Mid-size Companies –Today’s IT Challenges

Despite their unique challenges, mid-size companies have many of the same IT priorities as their much larger counterparts. The IT challenges mid-size organizations face today are complex. A recent McKinsey poll of senior IT executives identified the following key IT challenges: 

Source:  2013 McKinsey poll of senior IT executives 

Source:  2013 McKinsey poll of senior IT executives 

In order to successfully address these challenges, the mid-size organization often needs to quickly understand their unique set of internal IT challenges, those areas within their current business model can “get in the way” or prevent successful execution of their business model.

The mid-size business model characteristics we often see that curtail successful IT delivery include the following:

  • Inability to justify large investments in IT systems or infrastructure;
  • Limited payback or ROI from IT investments, due to insufficient scale;
  • Difficult to attract needed IT talent, with resulting lack of expertise;
  • Revenue does not necessarily equate to complexity ... small companies can have very complex IT needs;
  • Tendency for informality in IT support;
  • Few physical locations but a dispersed workforce;
  • Constant evolution of the business model to remain competitive; and
  • Growing imperative for security and disaster recovery (e.g.; Target breach and Hurricane Sandy impacts).

An inability or failure to address these challenges manifests itself in two major areas for mid-sized companies: primarily disappointing or failed IT projects and a reluctance or hesitance to take advantage of new IT models and trends.

Our experience however, is that there is light at the end of the tunnel! Recognizing these challenges is the tough part. Working with our clients, we address each item with a specific action plan and realistic approach to deliver capability that meets expectations. In most cases, the small to mid-size organization can face its IT challenges, and move forward with some specific help to “punch above their weight.” 

Avoid Failure - Setup the Right Team


One of the recurring themes we have seen with today’s IT development projects and the rollout of new capabilities has been the lack of preparation and setup of the right team with the proper skills to ensure success. A key root cause of IT project failure in over 90% of the projects we remediate has been the project team.

In order to avoid this pitfall and make sure that you see positive results at the end of every project, make an attempt to do the following:

  1. Ask Take the time to ask everyone (vendors, software supplier, key partners, etc.)  what would be the composition of a successful team. Find out what was used successfully in the past for governance and subject matter expertise.  
  2. Tough Love – Step back and ask if your current resources are really capable of driving success.  Do they have the knowledge and expertise to create and sustain something new?  Or will you have to face skill gap issues after the project has started?
  3. Then Supplement – Face the fact that you may need to supplement your current resources, because you may not have the right resources to get the job done.  Be realistic about what your team can take on.
  4. Stop – Don’t start the project unless you have the right team, the right leadership and expertise in place. Don’t get started with a team that is limited or has constraints.  In the long run you will regret starting without the right resources. 

We have found that in most cases the composition of the team and their expertise is more important than the software and tools you are attempting to deploy.  Getting the resources right at the beginning will make a significant difference!


Obamacare Website - the Tip of the IT Iceberg


The current Obamacare website has been a wonderful source of publicity and insight into the world of IT. Having spent multiple years on countless projects (some much larger than Obamacare) it’s great to see pundits, politicians and others voice an opinion on what should have been done.  

In IT, there are an untold number of similar stories. IT projects with failed deployments and cost overruns - most of which never appear on CNN or in the footnotes of the latest financial reports.  

Having worked with multiple CEOs and leadership teams on how to avoid IT failures before they happen or remediate during the process, it’s wise to pay attention to those in the trenches.

A preemptive strike to avoid IT failure is possible. It includes looking at the following items:

  • Accountability - Who is going to define, design and deploy the IT capability (or, how many cooks are going to be in the kitchen)? Are resources integrated into one team?
  • Solution - Is the solution too complicated to be viable? Has anyone taken a hard look at requirements with a focus on simplification or a phased rollout? In most cases failure occurs when trying to deploy current state processes with new technology. 
  • Communication and change management  - Ignore this topic and you will fail, hands down. The impact of change will cut across staff, process, and technology, and require training and realignment of tasks.
  • Test  - You can never do too much testing. If you think you have tested everything, go get another opinion. Attempt to keep your testing team engaged, and at the same time objective about the ability of the developed functionality to efficiently and effectively meet the intended requirements.

Why did the rollout of the Obamacare website fail? One explanation is that the items listed above were likely ignored. The real crisis for IT is that most companies are only focused on the tip of the iceberg, continuing to ignore the steps surrounding each initiative required to deliver quality functionality. 


Dodd Frank's Unintended Consequences

Over the next year there will be a great deal of scrutiny around the implementation of Obamacare.  Healthcare affects everyone, and no one will be left out, from the enrollment process to the delivery of care.  There will be less discussion around the impact of Dodd-Frank as the major implementation dates approach.  Most Americans do not work at a hedge fund or a financial institution, so the direct impact of implementing an overwhelming set of regulations will be less obvious.

Nevertheless, it is all about the “unintended consequences” that will impact Americans, even though they cannot put a legislative tag on it.  Potential consequences don’t relate to the need for visibility around derivatives – especially those that are based on the value of mortgage-backed securities.  Where the consequences are less clear and less predictable are those that emerge from the more ad-hoc rule based responses to financial crises.  The powers afforded regulators directly tie to the experience of the Lehman collapse. 

The Lehman bailout was followed quickly by the Bear Sterns bailout, setting up unreasonable expectations that the government would bailout any big financial institution, and was further supported by the bailout of Fannie Mae, Freddie Mac and AIG.  Dodd-Frank still requires special treatment of the largest financial institutions, offering the ability of banks to borrow money at lower rates than smaller banks.  This has led to a flurry of activity around the purchase of smaller regional banks by larger firms.  So rather than encouraging the break up of the larger institutions, Dodd Frank has encouraged consolidation.

Even though unintended consequences are, by definition difficult to predict, the following are some that are being realized:

Fewer and bigger banks: Because of the costs of Dodd-Frank compliance, banks will have more incentives to consolidate into the “too-big-to-fail” banks the bill was designed to eliminate.

Higher consumer costs: With higher regulatory costs, banks are hiking fees elsewhere. It is becoming more expensive for consumers to use banks.

Fewer mortgages: With Dodd-Frank and pressure to buy back bad home loans, big banks are becoming increasingly inclined to pull out of the mortgage business.

Tighter trade credit: Dodd-Frank provision requires banks to comply with new liquidity and capital standards, including backup liquidity lines. This may have a negative effect on the ability of banks to extend trade credit and thus impact the economy.

The unintended consequences are similar to the US tax code, with all of its complexity, leading to unnecessary overhead and additional cost passed on to the consumer.   Banks will be forced to charge higher rates on loans to recoup their costs, and add more fees or reduce their profits.   

Dodd-Frank is destined to fail in preventing the next financial crisis.  The law doesn't address what many regard as key culprits in the financial crisis — the roles of Fannie Mae and Freddie Mac, the credit ratings agencies and the fact that the financial system is more consolidated than ever in the hands of a few “too-big-to-fail” banks.  Ultimately it will have to be amended to deal with the large number of “unintended consequences.”


Corporate Performance Management Suites Deciphering Today’s Choices - From RFP to the Right Decision

The winds of technical change and opportunity are in full force today… just look at what is going on in the area of Corporate Performance Management (CPM) and the new suites of tools and capabilities.  The legacy toolsets used for financial consolidation and financial reporting are attempting to weather the storm.  Long standing decision support toolsets and business intelligence tools for functional areas like Finance, Treasury, Tax and other key business functions are ripe for significant change…more like full out replacement!  If you haven’t started, you need to be evaluating the new world of Corporate Performance Management (CPM) software and the improved set of capabilities.  Making the effort to understand how much the CPM world of Financial Consolidation has changed is critical.   We have a view on what you need to consider when evaluating the current players, whether those in the Gartner magic quadrant as well as those new tools that have not hit the quadrant.

We recently completed an in depth evaluation and analysis of the following vendors and their tools; Oracle – Hyperion Financial Management, IBM – Congo’s Controller, SAP – Business Objects 4.0, OneStream – OneStream XF (Extensible Finance), SAS – Financial Intelligence, Tagetik – Tagetik4, Longview – Corporate Performance Management, Host Analytics- Complete CPM, Consolidation, Budgeting, Analytics, Decision Hub, Infor – Office of the CIO, Prophix – CPM, Consolidations, Express, G/L Reporter, Board International – BI and CPM Solution.  The new players have changed the landscape of CPM solutions, which is great news for some organizations, but also presents a new dilemma. Several financial organizations have been using toolsets (from one of the above named for over 10 years) and are now faced with either updating the current tool or selecting a new toolset. Having recently completed a robust evaluation of the CPM marketplace and the players listed, it was fascinating to see how much has changed, what has improved and what still needs to be considered.

When making the critical decision about the toolset that can make or break your financial engine, make sure you look into the following financial areas: financial close, reporting, budgeting, forecasts, SG&A, general ledger mapping, intercompany accounting, tablet solutions, dashboards, MS Office integration, job costing, WIP and cash flow modeling.  You will find that there are key differentiators, as well as nuances for each vendor’s solution.  Assuming the each vendor can do the “basics” as listed above; take a deeper look at integration, knowledge management, training, hosting, software as a service and other key capabilities in today’s marketplace.  Not only does your decision on the right toolset hinge on key functional requirements, but it also has to be the right decision for a range of users, ranging from the CFO to the Staff Accountant who must dig into the details each month.

How did we get in front of this critical decision, weigh the alternatives, and make the right decision?  We defined a set of key criteria, criteria that guided every step of our process.  Our process started with an RFI and then RFP, engaged the finalists in deep dive onsite reviews, and finished with contractual negotiations to identify the best software with the best value for the client. A sample of the key criteria we used throughout our process included the following:

All of this was predicated on having the right internal team and the right external support to assist throughout the process.  In many cases, since the current financial close processes and tools are still working well, companies struggle when faced with moving away from ‘out of support’ software tools that still work and are critical to key processes like financial close. 

Instead of struggling with the inevitable change, make an effort to understand the new and exciting set of CPM and Decision Support capabilities.  Go beyond the data in the Gartner magic quadrant of Corporate Performance Management Suites and take a look at some of the new capabilities mentioned above.


Cloud Driven – SLAs – The Keys to Performance

The movement to Cloud delivery provides us with a myriad of new capabilities. The promise of converting capital expense into operating expense, adding resources only when needed and significantly reducing the cycles of IT procurement and cost are hard to ignore. The reality is that the Cloud can meet the business requirements of immediate sense and response, reduce the current complex model of IT delivery and truly offer self service.  Moving to the Cloud will remove the current internal delivery challenges, reset your current operational model and the direct ownership of the resources needed to deliver the capability.   

To limit the exposure and concern that comes with moving to the cloud and upsetting your current delivery model, the best deployments of cloud capability are using Cloud driven SLA’s to drive performance, address risk and meet the performance requirements for Cloud delivery.  

Effective Cloud SLAs must follow the same key principles that have been utilized for years, namely:

  • The Cloud SLA should be measurable, simple to understand and readily available;
  • The Cloud SLA should identify the service to be performed and expectations you have for specific outcomes;
  • The client should be able to identify Key Performance Indicators (KPIs) and the level of acceptable performance;
  • The Cloud SLA must explain how the service be measured – does one bad transaction or missed backup trigger an SLA measurement?
  • The Cloud SLA must define when it will be measured – does this happen daily, monthly, quarterly?
  • How will success be defined – Are you happy with availability of 99.9 or 99.9999%?
  • The Cloud SLA should note the responsibilities of the client and the service provider – who will perform the backup and restore going forward?
  • What are your Cloud reporting requirements – how often do you need to know that the Cloud solution is working?
  • What are the incentives (or penalties) that are needed to meet your expectations for levels of service and quality?

When challenged to make a Cloud procurement decision, there is an opportunity to address the key questions noted above and establish the terms and conditions that are required for Cloud Service Delivery SLAs and clarify the expectations for Service Delivery and Performance Management. 

Service Delivery and Performance Management – Cloud SLAs

One of the best practices we use when identifying Cloud Performance and Service required SLAs is to use the IT Infrastructure Library (ITIL) approach to setup the key Cloud performance areas of:

  • Service Requests;
  • Incident Management & Continuity;
  • Problem Resolution;
  • Change Release;
  • Capacity;
  • Configuration Management;
  • Availability; and
  • Security.

Each performance area is relevant to Cloud delivery and should be examined carefully to understand what will be provided by the Cloud provider.

Once you complete an in-depth look at each Cloud performance area, it is critical to drill down a bit deeper into the types of performance metrics that will really make a difference when signing up for Cloud Delivery. For example, each of us should be taking a deep breath and looking into the answers to the following key questions:

  • Time to Respond – How long does it take for the Service to handle your request?
  • Time to Transact – How much time does it take to complete a transaction?
  • Resolution – What is the time it takes from identifying a service problem to providing resolution?
  • How reliable is the Cloud Solution – When you look at the setup of hardware and software and connections, how reliable is the solution?
  • Availability – What is the uptime of the Cloud Service?

It is also important to keep in mind that the Cloud does not address every aspect of application or infrastructure delivery. The wise user will be able to understand the difference and distinguish the requirements that are unique to network performance, application performance and infrastructure performance. Depending on your specific Cloud solution, you may have all or only portions of IT performance to consider when establishing Cloud SLAs.

The key to really understanding what is needed for Cloud SLAs is to know your internal boundaries and what the Cloud solution will deliver. Be aware of what you will be doing and what the Cloud provider will be doing, once you have moved to production.


Big Data, Big Opportunities

Organizations today are facing a number of new challenges and opportunities related to the deployment and use of Big Data concepts, processes and technology. A number of trends and key directions are starting to develop, creating the main focus areas that business and IT leadership should consider as they approach deploying and operating Big Data for their organization.

Leveraging Data

One of the keys to effectively leveraging and realizing the value of Big Data is to understand  some of  the approaches you need to take. Whether you are trying to get closer to your customers or to your business, points to consider include:

  • Aggregate – What are the standards or principals you need to apply to efficiently and effectively drive aggregation? Look at whether you have setup the standards and controls so aggregation is not just efficient, but also cost effective.
  • Organize – Have you organized your approach to Data in a way that benefits your customer and your organization?  Most organizations have not considered using external validations, such as webex based customer seminars or Google analytics that look at, for example, sales data.
  • Apply - What are you doing to apply the data and tools required to succeed in this space? One consideration is looking at the tools you are using today and considering how you can drive consolidation and savings, in order to fund a new focus on Big Data and analytics.

Delivering Products that matter

The approach you take will not make a difference if you do not have a grounded view or strategic vision to where you want to go. The key trends and focus areas we are seeing today include:

  • Support Collaboration – Using Big Data to support collaboration, both internal and customer focused.
  • Drive Analysis – Improving analysis and the current approaches are myriad. Spotting patterns in data and framing relevant analysis is more evident. Using new tools such as semantic data toolsets, Hadoop and Cloud Services provide new analysis capabilities and opportunities.
  • Increase Efficiency – Look at the new products you are going to deliver. Are they able to increase the efficiency of your customer services or will the products improve the internal services you provide?

Big Data Tools

The opportunities related to using the tools of Big Data may not be evident. The world of mainframe computing and using ETL to address massive amounts of data has changed.  Take a look to see if you can use tools like Hadoop to drive savings. Are you able to reduce of eliminate ETL (extract, transfer, load) altogether? Can the new tools reduce mainframe costs?  How about embracing open source tools and see how you could replace Unix with Linux? Using the new tools of Big Data could provide the platform for innovation, consolidating databases and driving significant efficiencies.

To find out more about how to use these approaches, don’t hesitate to contact us.

HIPAA Compliance in the Cloud

Regulations that govern privacy are here to stay. Any entity, whether it be a hospital, a physician, an attorney or any other business associate has a duty by law to protect information. These interrelated groups rely on each other to be compliant with the regulations. Everyone who has access to patient information must be in compliance with HIPAA.
According to HIPAA, there must be proper controls around patient information, with the patient having a clear understanding as to what information is shared and some agreement from that patient as to what can be shared. Any organization considering Cloud must be able to demonstrate the required controls over their data.
Given the obvious challenges around the protection of personal health information and the associated regulations, what are some of the drivers that motivate businesses to consider the Cloud? There are a number of reasons:
  • Collaboration across business entities with minimal investment
  • Costs involved in continuously refreshing infrastructure – many organizations would like to eliminate the need to invest significant capital resources in on-going technology upgrades
  • Costs involved with hiring skilled resources to support the systems and technologies needed
  • Costs related to comprehensive security monitoring and control – system intrusion protections, data compromises, and encryption are all protections that can be achieved in a cost effective manner with the Cloud
Eventually, most organizations will be faced with a need to leverage Cloud capabilities. A simple approach to evaluate the use of the Cloud to meet HIPAA requirements can be distilled into a series of steps:
  1. Understand the specific control requirements that pertain to your organization. This may involve one, or possibly a series of regulations that require compliance.
  2. Assess the current control environment against the requirements from the regulations, and identify any gaps.
  3. Define the additional controls required to mitigate any gaps in the current environment.
Most organizations, especially hospitals, don’t know how to begin an assessment. Because
many organizations are overwhelmed by the regulation itself, they don’t move from the initial
assessment, gap identification and risk assessment.
So, in order to get beyond initial analysis paralysis, there are a few simple questions to help you get started. These include:
  • Who manages patient information?
  • Where is patient information stored and accessed?
  • Is patient information found on the organization’s laptops, mobile or other portable devices ?
As an organization goes through their assessment, it will be important to start the dialogs with potential Cloud providers to understand how they are addressing HIPAA concerns. All health-oriented businesses that are using, accessing, storing, and sharing patient information must realize the importance of meeting HIPAA/HITECH (Health Information Technology for Economic and Clinical Health) requirements, regardless of the technology they put in place.


Using Services (IAAS, SAAS, PAAS) to Increase Organizational Capability and Reduce Cost

One of the challenges we now face is how best to understand the ‘ x as a service’ marketplace, the key concepts and economic benefits where services can increase organizational capability and save money. Current advances in ‘x as a service’ capabilities provide organizations with the ability to look at addressing and solving their traditional challenges in new ways. Some of the best examples include the following: 

Improving IT Asset Management and Streamlined Operations

Delivery of Infrastructure as a Service can increase resource utilization and reduce overhead. For example, infrastructure is often isolated or silo’ed based on a “line of business” model. New cloud capabilities move the “isolated” infrastructures into a global cloud, and they now function as if they are in one integrated data center. The logic that was used to build the current independent model is no longer relevant or cost effective. The advantage is that you can quickly ramp up infrastructure capability and start a new venture with limited lead time and fewer constraints. The service provider delivers this as a service, allowing you to focus on the requirements. A key question to ask the service provider is their ability to deliver the financial accounting, charge back and metering model you require to make chargeback information visible to your business customer. 

Software Development and Testing

One of the constant challenges faced by projects is the ability of IT to meet the demands for new environments. IT is often challenged with budget constraints, long lead times to provision environments and often conflicts with multiple other competing environments.  All of this leads to project slippage, delaying delivery and a lot of frustration. One of the key benefits with the ‘’x as a service provider’ is that the provider can provide the development teams with the ability to provision their own environment reducing time and the overall IT workload.  In the end, this means faster turnaround and ultimately shortens delivery time for the business. 

IT is often challenged to provide solutions that accurately react to the highs and lows of demand, spikes in traffic and consistent performance, at the time when it is critically needed. The quick solution often deployed includes increasing investments in infrastructure and resources, without a guarantee that the investment will deliver results. With Cloud, organizations can increase capability and save money using the ‘x as a service’ approach that automates requests for new computing and storage, and adjusts for seasonal variability. Expansion can be immediate, leveraging the public cloud for extra capacity. The associated reduction in capital expenditures and infrastructure can be realized almost immediately.   

These are just a few of the examples of the use of IT services to increase organizational capability and save money. Our experience is that the marketplace is delivering a wide range of solutions and capabilities, with new and more innovative solutions to address the traditional challenges outlined above.  

Embrace the changes in ’x as service’ solutions and seek ways to solve your current issues!

Delivering Transformation with Precision

You’ve just walked out of an operations review, only to hear that another project has not delivered as expected. The team lead had been called on the carpet, having to explain what has gone wrong with deployment and what actions are going to be taken. The team lead has just completed a lackluster review of the project’s current status and most of the meeting was a critique of actions taken and the directive to fix the current problems and then report back to leadership. You have now witnessed so many of these meetings, that aside from the specific crisis at hand, you have the gut feeling that ‘there has to be a better way!'

It is likely that your  team and organization has become overwhelmed and  too focused on remediating current issues. The same issues continue, happen repeatedly and the result is that there is little or no change to the conditions that created the problems in the first place.

There is a better way and a solution. I’m calling it “Precision Transformation.' My definition of Precision Transformation includes the specific activities, metrics, measures and change management required to deliver results with precision.

My premise is that although IT organizations are well known for gearing up a project plan and project team to deliver a solution, there is limited focus on delivering with precision. Given the complexity of delivering results, the focus needs to change.

Driving precision transformation will change IT delivery, whether it is in the execution of the software delivery life cycle or  in IT operations. To make this happen consider the following:

Defining Need: Are your customers able to accurately describe what is needed? This goes beyond the classic use of business analysts to refine customer requirements. If the customer cannot define the need with some level of detail, then why are we doing the project to begin with?  Three simple questions to ask when defining the need include:

1) Is the need defined in detail? 

2) What is the expected impact to the end customer? 

3) What will this new functionality do to  current state operations?

Quick Hint: If you cannot define the need with some detail, then why are you doing the project ?

Defining Delivery:  Ask your customer to close their eyes and define the perfect delivery.. aka ‘nirvana.' Three simple questions to ask include:

1) What does best in class delivery of the solution look like? 

2) What does delivery look like for operations and IT?

3) What would be their worst nightmare …things that could go wrong?

Quick  Hint: If the customer cannot answer all of these questions, then go back to the drawing board!

Defining Operations: Pull out your current documented operational and IT models, all the metrics, all the reporting and examples of  the operational reports that are created today.  Or if you don’t want to collect this data, draw it on the white board.  Ask you team these three simple questions:

1) What are we going to eliminate / improve / change with the rollout of the new initiative? 

2) What is the impact to our architecture and infrastructure when rollout happens?

3) What steps were taken throughout each phase of the SDLC to make sure operations are going to be robust?

Quick Hint:  Ask these questions at the start of project and ask them at the end!

IT and Operational Strategic Delivery – Preventable Trends

Having spent years on multiple programs that are labeled as "strategic" or “game-changing” opportunities, we continue to experience a number of trends and repeatable patterns. The focus of this discussion is "Preventable Trends." Some of the recurring preventable trends that we experience have a significant impact on the delivery of strategic transformation targets, the teams and partners working to achieve a key objective. Examples of preventable trends include:


Poor Management Turnover: We expect management to change and new leadership to come forward with fresh strategies and approaches that will challenge and improve the current state. In most cases, the real life experience and reality of a leadership change is not good. What we continue to experience is management turnovers that are lackluster, expand the risk profile of delivery and create new negative downstream impacts.


For example, in most cases, there is little or no pre-transition planning which is then coupled with rapid pace announcements that confuse and often impede the relationship of IT with its business customers, staff and strategic partners. In addition, the incumbent IT, business and HR organizations are “shell shocked," offer limited expertise, and are not experienced in dealing with the communication and change management required to successfully manage the change in leadership. Although it’s great to announce a new leader, we quickly realize that the team supporting that leader is not able to deliver those shifted objectives, lacking both the capabilities and experience of successfully working through a management turnover.


Confusion in the Ranks: Aside from preparing the Powerpoint and completing the ROI or business case material for approving the initiative, the focus on how the rank and file will accomplish the task is seldom discussed nor adequately addressed. What is the expectation for each member of the team? Do the team members really understand what the objective is and is the plan realistic and achieveable? Can every member of the team explain the "who, what, when, where and how" of the strategic objective in a way that makes sense?


A good way to find out whether or not you are going to be successfully is get someone to independently query

the team to see if they totally understand what is going on. Often the rank and file is confused by a lack of a clear management message, a change in funding for the initiative, limited or no ongoing communication regarding scope and objectives, and lack of full team participation (are some team members not participating in the work sessions). Each of these examples can be prevented with simple steps and an experienced leadership team that takes the time to make sure there is no confusion in the ranks.


"Going Live" Crisis: How many times have we experienced a ‘go live’ event that was not good? When you remember those events that went wrong and took the effort of multiple heroes to remedy the situation, did anyone mention doing a post-mortem after the fact? Was anyone capturing all the activities of the go live event such that they could be documented and reviewed with independence and candor afterwards? The experience of a bad ‘go live’ or significant issue after the initative has been launched is something that no one wants to repeat, and it is preventable. The team that are successful in preventing the crisis are the teams that make the effort to include the production teams and those impacted by the new initiative in the upfront define, design and build of each effort. The successful teams use each crisis as away to further strengthen the moves to production, taking each post mortem fact and turning them into improvement activities.


Each of these trends is truly preventable! Although the team may consider a detailed project plan as the key to a successful deployment and relish in spending hours updating the plan and conducting reviews of change to the plan, too little time is spent addressing the items above. Once you have lived through of any of all of the items above, be careful ... you might find yourself saying, "this was totally preventable!"


Why We Need New Operating Models – for Insurance and Financial Services

The time has come (some would say it is long overdue) to seriously consider new operating models for Insurance and Financial Services. I may be committing some type of heresy or creating confusion by mentioning both industries in the same sentence, but as an implementation and strategic advisor/partner for both industries, the truth is not pretty. The competitive and survival threats to both industries are real and becoming more evident in our evolving culture of expanded consumer awareness and increasing demands for customer transparency into the operating models of both Insurance and Financial Services companies. Although the 2008 recession opened the window into some of the business practices of both groups, there is a clear need to do much more than meet current legal and regulatory requirements of Basel III and Dodd-Frank.


Examples of threats that are going to drive new operating models in both the Financial Services and Insurance industries include:


Consumerization: The mobility and iPad revolution has arrived and has already moved beyond the current capability of most firms. Firms must “get in the game” and offer content and services that are valuable to the consumer. This is the real ‘game’ and the real threat. The ability to successfully initiate and complete transactions in limited time and with a high level of accuracy is troubling. When the capability does not exist, the consumer will move on to the next best provider. The lack of ‘best in class' capability for today’s consumers of banking and insurance products has become a reflection of the lack of current capabilities of senior leadership in operational delivery. Rather than radically change the operating model in response to demand (remember the use of the assembly line for automotive industry?) the operating models continue to represent an inability to quickly grasp customer demands and turn them into consumable products and services.


Data Management: Yes, ‘Big Data” is real and there is a lot of talk about its capabilities and how the world of data management and “Big Data” will change the world. Even so, there is little discussion about the use of data management and the impact is has on the operating models in Insurance and Financial Services. In a few cases, new approaches for data are layered on top of existing practices and operating models, causing the models to expand and create new operating processes, new operating controls and positively impact the overall risk framework. What is not happening is the rationalization and shut down of in-effective data processes and practices and the requisite changes to the operating model in both industries. A great example from my life is the interaction between looking at your online bank statement and calling the help line. What may happen is that data management will not be adequately addressed by either Insurance or Financial Services and the result will be complexity and consumer angst.


Transparency: As a consumer and a taxpayer who has funded several of the firms bailed out in 2008 with little or no insight into how the bailout money was spent and how the firms are actually operating today, the threat/value of transparency is very real. Consumers will continue to want transparency into billings and fees and the key items of service. But in addition, consumers, partners and providers of services to the Insurance and Financial Services industries will be clamoring for transparency into the use of capital, the realization of strategic goals for decreasing internal expense and holding management accountable for the same. How in this age of transparency can Insurance and Financial Service firms hold negotiations or reward participants in a financial transaction with limited transparency to their stockholders and the taxpayers who fund them? Transparency of data, transactions, leadership, decisions key funded ventures, and strategic partnerships are not threats to competition or confidentiality….they are threats to the survival of the Insurance and Financial Service firms, if not managed effectively with the stockholders and taxpayers who offer support.


These are just three examples of why new operating models are needed for both industries. Our experience and insight into both Insurance and Financial Services has proven that over the years, the operating models have evolved to in-effective monoliths that reflect corporate structures and not the consumer. Just as rapid as the “Occupy Wall Street” movement in 2011 and the KONY 12 video spread in 2012, the threats identified above will spread and will drive change to the operating models that exist today.


Preparing for Change

We all know the saying "change is never easy," and have probably heard this when embarking on a new initiative or program. You may be calling the team to action or working to roll out a new program that will face significant challenges. In order to prepare for the change and take control of the situation, think about these key areas and what you can do:


Governance – The governance model needs to cover both IT and the business. Instead of defining a governance model and rolling it out to your business partners, why not engage your partners in a quick worksession or interview exercise to define what each party wants to see as a part of governance. For example, a common, combined taxonomy for measurement across both IT and the business can go a long way in running an effective governance model that drives value from the IT organization to the business.


Value – Understanding the contribution of each partner in the delivery model is critical. Bringing together the combined team to define the value proposition and the desired outcomes will clarify objectives and help when faced with new demands and the need to re-prioritize projects, activities and other initiatives. A clear definition of value that can be periodically revisited when demand changes can be an effective tool to minimize the noise and keep the team on track.


Measurement – In order to prepare for the change, one of the most challenging aspects is how to measure success? What does successful completion of the initiative look like? Take a first step and forecast what you think the measurements should be. Then take the next step to determine if you can actually deliver the measurement, by collecting the data and then presenting it in a simple and concise manner. You may have a formula and a specification for a great measurement but gathering the data, analyzing the data, or explaining the measure may be more difficult or costly than the ultimate value of the measure. Strive for simplicity, look for measures that are not only practical, and look for fewer measures, not more.


Accountability – Understanding what each group brings to the table is critical and a great team exercise. A quick roundtable to get the opinion as to the role of each team member will probably demonstrate that accountability is not clear. Take the time before you begin the initiative to clearly identify accountability. Walking through a few examples and sample change scenarios up front will go a long way and help to eliminate confusion.

Web Metrics – Have We Finally Figured it Out?

Data can be captured everywhere on the web, but is there any intelligence that interprets this data and makes it available for critical decision making?

And what do I mean by critical decision making? Those decisions that you have to make when you either build that new mobile app or launch a social media program for your clients. These are the decisions that give you the best return on your investment.

You shouldn’t feel like a metrics failure. In fact, you join most of those struggling with the overwhelming amount of data and lack of information in the web analytics universe.

So, what is the real problem? Part of the problem is that data is really easy to get.  In fact, you can add, subtract, multiply and divide this data to satisfy every potential question about the web.  The rest of the problem relates to the old adage - just because you CAN, doesn’t mean you SHOULD.

So…why do we?

Like overachieving hoarders, we collect data and stack reports believing that, someday, an executive will ask a question about the web that can be found buried in your metrics.  We continue this behavior until the monthly report takes three weeks to build and disseminate. We avoid being nimble and agile, because we might “miss something." We collect everything because we are afraid of making the choices about what is important. We fear the answer that we might have to give the executive: “We made the decision that collecting and analyzing the data to answer your question was not a priority, or not cost-effective.”

The key to all of this, of course, is to make logical, rational decisions about what to collect and understand why you are collecting it, by engaging the business and responding to their information needs. These have to be the metrics that give us insight into what functionality we fund on the web to get the best ROI.

There is a simple question that you can ask yourself to determine if the metrics you are collecting have any significance for your business: What action(s) will you take, now that you have the information captured in this metric? Based on this simple question, if the answer is that the metric is  “nice to know,” or it was suggested by a consultant, or “we have always measured this,” or it just flat out “sounds important,” but still doesn’t result in action, then it is just another overhead activity that you can do without.

We don’t want metrics just because we can collect them, or they are nice to have. We want them to relate to business questions that need answers, ones that then lead to actions that positively impact the bottom line.  If you can’t link a metric or small group of metrics to a specific business question, then stop collecting them!

One last thing to keep in mind…..metrics should be dynamic.  Yes, I understand that need to normalize data and capture trends over time.  But as the maturity of your websites evolve, as well as the maturity of the business in leveraging the technologies, your information needs will change. Your metrics should change too.

The Consumerization of IT

The key premise of the ‘Consumerization of IT’ is that the use of technology has changed the expectations of IT, the CIO and Leadership. The rapid delivery of solutions across multiple platforms continues to grow the gap between ‘at home’ capability and ‘at work’ capability. The gap has grown so large, so quickly, that most of us are frustrated with IT, the CIO and leadership. Our expectation as consumers and workers has changed. Let’s break down the 3 areas of IT, CIO and Leadership to understand the change to expectations and the impacts we are noticing.

Changed expectations of IT

The IT consumer is most companies has grown accustomed to the traditional IT delivery models. The traditional IT models are often too long, not robust enough to meet expectations and in most cases, the subject of avoidance and work arounds. To the employee who needs to move quickly, obtain new capability and ultimately meet a business need,  IT must be able to rapidly innovate and constantly improve price and performance. If IT is not able to do this, then they should examine  how to change their relationship with the business. The expectation of IT should be shifted from’ build and deliver’ to ‘procure and deliver’ across multiple dimensions.

Changed expectations of the CIO

The CIO has a choice to make, either lead the charge or be run over as their customers seek what is quickly becoming ubiquitous IT solutions. The influence of the CIO is shrinking, why go to the CIO and hear all the reasons why you cannot get a solution, versus going online and finding  one that you can quickly acquire and more forward? The  office  experience  is most likely a downgrade of capability, which is often characterized by downtime and complex internal issues. The current expectation is that the CIO  represents a sea of constraints, limitations and endless rules. To change this expectation, the CIO should be stepping forward to identify the senseless rules and have them removed, removing IT barriers and leading the education of the organization to address what is possible. The expectation is that the CIO will be able to balance control and innovation, fostering a productive dialog and solutions that are comparable to the marketplace.

Changed expectations of Leadership

The expectations of leadership have changed , partially due to the acceleration and  availability of  IT capability and partially due to the frustration with internal IT organizations, IT Leadership and most likely the Operational leadership. The expectation is that leadership understands the need to accelerate delivery in both the traditional approaches and across multiple platforms. The additional expectation is that leadership knows to how to deliver results or will quickly acquire the capability. Most employee’s are far greater users and consumers of technology in the marketplace and are comfortable moving across multiple platforms, tools and mobile devices. Collaboration and global teaming is available at home, on the bus and in the park. The expectation is that leadership understands that the expectation has changed and see’s this as a requirement to remain competitive in today’s environment.  

Lean IT

Lean IT could be one the toughest challenges faced by IT organizations. Several companies are looking at Lean IT as a method to further streamline the IT organization or as a last ditch effort to further reduce ongoing operational costs. The organizations that are successful with Lean IT however, are focused on addressing productivity, quality and cycle time across multiple dimensions. A couple of best practice approaches to consider are:


Process Optimization

 A common approach is to seek the optimization of processes such that quality improves and cycle time is reduced. The simple steps of mapping the current state IT processes, breaking each process down into three levels of delivery will identify opportunities for improvement. Key items to look for include: repeatable actions or processes, actions that results in defects, and actions that result in mis-information.

For example, take a look at your current processes for Level 0 to Level 3 IT support. What are the handoff’s and processes that occur once the call is taken initially or the issue becomes known? Mapping each process, each handoff, who is involved, the amount of time, the amount of effort, the number of manual and automated tracking systems will identify the opportunities. The team should be looking for waste (e.g.: steps that can be removed from the process, areas to apply standardization for repeatability of process, removal of bottlenecks to achieve more productivity in the same time period). The objective is to make the changes without compromising the quality of the product or service delivered.

Conducting a Lean IT Walkthrough

 There are four areas of focus when conducting a Lean IT walkthrough, namely; operating practices, management systems, organization and capabilities, and mindset and behavior. Conducting a Lean IT walkthrough of these four areas will provide some unique opportunities and items to consider. 

  1. Operating Practices – A quick item to check for is whether or not the operating practices are documented. Are the practices common, well known and simple? If you were to ask five people, would you get the same answer? Variation in operating practices creates unnecessary waste. Setting aside tasks to complete later, creates waste. To the extent processes can be standardized and simplified, we reduce waste, cycle time and the time required to deliver to our customers, and make more efficient use of resources.
  2. Management Systems – Most management systems are fraught with gaps and inconsistencies, which leads to waste. Very often the systems do not include key constituents and management capabilities that are critical to success. One example is the procure to pay system and the number of reviews and handoff’s required to pay a vendor. How smooth and simple is the current process? Is it clear and simple or does it require multiple follow-ups and discussions with management and/or the supplier, resulting in lack of timely payment or mis-information? Or, are there redundant approvals, which also results in unnecessary wait time, which extends overall cycle time?
  3. Organization and Capabilities – Our experience with rolling out IT capabilities and multiple organization structures is that organizations that exist today will undergo change in the next 18 months to two years. The ability of the organization to move forward in response to business requirements is crucial and has significant ramifications beyond the immediate costs of additional headcount or additional IT capability. The business customer expects IT to be nimble, flexible, and having the foresight to address gaps before they impact the business. A good example is delivering web based or mobile capability. Was the IT organization ready for this shift to mobile and able to address the business needs immediately, or did it take months to hire or acquire the capabilities? The challenge is to continuously evaluate the organization and its capabilities. If you don’t, you will build in waste from resources who lack the skills and functionality needed by the business.
  4. Mindset and Behavior – In order to be successful with Lean IT, you must understand staff attitudes toward change and be able to motivate staff, or augment them with staff that understands and embraces the changes required. Often finding that key individual(s) in the organization who can be the ‘evangelist’ makes the difference in how quickly behaviors and mindset within an IT group will change.

These are only two of the best practices to consider, and are part of a larger set of practices and opportunities that could be addressed. A more serious consideration is obtaining the expertise and operational experience that is needed to lead the assessment and deliver results. Many organizations have hired expertise to conduct the assessment and prepare the hypothesis or ‘range of opportunity’ only to see them fail. Keep in mind that the experience of your leaders in delivering results and being responsible for the operation post deployment of the solution, will often make the critical difference in the sustainability of your desired results.


Vendor Contracts: 14 things to watch out for

One of the tricks to a successful contract and vendor relationship is the actual strength and flexibility of the contract between both parties. Aside from the typical ways we setup contracts and use industry standards, we also need to consider the key areas that we should be watching out for… or better yet… what are the "gotcha’s" that you need to be concerned about?


If I was explaining this to someone in a leadership role, I’d want to make sure the following list was incorporated into our discussion. Narrowing this down to 14 areas was tough, but here goes:

  1. Vendor Capacity – Do you know what the vendor has in place today, what is planned to support future deployments?
  2. Increase in Volume – Can vendor delivery scale to meet increased demand or services? For example, if you do increase the volume of work, have you pre-defined your expectations for pricing and delivery?
  3. Transition – Has the transition been defined with explicit deliverables for pre-transition, transition and post-transition.
  4. Current Staff – What will you do with the staff currently performing services? Will they become part of or integrate with vendor delivery? Who is driving continuity and knowledge transfer?
  5. Contract Changes – How will both parties deal with changes to the contract?
  6. Vendor or Client Default – If something happens, has the model for remediation been defined prior to the contract execution?
  7. 3rd Party Default – Has the model for remediation been defined if a supplier in the chain of delivery defaults or is not able to provide services?
  8. Proprietary or Confidential Content – How will the vendor maintain the confidentiality of content across the delivery model?
  9. Governance – Is there a complete governance framework in place for managing the execution of the contract for all parties - you, the vendor and any 3rd party suppliers?
  10. Contractual Structure – Has the contract been structured with the right tools to sustain and address prospective areas of risk?
  11. Data Privacy and Security – Has the combined team addressed privacy and security requirements in a proactive and continual manner that does not pose risks?
  12. Risk – Have you looked at each operational aspect of the contract and identified what actions would be necessary if the risk becomes a reality?
  13. Communication – Does the contract address both internal and external requirements, with a pre-defined approach for effective communication and change management?
  14. Lack of Investment or Commitment – Do you have the appropriate commitment for all parties to address oversight, contract commitment and the proper access to required tools? For example, what does your contract specify regarding 3rd party software access rights?

The items above are just a handful of key considerations. There are many more items to consider and take into account when delivering a strong and flexible contract between both parties.

IT Consulting – Acting as a Mobile Application

The traditional “Big 4” or "Big X" IT consultant model is in dire need of radical change. Recent
experiences indicate that although the technology industry continues to morph and deliver to client
demands, the client is really looking for the IT consulting industry to do the same, and act as a “mobile


Some recent examples bring this into focus:


1. A consulting need is often immediate. The client only needs the consultant for a specific period
of time (it may only be one hour or one day, not months) to meet a very specific need. Although
the delivery of some programs may require large amounts of committed consulting time and
resources, the bulk of client requests are not these “big ticket” items. Clients are looking for
consultants that can react quickly, and answer the need with straightforward content and value
added material. If you had one day to accept and respond to a client request, what would you
be able to do?
2. The need is specific. The C-level folks are often looking for a specific piece of data or value
added input in the short term. The trick to meet the specific request is to focus sharply on the
immediate need. Answer the need, but also make the effort to ensure the client understands the
full ramification of what they are asking for by putting the answer in context.
3. It has to be cheap and useful. Just like the mobile application that you love and use all the time,
part of the reason you are using it is that the cost is cheap and the content is consistently useful.
With lots of competition out there for IT consulting and rates becoming more cost competitive,
the consulting help has to be useful. Forget about initially supplying the client with lots of
PowerPoint decks and “fluff.” Give them what they need. And then later send them a link to
more items (again, just like the mobile application).


It may tough to do everything on this short list, but start thinking about your delivery from the view
of your client. Their time and focus is limited and they are often in a position where they must move
forward with a business decision quickly. The legacy models of IT consulting are going to be become
more like the mobile applications we all love to use and can’t wait for the next one!


IT Transformation – 6 Critical Success Factors

Your organization will not be able to deliver on the goals of IT transformation, unless you deal with the
basics to setup for success. If "10" is outstanding and "1" is poor, how do you rate your organization on
each of these?


1. A strong case for transformation. No one will “join you on the bus," unless they understand why
transformation is necessary. Make sure you are able to tell a strong story, and have a good business
case you can convey to those affected.
2. A good vision of the future. Talk about doing the impossible! A good vision of the future has to be
realistic and attainable. Some teams take a look beyond 5 to 10 years, but my experience says to
look to the next 1-3 years. Can you lay out a plan of items to achieve over the next three years? Rather
than predict, can you setup a plan and break it down into steps that will be embraced by the
rest of the organization?
3. Money. Are you funded adequately to deliver results? What are the chances of getting the
money you need to realize the transformation? As simple as it sounds, it is probably one of the
toughest items to achieve and is often gets stuck in the process of authorization, resulting in the delay of
initiatives. Without this item completed, you may as well shelve the project.
4. Senior management sponsorship. Do you have a strong senior sponsor who will support you in
the rollout and then support you when you hit the inevitable roadblocks? Your sponsor
cannot only be there to kickoff at the beginning and then take the kudos at the end when the project is
completed. He/she needs to continually offer insight and guidance to keep things moving. Is your
sponsor able to offer ideas to resolve issues and broker solutions when needed?
5. A strong dedicated team. Your team will only be successful if they are able to meet with a purpose,
resolve issues, make decisions and move to complete the work. Team dedication to the project is critical
and the team needs to be held accountable when items are not completed to schedule or at a level of
acceptable quality. Each team member needs to be strong enough and dedicated to making the project
6. Flexibility. Embarking on a transformation often means having great flexibility to adjust and reset the
plan, resources, funding and leadership as needed. The reality is that most transformation plans change
the day after they are agreed to. Flexibility is key to keep things moving forward, by being able to stop
or curtail a step in the process if necessary, reset and then move forward. How open is your organization
and team to being flexible as you move through one of the toughest challenges an organization can


Take a look at how you have rated the six critical success factors. How would they rate if "10" is
outstanding and "1" is poor? If you were to ask someone else on the team their view of each item what
would their rating be? Try this in a team meeting and you may be surprised to hear the results!


IT Sourcing – Why are you tracking your onshore and offshore resources?

How many companies are spending inordinate amounts of time, resources and systems to track the number (by headcount) of onshore and offshore resources? Are you compelled to continually understand how many people are onshore and offshore on a moments notice? Did you complete an assessment to get the initial numbers and then kept on tracking forever? Have you loaded the data into an online database and then required your lines of business to update the headcount and distribution each month? If you are doing any of these items, I’d venture to say that something is wrong and your organization is missing the point of vendor delivered capability.


Instead of tracking the offshore resource headcount and distribution, think about doing the following;


1. Setup a policy and monitor adherence. The truth is, vendors are probably going to be much more productive and cost effective if you let them do their job. This does not mean they have that assigned seat next to you on the floor and they wait until your calendar opens up to determine what to do next. This does not mean that looking out at a pool of resources that you have shipped onsite, with everyone in the room means increased productivity. Take the time to figure out what you really need onsite, set that as the goal and stick to it. Examples include setting onshore: offshore targets using percentages of total or defining the key roles that you will always want onsite, while leaving the remaining roles to by filled by offshore resources. Have the supplier self-monitor adherence to these targets and assign a service level agreement (SLA) metric that the supplier must meet.


2. Ask the supplier. If you are embarking on an initiative or a model for continual support, take the time to ask the supplier what their view is as to how best to operate. They should be upfront in terms of requirements and how best to optimize their delivery model. You should not try to make them a shadow of you or a complete replication of your culture and organization. You are asking supplier resources for help, so reach out and recognize that if they are a good fit to the work that must be completed, you will have many more options and greater flexibility in your delivery.


3. Get rid of the tracking. What do you get for tracking supplier resources? How much is it costing you to track and maintain this data? Why are you doing it instead of asking the supplier to do the tracking? A lot of organizations will put in place elaborate models for tracking where the supplier resources are located, and often track the number of hours, and then implement policies and controls that just add overhead for the supplier. Instead, spend your time focusing on deliverables and execution. You will realize more benefits.


This may seem like harsh advice, but I’ve sat in too many meetings and strategy sessions on this topic with little understanding of the reality that there is little ROI in performing this tracking activity. Once you have the basic supplier resource information, and understand your supplier baseline, set the goal you want to achieve. Then step back and seriously consider what more you really need to make it happen!