothman, famed Agile practitioner and author of Manage It!: Your Guide to Modern, Pragmatic Project Management, states that when organizing an Agile portfolio, she asks these 4 basic questions:

How strategically important is this set of work?
Do all these things look like they'll fit into one iteration?
How does this iteration fit into all the releases we'd like to do?
Is there anything preventing us from completing a particular iteration? (Or is there a reason to order features in a particular order?)

When viewed from the lens of a traditional PPM point of view, question 1) asks you to prioritize the projects based on a company's strategic initiative, 2) is really asking whether you have the resource capacity to do the work, 3) is whether it will impact scope/requirements and 4) is whether there are any roadblocks (impediments in Scrum terms) that will effect the performance (or velocity in Scrum terms) of the portfolio.

The following figure from Lee Merkhofer, a well know practitioner in the field of decision analysis techniques for prioritizing portfolios provides a flow diagram that parallels the questions just outlined:

Interestingly, there is really little divergence from the questions and procedures outlined by the Agile and Traditionalist groups, except that the latter has a bit more formalisms in their terminology and process. In my mind, both movements have always adopted the notion that you would have to loop back into your process if scope changes occurred (which they almost always do), and the difference is that the Agile group have been more explicit about it and needed to create a new vernacular to describe their process so as to differentiate themselves from the waterfall movement. PMI in their upcoming 4th edition of the PMBOK seem to be trying to bridge this gap and is a topic I wrote about before.

The diagram below shows how easy it is to reconcile the two movements:

Regardless of where one stands in relation to these two movements, the most important factor is that effective PPM management is more than just the collection of status reporting of a group of projects for a specified date, but also forecasting the delivery time, scope and cost of those projects and how that will impact the overall business initiatives of the company. Without this capability, we are not able to take true portfolio decisions – such as reallocating investment from one project to another, or canceling underperforming projects – to maximize ROI.

But once an organization has realized and achieved such a state, the organization has moved beyond traditional PPM, and is now engaged in Portfolio and Investment Optimization (PIO) and would be looking to utilize such portfolios of investments to capture new markets and/or become a disruptive force in their industries. Traditional project management is typically concerned with what is known as the "triple constraints" of time, cost and scope, but an organization involved with PIO would be elevated to a new triple constraint of priority, capacity and objectives:

The need to balance the constraints of time, quality and scope to maintain the quality of the projects and portfolios would be elevated to the balancing of priority, capacity and objectives to maintain the performance and velocity of the portfolios and investments of the organization.

By adding the descriptive, empirically based framework of Agile/Scrum to the prescriptive, process based framework of the Waterfall/PMBOK we can have the best of both worlds: e.g., time tested and proven methods of traditional project management and the unadulterated transparency that exposes to everybody whether the best decisions relative to the business objectives are being taken given current information at the moment of decision and if not to go back and fix the problem through iteration.

By integrating and utilizing these practices on a consistent basis, would an organization be truly engaged with the kind of forecasting and trend analysis at the enterprise level required of a PPM system allowing it to build an optimized portfolio of projects and investments. At this level it could develop truly meaningful, time dependent models that would allow the organization to determine demand capacity, prioritization of important project investments, and shifting requirements of its total portfolio. This is the foundation of PPM that maximizes the efficiencies to obtain ROI.

PPM software vendor underdogs

noreply@blogger.com (Don Kim) — Thu, 22 May 2008 01:46:00 +0000

Came across this interesting article discussing MGM Mirage's project to build an $8 billion city center, and is considered the largest private project ever done. What's most interesting to me is that they will be using a PPM solution from a little know vendor:

So when CityCenter project leaders had to select a project management system to help monitor what is believed to be the largest private development in U.S. history, they naturally settled on a proven software package that they were sure could support such a massive undertaking, right?...

By August 2005, Bodner and other project leaders were reviewing proposals from four software vendors, including Skire Inc., a little-known company in Menlo Park, Calif., that was pitching a hosted Web-based system. Bodner was impressed with the functionality of Skire's Unifier capital project and program management system. "With Skire's product, there wasn't any preconceived notion about how to do change management and cost reporting," says Bodner, who has 34 years of project management experience. Skire users "can dictate how [they] want this information recorded and reported,"...

Bodner's push to sell his partners on Skire began with MGM Mirage's IT organization, which he invited to grill Skire executives regarding the company's financial background and security provisions. After Skire completed a 20-page questionnaire, a team of MGM Mirage security experts tried unsuccessfully to hack into the hosted system. That exercise, along with supportive references from Skire customers who were using the change-control and cost-reporting functions, helped clinch the deal between the CityCenter project team and Skire in October 2005.

So despite the fact that there are a plethora of PPM solutions out there including many well known ones such as Planview, Primavera, CA Clarity, MS Project Server 2007, etc., there is still room for smaller, less well known companies such as Skire to capture one of the largest private projects to date. Perhaps the software market is not as saturated or a commodity as one might think.

"Back of the Napkin" Business Visualizations

noreply@blogger.com (Don Kim) — Mon, 19 May 2008 00:53:00 +0000

Found this very interesting blog called "The Back of the Napkin" by Dan Roam, which is same name of a book published by Dan on the importance of simple visualizations that are typically diagramed on the back of a napkin which can often times spawn new industries. One good example he provides is the simple triangle diagram developed on a back of a napkin by the founders of Southwest Airlines.

He talks about this in the video below:

This kind of "prototyping" of ideas in a simple hand drawn format is nothing new or novel, as I can cite numerous instances of "white boarding" that my colleagues and I engage in during meetings to flesh out complex ideas that cannot be described in words, and needs a diagram to flesh out.

In project management, using yellow sticky notes to lay out your initial schedule is (or should be) a common practice to build the initial WBS with your team members, so that you can re-arrange the stickies until it starts to makes sense before you formally build the schedule out in some software scheduling tool.

But as in all things in life, it may seem common sense but you sometimes forget and people such as Dan Roam pointing it out to you is a good reminder. Also not bad for individuals like himself to publish a book on it and get lucrative consulting gigs explaining it!

Blue Ocean Strategy

noreply@blogger.com (Don Kim) — Thu, 01 May 2008 03:16:00 +0000

The whole field of strategy intrigues me, especially as it applies to business pursuits. My current profession of managing projects is typically concerned with more tactical pursuits such as completing my activities on time and within budget, but I often like to view projects that I am working on for their strategic impacts. This probably stems from my background in running my own business, as I was constantly looking for strategies to stay ahead of the competition.

It was with interest that I ran into this article explaining "Blue Ocean" strategy which is the title of a book Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant by W. Chan Kim and Renée Mauborgne, which was one of Harvard Business School Press' best selling books. In this primer published by Insead, it summarizes blue ocean:

The rule of strategy has been that to gain share in a given market place you must take something from the competitor. In other words, you win, they lose. This is known as zero-sum gain... In this traditional view of strategy, it is presumed that the structure is fixed – the environment and conditions are already determined and cannot be changed by the efforts of a company. In academic terms this is known as the structuralist view or environmental determinism. “Strategy thus becomes a question of outpacing rivals to gain a greater share from a limited economic pie,” Mauborgne says. “But when we look at industry who do we admire most? Those who outpace rivals? Yes, we admire winners. But more so, we admire people who create new paradigms, businesses and market spaces. These are what expand the pie of intellectual and creative wealth. In other words, creating a non-zero sum game.” This shift from win-lose to a win-win is the essence of Kim and Mauborgne’s Blue Ocean strategy.

The diagram below highlights the main points and differences:

Though the argument is interesting, I can't help but feel that this is hardly an original thesis. There have been numerous books which have positioned the same assertion such as The Innovator's Dilemma: The Revolutionary Book that Will Change the Way You Do Business (Collins Business Essentials) by Clayton M. Christensen back in the 90s.

Nevertheless, I may read the book as the primer indicates it has case studies and practical examples such as how "Cirque du Soleil eliminated animals and star performers from the show, which dropped its cost structure and created an all new element of artistic dance and music to achieve differentiation." I have been impressed with how this franchise has been able to constantly re-invent themselves and sustain their niche market share given that the circus has all but disappeared as an entertainment venue.

Given the projects I'm currently working on, the major focus of all of them is based on this reconstructionist notion of needing to simultaneously differentiate yourself from the competition while keeping costs down, and is probably why I have not had any free time. As everyone attempts to differentiate, the irony is that the process of differentiating is such a widespread practice, that it no longer differentiates you to differentiate! Maybe the new strategy is not to differentiate but to aggregate and synthesize. Maybe I'll write the next big strategy book...