Monthly Archives: August 2008

Avoid Corporate Death by Beating the Odds

No company is created to fail. Yet the odds are stacked against corporations surviving more than a few decades. Many once-greats are dying a slow death, losing much of what made them superior. Others have expired quickly. And new research shows that many more are starting to atrophy astheir leaders turn their focus to managing complexity — and away from leading for the future. A new, nine-element framework can help you diagnose your organization’s health, and address the factors that increase corporate life expectancy.

Robert Rudzki, President of GreyBeard Advisors, author of Straight to the Bottom Line and Beat the Odds, and blogmaster of Transformation Leadership just published his manifesto on ChangeThis (now Porchlight) — “Avoid Corporate Death: Nine Essential Elements Will Keep the Reaper From Your Company’s Door”. In this paper he notes that companies that do not lead firmly for the future have a much greater chance of corporate death than those that do, and that, more importantly, resilient organizations appear to have nine fundamental traits in common – which he has defined as the Beat the Odds (BTO) Guidance Framework.

As “proof” of its success, he offers a recent study by the Iacocca Institute of Lehigh University and BetterManagement.com that asked 700 executives to rank their companies against the framework. The result — companies with higher BTO scores also had a return on invested capital (ROIC) or a return on equity (ROE) that exceeded their corporate cost of capital. Correlation may not be causation, but it sure is impressive nonetheless. And considering that there have been more than 600,000 outright business failures in the US alone in the past 10 years, any little bit helps.So what’s the basis of the framework? The following nine rules that define how a resilient enterprise should operate.

  1. Establish a Purpose
  2. Live and Defend Your Core Values
  3. Acquire a World View / Create the Future
  4. Articulate an Inspiring Vision / Lead at All Levels
  5. Develop Strategies / Business Models / Competencies Consistent with the Foregoing, and Linked to Each Other
  6. Assure the Organization is Aligned and Energized
  7. Measure What You Want to Achieve and Nothing Else
  8. Decide! Act! Get On With It!
  9. When in Doubt, Use Common Sense

For more information on the framework, see the manifesto.

Green Your Desktops and Keep Even More Green in Your Bank Account

In yesterday’s post I asked you, as a supply and spend management professional, to take heed because you can save bags upon bags of money by forcing IT to Green your data centers – and please the grippies (green hippies) at the same time as you drastically reduce your energy requirements and, consequentially, your carbon footprint. But that’s not all you can do! You can also green your desktops and save more bags of money. Many more!

Even though many computer manufacturers are now releasing desktops that run on as little as 120W of power, which is much better than the 300W to 450W a workstation sucked up in years past, that’s still at least twenty (20) times as much power as a normal office workstation should be consuming when you consider that a Sun Ray 2 has a typical power consumption of 4W; and still at least five (5) times what a high-end developer workstation should be consuming when you consider that a IBM CP-20 only requires 25W. Now it’s true that these light-weight thin clients require virtualization and heavy-duty servers on the back end, but when you consider that one processor on a modern server can generally support four (4) users, and that modern servers will have four processors per core, and that mid range servers generally have four cores, that says that you can support up to sixty-four (64) users on one server! Now, it’s also true that this heavyweight server is likely to suck up 800W of power, but what’s more energy friendly: one 800W server and sixty-four 4W thin-clients or sixty-four 120W workstations? You guessed it, the heavy weight server with the light-weight thin-clients, by a factor of 86%! And if you already have a data center with under utilized servers configured for virtualization, you might not even need to add a server to replace your power-hogging desktops with light-weight thin clients.

Now I’m sure you’ve already come up with half a dozen objections (which could likely be augmented by your vendor of traditional fat-client desktops) as to why you can’t do this, including “I need my own environment“, “my data needs to be secure“, “I need fast response time“, “I need a local hard drive“, etc. but the reality is that you can do this and all of your objections are likely invalid. Here’s why:

  • you still get your own environment, it’s just stored on a server
  • your data is more secure because your server room is likely locked down tighter than most military installations, while anyone could walk in and walk out of your office with your desktop under their arm (but if they walk off with the SunRay, because it’s just a dumb terminal, they get nothing – as they can’t even access the device without an active smartcard and a connection to your network); in addition, you can lock everything down so that your employees only have access to the applications and data you allow them to access
  • modern virtualization environments allow for dedicated processor time-slices and resources to priority processes – so you can not only be guaranteed of fast response times, but more processing power than you could have on a desktop if you really do need it
  • these devices have USB ports and you can back up locally if you really need to; or, if security is an issue, you can remotely disable the capability by user account on the server and prevent data theft
  • plus, it reduces support requirements; since all workspace images are on the server, your IT can update them all at once on the server with one simple update command – no more walking around to every desktop to do an install (which is common even if you have network install capability, as a network admin will still have to go turn the machine on or reboot it if it locks up)
  • it reduces support requirements more than you think; with virtualization, the data image can be separated from the environment image, and if you mess up your environment, your network administrator can replace it with a clean copy in about 15 minutes
  • it reduces hardware requirements more than you think – as you can integrate with your VOIP-based telecom system if you desire
  • it reduces the amount of hardware you need more than you think, as you no longer need to buy your employees who need to work on the road or from home a laptop or second machine as they can pick up the thin client, take it home, plug it in to their high-speed internet connection, and connect to your network over a VPN with a properly configured smartcard; and, again, if the thin client gets stolen, you don’t lose any sensitive data as nothing is stored on the client
  • it reduces your energy requirement even more than you think, because most thin clients automatically power down to a sleep mode that requires less than 1W of power when not in use. An employee could accidentally leave one on during their month long vacation and it would consume less power than an average workstation would consume in an hour.
  • you’ll save a lot more money than you think you will; most office users only require office applications which run great on the SunRay, which can be obtained for $299; if you have developers using graphics, multimedia, or data intensive applications, then you’d need something like the CP-20 which can be obtained for $599. Compare that to an average workstation configuration of $599+ for an office worker and $1499+ for a high-end developer workstation and even factoring in the cost of a few servers, you save a bundle. Plus, you’ll get 6 to 7 years out of a thin client whereas a desktop typically only lasts 3 years.

Now, at this point, I hope you’re asking “How do I start?” and “How do I figure out how much money I really could save by helping my organization move to Green IT?. The answer is still to start with an audit that analyzes your current infrastructure and user needs and comes up with an optimal network and infrastructure design and configuration that uses best-of-breed technology to meet your current computing needs with less energy and less hardware investment then it would cost to simply keep operating on the same energy-inefficient model. Then you can replace your machines in phases, starting right away with the oldest, and watch the savings rack up year over year … as your energy and hardware costs will go down … way down!

Again, if you’re looking for someone to call on for help with this type of audit, I would again consider NCS Network. The first provider in Canada to offer a green data center solution, they have a lot of experience with Green IT technologies and have saved some clients as much as 75% on their annual IT-related costs (by simultaneously upgrading their data centers and desktops with optimal best-of-breed Green IT solutions). In one case, they reduced a client’s IT energy footprint by 94%! Imagine how fast your savings would rack up even if you were already fairly efficient and they found that efficiency could only be improved by half of that, or 47%. Run the calculations. I’m sure they’ll tell you what I’m telling you – green your IT and you will save bags of money – which is the one kind of green we all care about.

Furthermore, if you call NCS Network and mention that you heard about them on Sourcing Innovation and book an audit before September 30, 2008, they’ll give you 10% off of their standard rates.

In full disclosure, although I do not own any shares in NCS Network, or get any commission for referring you to their services, there is a partnership between NCS Network and the doctor‘s company, whereby the doctor may serve as their Chief Software Architect on a consulting basis when an NCS Network client needs a senior software architect and Emerich Winkler of NCS Network may serve as the doctor‘s Chief Network Architect on a consulting basis when one ofthe doctor‘s client needs a senior network architect. However, if you hire them, and don’t hire me, I get zip, zero, and zilch and there’s really no financial incentive for the doctor to recommend NCS Network to you.

Green Your Data Centers and Keep More Green In Your Bank Account

Supply and Spend Management Professionals everywhere, take heed, you can save bags upon bags of money by forcing IT to Green your data centers – and please the grippies (green hippies) at the same time as you drastically reduce your energy requirements, and, consequentially, your carbon footprint. That’s right, you can save energy and the environment as a side-effect of implementing IT technology that not only saves you money, but performs better overall! And all you have to do is make sure IT buys the right technologies from the right vendors, and not just the vendors that give them the most free toys or the most free passes to the tech expos. So read this post carefully. The technologies described within will not prevent IT from supporting your current application infrastructure or affect any SLAs you might have – although it might mean that IT has to upgrade their skills and / or get comfortable with new technology. (And if you’re not willing to learn on a daily basis, and you’re in IT, you’re in the wrong profession — and shouldn’t be surprised if you’re told to shape up or ship out.)

As I informed you in a recent post on how IT is our greatest threat to our energy future, your corporate data center is a huge energy hog, and likely sucks up considerably more energy than the rest of your office-based operations combined. Why is this the case? First of all, those big-boxed traditional servers suck up considerably more power than an average workstation, especially since they usually have redundant always-on power supplies, with power requirements in the 700W to 1,500W range being quite common. In other words, each server generally sucks up three times the power of a normal workstation, 24/7, whether it is used or not. But mostly your data centers are huge power hogs because of the huge amount of heat a large number of servers in a compressed space will generate and the simple fact that if the room is not cooled to at least normal room temperature, they’ll overheat, melt, and take not only your hardware investment, but your data (which just might be your most valuable asset) with them. Today, it often costs more to keep your data centers cool than it does to fill them with equipment. If you reference a recent article from Hewlett Packard on Electronics-Cooling.com, and recalculate the 3 year energy cost to acquisition cost with today’s prices (where you can get a fully configured 1U server for (well) under 3,000 and where the average retail price of electricity is now over 11c per kWh and rising fast), you find that, today, the average cost of keeping a server powered and cool is at least 30% more than the server itself!

So what can you do? You can start by using servers with power efficient chips, virtualization, and dynamic CPU allocation to reduce your power requirements. These initiatives can decrease power requirements substantially. Lower power hardware requires less watts to run. Virtualization allows you to reduce the number of servers you require by packing more applications onto fewer servers. And dynamic CPU allocation allows you to automatically shift processes between processors and, during down times, power down one or more cores to reduce energy requirements. This means that your server room can run at full capacity during the normal work day when it is being hit hard by every employee in your operation, but automatically power down by 75% (or more) overnight when almost no one is utilizing your systems and networks.

Then you can reduce your cooling requirements by using rack-based (liquid) cooling that focuses on keeping the servers chilled, and not the entire room they are housed in. Even in a jam-packed server room, your servers aren’t even going to take up a third of the space. This means that not only are you chilling a lot more space than you have to, but you have to chill part of the room cooler than it needs to be as, chances are, the vents won’t be right next to all of the servers. However, a rack based solution that only chills the servers only sucks up the energy needed to chill the servers, and this tends to reduce your power consumption by at least 15% to 20% alone! Furthermore, you can then install a heat exchanger to route the vented heat throughout your office building and use your servers to heat your building in the winter! That’s two hits of energy savings for the price of one!

So where can you get this technology? IBM and Sun are making leaps and bounds in virtualization, IBM and HP are leading the way with rack-based cooling solutions, and all three are leading the way in energy efficiency in their server offerings. (However, it appears that IBM has the best dynamic CPU allocation as it’s virtualization is dynamic and allows you to time-slice processes down to 1/10th of a CPU and use shared pools to insure a sleeping core isn’t powered back up until absolutely needed.) So, contrary to some propoganda, you’re not necessarily restricted to one vendor if you want to save energy, and thus you can use the competition between these vendors to save huge bundles of money.

At this point, you’re probably asking “How do I start?” and “How do I figure out how much money I really could save by helping IT go green?“. The answer is you start with a data center audit that examines your current infrastructure, your current network, and your current user support needs, and comes up with an optimal data center design using best-of-breed technology that will meet your current needs with less energy and less hardware investment requirements than it would cost to upgrade your data center using your current technology and infrastructure design. (And yes, you’ll save money on hardware too since virtualization will let you do more with less!) Then, as you replace and retire existing hardware, you can replace it with the right hardware – and cooling systems, for your needs and watch the savings rack up year over year (especially since today’s virtualization platforms tend to be more extensible and upgradeable in addition to lasting longer).

If you’re looking for someone to call to help you with this audit, I’d recommend you consider NCS Network. The first provider in Canada to offer a green data center solution, they have years of experience in designing, maintaining, and auditing data centers. In addition, they have partnerships and relationships with Sun, IBM, vmware, MiTel, Cisco, Wyse, Citrix, Xen Source, red hat, APC, Novell, and, of course, Microsoft. If you mention that you heard about them on Sourcing Innovation and book an audit before September 30, 2008, they’ll give you 10% off of their standard rates.

In full disclosure, although I do not own any shares in NCS Network, or get any commission for referring you to their services, there is a partnership between NCS Network and the doctor‘s company, whereby the doctor may serve as their Chief Software Architect on a consulting basis when an NCS Network client needs a senior software architect and Emerich Winkler of NCS Network may serve as the doctor‘s Chief Network Architect on a consulting basis when one of the doctor‘s client needs a senior network architect. However, if you hire them, and don’t hire me, I get zip, zero, and zilch and there’s really no financial incentive for the doctor to recommend NCS Network to you.

(e-Sourcing, e-Procurement, and e-Supply Chain) RFP Help Here!

Here’s irony for you: as a Purchasing and Procurement professional, some of the most complex products and services you will source are the very tools that you have to acquire in order to be successful. That’s right, I’m talking about e-Sourcing tools and e-Procurement systems.

If you’re a regular reader of Sourcing Innovation, you know that I don’t pull my punches when it comes to reviewing e-Sourcing and e-Procurement tools. I’ve seen it all, and I can assure you that there are very real differences between them — differences that can and will have a profound impact on your success.

I can help you find the tools and solutions that are right for your company and your needs.

Unlike industry analysts, who are paid by the very vendors they “review,” I do not have any skin in the game with regard to a particular approach or a particular vendor. And, unlike armchair “experts” who opine on technology without having any technology background, I am a technologist by training (a PhD computer scientist, in fact) who cannot be fooled by a pretty user interface or a piece of Marketing drivel. When I get a vendor brief, I insist on looking inside the cookie jar. I’m not satisfied just admiring the glaze on the outside. If the vendor won’t open the jar, I assume the worst, and I’m usually right. (And they don’t get a nice blog entry on Sourcing Innovation either!)

There are numerous mistakes that are easy to make in the RFI/RFP process. You should not be embarrassed if you have made some of them, because both vendors and analysts are aggressively pushing strategies that ultimately benefit them, not you. It’s very hard not to fall into the traps they’ve set for you.

For example:

  • Never, ever, use an RFI or RFP “template” from a vendor. At best, this is just a way for the vendor to sell you the exhaustive, but often mostly useless, set of “features” they happen to have. At worse, it is a way for the vendor to sow “poison pills” that other vendors will have difficulty answering, so that the scoring algorithm on the RFx will cause them to appear better than the competition, whether or not this is true.
  • Never use an analyst’s report to generate a list of “features” that the analyst believes a product should have. The analyst doesn’t know anything about you or your business, and typically knows very little about the products, either (other than what he or she has been told by the vendors who are paying him or her or his or her company).
  • Never use vendor marketing materials to decide on the “key features” that you need. Vendors often compete with each other on irrelevant points that have no bearing on the functionality that your business requires, and analysts tend to repeat these irrelevancies until they achieve a life of their own.
  • Never assume that a product is “stable” or “bullet proof” just because it’s been out there for years. I’ve seen mature RFP software utterly fail, when RFP software (after years and years of development!) ought to be a slam dunk. I’ve seen “enterprise” e-procurement systems where the price actually charged by the vendor does not match the catalog price (you’d think they could at least get that right!). By the way, neither of these examples involve small vendors.
  • If a claim seems outrageous, it almost always is. For example, no static report can replace an opportunity assessment from a trained professional. Don’t imagine that you can base a procurement strategy on the output of an automated tool.

Fortunately for you, I’m in a unique position to help. With my dual background in technology and sourcing/procurement, I can work with you to:

  • understand what you need and do a proper Needs Assessment
  • put together an RFP that outlines the functionality you need, not an exhaustive list of useless features. Vendors want you to focus on irrelevancies; you need to focus on core value.
  • review the RFP responses and help you identify the questions you need to ask, like I did generically last year in my X-emplification and X-asperation series
  • review a potential contract in order to identify:
    • unnecessary modules
    • missing functionality
    • missing cost definitions (so you don’t get burned later on)
    • and other potential weaknesses

So if you need help with that needs assessment, RFP, or contract, reach out at any time using the contact information in the FAQ. No job is too big or too small as I know that you don’t put the cart before the horse.

P.S. Yes, as per the categorization, this is an advertisement for the doctor‘s services. I’d hoped I wouldn’t have to state the obvious, especially since I classified it as such, but it appears I have to.

 

The Pickens Plan for Energy Sustainability

Courtesy of AJ Sweatt on the MFGX blog, I was alerted to this site which, in AJ’s words, has a great energy plan that is clearly enunciated, easy to understand, the right thing to do, and – what really caught my eye – a potential boon to manufacturing.

America is addicted to foreign oil. This wouldn’t be a bad thing, as every country these days relies on another for something, if it wasn’t for the fact that the addiction is becoming all encompassing. As noted in the plan, America’s dependence on foreign oil has increased from 24% to 70%+ in the last 38 years, with no end in site. It’s unsustainable — and there’s no excuse for it! As I’ve pointed out in many previous posts, there are affordable clean-energy alternatives — and with the exception of transportation (and air and sea travel in particular), there’s no excuse not to be consuming clean energy.

Not only is the current North American dependence on oil unsustainable, it’s scary. As the Pickens Plan notes, at current oil prices, we will send $700 billion dollars out of the country this year alone – that’s four times the annual cost of the Iraq war. Furthermore, projected over the next 10 years the cost will be $10 trillion – it will be the greatest transfer of wealth in the history of mankind. Wealth that America needs if it is to maintain its standing in the global marketplace. And, moreover, it’s sufficient wealth to build wind facilities that would produce 20% of the annual electricity requirement of the US, with $9 trillion to spare! In other words, for what the US is spending on oil in one year, it could build facilities that would produce 20% of its power needs over the next half-century!

As the article notes, the United States is the Saudi Arabia of wind power. Studies from around the world show that the Great Plains States are home to the greatest wind energy potential in the world — by far. The Department of Energy reports that 20% of America’s electricity can come from wind. North Dakota alone has the potential to provide power for more than a quarter of the country. Imagine if the US capitalized on this power … and then capitalized on all the water power available off of both coasts (through tidal turbiness) … and then capitalized on all of the solar power available in the southwest semi-deserts. The US could easily meet two thirds, if not three quarters, of its non-transportation energy needs without breaking a sweat. And that’s with today’s technology. Solar and tidal power technologies are still improving, as well as getting more economical to deploy, and it stands to reason that future improvements will make the technology even more energy efficient and economical.

In addition, instead of touting bio-fuel as the alternative to oil for transportation needs, it’s proposing natural gas, with greenhouse gas emissions that are 23% lower than diesel and 30% lower than gasoline. Given that natural gas is a domestic energy source, and that bio-fuel, which decreases global food production (which is already at a record low), is not the answer, this is a very well thought out suggestion. It’s probably not a permanent solution, but it’s a long term solution, and by the time we reached a point where natural gas supply was a problem, fuel cell technology, or even more modern energy sources, should be ready to take its place.

So, as AJ recommends, take a minute and read The Pickens Plan. If only the politicians were so clear thinking.