Month: June 2008

I thought I was done with this subject last week.  But then it struck again, Analysis Paralysis!  I am near completion of a deal that is over 4 years in the making, not for me, but for a fortune 100 company.  In other words, they’ve been work it this long.

This company has been looking for a solution and had contacted one of our reps back in 2003.  They were about to move forward with the implementation but someone convinced them to wait, and ultimately pushed to build the program in-house.  It’s the same story I hear time and again, “we can build it in-house for half the cost”.

Yeah, right.

So here I am in a conference call with a handful of representatives from this large company and they are sharing with me how after 4+ years they couldn’t build a good tool and wanted to use ours.  This happened for a number of reasons.  Reason #1…It’s not what they do!  Sure it looks easy, but when you actually set out to do it, reality hits.  Reason #2…not enough time.  Building a tool takes away from their core business, and that always takes a back seat.

Suppose I wanted a nice wooden baseball bat and I see that Louisville Sluggers cost $29.  If I’m not careful I could be talked into buying a piece of lumber, sticking it on a wooden lathe and saving myself ten bucks to make my own.  We all know that would be a disaster. Yet somehow in business we don’t always take that same common-sense approach.  Instead we waste too much time arguing, waiting and losing money.  Isn’t it better to pay a small premium for another’s well invested expertise?

Waiting usually costs more than doing nothing or delay.  As one CEO recently said, “After hearing all the facts, make a confident decision, even if you aren’t certain.  It’s indecision that is costly”. 

 

–Warren

Biblically, 7 is the number of perfection, and 6 is the number of “man.”  Remember 666, the “number” of the Antichrist?  In light of that, I’m going to enumerate the worst sins consulting companies can make.  These are the ones that doom them to hell on earth.  If you’ve been in business for any length of time, you have probably already nailed these and gotten past them.  But they may be worth reviewing.

#1: Ignoring your customer’s complaints
The customer is always right, right?  No, not true.  But, when they believe they are right, you had better be there to work things out.  Sometimes you can make them see your position in a disagreement, but more times than not, you’ll need to suck carpet and make things right.  That’s part of what they expect of the relationship.  The mere fact that you take money from them puts you in that position.  Cruel fact of life – get used to it.

#2: Failure to smooze
This one is akin to the first, but slightly more on the positive side.  Remember the old adage “out of sight, out of mind?”  That’s what happens when you haven’t had face-time with your customer in a while.  They literally think less of you.  The relationship grows cold and they are less likely to call on you when a need arises.

#3: Letting sales slip
Consultants and consultancies have two big jobs: consult and sell consulting services.  Both are equally important.  Once a gig has been landed, the tendency is to settle in and forget about what comes next.  Looking for the next gig is hard.  It’s much easier to do what you’re competent at, and let the sales work take care of itself.  Problem is…  it often doesn’t.  When the gig ends, you’re on the street again without work.

#4: Shoddy work
This one’s so obvious, it’s hardly worth mentioning.  But it really goes deep down to the type of person you are.  Keep your standards high.  Remember that you are competing with other consultants, and for future work.

#5: Low utilization
Got a nice high billing rate?  Higher than working at Wal-mart?  Consider this: your “effective” billing rate (or utilization rate) is your revenue divided by the total calendar hours.  For example, $50,000 divided by 2,000 possible billable hours in a year is an “effective” rate of only $25 per hour.  You may charge $100 and hour for your time, but only book 25% of the total possible hours.

#6: Not picking up the scraps
Nobody likes to think of themselves as a handyman who takes odd jobs.  We’re skilled professionals with higher education.  But there’s no shame in stooping down to pick up small jobs.  Sometimes you can even charge more for them.  They can fill gaps between the big gigs and give you interesting new experiences.

 

–ray

This is a follow-up to the post named “Why IT Projects Get Killed.”  I began to wonder at what stage IT projects get killed.  In other words, when they are canceled.  Most of the projects I’ve worked on have been successful, but I’ve seen my fair share of canceled projects.

For this post, I decided to take a guess at when I felt IT projects are canned.  Of all the canceled projects, these are my guesses at when they occur.  I have no detailed surveys to back up my assertions, just a little experience.  So, here goes…  Post a comment and let me know what you think.

    25% In the investigative stages
    50% In the requirements gathering stage
    10% In the development stage
    10% In the final QA stage
    5% In the pre-sales marketing stage

25% In the investigative stages
This one’s fairly obvious.  A project passes the “good idea” stage and passes into the “due diligence” stage to learn its true value.  That’s when it dies.  Not all good ideas have true merit, or can be marketed effectively with the given resources.  It’s common for projects to die here.

50% In the requirements gathering stage
Here, the project members are interviewing customers and collecting information.  They may even be building prototypes to prove the concept.  But just as in the investigative stages, the idea may die because it cannot meet requirements or marketing expectations.  Again, lots of possible reasons for cancelation, but most of these are because the idea wasn’t feasible.

10% In the development stage
By the time it’s gotten to the stage where development resources are committed, it’s probably proven to be viable or too highly visibility to cancel.  By this stage, the project stakeholders may never cancel it, even if it isn’t viable.  Egos and persistence are at play here.

10% In the final QA stage
Sometimes products never meet customer expectations, or will cost too much to do so.  The project may have gone terribly over budget, and customers hate it.

5% In the pre-sales marketing stage
Surprisingly, some get to this last stage, and still die.  I was once involved in such a project in 1995.  It was killed after two years of intense development, before a single sale was made.  That’s right!  We finished a two-year death march, only to find the product pulled from marketing.  There were too many competitors and not enough customer value.  That fiasco, and a few others like it, eventually killed the entire company.

 

–ray

We’ve all heard the term analysis paralysis, and frankly it is a millstone around the necks of many corporations, especially ones that are heavily layered in management.  In today’s world economy only the quick and flexible survive. 

Imagine you have a great idea you spend days, if not weeks, researching.  You run the initial numbers and cost analysis that shows a marked improvement with a bottom line benefit.  You can hardly contain your excitement!!  So, let’s get started, right? Wrong!

Bob, over in development, isn’t sure this will actually save the company money and he thinks they “might” be able to build their own tool.  So he talks to Chris in accounting and before you know it there are too many cooks in the kitchen and everything is on hold!

It took 6 months before a decision was made to build this tool in-house.  It took Bob’s team over a year to figure out they couldn’t build the tool properly, and they spent 12 times the amount the original “off the shelf” implementation would have cost!  And the final result?  Still waiting…

If they had simply gone with the original idea of an off the shelf tool they would have saved the company enough money to buy the thing 20 times over!  Instead they’re back at square one.

I am all about due process and thinking things through.  However, at some point a decision must be made and all too often one isn’t made out of fear, job security, or simply because someone is being territorial.

This is a common story and that’s why strong leadership is important.  If you’ve done the homework and you know it’s a worthy endeavor… push, push and push some more.  In the end you will be rewarded for a job well done or sleep well knowing you gave everything you had.  To use a sports term, “Leave it all out on the field.”

 

–warren

I like CIO Insight.  They seem to hit a lot of relevant issues.  Their “Why IT Projects Get Killed” is a short slide-show with a simple breakdown of the top five reasons IT projects get killed.  A link to the article is below, and I’ll comment on the top reasons.

http://www.cioinsight.com/c/a/Management/Why-IT-Projects-Get-Killed/

Reasons:

1. 30% Business Needs Changed
2. 23% Does Not Deliver As Promised
3. 14% No Longer a Priority
4. 13% Exceeds Budget
5. 7% Does not Support Business Strategy

Well, that’s only 87%.  I suppose the other 13% fall into the “Other” category.  I’d like to take a crack at interpreting the numbers.  Here are my thoughts on why IT projects are killed.

30% Business Needs Changed
From the time a project is first proposed until it is started, things have changed.  These are often projects tightly connected to cultural events.  For instance, your proposal for a new drive-through pharmacy may lose 7% of its expected revenue if the price of gas goes to $5.  Anything that tightly connected to consumer behavior must be watched closely.

23% Does Not Deliver As Promised
Oversell and hype.  Lots of people do it, and lots fall for it.  It always surprises me how pessimistic people are when investing money, but how easily they fall for a good story.  Almost a quart of the projects don’t live up to the promise.  But it’s not jsut hype that contributes to this number.  Sometimes people simply don’t realize how big a project is when they start it.  That’s understandable.

14% No Longer a Priority
This feels like reason #1.  Business needs change, and the project is no longer a priority.  But I suppose there other reasons a project may no longer be a priority: Can’t make money at it, Other solutions have arisen to replace it, Employees or customer have changed.  But still…  aren’t these all “business needs.”  If so, a full 44% are canceled just because “things change!”  Yikes!

13% Exceeds Budget
I expected this to be higher.  Most people I talk to go over budget on their projects.  That’s why they use products like Standard Time®.  They know they’ll be cancelled if they go over .  Well, maybe it’s doing its job!

7% Does not Support Business Strategy
This happens when unlearned individuals go off on exciting missions that the executives don’t support.  A project gets started, but killed soon after – once it’s discovered to be nonsense.  I’ve run into quite a few of these individuals.  But I don’t fault them; they try.  And that’s all the CEO really expects of them.

 

–newshirt