When do acquisitions make a company too big?

There seems to be a belief in some quarters that when it comes to IT companies, the larger the better; for example, Acquire Me! Oracle’s and SAP’s Next Likely Targets which quotes:

"A move by Big Blue, say on a midmarket ERP partner like Lawson or Infor, could presage further consolidation in that arena by Oracle and SAP." (The 451 Group report – Where Might Old Foes Oracle and SAP Each Look Next to Stave Off Apps Hunger Pangs?)

However, from a customer (and a partner) point-of-view, dealing with some larger ERP vendors means going through the bureaucracy to get even small things done. Also, large software vendors seem to go for a centralised control model. It might be old news, but at a conference in 2008, I was told by a senior local representative that Oracle’s process for confirming quotes for SA companies could only be done by Head Office in the US, this required a wait of several weeks before a quote could be approved.

Waiting that long for a quote might be OK in some countries, but South African business people are not typically enamoured by long decision cycles.

Just how important/valuable is certification?

The question of whether IT certification has value has come up again via an article by Andy Klee. This issue has been debated on Twitter and elsewhere before.

In my opinion, certification is useful to the individual, in terms of having to understand the concepts and techniques that the technology requires; and to a company to show that the person has grasped those concepts and techniques.

But that is where it stops. Anyone who has worked on IT projects for more than a few years has met people with certifications but little practical and useful experience and knowledge. The opposite also applies – I know of people who are superb at what they do but don’t have a long list of certifications.

One of the mistakes a customer can make is to use the certification credentials of an IT provider as a measure of risk mitigation.

That gadfly of commentators, Dennis Howlett, has made his own comments about the certification article, and I tend to agree with him regarding its value to vendors who make big money out of charging for exams.

Some vendors – like Microsoft and SAP – make a big deal of certification, and probably have big teams drawing up new certifications. Other vendors – like Oracle’s JDE group – probably have not been given the same resources, with the result that Andy discusses.

The lean approach applied to information

An article in the Manufacturer.com discusses how the lean approach used in manufacturing can be applied to information.

The article starts off by pointing out how companies have invested in expensive systems,

only to discover that getting the information they want exactly when and where they want it actually becomes a barrier in process improvement initiatives.

It lists some points that information system must meet in order to be called ‘lean’.

1. Accessible
2. Available
3. Timely
4. Pertinent
5. Concise
6. Complete
7. Legible
8. Accurate
9. Consistent in access method/path; in presentation form and terminology

We are going to see how we can apply these points in a new project.

How the software world has changed

Care of @CurtMonash on Twitter, a photo of the Top Software Vendors in 1989. How the world has changed!

old DEC, new Oracle

The news that Oracle is to acquire Sun Microsystems sent my mind back over 10 years to a company I used to work for that had many of the attributes that the new Oracle/Sun business will have.

I am referring to DEC, aka Digital Equipment Corp, aka Digital. Look at what Digital had and what Oracle will now have:

Technology	DEC	Oracle
Relational database	Rdb	Oracle
Operating system	VMS	Solaris
Middleware	MessageQ	BEA
Hardware	VAX	Sun

There was a belief about Digital that it became too difficult to manage so many different technologies, and that contributed to the company’s demise. So I can’t help wondering how Oracle will manage.

The difference between the two is that Digital developed its products through innovation, Oracle has been getting them by acquisition.

Truths About IT Costs

A Harvard Business Review article The Truths About IT Costs lists seven ‘truths’ about IT costs. These are:

1. Enhancements often don’t deliver results commensurate with their costs.
2. Projects are often too big and take too long, partly because unnecessary functionality is built into applications.
3. Previously purchased applications and infrastructure technology are often underutilized.
4. Project failure rates are too high.
5. Tech teams do not have sufficient incentive to achieve high quality, and quality is often not measured.
6. Managers don’t know enough about the systems that support their areas.
7. IT is too risk averse: “No one ever got fired for buying IBM or Microsoft.”

The article reads like some consultants’ reports – addressing problems at a high-level, with a few key recommendations; but when you think about it for a while you wonder how to practically implement the recommendations.

Update: see also Michael Krigsman’s critical blog

Organisations need to be project-prepared before they adopt PPM technology

Brian Sommer commented on reports that organisations should really start looking at project portfolio management (PPM) – PPM & IT Management – is now finally the time?

Many organisations have some rudimentary project management capability – such as an enterprise licence for Microsoft Project – but have no idea how to really benefit from a project-oriented to their business.

The work that I have been doing at my company in the last 2 years has shown me that simply implementing a technology solution is most unlikely to make an organisation project-prepared. The problem is that the project software vendors like to promote their software as the first step. Working with consultants like the X-Pert Group have shown me that to become project-oriented, an organisation has to go through a cultural change, starting at the executive level, and has to be prepared for a long learning curve and a number of struggles on the way.

So while I would love more people to come to us for project technology, I would recommend that they put their houses in order first.

Does high project failure require "professionalising" IT?

Two recent blogs by Michael Krigsman discusses how high IT project failure rates are, and some of the key reasons.

Study: 68 percent of IT projects fail
Requirements and failure: Interview with CA’s SVP of IT Governance

I am friends with a number of professional engineers – civil, mechanical and electrical – and I don’t believe they would dare to operate if the failure rates of their projects was anywhere near as high.

Michael identifies issues relating to lack of skills, knowledge and competency as the key factors leading to failure. Skills, knowledge and competency are what training and education programs are supposed to develop. People go to university to acquire skills and knowledge. But for professionals like doctors (my wife being one) and engineers, a university degree only starts the process. The engineering companies I know expect to train young engineers for several years before they are ready to be let loose.

But when it comes to IT, customers often think they have the in-house capacity to for projects. I think many people also look at software like Microsoft Office and think that implementing and using software is easy.

Many years ago in South Africa, there was a debate in the Computer Society about whether IT should become a profession. At the time, the proposal was defeated. After reading Michael’s blog, I am wondering whether we should re-look at the proposal. The next step would  be where do you start, and would IT vendors, consultants and users see this as beneficial?

In engineering, aircraft engineers must be a relatively recent addition as a profession. So how did they go from being a bunch of techies to having their own professional status?

BTW, I suspect that the information Michael uses comes from projects in the more well-resourced developed economies, so I wonder how the projects perform for those of us in developing countries?

IT Social Media survey

On the ITtoolbox site there are the results of what I would consider a substantial survey of social patterns of IT professionals.

While only slightly more than 50 percent of respondents were from the US, the questions were quite US-centric and reflected a bias towards how business and society operates there. It would be really interesting to see a similar survey which is really structured for global sample.

Stifling corporates

A few weeks ago, the managing director and I had a meeting with the South African innovation manager of a major international food manufacturer based in north America.

My managing director has a gift of being able to identify quickly the essential issues that a prospective customer has, and this often enables us to have meaningful conversations early on in a discussion. In this instance we were getting along very well and discussing some really interesting challenges and possible solutions, when the IT manager was invited into the meeting. Within minutes his attitude towards any kind of solution killed the atmosphere.

He pointed out how every subsidiary had to comply with the rules laid down for IT projects by head office. Listening to the bureaucratic process that they had to follow, I was struck by how a good intention - preventing project and software proliferation – had served to obstruct a manager from making his department more productive, and effectively stifled any type of creativity or process innovation.

It also made me appreciate how fortunate we are as a company to deal with owner/manager companies in the medium-size business market. We had meetings this week with MDs and FDs (managing and financial directors) of building and construction organisations. In the space of a single meeting with some of them, we went from an initial discovery session to the directors making decisions about preliminary work we could deliver. They were able to identify the problems, debate and evaluate options, and decide on a course of action to introduce new or improved processes without having to go through a laborious approval process.

Vinnie has coined the term “business process angioplasty”, which is his way of showing how processes should be improved. The food company needs to do some business process angioplasty on its IT adoption process.