Florian Krueger

Archive for the ‘Common Sense’ Category

The (un-)negotiable value of IT

In Common Sense, IT, Management on November 26, 2010 at 2:56 pm

Have a laugh. Have everyone around you define the value of IT in one sentence. I mean it, do it and do it now. This is just too funny to be missed.

The answers I got so far are:
– What’s the question?
– 42
– I’ve been searching for that for all my life
– Whatever I tell you it is…
and so on and so on.

And just so we are clear, I did not ask the average Joe down my local Pub, but I’ve asked people I trust, people that are typically capable of formulating a thought that is related to the IT in general and are all together earning their money in the IT space. I’ve asked around our offices within the CIC (Cambridge Innovation Center) a place that screams IT and screams brainpower… right I’m the exception here ;-)…

Sadly, my findings where exactly the same as with the vast majority of most clients and prospects, namely CIO’s and Enterprise Architects etc. of the Fortune 2000’s of this world. There is a huge hole in the understanding of what it is that the IT actually contributes in terms of measurable value. How can this be the case after so many years of building systems and measuring the slightest deviances in all possible scenarios across a wide range of KPI’s etc.?

Now – did it get easier over the past years to define the value by looking at bundling information into application portfolios, or service-oriented architecture landscapes?
Did the “Business” get any better in describing what it wants?
Could cloud-based solution-models help people to communicate and collaborate in a new way and therefore eliminating the need of defining the value of IT, because the perception has changed? (And what on earth are they anyway and who gets to call something cloud-based? ROFL)
I don’t think so.

Net of the matter is: Stuff gets more and more complex and consequently complicated and the missing links between the business and the IT are still not the exception, but vice versa.
This is one of the many reasons, why the value of IT has not been agreed upon, or valid suggestions have been made in terms of defining a way how to measure the same.

But, you will never see the light of that day, where I introduce a problem without presenting at least an idea for a solution and yes, again you are right this has to do with self promotion. 😉

IMHO there are three important building blocks for measuring the value:

1. Quantitative Value, consisting of
a. The change in operational expenditures aka OPEX (does it become more, or less expensive to keep the lights on?)
b. The effect, or impact that your CAPEX, or capital expenditures have and the resulting impact on OPEX
2. The Qualitative Value, meaning
a. Degree of Automation
b. Process Maturity
c. Applied Compliance and Security Management
d. Incorporation of Innovation and Change Management Best-Practices
e. Internal and external Level of Satisfaction
3. The Return on any Investment

The Quantitative and the Qualitative Value are only in so far depending on one another, as they depict the overall maturity of an organization in terms of its Business-IT-Management capability. The ROI is detached and simply describes the value as an asset which is, or is not becoming profitable.

To apply this approach one needs to do three things:

1. Conduct an assessment of one’s trailing OPEX and CAPEX over the past years and the reasons for its development / internal skills to manage it
2. An assessment of the state of the IT in the 8 different domains, which are
a. Transparency
b. Road-Mapping
c. Consolidation
d. Business Orientation
e. Governance
f. Program Portfolio Management
g. Finance Management
h. Strategy Alignment
3. An assessment of the planned investments and the projected ROI

I have consulted on this matter extensively and I don’t claim to have the keys to the castle, but I have not seen someone combining these different thoughts, to come up with one solid statement, like:

The value of our IT during the next year is 12.87% of the EBITDA and any percent of failure equals a 4.1% reduction of the above, which means that the planned 3.7 Billion investments on XYZ are a wise choice.

New Ideas for old Problems

In 2.0, Common Sense, Management on September 18, 2009 at 2:00 pm

As time goes by…

Companies and moreover people wait to see what is happening. Well nothing will happen when everyone waits. We have to shape our own future and our future will be what we envision. Therefore we need to understand the tasks and challenges which are evolving and more importantly take immediate action.

According to Analysts, markets are shifting, or floating. There are global markets, dealing with specific ideas, requirements, or opportunities, which are not bound to any limitations as they once were. E-Lancing is harnessing the power of Outsourcing and combines it with the Power of Crowdsourcing. Clickworking – as a modern form of Slavery – currently is the last chance for many unemployed people to earn any money at all.

Professionals which are not adapting at the speed of light will be left behind. Creating an own brand through Blogging and Microblogging and the constant usage of all existing tools, such as Social Media and Professional Networks are the prerequisites to the creation of any noteworthy opportunity to develop oneself or any brand for that matter. What used to be Alumni networks, is becoming interest groups, so highly individualized that only a handful of people might be in the same one at one time. More interesting are the overlaps between different interest groups and synergies resulting out of these. People with a bigger, or multiple presence can be found easier and get more credibility when promoting services, or themselves.

On top of all that market conditions, as they are associated with these global ‘Floating Markets’ are moving east. Europe becomes more and more like the US, the US more and more like Asia and Asia becomes what Europe once was. This is driven by basic survival instincts and supported by information now readily available all over the globe. Why should an Indian outsourcer with the same qualifications earn less than his Siberian counterpart? Why should a Malaysian programmer earn less than his Chinese colleague? As costs of living will equalize the last excuse will be removed and things will level out to an extend where geography will matter less and less.

As a European myself, I see our only chance to develop a sustainable business model in Innovation. Innovation is a valuable good which we can only afford when we have to things: time and high quality education – and this requires some level of commitment, if not dedication. Dedication needs to come from the Governments, but also from our students. They need to understand that their only chance to maintain their standard of living will be to work harder and learn more than their global competitors.

Long story short, as time goes by, we need to lay the foundation for our future wellbeing now. We need to act on what we feel is necessary and dare to take risks, despite the economic challenges. If we hunker down and try to wait it out, the only thing that will happen is that we will lose our slight advantage on innovational capacity and while we do act on this understanding we will need to make it clear to everyone that this is the one chance we’ve got.

Ok, so I am a German and nothing in Deutsch?

In 2.0, Common Sense, IT on July 2, 2009 at 6:32 pm

Falsch, natuerlich lasse ich es mir nicht entgehen auch meinen Senf auf deutsch dazuzugeben. Immerhin beschraenkt sich das Blog ja nicht auf meinen Wohnort und der ist momentan ohnehin im Flieger.

Was treibt mich um und warum ist das was ich schreibe fuer den Leser potentiell relevant? Well, gar nicht, wenn der Leser kein CEO, CIO, COO, CTO, oder sonstwie im gehobenen Management ist, weil ich es selbst bei groesster Selbstbeherrschung nicht schaffe beim Bullshit Bingo nicht mitzuspielen.

Der Bereich in dem ich micht bewege liegt irgendwo im nirgendwo, naemlich genau zwischen dem “Business” und der “IT”. Auf der einen Seite haben wir CEO’s, welche der Meinung sind, dass heute technisch ohnehin alles moeglich ist und die auch nicht davor zurueckschrecken, den Scope nach 50% der Projeklaufzeit um 180 Grad zu drehen und auf der anderen Seite haben wir CIO’s, welche nach einer erfolgreichen 20-jaehrigen Laufbahn in der IT und deren Management wissen, dass Sie ohnehin die besseren CEO’s waeren und die Notwendigkeiten des “Business” viel besser beurteilen koennen, als ebendiese…

Das lieber Leser, ist ein Problem von dem ich glaube, dass es so alt ist wie die Menschheit selbst. Fremdbild und Selbstbild sind seltenst 100% identisch und koennen es auch nicht sein. Ich denke der Weise erkennt seine Fehler und laesst sich helfen. Hilfe muss auch nicht immer von einem Berater wie mir kommen, oftmals reichen Freunde (Keine Freibiergesichter, sondern FREUNDE), oder noch besser Familie vollkommen aus.

Ich habe mir mal den Spass gemacht letztes Jahr ein sogenanntes “Common Sense Reference Model” zu basteln, in welchem bei saemtlichen Entscheidungsprozesses auf bestehende Faehigkeiten und gesunden Menschenverstand referenziert wird. Sie wuerden sich wundern, wie viel man damit hinbekommt.

Das zweite grosse Thema was mich seit mehreren Jahren umtreibt, ist das Thema Nachhaltigkeit, oder “Sustainability”. Nachhaltigkeit im planerischen Sinne darf sich keinstenfalls auf oekologische Aspekte reduzieren, sondern muss oekonomische und soziale Themen gleichwertig mitbehandeln. Die Tatsache, dass keine Firma, welche mir bisher ueber den Weg gelaufen ist, wirklich ein allumfassendes Nachhaltigkeitsprogramm zum Leben erweckt hat, stimmt mich traurig und erklaert in meinen Augen zu einem grossen Teil, wieso die Wirtschaft da ist wo sie ist.

Wer mich kennt hat’s schon oft gehoert: Wir in Europa, sind die Einzigen, welche eine reiche Geschichte besitzen und die Faehigkeit,sowie die Erlaubnis haben, diese zu reflektieren. Daraus sind tolle Sachen entstanden, wie die Aufklaerung, oder die Demokratie, um nur zwei Besipiele zu nennen. Daraus wiederum resultiert die Verantwortung, aus dieser Geschichte Lehren zu ziehen und das Gelernte umzusetzen. Ausser schoenen Worten habe ich bisher noch nicht viel gesehen. Wer mich davon ueberzeugt, dass seine Firma anders ist, hat die Wahl zwischen meinen drei Lieblingsgerichten: Kaesefondue, Spanferkelbraten, oder Haeggis… Pick one und danke fuers Lesen…

Ihr Florian Krueger