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The upside to a downturn

The upside to a downturn

A conscious decision to make the best use of the economic slowdown is a smart move in itself. Right now is the time to revisit whether you are doing the right things and how well.

When did you last stand back and check to see whether what you’ve been doing is in fact the right thing and if so, then how well you’ve been doing it? Most IT organisations admit to operating reasonably reactively, fixing faults and addressing issues as they arise, or when they become urgent enough. But if you continue to do what you’ve always done and how it’s always been done — you are more than likely going backwards in this fast-changing world.

In response to hard times, there is a balance to achieve between being reactive (protect against risks and costs) and being proactive (invest in adjusting) when responding to changing business landscapes and demands.

These times will actually test us all for agility — from individuals, to teams, to whole organisations.

To use this time wisely — we need to get wise about what needs changing. Blanket chops and changes may not be the best course of action.

To check on whether the basics are right, a Service Management audit check can help quickly establish what fits and what needs changing. If you are counting on people doing this as a matter of course in their day-to-day jobs — then think again — because, as the Tui advert would respond, “Yeah right”.

Invest in creating the process to better manage the process

The constrained financial environment means most non-essential capital-spend is on hold and IS teams aren’t being stretched trying to manage projects alongside operational tasks. Management can package this into an opportunity to create cross-functional working groups that can start to attack poorly designed work practices.

This includes updating documentation, training people on revised processes and conducting research by visiting other areas of IS and the business to develop their applied knowledge. It is also an ideal time for planning, discussing strategy and involving the business in dialogue to readjust for the changing landscape. No one is sure as to how temporary the current trends are and what IT might need to do to support the business to adjust its own course.

This is a time to truly test agility, flexibility, IT-business alignment and all those other things IT strives to accomplish. It will also put to the test the capability of IT leaders, teams, processes and systems.

Ironically, we may not have the luxury of time to attend to this (especially if the economy picks up quickly) and the sooner improvements are initiated, the less time wasted and the greater the opportunity to make some needed changes.

So, where do you start and how do you get people to work together on this? You could potentially assign an experienced, external party to come in and quickly set up such an initiative. This can help prevent temporary role changes, assigning authority, sourcing trusted and necessary expertise, governance and control challenges.

This is what the CIO of an Auckland-based utility company faced recently after engaging with our IT service management consultancy.

A typical assignment may start with conducting a series of interviews with IS personnel to understand what level of capability exists (check-list of core and supporting questions targeted to assess process maturity ratings based on a similar model to CMM) and the gaps. Customer feedback is also included, as is evidential information regarding process outcomes. An output of such an exercise is a comprehensive report outlining process maturity ratings, an IS organisation SWOT analysis and a realistic pathway forward. The current capability, organisational context, priorities and the appetite and readiness for change all have to be accounted for.

Not one size or model fits all — so the key is to understand how to adapt and leverage what exists for moving forward while integrating the essence of good to great practices.

The biggest challenge for the utility company client is they have a relatively small IS team. A smart start that they made was to provide ITIL training for the entire team, which kick-started understanding and buy-in to the benefits and the need for change.

Given much of the company’s project work and capital spend is on hold, they have chosen to concentrate on developing internal process capability during 2009.

Much talk — little action

ITIL is a common term used in the IT industry now, with many people relating to it as a theoretical set of terms that describe good to great practices.

At best it is being applied by astute leaders to ensure they have a solid foundation of process, people and operational capability they can leverage as need be. This then allows them to focus beyond the day to day support, towards becoming valued research and delivery partners alongside the business.

The reason many IT organisations take little action though, is possibly because:

  • They understand very little about the framework itself, therefore fail to appreciate how it may be best applied and adapted for their operation.
  • This lack of appreciation turns them into poor sponsors.
  • It all seems too hard.
  • It may be just a trend or phase and its better to let others try it first.
  • They’ve done OK without it in the past.
  • We find that the most successful outcomes are reached when applying any good practice framework, if:
  • The key sponsor (CIO) understands, believes in and actively supports its purpose and benefits.
  • Empowers and engages the wider IS organisation to participate.
  • It is integrated into the fabric of the way work is done, so it becomes less about the framework and more about ‘how we’d like to do things around here’.

Attend to service improvements

An economic slowdown doesn’t mean slowing down on improvements, when in fact it can help achieve the opposite. Not all improvements have to be costly and time-consuming to put into place.

Remember also that “perfect is the enemy of done”. Don’t suffer from waiting to combine one improvement with another, which is wise to do only if there is a key dependency making this necessary. Otherwise, a small issue addressed for customers is better than waiting months or even years for a few more requiring significant effort.

Some ideal areas to address are:

  • Staff induction (within IS and about IS in the company induction process).
  • Refresh and deliver updated staff and user training.
  • Brain-storm how to cut out the dead-wood from manual processes and fine-tune them to avoid process-bounce (multiple handling).
  • Improvements identified in recent customer surveys.
An external, experienced and skilled facilitator can help secure progress faster than internal think-groups might — where alternative agendas may distract from the intent of maximising service benefits.

Bonus benefits

Initiatives to kick-start new or improved practices can work to keep personnel motivated, engaged and focused during times that have a high potential to lower morale and productivity, if the focus turns to negative thoughts and behaviours.

So, not only do such initiatives get teams to reflect and focus jointly on operational processes, it allows:

  • For cross-functional work groups to concentrate efforts and thinking into improvements, which lead to customer service enhancements and reduced inconsistencies.
  • Improved engagement to be maintained during times when morale can wane.
  • Building a common focus can unite people and prevents silo and survival self-serving modes to dominate.
  • Customers to still receive improved services even during bad times.

Sustainable ‘smarts’

Smart leaders are always looking to the future, creating means of remaining sustainable, in financially difficult times as well as easier ones.

So, creating a culture that expects and supports ‘smarter’ behaviour, practices and outcomes in a continuous cycle requires conscious strategic intent, direction and sponsorship from the top. Once this culture is established — it’ll be there to support the business in good times and even more importantly, through difficult ones.

Using a service improvement programme, CIOs and top IT teams can get started now to embed such a culture.

Sidebar: Putting IT (projects) together

By Scott Groombridge

Research indicates that New Zealand loses more that $300 million on failed IT projects per annum, with approximately 45 per cent of projects not delivered on time or budget. The research from overseas suggests that it may be a lot worse. In today’s financially constrained times this is unacceptable.

What is your company’s IT budget and what would it cost if 45 per cent of your company’s projects were late, even by just 10 per cent? Remember to include internal costs, cost of not delivering the functionality, impact to the customer, etc.

IT projects have been delivered for more than 40 years now, and companies are still not getting it right, so obviously this is not an easy thing to fix. This article highlights an initial set of best practice tools that can be used to make some immediate improvements with very little cost and huge potential benefits.

Projects fail with two main symptoms — overrun (time and budget) and requirements not met. Overrun (budget and time) is often ultimately caused by poor direction and resource constraints.

Companies start projects when the key executives are not fully bought into them and, whilst good at business in general, they are not using best practice project methods. In other words, executives are simply not getting it right and are using standard business practices when setting up or running the company’s project portfolio, when they should be using tested, well-tried methodologies.

Use best-practice methods.

A classic example here is accountability. When running a portfolio of projects, there must be a single person that is ultimately responsible for each one of the projects.

Assign a single person to be responsible for each project you have and ensure they understand what their responsibilities are.

Projects usually require business change. Building a change component into an individual project is usually done, ie at the micro level, but, often neglected when considering the total change impact when planning the portfolio of projects at the start of the New Year, ie at the macro level.

A good project will be delivering benefit to the business and will require expertise from the business, change to their processes, use of their resources (people and equipment), while in the meantime these resources have to keep the business running. Often these resources are fully utilised, before the projects are even considered.

Plan your company resources at the portfolio level before planning at the project level.

Long running projects using traditional methods fail — full stop.

If the requirements for a project are defined today and the delivery is more than one year away, it is unlikely the business will remain static as when the requirements were taken. Many of us have heard the story of a two-year project that was 95 per cent complete and took another year to finish!

As well, a typical company’s staff turnover rate is around 15 per cent, which means if the project team is 13, then two people will leave each year taking knowledge and experience with them, let alone staff that have been seconded and then pulled back to the business because project change has not been planned!

Business priorities change too, which also means that a project’s requirements can change or it can pull resources away from the project or even a programme.

Break projects into bite-sized chunks or use iterative methods.

Another hot potato is that IT starts off on the back foot straight away, in that “non-IT” people simply don’t get how much things really cost and the effort required. So when they ask for a new system and are told that it will take 12 months and cost $1 million, they fall out of their chair! So they ask for the budget to be revised, ie do more for less, without compromising quality.

It gets worse when we talk about maintenance and BAU budgets, where the benefit is risk reduction, eg how much will that server room replacement cost?

These things create a divide between the business and IT and this must not happen as the business is the customer!

IT and the business must communicate well.

New Zealand companies need to be as competitive as ever in the global economy and now that we are in a recession “working smarter” must be held with the utmost importance. Using tools as above to start with, will make a huge improvement, and working with partners who can provide a full toolbox, New Zealand companies can realise all the benefits available to them.

In summary, work the smartest and be successful!

About the authors:

Shubha Raniga is principal consultant at HB Solutions (Holistic Business Solutions), which provides service management strategy advice. Contact her at connect@hbsolutions.co.nz

Scott Groombridge is general manager of Sead (www.sead.co.nz), an Auckland-based firm specialising in providing IT project staff.

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