Tag: decision-making

Lessons Learned in Creating a Corporate System

EXECUTIVE SUMMARY

This article discusses the various strategic, political and cultural factors that were associated with the decision to develop an online employee portal at SmFedCon. The cause and contributing factors that led to the software development project are explored in detail. Focus is placed on SmFedCon’s decision processes to make the initial decision not to develop the employee portal.

Examples are included that show how factors such as personal biases and financial conservatism influenced SmFedCon from realizing the potential of the online employee portal.

ABOUT SMFEDCON AND THE PROBLEM REQUIRING A DECISION

SmFedCon was a small US Federal government contractor that provided Information Technology (IT) services in the areas of strategic planning, project management, and software development. It had approximately 240 employees and 98% of these employees worked onsite at various government locations across 14 states and Washington DC.  It was growing rapidly and was involved with multiple high-level projects. Due to this rapid growth, a decision needed to be made if SmFedCon was going to spend time and resources to create an online employee portal.

HOW WAS THE PROBLEM IDENTIFIED

Within a few months of joining SmFedCon, CIO noticed a pattern where the quality of documentation deliverables was declining due to a lack of a version control system and no central document repository. What broke the camel’s back was an incident where one of the federal clients was about to receive different versions of the same document from the main office, project manager and the project team member. Although this was stopped in time, CIO realized that this as an issue and needed to be addressed. This issue was also confirmed by some of the employees who worked on-site at federal client facilities.

ACTORS AND ROLES

The following table shows the reporting structure, roles, and actors involved in the decision-making process for creating an online employee portal:

Actors

Roles

Reported To

Chief Executive Officer (CEO)
  • Corporate priorities decision maker
  • N/A
Chief Financial Officer (CFO)
  • Corporate Financial Management
  • CEO
Chief Information Officer (CIO)
  • Corporate Technology Management
  • US Federal Government Projects Management
  • CEO

In regards to the online employee portal decision process, (1) the CFO’s role was to determine if new project budget requests made financial sense, (2) the CIO’s role was to provide a 2-page business case document to the CEO and (3) the CEO’s role was to decide.

BACKGROUND

Strategic Factors – Not in the Technology Roadmap

Although the initial decision not to develop the employee portal was overturned due to changing circumstances but at the beginning, it was based on SmFedCon’s technology roadmap. The technology roadmap was written some year back before the company started to see rapid growth and did not take into account potential issues that might occur due to mismanagement and miscommunications.

Political Factors – Power

The CFO and CIO reported to the CEO however the CFO had more power at SmFedCon. CFO could easily influence the CEO in certain decisions. The CFO’s power came from the 20-year friendship with the CEO and as a trusted advisor to the CEO. The CFO was also responsible for IT prior to the CIO joining the company.

Cultural Factors – Small Business Mentality

While costs should be kept under control in all organizations but small businesses are especially sensitive to this. However, this sensitivity can blind small businesses from what is possible. This was the case with SmFedCon. Even though they saw how an online employee portal could help solve some of the issues they had it was just not in the budget to pursue this direction.

SMFEDCON DECISION PROCESSES – The 2-Page Business Case

After the issues were identified, CIO met with the CEO to discuss that an employee portal could be the answer. CEO requested a 2-page business justification document to show if the employee portal could address the current and perhaps future needs.

The 2-page business case linked current issues with quality degradation, loss of productivity and eventually loss of clientele. It also listed the various types of options that were considered to stand up an online employee portal. These options included proprietary software vs. open source, existing application customization vs. software development and associated costs. The document listed the only option that was most feasible for SmFedCon.

The CEO discussed the 2-page business case with the CFO during one late hectic evening. The next day CEO informed CIO that the company had decided not to move ahead with the online employee portal project.

Next week, the CEO was working on a federal solicitation response when the computer died. At that time CEO was the only person who had the latest version of the document. CEO was also collaborating with other writers but they only had previous versions. Although the documents were retrieved CEO realized how the online employee portal with the documentation management system could have saved time and would have been beneficial. The next day SmFedCon won a contract that they were working on and the CEO asked the CIO to go ahead with managing the development of the online employee portal.

The following diagram shows the decision-making process at SmFedCon.

Decision Making Process at SmFedCon
Decision Making Process at SmFedCon

ANALYSIS

In hindsight, there are a number of things that could have been handled better.

As companies grow, they have to realize that what worked in the past when there were only a few employees would not be sufficient in the future. Processes and tools should be in place and scalable to the growing needs of the organizations. In regards to SmFedCon, this was not the case. Although the company was growing rapidly it did not invest in processes and tools that could have helped it become a well-oiled machine. In the case of an online employee portal, it was a necessity not a luxury since a vast majority of the employees were not on corporate locations but they still needed to access the correct version of the documentation and be able to collaborate with other team members.

Framing the Problem

When CIO joined SmFedCon, the problem with documentation management, project management, and team collaboration was not defined. There was no framing of what was going on. Although CIO was were not hired to improve operations but suspected that it might have been one of the underlying Blink moments that the CEO had. CIO suspected this because CIO had worked with the CEO as a consultant and helped one of SmFedCon’s clients improve operations. It would have been advantageous to the company if they had given CIO the opportunity to conduct a thorough study of the company to see what other areas could be improved upon.

Biases – We all had them

In the decision-making process for the online employee portal, there were definitely some biases from all actors. CIO’s bias came from working with small businesses in the past where cost was always a major issue. Additionally, in those organizations, CIO was responsible for recognizing patterns and improving operations and thus tried to do the same with SmFedCon. Due to CIO’s background in technology, CIO believed that most operational issues can be solved through well thought out management and technology systems which were another bias. CIO’s decision not to get buy-in from the CFO prior to giving the 2-page business case and not getting CFO involved in determining the project budget stemmed from an unpleasant experience working with a previous CFO. All of this played into the CIO developing the business case without working with the CFO.

There were some biases from the CFO as well. Since CFO handled IT before CIO joined, it seems like CFO was reluctant in giving up control. As CIO looks back, s/he remembers an incident where the CEO had to have a closed-door meeting with CFO so that CEO would give CIO login credentials for a corporate system. CFO was skeptical about IT projects and was quick to make judgments about them. CFO was also double the age of the CIO and might have not understood/accepted why SmFedCon hired a young CIO at the company only in their 20s. In regards to the online employee portal, all these biases might have played a role in the CFO convincing the CEO that it was not feasible to start this project.

Although the CEO was not quick to make judgments the 20-year-old relationship with the CFO might have played a role in the decision. Additionally, the decision not to be moving ahead on the project might have been exacerbated by that hectic late evening.

Alternatives to Recommended Direction

The 2 pages CIO chose to concentrate on stated what issues SmFedCon was having and how they could be solved through the online employee portal. The document did not have many alternatives to select from. It only listed that SmFedCon can create the online employee portal (1) using open source technologies, (2) the CIO would guide the developers and vendors in the design and (3) CIO would manage its development.

CONCLUSION

Although a decision-making process was followed initially it did not result in the desired outcome. As discussed earlier, while there are many reasons for this however establishing good relationships and getting buy-in would certainly have helped.  Some of the other decision-making processes that could have helped include:

  • Nominal Group Technique – This technique could have been helpful in determining the various issues employees were having. Since the online employee portal was the CIO’s idea even though s/he had been with the company only for a few months versus other employees who had been around for a long time. This might have created some resentment towards the idea. The Nominal Group Technique could have helped to make idea generation and problem-solving more collaborative.
  • Framing – Proper framing of the issues would have helped too. CIO did not frame the issues correctly and jumped to the solution. It would have been great to just step back, frame each issue individually and then see how issues could be resolved.
  • Personality Types – CIO assumed that most people are like him/her. However, if CIO had understood the various personality types and their motivations then his/her recommendations could have appealed more to the CEO and CFO.

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5 Questions to Ask About Prescriptive Analytics

Prescriptive analytics is used for performance optimization. This optimization is accomplished by using a variety of statistical and analytical techniques to identify the decisions that need to be taken in order to achieve the desired outcomes. The data sources used for the determination of outcomes can range from structured data (e.g., numbers, price points, etc.), semi-structured data (e.g., email, XML, etc.) and unstructured data (e.g., images, videos, texts, etc.).

If done correctly, Prescriptive Analytics is the Holy Grail of analytics. However, if done incorrectly, it can result in misinformed decisions that can be outright dangerous. Individuals and organizations have to understand that even if the data is correlated that does not mean that there is some sort of causation. A general example of this is when in a news report, the host(s) says that the survey has shown that x is correlated with y but then they go on how y was caused due to x. This is simply what I call “jumping the data gun” and organizations that are not aware of this can fall into this trap.

Another thing to be aware of is that after the Prescriptive Analytics gives you certain courses of action and you apply those actions, keep track of how well your Prescriptive Analytics is performing as well. In other words, you have to measure the performance of your performance optimization ways. The reason to do this is that over time you can see if the models presented by your Prescriptive Analytics engine are worth following, re-doing or dumping.

To get you started, here are a few questions to ask:

Today

Tomorrow

Who uses prescriptive analytics within, across and outside your organization?Who should be using prescriptive analytics within, across and outside your organization?
What outcomes do prescriptive analytics tell you?What outcomes prescriptive analytics should tell you?
Where is the data coming from for prescriptive analytics?Where should the data become from for prescriptive analytics?
When prescriptive analytics is used?When prescriptive analytics should be used?
Why prescriptive analytics matter?Why prescriptive analytics should matter?

When you are asking the above questions, keep in mind that Prescriptive Analytics uses data to create a model (aka a data version of the world) that is used by individuals and organizations to make real-world decisions. But if the model itself is flawed then you are bound to get answers that although might look visually appealing are completely wrong. It is not all doom and gloom though. In fact, Prescriptive Analytics is used in determining price points, expediting drug development and even finding the best locations for your physical stores. Companies like Starbucks have been using Prescriptive Analytics in the last few years to determine the best locations for their next coffee stores. Interestingly, some have claimed that wherever Starbucks goes, the real-estate prices also increase. While there is some correlation between a Starbucks coffee store opening with increased real-estate prices but this does not mean that because of Starbucks coffee stores the real-estate prices increase.

Analytics Trophies

References:

  1. 5 Questions to Ask About Business Transformation
  2. 5 Questions to Ask About Your Information
  3. Starbucks Tries New Location Analytics Brew

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5 Questions to Ask About Predictive Analytics

Predictive Analytics is a branch of data mining that uses a variety of statistical and analytical techniques to develop models that help predict future events and/or behaviors. It helps find patterns in recruitment, hiring, sales, customer attrition, optimization, business models, crime prevention and supply chain management to name a few. As we move to self-learning organizations, it is imperative that we understand the value of Business Analytics in general and Predictive Analytics in particular.

It turns out that Predictive Analytics is about Business Transformation.  But in order for this Business Transformation to take place, you have to take into account the organizational contexts in the following ways:

  1. Strategic Perspectives: Not all organizations are the same and thus what works in one organization might not work in yours. Based on the knowledge of your organization’s maturity, you have to decide if Predictive Analytics is going to be a top-down, bottom-up, cross-functional or a hybrid approach. Additionally, take into account what should be measured and for how long but be flexible in understanding those insights might be gained from data that might initially seem unrelated.
  2. Tactical Perspectives: One of the key factors in Business Transformation is change management. You need to understand how a change would affect your organization in terms of people, processes, and technologies. You have to take into account the practical implications of this change and what kind of training is needed within your organization.
  3. Operational Perspectives: It is all about how the execution of Predictive Analytics is done within your organization. To fully integrate Predictive Analytics into your organization, you have to learn from best practices, learn the pros and cons of your technology infrastructure and determine if the necessary tools are intuitive enough for people to make use of them.

Now that you understand the different organizational perspectives, it is time to ask the following:

 

Today

Tomorrow
Who uses Predictive Analytics to make decisions? Who should use Predictive Analytics to make decisions?
What happens to decisions when Predictive Analytics is used? What would happen to decisions if Predictive Analytics will be used?
Where does the data for Predictive Analytics come from? Where should the data for Predictive Analytics come from?
When is Predictive Analytics relevant? When should Predictive Analytics be relevant?
Why Predictive Analytics is being used? Why Predictive Analytics should be used?

When you ask the above questions, keep in mind that the reliability of the information and how it is used within the organization is paramount. A pretty picture does not guarantee that the insights you get are correct but you can reduce decision-making errors by having people who understand what the data actually means and what it does not.

Measurement
Measurement

 

5 Questions to Ask About Your Information

Information collection, understanding and sharing has been a worthwhile pursuit since the dawn of humanity. In the beginning, now and in the foreseeable future, this pursuit will continue, even if the “tools” change. We will continue to use the information to make short-term and long-term decisions for our groups and ourselves. But depending upon the sources of the information, we might make good decisions or we might not. It is only until the results of the decisions are evident that we will know if where we ended is where we wanted to be. Sometimes we will make quick decisions and sometimes we will take our own time to make a decision. But in all of these circumstances, we will always hope that the information sources that we used to make our decisions are credible.

In order to understand the information, we need to understand the various “flavors” of information that we receive. Let’s explore them below:

  1. Redundant Information: Think about how many times you have received the same information from two different secondary sources. In your mind, you might be thinking that since two different secondary sources are providing the same information then it must be true. But what if the primary source of the information is the same? What if nothing new has been added to the information that you received? This is the concept of Redundant Information where the primary source of the information is the same and nothing new has been added to it.
  2. Corroborated Information: Think about how many times you have received the same information from two different secondary sources and are sure that the primary sources of the information are different. In your mind, you might be thinking that since the two primary sources are different then it must be true. This is the concept of Corroborated Information where the primary sources of the information are not dependent on each other.
  3. Contradicting Information: Think about how many times you have received the same information from two different secondary sources and found out that they were saying the opposite things. This is the concept of Contradicting Information where the information that we receive does not agree with each other.
  4. Perspective-Dependent Information: Think about how many times you have received the same information from two different secondary sources and determine that there are various versions of the truth. One version might be at a high level while another version might be at a lower level. This is the concept of Perspective-Dependent Information where information that you receive has been looked at from top-down, bottom-up and horizontal perspectives.
  5. Biased Information: Let’s face it, everyone has biases at some level based on their history, culture, societal norms, politics, religion, age, experiences, interactions with others and various other factors. These biases can creep into the information that we receive from others but also influence us when we make our own decisions. This is the concept of Biased Information where even in front of mounting evidence that challenges your views, you are still holding on to your conscious and unconscious thought processes to make decisions.

Now that you understand the various flavors of the information that you receive, it is time to ask the following:

 

Today

Tomorrow
Who receives the information? Who should receive information?
What happens to the information? What would happen to the information?
Where does information come from? Where would information come from?
When is information being shared? When would information be shared?
Why information is collected? Why should the information be collected?

When you ask the above questions, keep in mind that the information flavors and contexts are closely related. Even if you understand the information flavors being used but do not understand the context around them then your decisions will be skewed. On the other hand, be mindful of only looking at information that confirms your views (aka cherry-picking) since you will miss something that might have helped you better understand the world around you.

Information Flavors Information Flavors
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