Four Things

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Four Things

• Niel Nickolaisen
• CIO, Headwaters, Inc.
• Co-founder, Accelinnova

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Introduction

• I suffer from impatience, consultant fatigue, and
  career angst.
• I look for solutions I can implement immediately,
  that do not require months of consulting, and
  that add immediate business value.
• Therefore, I present . . .

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4 Things

• That are immediately implementable.
• Proven.
• Easy to explain (even to the CFO).
• That generate business value.

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The Four Things

• Purpose Alignment
• IT Lean, Six Sigma
• Build a Model Not a Number
• IT Customer Service

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1. Do More Smart Stuff (and less stupid stuff)

• Example, ERP implementation.
• Legacy sequence of data entry was
• Name, telephone, address.
• ERP sequence of data entry was
• Name, address, telephone.
• Requirement was to customize ERP to match
  legacy sequence.

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The Test

• Was this customization smart or stupid?
• This is not isolated
• 2006 Standish Group indicates that 45 of
  functionality is never used. Another 19 is
  rarely used.
• Same report shows IT projects return 0.59 for
  every dollar spent.

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Always or Often Used 20
Always 7
Often 13
Never Used 45
Sometimes 16
Rarely Used 19
Never or Rarely Used 64
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Purpose Alignment
High
Partner
Differentiating
Market Differentiating
Parity
Who Cares?
Low
High
Mission Critical
Low
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In Practice
High
Do We Take This On?
Differentiate, Create
Market Differentiating
Achieve and Maintain Parity, Mimic, Simplify
Who Cares?
Low
High
Mission Critical
Low
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Example - ERP

• Consumer Packaged Goods company.
• Revenue from multiple channels (call center,
  internet, wholesale specialty, wholesale big box)
• Replacing legacy system (poor transparency,
  multiple time data entry, low automation).

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Before
High
WMS Legal Structure Accounting Product
Development CRM
Market Differentiating
Channel Mgmt
Analytics
Low
High
Low
Mission Critical
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After
Proven products with no channel conflicts
High
Analytics Channel Mgmt Product Mgmt
Market Differentiating
ERP CRM Legal Structure
Low
High
Low
Mission Critical
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Doing What Is Smart

• Reduced project timeline by 50 and cost by 40.
• Provided additional benefits (streamlined,
  simplified business processes).
• Delivered high impact results immediately.
• Why do it any other way?
• And, on-going decision filter for all business
  decisions!

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A Caveat

• Parity is as important as Differentiating but its
  value does not come from its uniqueness.
• To separate the truly Differentiating from the
  truly Parity, use the Billboard Test

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Example Split Payments

• Single purchase, multiple credit cards.
• Requires massive customization. Are split
  payments differentiating?
• If so, they pass the Billboard test and we should
  advertise.

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My Split Payment Billboards
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A fist full of credit cards
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Give Me Your Tired, Your Poor, Your Maxed Out
Credit Cards
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2. IT Lean Six Sigma

• Lean Deliver value by reducing waste.
• The 7 forms of waste
• Rework (pretty much everything I have done).
• Waiting (approvals and workflow).
• Over processing (remember, 64 of features and
  functions are rarely, if ever, used).
• Inventory (30-40 shelf ware).
• Motion (poor access to expert users).
• Movement (Alistair Cockburn, People wont climb
  stairs to get an answer).
• Over production (licensing).

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The 5S Tool

• Sort
• Set in order
• Shine
• Standardize
• Sustain

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Example - Before
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Example - After
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Applied to IT

• Sort what we use from what we have (COA with
  25,000 accounts).
• Minimize exception handling
• Who is going to use this feature / function?
• What do they want to accomplish with this feature
  / function?
• How often do they need to accomplish this task?
• If they dont have this feature or function, how
  will they accomplish this task?
• System stratification and treatment (A/B/C)
• There are no Mights in 5S

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Six Sigma
Standard
6 Sigma
3 Sigma
Process Variability
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Applied to IT
Project scope 60 days. Actual 50 day. 10 day
variation. Why? What can we learn? Standard SPAM
filtering performance 60 seconds. Measured
performance 120 seconds. Variance of 60
seconds. Why? Firmware not current. Why not? No
consistent process for applying patches /
updates. Why? Stop the bleeding and find the
knife.
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3. Build A Model, Not A Number
calculation
Value Calculation
Benefits
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But . . .
calculation
Value Calculation
Guess
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How About This?
Purpose
Considerations
Costs and Benefits
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In Practice

• Customer retention / loyalty program.
• No way to guess at benefits with most coming well
  into the future. Big costs.
• But, potentially important considerations.
• Developed a model that
• Included considerations
• Delivered interim value
• Improved knowledge about future phases.
• The hardest part We will make no decision
  before its time.

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4. IT Customer Service

• Is it better to be right or helpful?
• Customer service basics
• Communicate (the good and the bad) so that
  customers can plan alternatives.
• Present options and let customers decide.
• Measure customer satisfaction.

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Right or Helpful Example

• Username is first initial, middle initial, first
  four of last name
• nrnick_at_ . . .
• What to do with
• Brian K. Butterfield

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Simple Questions

• Differentiating or parity?
• Does this generate waste?
• What do we need to decide today?
• Are we being helpful or right?

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Questions?

• More stuff available at
• www.accelinnova.com
• Email nnick_at_headwaters.com