Archive for August, 2009

Is Enterprise 2.0 just too risky?

Posted in Communicate / Collaborate on August 27th, 2009 by Leanne Fry – Be the first to comment

I met with the members of the Knowledge Management Roundtable in NSW yesterday to discuss Enterprise 2.0 and the opportunities for business it provides within the firewall.

Marie O’Brien is the very capable and entertaining facilitator, and the sessions I attended were all strongly practical.

A couple of the questions asked reflected the very real issues that organisations are wrestling with, either in just opening up social sites to employees at work, or in working out how to leverage social networking in an organisation. I thought they were worthy of noting:

If you provide access to social sites, will people spend their time surfing?

This issue isn’t going to go away anytime soon. Will you see productivity plunge if you allow employees access? I first heard this concern over 10 years ago, when as part of a global intranet roll-out we provided internet access to all our employees. And the talented director I reported to, when asked by me for an official response, commented ‘that is entirely an issue for management’. The mechanisms for time-wasting have always been available, some just more or less visible than others.

Blanket bans may well be counter-productive. The benefit ‘back then’ was that we wanted web savvy employees, people who understood the internet and how it might assist business. I would like to suggest that is still applicable. How can you come to grips with social networking, either within your organisation or for partners and customers, if you don’t understand it yourselves?

The interesting thing about internet access all those years ago was that we saw a spike on the first day we rolled it out to each group of employees. By about day 3 access levels were back down to acceptable levels.

If you provide blogs within an organisation, how do you select the topics and the contributors?

This made me stop and think. On my last project we certainly seeded our first blogs. By that I don’t mean we chucked the technology at a likely suspect and hoped for the best. We worked out a cross-section of influencers, from the leaders to the workers, talked to them about why a conversation might be a good idea, and got the ball rolling. But within a very short time the requests started flowing. And the interesting thing was that everyone who contacted me wanted to start talking. They had people they wanted to connect with, and stories or business information they wanted to share. The technology came second. Sure the technology was a bit interesting and fun, and a whole lot more flexible than an email newsletter, and it might have even inspired a few people to ramp up the communication again, but people wanted to share.

So a mix of understanding the conversations, understanding the corporate dynamic so we knew which conversations carried what impact, some marketing 101, and then visibility and word of mouth, meant that we didn’t have to drag people to the altar!

Process re-engineering or process understanding?

Posted in Business Process Consulting on August 21st, 2009 by Stephanie Chung – Be the first to comment

Throw the word ‘process re-engineering’ to an organisation, and you may scare people. It might be because they don’t know what’s involved, or it might actually be because they have had experience, and think you mean large scale change.

I don’t think process re-engineering needs to be that dramatic. Certainly my experience of it is not so dramatic. The end goal is not looking at the processes to necessarily always bring about change. In most cases you are leading people to discover the issues themselves, just through discussing what they do and what the hand off points are. You are aiming for the ‘ahh ha’ moment, not the ‘argh’ moment!

I undertake process re-engineering on the basis of wanting to understand the day to day basis of a business, rather than going straight to the issues and resulting solution. The starting point is recording the deep dive into your business processes. What is ingrained in the business that is never talked about or formally documented? Detail every single step and pass off point, who is involved and what parts are automated and manual. Documenting it opens up the ability to see where elements are double handled and areas that are manual that don’t need to be. More importantly, people often learn things about their role that they had not thought about before or had taken for granted.

In our most recent experience, it took us a few days to walk around all the different departments of a company and ask them what they did, who they interact with, and how they did their job. The output of this was a depth of analysis and insight into the organisation that even upper management acknowledged. It provided a platform for investment decisions and new project initiatives.

I have done this for operational processes, logistics handling, and as a basis for application development projects. In all cases, you interact with the people who are the touch points of the detailed end to end process, focusing on the who, what and how. You also can’t just look at one section or department, because there is much to be found in what happens in hand-offs between departments. The assumptions that are made often don’t enable an understanding of how everyone’s roles link together in the business.

The end goal is a focus on the business structure and processes that may have become blurred. A key benefit is the foundation created for improvement, as well as the active knowledge management from documenting and retaining process knowledge that commonly sits in people’s minds.

How much governance is enough?

Posted in Governing Programmes and Projects, Practice Areas on August 19th, 2009 by Raymond Young – 1 Comment

Governing IT and project risk

Boards have been looking for credible advice for some time now on how to deal with IT risk [i]. The jury is still out – deliberating how much time should be spent governing IT and IT projects. Research released today may have tipped the balance towards more rather than less [ii].

Evidence gathered over a 10 year period has shown that IT project failures result in a 2% average drop in the share price. The fall is somewhat greater if it is a failure of a new project and less if it is an operating failure with a current system. Investors were shown to be quite well informed with larger falls when the failure was more severe and more again when there has been a history of failures.

So how much time should be spent governing IT projects? Today’s research suggests it is the amount justified to minimise the likelihood of a 2% fall in the share price, with particular focus on new projects and avoiding repeated failures. It is clearly not the minimal amount of time that Deloitte have identified as the practice with many boards, that in their words is “tantamount to negligence” [iii].

Boards approve around 40% of all projects [iv] and the minimum standard must be (a) at the time of funding to ask four of the six key questions recommended by Standards Australia [v] and (b) to address the remaining two questions by having mechanisms in place to monitor performance.

The guidelines (tabled below) are clearly more to do with good governance than rocket science. However, the statistics reported in the table also show that not one of the guidelines is addressed adequately more than 40% of the time[vi]. The best interpretation of these statistics is that less than 0.2% of projects are governed effectively. Surely we can do better.

Key governance criteria

% time effective

(1)   clarify what success looks like

40%

(2)   understand the scale of change required to realise the benefits

40%

(3)   confirm the sponsor is personally motivated to drive through the necessary change and accountable for the business benefits

5-13%

(4)   determine how to measure and reward success.

33-66%

(5)   have a culture to listen and resolve unexpected problems

???

(6)   monitor benefits realisation and intercede as necessary

0 – 13%

Note: The HB280 guidelines are usually a good starting point for most organisations. There will be times when more detailed help might be required and we have developed the 6Q Governance™ toolset to help institutionalise better practice. However, our approach is focused on the transfer of skills/competencies and not dependent on any tools.


[i] R.C. Young and E. Jordan, “Lifting the Game: Board views on e-commerce risk,” in IFIP TG8.6 the adoption and diffusion of IT in an environment of critical change, (Sydney: Pearson Publishing Service, 2002), pp. 102-113

[ii] Anandhi Bharadwaj, Mark Keil, and Magnus Mähring, “Effects of information technology failures on the market value of firms,” The Journal of Strategic Information Systems,  18 (2009), 66 – 79

[iii] Deloitte, What the Board Needs to Know About IT: Phase II Findings: Maximizing performance through IT strategy (Deloitte LLP,  2007)

[iv] KPMG, “Global IT Project Management Survey: How committed are you?.” 2005

[v] R. Young, HB 280-2006 Case Studies – How Boards and Senior Management Have Governed ICT Projects to Succeed (or Fail) (Sydney: Standards Australia,  2006)

[vi] References are available but not included to manage word length. Academic references have been cited over industry sources to increase rigour. Please contact the author for details.

10 reasons to tackle corporate email – reason 4

Posted in Communicate / Collaborate on August 19th, 2009 by Leanne Fry – Be the first to comment

A manager who worked for me mentioned one week that he needed to come into work on the weekend. We worked for a company that did more than pay lip service to work/life balance, and so I quizzed the manager on the reasons for the extra hours.

‘Swamped with email’ was the response. So I asked the manager to carry out a quick task. I asked him to check how many of the emails in the ‘overload’ were in direct response to an email the manager had sent out.

Not surprisingly, the answer was up around 90%. And not surprisingly, a number of those emails were to members of our own team.

What we found was that email wasn’t helping us make decisions and solve problems on some issues. It was just extending the interaction, or delaying it. A bit like playing tennis. When the ball is on the other side of the court it is someone else’s turn!

So much interaction on email is kept between two people. It’s not visible, and it can sometimes be easy to add to the problem, not resolve it. Not much beats face to face interaction, or a phone conversation of course. But there are tools which, because of their openness, transparency and immediacy, make the process of discussing, agreeing and actioning more efficient.

10 reasons to tackle corporate email – reason 3

Posted in Communicate / Collaborate on August 19th, 2009 by Leanne Fry – Be the first to comment

Email is linear. Point to point. So it’s direct. That’s good. In business, that’s useful.

Think about usual email interactions. One person to one person. Or, if the conversation is within a team or project, one to many.

But if the results of that conversation need to be communicated more widely, it can become many individual ‘ones’ back to many. And it can spool off into many more ‘one to ones’. And at that stage readers are often wondering whether they are still needed in the conversation.

At that point, the original point of the email might be so far back in the thread that you can’t recall it, or completely lost if you have come to the conversation late.

If it is a long running or complex issue, bringing a latecomer up to speed with the ebb and flow of the conversation can be almost impossible.

So email has a role within organisations. No argument, but its ubiquitous nature means it is often the default tool. And there are better tools available for a lot of the interaction organisations need.

In many organisations there will be real value in taking specific conversations or interactions, which currently run through or are fuelled by email, into Enterprise 2.0 tools. Yammer (an inhouse Twitter) or other instant messaging tools can connect all people on a project or in a team much more quickly and fluidly than email. Quick exchanges can complement the work people are doing without a massive personal overhead.

Blogs can be an alternative to newsletters and email updates. They are more transparent, open to all, and because they capture the thread of the conversation in one place are very inclusive for new members or stakeholders.

And if there is a problem to be solved, wikis encourage group contribution and visibility more effectively than email will. They capture the collaborative output and knowledge for subsequent use.

Organisations should consider leveraging any skill and capability that employees bring in using social tools – the willingness to connect and share, the transparency. While there will always be people wedded to email, there might be people you can actively encourage not to become wedded to email!

Post-GFC: project failure leads directly to bankruptcy

Posted in Governing Programmes and Projects, Practice Areas on August 17th, 2009 by Raymond Young – Be the first to comment

Here’s a situation that may be playing out in companies globally:

A company is on the verge of bankruptcy. It has been particularly hard hit by the global financial crisis and is losing several million dollars a month. It desperately needs to reduce costs and their accounts are not up to the intense scrutiny. A number of key initiatives are being undertaken and the auditor has added the requirement to consolidate the accounting systems. The board has no choice but to agree, but there couldn’t be a worse time to do a new IT project. The chairman has overseen a number of IT projects and “not one of them has succeeded”.

IT said that the systems can be integrated in two months so the edict from on high is that it has to be done before Christmas. The new boss is claiming not to be on top of the detail and plans to delegate responsibility for the accounting system project to a manager. The manager understands the business processes but hasn’t been involved in the decision.

It wasn’t so long ago that the press was reporting on a similar IT project that failed just before Christmas.  I helped Standards Australia produce a handbook for boards and top managers of lessons learned from a whole range of similar disasters (HB280-2006).  In the case above, not one of the guidelines is being followed. It seems no one ever learns. The price this time will be jobs, followed soon after by bankruptcy.

For many, the GFC has all but removed any margin for error. Will boards also pay the price? The precedent was set in 2006 when the CFO, CEO and chair of the audit committee resigned from Australian Pharmaceutical industries following an IT project failure.

Where are the auditors?

My friendly advice in such cases is often rejected with the put down “have you ever implemented XYZ system?” There is little understanding that the real issues actually relate to governance. People fall into the trap of thinking they are IT projects, deferring to the vendor and assuming the business benefits will flow automatically from implementing a system. Fifty years of experience proves it doesn’t.

Perhaps we in the profession need to do more. It is disturbing that I often hear that auditors are not suggesting clients follow the 2006 guidelines in HB280 nor the related Standard on the corporate governance of projects (AS8016 forthcoming).

In the building industry, clients are not expected to know whether concrete has been poured correctly or the steel is of the right thickness. We have building inspectors to certify minimum standards have been met. It is completely dysfunctional to defer to vendors just because it is an IT project! Why aren’t our auditors providing ‘project inspectors’. It is not part of the formal auditor training, but it is common practice for audit firms to subcontract specialists when they don’t have the expertise. I’m arranging to provide these services for a mid-tier firm as I write, so clearly it can be done. Why is this not a common service?

Where were the directors?

Perhaps the most disturbing thing of all is that boards know projects have a high failure rate [i]. Why do they and senior management expect a different result when they continue to follow the same process? Governing projects is not rocket science. There are only six basic issues that have to be addressed:

  1. Make sure you know what success looks like (IT is generally only an enabler, it is rarely the real objective).
  2. Make sure you know what has to change for the benefits to be realised.
  3. Make sure you appoint a sponsor who is personally motivated to make the changes happen, and make them accountable for the benefits.
  4. Make sure you have a way to measure if the benefits have been realised (Do not use on-time on-budget. This is desirable but not the ultimate objective).
  5. Make sure you listen. Establish the right culture so that bad news is not filtered out.
  6. Make sure you monitor and intercede as necessary (Something always goes wrong and there are times decisions can only be made at the board and top management level. Political considerations cannot override the need to have the right person accountable. When the consequences include bankruptcy, we all lose).

This advice is usually enough for most people, but there are times more detailed help might be required. We have developed 6Q Governance™ to be the project inspector’s toolkit and when appropriate, we can work with you to transfer our skills.


[i] R.C. Young and E. Jordan, “Lifting the Game: Board views on e-commerce risk,” in IFIP TG8.6 the adoption and diffusion of IT in an environment of critical change, (Sydney: Pearson Publishing Service, 2002), pp. 102-113

Deficiencies with programme/portfolio management?

Posted in Governing Programmes and Projects, Practice Areas on August 12th, 2009 by Raymond Young – 2 Comments

Executive Summary

Victoria is considered to be one of the international leaders in New Public Management and their approach to project investments was expected to be at the forefront of practice. Our research has shown however, that their key investment frameworks (based on tools developed by the UK’s Office of Government Commerce) do not adequately support their strategic goals.

Our evidence suggests there are major deficiencies with best-practice. We are taking the lead to address this by developing approaches to help boards and top managers to govern projects effectively. However the significant deficiencies with program and portfolio management have yet to be addressed. A call is made for others to contribute.


No adequate tools to govern programmes/portfolios to realise strategic goals

Projects in the public sector

We were recently commissioned by the Victorian Auditor-General’s Office to undertake a study to explore ‘The role of projects within the Victorian Public Sector’. We subsequently extended our study to include New South Wales and found that projects are increasingly important across the whole public sector. Projects now consume around 20-30% of budget[i] and are the main enabler of government policies such as improving health/education and reducing crime/traffic congestion.

The significance of the studies is that they have highlighted a very major flaw in the way projects are typically managed. Victoria is considered to be one of the international leaders in New Public Management and their approach to making project investments was also expected to be at the forefront of practice. It was therefore a revelation to discover their key investment frameworks (based on tools developed by the UK’s Office of Government Commerce) did not adequately support their strategic goals!

The deficiencies can most clearly be seen by considering the impact of the huge project investments over past decade in education and health (estimated to be between $10-20b). The Victorian Department of Education and Early Childhood Development is considered one of the best in Australia, and their effort is undeniable, but their results have not contributed to the government’s 10-year goals. Literacy has generally not improved and numeracy has actually decreased [ii]. Waiting times for health services appear to have been largely static despite almost a billion dollars a year being poured into health related projects. What is going wrong?

Projects in general

Please understand I am not taking the boot to public sector. As a citizen of NSW I am envious of the quality of life the Kennett, Bracks and now Brumby government have delivered for Victorians. A quick comparison with the post-melt-down corporate sector reveals the Victorians govern better than almost anyone in both the public and private sector. Yet their track record with project investments echoes the dysfunctional pattern found all over the world (where half to two-thirds of project investments fail to deliver any benefits at all [iii]). If the ‘best’ cannot get it right, there must be something wrong. Something is missing.

What we have found is that the Victorian investment frameworks are “directed mainly at asset investments”. Their strength is that they select investments based on the benefits to be delivered rather than the cost or the time. Their weakness is that selection is at the project investment level rather than at the program level.

  • Asset investments alone (such as IT, schools, hospital or roads) seldom directly lead to the realisation of strategic goals such as reduced crime, increased literacy, or reduced waiting times.
  • Programs of projects are almost always required (e.g. build school + change bus routes + recruit quality staff + develop and implement quality curriculum + manage parent/community perceptions = increased literacy). It is pointless to fund an individual project unless all the other critical inter-related projects are also funded.
  • Effective governance is also required. Organising and funding whole programs is important, but can easily go off track after approval. Strategy is emergent and needs to respond to the changing environment. Governing is the high-level ‘steering’ of the program through the emergent issues that cannot be planned for (e.g. bushfires, swine flu, global financial crises, etc.)

Deficiencies in best-practice?

Our studies suggest there are major flaws in the way projects are managed. Value is reported to be lost in three major areas [iv]:

  • The traditional emphasis on project management has the potential to increase value by 15% (by avoiding rework and over engineering).
  • The approach taken by the Victorian government is better and may represent current ‘best-practice’ because it has the potential to increase value by 33% (by investing to reduce underutilised infrastructure).
  • The most potential value to be realised is in avoiding duplication of project effort through governance of programmes and portfolios (52%)

This understanding is show schematically below:

Relationship between governance and PPPM

New program / portfolio tools needed?

The solution appears to be more effective governance using programme and portfolio tools as appropriate [v]. e8 Consulting has been focussed on developing governance guides such as 6Q Governance™ to supplement the governance Standards AS8016 and HB280. However, further study has revealed that the disciplines of portfolio and program management to be very immature.

  • The leading programme methodology Managing Successful Projects (MSP) is overly mechanistic and not closely followed by practitioners because it is relatively ill suited to implement strategy [vi].
  • The dominant portfolio approach in practice seems to be based on the selection of projects and more suited to new product development than the implementation of strategy [vii].

These and other early findings [viii] suggest we may have to develop the tools ourselves. We hope it isn’t so and post this blog in the hope that others can comment on our findings and collaborate to find a faster way forward.


[i] We estimate project expenditures to be around $6-8b pa in VIC and $8-12b pa in NSW

[ii] VAGO, Literacy and Numeracy Achievement (Victorian Auditor-General’s Office,  2009)

[iii] R. Young, “What is the ROI for IT Project Governance? Establishing a benchmark.,” in 2006 IT Governance International Conference, (Auckland, New Zealand, 2006)

[iv] Doug Watters, “IBM Strategy and Change, survey of Fortune 1000 CIOs.” August 17, 2004

[v] Sergio Pellegrinelli and Cliff Bowman, “Implementing strategy through projects,” Long Range Planning,  27 (1994), 125 – 132

[vi] Sergio Pellegrinelli, David Partington, Chris Hemingway, Zaher Mohdzain, and Mahmood Shah, “The importance of context in programme management: An empirical review of programme practices,” International Journal of Project Management,  25 (2007), 41 – 55

[vii] Michel Thiry and Manon Deguire, “Recent developments in project-based organisations,” International Journal of Project Management,  25 (2007), 649 – 658

[viii] Alan Stretton, “Program Management Diversity – Opportunity or Problem?,” PM World Today,  11 (2009)

KM guiding principles

Posted in Communicate / Collaborate on August 11th, 2009 by Leanne Fry – Be the first to comment

At the conference presentation last week, a slide that resonated with a number of people I spoke with was one on guiding principles for knowledge management.

I’m a big believer in guiding principles (you can define them many ways: rules, beliefs, philosophy, basis of reasoning or action). I like the way they force you to articulate, and agree on, what you are striving for. They are a great way to start an initiative, and as you always need input and sign off from a number of stakeholders, they get the project rolling. And I’ve found that if you are working with teams who have been around the block a few times, they are an essential tool to re-focus energies and direction.

Depending on your project, they might actually be a critical step that you bypass at your peril. I’ve used them in business and IT strategy development, corporate communication and investor relations, and IT development projects. On a major IT sourcing strategy project, we used them to turn lessons learned from the original outsourcing deal into guidelines for the next.

This Harvard Business Review article, Transforming  Corner-Office Strategy into Frontline Action, remains one of the most interesting things I’ve read on strategic principles and how they can guide and transform business.

So in developing guiding principles for knowledge management, I have my business hat firmly in place. If someone was trying to sell a new round of knowledge management initiatives to me, what would I want to hear?

Here are five guiding principles for KM that might provide some food for thought:

  1. Make knowledge tasks and activities part of the way people work.
  2. Embed knowledge management in your key business processes.
  3. Target business processes that deliver real benefits to teams: save time, cut costs, prevent errors, simplify activities.
  4. Market your achievements and benefits to existing and new customers as if it were a product you were selling on the open market.
  5. Don’t make people switch between too many toolsets. Leverage your intranet, and turn it into an internet scale knowledge system.

Enterprise 2.0 for knowledge management?

Posted in Communicate / Collaborate, Practice Areas on August 10th, 2009 by Leanne Fry – 2 Comments

I presented at the ARK Group’s KM Australia conference in Sydney last week. The title of my presentation was ‘Enterprise 2.0 – Breathing new life into KM’. A bold claim? Probably, but the whole point is to initiate some debate.

I firmly believe all the tools, connectivity and behaviours associated with what we call Web 2.0, or Enterprise 2.0 within an organization, have the power to turn many of our knowledge or information management efforts on their head. For the better. Over the next few posts I’ll elaborate on some of the thinking behind the presentation.

So my presentation followed the journey I took with Annalie Killian and the excellent folks at AMP, where we implemented a collaboration platform, which included wikis, blogs and the like, to address knowledge management challenges.

Without playing the generation card too heavily, the very real risk for many organizations today is the opportunity they might be losing. We have new generations walking in the corporate door with all the skill and will to connect. They do it every day – it is part of their lives. And yet we often hand over little more than an email account and access to a share drive. Some organizations don’t allow access to Facebook and other social networking sites. In short, we switch them off.

And when knowledge management often struggles with switching people on, it seems like a wasted opportunity.

A real strength of enterprise 2.0 tools is how they connect people. They link people to other people and to information and knowledge assets, in a less formal, but no less effective way than more structured knowledge tools. Why wouldn’t you leverage behaviours that are likely to bring business benefit?