September 24th, 2009

Pay to play: The vendor / analyst mating dance

Posted by Michael Krigsman @ 10:12 am

Categories: CIO issues, Consulting, Devil's Triangle, IT issues, Vendor relationships

Tags: Analyst, Games, Enterprise Software, Personal Technology, Software, Michael Krigsman

Certain elements of the enterprise software ecosystem contribute directly to failed IT projects. For example, I have written extensively about the Devil’s Triangle, which describes conflicting relationships among enterprise buyers, technology vendors, and system integrators.

• Related: Exploring the Devil’s Triangle

Industry analysts can also contribute to failures by creating mismatched expectations between customers and vendors. This happens when analysts slant coverage toward a specific vendor in hopes of later securing a lucrative consulting contract or retainer.

I put together a diagram to illustrate:

CMS Watch founder, Tony Byrne, details the process in a blog post titled The vendor-analyst echo chamber game. Here’s a quote:

[S]oftware vendors typically don’t spend money with analyst firms to bribe them outright. Rather, they purchase attention through which they can try to get an analyst to define the marketplace and customer challenges according to that particular vendor’s approach.

It’s the vendor-analyst echo chamber game, designed to manufacture artificial demand.

Although the diagram describes a fundamental conflict of interest, many analysts have integrity beyond reproach. The best analysts play an important role in helping buyers make wise strategic decisions. Those excellent folks provide substantial value and contribute to project success by aligning expectations between technology buyers and sellers.

What do you think about this issue? Please share your thoughts.

September 16th, 2009

Social CRM reality check

Posted by Michael Krigsman @ 7:46 am

Categories: CRM, Consulting, Enterprise 2.0, IT issues

Tags: Consultant, Agent, Social Media, CRM, Real Estate, Business Operations, Michael Krigsman

Some so-called “experts” apparently believe that enterprise organizations must instantly adopt social networking if they are to survive and thrive. Although social tools such as Twitter and Facebook are useful, that perspective reflects ignorance of how large companies adopt new technology.

Genuine CRM expert, Jill Dyché, addresses this issue in an insightful blog post, subtitled “In which Jill watches Social CRM consultants get naked—and throws them a towel.” Here’s an excerpt:

I sympathized with the two guys who came in to lead a discussion of how social media can be a strategic game-changer…. One of the consultants proclaimed, “You can’t do CRM without going social.”

Daring? Yes. True? No. You see, the insurance company had already tried enticing agents to use social media. In turn, the agents tried enticing their customers, many of whom they’d known for years. The fact is that social media, bright and shiny though it may be, is still one of many communications channels. In a survey of agents, most admitted that they were available by phone “during 90 percent of the business day, and often thereafter” but they nevertheless tended to use social media “occasionally or when I’m bored.”

The social media dudes advocated enlisting the CEO who, unsurprisingly, was busy doing things like communicating with Wall Street. (And I’m pretty sure that most of those conversations weren’t done using Twitter.) When he was finally asked to publicly advocate instant messaging accounts for all agents and a corporate Facebook page, he e-mailed his direct reports a missive that said something along the lines of the following (although shorter, and a bit more colorful):

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September 7th, 2009

Exploring the Devil's Triangle

Posted by Michael Krigsman @ 12:16 pm

Categories: CIO issues, Consulting, Devil's Triangle, Governance, IT issues, Implementation, Project strategy, Vendor relationships

Tags: Software, Consultant, Software Company, Customer, Triangle, Devil, System Integrator, Tools & Techniques, Management, Michael Krigsman

The Devil’s Triangle describes a basic set of dysfunctional relationships that push many projects toward failure. Although I’ve written about many facets of this important topic previously, today’s post summarizes the issue succinctly.

Three parties participate in virtually every major software deployment: the customer, system integrator or consultant, and the software vendor. Since each of these groups has its own definition of success, conflicts of interest rather than efficient and coordinated effort afflict many projects.

The Devil’s Triangle explains how economic pressures can drive software vendors and system integrators to act in ways that do not serve customer interests. It also offers insight into the ways some enterprise software customers damage their own projects.

Devil’s Triangle relationships are a short sighted and self-interested way of life for too many participants in the enterprise technology landscape.

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August 7th, 2009

Five reasons to fire your system integrator

Posted by Michael Krigsman @ 7:24 am

Categories: CIO issues, Consulting, IT issues, Project management, Vendor relationships

Tags: Consultant, System Integrator, Remote Access, Blogging, Outsourcing, Internet, It Operations, Business Operations, Outsourcing & Subcontracting, Michael Krigsman

Today’s post is written by guest blogger, Phil Simon, an independent systems consultant and author of the excellent book Why New Systems Fail.

Although consultants make easy scapegoats when projects go wrong, there are definitely times when you should replace the incumbent.

Here are five good reasons to get rid of your system integrator:

1. The consultants are difficult to work with. If their attitude isn’t helpful then antagonism arises and the project will suffer. However, don’t mistake “being difficult” with being honest.
2. The consultants are inexperienced. No consultant knows the answer to every client question. However, if their answer to the most basic questions is routinely “I’ll have to get back to you on that,” then show them the door. Be wary of SI’s that promise you rock stars but give you trainees.
3. The SI’s management is not responsive. Excessive turnaround time from the project or client manager exacerbates delays and causes problems. Give the consultants an opportunity to cure the problem, but if they don`t then cut the cord.
4. The SI churns your account. Don`t haggle over inconsequential sums, but overcharging is a cardinal sin. Do not ever accept an SI that works inefficiently just to rack up billable hours.
5. The SI’s travel expenses are unreasonably high. Travel is a necessary part of business, but excessive travel is bad news. In today`s economy, every consulting company should consider ways to reduce travel costs with remote access, collaboration software, and other tools.

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June 12th, 2009

TechCrunch Research: Big deal or not?

Posted by Michael Krigsman @ 6:22 am

Categories: Consulting, Uncategorized, Vendor relationships

Tags: TechCrunch, Advisor, PROJECT FAILURES ANALYSIS TechCrunch, TechCrunch Research, Investment, Finance, Michael Krigsman

TechCrunch, the opinionated startup-focused blog network, has launched a low-cost analytic research service. Given the company’s high profile, this research offering cannot be ignored. However, does this new TechCrunch initiative provide value to buyers or threaten established analyst firms?

TechCrunch describes its 1Q 2009 Report report this way:

[It] provides key take aways and statistical support for the major trends of Q1. The report covers trends in start-up foundings, products, financings and exits across a variety of technology sectors: consumer media and entertainment, social networking, cloud computing, mobile communications, search, advertising and ecommerce, consumer electronics and clean tech.

The report costs $149 and partially overlaps the outstanding, web-based MoneyTree Report, which is free and has been around for years. PriceWaterhouseCoopers and the National Venture Capital Association sponsor MoneyTree.

THE PROJECT FAILURES ANALYSIS

TechCrunch keeps its finger on the pulse of startups, writing with a colorful (some say arrogant) tone and style. This formula has propelled TechCrunch’s popularity and influence among those following technology startups and investment.

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March 6th, 2009

Stop whining about ERP failures

Posted by Michael Krigsman @ 9:08 am

Categories: CIO issues, Consulting, Devil's Triangle, IT issues, Vendor relationships

Tags: ERP, Enterprise Resource Planning (ERP), Enterprise Software, Software, Michael Krigsman

As a guy writing about IT breakdowns and problems, I understand that large enterprise software rollouts don’t always go as planned. Despite this, I’m skeptical of pundits, analysts, and observers who complain about failed projects without offering a better idea or solution.

In a blog post on this topic, CIO magazine’s Thomas Wailgum wrote:

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March 5th, 2009

Roche CIO discusses IT, consultants, and the Devil's Triangle [podcast]

Posted by Michael Krigsman @ 5:26 am

Categories: CIO issues, Consulting, Cultural issues, Devil's Triangle, IT issues, Interview, Project strategy, SAP, Vendor relationships

Tags: Podcast, CIO, Roche Holding AG, Information Technology, Business, Jennifer Allerton, Strategy, Management, Michael Krigsman

Jennifer Allerton is CIO of Swiss pharmaceutical giant, Roche, where she reports directly to Roche’s CEO and oversees an IT / informatics staff of 2500.

During this conversation, I asked Jennifer to discuss the CIO’s evolving role, success and failure on IT projects, and the IT Devil’s Triangle. We met at the launch event for SAP’s Business Suite 7 product in New York City.

• Related: Allerton talks about SAP, consultants, certification, and system integrators

If you care about CIO or IT issues, this seven-minute podcast is essential listening. To hear it, click the player at the top of this post.

Here are a few excerpts from the recording, just to give you a quick flavor of the conversation. I’ve edited these quotes to keep them short.

Please describe a CIO’s primary challenge?

The CIO must determine the best way to apply technology to the business. Historically, the CIO placed multimillion-dollar bets on uncertain technologies and therefore had to be a technology expert. Today, the CIO’s role should involve 80% business and 20% technology.

What about the gap between IT and the business?

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February 25th, 2009

San Diego fires Axon over ERP implementation problems

Posted by Michael Krigsman @ 10:58 am

Categories: CIO issues, Consulting, Devil's Triangle, Government projects, IT issues, Implementation, Oracle, Politics, Project failures, SAP, Uncategorized, Vendor relationships

Tags: San Diego, SAP AG, ERP, Axon, System Integrator, Tools & Techniques, Project Management, Workforce Management, Advertising & Promotion, Outsourcing

The city of San Diego, CA terminated its software implementation contract with services provider, Axon, citing “systematically deficient project management practices.” The project is running $11 million (27 percent) over-budget to date, a number which will likely increase.

San Diego’s termination memo highlights key Axon governance and implementation process deficiencies. Tom Fleming, president of San Diego Data Processing Corporation (DPC), a municipal IT contracting agency, wrote the document:

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February 3rd, 2009

A tale of consulting arrogance

Posted by Michael Krigsman @ 6:40 am

Categories: CIO issues, Consulting, Devil's Triangle, IT issues, Implementation

Tags: Consultant, Healthcare, Enterprise Software, Software, Michael Krigsman

The role of third-party consultants on IT projects is tricky. On one hand, they bring valuable expertise and specialized knowledge that many organizations can’t afford to hire as full-time employees. At the same time, some consultants are disruptive, following their own agenda instead of doing what’s right for the client.

Look at this story from a blog in which someone chronicles his company’s ongoing enterprise software implementation:

At the beginning, we were quoted a set number of days consultancy work to do the implementation (370). In fact we are now well over 800 days, there are another 65 booked for the next 10 weeks, plus, it seems clear that we are still no closer to go-live than we were 5/6 months ago and we will need yet more people. In addition, during the work over the last 2 years, they keep insisting that certain things were not part of the “original blueprint” and that these items are part of a “second phase” of work. Well we certainly never agreed to any such “second phase”. I was told by the project manager quite confidently that we should expect to budget for at least another 70 - 100 days of consultancy work each year for the next 5 years.

Now, read the anonymous author’s tale of his consultants’ arrogant attitude:

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January 27th, 2009

5 tips to reduce outsourcing risk

Posted by Michael Krigsman @ 6:22 am

Categories: CIO issues, Consulting, Devil's Triangle, IT issues, Interview, Project strategy, Vendor relationships

Tags: Project, Risk, Managed Hosting, Outsourcing, It Operations, Business Operations, Outsourcing & Subcontracting, Michael Krigsman

Service providers present a special challenge to organizations involved with complex IT projects. Although consultants are integral to many projects, dysfunctional service provider relationships can increase the customer’s risk of failure.

To explore this issue, I spoke at length with Alec Miloslavsky, CEO of Exigen Services, an outsourcing supplier that specializes in Agile development. I asked him why traditional relationships with system integrators sometimes cause a gap between customer goals and consultant interests:

Traditional consulting companies base their relationship model on labor arbitrage, where the services provider gains financial benefit primarily from differences in labor costs. As a result, the consulting firm neglects key issues in IT project delivery, increasing the customer’s risk.

Alec added that projects generally face three types of risk:

• Financial risk, where project cost rises above expectations
• Time to market risk, where the project is late
• Delivery risk, where the project doesn’t achieve planned objectives

Pure labor arbitrage contributes to all these problems, especially in environments where there is insufficient governance to control results.

I asked Alec for five tips to help services customers get the most from their relationship with external consultants. Here is his list:

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