Wednesday, May 26, 2010
ERP Systems: Does the expected v/s derived business benefits outweigh the cost implications?
“Buying and deploying a new ERP system typically costs millions of dollars. The justification, selection, and implementation process can take as long as two to three years. In today’s economy, it is nearly impossible to get approval on projects with such a large scope and cost, so some companies are exploring an alternative: rehabilitating their current ERP system. However, the decision is not a simple either/or choice.”
Should You Rehabilitate Your Current ERP System Rather Than Buy a New One?
1. STAY WITH WHAT YOU HAVE.
If your ERP is stable functionally rich core ERP and the Vendor states its commitment to continued support.
Many companies therefore go for the ‘if it works, don’t fix it approach which is very sound if competitive advantage can be maintained.
However tuning may be a good idea to create a go faster system and ensure optimum use of core modules available.
Non-core but essential business functionality may be added by considering either vendor add-ons or indeed niche products from specialist companies in areas such as Financial Reporting, ERP links to Desktop, BI, CRM up to and including quotation and order configuration. All of these, including tuning can be sourced by 3rd party Vendors at prices that ensure increased ROI on current systems, no sunk costs, and lower TCO going forward. Any investment made in these solutions should be upgradable to next releases of your core ERP and indeed other core ERP solutions.
2. UPGRADE TO VENDOR'S NEXT MAJOR RELEASE
Many companies have moved this way with eventual success. 3rd Party Service Vendor's like T/DG(http://www.thedigitalgroup.com/) has access to resources to assist customers in evaluating the specific pros and cons of this move to your organisation.
We also recommend as above if this route is chosen route is chosen, non-core but essential business functionality may be added by considering either vendor add-ons or indeed niche products from specialist companies. The latter should always be considered.
3. CHANGE ERP VENDOR
Most of our Client's experience with generic Off-the-shelf ERPs would shy away from this course of action in a very high number of cases. There are exceptions.
However on the whole, if implemented and serviced correctly, including value add best of breed (back in vogue) add-ons, reasons to move have to be very convincing in view of the costs and business disruption ( high risk) involved. Most of the times these decisions are based on long-term cost implications, maintainability issues, high cost of upgrades and technology obsoleteness.
Friday, March 13, 2009
Outsourcing – The Known Paradigm in a Flat World
Belief in a flat Earth is found in mankind's oldest writings. In early Mesopotamian thought, the world was portrayed as a flat disk floating in the ocean, and this forms the premise for early Greek maps such as those of Anaximander and Hecataeus of Miletus. The fallacy that the earth was flat also was a contributing factor in Columbus discovering the Americas. Though we know in the real world that the earth is geographically spherical but day-on-day it is becoming Flat!
As Corporations and Organization’s become multi-locational, multi-nationals and increasing availability of resources, modern communication, internet(world wide web), emergence of modern work-flow systems, global talent, raw material is truly defining the world as a level playing field in terms of commerce, where all competitors have an equal opportunity and equal reach to resources by varying degrees of separation. Modern Corporations aare adopting Global Philosophies of present day Management Gurus – “Diversification”, “Cost/Skill Arbitrage”, “Transnational Competitiveness”.
Organisations are focusing on their core-competencies and are outsourcing non-core activities to companies having core expertise in those competencies. Though for many enterprises outsourcing has became a preferential thing, for some enterprises it is still a proverbial dilemma to Outsource or Not to?
1. First of all, why is it worth outsourcing?
There are several reasons for using out-side services: someone can do something much better, than you (we mean company) and it is cheaper to buy these services than to make everything in the company.
Would Nike be as successful as it is now if it didn’t use cheap labor of Philippine workers? Nike concentrated on its core-competency Branding & Marketing and realized that manufacturing was not its core competency. Would you hire an accountant, create a work place, pay taxes, if your enterprise is not so big and your accountant works efficiently two days per month? Most likely you would buy services of accounting firm.
Everything depends on the tasks you need to accomplish. On the scale there will be the cost, on the other – quality/speed/security.
Let’s consider several situations
Situation 1. You are a big company. Every employee has a computer. You need to automate work of many divisions. You are worried about security; you want to protect your information to the maximum.
Solution: First of all, you should worry about security, consequently, the most responsible people – system administrators should work in your company. They would be responsible for undisturbed operation of your servers, network, and e-mail. It is enough having in your company a small IT division which would be engaged in adjustment of computers, printers and other office equipment. But probably it would be worth using services of local IT company in case financial arrangements show that it is really profitable.
Is it worth hiring programmers who would be developing software for your company, for example, for accountants? It is worth, but only if
- you are a software development company;
- you cannot buy ready software;
- you want to sell what your programmers would develop;
- you found a very talented manager who would be able to organize the work of prospective development division;
- you don’t know what to do with your profit.
Situation 2. You are a software development company. Your software is popular, but the expenditures for its development are still very high. You want to cut down expenditures, speed up development of new versions of the product(s). Or you would like to get new products and increase expenditures not more than by 30% (or less).
Solution: The biggest part of your expenditures is salary and taxes. You can refuse current “expensive” workers, hire a company with cheaper labor cost, and leave in your company the most effective managers who would be able to set tasks and control the process of these tasks implementation.
Situation 3. You are a not very big company, selling your products and services. You need a web site or a software product, but the project budget is limited. You turn to local software companies and understand that their services are too expensive for you.
Solution: You can work with other companies (or freelancers), who can sell these services to you at a low price.
So, you decided to use software outsourcing services, you need to accomplish several tasks then.
2. How can I choose the developer(s)? Russia, India, China, or Western Europe?
Developers can be situated anywhere: in another city, another region, or another country. I cannot elaborate or comment on other countries resource pool except India. The reason for differences is that historically, Indians have contributed towards the growth of mathematics and science. In 498 CE, Indian mathematician and astronomer Aryabhata stated that "Sthanam sthanam dasa gunam" or place to place in ten times in value, which may be the origin of the modern decimal-based place value notation.The oldest known text to use a decimal place-value system, including a zero, is the Jain text from India entitled the Lokavibhâga, dated 458 CE. The rules of Algebraic Math also was invented in ancient India. The growth of the intellect and analytical abilities in ingrained in the Indian Education system. Education in India is also more inclined towards developing Math & Science capabilities. More attention is paid to thorough study of math sciences. Also the Indian education system is very diverse and right through Pre-KG schooling a child is subjected to a lot of analytical and derivative studies. The reason the IT best brains have come from the IIT's and IIM's and Engineering Institutes of India. It is a known fact that Bill Gates has commented on the growth of Microsoft contributed by the best brains from the India. Major IT start-ups which have now spun into muti-billion dollar corporations have been started by Indians in the US. The US Silicon valley is full of these stories of young Indian's from IIT's/REC's starting off small IT corporations in Silicon Valley which gave impetus to the growth of the IT industry decades ago.
Thus, if you decide to outsource some work to some company, we recommend you to confirm the savings against vis-a-vis educational and experience.
3. How can I keep control over the project if the company developing it is situated too far (for example, in another country)?
Refer my previous blog- Deploy Offshoring Success: Define Metrics
4. What if there will be problems concerning intellectual property?
In any case, the person or company that ordered site design or/and development or software development gets the intellectual property rights. But you still need to discuss it with developers beforehand.
5. There can be communication problems, especially if developers speak some other language.
The medium of Higher Education(University education) is English. This does not pose to be a problem when comparing working with other countries like China, Japan, Russia or Phillipines.
6. Time difference may become a problem.
Sometimes time difference between customer and developers can be very sufficient. Nevertheless, we believe that time difference can be a great advantage. For example, if your company develops some project and you decide to outsource some part of work, you can work with the overseas team in shifts, so that programming goes on 24 hours a day.
7. Is it profitable to turn to third-party developers?
The answer is: yes, it is very profitable. First, using services of third-party developers you get high return on investment. Second, you can reduce the need to invest capital funds in non-core business functions, so capital funds more available for core areas.
8. How skilled are the companies acting as third-party developers?
Usually, such companies, especially if they work with foreign companies, have sufficient experience and skills which allows them to successfully operate on the international market of programming and Information technologies. You can view portfolio, clients list, find out the rates and pricing, how the work process is organized. Before signing the contract of long-term relations with a software development company, give some small project to this company and check the result. If everything suits you, you can continue the relations.
9. How do assure that Outsourcing would benefit me or my organization?
(Also Read my blog article- Deploy Offshoring & Outsourcing Success: Define Metrics)
Saturday, March 7, 2009
9-Key Factors behind a Successful Technical Career
The Bell Labs engineers who did extremely well for themselves – as they progressed in their career, showed the following qualities that differentiated them from their peers: taking initiative, cognitive ability, networking, leadership, teamwork, followership, perspective, organization savvy and show-and-tell capability. Let us look at each of these and see what lies underneath.
1. Taking Initiative : This is about accepting responsibility above and beyond your stated job. It is about volunteering for additional activities and promoting new ideas. None of these will jump out as apparent as a young engineer gets in to his/her first job. She/he will tend to think that her/his career progress is really dependent only on the ability to write code. The concept of initiative begins by looking for technical and other opportunities in the organization and volunteering for them. The idea of volunteering is littleunderstood – both by organizations and individuals. In the days to come, it will gain increasing prominence in our professional lives. Initiative is also about two other things – dealing constructively with criticism and planning for the future. The latter is a function of many things – a good startingpoint is to start mapping the environment, learning to understand how the future is unfolding and then stepping back to ask, how am I preparing myself?
2. Cognitive abilities : The concept of cognitive development is about understanding the interplay of technology and trends in how they are getting deployed. It is also about recognizing the business eco-system in which technology works. It is about situational understanding and consequence thinking. The importance of consequence thinking is very critical. It asks us to look beyond the immediate deliverable of a task and it is about asking who will be impacted by my work, what is the end state? People in our industry just think in terms of modules and seldom ask where is it going, who is my customer and more importantly – who is my customer’s customer? Cognition is a key faculty that determines how much we are able to read patterns, make sense of things. Refining cognitive skills helps us to go beyond stated needs of our customers to explore unstated needs.
3. Networking : We tend to think of networking in a social sense. As one grows higher in life, we are often as powerful as is our network. Building a professional network requires us to step out of the comfort zone to look at whom can I learn from? Quite often, and more as one progresses in life, the learning has to come from unusual sources- industry peers, mentors, leaders from Client Organizations and sometimes from our sub-ordinates themselves. The interesting thing about benefiting from a network is that it workslike a savings bank. I need to deposit in to it before I withdraw. We all have heard about how important internal and external knowledge communities are. We should all affiliate ourselves to different and diverse knowledge communities to have a wider radar to experience and understand matters which might not even concern us. These create networking opportunities and open many doors.
4. Leadership : Next to networking is development of leadership skills. Many technical people associate it with “Management” and shy away from developing key leadership skills like communication, negotiation, influencing, inter-personal skills, business knowledge, building spokespersonship and so on. Take forinstance negotiating as a skill. Imagine that you are an individual professional contributor. Why should you learn to negotiate? Tomorrow, your organization becomes member of a standard body and you have to represent the organization as a technical expert. You will find yourself needing to negotiate with powerful lobbies that represent a competing viewpoint or a rival standard. Unless you have honed your capability alongside your hacking skills, you will be at a complete loss. Yet, you do not discover your negotiating capability one fine morning. You need to work on it from an early stage.Negotiating for internal resources is becoming another critical need. You can choose to remain an individual professional contributor but from time to time, you have to create mind share in the organization where resources are limited and claimants are many. Establishing thought leadership is another key requirement of growth and independent of whether I want to be a technical person or grow to be a manager, I need to develop as a leader who can influence others.
5. Teamwork : Our educational system does not teach us teamwork. If you ever tried to solve your test paper “collaboratively” – it was called copying. We all spent all our school and college life fiercely competing to get the engineering school and seat of our choice. Then comes the workplace and you suddenly realize that it is not individual brilliance but collective competence that determines excellence. Collaboration is the most important part of our work life. Along with collaboration come issues of forming, norming, storming, performing stages of team life. Capability to create interdependencies, capability to encourage dialogue and dissension, knowledge sharing become critical to professional existence. All this is anti-thesis of what we learn in the formative years of life. Add to it, our social upbringing – our resource-starved system tells us to find ways and means to ensure self-preservation ahead of teamwork. In Japan, the country comes first, the company (read team) comes next and I come last. In India, it is the other way round.
6. Followership : The best leaders are also great followers. We can be great leaders if we learn and imbibe the values of followership. Everywhere you go - there are courses that teach leadership. Nowhere will you find a business school teaching you followership. Yet, when solving complex problems in life, we have to embrace what is called “situational leadership”. I have to be comfortable being led by others, I must learn to trust leadership. Many people have issues reporting to a test lead as a developer, or being led by a business analyst or a user interface designer. In different parts of a project life cycle, people of varied competence must lead. I must be comfortable when some one else is under the strobe light. I must have the greatness to be led by people younger than I, people with a different background or a point of view. That is how I learn.
7. Perspective : This is the hardest to explain. It begins with appreciating why I am doing what I am doing. Quite often, we find people having a very narrow view of their tasks; many do not see the criticality of their task vis-à-vis a larger goal. So, a tester in a project sees his job as testing code or a module designer’s worldview begins and ends with the module. He does not appreciate the importance of writing meaningful documentation because he thinks it is not his job or does not realize that five years from now, another person will have to maintain it. There is a very good story which I would like to elicit here- There were 2 workers who were laying bricks. A passerby asked the first one as to what he was doing. He replied, “I am laying bricks”. He asked the second one. He replied, “I am building a temple”. This story explains what perspective is and how the resultant attitude and approach to work can be vastly different.
8. Organizational Savvy : As technical people grow up, they often feel unconnected to the larger organization. Some people develop a knack of exploring it, finding spots of influence, tracking changes, creating networks and in the process they learn how to make the organization work for them. The organization is not outside of me. If I know it well, I can get it to work for me when I want. Think of the difference between one Project Manager and another or one technical lead from another. One person always gets the resources she needs – the other one struggles. One person knows who is getting freed from which client engagement and ahead of time blocks the person. One person reacts to an organizational change and finds himself allocated to a new project as a fait accompli – another person is able to be there ahead of the opportunity. Larger the organization, higher is the need to develop organization savvy. It begins with questioning ones knowledge about the larger business dynamic, knowing who does what, tracking the work of other groups, knowing leaders outside of my own sphere and a host of other things. Importantly, it is also about tracking what the competitors of the organization are doing and keepingabreast of directional changes.
9. Show & Tell : This is the bane of most Indian software engineers. We all come from a mindset that says; if you know how to write code, why bother about honing communication skills? Most of our Clients also think that the one area of improvement for our engineers would be definitely - Communication. Show and tell is about oral and written communication. Some engineers look down upon the need for communication skills and associate it with people who make up for poor programming prowess. It is the greatest misconception. Think of the best Chief Technology Officers of companies like Microsoft, Oracle, IBM Global Services or Sun. Their number one job is evangelizing. If they cannot forcefully present their technologies, nothing else will matter. So, every engineer must pay attention to improving the ability to present in front of people, develop the ability to ask questions and handle objections. In a sense, if you cannot sell the technology you create, it has no value. So, building salespersonship is a key requirement for technical excellence.
The foregoing points are not relevant if you have already filed your first patent at theage of eighteen. Everyone else, please take note.
Let us make the above 9 factors as our guiding factors to have 200’9’ as our stepping stone to Future Success!
Best Wishes
Mustafa BalsaraMonday, February 16, 2009
Deploy Offshoring & Outsourcing Success: Define Metrics
I am sure that Cost Control, Value Addition Services, Customer Sensitivity, Right sizing, exploring business options would be some of the top 10 to-do’s on every CXO’s list for 2009.
They're striving to see through the economic and political fog of today to what the post-meltdown future holds. They're discussing new and evolving ideas such as "joint accountability" and "collaborative partnering" the critical role technology can play in defining and managing outsourcing success, business and community development through public-private partnerships, outsourcing as a vehicle for corporate social investment and how outsourcing professionals can become blackbelts for a flat world. One major focus is on increasing process efficiencies across the entire spectrum of their offshoring operations — from call centers, Technology Development to Research & innovation work.
First let's revisit the often talked topic : Why is Outsourcing necessary ?
I am sure; everyone must have read about the term "Opportunity Cost". An Opportunity Cost is the value of a product that is forgone when pursuing another product. Let us take an example: If a CTO/CEO of a company spends 2/3 hours everyday on problem solving everyday issues on an existing customer facing technology service platform or Web Application, which could have been easily outsourced, the opportunity cost is the time lost in fire fighting redundant or trivial issues. That time could have been used to take important strategic decisions about your company's future technology roadmap or defining a new technology service or it could have been time well spent playing baseball with your kids. Either way, the time represents an opportunity cost, or you may call it an opportunity lost. Now let us try to understand how to make outsourcing a beneficial experience for both you and your customer. Cutting cost is the first thing most of the companies think about while outsourcing their business needs. Now this is the problem.
As a company planning to outsource your services you should focus on these 3 things:
1) Leveraging Cost/Skill Advantages
2) Quality of work desired.
3) Customer satisfaction.
Preparing a business case weighing on the above 3 factors gives you enough reasons on WHAT- WHERE- HOW -WHEN to Outsource questions.
More importantly the success criteria of offshoring or Outsourcing would be measured by the following metrics:
Prior to Outsourcing-
- Political, Business and Economic Atmosphere of the Region
- Country Demographics- Language & Cultural Neutrality
- Talent Pool of the Vendor
- Customer Credentials
- Domain Expertise
- Infrastructure & Business Continuity Engagement & Procedures
- Process Adherence and Quality Standards Frameworks
- Employee Engagement & Employee Turnover rate
- Internal Business Engagement and Offshoring repurcussions
Now that you've shortlisted a suitable vendor, the following would be the post offshoring factors which you should consider
- Service Level Agreements and Service Level Deliverables
- Turnaround Time for Issue Resolutions
- Transition Plans, Project Plans, Resourcing Plans, Communication Plans
- Risk Management.
- Business Value Propositions
Develop a Cost v/s Benefit Analysis during the term of the engagement to monitor the benefits arising of the engagement in terms of customer satisfaction scores(C-SAT), Increase of Business Revenue, Reduction of Issues, Sales Figures, Saving of Annual spending on Marketing or Development budgets etc whatever are the direct impacts or percieved benefits from the offshoring engagement. These would be healthy indicators which would define the success of the engagement and finally to the business.
I would welcome more suggestions on what are the benefits you've encountered from your offshoring engagements.
-Mustafa Balsara-PMP
Sunday, February 15, 2009
Simplifying UI Complexity for IT Applications
This is an interesting depiction of how modern day web applications instead of convincing the customer on the application design confuse them more.
I think part of this is most of these apps are mimicking paper forms. I’ve even seen some cases where it seemed the UI form was meant to capture data for a specific HL7 message (ughh). It reminds me of some tardy ERP-type systems which we still have existing today.
While conventional wisdom holds one in good stride but as technology progresses I firmly believe that we would need to 'Think-out-of the box' designs.(these are tall words, but I am trying myself to figure out how?)
The UI has to be designed looking to the user who is going to use it and what information he would like to “USE” rather than ‘SEE’.
The below are a few guidelines which I guess would contribute to an efficient way to design a UI:
1) Style Sheet guidelines - We use CSS but sometimes new styles appear to be created without enough thought. You have to keep your CSS files clean and well documented. Review them on a regular basis to ensure that new styles are only being added when needed. I would personally prefer a CMS to handle this to maintain consistency.
2) Define guidelines around button placements e.g Save, Cancel, Submit- They should be ideally located at the same locations on the each pages.
3) Define load time expectations - If the page is taking too long to load(lot of graphics etc) then I guess the end-users would only be more frustated. Take care of that - minimality is the key.
4) Screen Resolution- Study your end-users, what systems they would be using. Certain countries still have the 800x600 dpi monitors. Optimise designs to fit those screen resolutions or Aspect Ratio
Resolutions with a 4:3 aspect ratio: 800 x 600; 1024 x 768 ; 1152 x 864 ; 1600 x 1200
Resolutions with a 5:4 aspect ratio: 1280 x 1024 ; 1600 x 1280
5) Use of descriptive text - What types of information should be provided to users? Information provided should be used and not only to see.
6) How are errors and confirmation text displayed - Do you take users to error pages or show messages on the page. Pick a method and stick with it.
7) Do you use pop-ups? If yes, how should they display and what behaviors must they support.- How are lists displayed? For example, if a lists of users is returned by a search make sure they are always displayed the same way. This code needs to be common and the display of the users should clearly be the same on every page. Certain browsers block pop-ups, one needs to factor that pre-requisite on the pages.
8) Concentrate on Semantics- e.g Data labels across all forms have to be consistent and should follow conventions.
9) For webforms - there could be mandatory and non-mandatory fields- Mark them separately.
10) As far as possible “Free text” fields should be minimized for web form based application unless unavoidable. Drop down’s or Radio buttons should be preferred wherever possible. This makes form filling faster, easier and data storage easy and retrievable for business intelligence reporting.
11) Strive for consistency, minimality, ease of use, neat design: Cater to universal usability, Offer informative feedback, Permit easy reversal of actions, Make users feel they are in control.
Feel free to add on this post with your comments/suggestions. I would appreciate your thoughts!
- Mustafa Balsara, PMP
Social Networking Services- A New Global Connect Web2.0 Revolution
Social Networking is all about sharing and discovering the myriad ideas and interests in this information universe (Okay...I'm starting to sound like Carl Sagan) It is not about staying in one place rather being able to pick the best one that meets your specific needs at any given time. The trick is you have to invest the time in order to get any true value.
This opens up a lot of options/avenues to information exposure to friends, communities based on interest, professions/activities etc. I would say “Reducing Degrees of Separation” Its wasn’t too long ago when we said that if on an average everyone know 42 people around them, then the entire 6 billion population of this world is just 6 degrees away (6th root of 6,000,000,000 = 42.628)
Use this formula: (average number of friends per person) ^ (degrees of separation) = total population
The success of Orkut, Linkedin, FaceBook, MySpace etc has shaken the entire internet industry. This has announced that these platforms and technologies are here to stay. They define Web2.0 technologies. Web 2.0 websites typically include some of the following features/techniques. Referring to Andrew McAfee's defined acronym SLATES to refer to them:
1. “Search: the ease of finding information through keyword search which makes the platform valuable.
2. Links: guides to important pieces of information. The best pages are the most frequently linked to.
3. Authoring: the ability to create constantly updating content over a platform that is shifted from being the creation of a few to being the constantly updated, interlinked work. In wikis, the content is iterative in the sense that the people undo and redo each other's work. In blogs, content is cumulative in that posts and comments of individuals are accumulated over time.
4. Tags: categorization of content by creating tags that are simple, one-word descriptions to facilitate searching and avoid rigid, pre-made categories.
5. Extensions: automation of some of the work and pattern matching by using algorithms e.g. amazon.com recommendations.
6. Signals: the use of RSS (Really Simple Syndication) technology to notify users with any changes of the content by sending e-mails to them.
More and more internet savvy people are opening to idea of such social networks to connect with friends, family, groups of common interests and this is bringing a social information revolution across the world wide web with so much of information pertaining to consumer activities, interests being shared across the WWW. Going forward how could this information be normalised, categorised & analysed for social intelligence purposes......am I hinting at Web3.0.