Squeezing the last drop

One of my CIO friends narrated an interesting anecdote about his meeting with a CEO of a mid-sized IT services company. They were talking about the extension of a contract that had run through 3 successful years. The CEO was relatively new to the company and not party to the original contract. He was berating the fact that they were losing money on the current deal and needed to turn around the business and the fact that the global HQ was fast losing patience.

The contract was signed in times when growth was good and business expectations were stratospheric across industries. The then CEO was exploring local expansion as well as captive services for global operations that would have given Indian entity a firm standing. The downturn took everything away including the CEO. Business growth did not revert despite the economy stabilizing. The pressure to turn around the business thus became paramount for this IT Company.

As the negotiations stretched over a few days, the CEO began demonstrating discomfort. In an open book costing he was justified in his pricing but unable to acknowledge that the company had built up higher running cost which could do with pruning. As the customer, my CIO friend was unwilling to pay a substantial increase to accommodate. The choice to the vendor was to cut costs in a hurry and acquire new customers, and to the CIO it was about continuity or moving to another vendor.

Companies set up specialist functions to negotiate deals, sometimes within Finance and at times as an independent charge or within the function equipped with experts who justify their existence with great sounding deals. Some of these may be win-win, but many end up with bickering over legal contract terms or lose-lose unless you are an 800 pound gorilla who nobody can ignore. So how does one define the limit for negotiation ? How do we know that the deal is great for both of us and not a win-lose or lose-win ?

Conventional way is to negotiate hard, drive a bargain that is best value for the customer. It does not matter if the supplier makes money or not; they can always recoup their margin in the next deal or with other customers. This belief has survived and done well for many. Suppliers recognize it and so do customers who play the game. The industry has adjusted prices accordingly so that nothing sells for full price anymore. Everything has percentage off going all the way to 90%. Can we get it free ?

There is a need to change some of these paradigms to bring the dance of the discount to a stop or at least reduce it to realistic levels may be linked to volume of business. CIOs too need to set fair expectations internally and externally to create win-win scenarios and work upon long-term relationship building. Rarely any deal now is tactical. It is also important to remember that people churn across companies. The spurned, scorned or bitter salesperson may turn up a few years later in another company which is critical to your business operations.

People buy from people, so don’t squeeze the lemon too hard, you may end up with a bitter taste.

P.S. my CIO friend concluded the contract with the vendor who did reduce his overhead costs.

Learning never ends, neither does work

Over the weekend while I sat reading some emails and my commitment towards writing Oh I See, a 4-year old walked by and curiously observed my activities, uninterested she moved on. An hour later, once again she found me transfixed at the same spot. This time she queried the nature of my busyness. I replied that I was working. “What are you working on ? Do you have homework ? If you did not do your homework, your teacher will punish you ?”

What is the incentive for any CXO to invest his/her spare time towards anything related to work ? Do organizations really expect 24 X 7 attention ? The portable computer was just the beginning, the tablet is not the end; increased connectivity driven by technology advances in telecom coupled with mobile enabled work processes as well as applications leave few areas unexplored. But these are optional to some extent and do not impact everyone in the same way. Reality is that work expands to fill all the time like traffic expands to take up available bandwidth in a network. Are you doing what matters ?

So is there a way out ? Different strategies work for different people. Some take the discretionary route to carefully deciding what occupies their precious time. It could be reading newsletters, industry research, business magazines or management books, or just the general newspapers; fiction and other categories like travel also find their place. It is the discipline that keeps them going. The time thus spent is invested in gaining perspectives or insights that could help in various walks of life. The remaining choose to stay away from such mundane activities.

While I make a general observation from my limited span of friends, colleagues and acquaintances I have interacted with, the fact is that reading as a habit or investment is waning. Most IT professionals slog to acquire various degrees and certifications, but stop short of expanding horizons. This is despite the fact that it is a lot easier to find information in all forms, print or digital. Reasons and excuses revolve around paucity of time, to work pressures to just plain inertia.

I have been asked the question “How do you find time to read so much, write a blog, respond to so many IT reporters ?”. I don’t know, but I do find it. Without sounding condescending I would say that to begin with it is the prioritization of critical versus important. Focus on what matters towards where you want to be. Second is the determination to learn. It does not matter what you start with as long as you do. Slowly curiosity rises and it becomes a habit that generates long term benefits.

I find that every interaction provides a new perspective, a new question, a new way of thinking; the opportunity is too tempting to leave. This is especially true when I interact with students in B-Schools. They challenge you with the sole motive being to learn from your experience. So I spend nights, weekends, traveling time, and spare hours at work, whatever sliver of time I can find. Like the proverbial drops, they do fill the ocean. After all, any time is better than no time.

I believe that learning is not a destination to reach. Learning ends when we complete the journey of life.

The Elastic CIO

Last week I happened to be in a panel discussion with some CIOs who were expected to debate on “Improving Enterprise Efficiency”. The sponsor management personnel on the table listened attentively and sometimes also asked intelligent questions to the CIOs. The expert moderator balanced the discussions well jumping from one to another keeping everyone engaged. Unfortunately the enticing headline inevitably focused on server virtualization, private cloud, and VDI as the key theme.

How do you create a link between responsive IT systems to Enterprise efficiency and Business IT Alignment ? The question had everyone stumped and the answer emerged as the lack of responsive systems would imply time wasted by the employees; thus response times are important to efficiency. Intuitive and elementary, so what is the debate ?

Taking another element of research over the last decade on significant portion (estimates vary from 50 to 90%) of IT operating expense is expended on maintaining the lights on or business as usual. So reducing this piece of the pie will presumably shift the budget towards innovation and not as savings. This shift of expense to investment if prudent and allocated to virtualized servers will improve the efficiency of the enterprise. And we will all live happily ever after !

If through some magical process or non-empirical derivation two unrelated pieces of research can be correlated, then as suggested by the Chaos theory, anything can influence the outcome of what the IT organization creates, manages or improves upon. It could be sun spots, or a butterfly in eastern Asia; or global warming might provide insights.

Above is just a sample; simplistic evaluation models defined to justify generic technology investment have almost become the norm. Even when the specific context may not apply, the push to sell is discomforting and creates an auto pushback. Confused, the CIOs have been struggling to divert the discussion to their technology team which is better equipped to discuss alternatives and how they align to enterprise architecture.

The elasticity of hypothesis amuses and at the same time frustrates. Nowadays the headline proposed at any event or by a consultant or vendor speaker has rarely any connect with the subject. The stretch of imagination belies conventional and sometimes unconventional wisdom. However, despite repeated occurrences, the bait still works in getting CIOs excited to come and participate.

The elasticity expected from the CIO goes against the business aligned IT leader with a dialogue that is expected to straddle server provisioning or data centre cooling to improving customer service with process redesign using video analytics, or complex transport management. The diversity of expertise with deep levels of understanding creates a superman like persona who is discussing code optimization with the programmers and engaging the board on shareholder value.

The latter is still rationale and achievable with some hard work, some help and coaching, but the former in which unconnected factoids create an opportunity for specific technology breaks the rubber band.

The follow up nemesis

The meeting finished with agreement on clear responsibilities, timelines and the next scheduled meeting date four weeks away. The minutes circulated to the team the next day captured this very well. Like all projects, this one was thus far on track though the next three months were critical. The requirement gathering had gone well and the first cut was delivered on time; everyone seemed geared to take on the challenge and another successful project delivered.

Over the next few weeks, some updates were received on the portal, a couple of emails and then none. I began to wonder getting anxious if everything was okay with the project. So a reminder was sent to the group asking for updates; received one response, silence from others. With just one week remaining for the next meeting, and progress report depicting inconsistent updates, acidity levels started rising on the real progress.

So I started calling folks and walking across to their workstations to figure out what gives ? Some titbits:

“Yes, I have completed the tasks, but was too busy to provide an update”

“You should have the status by end of the day”

“Why are you getting on my back ? By the time we get to the meeting, we will be on track”

“Sorry, something urgent came up, so am a bit behind schedule”

All this made me wonder, here we are in the midst of an important project that has Board visibility, will provide a significant benefit, everyone vied to be on the project due to the positive impact, but they do not find time to provide an update. What causes such behaviour ? Why do some people find it difficult to provide open and clear communication on agreed milestones or request for information ? Why is follow up necessary ?

With multiple priorities and fires that need to be doused, short-term dementia is pervasive. Rarely the lack of response is out of disrespect, disregard or plain indifference. Follow-up is essential to bring the issue at hand to attention, to reinforce the signal of ownership and shared responsibility. It also helps in bringing back focus on what matters.

Having said this, there could be instances of no response where connect is not adequately strong or in some cases of missing shared accountability. Another factor that contributes to silence is fear of conflict; this occurs when the issue and people are inseparable. Culturally many are unable to provide bad news and thus prefer not to respond. In all these cases, the leader has to intervene and create the way forward.

IT organizations suffer the most when following up with diverse groups – internal and external – when working on cross functional projects or when solving problems that require different technologies to work together. It is important for IT leaders to inculcate missionary discipline within the team to ensure that initiatives in which IT participates, there is clear communication to all stakeholders.

Someone summed it up well “If I did not have to follow-up, I would save half my day”.