Diagnosing Viability of Chargeback Models for Portals and SharePoint

April 24, 2009 at 9:56 am | Posted in business case, Intranet, Microsoft SharePoint, portals | 2 Comments

I just had a good conversation with a client about whether setting up a chargeback model for SharePoint would be a good idea for them and how to design it.  This is a common question that I blogged on over at the Collaboration and Content Strategies blog (see Do Chargebacks Work for SharePoint, Portals, and Collaboration?), but thought it could be useful to provide the set of questions I use to diagnose a portal chargeback situation and determine if it is the right path to take and how to design the model.  It’s probably useful to read that previous blog posting first to see where I’m coming from.

1. What’s the governance structure (e.g., federated I assume)? How many other sites using it?

  • Rationale: Validating that the organization fits the standard situation where there is a federated model where I’m talking to the central IT provider and there are many potential adopters of the enterprise portal. 

2. Rollout maturity: Where are they on the curve of network effect? How many other sites could potentially use it?

  • Rationale: Collaboration technology thrives on network (aka snowball) effect where the more people use it, the more valuable it is.  You don’t want to disincent usage. But once the portal is rolling and users are addicted, it may be possible to shift chargeback models from a tax to a utilization model to prevent abuse and provide a more fair sharing of the cost burden based on usage.

3. Pricing: Cheap? Subsidized?

  • Rationale: It can help adoption of the chargeback if not all cost recovery is addressed by the fees. For example, maybe 50% of the infrastructure is centrally funded and the other 50% is recovered through chargebacks.  This is not essential though.  100% recovery through chargebacks can help provide the business a clearer view of costs and value.

4. Competition/lockin: how easy for units to say you’re too expensive and use something else? policy or regulatory barriers?

  • Rationale: A common problem with chargebacks is that potential buyers start haggling with you or just go to a SaaS provider who is a few bucks cheaper. Then all information sharing and network effects go out the window. This works best when there are barriers to users going outside the centrally provided service.

5. Chargeback maturity: do other technologies use chargeback too? Is there a “tax” model that has been used”?

  • Rationale: If business units aren’t used to being told they have to pay a chargeback they may balk at the idea, even if it is a good one.  In an extreme case there may not even be an accounting/financial process where chargebacks can be implemented.  Same goes for “tax” -if you’re just one of many the business will understand your proposition much better.

That’s it.  From these 5 questions I can now tell a client whether they share characteristics of other organizations I’ve spoken with that have been successful or unsuccessful with chargebacks.  I can also determine whether it is better for them to do a usage or tax-based assessment.  And provide a few areas to beware of (and hence prepare for) as well.


Today’s Cost Cutters are Tomorrows Spendthrifts: The Hemline Index Redux

April 16, 2009 at 7:07 am | Posted in business case, Recession | Leave a comment

I’m putting the final touches on a research document called “Thriving with Slashed Budgets: A Framework for Saving Costs While Meeting Needs” and my thoughts have turned to hemlines.  Yes, there is a connection.  Have you ever seen the 1960’s sci-fi classic “The Time Machine”, based on the book by H.G. Wells?  There’s a famous bit of special effects where the time traveler watches the hemlines of models in a store window rise and fall as time speeds by. It’s an anachronism to a certain extent since this 1800’s person is noticing something that wasn’t brought to the public consciousness until 1926 when economist George Taylor published his “hemline index” theory, which showed a correlation between the state of the economy and women’s hemlines.

The connection here is that the hemline index is a good analogy for how fads in loose spending give way to fiscal conservatism in an endless boom-and-bust cycle. Perhaps a telling measure today is the acceptable location on a cost justification continuum that measures the “hardness” of the justification (see below). In good economic times, projects requiring cost justification get by with lower levels of “hard” proof of their value. However, in tight economic conditions CFOs demand more cost justification and push the degree of hardness further to the right. Those projects that breezed through reviews in better times with soft justification are running into a difficult challenge now that budgets are tighter.  Being asked to retroactively prove the value of a system with large sunk costs is a difficult position to be in.

cost justification continuum

Note: It seems I also referred to “The Time Machine” in a recent blog posting. I described an underclass of workers that toils in oppressive conditions to enable a seemingly perfect technology future for the beautiful people as “information morlocks”. To clarify, time machines are not part of my coverage area and I don’t expect to be writing more about “The Time Machine” anytime soon.

Can’t Prove Collaboration ROI? You’re Not Alone

March 25, 2009 at 2:58 pm | Posted in business case, collaboration | Leave a comment

Proving the return on collaboration has always been fraught with peril.  If you’ve had difficulties doing that, you’re not alone.

Sure, discussion groups and wikis can be valuable, but how do you put a dollar figure on that?  Calculating ROI by using productivity measures (“We’ll save 15 minutes per employee per day, multiplied by the number of employees …”) can get you laughed out of the CFO’s office.  But “hard” ROI (provable, measurable impact on a company’s profit through increase of revenue or decrease of expenses, accurately attributable to a direct cause) for collaboration is possible only in a few specific cases such as web conferencing vs. travel or “projectized” infrastructure.  This was made only more clear in a set of interviews Burton Group has been conducting as part of our research into the impact the recession is having on collaboration initiatives. 

Our interviews did uncover one industry where the value of collaboration is more apparent than most: universities and their ability to receive grants. As one of our interviewees revealed “Granting institutions fund research and assume you have the infrastructure. If you don’t, you won’t win the grant. Proving you can collaborate with the others listed on the grant application [is critical, so we] have to demonstrate we can collaborate in that way … It’s an important part of the grant writing process.”

This isn’t surprising, given that the Web itself came into being as a way for scientists and academics to collaborate from geographically dispersed locations.  As the 3/12/09 edition of The Economist describes:

In the late 1980s, CERN was planning one of the most ambitious scientific projects ever, the Large Hadron Collider, or LHC …  As the first few lines of the original proposal put it, “Many of the discussions of the future at CERN and the LHC era end with the question—‘Yes, but how will we ever keep track of such a large project?’ This proposal provides an answer to such questions.”

And the rest is history.  That proposal (called “INFORMATION Management: A Proposal”) by Tim Berners-Lee launched the World Wide Web.

Jump to today and the need for academics to collaborate is the acute.  For example, one university we spoke with received about $1 billion/year in funding from grants. And every grant application that involved collaboration with academics at multiple spots on the globe (which is most of them) had to reinvent how they were going to work together.  We were told some individual projects cobbled their own collaboration together, another used seed money to hire programmers for a year to build a custom solution.  What a waste.  This seems like a perfect opportunity to be able to prove the value of having central IT implement a collaboration facility along with a beautifully crafted content chunk extolling its virtues that can be appended to every grant application.  Surely making a case for this infrastructure that plays a major role in winning $1 billion of grants (and incurs redundant costs for each project that builds a one-off solution) should be easy as cake! 

Alas, that is not the case.  At least, not at the universities I talked to.  We were told “The Institution has to see that as a threat to future success, faculty retention, attracting the best faculty, how good the grad students will be; but we haven’t gotten there.” 

The sunny side of this story is that if proving the value of enterprise-wide collaboration is even difficult for grant writing – where web based collaboration is required and the dollars at stake are huge – the fact that you haven’t been able to do it means you’re just par for a very difficult course.

Don’t Touch My Wallet: Convincing Management that Smart Companies in Recessions Increase Spending on [IT, training, advertising, etc.]

February 26, 2009 at 4:26 pm | Posted in business case, collaboration, communication, Content Management, Recession | Leave a comment

The recession has proven to be a boon to writers of articles and blog postings you can email to your executives about how whatever domain they are experts in (like customer relations folks or training people) is critical to avoid cutting and maybe even increase spending on it like other smart companies do.

In researching how the recession is impacting my domain (information technology, and communication, collaboration, and content technology in particular) I was pleased to find articles saying that should really get more budget in tight times. Wonderful! 

… But then I decided to check and see what other domains were saying about recessionary spending. After trolling dozens of sites on other domains like customer relationship management, training, marketing I noticed a familiar pattern – they all say they are smart places to spend too. Needless to say I did not find any articles from domain experts saying “In a recession, our department’s budget should be cut” or “Companies that come out of a recession stronger are those that cut spending in our department”. Instead every department has become the business equivalent of Garrison Keillor’s Lake Wobegon. At Wobegon Corporation every department provides greater than average returns on investments in recessionary times.  Everyone can’t be right, so who is right that spending in their domain should increase during recessions (please let it be portals!) ?

The “Don’t Touch My Wallet” (DTMW) script

There are arguments and articles that rise above the fray – I’ll get to them at the end. But the bulk of them fall into a script I’ll call the “Don’t Touch My Wallet” (DTMW) script. There are a standard set of key elements you’ll find in a DTMW article.

The “Don’t touch my wallet” (DTMW) statement

The metaphor

The motivational pablum

The survey

The articles often quote a survey that shows organizations who spent more on their domain in a recession did better than their peers. They generally don’t reveal enough about their methodology to truly evaluate their findings, but these surveys feel fixed for 3 reasons:

  1. They are almost exclusively sponsored by organizations with a vested interest in the domain and would be unlikely to publish the results if they showed cutting costs to be a more effective strategy.
  2. The mere fact the surveyed organizations were in a position to increase spending in a recession indicates companies with comparatively better financials (compared to their peer group). Of course companies that go into a recession financially stronger are more likely to come out of it stronger.
  3. Just surveying those companies that increased spending in one domain is a self-selecting sample. Companies that increased spending on a particular domain already determined it is important for their type of business. For example, companies that doubled advertising expenditures in a recession are probably those that know they are in industries where advertising gets high leverage (like image-related consumer goods), while those in unimpressionable markets (like mining) would probably not bother to increase the minimal ad spending they have. So blanket statements that say “companies that increase ad spending in recessions do better” are not as universally applicable as they imply.

A good study should be sponsored by an institution that doesn’t have a stake in the results and examines both sides of the coin: winners and losers, companies who started in good or bad financial condition, companies that increased or decreased spending in the domain.

Principles about spending in a recession

Reading all these DTMW articles did help me uncover some underlying principles about spending in a recession. These are scary times. I don’t begrudge anyone trying to make the case for their domain (and, by proxy, their job). Quite the contrary, it’s everyone’s responsibility in tough times to think about the value their role brings. Where small investments can provide leverage in these conditions, you should make the case for them, throwing them into the marketplace of ideas with the understanding that everyone else is doing the same. With every experts in every domain publishing a DTMW script, running to your executive with a request for more money attached to an article backing up increased spending is likely to be laughed at when every department is making the same argument.

If you have money to spend in a recession that your competitors don’t, you’ll get more leverage anywhere you spend it wisely: IT, training, customer service, etc. Industries have different leverage points (elasticity) where a dollar of recession spending added or removed has a multiplicative effect on profitability. Don’t accept blanket statements across all industries about where that elasticity exists (e.g., “All companies should increase sales travel rather than cutting it when times get tough”). The key is to understand the dynamics of your industry and firm and select the correct points of leverage.

Recessions can shake organizations up for the better – they force organizations to cut waste, improve efficiency, be more aware of what they are doing and why. That last point (what you’re doing and why) brings me to portfolio management. In a recession, as at all times, portfolio management theory applies. This theory says organizations should allocate spending to categories – usually these three: running, growing, and transforming the business. Then all initiatives should be categorized accordingly and evaluated against each other.

So first, keep the lights on. Assuming you have some money left after that, understand there is a portfolio of incremental improvement projects and transformational projects that should be evaluated as a whole. The DTMW articles make the mistake of bypassing reasonable portfolio management discipline to make the argument that one should just jump to spending more on their pet domain without analyzing its relation to other projects in the portfolio. Spending more on domain A may indeed have a high return.  But if spending on domains B, C, and D have an even higher return, spending on A wouldn’t be a wise move without money to cover all four domains. 

So how do you do this right?  After hours of reading DTMW articles, it was a joy to finally find one that stated the case for its domain (web design) properly, succinctly, and with a professional level of humility.  This may not grab the attention of the CFO, but it will withstand reasonable scrutiny once investigated further:

Is web design really worth spending money on now, when money’s so short? It depends on your circumstances, but we think you should give it serious consideration.


So my conclusion is that, despite what DTMW articles say, smart companies are not the ones that blindly increase spending in one domain just because other companies do (it’s a self-selecting sample) or because a logical argument can be made for the importance of spending in that domain (all domains have differing elasticity based on industry and individual factors). Recessions give smart companies an opportunity to gain an edge by selectively outspending their competition in key domains. They select the domains by digging harder into the data and applying portfolio management discipline.

Back to my domain of IT, I posted previously about a Diamond Management and Technology Consultants study. While it is from a company with a stake in IT spending, I like the fact that they looked at companies that underperformed as well as outperformed. And their high-level advice fits the “be selective” mantra:

The central lesson of our research is that at the very time when a leader is tempted to shorten his or her time horizon and make simple across-the-board cuts, superior performers dig into the data and act more intelligently than the competition.

"Two Executives Trampled, One Gored Due to Craig Roth Article: Film at 11"

February 6, 2009 at 10:08 am | Posted in business case, Enterprise 2.0, Fun, social software, Web 2.0 | Leave a comment

Social Computing Magazine has published my article The Elephant in the Social Software Room, which I posted in this blog last week.  The theme of the article is that there is a business issue that is unspoken but impacts decisions about adoption of social software: to what degree do organizational structure and gatekeeper processes serve a positive purpose?  The truth is that many suspect they know the answer, but no one really does.  Assumptions that there is value to the structure drives the amount of risk that executives worry about when technology helps employees circumvent these structures and processes.  Perception that the structure doesn’t always have value is what drives employees to look for mechanisms to get around the artificial walls and bureaucratic processes.

The part I really like is that Social Computing picked up on the analogy and inserted a picture of an elephant in a boardroom to illustrate the concept.  I sincerely hope that no executives were trampled during this photo shoot, however worthwhile the issue at stake is.


The Elephant in the Social Software Room

January 29, 2009 at 2:18 pm | Posted in business case, Enterprise 2.0, social software, Web 2.0 | Leave a comment

As we found in our social networking field study that Mike Gotta ran, organizations often fret about potential negative impacts of breaking down organizational and, to some extent, social barriers.  Some stakeholders wonder whether execs really want borderless discussions among their staffs, whether engineers really want sales people to be able to contact them directly, whether employees will spread poor practices without gatekeepers, etc. 

I’ve come to the conclusion that there is an elephant in the middle of the social software room.  The unspoken question that is in the minds of execs is “Does our institutional structure and its information flows and bureaucracy serve a real purpose? ” Because if the answer is “yes” to any extent, that forces one to examine what the useful purposes are and how technology (and the culture embedded within it) may thwart those purposes. Social software acts as a blunt instrument for short circuiting institutional structure and bureaucracy since it cannot be selectively applied to its parts that are not beneficial while sparing those that are serve a purpose.

One way to think about this in a more concrete way is to determine what proportion of the lines connecting boxes on the org chart are meaningful.  Do they serve a useful purpose to the organization?  If you were starting from scratch, would you redraw the same line?  Certainly there are many lines that only exist because of outdated needs, useless political infighting, or patterns that emerged over time for reasons that don’t apply anymore.  I’m just as certain there are lines that make sense. The probability that any line on an org chart or to a gatekeeper on a process flow diagram is meaningful is certainly not a perfect 100%, but it’s not a Dilbertian 0% either.

Too bad, because if the answer were indeed that 100% of the lines were useful or 0% of them were useful, then the correct decision on whether to adopt social technology that can circumvent the organizational structure or chains of command for information/process flows would be easy.  The problem is that in practically all cases, it lies somewhere inbetween.  That is when a blunt instrument introduces risk since it doesn’t know the meaningful lines from the meaningless ones.

If there are ways in which the current hurdles to fully open social communication positively act as a reward system, influence trust, or affect information quality, how will the social software know and respect those boundaries?

Organizations have not had to question the value of their structure, information flows, and bureaucracy very often in the past because there were few ways to circumvent it.  But social software provides the most effective way to date for employees to get around the barriers and pathways that have been established formally and through practice. It’s time for those concerned about potential negative impacts of social software to step back and examine the real question: what is the real value of the organization and bureaucracy as it stands today?  Getting the answer to that question on the table is essential before jumping into technology.

Note: This is a cross-posting from the Collaboration and Content Strategies blog.

The Role of Communication, Collaboration, and Content Technology Investments during Tight Economic Conditions (part 2)

January 15, 2009 at 4:03 pm | Posted in business case, collaboration, communication, Content Management, Recession | 13 Comments

The continuing slump in the world economy is doing little to dampen information worker’s enthusiasm for new and improved communication, collaboration, and content (3C) systems.  I wrote in part 1 about how organizations that invest during economic downturns generally do better than their peers when the downturn is over.  These investments may involve actual capital expenditures or may just be investments in time and resources.

I’d like to provide some ideas on how organizations can respond to communication, collaboration, and content trends when IT budgets are constrained.  I will address three distinct approaches in this posting and one more in part 3 (I’ll probably post that next week). 

Cost Savings

As I wrote in my document “Building a Business Case for Collaboration Initiatives“:

Costs and benefits can be thought of as being “soft” or “hard” by using a hardness measure like the 1-to-10 scale used in the Mohs scale of mineral hardness. Provable, measurable impact on a company’s profit through increase of revenue or decrease of expenses, accurately attributable to a direct cause, is similar in hardness to a diamond (i.e., it scores a 10)—and it is equally rare and valuable. On the other hand, “it will save every salesperson five minutes per day” is like talc (i.e., it scores a 1)—it’s simple, easy, and soft.

There are some instance-specific examples of hard benefits from 3C, but the generalized enterprise cases haven’t changed much over the years:

  • Reduction of printing and distribution expense through web-based delivery
  • Reduction in travel costs due to better use of 3C technology (especially web conferencing, but also collaborative workspaces and soon enterprise virtual worlds)
  • Reduction in software expenses by consolidating 3C infrastructure
  • Reduction in facilities expense by closing offices or floors and substituting hotelling or telecommuting
  • Reduction in software expense through competitive SaaS alternatives, such as for e-mail (this is perhaps the only new item on this list)

Cost Avoidance

Cost avoidance can be described as spending  a little now to save a lot later. The idea is that a change in the environment is occurring that means the status quo will no longer work in the future.  The proof is usually a “hockey stick” argument – a chart that shows a slow increase of something (like number of websites) up until recently and then a sudden upturn expected to get worse in the future if money isn’t spent now to get it under control. 

Standardizing on intranet or portal infrastructure is a common example of a cost avoidance argument where money is spent to day to prevent future chaos that will cost more to fix.

Given the tight economy, you can expect the payback period executives are willing to consider has shrunk significantly.  After all, if management thinks the recession will last 1-3 years and the payback period for your proposal is 5 years, why not postpone the investment until the recession is over?  Assume that the avoided costs have to greatly exceed the investment within 12-24 months to be considered.

“Free” Stuff

There is a slew of open source software for communication, collaboration, and content, especially in the hot areas of wikis, blogs, and content management. Larry Cannell did a detailed examination of the options in Open Source Communication, Collaboration, and Content Management: Cutting-Edge Innovation, Low-Cost Imitation, or Both?  He pointed out, however, that free software doesn’t mean there are no responsibilities since “these are still licensed products with terms that require compliance.”  And implementation and support may require external costs.

Open source 3C products we tend to hear a lot about include: Drupal, Media Wiki, TWiki, Alfresco, Apache Roller, Zimbra, and Liferay (to name just a few).


That’s it for part 2.  I plan to post part 3 next week.

The Role of Communication, Collaboration, and Content Technology Investments during Tight Economic Conditions

December 12, 2008 at 8:58 am | Posted in business case, collaboration, communication, Content Management, Information Work, Recession | 1 Comment

Readers of this blog know that the Collaboration and Content Strategies service I am service director for researches, publishes analysis, and advises clients about communication, collaboration, and content (3C)technologies and the processes around them. Unfortunately, many of the technologies we cover are relegated to the “nice to have” category by some executives, such as collaborative workspaces, social networking, portals, and taxonomy tools. As service director for this group I speak with owners of 3C technologies at a diverse set of organizations through client and sales interactions and one refrain I hear across all these groups is the difficulty of justifying investments in “new fangled” technologies in such difficult economic conditions. News of layoffs is becoming commonplace, bonuses are being cut back, lines of credit are becoming expensive or scarce, and uncertainty is reducing the scope of future purchasing plans. Understandably, many organizations feel compelled to stall improvements to 3C processes that, while perennially inefficient, have worked fine so far. What is the role of new 3C technologies when IT budgets are under unprecedented attack?

In light of this question, I read with interest a study recently published by Diamond Management and Technology Consultants that compared the performance of 400 organizations before, during, and after the previous recession (1998-2004) to see which approaches resulted in the best long-term growth prospects. The study, “Don’t Waste a Crisis: Emerge a Winner by Applying Lessons from the Last Recession,” categorized firms according to whether their performance improved, decreased, or stayed the same coming out of the last recession.


The study found that:

“Only the top two quartiles (Stalwarts and Opportunists) increased gross margins during the recession year, and by the end of the recession had improved margins by 20%. In other words, they were smart about their cuts and successfully improved the design of their business (i.e., the configuration of people, assets, capital, and information to generate value for customers) to create operating leverage that eluded others. The central lesson of our research is that at the very time when a leader is tempted to shorten his or her time horizon and make simple across-the-board cuts, superior performers dig into the data and act more intelligently than the competition.”

So how should investments be allocated during tight times and do new 3C technologies have any place in such an investment portfolio? Standard portfolio management theory, at least as I’ve always described it, talks about dividing investments into those aimed at running, growing, and transforming the business. A high level rational analysis of this type shows the fallacy of retreating to a 100% allocation of investments into “keeping the lights on” (as “run the business” is commonly referred to). The Diamond analysis looked at investments and, while omitting the “run the business” category (I’m sure it was in there!), adds another category crucial for tight times: “cut costs” (more an initiative than an investment).


I found it encouraging to note that it wasn’t just companies facing market competition, such as a consumer products company, that found opportunities to pull ahead during times when others are retrecnhing. Diamond notes that Southern Company, a utility company in Atlanta, invested in automated meter-reading in 2008 which will yield long term efficiency benefits and enable dynamic pricing in the future. Even an insurance company, an industry that is among the hardest hit by the current economic crisis, was able to:

“… identify areas to expand the use of technology to change the nature of relationships with agents and customers. Even in the face of a challenging insurance environment, this innovative insurer is reinventing how agents interact with their customers in a digital world, and investing at a time when its competition is retrenching.”

These findings provide some explanatory power to the way I describe the approach smart companies are taking towards 3C technologies that may seem unneeded when budgets are being slashed. While they can be deployed to improve vertical business processes (such as order-to-cash or communicating design specifications updates to partners), they are also used to bolster horizontal business processes. These horizontal business processes are some of the most common and fundamental to businesses, such as collaboration, expertise location, notification, searching, and documentation. These horizontal processes do not have ROI of their own, but rather act as multipliers when they are applied to initiatives to improve specific instances of business processes. I believe that investments in these technologies during tight budget cycles can not only help organizations maintain or improve current rates of efficiency as more output is demanded from each employee, but these investments put the organization in a better position to race ahead of expectations  and competition once the recession is over.

The Diamond study confirms this when describing the principles they derived from their research. I believe one in particular supports examination of investment in 3C technologies: “Automate, Automate, Automate”:

“Given the continued, rapid decrease in the cost of information technology, it is essential during a recession to search for new places to automate.”

In summary, I realize this posting has been a bit longer than an elevator speech you might need when you get only a minute to describe to an executive why that new blog, collaborative workspace, or portal is needed. So here’s the short version: Companies that come out of recessions in a stronger position than they went in are those that judiciously invest in technology and related processes that let more work get done with less resources as well as reducing costly delays and red herrings when making decisions. And when the market downturn ends – and it will – opportunistic organizations will be in a better position to succeed than those that had hunkered down during the recession.

Note: This is a cross-posting from the Collaboration and Content Strategies blog

Questions from “Preparing a Business Case for Collaboration” Telebriefing

September 12, 2007 at 3:49 pm | Posted in business case, collaboration | 2 Comments

Note: This is a cross-posting of an entry I did in the official Collaboration and Content Strategies blog.

In my telebriefing on “Preparing a Business Case for Collaboration” I was pleased with the great questions that were submitted. I’ve posted them here along with my answers.

Q: You mentioned “managing high expectations” [as a risk factor for collaboration projects]. How do you recommend a deployment strategy strike a balance between addressing enterprise-wide expectations with focused hand-holding deployments? In other words, a great solution for a few or a plain-vanilla for everyone?

A: This is a difficult issue to address since in many cases one benefactor is footing the bill for collaboration technology that can be used by many users. Naturally that benefactor expects it will be customized to meet their needs over those of the non-paying masses. If you truly think the solution meets only a narrow niche in the organization, I’d recommend examining the following strategies:

  • Try to find basic infrastructure that can be customized (i.e., templates) to meet the benefactor’s needs today and then, when business needs justify rolling it out to more users it is be customized to meet other needs as well.
  • Try to hunt down one or two more areas of the business that can split the cost of the project in return for balancing the requirements to meet everyone’s needs.
  • Talk to a CIO that is above the benefactor and see if he/she can exert pressure to generalize the requirements or chip in on the price to give the rest of the organization a say in the capabilities needed.
  • A last resort is to purchase a niche product to meet their very specific needs (hopefully it’s not too expensive or maintenance intensive) and put governance in place to make it clear this is not for the entire organization.

Q: How would you overcome cultural roadblocks to Collaboration deployments?

A: To be clear, there are generally not many cultural roadblocks to the collaboration technology itself other than the difficulty in getting people to learn a new interface. The roadblocks are all non-technological. And there’s no silver bullet either. But your question was what have I seen used in practice to overcome them. Here are a few that I’ve seen in practice

  • Big splashy rollouts: Meeting in the company cafeteria, catchy names and slogans, balloons, little knick-knacks to put on the desk. This generally causes a small spike in usage but doesn’t go much further. In theory if awareness was the only roadblock this could work, but it usually isn’t.
  • Changing performance reviews to emphasize collaboration: Some organizations have realized their review processes focus exclusively on individual performance and have altered them to take collaboration into account. This can be in the form of qualitative ratings (obtained by talking to peers, work on team projects) or quantitative measures (social networking ratings). One always has to be careful when tweaking performance evaluations, but this can be part of a good strategy if individual performance is being exclusively emphasized when teamwork is needed.
  • Internal research: Most organizations don’t really know the reasons collaboration is being avoided so imposing solutions is a shot in the dark. In this case it is a good idea to actually talk to people from the executive office to staff workers in short interviews and determine their views on collaboration and why it does/doesn’t occur in their area. This is often done by external consultants to encourage anonymity. Formal network mapping can provide a more extensive look at where the informal collaboration networks in organizations lie and where opportunities are being missed.
  • Changing incentives: In cases where specific incentives are often tied to individual behaviors (e.g., salespeople), formulas are sometimes tweaked to provide better compensation for collaborative efforts. This can be very tricky, but probably needs to be addressed if the behavior being incented doesn’t match the collaborative needs of the organization.
  • Removing inferior alternatives: Eliminating shared drives while making information workers aware of team workspaces can tip their behavior in favor of collaborating. It’s no guarantee – they may simply walk files over on a thumb drive or email them too, but it eliminates one avenue. I’ve seen the same done with e-mail attachment limits as well, although there are sometimes good reasons to e-mail large files rather than posting them to a workspace.
  • Leading the horse to water: Sometimes collaborative tools aren’t used because there is no established pattern of behavior. They simply haven’t used them and are more comfortable with the old ways. In these cases, a mandatory activity that forces usage of the tools at least once exposes them to the technology. Just like coupons are, in part, to establish patterns of behavior, these efforts can get information workers used to a technology as well and if they see a need for it soon thereafter, they may use it. Examples include requiring status reports to be filed on a wiki, requiring time off to be noted in a shared calendar, or requiring presentations for an internal conference to be uploaded to a workspace.

Q: Do I have an example of this methodology being used for a government agency?

A: I don’t have completed examples I can give you. I do have a template that guides you through the sections that I showed briefly in the presentation and in more detail in the Methodology and Best Practice document I published on this topic (Building a Business Case for Collaboration Initiatives). If you’re working on a business case I’m also happy to talk to you and give advice as well as give it a once-over before you send it to your management to see if it can be strengthened.

Q: Can I get a copy of the slides?

A: Yes, they are posted on our website here. You can also hear a replay of the telebriefing there as well.

Business Collaboration Generally Requires Collaboration Technology

August 7, 2007 at 2:02 pm | Posted in business case, collaboration | 4 Comments

I wrote in a previous posting about all the negative possible meanings of the word “collaboration”. But we view collaboration as a beneficial activity for a company – one that is core to its ability to plan, react, and compete. Accordingly, the question I want to address today is this: How does a collaboration technology strategy act as an enabler for a business collaboration strategy?

I think of business collaboration as the way a non-technical person from the business side of the organization would think of collaboration. Collaboration with partners will be thought of first by a business person in terms of legal, financial, organizational, and business processes. They will generally not (and should not) think first of web conferencing, wikis, and document libraries. But is it possible to do complex, large-scale business collaboration at a competitive rate of speed and efficiency without collaboration technology to support it?

There are a few examples that come to mind that illustrate the need for business collaboration and, underneath, the need for collaboration technology.

Business collaboration for planning

Let’s take collaborative planning as a first example. A July 2007 survey in The McKinsey Quarterly called “Better strategy for business units: A McKinsey Global Survey” discussed the positive impact a collaborative approach has when formulating business unit strategy:

According to this analysis, executives who are satisfied are the likeliest to describe the process at their companies as collaborative. Specifically, executives at companies with a collaborative approach to strategy represent 37 percent of the sample but 42 percent of those who are satisfied with their process.

This quote refers to business collaboration – corporate and business unit executives working together, sharing information and ideas, to create the best strategic plan for their business units possible. This no doubt includes meetings, approval cycles, and changes to incentive plans. But could this business collaboration be successful without collaboration technology to support it? Technology such as information sharing mechanisms, approval workflow, and meeting coordination – just for starters – would enable this business collaboration to take place. I doubt they could put an ROI figure on the technology in this case just as they can’t put an ROI figure on the business collaboration (or even if they could they couldn’t precisely determine the percentage of impact to allocate to the technology), but without it the business would have difficulty functioning.

Business collaboration for reacting and competing

Now let’s look at an example on the impact of collaboration on a company’s ability to react and compete. A very public and stark example can be found by examining what happens when an impenetrable and formal barrier to collaboration, such as a legal one, is removed. The Glass-Steagall Act, particularly its enhancements from the 1950’s to strengthen the wall between insurance and banking, provides a great recent example since it acted as a formal barrier to collaboration in the financial services industry.

So what happened to insurance and banking firms that did not have collaboration technology in place at the end of 1999 when Glass-Steagall was repealed (by the Gramm-Leach-Bliley Act)? After all, there was an open field for exploiting scale, reach, and synergies the likes of which had not been seen before in the industry. Merger and acquisition activity was rampant; the land grab was on. There was a strong need for business collaboration. Indeed, a 2004 presentation (about 4 years after the repeal of GSA) on CONDITIONS AND TRENDS IN THE INVESTMENT BANKING INDUSTRY by SunTrust Robinson Humphrey (available here) said that “Since the repeal of Glass Steagall in late 1999, commercial banks have aggressively pursued highly profitable investment banking operations.” This was just one factor in a consolidation trend, but a major one. The presentation goes on to address what this means for service providers and calls out the “Collaboration required between corporate and investment bankers”

But timing is everything. The implementation time for collaborative technology (as a rule of thumb I’d say 1 year for technology and 1 more year for a base level of adoption) generally exceeds the reaction time that business collaboration initiatives require.Therefore, the collaboration technology underpinnings must be in place before a business collaboration initiative appears on the horizon. This is quite the opposite of how many organizations treat initial collaboration technology acquisition – as a reaction to specific events.

I have not seen an academic study that has determined the correlation between a large corporation’s collaboration technology maturity in 1999 and their subsequent position after the shakeout. There’s a great PhD thesis in there for someone. But I believe it’s no coincidence that when I look through the list of clients of our collaboration and content strategies service, insurance and banks form a large percentage of our client base. And in my consultations with these clients over the last nine years I have found that the large ones – the ones that do the most acquisitions and exploit the most synergies between business units – to have consistently been strong proponents of collaboration technology.

Business collaboration requires collaboration technology (and I need it yesterday)

Of course, I could also have written an entire article about how a culture that encourages and rewards collaboration is also required and must be in place before business collaboration is needed. And maybe I will write that article … at another time.

My point here is that while businesses need to be driven by business “collaboration” rather than technology, most business forms of collaboration require technology to support them. And the technology strategy planning cannot wait until the business details of the collaboration are worked out. Organizations need to understand that 1) business collaboration is omnipresent in the business climate and is often required quickly and without warning. 2) Collaboration technology enables business collaboration. Therefore, 3) a collaboration technology strategy must be in place to enable future business collaboration initiatives.

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