Posts Tagged ‘projects’

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HP Can’t Pay Its Salespeople – Another CIO Failure?

Monday, September 14th, 2009

HP's Sales People Have Not Been Getting Paid On Time <p> <div xmlns:cc="http://creativecommons.org/ns#" about="http://www.flickr.com/photos/pixieclipx/308927905/"><a rel="cc:attributionURL" href=Being a salesperson is a hard job. More often than not they live from quarter to quarter and if you don’t make your numbers, then you end up getting shown to the door. Hewlett-Packard is a huge IT products and services company that lives and dies by the actions of its sales teams. Making sure that the sales teams get paid should be a simple task right? Think again…

The Problem With Pay At HP

HP’s CIO Randy Mott has a problem on his hands. Within HP, payments for the HP’s business-technology group sales teams are handled by a software application called Omega (which is sorta funny when you think about the fact that Omega is the last letter in the Greek alphabet – it sure doesn’t seem to have the last word on calculating pay).

Omega has been around for a long time. It was born back at Digital Equipment Corporation (anyone remember DEC?), got picked up and used by Compaq Computer Corporation, and then finally found its way into HP. It must either be a well designed program to have had that long of a life or else it’s so dang complex that nobody is willing to tinker with it.

The problem with Omega is that it is struggling to deal with HP’s growing amounts of sales data. It was never originally designed to deal with this much volume. What’s happening is that Omega is now malfunctioning. Some HP salespersons are not getting paid on time – they are ending up waiting up to seven months to get paid!

Fixing The Omega Problem

HP is aware of the problem and they’ve tried unsuccessfully to fix it. As a stopgap measure, HP has been automatically paying its salespeople 60% – 70% of what they should be getting for meeting their sales quotas. One suspects that this is being done in order to allow employees to meet house payments and keep food on the table.

In the past HP has tried to fix Omega by adding new software that was intended to smooth out the flow of sales data. However, back in November of 2008 when HP closed its books for the year, they discovered that some of the data in Omega was both incorrect and incomplete. Clearly the band-aid approach to dealing with the problem had not worked.

What Should HP Do?

The Wall Street Journal is reporting that at a HP sales meeting in 2008, one of HP’s senior vice presidents of sales, Randy Runk, got up on stage and promised the sales teams that they would all be paid on time. Clearly that is not happening.

As CIO, Randy Mott (are all HP senior executives named Randy?) is responsible for fixing this problem – he’s already let it go on for far too long. Let’s say what HP is clearly not willing to say themselves: Omega’s time has come and gone and it must be replaced.

Mott needs to do two things immediately: he needs to campaign to have all HP sales reps who’s compensation is handled by Omega to be automatically paid at the level that they would be if they met their sales quotas. This should continue until the Omega issue is resolved. Any bonus will be calculated and paid with interest once the Omega issue has been resolved. Doing this will calm the sales forces and prevent them from leaving en-mass.

Next, Mott needs to start building a new replacement system for Omega. Why this has not been started already is beyond me. You would think that when HP took a look at the 6,500 that they were using and decided to slim it down to just a mere 1,500 systems, that Omega replacement would have been identified as being a high priority.

Based on the age of the Omega application, I’m willing to bet that its a single monolithic solution. Clearly a modular design is called for. I’m also willing to bet that HP doesn’t have a clear idea of all of the things that Omega does. No problem, if Mott and his IT team sits down with HP’s finance team they can come up with system requirements that may be much simpler than the twisted requirements that Omega now implements.

Final Thoughts

Randy Mott has been doing some amazing things at HP. However, somehow the way that he’s been prioritizing what his IT teams need to be working on skipped over the Omega problem. Clearly the prioritization of IT projects needs to be re-looked at.

Mott needs to take immediate steps to resolve the problems that this IT issue has created and then he needs to fix the problem once and for all by creating a replacement solution for the out-of-date and overworked Omega system. If he can do this quickly, then he will have found a way to apply IT to enable the rest of the company to grow quicker, move faster, and do more.

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What We’ll Be Talking About Next Time

Innovation, innovation, innovation – everyone wants it, but nobody seems know know how to get and keep it. CIOs are under a lot of pressure to do more with less these days and being able to nurture an environment of innovation sure would help. The trick is HOW to do this…

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Getting & Keeping IT Top Management’s Attention

Wednesday, February 18th, 2009
Getting Senior Management To Stay Involved In A Project Can Be Hard To Do

Getting Senior Management To Stay Involved In A Project Can Be Hard To Do

In my humble opinion, one of the key contributors to why so many IT projects fail is because of simple neglect. I guess the best analogy is if you were starting to drive down a highway road. When you started driving, you’d keep your hands on the steering wheel and make sure that the car was going in the correct direction and that it stayed on the road. However, if later on you took both of your hands off of the wheel, then the car would start to drift and would eventually plunge off of the road.

IT projects seem to follow this same path: when they are kicked off, everyone, including senior IT management, seems to have their hands on the steering wheel. However, as the days, weeks, months go on it sure seems like nobody is holding on to the wheel any more and the project tends to start to drift. All too often, more people are then thrown at the project or, worse yet, the schedule is reduced which causes the project to speed up. This just makes the eventual crash all that more spectacular.

So none of this discussion is news to us IT folks – we’ve seen it over and over again. What we need to find is a way to stop this from happening. Jesper Simonsen is a European professor who has spent some time studying this problem. He’s come up with some suggestions as to how we can go about fixing it.

Simonsen believes that the key to getting senior IT management involved in a project is to use participatory design so that they feel that they have contributed to the solution. The specific technique that he believes can be used to make this happen is called “problem mapping“.

Too many IT staffers solve problems by sitting in their cubes and dreaming up new ways to deal with old problems. Participatory design requires IT staffers to deal with a problem directly. They share their views on the problem and then they offer their suggestions as to how IT can be used to solve the problem.

In order to engage senior IT management, they need to be involved in this development of an answer to why IT needs to be involved in solving the problem. This is where problem mapping comes in.

Problem mapping is designed to allow the argument regarding if and how IT should be used to solve a problem to be evaluated. It provides a means by which the argument can be visualized and helps in seeing the structure of the argument.

When you use problem mapping, you create a table that has four columns with the following headers:

  • Problem / Need
  • Causes
  • Consequences
  • Solutions

The real power of using a problem map is that it will force all involved to talk about what they see as being the real problem. The link between what they are proposing as a solution and the original problem is very clearly shown.

The key point to make here is that by making the whole problem solving process so visible, you will actively engage the top management in the process. They will be given an opportunity to sit back and challenge, make changes to, and review the solution that is being created before their very eyes.

Once you’ve achieved this level of participation at the start of a project, the senior IT management will remain involved during the entire project because they will better understand what is being done and they will feel as though they have contributed to the solution.

Do you have problems keeping your senior management involved in projects after they get started? What have you tried to improve their involvement? Was it successful? Leave me a comment and let me know what you are thinking.

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Can’t We All Just Get Along (In IT)?

Monday, January 26th, 2009
IT Departments Need To Work With Colleagues In Other Firms To Understand Technology

IT Departments Need To Work With Colleagues In Other Firms To Understand Technology

So there you are, manning the laptop, doing your utmost best to guide your IT department and, of course, your company on to greater glories. Do you really need to network with your colleagues at other firms? For that matter, do they really have anything to teach you?

Peter Whatnell over at Sunoco has some thoughts on this subject. Whatnell is a bright guy: he’ s been in charge of Sunoco’s IT operations since 2001 (remember the dot.com crash?) and he is now the president of the Society for Information Management. Ben Worthen over at the Wall Street Journal recently had a chance to sit down with Peter and have a chat about the importance of remembering to look outside the company for ideas.

Whatnell makes the good point that the colleagues that you network with don’t even have to be in the same industry as yourself. As an example, if you talk with someone who is working in IT for the construction industry and they start to mention how they are starting to use mobile devices to quickly distribute design changes, then you may have found an idea that you can use in your neck of the woods.

One of the big questions that we all deal with is “am I giving away competitive information if I talk shop with a colleague from another firm?” Whatnell makes the point that by now we should all be able to realize that what makes our firms competitive is not the underlying technology that we use. Talking about technology is not going to reveal any big company secrets.

What makes our firms competitive is how we go about using these pieces of technology in order to solve the problems that our firm is facing. This means that even if you and your competitor have access to the same technology, you’ll end up putting it together much differently.

Whatnell believes that the true source of a competitive advantage is knowing exactly how you can use IT to help make your business more successful. One interesting way to do this is to ask key executives how the firm makes money. If they don’t know, then this is an area that IT can help simplify.

In these tough times, it’s interesting to hear what Whatnell has to say about what his biggest challenge is. Sunoco is an oil company – it’s a commodity business that’s competing in a mature market. In order for Sunoco to be successful, the firm is going to have to find a way to become THE low cost provider.

What this means for IT is that we need to find ways to help the business side of the house cut expenses, reduce cycle times, and improve their overall agility. The goal should be to avoid having IT being told to just “cut your budget to help our bottom line.”

In the end, Whatnell says that an IT department needs to have earned its credibility within the company in order to be able to be able to contribute to helping the company reduce costs. The key here is that you need to have already earned this credibility.

Do you routinely meet and talk with colleagues that work outside of your firm? Do some of these colleagues work in different industries? Does your IT department have the ability to work with the rest of the business to trim costs? Do you feel that your IT department has the credibility that it will need to have these discussions with the rest of the business? Leave me a comment and let me know what you are thinking.

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Posted in it strategy | 3 Comments »

3 Secrets That Oil Companies Use To Run A Great IT Department

Thursday, January 15th, 2009
Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

Peter Whatnell, CIO of Sunoco, Has Some Interesting Thoughts On How To Run A Successful IT Department

If you had to guess as to what the secret of running a great IT department is, what would you say? Peter Whatnell over at Sunoco has some thoughts on this subject. Peter breaks it down to three key items: knowing how your company makes money, choosing to not run against the company’s culture, and remembering to never fall in love with technology. How hard can that be?

Whatnell is a bright guy: he’ s been in charge of Sunoco’s IT operations since 2001 (remember the dot.com crash?) and he is now the president of the Society for Information Management. Ben Worthen over at the Wall Street Journal recently had a chance to sit down with Peter and have a chat about the role that an IT department plays in a company’s success.

Whatnell pointed out that the arrival of a global recession has caused all IT departments to take any plans that they had created prior to the end of August and basically throw them away. The big hit is going to be especially felt in new projects.

The difference between current events and the dot.com crash that happened back in 2001 is that that crash really only impacted the IT community. This time around, it’s really a global meltdown and it’s impacting the whole business.

IT is facing a significant challenge in that there is now a lot of easy-to-use IT technology that is available to consumers. Examples include the iPhone (of course!) and free on-line email accounts with virtually unlimited storage. What this means is that corporate users are now expecting to see similar products available to them while they are at work.

IT departments have some valid security and support issues for not diving headlong into offering such services internally. However, they do need to seriously consider how to offer their customers such services.

Whatnell stresses that we need to make sure that we don’t “…waste a good crisis.” What he means by this is that 2009 is going to be tough and it’s going to force every IT department to investigate nontraditional ways of delivering IT services.

Whatnell is somewhat famous for saying that he’d consider moving to a cheaper alternative, such as Google’s email system, if he could get 90% of the functionality for 10% of the cost. One of the reasons that he’s taken this stance is because he realizes that most users only scratch the surface of the functionality of the applications that they have available to them. Give the power users access to the fancy, expensive version of the apps and give everyone else the basic version.

Whatnell has some very specific thoughts when it comes to evaluating potential IT projects. He says that he evaluates projects based on what they do to support the company’s strategy, what the business case is, and finally, what the business risk is.

He points out that the more change that an IT project would cause to how business is conducted, the bigger the risk is. This does not mean that you don’t do the IT project, but that you need to be very careful and make sure that you give your full attention to all of the change management activities that would be required.

What do you think about what Peter has to say? Do you think that his view from inside an oil company is relevant to the rest of the IT industry? Which of his suggestions do you think is the most important? Leave me a comment and let me know what you are thinking.

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Posted in it strategy | 10 Comments »

How Can IT Get Your CFO To Give You $$$?

Thursday, December 4th, 2008
IT Departments Need The Funding That The CFO Controls

IT Departments Need The Funding That The CFO Controls

It is a sad fact of the IT world that everything requires money. No matter how cool the new technology would be to have, no matter how critical the update or change may be, you are not going to be getting or doing anything about it unless you have the funds to spend.

In the modern corporation, all funds start in the office of the Chief Financial Officer (CFO). He/she reports to the CEO and at the end of the day, no money flows in the company unless the CFO says that it can. Darn it – can’t he/she see how critical your IT project is and just give you the funding that you need?

Elizabeth Millard over at Baseline magazine took the time to talk with CFOs in order to find out what we IT’ers need to do differently. It turns out that what we have here is a failure to communicate. Specifically, we in IT have a bad habit of telling the CFO what we are trying to do and our proposals are generally not very well put together.

What we seem to be failing to do is to look at how a CFO views the world. Everyone is coming to him/her asking for funding. They need to come up with a way to quickly accept or reject a request.

If a proposal crosses their desk that has the support of the CEO, then it has a pretty good chance of getting funded. However, if the proposal that the CFO is looking at is a low priority project or if the proposal is lacking any sort of clear time line for showing results, then you can pretty much forget about it being funded.

The burden of clearly explaining what an IT project is going do in simple, straightforward business language is the responsibility of the IT department – it’s not the CFO’s responsibility to learn our language. At the end of the day, we need to be able to describe what impact on the firm’s business goals, security, customer relationships, and worker productivity is going to be.

In order to capture the CFO’s attention, we need to be able to talk to them in terms that will catch their attention. This means that every IT project needs to be able to do three things simultaneously: minimize IT staffing levels, increase customer satisfaction, and (of course) save the firm money.

In the world of corporate finance, surprises are most unwelcome. A proposal should never show up on a CFO’s desk without having been well advertised in advance. This means that you need to set up a regular set of meetings between the CFO and IT management in order to keep the CFO appraised of IT challenges and initiatives.

IT and the finance department actually have a lot in common. Both are committed to making the company successful. Areas of overlap include managing services provided by the firm, storage of company records, disaster recovery and business continuity planning, regulatory compliance and discovery initiatives, and security.

No IT project ever gets done in a flash – there are always phases to our projects. These phases need to be carefully spelled out to the CFO and the value to the firm that the project will provide at the end of each phase needs to be clearly stated.

One final thought: a great way to get a CFO to NOT approve your project is to tell the CFO that the project is urgent and then ask him / her to quickly make a decision. More often than not they will – NO!

Take your time and talk with the CFO to make sure that he/she understands how much the project will cost, what risks it comes with, and what you expect the outcome to be. This is your best path to getting the CFO to approve the IT funding that your projects so desperately need.

What is your IT department’s relationship with your CFO today? Do you have regular meetings with your CFO to keep him/her up-to-date on IT initiatives or do you surprise the CFO with funding requests? How many of your project funding requests does the CFO approve and how many does the CFO reject? Leave me a comment and let me know what you are thinking.

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Posted in CFO | 1 Comment »

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