The Return of the $1 Billion Plus Deals
Posted by Andrew Moore in General on May 1, 2012
M&As require a holistic programme strategy for business integration
Contributed by Charlie Mayes, Managing Director, DAV Management
Whilst it’s encouraging to see signs of recovery in the US economy, I think the market is still undeniably tough – especially in financial services and in particular in investment banking. JP Morgan Chase, largely viewed as the bellweather for the industry, released lower than expected results in January as the European debt crisis continues to weigh on trading and corporate deals. That said, and despite a slow start to the year in terms of large global M&A deals in the technology, electronic and digital media and telecoms (TMT) sectors, there were four deals that took place in February valued in excess of $1 billion.
According to Regent Associates, one of Europe’s leading suppliers of corporate finance services to the TMT industry, Oracle is buying Taleo, Misys and Temenos are involved in an all share merger, Hutchinson 3G Austria has agreed to buy Orange Austria and Glory, Japan’s largest money-counting machine manufacturer announced it would buy Talaris. I view this as a positive sign and found it particularly encouraging that European companies were involved in three of the four $1 billion plus global deal announcements.
So despite the relative lethargy in the market as a whole, M&As will continue to be a strategic tool for growth. The good news is there seems to be a large appetite and plenty of capital for high quality assets, particularly in the US and Asian markets. However, especially in the current climate, acquisitions must be made to work. From my perspective this means adopting the right approach from the start and managing a properly structured process through to the realisation of the envisaged benefits.
I believe that one of the problems for most M&As is that beyond the headline announcement of the deal, many simply fail to deliver the business value anticipated. It’s a sobering fact that M&As are actually more likely to destroy shareholder value than create it. According to some reports, between 50 and 70 percent of M&As either fail outright or fall short of their desired goals. Indeed, in the first year following a merger, a company’s market value can fall by as much as 10 percent.
In my experience, one of the most common causes of failure is that the acquiring organisation simply doesn’t manage the end to end M&A process effectively. While the overall strategy and up front due-diligence may actually be solid, it’s the execution that goes off the rails. Nowhere have I witnessed this happening more acutely than in the business and IT integration aspects of a merger, which ultimately determines the degree to which any M&A transaction will succeed. In many sectors a large percentage of all merger synergies are dependent directly upon IT and in some, particularly financial services, it is the IT integration process that effectively drives the merger timetable. I therefore find it concerning to learn that there is a long list of merged organisations who’ve struggled and in some cases failed, to integrate their IT infrastructure effectively, resulting in a significant impact on the merger economics.
Why is this? Well, IT programmes on this scale are complex and involve big money. It’s also questionable whether many organisations actually have the necessary skills and experience in-house to manage such challenging tasks. Although there is limited data available on the financial results of major systems programmes, anecdotal evidence suggests that many IT enabled business change programmes suffer substantial overruns, do not deliver the desired outcomes, and are effectively written off.
Unfortunately, the hard graft of making a merger work usually only starts once the ink is dry on the deal. At this point the organisation belatedly realises the extent to which it needs to unify the business, its culture and processes. This often includes merging supporting systems such as back office and billing systems, and then consolidating IT platforms. Although a reported 75 percent of mergers and acquisitions fail to meet business expectations, in a tighter business marketplace, they must be made to work.
For this to happen, it will require a more holistic strategy than has generally been applied in the past. In my experience, integrating the IT systems and business processes of two merged companies is no different to any other business change programme. Success factors include:
- Meticulous planning – identifying the risks upfront
- Managing the programme in a structured way
- Knowing what the business objectives are and understanding the vision
- Defining the benefits and goals for the business and then focusing on their realisation
- Ensuring stakeholders are closely managed and communications are regular, relevant and clear.
There really is no short-cut to making M&A integration work. It requires pace and clarity in the execution of your plans, effective due diligence, a viable integration plan, and then having the programme management capability on board to deliver it. In the current economic climate those organisations that can successfully incorporate these principles into their merger methodology will be the ones that position themselves most effectively to take advantage of the long-awaited upturn.
A lost generation
Posted by Andrew Moore in General on March 29, 2012
Home grown ICT skills are an essential ingredient of a resurgent UK economy
Posted by Charlie Mayes, Managing Director, DAV Management
Recently the Education Secretary, Michael Gove, announced he was scrapping the existing ICT curriculum. In its place, he will introduce new Computer Science courses. He blamed the previous Government for dumbing down ICT, suggesting that children are not learning technology skills in schools; they are merely learning how to operate a computer.
In many schools ICT had become solely focused on the use of office productivity software. And national education policy had also conflated computing with digital literacy. This resulted in many schools confusing the two and in my opinion not properly supporting either. The consequence being that this has led to a lost generation who don’t have the right technology skills to support our existing workforce. The changes announced by Michael Gove are aimed at correcting this but it will take years for planned improvements to filter through.
So what signal does this send about the importance past and existing governments place on nurturing the ICT skills of the next generation? Right now you would be hard pushed to find a business that is not reliant on technology and this lack of investment in core skills doesn’t bode well for the future competitiveness of British business. Today we face intensified global competition from Europe and the rest of the world. In order to compete Britain must have the right skills and competencies in the workforce to sustain economic potency. With the pressure, however, on government spending cuts and in light of these recent developments, is Britain in danger of not having the skills or not investing enough to get the appropriate level of competency within business?
There are also other dimensions at play within the IT business sector to consider – one of which is the impact that outsourcing and offshoring has had on the development of IT skills in the UK. Twenty years ago businesses took on significant numbers of graduates and trained them in the latest technical skills. Once trained these graduates moved around the industry rounding their knowledge and cross-fertilising ideas, practices and cultures developing a strong UK based IT services industry. Today such comprehensive training programmes and even apprenticeships, are sparse. Again UK plc is in danger of not developing programming talent or core technical skills and if organisations look to bring back operations previously offshored, which appears to be a growing trend, then in all probability they won’t be able to find the skills to build the new onshore teams.
Indeed, in my experience this problem runs even deeper. This is not just about a lack of internal technical investment; many major IT programmes have been outsourced and as a result management does not have the experience themselves to deal with an insourced operation. The same rules apply to the outsourcing industry. In many of the larger outsourcing deals, the outsource provider will typically offshore a lot of what they do because labour is cheaper and the skills more readily available, further exacerbating the problem; so, in many cases, even the outsourcers no longer have the requisite UK based skills.
To go back to my opening statement, if basic knowledge and understanding is not established within the education system, meaning that we probably now have a generation lacking in foundation skills and experience, and if, as we often see, businesses don’t compensate for this by investing in fully funded development programmes for existing staff, how will we nurture these vital skills for the future? The worry is that if there is no opportunity for children to learn in school and no opportunity to learn in the market place, then we are in danger of having future generations that won’t understand ICT at all. It’s a popular view that Britain’s future strength will flow from innovation and world class services, but if this is the case and we aren’t investing in the skills required to nurture innovation, particularly in technology, how on earth will we remain competitive on the world stage?
Collectively we have a duty to take action now. Changes are afoot within schools but these will take time to feed through and in the meantime we as businesses must do all we can to develop the capability of our people – whether this be through formal development programmes or empowering people through inclusivity and mentoring. It is a small step but if every organisation took this approach, collectively we would pass on and benefit from our shared knowledge.
Treading (with agility) on eggshells
Posted by Andrew Moore in General on February 24, 2012
People and relationships largely determine the outcomes of projects and programmes
Why is so much hope pinned on Agile as a software development method? Perhaps because the track record of IT projects is so poor? Project failure rate can be one in five and many end up either being “challenged”, “failed”, over budget, behind schedule or simply not delivering what was expected.
The blame for failure has often been put down to moving milestones, with changing requirements making project progress so slow. However, some specialists argue that often the source of project dysfunction is people i.e. the project manager. That’s because too often engineers, IT professionals and technical staff are made project managers under the mistaken belief that if they have good technical skills, they’ll make a good project manager. Actually, what they really need is the ability to handle people, embrace conflicts – and even thrive on them – whilst navigating their way out of the organisation’s political maze and successfully treading on eggshells.
This “people” aspect of building software is at the heart of Agile development, which emphasises communication, collaboration, rapid production of code and frequent ‘probe, sense, respond’ feedback. It requires a more flexible approach to development instead of the traditional ‘waterfall’ approach, which demands getting all the requirements upfront and then moving through the development process one phase after another, until finally you typically find that the project fails to deliver what was originally envisaged and has changed out of all recognition.
On building or engineering projects, you’ll rarely hear of a plan to build a 20,000 square foot shoe store somehow ballooning into a project to build a 10-acre shopping centre! But that’s what usually happens with software projects, especially if an organisation starts off with one worthy objective in mind but the project gets side-tracked by misaligned stakeholders and heads towards a different “destination” to that originally envisaged. In some scenarios this can turn into a ‘boiling the ocean’ project. Just like any attempt to boil an ocean will only expend plenty of energy without changing the state of the sea, so attempting to deliver an extensive wish list of software features will add cost without necessarily delivering any value to the business at all.
Is Agile the way forward? Possibly. But at DAV we would argue that adopting an Agile approach is not in itself a guarantee of success. Just like any other methodology, we believe it is the “people factor” that determines whether you get what you want.
The reality is that a good project manager does not try to attack all problems with the same tool or methodology and cannot adopt a blanket-Agile approach. Instead, an effective project manager will analyse the situation, figure out what problems should be dealt with at all, prioritises them and then choose the appropriate tools to get the job done.
Perhaps more importantly, a successful project manager will take these steps in cooperation with the sponsor and other stakeholders, as well as the senior project delivery team members. If you don’t get buy-in from the stakeholders, sponsors, or team, then whatever approach you adopt is just not going to work. The key skills here are collaboration, communication, negotiation, an ability to walk on eggshells and perhaps most importantly of all, leadership.
2012 IT and Business Resolutions
Posted by Andrew Moore in General on January 27, 2012
Embracing developing technology trends can make the difference between success and failure
A quick glance out of the office window recently revealed an army of joggers, as people with a cast iron resolve to maintain their New Year’s resolutions – become healthier, break bad habits and embrace new things – pounded past.
It’s an approach that should also be adopted in business, as 2012 promises to be a crucial year – when taking maximum advantage of rapidly developing technology trends could mean the difference between success and failure. There has never been a more important time to harness technology to help your business evolve and grow and a proactive attitude towards technology from directors themselves will be key to saving time and money, boosting business performance and unlocking new opportunities.
But the world we live in is both volatile and uncertain and the first resolution for any business leader coming into 2012 must have been to become change-friendly. Whatever the sector, organisations of all shapes and sizes are likely to experience some kind of change within the next year. And in order to survive whatever the economy or competition may throw at them, businesses must ensure that they are open to change and have the structures in place to make it happen.
A New Year often means a clean slate and an opportunity to make improvements. With this in mind, here are five technology trends organisations might want to think about embracing to keep their business nimble, resilient and competitive.
Cloud is no longer a technology for someone else – or just the early adopters
Cloud computing – the access of services and the storage of data via platforms on the Internet is undoubtedly the trend to watch in 2012. In fact growth in Cloud spend is outpacing on-premise as companies realise the efficiencies of scale of developing private clouds. Pundits predict that the Cloud will play a significant part in the UK’s recovery. Today even the smallest businesses can benefit from the best technology in the marketplace as the Cloud connects vision with capability. There are stories of new businesses being started up in bedrooms using cloud computing. In particular using the Cloud to test new ideas is a great way to start, businesses can put an idea together using the Cloud in a couple of weeks and just see if it works.
Harnessing intelligence
While the combination of Internet, email and mobile devices keeps us in contact with our colleagues and the wider world ever more comprehensively, experts warn that a failure to embrace ways of dealing with the resulting information barrage could seriously hamper efficiency. In fact, recent research released in October 2011 by the NationalField, the business social network operator, claimed that 20 percent of UK office workers receive an average of 50 emails a day from colleagues alone, so finding ways to quickly organise, analyse and present all this data ought to be a major priority for 2012. The cynical ones amongst us will no doubt add the word ‘delete’ to this list.
Creating an agile environment
As if dealing with the bombardment of correspondence wasn’t enough, the signs are that the immediacy of social networks such as Facebook and Twitter is creating a consumer who expects a faster response time than ever before from businesses hoping for their custom. Younger people in particular are likely to make purchasing decisions based on an organisations response rate, indeed recent research indicates that one third of 16 – 24 year olds expect a response to an email within one hour. So adapting your infrastructure and processes to enable a quick response is a must in the year ahead.
Consumerisation of IT
There are now three times as many smartphones in the world as there are PCs and this is creating another effect on the workplace known as consumerisation. As Generation Y (typically regarded as those people born in the 1980s and early 1990s) joins the workforce, they are increasingly used to having smart IT and communication technology at home and the expectation is that they will get this at work. A recent survey by Six Degrees, a managed data service, found that 78 percent of employees believe their own devices are superior to those supplied by their employer. But although experts agree that there are security issues for businesses to consider before allowing employees to use their own devices, there is also an opportunity to harness Generation Y’s knowledge of emerging technologies and provide useful insights to directors on their future use by the business. Talking to individuals to potentially open up to new ideas, having the ability to harness these to make the business more agile and more cost effective, can only be a good thing.
Security concerns
Whilst there are advantages to be gained from using the Cloud or embracing more mobile technologies and social platforms, there is understandable concern regarding the security of these technologies. In November 2011, the government held its London Conference on Cyberspace and key statistics that came out of this included the fact that cybercrime costs the UK an estimated £27bn a year, and globally it is as much as $1trn. Additionally, more than six million types of new malware were detected by industry in the first three months of 2011 alone. So, it is not about allowing a free-for-all and letting any employee bring any device into the workplace, there must be policies and procedures in place to manage this. It is about implementing security solutions that are agile and user friendly, backed up by good policies and procedures.
So in conclusion
Back in the 1980s I first came across the now familiar quotation by Heraclitus, “nothing is permanent except change”. As hackneyed as this quote has now become it is still very true and the pace at which it applies to technology can be alarming for most businesses. Clearly not all of the initiatives referred to above can be embraced at once but it is essential that business leaders recognize that alignment of business and IT is no longer just a goal, it is the norm and getting started with a plan to adopt new technology may well mean the difference between being there to set business resolutions for 2013 – or not.
Why social media didn’t have a quiet Christmas
Posted by Andrew Moore in General on January 17, 2012
Assertive customer action, fuelled by social media, is an unpleasant prospect for any business
Social media was often cited in 2011 as a catalyst behind both the spread of the Arab Spring revolutions and the UK riots - arguably the stories of the year.
Even over the Christmas period, when most people were enjoying a couple of weeks of downtime, social media was again behind another revolt. GoDaddy, a US Web hosting and domain name specialist, found itself on the receiving end of a social media campaign throughout Christmas over its support for an anti-online piracy Act. The action followed because GoDaddy was supporting the Stop Online Piracy Act (SOPA), a proposed bill which would allow the U.S. Department of Justice, as well as copyright holders, to seek court orders against websites accused of enabling or facilitating copyright infringement.
GoDaddy had first announced its support in late October 2011, but once details of the company’s pro-SOPA stance appeared on the social news website Reddit on December 22, the story went viral.
Demonstrating the power of social media in driving customer direct action, within a few days customers had moved over 72,000 Internet domains off GoDaddy’s hosting service and onto alternatives, in protest at its support for the legislation. There was no let up as the New Year approached, with the protesters declaring 29th December, “Move Your Domain Away From GoDaddy Day.”
Although GoDaddy eventually rescinded its support for the proposed SOPA legislation, the consensus is that the protest may have damaged GoDaddy’s brand, even if it didn’t markedly affect its customer base.
The revolt is likely to become a celebrated case study of Internet assertive action fuelled by social media, with GoDaddy struggling to fend off the collective sentiment of its customers, just as Middle East regimes were unable to resist the will of their citizens.
The GoDaddy example raises questions about how organisations should go about trying to avoid a social-media led customer revolt. There are some clear risk factors to be aware of. It helps if you can recognise where fires may start, perhaps those sparked by an organisation’s actions that ultimately frustrate or annoy a significant proportion of its customer base. Avoiding this unhappy scenario means understanding your customers well enough to predict which decisions might be controversial and incendiary.
If social media fires do start, then they must be dampened down and extinguished through decisive action, not left to burn and spread further. The Christmas period probably didn’t help, but by the time GoDaddy had acknowledged its customers’ complaints in a series of statements, the damage was done and the “GoDaddy Exodus” was already being promoted through social media, with some key customers quickly announcing plans to transfer their domains elsewhere.
The outcome shows that in today’s digital, 24x7x365 always-on world, if your customers are unhappy about something, they’ll quickly let you (and potentially millions of others) know about it. Social media services like Facebook, Twitter and Reddit have the power to damage a brand’s credibility – and potentially, its customer base – within days, even hours.
Perhaps more easily said than done, but the most obvious way of preventing a social media-led revolt is to know your customers so well that you avoid any risk of taking action that alienates them. You can only do that by putting in place effective communication mechanisms that enable you to not only listen to what your customers are saying, but hear what their concerns and desires are and then promptly act on them.
Skilled labour – Why project managers and Project Management Offices are taking on a more strategic role
Posted by Andrew Moore in General on January 3, 2012
Business and IT need to be more than just aligned
In any business change project, it is critical that all parties are working to an agreed goal that everyone believes in and is committed to achieving. It also helps if everyone understands each other, which is why it’s important to have a common language, not only in projects but in IT in general.
As IT gets more complex and pervasive, there is an ever-growing need to clearly define, recruit and grow the skilled resources that you need as a business. Last month saw the publication of an updated UK framework for IT and business change skills that is designed to help organisations recruit, develop and retain their staff more effectively.
SFIA – the Skills Framework for the Information Age - provides this essential common language of IT that is the foundation for consistent, unambiguous and clear definitions of IT skills. By necessity it integrates with an organisation’s way of working, to improve capability and resource planning, resource deployment and performance management.
Why is this important? Because a key aim of organisations is to manage capability so that the right skilled people are in the right place at the right time to achieve reduced risk to projects and services; reduced need for expensive externally provided resources; and gain greater control over recruitment costs by reducing attrition and attracting the right candidates.
The latest update of the SFIA skills framework to version 5 is not a radical one. The seven existing ‘levels’ – ‘follow’, ‘assist’, ‘apply’, ‘enable’, ‘ensure/advise’, ‘initiate/influence’, ‘set strategy/inspire/mobilise’ – remain largely unchanged, but notably there are some changes to governance and information management, with the Portfolio, Programme and Project Support skill being incorporated within a category covering Business Change implementation.
These skills definitions are going to take on an even greater significance, because, as a recent Forrester blog detailed, IT is still facing an uphill struggle to align itself with the business. In fact, aligning itself with the business is just par for the course. But just as in golf, par won’t get you wins. Aligning with the business only makes you an ‘also-ran’ - although for some, that’s still a significant challenge in itself. For IT groups with a track record of success, the challenge is how to move beyond alignment.
Forrester believes that there is a key role here for project management offices (PMOs). Leading-edge PMOs, it says, are evolving to a more strategic role, focused on portfolio management of business investment rather than just IT projects or programmes.
Good PMOs are now focusing their efforts on everything from guiding business leaders through building a business case for the investments they want to make, to facilitating decision-makers through selection from the portfolio of investment proposals, to tracking benefits realisation and ROI.
The reality is that in some organisations, this will pit PMOs against Enterprise Architects that have previously owned the strategic planning and business architecture process. In such cases, it’s down to the CIO to own strategy and to execute it through the combined efforts of business-facing professionals, including the PMO and Enterprise Architects.
The key point here is that just as the SFIA skills framework has evolved to represent new IT skills – such as animation development, a key forte of the fast-growing games industry – all areas of the IT industry, including project managers and those heading up PMOs are now having to up their game and their skills to be more innovative, flexible and beyond-business-aligned.
Agility, it would seem is no longer the goal, but has become the norm.
Meet the New World
Posted by Andrew Moore in General on December 22, 2011
Work backwards from the outcome and take action now to eliminate risk
I read with interest a recent article written by Professor Eddie Obeng in the October edition of Project Magazine ahead of his keynote presentation at the Association of Project Management conference. Most of the points raised in this article really resonate with DAV’s thinking and approach to programme management, especially in today’s fast paced, financially strapped new world.
Professor Obeng suggests that the environment that we live in today is so complex and that projects move so fast it is becoming near on impossible to manage them. In Obeng’s view the old way of doing things in a slow and stable environment doesn’t hold true anymore and we are certainly seeing this in the clients for whom we work.
Obeng points out there is a real imperative to recognise and drive change at executive level. Today, every organisation is actively seeking change and their CEOs are being swallowed up by it. CEOs in FTSE companies last an average 2.5 years, whereas their strategic plans take three to five years to come to fruition. So if companies are going to achieve anything, they need to move fast.
Professor Obeng highlights a clear dilemma here, that even though the pace of projects has accelerated and project managers have adopted a more agile and flexible approach, projects have not become more successful. He goes on to say that the pace of change often outstrips our ability to learn and the organisation’s ability to change. All too frequently this means that many of the projects initiated lack complete clarity on what the end result will, or should, be and how best to achieve this. Often there is such a desire to just get the job done, especially as stakeholders push for early results, that many projects lack the ability to realise the anticipated business outcomes.
According to a multitude of recent reports and surveys such as the Standish Group’s Chaos report, the Bull report, and the KPMG survey, only about 25 percent of projects get executed successfully, the remainder either failing completely, running over time and/or over budget, or simply not delivering the expected results and this research concludes that the reasons for failure are poor specifications and systems. For example, Obeng points out that the Olympic Stadium was built in record time. But were more resources used than needed to complete the job? As an aside, I suspect it’s no coincidence that construction projects don’t seem to suffer the same level of failure as their IT counterparts (although when they do go wrong it can be on a grand scale).
So how will project managers need to adapt in the new world? Obeng states that we need new thinking and that to deliver successful outcomes in this new world then planning often needs to be done in reverse. He states that project managers need to plan backwards from the outcome and take actions now to eliminate risk and get people to really engage and commit so that the project stays on track. He acknowledges that the days of the old world are gone. Traditionally structured and methodical ‘painting-by-numbers’ projects, where both the project manager and the stakeholders knew what to do and how to do it, are now decidedly a thing of the past. Obeng states that good project managers need to learn how to use their skills differently. Today, breakthrough performance depends upon strong leadership capability, communicating effectively with all stakeholders and building relationships based on mutual trust and respect – people and perspective will matter more than scheduling and reporting. At DAV we have always recognised how important stakeholder communication is and making sure that expectations are set and managed correctly. A good dose of structured common sense is also essential and there is still no substitute for experience.
Obeng’s view on the human factors is also consistent with DAV’s thinking. Successful project managers must have the ability to form three distinct sets of relationships. The first with the project team itself but here he feels it should have more of a leadership bias than a management one. Secondly and, for me, rather crucially, they need to build relationships with the business stakeholders and directors outside of the project team. And these must start before the project and continue after the project, so that project managers are ready for the next one. Thirdly they need to be well plugged into the project community or network in order to continue to learn and share and be challenged with better ways of working.
From our perspective we are seeing more global projects and the need for us to inject more innovation and creativity into our approach in order to make the most of scarce resources and it was refreshing to see how closely our thinking aligns to that of Professor Eddie Obeng. The world has changed and our collective thinking and approach needs to reflect this if, as a project and programme management community, we are going to deliver successful project outcomes to our clients.
It’s That Time Of The Year Again…
Posted by Andrew Moore in General on December 14, 2011
Cloud adoption looks set to accelerate in 2012
It seems not five minutes since we were speculating on what would be the big technologies for 2011, but we’ve once more reached that point in the year when the Gartner Research Group identifies the top 10 technologies and trends that it believes will be strategic for organisations in the forthcoming year. Gartner defines a strategic technology as “one with the potential for significant impact on the enterprise in the next three years” and encourages businesses to include these 10 technologies in their strategic planning process and think about how they will fit into the organisation moving forward.
Gartner highlights the key trends in this way to provide organisations with knowledge and advice, so that they can explore the underlying technologies and determine how they might be deployed to help their business deliver more value. Carl Claunch, Vice President and distinguished analyst at Gartner, encourages organisations and CEO’s in particular, to heed Gartner’s advice and subsequently “kick off a search for combinations of information sources, including social sites and unstructured data that may be mined for insights” and help them make the most of the technologies available.
Gartner’s predicted Top 10 Strategic Technologies for 2012 are:
- Media Tablets and Beyond
- Mobile-Centric Applications and Interfaces
- Contextual and Social User Experience
- The Internet of Things
- App Stores and Marketplaces
- Next-Generation Analytics
- Big Data
- In-Memory Computing
- Extreme Low-Energy Servers
- Cloud Computing
From a DAV perspective, we’ll be looking out for the technologies that enable businesses to transform the way they work, helping them to become more flexible, agile and resilient in the face of ongoing economic and business uncertainty. And in this, Cloud adoption looks set to remain a serious consideration.
Cloud Computing was number one in last year’s ranking and it is certainly a phenomenon that we have seen rise throughout the year. 2011 has witnessed organisations such as Centrica and Comic Relief undertake significant programmes of change to migrate their systems to the Cloud and slowly the mist around this technology has begun to lift. This year enterprises have been on a journey of discovery of what Cloud means to them, both from a private and public perspective and we have seen them slowly move from thinking about the Cloud to making decisions about implementing it, based on what makes sense for the business. Gartner predicts that next year cloud computing will be number 10 on the list for organisations and that we will see “the full range of large enterprise providers fully engaged in delivering a range of offerings to build Cloud environments and deliver Cloud services.”
However, adopting a Cloud based architecture does present a significant and often unrecognised challenge for any organisation. Despite its strong technology overtones, for a Cloud solution to deliver the kind of benefits most organisations are seeking then its adoption must be regarded and approached as a full scale business change programme – with all the attendant cultural, process and organisational implications being considered.
Getting the approach right is crucial and the rewards for enabling the business to think and act in a different way are enormous. The flexibility, agility and resilience that a Cloud platform and technology can deliver to organisations is very compelling and in the past couple of years we have been very heavily involved in helping one of our clients in the financial services market transition its global data centres to Cloud technology. The operational gains and cost savings they have achieved have been quite phenomenal and look set to continue.
I think in 2012 we shall start to see more of these use cases coming through and more demand from our clients to help them shape and deliver programmes that will fundamentally change their businesses as they look to adopt Cloud technology.
In today’s Trust Economy, relationships matter, and influence is king
Posted by Andrew Moore in General on December 9, 2011
There's no 'fast forward' button for trust
They say we’re now living in a Trust Economy again. What does that mean? It harks back to times when commerce was localised and the people you did business with lived in your local community. I know the Internet has made the world smaller and you can now do business with anyone – in theory – but bear with me.
In those days of local trade, there was less focus on advertising, marketing and brands because you did business with the people you knew. It was a Trust Economy because your business success was based on mutual trust. And in a Trust Economy, your market is your community or network, trust is mandatory and influence is king.
If you want to understand how to create trust and affect individuals authentically, imagine yourself, as one blog put it, moving into a new neighbourhood. How do you meet people? Not by knocking on people’s doors (though saying hello to the next door neighbours might help.) The reality is that over time, as your community gets to know you, your trust and reputation grows. Taking this into a business context, a couple of points to consider here are:
- You can’t fake a relationship.
- Relationships come before sales.
Leveraging your relationships will help increase awareness of your product or service, but first of all, you have to nurture your network before you can tap into the potential it offers. There never has been a fast forward button for trust.
Of course, we’re not living in a localised economy now. The advent of the Net and social media means our local marketplace is now a global one. But relationships still count, and influence matters. When it comes to social media, the influence of an individual is not a function of wealth or celebrity, but of the individual’s – or possibly the organisation’s – credibility and contribution in the community of ideas. Just like in those old localised days, influence is authentic and cannot be coerced. And any return on your influence accrues on the value of (your) contribution.
With a growing focus on metrics in social media, can you truly measure this return? From the conversation on metrics generated by a recent post and its comments on the Harvard Business Review – no, you can’t. Influence is hard to define, and without an agreed definition, difficult to measure.
But whether or not you can measure influence, the fact is that relationships are back, and the more you give, the more you get in return. Lasting business relationships are based not on creativity or connectivity, but on trust. And as a DAV article on social media, A Social Dilemma explains, in the business to business (B2B) world, existing relationships often drive sales.
Today’s organisations need to squeeze every ounce of value out of their relationships. The more we collaborate and have dialogue with colleagues, clients and partners, the better we will understand their needs and perspectives, and the more influential and effective we will become.
This is especially true in our business where large scale business and technology change programmes have a direct impact on significant numbers of people. Faced with this scenario, DAV’s clients would never engage us without having first gone through a ‘courtship’ process, from which comes the all-important understanding of the client’s business and the challenges they are facing. This allows DAV and the client to ‘get to know each other’ and so lay the foundations for a solid, long lasting relationship based on mutual trust, confidence and, ultimately, influence.
Remember: in today’s Trust Economy, relationships matter. And influence follows.
NHS IT: Small wins equal big victories
Posted by Andrew Moore in General on November 25, 2011
Learning the lessons from Trafford
I read a recent report by Oxford University and McKinsey which found that one in six big IT projects goes over-budget by an average of 200%.
And the harsh reality is that too often those projects have been in government, with the Whitehall landscape littered by failed projects. The latest, the National Programme for IT (NPfIT), an ambitious £11.4 billion programme of investment designed to reform how the NHS in England uses information to improve services and patient care, has been under fire from the National Audit Office. Arguably, NPfIT, a ‘grand design’ for NHS IT, has sapped the confidence of those reliant on it, left suppliers and government wrangling over contracts and trusts picking up the pieces.
A central part of the Programme set out to create a fully integrated electronic care records system, with the objective of ensuring that every NHS patient had an individual electronic care record which could be rapidly transmitted between different parts of the NHS, in order to make accurate patient records available to NHS staff.
But as the NAO reported, this intention proved beyond the capacity of the Department of Health to deliver and the department is no longer providing a universal system. The NAO concluded that the £2.7 billion spent to date on care records systems does not represent value for money. And, based on performance so far, the NAO says it has no grounds for confidence that the remaining planned spending of £4.3 billion on care records systems will be any different.
So what do trusts do now?
One of those trusts that has had to come to terms with the implications of the National Programme, and from which other trusts could learn, is Trafford General Hospital in Manchester. Trafford bought its main systems outside the National Programme for IT and is one of the most technologically-advanced in the UK.
Trafford’s method has been step by step progress over 10 years: implementing systems, learning from what went well and not so well, and integrating hardware and software from a range of suppliers. That approach could help to explain why the clinical staff at Trafford hold the small IM&T team there in high regard. At Trafford it’s the doctors and nurses who say what they want. Systems are not imposed on them and the technologists are in the background
So, what project and programme management lessons could we infer from Trafford’s implementation of IT and the fallout from the wider National Programme? Five immediately come to mind:
- Look at the big picture and what you are trying to achieve, from an IT perspective, with a long term plan and strategy so that you know what you are implementing is in line with your strategy
- Be in control of your IT suppliers. Too often in government and in the wider public sector, it’s the other way round. Make sure you are working with a trusted supplier that has a strong track record and, above all, make sure that your commercial and relationship management approach drives behaviour that will deliver the outcomes you want.
- Don’t reinvent the wheel if you don’t have to and always avoid developing a new IT solution from scratch when something off the shelf will do the job. Using standard products reduces complexity, as does breaking IT projects into manageable chunks, using modular or agile approaches to IT project management - the Department for Work and Pensions’ Universal Credit system, due to go live in 2013, is a case in point here. Step-by-step progress, implementing systems, learning from what went well and not so well, relishing small wins and integrating hardware and software in a staged way, is a more likely route to success than a Big Bang approach. Remember also that most COTS solutions are delivered with standard processes and procedures built in. Use these wherever possible as they are developed from a base of good industry practice and help you avoid getting into the minefield of software modifications and misguided business process changes.
- Don’t impose change. Always have the push for change come from business users – which in Trafford’s case means the clinicians – who understand what technology can do for them. They will become your champions and help to drive change from within.
- Keep IT in the background – not centre stage. Grand designs rarely herald great success.
Taking heed of these simple guidelines will pay dividends in the long run and help to avoid being part of the failure statistic headlined above.
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Andrew Moore
