Enterprise Initiatives

As I look out into the future of IT over the next 5 to 10 years, I see a huge shift in how IT shops will need to operate in order to help their companies survive. We are already well aware of the pressing needs for IT to provide agility and flexibility for its business partners due to the speed at which the business landscape is changing. The forces of globalization, economic pressures, and advancements in technology are creating as much change in an 18 month period than we used to experience in a decade. In order for companies to survive and thrive, they need to adapt. As Charles Darwin once said,

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

I wrote a post last year called How did we become a Dilbert cartoon which discussed my theory on how IT has become so out of touch and bogged down with trivial issues. I see Dilbert every day whether it is at the places I have worked, the case studies that I research, the discussions I have with peers at conferences, or from the forums and user groups I participate in. Somewhere along the line, many IT professionals in the US have forgotten what IT's purpose is and take their IT profession for granted. These people put themselves and their favorite technologies first and their business and shareholders second. How many important initiatives have you seen stalled because certain individuals refused to change or learn something new? Look how many companies are struggling implementing transformational initiatives like SOA, ITIL, business process reengineering. All of these types of initiatives can make a huge impact to the bottom line. But how many of these have stalled because people fought these initiatives with all of their might? The basic problem is that transformational initiatives requires transformational leadership! How many leaders within IT do you know who excel in the three critical areas of transformational leadership required to deliver technological solutions: Business Acumen, People & Organizational Skills, and Technology skills?

From Misc IT

Looking down the road, I see certain technologies maturing and becoming critical to helping businesses staying competitive. These technologies are:

• Infrastructure as a Service (IaaS)
• Platform as a Service (PaaS)
• Social Networking/Software within the enterprises
• BPM, SOA, and Event Processing working in harmony
  

I am amazed at the number of pundits that exist for all of these technologies, especially cloud computing. Many people are strongly against these advancing technologies at the expense of their own careers (they just don't realize that they are making themselves the equivalent of Y2K programmers yet). Sure, cloud computing has its challenges with data security, privacy, and in some cases reliability, but it is in its infancy state. Instead of focusing on what the limitations are, we should focus on the huge strategic and financial opportunities that it creates. Let me quote Darwin again.

“Ignorance more frequently begets confidence than does knowledge: it is those who know little, and not those who know much, who so positively assert that this or that problem will never be solved by science.”

I still remember the naysayers doubting PCs and distributed computing and declaring that nothing could beat the mainframe. Do you here the negatively by some about social networking and social software? Doesn't it sound like the negativity we heard when people were trying to bring the Internet into corporations?

Why do we get in our own way of progress? Why are we living in Scott Adam's world of Dilbert? Why do system administrators fight cloud computing? Is it fear of job elimination? Loss of control? Not wanting to learn something new after 20 years? Why do IT professionals revolt against SOA? Does it require them to actually architect something rather than drag-n-drop some code in their favorite Microsoft IDE? Does it force them to collaborate with other people including business people and take them out of their comfort zone? Is it hard work? I don't know what the answer is but I do know that with out transformational leadership, the resistance can put up huge barriers and can kill initiatives that can give a company an edge over its competition.

What about outsourcing? Do you really want to get IT professionals fired up? Just the mention of the word brings anger and negativity to many. But why? Maybe we all need a lesson in economics or should simply read the book The World is Flat. While we in the US are sitting here complaining about change, countries like China, India, Taiwan, Ireland, and many others are graduating engineers by the thousands. These folks are more than willing to work on any task that they have the privilege to be given. And there lies the problem. To these people, work is a privilege, a way to have a better, more prosperous life. In the US, many people see their job as something that is owed to them. How many people in your shop are actively working on improving their skills? Just the fact that you are reading this post puts you many steps ahead of most. Many people that I have worked with in my 23 years do not invest their own time and energy required to continue to learn and adapt to the world around them, both from the technology and the economic standpoint. I am fine with the fact that many people value their personal time way more than some of us do, but if you don't invest the time you do not have the right to impede in the advancement of the organization!

Getting back to the emerging technologies that I mentioned above. To be successful implementing the transformational change to embrace these technologies, IT shops need the following foundation:

1. Strong leadership with the ability to promote and manage change
2. A well run and planned Enterprise Architecture
3. Solid working relationships and trust with the business partners
4. Discipline
5. Fiscal awareness
6. Numerous Strategic Partners
   

Strong Leadership
The leader(s) must be visionary, strategic, emotionally intelligent, and must be able to execute. I have seen leaders who have great ideas and are pretty smart, but they fall down when it comes to execution. Nine times out of ten, the failure can be contributed to people not the technology. In other words, resistance to change prevails and the company reverts back to the status quo leaving IT with the reputation of a cost center. The following presentation speaks to how to anticipate and plan for change up front to reduce the odds of failure.




Enterprise Architecture
To enable a flexible and agile enterprise, it all starts with an architecture that maps to the overall business strategy. No longer can we afford to build software in silos and continue to pay huge sums of money to keep the lights on. In order to be efficient with our ever shrinking budgets, we must have an IT strategy that is supported with an architecture geared towards maximizing our resources (both human resources and technology resources). The more standard and consistent the architecture is, the easier a company can move to the clouds, alter business processes in days instead of months, change business rules on the fly, adapt to mergers and acquisitions, and connect to partners, suppliers, and customers. Remember this, your biggest threat tomorrow might be a company that does not exist today! Why, because a startup does not have legacy to deal with and will most likely embrace these new technologies from the start and race right by you to the finish line. Companies must change or die. The following presentation speaks to the value of EA.


Relationships and Trust
In order to accomplish transformational initiatives, IT must forge great working relationships with its business partners, both internally and externally. Without the trust, funding and executive level support will be extremely hard to come buy. To earn that trust, IT must understand the business and put forth solutions that are beneficial to the business first and IT second. The following presentation shows an example of how SOA was explained to the business in tangible business terms (increase sales, customer satisfaction, etc.) instead of technology terms (reuse, ESBs, services, etc.).


Discipline
This is critical. We can no longer fly by the seat of the pants anymore. It costs the company too much in maintenance and hinders agility. That is not to say that we should all embrace heavy methodologies like CMM. There needs to be the right balance between process and agility. And for those IT professionals who will fight process to their death beds, there are millions of knowledge workers in foreign countries hungry to do your job for you. Today's resistance is tomorrow's unemployment.

Fiscal Awareness
Being fiscally aware is a key contributing factor to allowing IT professionals to see the "big picture". After all, the main purpose of most companies is to make money, or in government, to make the best use of tax payer dollars. It's all about money! So why are so many IT professionals so clueless about the financial impacts of the work they do and the decisions they make? How many times have you sat in meetings with armies of people for an hour or two and nothing gets accomplished? How does that contribute to the bottom line. When technologists argue about .Net vs. Java, or IBM vs. Dell for months on end while projects get delayed, why doesn't anybody seem to care? When IT professionals make technology decisions primarily for the sake of technology, they often make a choice that is not fiscally responsible. When making these decisions we must think about more than how we will use the products within IT. There are many factors that need to be consider. We should look at the feasibility not just from a technical standpoint, but also from an economic, operational, and political standpoint as well.

Strategic Partners
And finally, there is so much change and so much to learn, it would be suicide to think that we could deliver anything transformational in a reasonable amount of time without the help of partners. The business can't wait for IT to train an entire staff to a high level of competence on these emerging technologies. They also can't wait for us to stumble and learn from failing in production. Instead we will need strategic partners in many areas to help build the agile enterprises of tomorrow. These partners may be used for the following reasons:

1. Business Process Outsourcing (BPO) - (example: Payroll, HR, web site hosting, etc.)
2. Acquire new skills (SOA implementers, BPM experts, Cloud specialists, etc.)
3. Strategic partners (Organizational Change Management expert, EA help, etc.)
4. Technology outsourcing (IaaS, PaaS, SaaS, etc.)
5. Project based outsourcing

Outsourcing does not mean the same as offshoring and outsourcing does not always relate to development. When cost is an overriding factor offshoring is a no-brainer. Of course without EA and discipline, outsourcing may cost more than expected. There is simply too much to do and so little time to do it. Find the right partners and hold them and yourself accountable for transferring the knowledge to members of your staff.

Summary
I apologize for the length of this post (if you made it this far). I am very concerned for the future of my IT colleagues in the US and had to do a "core dump" on this post. After many years of prosperity, many IT professionals in the US have become intellectually lazy and blind to the opportunities and challenges that this new economy has created. The combination of our financial crisis coupled with the forces of globalization and technological advances will create radical changes over the next decade. Many professionals are too wrapped up in reality TV to realize that the world is catching up and is ready to pass us by. Those who understand that can embrace the new opportunities that these conditions will create. The others will be the equivalent of the Y2K programmers who did not embrace the post 2000 innovations. I'll leave you with another great quote from Darwin...

“In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed"

As I sit looking out the window of the 23rd story of the Marriott in Ontario overlooking the incredible sight of Niagara Falls, I started forming my New Year's resolution and created a list of things I hope to see in 2008. First, the resolution. As always, I pledge to make myself a better IT professional in the three areas that I believe make a leader complete: Technology, Business, and People.

Technology
I pledge to strive to learn more about the following areas of technology:

1. Web 2.0
2. Security
3. Agile Development
4. Event Processing
5. Enterprise Metadata

As always, I will share my experiences and opinions on my blog and welcome your feedback.

Business
I plan to work even closer with my key business partners in 2008. My current BPM/SOA initiative has my IT shop spending more time with business than it ever has before. This year we will make the time spent with the business more productive and generate more results. I will share my experiences with all of you as IT and the business work together to take our company to the next level.

People
I pledge to do a better job guiding people through change. We can talk about enterprise initiatives like SOA, BPM, Enterprise 2.0, Outsourcing, Agile, and others all day long. To make any of these successful, you will need to get people motivated and beating to the same drum. The people side, especially change management, is usually the hardest part of these projects. I will share my lessons learned in this area, as well.

2008 Wish List
That takes me to my wish list. My wish list is aimed towards my fellow EA bloggers. During 2007, my first year of blogging, I learned a great deal from sharing information with other EA bloggers. My wish list is all about making this experience more valuable in 2008. For this to happen, I ask for the following:

1. If you are going to complain about something, offer solutions. Throwing darts adds no value if you don't provide alternative solutions.
2. Share lessons learned, I do. And don't just share the things you did right, the best lessons learned usually come from doing something wrong and recovering from it.
3. Don't call out others for having opinions. If people have a different opinion then the one you believe in then collaborate in a professional manner. It is beneficial to the readers to see the both sides of a discussion. Calling people out leads to either a flame war or worse, can cause an otherwise collaborative discussion to fizzle out.
4. Become more connected. Let's collaborate more through social networks, conferences, user groups, etc. I am on LinkedIn, Plaxo, Facebook, and any place that I can find other smart people to learn from.
5. Request blogging topics. I have, from time to time, requested bloggers who I follow to discuss certain topics of interest. I would love to have the opportunity to share my thoughts on various topics that interest my readers.
6. No more "SOA is hype/just a buzzword articles. SOA is real. I am experiencing it first hand and the benefits to the company are tremendous. The real question about SOA is "How can one pull it off?" I'd rather see posts focus on that question.
7. And finally, have a productive 2008!

I just posted my top 10 posts for 2007 and all of them were related to Linux and open source (thanks Digg!). But my real passion for writing is enterprise initiatives like SOA, BPM, Enterprise Architecture, Project and Portfolio Management, Outsourcing, and any initiative that requires a combination of leadership, technical knowledge, and people skills. So here is my top 10 posts for all non open source topics in 2007:

1. How did we become a Dilbert cartoon?
2. What does it all mean?
3. Selling SOA - a True Story
4. Top 5 Bone Head Moves
5. Outsourcing vs. Offshoring
6. Adobe Flex beats Silverlight every time
   
7. Zap Think's Who's Killing SOA
8. Another Benefit of SOA - Career Path
9. Why are you still generating reports?
10. SOA and BPM Consolidation

I would also like to list a few of my lesson learned posts because I believe these types of posts add the most value to the community.

1. SOA Lessons Learned
2. Lessons Learned from our first SOA implementation - part 1
   
3. Lessons Learned from our first SOA implementation - part 2

Happy Holidays!

I found this piece of research from Duke University that discusses outsourcing, labor shortages, and graduation rates of engineers. This is a very long article so I will try to summarize it for you.

First, the researchers tackled the issue of graduation rates. They questioned the data that is reported by the popular media and policy makers which state that the....

United States graduates roughly 70,000 undergraduate engineers annually, whereas China graduates 600,000 and India 350,000....China and India collectively graduate 12 times more engineers than does the United States....

The researchers found major flaws in the above mentioned numbers. They found that the definition of engineer varies widely in China and India from the definition in the US. Comparing the graduation numbers by using source data from the different governments does not give us an apples to apples comparison. The researchers shared this example....

We were told that reports sent to the MoE from Chinese provinces did not count degrees in a consistent way. A motor mechanic or a technician could be considered an engineer.

What they found is that the US is graduating nearly as many engineers as India. China does have more graduates but not as a percentage of their overall population. So the theory that there is a shortage of engineers coming out of US colleges seems to be false. Based on this finding, they tried to answer the following questions:

What skills would give U.S. graduates a greater advantage, and would offshoring continue even if they had these skills?

44% of the respondents said the US engineering jobs were more technical then outsourced technical jobs versus 1% who said the outsourced jobs were more technical. Then they found that over 80% of the companies surveyed were able to fill onshore engineering jobs in four months or less which shows that there is no labor shortage.

So if we are graduating enough engineers and there is no labor shortage, what is the driver? What they found is that the driver is pure cost reduction. High salary demands and rising health care costs are causing employers to look offshore for cheaper alternatives. Other benefits are the 24x7 work days accomplished by having teams work in the US by day and offshore at night. Work ethic and long hours also contributed to outsourcing.

I have read a few articles recently claiming that US companies are seeking offshore development due to superior technical capabilities and innovation. What this report tells me is that it is still all about cost. I would love to see another report done about the total cost of ownership of outsourcing. I agree that you can get the job done cheaper offshore, but I wonder if executives understand the true costs. It is much more complicated then taking an offshore resource's hours and multiplying it by $25 to compute their cost. There are many other costs like infrastructure costs and software licenses, the cost of your own onshore resources who must manage them, review their designs and code, and the overhead dealing with communication and cultural issues.

I am not here to criticize outsourcing or to discourage people from engaging in it. I understand why companies are pursuing outsourcing and there are many success stories. I just found this research interesting because it disputes some of the myths about labor shortages, talent levels, and graduation rates. It clearly shows me what I already knew which is it's all about cheap labor.

I have written a couple of articles (here and here) recently about offshore development and how the success or failure of offshoring depends heavily on the US companies' ability to manage their offshore development partners. I may have come across as a strong supporter of offshore development, which was not my intent. My intent was to point out that if you are going to send work overseas you better have good processes and controls in place to manage it.

This takes me to my next point. I am a huge fan of agile development. One of the many things I like about agile development is that it does not require you to spend countless hours analyzing and documenting requirements and designs. Instead you cycle through many iterations of requirements, design, and prototypes with your key stakeholders and deliver functionality in small chunks.

Now lets look at the offshore model. Because of the communication barrier, the lack of business knowledge offshore, and often the limited experience level of the development team, the amount of documentation required to make this work increases immensely. Without the "war room" mentality of agile development, the projects tend to lean more towards a waterfall approach. Waterfall projects are rarely discussed in the same breath as "speed to market".

On my current BPM/SOA implementation, we have about a dozen projects that we wish to implement in the next 12 months. As we work with our SOA consulting partners (a US company with an offshore partner), we put together two different pricing models for our executive sponsor for each project. One price is for the most cost effective approach which leverages offshore development resources, and one is for the fastest to market approach which requires more on-site collaboration. So far the business has only chosen the speed to market solutions. Why is that you may ask? Well, all of these projects have a huge ROI if we replace our 20 year old business processes with new streamlined processes. Every day that we continue to do business with our legacy processes we are wasting valuable corporate dollars. For this reason, our sponsor is willing to pay a premium to get the work done quickly.

So if speed to market is your goal, agile development could be your answer. If you want to be agile and deliver functionality every 10 weeks or so, you must have great collaboration amongst your team and should not follow an extremely rigid methodology. In my opinion, this is when you should not rely on offshore development.

I posted this article called "Offshore blunders. Who is to Blame?" on CIO.com the other day. The story discusses a few case studies that I have personally witnessed over the years.

There are many reasons why offshore development fails:
* Resistance to Change
* Unrealistic Expectations
* Lack of repeatable processes
* Poor vendor management
* Poor vendor performance

Usually when there is a report of an offshore development project failing, the critics immediately jump on the anti-offshore bandwagon and declare that offshore development can't work. When you look at the reasons these projects fail (listed above) how many of these are the vendor's fault?

Resistance to change - This is the number one reason for failed offshore projects. Companies tend to ignore the basics of change management. The staff sees offshore as a threat to their jobs and becomes unwilling to cooperate and allow the vendor to be successful.

Unrealistic expectations - Some companies struggle to deliver so they think throwing projects across the ocean will solve their problems. If you can't manage projects onshore, how the heck do you think you can manage them offshore?

Lack of repeatable processes - Regardless of whether your vendor is CMM level 5 or ISO certified, your home based staff needs to have some form of process in place or your project will most likely end in a disaster. You still need to deliver the appropriate specifications to the vendor, have valid change control procedures, perform code and design reviews, and perform project management best practices to keep the project on schedule.

Poor vendor management - Shipping projects offshore may reduce the amount of development that you need to take on, but it increases the level of oversight that you must provide. Keep in mind that the vendor does not have the business knowledge that your staff has. If you let them make all of the decisions you are doomed for failure. Let them make recommendations, but approve all decisions.

Poor vendor performance - Ah, finally something I can blame on the vendor, right? Wrong! Who is responsible for selecting the offshore development team? That is the person who is accountable. This is no different if you performed a vendor assessment for a CRM package and you picked a package that did not meet the business needs. Is it the software companies fault? Will the CEO blame the vendor or will he hunt down the CIO?

Let me add that as a taxpaying American citizen, I don't like the fact that our beloved IT jobs are moving offshore. I can moan and groan about it all day long or I can figure out how to make it successful so I can satisfy my users' needs. As a leader in IT and a shareholder of my company, I understand the economics of offshore development.

IT is not the only industry that has been losing jobs overseas. Manufacturing and engineering jobs have been leaving the country for years. It just took a while longer for the IT industry to follow suit. Until our government gives companies incentives to keep jobs at home (don't cross your fingers on seeing this any time soon), jobs will continue to move offshore.

The next time you see an offshore development project fail, before you post your next "I told you outsourcing doesn't work" article, research the reasons why it failed. The odds are that they failed for one or more of the reasons I highlighted above. If that is the case, then who is really to blame?

So many exciting changes are happening in the world of IT today. Look at all the hot topics from around the net that we read about each day:

• Virtualization
• Web 2.0
• SOA
• BPM
• Saas
• Outsourcing
• Open Source
  
• Mobile Computing
• Event Driven Architectures
• Mashups
• Collective Intelligence
• Super fast chip technology
  

What does this all mean to the future of IT? Most of these technologies (if done right) will impact the workplace in a variety of ways. Some of these technologies will enable people to be fully functional from remote locations (Mobile Computing, Web 2.0, Mashups, Collective Intelligence). Some of these technologies will eliminate human processes both in the business (BPM, SOA, Event Driven Architectures) and IT (Virtualization, Outsourcing, SaaS). Others will make us less dependent on the big vendors (Open Source, Virtualization). Then there are the advancements in chip technology and memory which can really rock our world. Can you say diskless PCs?

So as I read article after article, day after day, I begin to wonder what this all means to the working people in IT. I can be pessimistic about the future of IT and paint a picture that looks like this:

• Mass virtualization - elimination of many systems administration and networking jobs
• Mass Outsourcing - Most of development farmed out due to cost effectiveness of remote development (both onshore and offshore)
• Less internal development - Reduction of development jobs due to effective end user tools (BPM, Mashups, Web 2.0), external development (Outsourcing, SaaS), and improved collaboration and automation (Collective Intelligence, Event Driven Architectures, SOA)
  

Or I could take an optimistic view of the future of IT:

• Business Alignment - business heavily relies on IT for automating and streamlining business processes (BPM, SOA, Event Driven Architectures)
  
• Enterprise architecture - Architecture becomes key differentiator and enabler
  
• Rapid development, less maintenance - Tools (Mashups, Web 2.0) and architecture provide a platform to rapidly deploy. IT delivers loosely couple services, not proprietary monolithic applications, which reduces maintenance and allows for more new development.
• Cost effective computing - Business looks to IT as a partner and an enabler instead of a cost center. IT makes the business efficient (Mobile Computing, fast chip technology, collective intelligence) while being cost effective (SaaS, Virtualization, Out Sourcing, Open Source, BPM, etc.).

My belief is that it will come down to the IT leadership, mainly the CIO. The CIO needs to measure and promote the value of the IT department as we move through these dramatic changes in technology over the next few years. He or she must be a trusted business partner to the CEO, CFO, and COO. IT should be proactive and start implementing these technologies (where it makes sense) to enable the business, as opposed to waiting for the business to tell IT to implement these technologies to reduce costs and headcount.

So what is your view of the future of IT? Is it pessimistic or optimistic? If it is pessimistic, what are you doing to change it?

A good buddy of mine forwarded me this article from eWeek by Deborah Perelman. The following quote from the article summarizes the content: “In the simplest terms: too many IT workplaces have become Dilbert-ized—micromanaged, bureaucratic and stifled creatively. It's become an environment where busy work is praised and morale is low.” The article talks about IT as a commodity with trends in outsourcing. Flextronics CEO, Michael Marks, goes one step further in this Businessweek Online article Design is a Commodity. He recommends outsourcing the engineering process for electronics.

How did we get here? In my opinion, IT has done this to itself through the years due to the following reasons:

1) Not working closely with the business

2) Inability to successfully manage projects

Let’s talk about the first point. In the 60’s and 70’s, the business was dependent on IT for information. There were no high powered PCs and the Internet was not for commercial use. Most of what IT worked on in the public sector was business enabling applications. During the 80’s and 90’s, huge advancements in processor speed, memory, and disk technology enabled personal computers to do the work of the massive mainframes from the previous decades. Then the internet came of age which changed the way people and businesses interact with one another. These two important technology advancements changed business for the better but not without consequences. The days of IT being in control with centralized and reliable systems gave way to the complex, distributed, and multi platform environments that we live in today. This in turn, directed a lot of IT’s attention towards infrastructure projects. In today’s world, a large portion of IT budgets go into projects and services that keep the lights on for the company (email, voice & telecommunications, security, compliance, etc.) and do not contribute to additional revenue. In addition, software vendors started delivering shrink wrapped solutions (ERP, CRM, Financial applications, etc.) that was not feasible for companies to build internally. I believe these factors have all contributed to the fact that many IT shops have become disconnected and/or out of touch or alignment with the business. IT has become perceived more as a cost center then an enabler. Employees have become known as what Catbert calls “Headcount”.

Point #2. The PMI Institute states that 72% of IT projects they studied were late, over budget, lacking functionality, or never delivered. Of the 28% “successful” projects, 45% were over budget and 68% took longer then planned. These numbers are frightening! Lack of project management best practices have caused many companies to lose faith in IT. Many business units have started buying their own software packages or paying outside vendors to solve their business problems. This is another reason why IT and the business have become unaligned.

When a company views IT as an expense and not as an enabler, the IT shop becomes a poster child for Dilbert cartoons. Companies tend to look for ways to reduce or eliminate expenses. Once you view your employees as “headcount”, the creativity, passion, and drive gets drained right out of you.

So is IT doomed? Many experts believe that in order for companies to stay competitive and survive in the upcoming years, IT needs to focus on business processes. In the article, The How, Why, and Where of Future I.T., Mark Gibb’s states that, “I.T. has to be able to show that it delivers a real return on investment.” To accomplish that, I believe that IT should start embracing:

1) Project management – to improve delivery and communication

2) Portfolio management – to maximize IT investments, align priorities w/business, and control workloads

3) Business process management – to optimize and automate business processes

4) Enterprise architecture – to align technology with corporate goals and strategies

5) Change management - to manage change and impacts on people and processes

6) Agile development – to deliver value early and often

What are your thoughts?