Tuesday, March 17, 2009

What Business Leaders Can Learn from the Military

Colonel Tom Kolditz was the guest at a recent Harvard Business IdeaCast. He is an expert on leadership in dangerous situations. Col. Kolditz is teaching at West Point and the author of "In Extremis Leadership: Leading as if Your Life Depending on It".

Obviously, leadership in extreme situations where lives are in danger is a bit different but the Colonel points our three lessons business leaders should contemplate in the situation with economic uncertainty:
  1. With the feeling of increased danger, there is increased focus on the leader. Individuals will rely more on the leaders and try to read how the leader perceives the situation and what approach will be pursued.
  2. There is a greater focus on the core competence of the leader while "soft skills" becomes less important as the stakes are higher.
  3. Trust in a leader becomes more fleeting than normally and trust is largely determined on an assessment of if the leader is going to put the interest of the organization first.
The discussion is also available through iTunes podcast directory as Harvard Business IdeaCast 133.

Wednesday, March 11, 2009

Top 10 Functions to Outsource

Most of CIOs and CTOs will be asked to trim costs and improve operational efficiencies as the economy labors through the recession. Outsourcing is one option.

Baseline Magazine discussed what functions are most suitable for outsourcing with Frank Casale of the Outsourcing Institute and Allen Weinberg of McKinsey & Company’s Outsourcing and Offshoring Practice Group. This is the resulting top ten list:
  1. Application Development. If this is new - start small with a project or two.
  2. Testing. This is good to outsource whether you outsource other parts of the process or not.
  3. Application Management. If you prefer to keep the dev team in-house, is this an option to make the organization lean.
  4. Database Management. You can often buy better expertise in this area for a fraction of price for staff.
  5. ERP. Outsourcing in this area has matured and is increasing.
  6. Help Desk. Outsourcing the entire of part of the function may cut costs and increase the service level.
  7. PC Maintenance
  8. Systems Integration. Restructuring in the market place (by mergers and acquisitions) will increase the need to integrate systems.
  9. Infrastructure Management
  10. Business Process Outsourcing (BPO).

Tuesday, March 10, 2009

Execs Views on IT - Importance, Efficiency, and Innovation

The IT Governance Institute (ITGI) recently released the survey An Executive View of IT Governance. The survey was conducted by interviewing 255 non-IT executives across 22 countries. There are some interesting general conclusions in the results despite the lack of focus on a specific geographical area or an industry.

IT is considered to be very or somewhat import to the organizations, as indicated by 87% of the execs. IT is also perceived to contribute to efficiency and effectiveness on equally high levels, rated at 87% and 81% respectively. The same standard is, however, not maintained when it comes to contributions to innovation. Only 59% of the execs consider IT to make very or somewhat important contributions. Of this number, the very important contributions is a dismal 22%.

The consensus is somewhat reassuring - that is, IT is important and it makes important contributions to efficiency. However, the low rating in the area of innovation should be call for concern especially for organizations operating in a particularly competitive or technology intensive environment.

Innovation is a different animal and it takes a mix of using analytical skills and thinking outside the box. This is different from making sure the lights are on at all times and optimize system performance and peoples interaction with IT systems. Clearly, more work needs to be done in IT innovation and the best approach is to try different solutions based on the assets available.

Thursday, March 5, 2009

Community-source Development

IBM's success with community-source development provides much needed metrics to illustrate the effectiveness of this model. In community-source, the traditional means of using employees for software development is combined with open source collaboration.

The community-source approach is more focused on solutions to needs compared with the traditional open source model. Additionally, the concept attempts to capitalize on sharing code across different kinds of project in a more seamless and integrated way than traditional open source.

Community-source is the result of open source combined with Web 2.0 thinking and a strong project management component. It's not really new, IBM started in 2002 but it took a few years before it matured. IBM's community-source effort currently have more than:
  • 31,000 users
  • 1,400 projects
  • 2,400 instances of direct reuse of components
The potential for large savings in development costs and avoiding vendor lock-in comes at the top of the list of specific characteristics of community-source development that may be particularly appealing in the current economic climate.

Ultimately, community-source allows organizations with shared business challenges to collaborate. This surely means lower costs but they have to be mindful and keep an eye on the competitive edge of the value proposition especially when direct competitors are involved in the process.