Fixed bid or Time & Material contract, which one to choose ?

The customer was known to be a tough negotiator; the partner knew it would be a long and tiring discussion going over each and every line item in the contract. They had spent almost 6 months discussing the scope, exclusions, inclusions and service level agreements. Now that the detail was out of the way, the last mountain to climb was deciding the commercial terms of engagement. Both were masters of the game and that made it an interesting setting for others to observe and learn from.

Starting point was the global RFP which had taken everyone by surprise with level of detail and articulation of expectations; none had seen such a comprehensive document clearly outlining the selection criteria and process towards the journey that would select first among equals. It was an important engagement for both customer as well as providers who had reached the penultimate stage towards closure; for the partner it was a long and hard fought battle to emerge as the better player amongst global competition.

Considering deals in the market, the contract value was not very large or the customer a big name to add as a logo; the deal was important in the goals and audacity of what it attempted to achieve. Thus interest from OEMs and partners was definitive with local and global teams from vendor organizations putting their best teams on the job to respond to the RFP and subsequent clarifications. Everyone commended the process, transparency and the professionalism shown by the team through the journey.

The solution architecture was complex yet simple in its design with integrated pieces that made up the whole. It had not been attempted before and that raised adrenalin levels akin to conquering an unscaled peak. With passing time the scope became clearer to everyone with vendors garnering global resources to stitch together the masterpiece. Tough filter criteria eliminated some of the contestants leaving behind a mix of large credible players who imbibed confidence with their brand and experience.

Between the remaining contestants two camps emerged which proposed to use Commercial-Off-the-shelf (COTS) solutions with minimal customization, or setting a foundation of COTS but with extensive customization to create comfort fit to existing processes. Both approaches created the solution demanded by the opportunity though with divergent approaches. Conventional wisdom dictated that minimal customization while a school of thought propagated adaptation to what business can use.

The two approaches demanded alternative commercial models with respective recommendations on why one is better over the other; these were fixed bid versus time and material, the first for COTS, the latter for customized solution; the company had used both approaches in the past though on smaller initiatives with mixed results, neither emerging as a preferred way of working. The current project much larger with budgets that were well-defined, thereby required a very different yardstick to arrive at any conclusion.

COTS fixed bid offered some level of certainty of outcomes, the number appeared large; it also created perception of limited flexibility by which business teams were discomforted. What if the solution delivered does not meet our requirements, what if people are unable to use it as expected, what if it did not deliver promised results ? There were many case studies on what did not work in large projects including for solutions proposed by the vendors; it thus required acceptance of associated risks.

Customized always gives the comfort with the syndrome that I know what I want and I will get it; it leads to extensible timelines and in many cases suboptimal process. Agreed that when completed it is used by everyone eventually; this methodology has been fast losing traction among savvy business and IT folks with the balance in favor of COTS and Cloud hosted for purpose apps. It may sound counterintuitive for someone attempting a project so large and complex, but there were proponents of bending the solution.

Coming back to the commercials, the customer finally decided to take the risk with a fixed bid hoping to pull it off with the bravado demonstrated by some of the team members, acknowledging that the world has moved on. They fought hard on every line item and then some wanting to create an open book costing which eventually prevailed in the interest of the marquee project. Both sides came out of the marathon negotiations feeling exhausted but with a win-win having listed out all possible risks to the project.

The project got off to a great start, did it deliver to promise ? Wait for the next year !

Don’t let your Digital Strategy fail; align to execution on the ground

I have been searching for replacement tires for my car for the last few weeks; so I traveled from search engines, to websites of popular manufacturers, to social media groups, to for purpose automobile portals to find where I can get genuine, reliable tires at a good bargain. Search results pushed me towards aggregators and marketplaces who probably do better SEO but did not carry the product I wanted. That is when I realized that the specifications of my requirement are unique and will require me to invest more time and effort.

In the digital world with every newspaper carrying multi-page advertisements from popular internet marketplaces to hoarding on roads, I believed that everyone is hungry for business. So painstakingly I filled all kinds of forms on various manufacturer websites and portals giving them the information they wanted – personal details, car make/model, tire specifications, timeframe for my requirement, and waited for a response. I was hopeful that between 8 portals and manufacturers I will be able to fulfill my need.

Patience is a virtue and the portals/manufacturers were colluding to prove that I am not that virtuous after all. Days passed with no response from anyone, big name global and local internet shopping sites as well as global and local big brands who collectively invest ridiculous amounts on advertising enticing consumers to choose them or shop on their sites over others (barring one who regretted that they did not service my location). Wondering if my email id or phone number had a problem, after a week repeated the process while expanding my search to the physical world.

Many years back I was involved in setting up an internet portal for a large retailer; we evaluated multiple technology solutions wanting the best option within our affordability. The team was excited and it was the beginning of the new cycle of euphoric expectations that subsequently resulted in obscene investments being thrown at virtual retailers and marketplaces. Conservatively we focused on process: how we will receive queries from customers, check orders for completeness, inventory availability to promise.

As we went live and the site picked momentum, we learned the ropes spending frugally on SEO, SEM, PPM, PPC, social media, steadily increasing traction. We exercised care to respond to every message received, suggestions, bouquets and brickbats, and fulfil all orders. 93% order completion was a sore thumb while 99% response to queries offered solace. Enviously we observed the investments into the perceived bubble with no focus on customer or end to end process while we toiled to create a profitable, sustainable business model.

The market expansion based on the promise of low price ensured that remaining wisps of customer loyalty disappeared into thin air fueling a race to burn money faster than others. Abandoned carts increasing and returns crossing the teens, some believe that they are too big to fall and moneybags will continue to prop them with the fear of losing their investments. What does it take for someone to become irrelevant ? Someone with deeper pockets and money to burn to eventually starve the other to oblivion.

Checking around with friends I discovered a few contacts with some of the manufacturers and portals; so I send emails to my connects describing my need and predicament. Prompt came the responses apologizing for the lapse and the offer to help connecting me to relevant people. This is where things started to get interesting. One manufacturer advised that they do not manufacture the specific SKU and that it would be figuring on the website by error. Another offered an attractive price but could not guarantee availability.

The portals/marketplaces feigned remorse that they did not control their partners who listed their merchandise; they were only a technology provider and offered fulfillment services as a value add. The merchant claimed they were out of stock and did not know when the new consignments would arrive. In comparison the store that I visited courteously offered alternatives to choose from explaining the finer nuances of my choices making me wonder why I spent so much time attempting to buy online.

Digital marketing strategies work, they attract customers, create a pull, help customers choose, and then they need the real world to take over with real processes that will stand the test of time without failing. Success requires alignment to create customer satisfaction, repeatability ensures delight and repeat purchases. The future belongs to those who unflinchingly focus on execution, right first time, every time. Invest in technology and also in process and execution, they will collectively stand by you.

Crisis Management: you can prepare for natural disasters, not stupidity

In the last month a large number of enterprises were flooded by unseasonal and incessant rain; the situation was such that people shelved differences and collectively in unison worked to save human lives. Stories of valor and selflessness published and circulated on social media gladdened the heart wanting to reach out to make a difference. If anyone did think about loss of property or submerged data centers, wisely they did not air their concerns lest be seen as insensitive to the disaster and loss of human lives.

Nature’s fury has no answer, we prepare for what we can imagine and what we get the budget for; the rest is assumed to unimportant not to attract attention or funding. This is despite the fact that many enterprises have suffered due to their oversight, inattention, or plain simple apathy towards their critical infrastructure, IT being a prominent part of it. In the three decades in the (IT) industry, I have seen a lot of things go wrong, experiencing some natural calamities and many more avoidable manmade disasters.

When I started my work life, mini computers were just beginning to gain interest, and my role included advise customers on how to set up Computer Rooms (yes that was the term used, there were no Data Centers then), power stability, routing of cables and the general stuff that we take for granted now. Customers would end up allotting basements, terraces, under the staircase, next to the elevator shaft, space locked in the middle of the office, and crunched space after all the executive cabins were provided for.

No amount of suggestions or fear of disruption made them reconsider; it was as if the temple of computing (you had to take off your footwear before entering the computer room) did not merit the importance that hardware providers demanded. My first tryst with natures’ fury happened with basements in a business district getting flooded with floating mainframes and submerged UPSes. It took almost 2 weeks for the impacted to recover leaving aside data loss from which some never recovered; history repeated itself again twice in a span of a decade.

People started moving the computer rooms upward locating them on higher floors much against the ire of the well-heeled executives who wanted the vantage window view and corner; servers needed backup window air-conditioning, until commercial data centers and improving networks made it feasible to outsource them. Clouds, ISPs and hosted applications made way for elimination of the hardware from the equation of things to manage. For the laggards and those who believe they can do better themselves they continue to face challenges.

Unfortunately stupidity manifests itself in many ways which cannot be obviated; the internet has many stories of engineers and users who have tickled the funny bone while they had to manage the effects of their actions with fried servers to roasted peripherals. The case of a factory gate pass system on the cloud has been told in many forums on how not to use the cloud or for that matter how the CEO fired the CIO and the entire IT team with their inability to fix his computer (he had forgotten the wall power switch).

Today the cart has been put in front of the horse many times with technology being imposed on the hapless in a quest to find the question to which they can be the answer. These are justified with same old anecdotes of disruptive companies having grown larger than life. There is little evidence that any of the followers have made any significant impact. IoT will change the world, Beacons will disrupt your life, Wearables are the next big thing, aggregators of the world unite; we have nothing to lose except the investor’s money.

Coming back to natural disasters, we try to save a planet for our benefit which has survived evolution of mankind and will probably live beyond its extinction too. We want it to remain habitable to our liking preserving the development we have indulged in precariously in proximity to water as well as hilly regions. Nature keeps reminding us our fragility and place in the ecosystem; my sympathies with the ones who lost a lot more than their personal belongings, their lives disrupted within a few days never to be the same.

Let us all put together our resources and energy to do what we can to reduce the impact of the fury that we cannot control.

First generation CIOs are vacating their positions; bridging the leadership gap

At the age of 25, I aspired to retire after putting in another 25 with a view to enjoy the rest of my life the way I wanted to with my friends and family. I did not want the compulsion to get to a workplace which expected me to put in 40 hours a week, but ended up demanding 65-70; not to talk about the travel and homework (as my kids called it) that took my attention post dinner when I was not traveling. I wanted to be the master of my destiny, time, and fulfil my bucket list before age related ill-health incapacitated me from living my desires.

It took me a year post the landmark and mid last year decided to hang up my boots. There were a few who preceded me in the same quest – most of them having crossed the golden milestone a little earlier. In the last few months I met many CIOs who want to take the plunge and get out of the rat race to do various things that they are passionate about. Most of them wanted a view on how green the grass is on the other side, pros, cons, challenges and opportunities; it’s evident that the trickle will become a flood sooner than later.

The CIO role has evolved and changed from techie to business leader with many taking on dual/multiple responsibilities; some have made it to the corner office and a place on the Board. With every new technology disruption irrespective of whether it impacts the enterprise and its customers, noise levels challenge the existence of the role which subsides as quickly as the hype is created by consultants, vendors and others. The business criticality of the role is now beginning to be felt and many companies are making efforts to retain their CIOs.

But what has been the trigger point for the CIOs aspirational breakout into newer horizons ? Why are they in droves wanting to get off the corporate treadmill into different roles ? They have started consulting companies, some joined hands with startups; academics has been the calling for a few, while the rest search for meaning in their life. Whatever they decided to do, the number of active first generation corporate CIOs, most of who started their professional lives at the bottom of the technology pyramid, is slowly and steadily dwindling.

Their experience makes them valuable contributors to industry bodies and associations where they rally resources and support to solve common problems. They are also active participants in Angel networks investing time, effort, and money into nurturing startups helping them take off and realize their true potential. Those who started work on succession pipeline and coach their teams to be ready for the eventuality are able to move off with relative ease with the knowledge that their legacy shall be remembered positively.

Everyone however has not been able to create smooth transitions; their teams were not perceptibly ready to take on the role. Thus the vacuum that they left behind was filled by external hires similar to a situation where the CIO would have left for other corporate opportunities. The interesting trend that appears to be emerging is to hire from big consulting and IT companies – practice heads, technology experts, and at times even senior project managers – each of them vying the CIO position and wanting the corner office.

Early results appear to indicate that successful succession planning and transition delivers better results for an enterprise with continuity of the journey; getting a seasoned CIO from outside fares better than a first time CIO from other disciplines despite their technical or functional expertise clearly demonstrating the complexities and nuances of a CIO role now having moved beyond technology. Organizations would do well to take cognizance of how the role impacts their ability to continue using IT as an effective tool to differentiate.

The CIO role and IT leadership is not just about the number of years of experience, it is about relevant experience that marries together technology, industry expertise, domain knowledge, people skills, and the generally accepted managerial skills. Current economic ecosystem with new disruptive business models necessitates the need for strategic CIO skills that were not so critical in the past. It is contingent upon CIOs to develop such skills in their teams to create a multiplier effect and also help them move off whenever the bug bites them.

If you are a CIO, get started now so that you can follow your heart when you are ready to graduate to the next level.