Daily Archives: September 10, 2010

Want to Fail Faster? Automate it!

This recent article in the McKinsey Quarterly on a better way to automate service operations nailed it: processes and work practices are best designed and implemented before companies roll out the new IT. Otherwise, the COO will walk into the field operations control center after spending millions on a new automated scheduling and dispatching system (and over a year implementing the software and installing the hardware) only to find that response times have not improved, and the number of jobs each engineer handles in a day has not increased.

This experience is all to common for leaders of service operations organizations that manage large groups of remote or distributed employees, including those that have made multi-million dollar IT investments in areas such as automated dispatching, schedule prioritization, workflow automation, and performance management. This is because these systems require processes and work practices different from those used in non-IT enabled situations.

This means that before a company implements a new service management system, the company not only has to sit down and baseline its current operations, but determine how these processes need to change in order to appropriately utilize the capabilities of an automated system. This is because best practices developed over the years to insure that manual processes don’t break down tend to be over cautious due to the limitations of the average person to manually schedule hundreds, or thousands, of resources across thousands of jobs — limitations that today’s software doesn’t have.

To succeed, a company needs to go back to square one and define the goals of its service operations, the resources it has available, and the equipment at the resources’ disposal. It has to throw away all of the old rules and constraints and be sure to only define true constraints (an engineer is only available 8 hours a day, service for tier 1 contracts must occur within 24 hours, etc), not perceived constraints (an engineer can only handle two calls a day, the repair must be by an engineer at the closest office, etc.). And then it has to trust the system which can optimize across thousands of variables.

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I’m Glad I’m Not a Pundit!

It seems that all the pundits in this space are doing these days are bashing other pundits about missing the point while missing the point themselves. Case in point: Jon Hansen’s recent bashing of Jason Busch*5 (of Spend Matters) over on Procurement Insights where he accused him of remodeling the city while Rome burns. (Followed by another bashing on how the industry he represents has lost its objectivity through familiarity.)

According to Jon, Jason should be more focussed on OECM punting Ariba and taking a 20M hit in the process and what the implications therein are, or that Ariba lost 3B on 1B worth of sales between 2001 and 2005 while suffering a number of implementation failures, then on ways to restructure Ariba for better performance*2, and because Jason’s not, according to Jon, Jason’s missing the point. Well, the first story is important, but until we get the full picture, which could take months, as we don’t know how much of the blame rests with Ariba and how much lies with OECM. (Remember the i2-Nike fiasco? While Nike tried to place all the blame on i2, it was as much their fault as i2’s. First of all, if you’re going to buy predictive modeling software, you should understand the limitations of what you are buying and the requirements of proper use!) And, in the internet age, the second story is ancient history … what’s more important is how they have been performing since then.

Don’t get me wrong — I’m not defending Ariba*1, just pointing out that there are three sides to every story and until we get all three sides (OECM’s, Ariba’s, and the truth), I don’t think it makes sense to start conjecturing on whose fault it is or (as Jon seems to imply) what Ariba did wrong. Let’s face it, this isn’t the first big IT failure, and since most organizations don’t really understand IT and won’t pay for that understanding (and, thus, can’t tell the difference between a proposal that illustrates the company knows what it is doing and a proposal that illustrates that the company is run, and staffed, by a bunch of baboons), it won’t be the last.

The real “big picture” is focussing not on the news story of the day (which, according to his post, he apparently does in all six of his blogs), but on educating the public so they don’t make the same mistakes. That’s why I don’t run stories on the latest deal/customer of Company X (irrelevant), the latest prediction of Research Firm Y (which may or may not materialize), or the latest headline in the WSJ (as most print publications are getting more sensationalistic by the day trying to maintain readership and forgetting what true journalism is really about). This blog is, and will stay, about education. That’s the “big picture”. (And that’s also why less is more! I could publish six posts a day if I wanted to, but if I overloaded you with information-free gibberish, what would you learn*4? You can’t drink from the fire-hose!)

Now I’m sure I’ll be the subject of his next rant*3, but I don’t care. I only care about what fellow supply chain bloggers think, not what media-hungry Bill Mahers think (whose rants don’t always make sense to me), focussed on the most sensationalistic stories they can find, have to say.

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*1It’s fairly well known I’m not their biggest fan, but I do try to be fair, and my history of vendor reviews speaks for itself.

*2 Given that Ariba was involved in a major failure, it’s now critically important that the focus is on finding a fix before it happens again as opposed to beating the issue to death.

*3 It wouldn’t be the first time.

*4 And would there be anything new in those? All you can really do at that speed is repackage existing news stories and content as you would be leaving yourself no time to think.

*5 I’m not defending Jason (as he can defend himself), just using his most recent bashing as an example of the absurdity of the situation.