The Costly Cost Obsession

Alan CameronThe obsession with cost control rather than value delivered, in both government and companies, is driving me mad – because it’s so 20th century and backward-looking. It’s time to put the customer or citizen first.

Cost-Cutting Now Won't Balance the Books

Recently I heard on the radio that suicides amongst UK young offenders remain at unacceptable levels, and we understand too that recidivism is high amongst offenders in this age group. The Prison Service, like so many others, is being asked to make cuts so that the government can balance its budget, but that means that prisoners aren’t adequately supervised, nor is their criminal behaviour addressed.

The lack of systems thinking is, I don’t hesitate to say, criminal. The result of cost-cutting leads to no change in recidivism and the long-term effect is an increase in our already high prison population, and an increase in costs. In turn, this spreads supervision more thinly and suicide rates don’t fall.

At a small and large society level, unnecessary deaths are tragic failures of management, and failing to turn young offenders into useful citizens not only increases the costs of continuing to incarcerate them, it loses the economic value of having these people usefully employed.

The value of the positive is ignored in the downward spiral of cost cutting that actually leads to an increase in costs in the medium- to long-term while, negatively affecting productive income generation. There is obviously a balance to be drawn – crime will always be there – but, like a successful fraud investigation system, success can be measured in a reduction in convictions as compliance improves and longer-term savings are generated.

A value-driven spiral needs to be primed, but the result is positive. As recidivism is reduced, staff are freed up to provide better supervision of and guidance to those with potential suicide risks, repeat offenders behaviour is changed and they start to add to society. Costs go down and tax generated from employment goes up. Instead we “cut” costs and build more prisons.

Short-Termism Damages Share Value

Let’s turn to industry. When profits don’t meet targets, the dead hand of hierarchical management and finance tends to decree, “No training,” or “No travel,” or “No process improvements.” You choose, and then let’s look for “Efficiency Savings.”

Examples abound. One company I know of provides support for purchasing for customers. 60% of these orders are single line items, and so the support is being removed from everyone. However, a small piece of analysis shows that the largest clients with the biggest global spread make up much of the other 40%. Some of their orders may be 100 line items, but the support has been removed so the end operatives have to take longer to complete orders for the highest value clients. So costs have been cut to help now, but some global clients simply won’t renew their contracts if deliveries of products are delayed.

The company looks only at costs and not at the value of the complex clients. Great for this quarter, but not so good in a few years. Revenue and profit will fall, but by then all the executives will have changed, and the next lot will start another round of frantic cost-cutting.

Similarly, a potential client, which is supposed to be Agile in all it does, has had to postpone a value-add process improvement in order that costs can be controlled. The hierarchical management is driven by 20th century share value behaviours at the expense of stable, predictable projects, delighted clients and future growth.

Contrast that with another client who can see that spending a few thousand pounds on a robust estimating service can assist with the control of projects worth millions. They see the value of what’s traditionally seen as an overhead, i.e. discretionary spending.

Shifting the Mindset

As Steve Denning pointed out in his keynote speech to the Agile Business Conference in London, cost-cutting is an inward looking view of what matters most to organisations, and as such, the only people ever satisfied are the inner circle who take the short-term gains it delivers. Executives paid in share options and politicians, wanting to make themselves look good, cling to the view that the customer/citizen doesn’t matter.

Contrast that with a customer-centric view where delighting the client matters most, where the value of actions is thought through and implemented. Self -organising teams manage their training to ensure that skills are optimised, and process improvements are continuous and focused on delivery for the client. Finance takes a client-centric view with a greater appreciation of how development teams deliver value and they support those activities.

In government, local control is real and targets are based on outcomes and not cost alone. Teams are multi-disciplinary and the silo boundaries between departments are porous. Vulnerable adults in prison are assessed to see if that is an appropriate place for them to be. Prison is not seen as primarily a place of punishment, but rather one where success comes from reducing re-offending and making released prisoners valuable to society. Teams address basic issues such as illiteracy, and social interactions to break cycles of behaviour. The cost is balanced against the value and not the need to cut for the sake of someone’s ego.

We firmly believe that the most successful software development comes from Agile teams focussed on adding value to clients. It is demonstrably true there and also in government.

It’s time to leave the 20th century and to put the customer/ citizen in the middle of all our thinking and to only do something if it adds value to those people. If you can’t answer the “What’s the value of this?” question, then don’t do it.

Written by Alan Cameron at 05:00

Effective Communication for Effective Delivery

Alan CameronThere is more to successful software delivery than just the tools, methodologies and management techniques that are used. Do these things all matter? Definitely! But, when we examine the factors that enable success across all areas of software development, the key feature is effective communication.

Not just communication - but "effective" communication. And that's not easy! Effective communication requires an understanding of how culture, methods and language affect the way in which we are perceived, which, in turn, affects how those around us behave.

Download this article to learn more about what you should consider with regard to culture, methods and language in order to facilitate improved communication that has a noticeable impact on your team's development and delivery.

Download


Alan Cameron
DCG-SMS Managing Director

Written by Alan Cameron at 05:00
Categories :

Adopting the Agile Manifesto for Business Transformation

Alan CameronI’ve been looking at the Agile Manifesto and its “Twelve Principles of Agile Software,” the underpinning of Agile product development, and it struck me that the manifesto and the principles can also be applied to business transformation, where the products are changed business methods.

It’s been reported that effective Agile development works best where the organisation understands the need for effective processes and applies that knowledge throughout the business; so, for me, it follows that there is a need for a recipe that applies Agile principles to business transformation.

So what are the principles that drive an Agile business? I suggest that the Agile Manifesto can only be adopted for business transformation with small changes. Therefore, with due deference to the authors of the original, I have amended the manifesto in a way that can be applied to business transformation, while keeping as much of the original wording as possible.

All the changes I suggest are highlighted below in italics:

We are uncovering better ways of delivering business transformation by doing it and helping others do it. Through this work we have come to value:

           Individuals and interactions over processes and tools

           Working business methods over comprehensive documentation

           Customer collaboration over contract negotiation

           Responding to change over following a plan

 
That is, while there is value in the items on the right, we value the items on the left more.

The principles can also be suitably amended:

1. Our highest priority is to satisfy the customer through early and continuous delivery of business value.

2. Welcome changing requirements, even late in the transformation journey. Agile processes harness change for the customer's competitive advantage.

3. Deliver working business change frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

4. Business people and change agents* must work together daily throughout the project.

5. Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.

6. The most efficient and effective method of conveying information to and within a business change team is face-to-face conversation.

7. Working business methods are the primary measure of progress.

8. Agile processes promote sustainable business change. The sponsors, change agents, and users should be able to maintain a constant pace indefinitely.

9. Continuous attention to business excellence and best practice enhances agility.

10. Simplicity – the art of maximizing the amount of work not done--is essential.

11. The best business frameworks, requirements, and methods emerge from self-organizing teams.

12. At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behaviour accordingly.

I am convinced that only Agile organisations can make the most of Agile development, and the best way for them to visualise how they will progress is to apply the Agile Manifesto to day-to-day business.

 

*Change agents are a proxy for the Agile development team and have the same function – but in business terms; that is, they develop and deliver the business change.

 

Written by Alan Cameron at 05:00
Categories :

Visit Us at the CMMI Institute Conference EMEA

CMMI EMEA

We're excited to announce that DCG-SMS will attend Unicom's co-located series of events on 26-27 March at the NOVOTEL London West.

The event includes the CMMI Institute Conference EMEA, as well as the DevOps Summit and the Application Lifestyle Management (ALM) conference. As a bonus of the co-location, attendees are free to attend any of the sessions across the three events, and the exhibition space will be open to all attendees.

We'll be exhibiting - so please stop by our booth and say hi! We'd be happy to tell you more about our mission at DCG-SMS, to improve our clients' bottom lines via quantifiable changes in their development - as well as how we can achieve this for your organisation!

Don't stop there! Attend a presenation by DCG's Tom Cagley, Vice President of Consulting, at the CMMI conference. On Friday, 27 March at 11:00 GMT, Tom will present on Agile risk management. He will discuss how to combine Agile and CMMI-based risk management techniques to increase the robustness of an Agile implementation without adding overhead and while mitigating risk.

Interested in more details about the conference? Everything you need is here.

More information about our CMMI solutions and services are available here.

Questions? Stop by our booth and ask them in person! If you can't make it, please send an email and I will reply as soon as possible.


Alan Cameron
DCG-SMS Managing Director

Written by Alan Cameron at 05:00
Categories :

DCG-SMS Accepted as a G-Cloud 6 Supplier

CCS_2935_Supplier _AW_72dpi

Great news for DCG-SMS! We've been accepted as a supplier for the Crown Commercial Service (CCS) G-Cloud framework, G-Cloud 6.

We're joining as a supplier of Specialist Cloud Services (SCS), which help to manage laaS, PaaS or SaaS services. Through G-Cloud 6, we are offering the following EU-compliant services:

  • Agile JumpStart
  • Project Triage
  • Estimation on Demand
  • Project Estimation and Planning
  • Vendor Estimate Validation

The G-Cloud format was created in order to make it easier for suppliers to sell their services and for buyers to find services that best fit their needs. In order to join, suppliers are carefully evaluated by the CCS.

Public sector buyers are now able to commission services from G-Cloud 6 suppliers, including DCG-SMS, via the Digital Marketplace. More information about DCG-SMS’ suite of services is available here.

We are looking forward to working with more public organisations in the United Kingdom!

 

Alan Cameron
DCG-SMS, Managing Director

Written by Alan Cameron at 05:00
Categories :

"It's frustrating that there are so many failed software projects when I know from personal experience that it's possible to do so much better - and we can help." 
- Mike Harris, DCG President

Subscribe to Our Newsletter
Join over 30,000 other subscribers. Subscribe to our newsletter today!