The MGS Blog

Thursday, March 31, 2011

Managing Distributed Teams

What is a 'distributed team'?

Why are distributed teams such a key part of outsourcing initiatives?

What tools are out there to help me manage a distributed team?

  • Basecamphq project management software (...as a service, monthly fee) see basecamphq.com/
  • Pivotal Tracker for Agile project management (...as a service, monthly fee) see pivotaltracker.com/
  • activeCollab for project management (installable or as a service, mixed pricing) see www.activecollab.com/
Research and Further Reading

SLA: If it looks like a contract and smells like a contract?

The typical SLA (Service Level Agreement) looks and smells like a contract, but is it a contract?
Have a look at these examples and make your own mind up (from Vinny).

Some SLA examples for Microsoft's Windows Azure Cloud Services Platform.

http://www.microsoft.com/windowsazure/sla/

These contracts service 'compute' capability, 'storage', and specialised applications like data, web content, and apps.

Notice the following: Contract-like structure (terms, definitions, exclusions, ), provision to claim 'credits' against 'downtime', and measurement methodology including parameters.

However, it's not quite a contract, it's more of a promise (that the vendor can change whenever) and in these case with a bonus (or penalty in the case of the supplier) "here's what I give you back if I fail to deliver". An SLA is nice to have, I might even pay something for it, it may even be referred to by a contract, but it isn't a contract!

Governance or 'how to manage the alliance'

The 'management' perspective on sourcing and global sourcing incorporates many tools, frameworks, methods etc. but tends to leave the 'management' model itself underdeveloped, presumably because firms already know 'how to manage', i.e. align and control resources. To phrase this differently, we assume management know how to manage, therefore remedies, techniques, and structures proposed for global sourcing are presented as unique or appropriate to the global sourcing context. Management simply needs to apply these novel or customised techniques in their own organisational contexts. Management simply wants new tools, the activities of management itself, "the acts of harnessing and controlling human activity to achieve desired goals or objectives", remains unchanged.

In the case of sourcing initiatives (projects) through to sourcing industries (addressing or creating markets for sourcing projects and services) we can bring focus back onto the overarching activity of management under the heading 'Governance'. Governance is the administration of activity, of people, projects, and resources. Governance retains the notion of its politics, of hierachy, of the concentration of resources and their control. Thompson (2003) refers to governance as action concerned with creating the conditions for ordered rule and collective action, but that it can be employed across multiple organisational forms: hierachies, networks and markets. Oshri et.al (2009) define governance as "the processes and structures that ensure the alignment of strategies and objectives of the parties involved" (Oshri et.al:112, 2009)

For sourcing initiatives governance capabilities are defined in terms of client and supplier perspectives by Oshri et.al, (2009). For the client organisation they are the processes that "align the client's objectives and strategies with the vendor's delivery system" (Oshri et.al:57, 2009). Governance from a supplier's perspective is "the dynamic alignment of the activities of the IT function with those of the overall organisaton." (Oshri et.al:84, 2009)

Reverting back to earlier research into the ITO (IT Outsourcing) industry, 'outside service management models' (Clark et.al, 1998) fall into five types: User Managed (functional manager), IS Managed (divisional), Vendor Managed (supplier), Committee Managed (e.g. a joint board or similar), Mixed Management. Each of these different types require differing forms of management or governance. Governance structure according to Clark et.al (1998) deals with and varies across three areas: Contract, Governance Costs, Governance Mechanisms. Contracts may be lengthy and detailed or short and general. Governance mechanisms can span close meticulous oversight through intensive compliance monitoring, through to 'light touch' intent monitoring. Costs and the need for cost control vary accordingly in direct proportion.
Aside: The very idea of 'Management', its purpose, meaning, legitimacy, culture, and consequences, has been widely and continuously debated by practitioners, theorists and researchers. Few deny the need for management as an activity, however the apparent necessity for Management as a specialisation is debated; see (Grey, 2005) for a gentle introduction to the issues of management of organisations.
References:

  • Grey, C. (2005) A Very Short, Fairly Interesting and Reasonably Cheap Bookabout Studying Organizations, Sage Publications Ltd.
  • Clark, T., Zmud, R. & Mccray, G. (1998) The Outsourcing of Information Services: Transforming the Nature of Business in the Information Industry. IN WILLCOCKS, L. P. & LACITY, M. C. (Eds.) Strategic Sourcing of Information Systems. Chichester, England, John Wiley & Sons.
  • Oshri, I., Kotlarsky, J. & Willcocks, L. P. (2009) The Handbook of Global Outsourcing and Offshoring, Palgrave Macmillan.
  • Thompson, G. F. (2003) Between Hierachies & Markets: The logic and limits of network forms of organization, Oxford University Press.

Tuesday, March 29, 2011

A Project Classic - Keep your 'eyes on the prize'

Reminded this evening by Michael McCabe of Fergus O'Connell's most excellent presentation of the project management solution; "How To Run Successful Projects - The Silver Bullet". The book and Fergus's training courses have deeply influenced many in high-tech in Ireland (link)

Governance Themes in Sourcing

What is the fact basis and following implications of claims that the IT industry has shifted from being people-dependent to process-dependent? (Oshri et al., 2007) One of the more significant implications is the claim that “knowledge management becomes part of the process.” (Oshri et al., 2007)

The idea that business operations should depend heavily upon ‘knowledge management’ appears at first to be vague, nebulous. What is knowledge and its relationship with skill, experience, expertise, know-how? How can knowledge be managed? Can knowledge be captured absolutely, transferred and shared unambiguously, valued, codified, commoditised, sold?

Oshri et al., (2007) don’t engage in understanding and theorising knowledge or knowledge management, instead they shift focus slightly towards the apparently less problematic idea of ‘expertise’. They characterise the desire to manage knowledge in terms of expertise as a personal characteristic, a characteristic that is evident as a resource both of the person and of the organisation.
“Expertise is a specific type of knowledge. It is dynamic, it evolves, and it consists of embodied knowledge and skills possessed by individuals. For our purposes, it refers to ‘knowing in practice.’” (Oshri et al.:54, 2007)
In this case study they present Tata Consultancy Services (TCS) ‘global delivery model’ (GDM) as a system of knowledge management, a system for managing dispersed expertise between pairs of organisations and multiple sites of labour (on-site, off-site, offshore). However while the article is located conceptually within knowledge management the global delivery model, its practices and dynamics address governance.

TCS's GDM is a project oriented view of the outsourcing business world. It requires a minimum 6 person management team, with three or more others (HR, QA). The GDM presents a set of recommended structures, processes, values and other mechanisms to shape or manage social processes surrounding knowledge and expertise development. Ultimately the GDM appears to be an organisational model, a simplified synopsis of TCS's own organisational structure and operational capabilities that contribute to its success as a kind of 'organisation of organisations'. The idea of an organisation of organisations captures TCS's situation where it manages multiple outsourcing relationships with many client firms. The first practice "implement an organizational structure that is a mirror image of the client's structure" imposes organisational flexibility upon TCS. The second, "implement a knowledge transfer methodology follows. Transfer commences between client staff and TCS onsite staff and continues from TCS onsite to TCS offsite (and remote) staff. Once 'internalised within TCS the GDM mandates codification, sharing, and reuse. Importantly though this is practice-centric human system rather than a static codification. They link projects with organisational capability as evidenced through personal development, career profiles and project records. The whole GDM as a process is reinforced by organisation-wide cultural conditioning, explicit 'values' to invest in continuous learning and knowledge sharing. While TCS's view of the work world is project centric, due to the continuous commencement and conclusions of project 'relationships', its success is dependent on its capability to share, bridge, and use learning 'across relationships'. The tetrad of interactions between TCS's four key capabilities (project management, quality assurance, digitisation, and centers of excellence) is central to the resilience of knowledge within TCS, despite the strangeness of TCS adopting the same multi-various organisational forms of its clients organisations.

It might be said that TCS is a purely knowledge organisation, one that is imminently adaptible yet consistent because of its reliance on the 'global delivery model’ (GDM).

References

Oshri, I., Kotlarsky, J. & Willcocks, L. P. (2007) Managing Dispersed Expertise in IT Offshore Outsourcing: Lessons from Tata Consultancy Services. MIS Quarterly Executive, 6.

IBM's Seven Keys of Success

IBM's own transformation as a competent and reliable global sourcing partner (supplier) involved refining and emphasising its internal 'project' perspective on high-tech production. They recognised that successful projects were the key to IBM's continued success. IBM had a catalogue the practices and techniques observed to be effective on the many hundreds of internal projects, both successful and unsuccessful projects, and practices or techniques that aided and impeded success.
"If you want to alter the course of your project's history, you must communicate at the executive level." IBM white paper, 2004
IBM's Project Management Centre of Excellence was promoted and eventually ingrained its approaches as core corporate value. They adapted the project perspective and refined it into a system for corporate delivery; governance for suites and programmes of projects. In essence this is a 'project of projects' approach and is applied across the entire organisation. A traffic light system monitors both direct and indirect controls. Direct controls are the typical outputs of any project: a schedule, scope, and performance against both. Indirect controls address the project's context, its environment and politics: overall benefits, stakeholders' involvement, risk mitigation, and delivery of benefits.
IBM7KeysDashboard
(figure 1. IBM 7 Keys HUD)

The model generally runs on a monthly cycle. These shared and relatively simple measures apply to all projects in the organisation (globally). The data is simple enough to be meaningful, aggregated and comparable across projects. The dynamics of the model are similar (if not identical) to the 'Deming cycle'; plan, do, check, act. In IBM's case for each project; 1) assess the state of the 7 keys over the period (1 month), 2) plan adjustments and change, 3) act and implement, 4) resulting in new status of the 7 keys.

Further reading

  • IBM white paper: Altering project history - Seven Keys to Success, 2004 (link)
  • IBM's Journey to Becoming a Project Based Enterprise (link)

Thursday, March 24, 2011

Exercise: Introducing Outsourcing to an 'Industry'

mccabe_whiteboard

Prepare a Response
As a consultant specialising in sourcing and outsourcing consider how you would respond to the statement, question and situation presented below...
Please post your comments in the comment form below.

Statement
Outsourcing is such a bad idea. The supplier simply wants to make profit. The buyer will make loads of mistakes and get shafted. So don’t do it. Its just a bandwagon!
Question
Formal criteria for selecting external suppliers are used in about one third of outsourcing decisions. Should formal criteria be used?
Situation
We are all members of the Management team in a large company employing 900 people here in Ireland. There are 18 people employed in the HR Department. Our Chief Executive has been to lunch with a friend who runs another large company employing 1,100 people. The friend has just made a decision to outsource his HR function (including payroll). There are two possibilities for outsourcing – one is with a company here in Ireland and the other is with a company based in Bermuda. The Chief Executive is keen on the idea and has nominated two people to “fulfill his wishes”. Let’s discuss the approach / issues involved here.
Acknowledgements: Questions/statements posed by Michael McCabe (mvmconsult.com)

Wednesday, March 9, 2011

Case: Bank of Ireland Outsourcing 2000-2011

Irish banks have, in the past, outsourced considerable operational activities to third-party providers. Bank of Ireland's multi-year deal with HP followed by the switch to IBM exemplifies one particular case of the benefits and risks of adopting a deep outsourcing strategy in a digital 'information' industry.

(24 February 2003: article-link) BOI license desktop and server software from Microsoft.
(4 April 2003: article-link) BOI announce 7 year deal with HP for IT services worth ~500M, over 500 bank employees to be transferred to HP.
(2 July 2003: article-link) BOI announce multi-million deal for banking software products.
(3 November 2010: article-link) BOI announce 5 year deal with IBM for IT services worth ~500M,