Competing in tough times – Performance Based Infrastructure

One of the ways organisations can optimize their IT Infrastructure cost is aligning it to expected performance standards. Quite often in the past most of us have invested into Infrastructure which provisions for supreme performance.

For example a performance management system being hosted on a platform that gives 2 millisecond response time with 10,000 concurrent users. While this was okay in past, now we need to understand very closely the expected performance more closely.

Like in the above example the 2 Millisecond for 10,000 may never be needed in actual scenario or might be needed only during 15 days in the entire year.

We can plan for the better Infrastructure utlization by closely aligning it to the expected performance.

In the current times most effective ways to manage existing infrastructure is to establish achievable performance standards for the groups of assets. Once these performance standards are determined, organization needs to analyze its financial commitments over the life of the assets. Then we need to do a fine tuning exercise between financial needs and performance standards.

This exercise conducted over the entire Portfolio can help organizations identify over 20 % to 30 % reduction in their financial commitments.

Competing in difficult times

During recession or turbulent times firms need to adopt different strategies for competing or creating value for which consumers will be willing to pay. Most often when we think of effectiveness in very constrained fashion. whenever we talk of efficient operations we start looking at our own internal operations and start finding ways to optimize the same.

My experiences have taught me that to bring about significant efficiencies we need to look beyond our own corporate boundaries. If we extend our visibility beyond our fore-walls it will unravel new kind of options.. and insights.

As corporate managers we need to look at what can we do improve product availability by working with our 3 PL provider to have the most cost effective logistics operations or with help of the stockist have advanced systems so that the inventory is not piled up as well as the information flows back to the manufacturing unit. The information visibility and flows needs to be made strong and accurate through-out the value chain.

At the next level corporates can work with their product sellers ( the sales person / lady ) to be more aware about  product quality and functionality as well bring about soft skill awareness so that a more polite behavior can influence the product sale positively.

If we start looking beyond our fore-walls we will find that there are immense possibilities beside the regular job cuts and cost optimization that most organizations tend to engage in.

We need to generate options in these tough times rather then close our options .. the rate of recovery will depend on how many such options are being worked out collaboratively across the VALUE CHAIN

Competing Value Chains

As the social networking grows more popular and web 2.0 starts making an impact on businesses world wide. I believe the corporates will have to change their thinking about their value propositions.

It will no longer be sufficient to be the most innovative product company or company that has the lowest cost of production. The demands from the empowered consumers will force companies to develop new set of the value propositions coming out of the collaborative value chain.

What is collaborative value chain ? To understand the concept let us look at a simple example from the world of mobile phones..

Mobile phone is designed in the high end sophisticated Nokia design labs or Sony labs, produced somewhere in Taiwan or China and distributed across the world through a complex distribution network but consumed by users like me and your self either through nearest mobile gallery or in a shopping mall or of late over Internet.

What does it translate into … Let us take a look at a  product consumption behavior of a well designed mobile phone being consumed by two consumers one in Mumbai ( financial capital of India)  and second in Khurja (a small town in India). The consumer in Mumbai will mostly check with his friends / colleagues for reviews before deciding on buying the product …will go across to next door mobile gallery and opt for the product he liked and will have it in his hands in less then 20 minutes.  On the other hand the consumer in Khurja might have got information about the product from his friends across big cities and now have decided to buy as it is going to be unique in the small town. He goes across to the shop in the nearest market and find that it is not available. He asks the shop owner about availability ( which is answered as next month). He is dejected but then the shopowner suggests him a competing product with some discounts and after slight hesitation the consumer buys the product and the well designed product will never be bought.

The above example illustrates how a well designed product lost its battle to a well supplied prouct.

This is the future.. in future success of Sony or Nokia will not depend on the product design which they can control internally but will be determined by their their logistics partner, as well as their distribution partner, stockists and lastly the courteous person who is manning the shop floor when the consumer walked in the shop to buy.

The success will depend on the end-to-end value chain.

The future belongs to “COMPETING VALUE CHAINS” , the value chain of SONY with its suppliers, vendors, logistic partner with it retailer will be competing with the value chain of NOKIA with its own set of suppliers, vendors, logistic partners etc. The success will be determined by the effective operations across the value chain.

The purpose of competing chains will be to bring  “RIGHT PRODUCTS… FASTER…and CHEAPER..to…CONSUMERS…WHERE they WHEN they WANT THEM.

Managing Outsourced Projects

While outsourcing the projects to offshore is typically a management decision, making it successful is more then often left to the execution team. The execution should establish strong policies and procedures for project monitoring and control to ensure that the distant team is integrated into their organization. There need to be mechanism for:

Progress Reporting / Checkpoints – Vendor should be requested to provide periodical progress report, in an agreed format, to the client point of contact. The report should contain periodical progress, status against plan, variance (if any) and areas of concern. This can be automated using KPI dash-boards, report cards. The periodicity of the reporting mechanism should be determined based on the length of project / program as well the phase of the project.

Communication – Vendor should be asked to establish the communication channels, roles and responsibilities and escalation path clearly as part of the program management model. The program management model should define the periodicity of the communication at different levels – project team, program management, steering committee level as well as project sponsor level. There should be regular communication between the on-site and offshore teams taking place via a combination of the channels like conference calls, reviews, discussions over video conference and regular communication over electronic mails

Status Reviews and Feedback – Regular project reviews needs to be carried out with the vendor as per agreed format. Meeting should be held periodically offshore to list down the issues related to the project, status of development, issues of concern, etc. There should be mechanism set for project status reports, milestone reviews for the project etc to be sent regularly in the pre-defined formats. The review mechanism and formats must be defined during the planning and transition phase of the work in the outsourcing relationship.

Change Control- There should be an exclusive mechanism for change control. Change requests which are reality should be evaluated and mutually agreed. The effort and costs must then be incorporate as regards to these change requests. During the discussion on change requests both parties should act mature and it should be a fair discussion rather then a way to get leverage from either party.

Standards- Vendor should come up with well-documented set of standards and procedures to handle various tasks in software development and project management for the offshore activities. These standards and procedures need to be followed during the project execution.

Consultants – Life

This job is the best I’ve had and I’m very happy. I work from home when not on the client premise.

• Typical travel time about 70% of the time but mostly 3-4 week trips
• Opportunity to explore world along-with the joy of working
• sometimes travel is with short-notice so it can be hard to plan
• Sometime long hours would mean you only see the inside of your clients’ buildings, your Hertz or Avis rental car, and your hotel room. Then you fly home. Rinse repeat. It can get old pretty quickly. Just my thoughts
• Flexibility is a key trait as is understanding that while the client isn’t always right, and it can be your job to help them understand that, they always think they are right and you need to be very diplomatic.
• Make a choice between 2 to 3 months at one client vs every 2 weeks at a different client

Downside…

• More then often you will find yourself in an assignment that would have been sold to customers with utterly unrealistic deliverable timelines, promised for the sole purpose of closing the sale with no regard to the fact that the consultants would be the ones to face the customer every day to try to actually make those unrealistic deliverable timelines.
• Unless you’re really careful, you WILL get fat as a traveling consultant, especially early on because you’re getting off work at 9PM and you just want to eat ANYTHING, and then you promptly go to sleep on that full stomach
• 75% travel = 75% on airplanes, in hotels and rental cars + 40 hours on the client site

Consultants Qualities

What differentiates a consultant….

• AGILITY
• WINNING MINDSET
• SPEED
• KNOWLEDGE & EXPERTISE
• FUN LOVING
• COMMITMENT
• LISTENING ABILITIES
• ANALYTICAL CAPABILITIES

Consulting .. some facts

The first management consulting firm was Arthur D. Little, founded in 1886 by the MIT professor of the same name

The first pure management and strategy consulting company was McKinsey & Company. McKinsey was founded in Chicago during 1926 by James O. McKinsey, a professor at the University of Chicago Graduate School of Business

Andrew T. Kearney, an original McKinsey partner, broke off and started A.T. Kearney in 1937.

Why management consulting grew first in the USA is because of deep cultural factors: it was accepted there, (contrary to say, Europe), that management and boards alike might not be competent in all circumstances; therefore, buying external competency was seen as a normal way to solve a business problem

Welcome to Consulting Enthusiasts

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“An eco-system that allows experts from consulting practices across organizations to engage and learn from each other”