Tuesday, December 29, 2009

Giants of Quality

The area of quality (for both IT and non IT) has had a few champions that completely redefined the epistemology of quality and the means of achieving it. I speak of W. Edwards Deming, Phillip B. Crosby and Joseph M. Juran. It is especially impressive to me as a quality “evangelist” myself, that they achieved what they did at a time when quality was not as well understood and significant as it is today. Championing quality today is a task I find extremely challenging and difficult to sell after the initial enthusiasm that top management displays. So the mind boggles at the difficulty that these champions must have faced and overcome back half a century ago. This week’s post is a dedication to their tenacity and passion for quality.

While Deming performed significant work for the World War II effort that resulted in improved statistical process control techniques, his true success came in Japan. The US experienced a great demand for its manufactured goods across the world and quality was sacrificed for mass production. The Japanese, however, understood the importance of quality and made the sacrifices necessary to achieve world class quality. This, of course, resulted in the Japanese overtaking the US in terms of desirability of their manufactured products and transforming a small island nation into a major world power and economic giant. Deming’s work in quality improvement was so effective that he was awarded the Order of the Sacred Treasure award by the Prime Minister. He then returned to the US to teach, author and consult. His years in Japan, however, remained the most effective in terms of the adoption and utilization of his techniques.

Crosby was famous for his zero defects philosophy and his belief that “Quality is Free” authoring a book with the same title. He also championed the concept of “doing it right the first time”. He contributed greatly with his lectures and seminars towards quality as a practice.

Juran pushed for the education and training of personnel and introduced the composition of three managerial processes: quality planning, quality control and quality improvement. Like the others, he authored, lectured and consulted about quality.

In writing about these giants of quality, I feel that we can learn a great deal from their life and work and the contribution they made to the world. It must have been difficult: but they persevered and won. How many like these exist today?

Monday, December 21, 2009

A Plethora of Sourcing

Procuring resources and capabilities for the tasks that require to be completed has been an important part of IT management since the introduction of IT into the business model. In the past, however, procuring talent meant visiting university campuses for entry level positions and posting advertisements in newspapers and job-websites for more experienced candidates. With the advent of greater complexity and faster changing technology and best practices, consultants were brought in to fill the gaps.

However, with the availability of significantly cheaper and at the same time good quality resources being available in foreign countries, outsourcing was the buzzword for a while. Now, however, many types of sourcing possibilities exist and IT executives have a smorgasbord of options to choose from. Some of the lesser known types of sourcing that also exist are:

  • Multi or Co-Sourcing: where tasks are performed by both the internal organization and an external provider

  • Knowledge Process Sourcing: is a type of sourcing where highly knowledge intensive work is carried out by highly skilled staff. E.g. Sox auditing may be assigned to a third party organization that specializes in SOX audits.

  • Global Sourcing: Global sourcing often aims to exploit global efficiencies in the delivery of a product or service which could include low cost skilled labor, low cost raw material and other economic factors like tax breaks and low trade tariffs

  • Strategic Sourcing: which consists of techniques to optimize the procurement of services and overall sourcing strategy of the organization

  • Corporate Sourcing: where divisions of companies coordinate the procurement an distribution of materials, parts, equipment, and supplies for the organization
    Second-tier Sourcing: is a procurement policy that rewards those suppliers that achieve or attempt to achieve the minority-owned business (MBE), spending goals of their customer

  • Crowd Sourcing: a technique of assigning a task to a group of people or community as an open call. Beta testing by PC game companies is an example of this technique where a group of typically teenage game enthusiasts perform testing for a small fee or even free.

  • Open Sourcing: utilizes previously proprietary software under an open source/free license. This may not always be a good choice but the price is certainly right.

So it emerges that there are quite a few type of sourcing techniques available and are no longer rare occurrences as they used to be in the past. The method of choosing which type of sourcing to use remains the same, however. A careful analysis of the needs of the organization along with consideration of its long term goals and objectives and an evaluation of the pros and cons of each type of sourcing possible will result in a mature procurement decision. A key here is to keep an open mind to the sourcing possibilities and to not be guided by one’s own prejudices in the matter.

Monday, December 14, 2009

SaaS: Pros and Cons

Software as a Service (SaaS) is a technique of software deployment whereby a provider licenses an application to customers for use as a service on demand. SaaS software vendors may host the application on their own web servers or download the application to the consumer device, disabling it after use or after the on-demand contract expires. The advantage of this is the transfer of the risks and responsibilities from the customer to the SaaS provider. There is also a potential benefit in cost for the customer as the “on demand” aspect of the billing only charges the customer for when the application is utilized. This also reduces the administrative burden of maintaining and tracking licenses across the organization for customers. Furthermore, cost savings may be realized due to a multitenancy approach to the architecture of the application and its data handling. While this entails a greater initial development effort for the provider, economies of scale are achieved by only requiring one instance of the application to service multiple customers.

So to itemize the benefits that SaaS offers:

  • Cost: SaaS delivers application at a lower cost than delivering them in-house.

  • Risks and responsibilities transferred: The risks and ownership of resources and capabilities required to deliver the applications are transferred from the customer to the provider. This is typically very attractive to smaller companies.

  • Efficient resources utilization: Freed up from delivering technology, IT resources can utilize their time on issues that impact the organization and business urgently.

  • Flexibility: The SaaS provider will typically offer flexible contracts and charging models. The customer will also be able to easily and with minimal risk try the service before committing to a contract. The ability to switch between providers is easier than with traditional outsourcing.

However, the following cons also exist:

  • Limited customization: As the SaaS provider caters to multiple organizations, they may not be capable of customizing the application for each individual organization to the extent required by them.

  • Scalability: Currently SaaS offers scalability to service smaller organizations but this is expected to improve as technology evolves.

  • Reliance on another: while this is listed as a benefit, it can also be a risk as all control of the application is placed on the provider and if they fail, then the customer organization suffers.

While SaaS is not a magic solution, in my opinion it does offer some benefits for organizations that have specific conditions and requirements that match the benefits that SaaS has to offer.

SaaS does not replace in-house IT; however, research indicates that it could well represent 25% of the software market by 2010. Therefore, SaaS should be kept in mind as an alternative should the situation and conditions merit it.

Monday, December 7, 2009

How Much is Enough?

This week’s post sparked from a phone conversation I had with a friend who is now an IT QA Manager at a company in Los Angeles (to go unnamed). What struck me was his comment on how there was a lot of chaos at the company due to a rapid rise in new business which was not matched by a proportional rise in IT resources and capabilities. When I commented that it sounded like poor management to me, he countered by claiming that the IT management was doing well to manage the situation. But to me the balancing act of taking on new business in proportion to the resources and capabilities available is under the domain of management as well.

Which brings us to the question of when to say “no” to the customer. Or to handle it another way, the company could raise prices high enough so that demand falls to levels that the organization can provide at adequate quality levels and without putting undue stress on staff. I suppose marketing purists might insist that any and all new orders must be taken on at all costs or there will be irrecoverable market share damage. However, I would counter that taking on new business to the point that your quality levels drop and disruptions and defects are common is no way of maintaining market share either. In any case, this particular company (that my friend works at) has obviously chosen the take all customers at any cost approach. My personal experience in my own career has been that most companies tend to make this choice. But is this wise?

Now there are no obvious answers here and a lot depends on various factors such as the economy, the goals and objectives of the organization (long term and short term) etc. However, in my experience, it has always been negative in the long term when an organization has adopted the approach of taking on all orders and actively seeking out more orders even when the rest of the organization is struggling to keep up with demand. This is especially puzzling when we consider how easy it is to manage demand by simply charging higher and allowing market forces to balance things out without hurting customer’s feelings. When the organization has upgraded its capabilities and capacity, it can always lower prices to re-stimulate demand for its service.

To me, it seems like the goal of meeting large quarterly targets is based on a desire to rake in bonuses and stock price returns at the cost of the company’s long term success. In other words it is a case of greed. However, unlike as depicted in fiction, greed is not good. How much is enough, Mr. Gekko?