Sunday, October 30, 2011

Reengineering an accounts payable function

Consider the case of approving a loan application. In the manual process, it takes 6 persons and considerable amount of time to accept the details, calculating risks and repayment capabilities and letting the application trail through hands of various functional levels.

But, when we reengineer the above process, the whole process may be converted to a PC based applications handled by a single person who performs the formal dealings with the customer & inputs the details on the computer generated form. All further, calculations and checking & further approval of the loan is made by the computer by checking various records of the customer.

Here, the reengineered business system is process based since all the trailing levels are capsulated into a single person to perform the process. The benefits of reengineered process lies in the customer satisfaction, reduced business process cycle time, reduced manual labor, reduced paper work and reduced number of persons to perform / complete the process.

Thus, BPR has various potential benefits that leads to long term business stability and process refinements. This prompts every business enterprise to go for BPR when it requires to change its business strategies due to changing customer demands, financial crisis, technological changes and business competition.

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Creating Process based Organizations via Reegineering

While reengineering a business enterprise, we create a process based organization structure for the enterprise to avoid the inefficiencies and time wasting business process cycles as in a functions based organization. ie - the business process information systems and the enterprise wide information infrastructure are integrated in such a way that the people of various functions or departments could easily form teams for related activities and project works.

Such a process based system enables faster business process cycles, workflows and data flows that creates a total quality business setup. The business enterprise is now able to produce its products and services faster and with added value to satisfy its customers.

Often, when we reengineer a business enterprise, a process that took 3 days and 6 persons to get completed, will require say only a single person and a PC and say only 2 hrs to finish the process with all formalities satisfying the business rules.

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Basic approaches to Reengineering

The three basic approaches to reengineering are as follows -

1. STREAMLIING

2. INTEGRATING

3. TRANSFORMING 

1. Streamlining - Streamlining approach to reengineering the business offers a basic, segmented, quick-fix methodology for reengineering. It cleans up and treats symptoms but doesn't  necessarily transform a process nor find a cure for a bad process. It doesn't change the way a company conducts its core business nor does it impose whether certain processes should exist at all. For eg: while reengineering an accounts payable process, we may reduce the staffs from the existing number to 7. If we follow a thorough transformation approach, this would require total number of 17 sign offs. The streamlining approach of reengineering the accounts payable process may also increase the level of spending authorization for managers. Another approach would be to translate the current workflow and dataflow via electronic means such as EDI. In essence, the streamlining approach to reengineering is simple, functional and makes operations go faster or better.

2. Integrating - The integrating approach to reengineering integrates discrete business processes, replacing them with a unified process that frequently cut across functions and department responsibilities i.e, it creates a process based organization of workflows within the reengineered process. For eg:, when we reengineer a sample business process that formerly required the functional trailing of workflows among various departments such as accounting, purchasing and warehousing, we re-order the workflows so that the individual functions are closely related by reducing redundancies, cycle-times and unnecessary retention of separate receiving logs and lists of prices. Now, the reengineered process will cut across all the functions and will now require only lesser number of persons and manual labor and lesser process cycle times to perform the tasks. But when we consider the business as a whole, the reengineering by integrating has only changed the accounts payable process, but it doesn't change the way the enterprise produced / manufactured products nor does it directly affect other major functions of the enterprise, but it has a profound influence on the jobs of the people performing the accounts payable process.

3. Transforming - Transforming approach to reengineering transforms the company as a whole. When such an organizational transformation is carried out, the projects should get complete commitment and sponsorship from the top management and support from the working staff. New strategies, policies, objectives and plans will have to be devised to effect the complete transformation. The enterprise shall search for the appropriate technology and workflows to setup the transformed system. The company shall benchmark its existing system with that of another similar company which has already applied reengineering in its system. The company shall seek help from IT consultants to bring in the right infrastructure and IT solutions.

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Friday, October 28, 2011

Basic steps in Business Process Reengineering

We can generalize Business Process Reengineering (BPR) efforts as an eight step process as follow -

Step 1: Formulate / Modify business visions, policies, objectives

Step 2: Formulate / Modify business strategies according to changing customer requirements, technology changes and competition

Step 3: Analyze the existing business process cycles & workflows and determine how they may be modified or refined

Step 4: Apply IT to setup an optimal Business Information Management Architecture (BIMA) to support the reengineered business process

Step 5: Modify or redesign the existing processes according to the reengineering strategies and develop refined Business Process Automation Systems (BPAS)

Step 6: Apply IT strategies to map BIMA onto an Enterprise Information Management System (EIMS) that is integrated across the enterprise and that fits into and supports the reengineered Business process cycles and workflows.

Step 7: Integrate the EIMS with the BPAS to build up the completed reengineered  business system

Step 8: Repeat steps 1-7 for continuous BPR due to changing customer demands, technology changes and business strategies, which leads to business stability

Since information management is a key factor in BPR, the BPR efforts are enabled & supported by a variety of IT solutions.

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What is Re-engineering? Why companies are doing re-engineering?

Re-engineering or Business Process Re-engineering (BPR) is way of rethinking or redesigning the existing business systems both in technical and behavioral terms. The ultimate goal of BPR is to continuously improve the business process cycles so that a total quality is built to the business system, its processes & workflows that reflects as high quality products & services produced by the enterprise. As quality products and services are provided by the enterprise for its customers, customers are able to gain value for the products and services that they buy. This improves customer satisfaction and customer orders. This further improves cash flows and easy realization of business profits and gains.

Now, since BPR leads to continuous business process improvements, the business process cycles and workflows are continuously refined according to changing strategies, technologies and customer demands. This ultimately leads to business stability in the competitive industry / business environment. Since every enterprise is striving for business stability, everyone is going for BPR.

BPR involves considering everything from business strategies to processes to organization structures to management systems (people, machine, money, information) to values & beliefs of the enterprise that undergoes BPR.

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Sunday, October 16, 2011

Lack of Risk Management and an affected project



A classic example would be the project my company executed before the formal PM processes were implemented. The project's core requirement was to generate reporting system for Medical Underwriting process. There was no Risk Planning for sure, otherwise the company would not have gone through two major design changes and the most worse cases of intra/inter department coordination and communication which was crucial for the success of the project.

There were two major risks that should have been identified early and risk responses planned therefore.

      1. The reporting system was initially based on an existing data processing system that they found not adequate anymore for meeting the targeted needs. This issue was identified later after the BRD was laid out and there was little time to analyze and design a new data processing module to facilitate Medical underwriting. The strict deadlines lead to design of a quick and dirty data processing model. This would mean some critical changes to the normal work flow of the end users and was done without consulting the end users. No alternate designs were thought of and no risk was analyzed towards the effectiveness of the new design towards supporting the reporting requirements and that of usability.

      The effect was that there were numerous issues that the development team had to deal with in order to make the new design sink with the reporting system. This incurred extra cost and development time. The user came up with usability issues because she didn't expect these changes from the normal work flow and wanted to make further modifications, which again affected project deadline.

      2. The introduction of the new data processing system created new risks associated with extra coordination and communication between departments and between project team and the department leads. This situation was never addressed during the initial project phases and lead to severe penalties in terms of user dissatisfaction, missed project deadlines and eleventh hour code modifications.

How things would be done now?

      This was the last project that I was a part before the new PM processes were implemented. So, if this project was executed now, I guess the requirements would be freezed before system design starts, risks related to each project activity would be analyzed and appropriate modifications would be made in the project schedule to account for risk response plan and contingency resources.

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Managing the Managers - Showing importance of Risk Management

Suppose you called a meeting with your project team, various experts and the stakeholders, to start the risk planning process. One of the senior people asks, “Why are we doing this, anyway? It’s your job to deliver this project -- are you saying that the project is already in danger of going down the tubes?” How would you respond?


If the organization is following formal PM processes, it would be easy to respond that it is the part of the formal Risk Management which is required to avoid any project failures, and the resistance would be minimum. If the organization is not following any formal PM processes, the resistance would be more and I would tackle the situation by following response/s.

     1. I would say that uncertain events that may pose negative threat to the project might lead to project failure and thus financial loss and loss of reputation.
     2. I would stress on the importance of assessing all possible risks to the project and listing them down along with their response plans, so that the project team is better prepared to tackle them with least time, effort and cost.
     3. Based on data available on previous projects and industry data, I would create a decision tree that would show the EMV for the project option which doesn't use Risk Management and for the project option that used Risk Management. This would have more impact on the top management as they have some quantitative data in front of them.
I am attaching a sample decision tree that I prepared to present a quantitative analysis of the situation. The decision tree shows the EMV of the possible outcomes and thus the best action to undertake.

Decision Tree


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Decision Tree / Expected Monetary Value model for risk analysis




EMV is a statistical concept (with a defined formula) which calculates average outcome when there is uncertainty in the final outcome (more than one possible outcome), where as Decision Tree model is an enabling analysis tool to represent the available decision choices as decision tree with their monetary value and probability of occurrence. So I guess both needs to be used together in situations where we perform Quantitative Risk analysis to decide which option/decision to pursue.

One of the major benefits that I see is that it will aid in initial project selection phase when you have multiple projects on the list which has very high profits. Through EMV based Decision tree analysis, we would be able to select projects that gives highest EMV. Since it is based on expert judgment, it can be totally skewed without taking into consideration of any external factors. Another drawback is that it doesn't take into consideration the risk tolerances of stakeholders which is a major decision factor when you decide on something. Also, if the number of alternatives increase, it would be difficult to follow the tree and validate.

I am not an expert user, but I think I understand its usage and would definitely use it if I have to do decision analysis of possible outcomes, provided, I have the monetary values and probability distribution values for each options.

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Project size driving Project risk



Project size and Project Risk: Another interesting topic in Project Management world. From my experience with software development, I think that project risk increases with the size of the project (I guess the size of the product would be directly proportional to the project size). Here is the reason -

Consider that software product consists of 25 modules. The following is a fact -

1. Not all risk associated with a software module or functionality is identified by even very efficient Risk Analysis methods.
2. Presence of residual risks
3. Presence of secondary risks

Given above situation, if we increase the software size, by say, 25 modules (totaling up to 50), the risk would be doubled. In other words, project risk is directly proportional to project size.

The various aspects of project size (software projects that I am familiar with) that drives project's risks are size of the software product in terms of programs, modules, interfaces, db transactions etc, number of database tables/databases, number of users who would use the software, project scope changes and project communication.

Is it possible to have a large project with low risk of failure?

Yes, absolutely - A large project can have low risk of failure, provided we use efficient Risk Management techniques.

I have been part of a few software development projects, which were quite large in size and were successful. Example would be the E-Governance project (I have been citing this project (http://www.maharashtra.gov.in/) in many of postings in order to correlate and understand various subject matter) that I have handled in my previous job. The project size was quite big encompassing the official government website and related applications, in-house content management solution and about 8 different intranet applications which is used by over 7000 employees every day. The total project phases took 2 years to implement and test run the system. The project was successfully implemented and risks were managed effectively to the point that state government won the national golden award for best e-Governance initiatives (http://www.maharashtra.gov.in/award/goiAward.php). The user (state government) still sees the project as one of its major success and traces it back to the success of the project team (software company and in-house players).

Is it possible to have a small project with high risk of failure?

Yes, absolutely - A small project can have high risk of failure if there are project risks un-handled.

Consider the case of a project which has scarce expert resources. If the company doesn't pay attention to appropriate employee retention policies and if they do not plan risk response and contingency resources in case any of these employees switches company, this would open avenue for project failure.

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Addressing risk due to interpersonal issues and incorrect project communication

Interesting question as I wonder this situation (Risk of failure due to interpersonal issues) is often less addressed anywhere. I shall address the situation using formal approach.

Definition of Risk and symptoms: I would consider that the Risk (Project failure due to interpersonal issues within the team or between the team and other stakeholders) is already identified and is listed in the Project Risk register. Next step would be to define the risk and its symptoms i.e when can I say that the project is at risk due to interpersonal issues. The Risk Register would contain the following information to to describe the risk and its symptoms -

Risk Definition : Failure of project due to interpersonal issues within the team or between team and other stakeholders.

Root cause/s : Poor Project Communication stemming out from lack of good interpersonal skills

 Risk symptoms : Some of the major symptoms would be -

        Uncertainty in project status reporting - Interpersonal issues may lead to lack of reporting of project status within the team and to the top management at the required time periods and in the correct format. This would lead to difficulty in tracking project status and performance.

       Project Delays - Inefficient means of interpersonal skills leads to lack of communication (introduces greater noise level) within the team and between team and stakeholders (top management, customers, team lead). This would lead to increase in work trails and activities that leads to schedule overrun and delays.

        Increased bug level - Interpersonal issues within the team would lead to inefficient team communication and understanding of system requirements and design. The team member might hit bugs (according to the team lead) very often.

        Complaints from unsatisfied customer. - An example situation might be when a team member pays little attention to the customer when he called in to express some concerns with the new version of prototype (especially in agile or extreme programming development environment).

Risk Response:

      Risk Response strategy: I would recommend 'Avoid' strategy to address this risk. We assume that the Risk Identification is done during project planning phase and from past project experience. 

      Specific Action to implement Risk strategy (Risk response): Create effective communication plan, give adequate interpersonal training to the team members and stakeholders and apply effective motivation within the team so that synergy is increased and interpersonal activities are most vibrant. These actions should be taken prior to project start and throughout the project execution so that the risk is avoided.

     Fall back action if specific action fails : If Avoid strategy fails, PM should have a fall back plan to address the issue when the above symptoms show up. One major step would be to address the main constraint resource/s, make them aware of the situation and give them notice to correct their actions. If the resources doesn't change their ways, PM should also define contingent resources of time and cost available to replace the constraint resource.

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Team Building/Motivation practices

What kind of team-building exercises and/or motivational practices have you used, or participated in? Would you recommend them for use by others? Have you been involved in a project that did not use such an activity or practice, but could have benefited from it?

 

Team building experience: The crux of all the team building methods are essentially the same - understand human psychology (tolerance, outlook of life, perseverance, thinking process, honesty etc) and then tune activities and processes that leads to synergy and success. I see that none of the methods does not mention a practical test/exercise that would be used as a tool to build a team according to that approach.

Let me mention a very informal way of team building during my initial training stages with my one of my previous employer. We were all freshers, selected as System Developers for this company and were invited for a socializing party before our training sessions. We were supposed to meet each employee (no matter which department), introduce ourselves and socialize. Later, I learned that the team leads and the HR guys were actually rating each of us based on our interpersonal and socializing skills. The way they structured the project teams for the upcoming projects could be seen as an exact reflection of what I noticed. Effective Team leads (and PMs) used the MBTI way to select team members for their projects. I would recommend this for onsite project teams.

Lack of Motivation - an example: There are various instances in my career, where I feel the project could have benefited from the more formal practices of team member motivation. Although I am pretty sure that these practices would have been applied indirectly as these are the basic human approaches to organize and resolve conflicts. In one of my past projects, I was assigned to lead a maintenance project of managing and enhancing the E-governance applications for a state in India. The project resources were allocated according to their professional degrees and were expecting more career growth in the long run. The company didn't realize this need and was not able to satisfy their thirst to advance their careers. The company should have conducted team sessions to assess individual needs to self actualization and growth. Project resources could have been rotated so that the original resources be given more challenging projects assignments. They could have been exposed to professional training according to their technical/business tastes. None of these happened and at the close of 2 years, half of the team left the company.

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Sample Software Quality Issue



One of the major Software Quality issue that I experienced is with product xyz which my current employer deployed as the Version control and Change control system (SCCM). xyz is one of the major players (not the top performer) which offers composite package of Version control and Software Change Control management (SCCM). Our company was lured into its usage based on the current requirements to establish formal PM processes and integrated business process framework. Even though the deployment found to be exciting to me in the beginning, there are (yes these quality issues are still getting fixed) three major quality issues that affected the entire development team (including me) - Usability, Correctness and Availability.

Usability: The software is a full blown out version of an SCCM. Even though version control is also built in, it was totally different from the current CVS that we were using. Many features were new to the current team and was incompatible with the current working procedures. Balanced approach was taken to change the current procedures and to customize the software features. The customization work didn't go well since many of the changes suggested were too difficult to be incorporated to improve usability, especially the version control aspect. So, the team was left with almost the original product with some minor modifications. The net effect of the quality issue was decrease in the level of productivity, when many of the features didn't seem to fit well with the current work procedures and user reluctance to use the product.

Correctness: The hasty customization work lead to several defects related to display (incorrect grouping of requests in user in-box, incorrect pedigree display etc) and file deployment to the servers (file corruption, incorrect versions deployed). The cycle of change requests to fix the bugs was initiated and this incurred wastage of time and effort.

Availability: The product is Java based and requires client side installation which has huge memory requirements to start and run. Sometimes, toward the end of the day, the development PC had to be restarted for releasing the memory. The product had also issues with clearing out resource contention and deadlocks, which literally wanted the server to be rebooted every alternate days. The net effect was that the application was least available during critical times of work process and created much user resentment in using the system. Recently, the company fired the contract person (poor guy) who was managing the product deployment and maintenance, to account for the losses and poor performance.

What could have been done?
      I guess, all of the above mentioned quality issues could have been effectively handled by just focusing on what the users actually wanted while customizing the product (user involvement) and ensuring that the users formally approved/signed off/tested for quality, the final customized software product. The quality issue could have been effectively handled if more time was allocated to initial customization and user training. In our case, it was just about a month, which I would say would be sufficient for only the analysis part.

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Quality considerations for software projects

Define one or two aspects of IT product quality that should be considered when planning software project activities. How can they be measured? What are the foreseeable consequences of poor quality from your example(s)? How can the negative consequences be avoided?

 


Interesting question. Some of the most important software quality aspects are - Scope aspect of quality that points to requirement analysis issues, Usability (extensive training required and slow response times), Correctness (defects, 1 in 5 transactions) and Integrity aspect of IT product quality that is related to privacy and security.

Since above metrics of quaity surrounding 'Correctness' metric of IT product quality is very always discussed and trivial, I shall focus on two other commonly used metrics for software quality namely - Maintainability and Availability.

Maintainability: Maintainability refers to the degree in which software can be modified to correct an error or adapted if the operating platform is changed or enhanced when the user requirement changes. The most common method to measure maintainability is to calculate the mean time to change (MTTC) which is the total time required to analyze a change request (defect, enhancement), design and implement the required change, conduct testing and deliver the change to users. Highly maintainable software products have minimum MTTC and have high quality as far as maintainability is concerned. The major consequence for a software product that is built less maintainable is that it leads to more time, effort and cost to implement a change. Consider the case of Linux kernel - it is built collaboratively through open source communities and is highly maintainable. Aspects such as object oriented programming, constant community support and the free source code makes the software easily maintainable when a change is required.

Availability:Availability is defined as the probability that the software is operating fine as per requirements at any given point of time. Software Consider the case of pace maker chipset. The chipset programming should be 100% available to save the life of the person who uses it. Poor availability can endanger life. Software availability can be increased by reducing the defects to minimum.

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Quality Program in a typical organization

What quality programs, formal or informal, have you experienced in your work? How well do you feel they were implemented? What was the level of management involvement? If you have not experienced working in such an environment, what would you look for to determine whether a company’s quality program was working?

 
I have had experience with 2 quality programs as part of my career in the IT industry.

ISO 9001 implementation (a marketing tool): I was exposed to this Quality program while working with my previous employer. I had chance to be a part of program implementation and see it in action for the forthcoming projects. The company was into software services for share markets and insurance sector. The company also had capabilities to act as the prime data provider of financial data of companies. The company wanted to diversify its growth into foreign markets. ISO 9001 certification was a marketing strategy.

The CEO had good relations with the KPMG group and he bought in consultants for an initial audit. The greatest impact was (something I still remember as black Mondays) firing of employees on Mondays which lasted for 2 months - about 25 employees were fired (total employee size was around 150). The top management (including project managers) were very keen to implement the program somehow to gain marketing power. As a developer, I was exposed to quality audits, which was done every week to make sure that each phase of program was implemented successfully. As I remember, all such audits were just to confirm to the KPMG guidelines and pass the audit and get the certification. The PMs and top management were also keen to make it happen, since they could earn certification in ISO 9001 implementation.

So, I think, it was not targeted to instill quality framework into organizational culture, but as a pure marketing tool. There was obviously total change in the day to day working procedure, but I still do not think there was any effect on continuous process improvement within the company. One major setback for the company was that some of the reliable PMs and top management people moved to other companies with the certification that they earned (it was truly a personal marketing strategy for them too). The company was not able to realize its set goals (getting more projects overseas) and the whole program has already incurred a huge amount for the investors and they stopped capital flow. The company was in a real bad shape by now. The CEO asked all top earning officials to resign and had to move office to a smaller square footage.

Six Sigma (blended with the tailor made PM process): Another employer uses Six Sigma methodology as the base for its in-house PM and SDLC process. The methodology was identified by the PMO director who has vast experience with working on various process improvement models. It was only recently that the PMO was created and the tailor made process methodology is put into practice. I guess, the reason for opting Six Sigma might be company's reliance on statistical analysis (health insurance sector) and its attention to continuous process improvement and BPR (introduction of new products that points to process redesign).

I have just started working on the new methodology (mostly SDLC specific stages, since I am in the development team) and I have a lot to learn in the long run to fully understand and appreciate how this methodology actually leads to creating quality in organization's work culture. From the projects that I am a part of so far, I can see exceptional improvements in the overall PM phases (since all process are defined and controlled by formal PM processes) in terms of planning, tracking and controlling quality.

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Finding root cause of unsatisfactory Earned Value measurements

Describe how you would go about finding the root cause of unsatisfactory Earned Value measurements on a project, and what measures you might take to bring the project back into plan. Please be specific. Let’s say that two members of the team, working on unrelated tasks, have both run significantly over schedule in the same reporting period. One of them is working on a critical path task; the other is not. What do you look for? What questions do you ask? What might you do?

 


I shall post my answer considering the fact that we are concerned with schedule variance only (not cost). First of all, I think EVM considers all activities as whole (to give complete project performance) and does not consider critical path activities separately. So the situation is little tricky. This calls for calculation of Schedule Performance Indicator specifically for the critical path and special consideration for the critical task. This doesn't not mean that we need to forget the non-critical task - it has to be kept on track too. Bottom line - both tasks needs to be managed appropriately.

What do you look for? What do you ask?
Say, we are at 7th month of a 1 year project. First thing I would look for is to collect data from the Project Schedule to identify Earned Value (EV), Planned Value (PV) and schedule performance indicator (SPI) values for those two tasks separately. Questions asked would be -

1. How much work is actually done?
2. What was the planned value for the task for that reporting period?
3. How much work was supposed to be done?
4. What was the reason for negative schedule variance factor? Scope Change/Resource scarcity/Idleness/resource bottleneck or others?

What might you do?

Using the data arrived, I would draw separate EV charts that plots EV and PV values until month 7.

Managing Critical path task - The EV chart would give me the schedule variance. Say, it is 2 weeks for the critical task. I would look out if there was a total float/total slack allowed on the task. If yes, and if it is 2 weeks, then I would adjust the Project schedule accordingly. If there is none, I would look out for identifying total slack of any succeeding tasks and try to find if 2 week can be adjusted. If not, then I would have 3 options

1. Allocate more resources to the task and any succeeding tasks in the critical path so that the scheduled project finish date if met. (increase cost)
2. Negotiate with top management to reduce scope (reduce scope)
3. Negotiate with top project sponsors to allow for 2 weeks lag (increase time)
I would choose option 1 considering my commitment to the project and given that the sponsors didn't accept options 1 or 2. Executing tasks in parallel is not a good option due the inherent risks that it might bring in toward schedule performance. Putting more money on resources will have to be justified as trade off to time and scope.

Managing Other task -
The only difference in managing this task would be the way I would look out for adjusting slack/float time. I might not really do such an adjustment, as there is no impact on the critical path. I would rather do research on answers to question 4 and try to identify the constraint that is delaying the task. I would then use the same analogy as with the 3 options (as above) to fix the negative schedule variance.

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Time reporting for technology professionals?

How do you feel about the concept of such time accounting for technology professionals? (e.g. compared to just reporting progress via e-mail or a progress reporting form.)

 

I guess, this is one the easiest ways to track actual cost/effort estimates for any IT project, so best suited for IT professionals. Reporting progress via email or progress report form doesn't necessarily do any cost/schedule performance monitoring. What is important here is the tracking of actual hours worked which can be consolidated and multiplied by the hourly rates to arrive at actual costs and then linking it to performance evaluations systems.

Another personal advantage of such systems is that it helps to keep track of the tasks which you performed and is a readymade tool to show your manager what you did for a particular time period.

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Need for better time reporting systems


System Background (circumstances):Most of the employers uses a web based time logging application that falls into the category of time attendance systems that we are addressing in this discussion. The goal of the system is to track employee hours spend during a working day under various project heads. The idea is that the top management should be able to see the actual hours put by employee for assigned project tasks. Doing this, will enable them to track project performance based on comparison of planned and actual hours worked. The data is also used for calculating actual costs and variety of expense reports.

How does the system function?Company has broken down the projects under various portfolio (capex, BAS(business as usual), strategic projects, internal project etc). Each portfolio is further broken up into individual projects with specific ids. Each project is then broken up into specific PM phases. So, when we are working on a project B and C, we are required to log on to timesite and enter the hours worked and details of work done for each project task ids, at the end of the day, each day. So by the end of the month (or any time), the top management can log in and see how many actual hours have been put for those 2 projects. Many companies uses this kind of system to calcualte actual costs and is thus used for cost performance monitoring and control. Work is going on to integrate timesite with our project task tracking system to arrive at actual effort estimations.

How well did it work, both technically and organizationally?Most of the companies seem to be quite satisfied with its performance towards cost performance monitoring and control. I, personally believe that the time reporting systems are in a growing stage. Several integrations need to be done to fully do automated earned value calculations and performance monitoring. Its not widely accepted organizationally since employees complain of too much time spend on tracking hours, but its being made a requirement for each employee due to its linkage to direct client billing systems and expense reporting. According to me, it is a nice strategy towards better project management.

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Schedule Compression - Scenario#2



I guess, since we have lesser amount of time left (6 weeks as opposed to 1 year), I would certainly let the sponsor know that we need to utilize 'Crashing' method to compress the schedule and would make sure that the sponsor is willing to put in money for extra resources to do the remaining activities in the critical path. 'Fast tracking' method might not be useful since only little time is left to assess risks and feasibility of doing activities in parallel.

Based on agreement from the sponsor to invest money on additional resources, I would prepare a resource break down structure for the rest of the activities on critical path for immediate hiring of required personnel. To determine resource allocation required, I might use MS Project schedule and just adjust the timing on the remaining activities and identify the extra resource requirement based on resource overload.

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Schedule Compression Determination

If you were managing a software development project that was a year away from completion and the project sponsor asked you to cut a month from the schedule, what would you tell him or her? What factors would you consider? How would you determine an answer?


I would warn him about increased cost in terms of resources/extra work and ask him if all the stakeholders are willing to do a trade off in cost/risk to cut the time down. If he agrees to this point, I would give him a date on which I can give him a detailed explanation of what I am proposing to cut the time down and the revised schedule for consideration.

There are two options which I would consider - Crashing or Fast Tracking - to perform the Schedule Compression. I would consider the following factors to do the homework -

1. Identify the critical path and find where I can apply more resources to get more work done in lesser time, so that total time on critical path is reduced

2. Identify parallel activities that can be executed at the same time.

3. Identify other important activities that takes more time and which are not there in the critical path.

I would determine which method I would use to perform schedule compression as follows -

1. If I find that there are activities in the critical path or other time consuming activities which can be assigned to more resources, I would list them down and determine revised resource allocation, revised critical path, amount of time reduced and extra cost required to maitain new resources and work coordination.

2. I would also list down activities that can be done in parallel, inherent risk on the the total project while executing activities in parallel, and extra cost involved to execute and coordinate parallel activities and total reduction in time.

3. From step 1 and step 2, I would determine which one gives me lowest cost/risk and highest reduction in overall time. If step 1 satisfies this condition, I would suggest Crashing or else I would suggest Fast Tracking. Which ever method I select, I would prepare revised project schedule and compile written procedure to follow for performing the opted method of schedule compression. For example - how many resources to be hired to be allocated for a particular task or which all activities can be executed in parallel and how.

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Importance of formal project planning



One of the projects that I executed for one of my employers was an internal employee goal tracking system. The system enables employees from CEO to bottom level, enter their goals supporting their superior's goals. According to user levels, there is ability to view/edit/approve/reject goals and there are mechanisms to conduct performance management. This project was a pet project of one of the VPs and he wanted to get it done as soon as possible bypassing all SDLC and PM phases. There was no proper planning as how to conduct requirement analysis, whether to use the existing user hierarchies in LDAP or create hierarchy on the fly, when should the system be implemented, when should the system testing start, how many people should work on the project and whether to use ajax based web development or normal html form based.

This project came in with very vague requirements and tight deadlines to complete design, coding and testing. Since this was an internal project (not for a client or strategic applications/products), no effort was made to follow formal process and I was told to bypass it. The priorities kept on changing due to shifts in management positions and due to changing system requirements. The project trailed along due to lack of effective planning as to what needs to be done towards implementing and integrating the system. There was constant schedule conflicts when one activity deliberately crossed over another (eg. Database design phase was interrupted when complete working prototype was required). The system was designed, developed and implemented without meeting the expected deadlines and went into UAT. The funny thing is that the system still awaits testing due to conflicts in management levels regarding the extra work that the system brings in.

The project would have greatly benefited from formal planning process and scheduled development. Project activities could have been clearly identified and sequenced. Well defined project plan could have reduced the uncertainty and could have lead to more realistic resource allocations and milestones. Appropriate means to manage schedule adjustments, especially schedule compression by Fast Tracking could have been beneficial.

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Importance of following well-integrated change control process (CCP) on IT projects

Change in IT projects' life cycle is inevitable. This points at the importance of establishing means to identify, control and document change in a formal approach. There will be changes in Technology, resources and organizational priorities. Equally important is change requests that initiates from the customer/user. In my experience with software development, these change requests comes in the form of additional features/functionalities, enhancements requests or bugs reported. In my current workplace, such change requests are very crucial since the products developed are very customer oriented. The need for an integrated change control system is very crucial in this case due to quick expected turn around times.

    Added complexity is to manage change when changes happen (more than once) during the various phases of requirements analysis, design, coding, testing and post deployment - Questions asked could be : How do you manage change to code that already went to production system? How do you track the life cycle of a change request, since a change request usually lead to a sub-project for applying that change? How do you report status on these change requests to the stakeholders? What roles each project team member should play while dealing with various phases of change control process ? How well can we improve response times to change requests by using automated Change control systems? How do you integrate Version control system with the Change control system? and so on ...

    All these questions points at importance of creating an integrated CCP whose motto is simple - identify, request, recommend alternative, approve/reject changes so that each phase is well tracked and in synch. with the version control system and that all change action status is reported to the stakeholders.

Additional suggestions for ICCP: However I may add that the CCB (Change Control Board)'s frequency of meetings will depend upon the organization's code release cycle policy. For eg: If the organization releases only one code change per quarter, then there is only need to have one CCB meeting per quarter (there are companies who still do this in the insurance sector). Whereas, in the case of a budding web-based application which is very customer oriented and uses prototype based development, then it is advisable to have at least 2 CCB meetings per week (so that code changes get promoted to production twice a week). Many companies follow this policy so that customer oriented change requests are well taken care of.

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Saturday, October 15, 2011

When a tech person is promoted to Project Management position - Gotchas and how to avoid it

Scenario: Nicek is a senior technical leader and got a recent promotion as Project Manager, but was not given appropriate training in PM process. Below is what happened and some advice to avoid the gotchas.


I think, the main problem in the case was the lack of PM focus in company's work culture. There was no explicit PM process or process methodology followed. Looks like the company liked the idea of cost cutting by making people to do multiple roles without clearly defining their roles and without appropriate motivation and compensation. Nicek's role was no different. He was assigned the PM, but was never communicated of the PM process that he need to follow to satisfy the management. He was expected to create a 'quick and dirty' solution, which he did (within time and cost).

There was lack of secured communication channels. The new PM sends a confidential info. by email and it ends up in disaster.  Nicek became a scapegoat of the eroded PM work culture in the company.

Now, if you ask whether Nicek was a good PM, I would say no - because he lacked experience. This was his first assignment as a PM, and he definitely needed training and catch up on his PM skills. He should have tried to approach the management to seek out what are his roles and responsibilities as a PM and what exactly the upper management expected from him.

The senior management should have focused on better employee training when they promote people from technical ladder to PM level. They should have established minimum PM processes which is well communicated to the Project Managers. PM process should control and coordinate the product development process, not the other way round.

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Samlple WBS (Work BreakDown Structure)

Below is a sample work breakdown structure for an online attendance management system that I worked on in the past -

WBS

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Sample Scope Change during a project and its impacts



Project background: Developer xyz was in the middle of a project that went several scope changes while in UAT. The project is about implementing capability in the current Underwriting software to do pre-issue Medical Underwriting. The project was initiated by client request to modify the software to account for some new insurance product feature. The system was developed according the initial system design which was based on the BRD signed by user.

What caused scope change UAT testing was scheduled one month ago and is done by the Underwriting specialist who is very demanding and an excellent tester. While testing, she started coming up with new scenarios which was not supported by the processing and reporting modules of the system. eg: the system was designed for to underwrite an employee for a single coverage belonging to a specified group of carriers and product types. During testing, she pointed that sometimes, there would be requirement to underwrite a life coverage for the employee and supplemental dependent coverage for the spouse, at the same time to account to for some GI (guaranteed issue) calculations. The new system supported underwriting of one individual at a time, first employee and then spouse. This requirement was not recorded initially since she was not invited during the JAD. If she would have, then this point would have raised and would have included in scope and thus the BRD.

Effect on Project's conduct and outcomeThe effect was that the situation called for a major design change, that ended in 2 week of extra coding. The project missed its deadline and was allowed extra 5 weeks to account for fixing and testing. The incurred extra cost for the company in terms of time and resources.

Lesson Learned: Involve the end user upfront in the JAD sessions and make sure that he/she signs off the scope.

Mind Mapping technique to prepare WBS



I would prefer the mind mapping technique to arrive at WBS (work break down structure), due to my liking for problem solving by visualization and modeling techniques. Another reason to like that technique is that it is very much similar to various modeling tools that we use during the System Analysis phase of product development and I have been closely working in this area. I would compare mind mapping method of creating WBS to preparing a context diagram. Just like a context diagram forms the basis for the high level and detail level data flows, a mind map forms the basis for high level and detailed level tasks. One great advantage of mind mapping model is that they account for easy translation to structure and plan since they work similar to translating our thoughts into sensible actions.

I haven't personally used mind mapping since I haven't prepared an official WBS on any project. However I sometimes use mind mapping technique for my own scheduling.

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Sample Project Management problem resolution



Project description: Project for xyz that included development, maintenance and enhancements to the official web site and web-based intranet applications that supported integrated work flows within various departments. I was leading a team of  team members including developers, web-designer and Mr X.

Communication Issue: During my tenure leading the project, I have encountered situations where I had to study and resolve conflicts that arise from communication issues. There was this team member X, who was very zealous and enthusiast about the job that he does. He was so multifaceted that he was put into parallel tasks such as HTML web page design, customer support and user training. Lately, there were many issues that came up since Mr. X was very aggressive while dealing with people at the client departments, where he was supposed to communicate politely and more responsive to user questions and call for support. This caused severe conflicts and constraints in project progress. There was constant delays in User acceptance tests (UAT) and final user approvals before the product can be delivered and deployed. All in all, this trailed the project hours, increased the operational expenses to work extra hours and delayed the project turnaround time.

How it could be resolved: I would like to use the 'Confrontation' method to resolve the issue, which would target at problem resolution and creating a win-win situation for Mr X., project and the project stakeholders. I would see how I could utilize Mr. X's skills more efficiently in some other area and fill his position with a cheaper resource who will just do UATs and trainings and who can be more patient and understanding while doing the UATs and training. This way, I can satisfy his desire to be aggressive, at the same time offer a solution for the users who expect patience and understanding. We would offer Mr. X a position in project sales team where he has chance to utilize his aggressive nature and his communication skills. This new arrangement of task activities among Mr. X and the new hire will have profound impacts on the project turn around time. The ultimate effect would be - satisfied Mr X. and happy users - thus less conflicts and least project delays.

Note: Actually, this is what happened in real time. I didn't know what kind of formal conflict resolution I was using to solve the communication issue. But, now I know. Another big indirect impact of applying this conflict resolution was that Mr X., now working in sales team, started bringing in new projects utilizing his sales skills, which was rather unnoticed.

Sample PM day to day work

Project Management skill is very important in information management area. Let me paint a historical (early 2000) projet lead role where I was responsible for managing the E-governance project for the state of Maharashtra, India. Let me frankly state that, we had no defined project management process in place that adheres to PMBOK guidelines. The project processes and phases were more attached to the product development process itself. My schedule of work for a typical small sized project can be broken down as follows -

Project initiation and planning: This doesn't happen every time. Depends on the availability of projects. On an average, the company used to get 1 medium sized project a year and 2-3 small sized projects (system enhancements, system integration etc) every year. Project initiation phase involves very informal meeting between the State IT director and other officials of respective state departments to discuss about the need to create a project to solve a problem. For eg: one such project was Online attendance management system, where, goal was to integrate swipe card data into intranet wide website to display attendance information of over 7000 employees. Project initiation involved preparation of government tender calling for competency in building such a system. Since our company had already built sufficient confidence among the project sponsors, the project selection process identified our company as the supplier. I used to spent at least 4-5 hours of meetings per day (for 3 weeks) with the department heads and the other vendor who was dealing with swipe card system. I prepared the initial project proposal that contained the project scope, WBS, resource estimates, cost estimates, and initial project plan. Later, project contract was signed on acceptance of base cost estimates and resource/time schedules.

Execution: During execution phase, my role was to develop detailed system specifications such as BRD, SRS and testing plans. Once that was done, it was handed over to the team of designers and developers who will then build and test the system. During this phase, I used to spent 2-3 hours (for 1 month and half) a day on generating specs and allocating work.

Controlling and monitoring: It was my responsibility to see that the requirements are completely satisfied by the specs and that the team develops an integrated system that would meet the goal of making the attendance information transparent across the state departments' intranet. I used to conduct weekly heads up meeting on Wednesdays to know project progress and address any team building issues. The client wanted quick turn around time and we were using prototype based development. Since our team was working directly from client's side (State IT dept.), the whole process of user interaction and system testing was user driven, means - the user was very demanding. My rest of the day's hours - about 4-5 hours (for 2 months) was spent on this process. This process was going on throughout the product life cycle . i.e from project initiation to project closure. The only project documents that were generated during this phase was the daily and weekly project status reports, which I need to send to company headquarters.

Project Closure: Project closure involves final user acceptance testing and user sign off on each particular feature as defined on the BRD. There is a period of 2 weeks of successful production run, after which the project sign off document is signed. My involvement during this phase was 1-2 hours per day (final 3 weeks).

A rough estimate, thus for the 2 month project phase (for the above mentioned small sized project), can be roughly broken down as -
Project Initiation and planning : 75 hrs
Execution : 105 hrs
Controlling and Monitoring : 225 hrs
Project closure : 30 hrs

Information Architecture for a web site - Sample Web site Concept Draft

XYZ Company Web Site Concept Draft


“Becoming industry’s premier outsourcing solution for managed care services”

Overview


For the past decade, xyz.coom (fictitious) has been the major online presence for XYZ Company for serving the online needs of its customers as well as exhibiting its capabilities and services to the industry. XYZ Company’s core strategy is to continue generating revenues from its outsourcing services in the managed care industry, at the same time provide improved services to its customers for their retention. A project on IA strategy was undertaken to look at the existing web site, analyze its current features and functionality, conduct IA research to understand the business context and content requirements, conduct usability testing to identify critical areas of improvement and arrive at a detailed IA strategy which would recommend the targeted information architecture for the improved web site. This article highlights two major strategic points based on which various modifications/changes would be suggested to the existing website.

Key strategic points


 
IA research has lead to the identification of two major strategic points based on which improvements may be made on the existing website in order to align the site functionality with the business context, content needs and user needs as well as leading to best user experience. Focus is also laid on how overall site services would be improved, leading to effective marketing of XYZ Company’s services. The key strategic points are listed as below –

1. Effective marketing of XYZ Company as the premier outsourcing solution for managed care services
2. Retain existing customers by improved site functionality, thus continue generating revenue
Described in the following sections are the details of what needs to be done to support each strategic point.

1. Effective marketing of XYZ Company as the premier outsourcing solution for managed
care services


 
The following are the major areas of improvements that could be made to support this strategic point –

1.1. Improvements to the Home Page


Home page is the face of the web site, which determines whether users would be attracted and retained to seek and search information and utilize the site services. The
current home page calls for various improvements as far as content organization, labeling and navigation is concerned.
The Home page should give a holistic view of all the available information and services that the site has to offer, thus enabling the user to easily seek and search for
required information. The current home page has a major drawback that the companyspecific content groups are available inside the ‘About Us’ page. Other content groups such as ‘Contact Us’, ‘Glossary’ is not visible on the first load of the page. Even though we have the links to specific user groups, it is not self-evident what kind of service that a user can expect from each of them.

The home page could be modified in terms of re-organizing the content items into related groups, naming them with clear and precise labels and placing them in visually
identifiable positions to attract attention of users. The following specific improvements are recommended –
 

1.1.1. Company Logo and tagline

 
One major step would be to extend the page width with a much more brighter company logo with the tagline. The current tagline is vague, as it does not cover the
complete industry that XYZ Company covers. It might be modified as ‘Providing premier managed care services for 3 million customers’. Tagline is very important to create ata-glance view of XYZ Company intended industry and services.
1.1.2. Content Re-organization, labeling and navigation


Effective content organization is vital to site usability and reaching out effectively to the vast customer base. Following improvements are recommended to effectively
market XYZ Company’s services and capabilities.
1.1.2.1. Organize content hierarchically into following groups and sub groups


o ‘Home’
o ‘About Us’
Mission
Value Proposition
Clients
Company History
Employees
Leadership Team
o ‘Products and Services’
Carrier Services and Solutions
Sales, Marketing, and Distribution Support
Product Administration
Technology and Operations
Voluntary Market Capabilities
Association Programs and Services
Search Products
o ‘Agent’
‘Products/Carriers’
‘Agent Tools’
‘Testimonials’
‘Locate a Provider’
‘My Cases’
‘My Forms’
‘My Profile’
‘My Network’
o ‘Employer’
‘Case Management’
‘Products/Carriers’
‘Quote Request’
‘Testimonials’
‘Locate a Provider’
‘My Cases’
‘My Forms’
‘My Profile’
‘My Network’
o ‘Individual’
‘Benefit Management’
‘Products/Carriers’
‘Quote Request’
‘Testimonials’
‘Locate a Provider’
‘My Cases’
‘My Forms’
‘My Profile’
‘My Network’
o ‘Infocenter’
‘FAQ’
‘Glossary of Terms’
‘Factoids’
o ‘Contact Us’
‘Phone Numbers’
‘Email Us’
‘XYZ Company Locations’
o ‘Careers’
‘Current Openings’
‘Contact HR’
‘HR Policies’

 
The above organization of content focuses on projecting XYZ Company’s core capabilities, what it has to offer its customers and it’s various targeted audiences. The main content label shall identify the main content group eg: ‘About Us’ and the sub-content labels shall be displayed within the area of the expanded tab or pulled down menu.

1.1.2.2. Implement tab based top navigation system


From the above content groups (as identified in section 1.1.2.1), identify ‘Agent’, ‘Employer’, ‘Employee’ and ‘Individual’ as the audience specific organization scheme
that could be potentially be implemented as tab based top navigation bar, which should be visible at the first glance on the web site. Placing this on the top has great
importance, since it is where user’s line of sight falls first and it is an industry standard. The top navigation bar may be visible only on home page.

Create and display image of XYZ Company corporate building on first page load linked to the ‘Home’ content group. The image can be animated with succeeding animations showing clients list, service highlights, satisfied users etc. Create and display audience specific image animation on the specific tab views of each audience content tab. This may be substituted for the current welcome blurb.

1.2. Implement global navigation system


From the above content groups (as identified in section 1.1.2.1), identify ‘Home’, ‘About Us’, ‘Products and Services’, ‘Infocenter’, ’Careers’, and ‘Contact Us’ as specific
content items for the global navigation system which will be consistent throughout the website. The global navigation system should be prominently placed on the very top of the web page.

1.3. Create global login section


Global member login section is essential which should be visible on a prominent location on the home page (top right part of the page or bottom left is suggested), which
would create the idea that site offers login based/personalized services.

1.4. Create new content groups


Create new content groups such as ‘Testimonials’, ‘News’, ‘Carrier/Product search’ and ‘Member Login’ on prominent locations on home page. Each of these content
groups should be placed within clearly identifiable sections with the identified labels (‘Testimonials’, ‘News’ etc)

 
2. Retain existing customers by improved site functionality, thus continue generating revenue



The content organization, labeling and navigation as recommended in section 1 will have a direct impact on improved site functionality and would allow users to easily utilize the site services. The following are some of the other specific areas that could be worked on to bring out effective user experience and satisfaction –

2.1. Implement local navigation system


Local navigation is essential to navigate within local content, especially when the user is logged in under a specific audience group or is accessing content within specific
audience group. For example, when user clicks on ‘Agent’ ‘Agent Tools’, he should be taken to a separate web page exclusively for Agent with the global navigation system on the very top and the local navigation system below it, both clearly identified.
The local navigation will be nothing but the sub-content items of the main content group ‘Agent’ as identified in 1.1.2.1, with an additional ‘Logout’ link. Below local
navigation, there will be specific content areas for ‘Agent Tools’. User can navigate to the Home page without logging out (via the ‘Home’ link on global navigation bar) and
can come back to the Agent section via tab based top navigation system.

2.2. Implement breadcrumbs


Breadcrumbs are an essential feature to inform users where they are and thus aid them in easy site navigation. The current website does not have breadcrumb feature and
needs to be implemented. Breadcrumbs can be implemented as, say, ‘Agent Agent Tools’, in between the local navigation and the main page section.

2.3. Making features/objects as self evident as possible


This should be one of the most important focus areas when the site is revamped. Make all content objects and/or features as self evident as possible so that users are not
kept thinking about what it is and how to use it. For example, the current home page has links to various audience specific sections such as ‘insurance agent’, which is not self evident as clickable. Another factor that improves site’s usability is sticking on to standard practices such top navigation system, global navigation system, local navigation system etc.

2.4. Consistent and meaningful label formats


Care should be taken that there is no duplication of content labels and that we follow consistent labeling convention throughout the web site. Labels should communicate
information efficiently and should have consistent fonts properties, noun/action usage and should not take up much of vertical space.
 

2.5. Common Footer


It is recommended that the footer contain major links from the global navigation such as ‘Home’, ‘Contact Us’ and additional content items such as ‘Privacy Policy’,
Copy right info and company address & phone number. It is advisable that the footer be common to all web pages and is visible without vertical scroll.

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Tuesday, October 11, 2011

Strategic alignment of IT resources - A case study in Grocery industry (Part 2)

Strategic alignment of IT resources - A case study in Grocery industry (Part 2)


 































 

Japan 



UK



Spain



US



Effect of economic situation



The effect of recession has prompted Japanese to be
more cautious while selecting grocery stores to shop. This situation is
breeding ground for underdeveloped private label market in Japan to
capitalize on price (32).



Consumers have scaled back spending and repaid debt
amid signs of slow recovery. In Q4 of 2009, the UK economy experienced the
first economic expansion in six quarters. Low consumer confidence, high
personal and government debt, and high taxes will slow recovery (48).



Recession has its impacts on buying habits on
Spanish people too. While looking out for cheaper private labels, they also
have increased quality sense (60).



Currently, there is high trends
that shows shift from eating out to going back to grocery stores and save money
(usage coupons etc). There exists high food prices,
down economy, low consumer confidence and notion of 'healthy eating which is
required and costly (4).



Technology & Infrastructure Issues



Concerns that old style of doing business is not
viable any more. Trying to improve innovation systems (33).



Robust private markets for technology and services.
Strong government support for capturing value in public sector (49).



Innovation system
highly dependent on foreign technology. Deficit appears to be structural
(61).



Major technology thrust pushes industry to take
drastic steps towards customer satisfaction and innovation (5).



Integration Issues



System integration issues due to heavy mergers
between companies and due to suppliers’ legacy systems.



Applications developers must understand retailers’
business and integrate with its existing systems as part of its value
proposition.



Severe integration issues in supply chain.



Major challenge is integration issues while
targeting global sourcing and thus being exposed to wider pool of suppliers, providing multi-channel
integration for customers and integration with legacy systems.


































 

Japan



UK



Spain



US



Political Structure



A parliamentary government with a constitutional
monarchy. Legal system is modeled after European civil law systems with
English-American influence; judicial review of legislative acts in the
Supreme Court. Supreme Court (chief justice is appointed by the monarch after
designation by the cabinet; all other justices are appointed by the cabinet)
(34).



Constitutional monarchy and Commonwealth realm (50).



Basque Nationalist Party , Canarian Convergence and
Union Coalition, Democratic Union of Catalonia (63).



Even though current US political setup and
administration is convinced that supporting innovation and entrepreneurship
is necessary for improving the economic conjuncture, the existing economic
recession cause consumer product manufacturers to reconsider their plans to
launch new products for Grocery industry (6,7).



Legislation



In 2006, the Internet providers attempted to
disconnect users anytime they detected P2P or any other file-sharing
software. The Japanese Ministry attempted to block P2P but stopped because of
concerns of privacy issues (35).



Growing dominance of large grocery chains prompted
Office of Fair Trading to review competitive practices of largest retailers
(62). Fear that smaller suppliers and sole proprietorships will be pushed out
of markets has prompted lawmakers to consider limiting labor and operational
tactics used by large grocers.



Education expenditures
amount to 4.2% of the population, which compares to 97th in the world. By
law, every public school in the country is required to teach Roman
Catholicism. But new legislation has been enacted which has made religious
classes optional (64).



Current US administration has put forth various
legislative measures to support product innovation and growth of grocery
industry, especially when Grocery Manufacturers association is influencing US
Senate to modernize U.S. Chemical Safety Laws (8).



Trade Policy



Japan’s weighted average tariff rate was 1.3 percent
in 2008. Import and export bans and restrictions, import quotas and
licensing, services market access barriers, non-transparent and burdensome
regulations and standards, restrictive sanitary and phytosanitary
rules, restrictions in government procurement, state trade in some goods,
subsidies, and inefficient customs administration add to the cost of trade
(36).



The Bank of England periodically coordinates
interest rate moves with the European Central Bank, but Britain remains
outside the European Economic and Monetary Union (50).



Spain’s trade policy
is the same as that of other members of the European Union. The common EU
weighted average tariff rate was 1.3 percent in 2008. However, the EU has
high or escalating tariffs for agricultural and manufacturing products, and
its MFN tariff code is complex.



US trade policies are designed to support grocery
industry expansion in developing areas and to reduce overhead for Grocery
stores and put in more money for product innovation (4).



 

Porter’s Competitive Forces Model


 

[caption id="attachment_461" align="aligncenter" width="827" caption="Porter's Competitive Model"]Porter's Competitive Model[/caption]

Dominant Blueprints & Strategic Focus


Dominant Blueprints & Strategic focus


 

Blueprint  (Drivers & Constraints)



























































Blueprint



Force



Japan



UK



Spain



US



Multi-Channel


Easy To Do Business With



Driver 



Acquisition
of small wholesalers, mergers and cooperative agreements are in response to
need for greater efficiency (39).
 



Growing
interest in shopping online makes retailers pursue web strategies that
compliment brick & mortar experience(47).



Efficiency
of marketing to consumers who often make decision to buy at point-of-sale(65).



Technology/Innovation
infusion in the form of Web 2.0 and mobile technology offers wide options for
channel integration and is leading blueprint's development and alignment of
IT (20).



Constraint



Shortage
of technical capability, attitudinal problems preventing wholesalers,
retailers, and manufacturers from working together. Poor penetration of
technology in traditional-bound portions of value chain (39).



Ordering
more efficient with RFID(51). Loyalty programs track
individual consumers‘ and tailor promotions (52).



Today,
more grocers are collecting customer-specific data. Large retailers using
RFID to deliver targeted promotions (66).



Convincing
customers to thinking "My Store" rather than "The store“.
Greater reliance on integration for increased sales, customer retention and
profitability (16,17,18,19).



Spend Management


Low Cost



Driver



The
market has shifted its focus to support more discount store models in order
to provide lower prices to customer (38).



Spend
management encourages higher quality and greater choice (Profit through
partnership, 1994), faster replenishment.



Spend
management software has been delivered to the enterprise however,
Europe was a unique case because of the large number of languages owed to its
significant presence in both Western and Eastern Europe (67).



Economic
recession compels companies to cut costs on direct and indirect
goods/services and they resort to spend management solutions to gain
visibility into the area of procurement and analysis(US21).



Constraint



Recession
is having a major negative impact on consumer confidence, as they look for
ways to cut back on daily expenditure and retailers have to drastically
rethink their operating strategies in an effort to retain even moderate
growth levels (38).



Cash
purchases without loyalty card provide no customer data to improve decisions.



Mega-Hubs were launched with promise to provide
interoperability between trading exchanges, however companies were not ready
to invest into the process because it was a separate entity (67).



Walmart's efforts to align IT to
current spend management blueprint is partly hindered by cultural/language
barriers while on its journey to global sourcing (23).



Employee


 


Productivity Multiplier



Driver



A
decade of declining economic growth aligned with contextual factors, such as
an ageing workforce, has caused Japanese firms to introduce changes to their
HRM strategies (40).



Respecting
employee rights to privacy and confidentiality requires controls that limit
data exchange between applications and by information consumer.



Integrating
and automating HR processes and multiple country systems is demanding for
service providers (68).



Increased
need to reduce the total cost of employee communication per year , improve corporate hiring process and increased
productivity improvement ,all influence usage of employee centric blueprint
(24).



Constraint



Regulations,
compliance and ethical enforcement activities in many organizations have been
confined to a few specific operating silos such as HR, corporate security, and
legal, and have been conducted either on paper or on spreadsheets, making the
procedures difficult to share across the organization (41).



Data Protection Act,
Chartered Institute of Personnel Development, and
Information Commissioner’s Office provide extensive guidance on
responsibilities and obligations of employers (53).



For
many multinationals the cost of administering a pan-European HR & Payroll
policy, with all the complexities of EU and country reporting regulations and
compensation and benefits variations, has made the HR & payroll
outsourcing message a compelling one (68).



Severe
integration issues exist when grocers try to implement fined tuned HCM
systems to support the blueprint as in the case of Brookshire Grocery store
(25)













































Blueprint



Force



Japan



UK



Spain



US



Supply Management


Fast & Responsive Service



Driver



The smaller supermarket chains around the country
are slowly being acquired. Larger retailers are consolidating and expanding
their territories. Retailers have too much inventories on hand
and they need to cut their cost structure, both in terms of labor costs and
store operations, and reducing inventories (42).



Tesco uses RFID tags on milk and DVDs to track
product from production facilities to shelf. Supplies can be replenished
faster and DVD stocks better organized on shelf (54).



Grocery retailers such as Asda
and Tesco have been marked to increase their product ranges, however European
companies are still refining the use (CPFER, 3PL, 4PL) infrastructure to
stave off the competitive pressures of expansion (69).



Early
adoption of EDI as common standardized means of integrated SCM systems
communication has smoothened the efforts of SCM
integrations between grocery stores and suppliers (26).



Constraint



focused (42).

Shorter order times, faster payment, interaction by
tech, finance and stock management personnel (55).



ERP does not as of yet have a dominant industry
association such as Manufacturing Execution Systems Association (MESA)
governing its development (70).



The
main driver that contributes to alignment of IT towards SCM blueprint is the strive towards service differentiation and the need to
remain competitive by being innovative in the SCM arena (27).



Product Innovation


Product Innovation



Driver



Health is a key factor in determining customers’
food choices. It is recognized that the consumption of certain foods can
promote improved health and well-being and the prevention or minimization of
disease. The addition of functional ingredients enables a product to be
distanced from other products within the same category, increasing the profit
margins and reducing the impact of price wars with competing commodity
products (43).



Introducing private label goods as a way to provide
low-cost alternative produces conflict with preferred suppliers (56).



CAD application resulted in an explosion of digital
data. Because those design applications created many digital files, it became


increasingly difficult to effectively
capture, manage, and control the output of those systems (71).



One
of the major drivers that support product innovation blueprint usage in US
grocery industry is the strive for brand focus,
which is implicitly offered by the underlying PLM solution (28).



Constraint



According to GNX's VP of
Product Development, the typical retailer private brand program comprising
several thousand products (SKUs) that are constantly changing, and data
maintenance can be a significant challenge. Failure to effectively manage
this data can negatively impact consumer confidence and market
competitiveness (44).



Grocery stores can provide aggregated customer data
to reveal preferences, but manufacturers must make independent decision to
change how they produce their goods.



By the 1990’s, industry demanded more sophisticated
applications to address issues such as product structure, change control,
configuration management, and others (71).



Full
collaboration with suppliers has been one of the major issues in ensuring
complete strategic alignment with the blueprint (28).



 

Countries Position in Blueprint Evolution


 

[caption id="attachment_468" align="aligncenter" width="961" caption="Countries' position in Blueprint"][/caption]

Summaries, Interpretations, and Lessons Learned


 

•Customer's are time-consciousness and demand power to establish preferences and satisfaction level has an ever increasing influence on the development and acceptance of multi-channel blueprints.

•Spend management is an essential dimension in business intelligence solutions, enabling better visibility into factors influencing strategic decisions.

•Leading grocery companies have invested enormous time and capital into aligning IT and business processes by standardizing applications.

•Retailers in the grocery industry search for innovative and efficient ways to integrate and standardize supply chain management by leveraging available IT resources to reinforce their business processes.

Conclusion


 

•Technology and innovation infusion has a positive impact on companies to quickly devise methods to establish effective means to perform sales promotions, improve customer service, provide easier and efficient tracking of products and supply chain management, and cut across multiple channels.

 •Leading grocery retailers are distinguished by their significant attention to—and investment in—aligning people, processes and technology.

 •To gain competitive advantage, retailers, manufacturers and wholesalers look for ways to reduce costs and improve response time by improving and standardizing their business processes.

•The major influences in the usage of product innovation blueprint are brand focus & subsequent differentiation and the strive towards effective means of product life cycle visualizations and subsequent IT alignment in satisfying a powerful customer.

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