Information technology as an investment


Information Technology can be a driving force that delivers increased revenue and profitability. One observation I’ve noticed about companies who do best with information technology is that they tend to be the ones who view it as an investment in their future and a competitive advantage. They are open to trying new ideas, are willing to push the boundaries of what is possible, and work with people who are passionate about helping the business grow.

Information technology enables opportunities not available other ways. A modern company has the opportunity for direct interaction with customers, improved sales capability, reduced support costs, professional networking capability, automation, and exponential growth. Technology can be a top competitive advantage, when combined with the experience and vision to utilize it effectively.


Linux, again?


It wasn’t long ago when simply mentioning Linux, or free/open source software, would typically result in my being shown the door before I even finished my project proposal. All these years later, open source is now accepted in business, and it is much easier to move ahead. It provides exceptional benefits and value to clients, including cost savings, flexibility, scalability, and stability. Practically everything from cell phones and televisions to supercomputers is using it.

Companies often lag far behind trends and technology, including those with the ability to transform their business in very positive ways. This occurs now with telecommuting, smart phones, social networking, cloud computing, and even Internet access for employees.  These are all advances with potential for significant positive impact on how a company does business.

How can companies take advantage of new technology, without the downsides? Here are a few ways to get started.

  • Be receptive to new concepts of how to do business. Consider how a technology might complement or enhance your company.
  • Technology changes quickly, so if a technology was not correct for your company during a previous evaluation, it may have changed and improved. Don’t immediately dismiss it, simply because it wasn’t quite right previously.
  • Start using the technology in a less critical area. This enables real world testing within your company, with reduced risk in case of failure. This might mean using the new technology in a development environment, or in a supporting role to start.
  • Work with a consultant with experience in a wide range of technologies. This avoids vendor myopia and conflict of interest, and enables getting the best result for your company.
  • Ask for guarantees. A few consultants base their fee on the degree of success they help you attain. This reduces the risk of spending a lot of money for technology that doesn’t enhance your business, and assures that the consultant has your best interest in focus.

 

This article was written by Doug Spencer, a technical and business consultant who helps companies utilize technology to improve business operations. Doug’s experience spans many industries, company sizes, and technologies. A public example of Doug’s results is in his suggesting and implementing infrastructure changes that enabled the United States Postal Service to approximately double their online sales annually, while sharply reducing recurring operating costs, and improving availability of online services. Revenue to USPS from their online offerings now exceeds $650M annually, with peak days exceeding $4.7M. Doug has provided similar successes for many private sector companies, and works with companies of all sizes.

Doug helps companies to realize their potential by utilizing his experience to enhance client revenue and save costs. Doug can be reached via e-mail at forhire99@gmail.com, or on LinkedIN at http://www.linkedin.com/in/dougspencer.


Reward Clients with Results


I find that using a value fee structure enables a mutually beneficial relationship with clients. To demonstrate the  contrast, hourly fees result in the discussion generally starting “How many hours will this take?” While charging for value, once we agree upon metrics to measure value, I have the opportunity to discuss “Is this the result you want, or will we get better results with these changes?” This changes the entire dynamic of the consulting relationship, from one that is adversary with hourly billing, to one that is cooperative and benefits everyone involved with value based billing.

There are often suggestions that can deliver huge improvements in results for the client, such as sharply reducing the time to market. Billed hourly, the best consultant goes broke making those types of suggestions, since they cut into the number of hours they can bill. Value billed, the consultant is compensated fairly based on the contribution, and client is rewarded with improved results, due to the parties having aligned interests in the best result.


Failure is not an option


Mission critical technology projects are situations where failure and unplanned outage of the project is likely to result in severe loss of revenue, reputation, customers, or potentially even lives in certain instances. Even a brief unplanned outage of mission critical systems can be devastating. Failure can be measured in millions of dollars of unrecoverable loss per minute, in certain situations and markets. Even in small to mid-size companies, an outage can cost over $40,000/hr in lost productivity, sales, reputation, and customer confidence. These concepts can provide significant benefit to companies of all sizes.

How can we prevent failures? To answer that, consider the following list of failure causes.

  • Hardware failure – Failure of power supplies, disk, memory, CPU, support infrastructure, or entire systems
  • Software failure – Bugs in software, operating system issues, hardware incompatibilities, configuration problems
  • Network failure – Equipment failure, routing problems, wiring problems, firewall configuration
  • Facilities failure – Failure or insufficient air conditioning, heating, electrical
  • Data center failure – Weather, disaster, flood, severed connectivity
  • Supply problems – Lack of available equipment to repair or replace failed items quickly enough, insufficient fuel for backup power generators
  • Human factors – Misconfiguration, mistakes, errors, and sabotage

Redundancy is key to maintaining hardware availability. We want to avoid single points of failure, to assure failure of one part of an infrastructure does not result in a failure of the rest of the infrastructure. This includes entire data centers, network connections, disks, hardware, applications and support infrastructure. The more critical the infrastructure, the more redundancy and expense is required to maintain it availability at an acceptable level.

Beyond hardware redundancy, software resilience is also required. This includes security, monitoring, testing, verification, bug fixes, and load balancing. Being able to run software in a way that concurrently handles your requirements helps, but getting to that point requires careful planning and implementation. Done incorrectly, the very redundancy that should be increasing availability will result in outages. An example of this is when a web application is load balanced, but the session information is local to each individual server. A failure of a server loses currently open sessions in an unrecoverable way.

Outages due to unintentional human factors can be reduced in a few ways. First, change management procedures should enable stakeholders to review proposed modifications and provide input to the process. If this step is skipped, a change to one part of the company can adversely affect another portion without proper notification. Redundancy can also be used in a few ways here. A development/test environment that enables testing changes without affecting production service provides the capability to discover unforeseen failure conditions. Redundant testing environments reduce production outages significantly, and can be implemented by nearly any size company for a relatively low cost.

Redundant production environments are the next step. These enable scaled deployments, where updates are deployed and tested to part of the environment to validate they work properly before changing the entire environment. Production deployments should always have a rollback plan that restores the environment to its known functional state. This might be as simple as backing up the files to be changed, or provisioning systems and scripts that deploy changes. Revision control systems are often useful in tracking, testing, and promoting changes from development through production, with the ability to rollback to a known good deployment in case of problems.

To prevent sabotage, security is critical. Good security procedures take a layered approach, where compromise of one layer does not compromise the overall system. Each layer should take a “least privilege” philosophy, where individuals only have access to as much as they require to do their job. Security begins with physical security. Are the systems, and supporting infrastructure, secured from physical access by those who should not have it? Are your data center physical security procedures effective? I’ve seen instances where data center doors were locked, but the doors were installed with hinges exposed to the unsecured side, enabling anyone with a screwdriver to easily gain access to this supposedly secure facility. Other facilities have had biometric locks with vault doors, only to have easy access into the “secure” facility through a raised floor.

Security doesn’t stop at physical security. Networks, systems, and software should be installed with least privilege as well. For especially critical data, requiring a process where multiple approvers review the access request before data is unlocked will limit the possibility of an individual utilizing data inappropriately. The approval process is another check in the process, moving an individual action to one that requires collusion.

Having procedures to stop denial of service attacks is another aspect to effective security and maintaining service availability for legitimate users. This may consist of utilizing firewall capabilities, request to a network provider to stop the rogue traffic upstream, updates to software, or infrastructure changes.

Facilities also need to be sufficient to support the infrastructure. The data center needs to have sufficient power and cooling, including backup power and cooling. Common failure points are uninterpretable power supplies with batteries that are insufficient or too old to handle the load, generators that cannot provide sufficient power, equipment that is not attached to circuits with backup power, and HVAC systems that do not provide enough cooling, especially when a unit fails.

Maintaining data in multiple geographical data center locations can result in latency issues, where one facility has newer data than another location. Depending on the locations and distances involved, speed of light issues may provide latencies that exceed acceptable limits. There are ways to assure data consistency, but they trade performance. Redundant data centers should also avoid similar geographical risks between locations, so that a disaster in one area does not take down all facilities.

These are just a few examples of issues faced while developing resilient, highly available infrastructures. This document is not at all comprehensive. It is important to have a trustworthy, competent consultant with experience at multiple sites to help improve your mission critical information architecture. I provide consulting service to provide comprehensive recommendations specific to your infrastructure and availability needs.

This article was written by Doug Spencer, a technical and business consultant who helps companies utilize technology to improve business operations. Doug’s experience spans many industries, company sizes, and technologies. A public example of Doug’s results is in his suggesting and implementing infrastructure changes that enabled the United States Postal Service to approximately double their online sales annually, while sharply reducing recurring operating costs, and improving availability of online services. Revenue to USPS from their online offerings now exceeds $650M annually, with peak days exceeding $4.7M. Doug has provided similar successes for many private sector companies, and works with companies of all sizes.

Doug helps companies to realize their potential by utilizing his experience to improve revenue and save costs. Doug can be found on LinkedIN at http://www.linkedin.com/in/dougspencer


$3M for 30 seconds?


There is a lot of coverage about the cost of an ad during the Super Bowl. $3M for 30 seconds does seem absurd to most people, at first glance. That is, until you consider the value of that ad to the company who paid for it.

Not only does a company receive 30 seconds during a single, heavily watched event for that money, they also gain almost continual, worldwide coverage leading up to the airing, plus post airing analysis, critiques, best ad re-airings, individuals sharing their recollections, and discussions about the cost. That buzz, and coverage, amplifies the effectiveness of that single airing far beyond what any other ad generates. They are not buying a single ad. They are gaining hundreds of millions of dollars worth of coverage that keeps their company in the spotlight for years and decades to come.


Pick a consultant


You have identified a project that you expect will generate $1M per month of value to your company upon its successful completion. You have narrowed your choices to the following consultants to help deliver the project.

  • Consultant A is a Consultant who bills $150/hour. You don’t know it up front, but they will end up billing you 4,000 hours of effort, for a total of $600,000 and 2 years of delay, without delivering useful results at the end of the effort. Your company receives $0.00 in value from this arrangement, and pays $600,000 in hourly fees at $150/hr for the time before you give up on the project as “impossible.”
  • Consultant B is a consultant who has extensive experience, great references, who has delivered these types of results multiple times in the past, and will deliver results in 300 hours that meet your project goal. This individual submits a proposal for $500,000 to deliver the result, due upon successful completion, regardless of the number of hours it takes. Using their experience and insight, this individual also identifies a way to improve the project to add $500,000 in monthly value for your company. With your agreement regarding the added value, they charge $200,000 to implement that change, which will require 2 additional weeks. In total, this individual devotes 2.5 months to deliver results that provide your company $1.5M/month in value, and charges $700,000 for that result, and you start benefitting $1M after 2 months, and $1.5M after 2.5 months. Calculated hourly, you would have paid $1,842.10/hr. for this consultant.

Which do you choose:

  • Consultant A, the consultant who doesn’t belive they can deliver in a reasonable amount of time, so they bill hourly for effort.

Or

  • Consultant B, the consultant who has extensive experience, knows they will deliver the project successfully, so they bill for results, plus they add $500,000/month in value beyond the initial project proposal.

Consider that by the time you have given up on Consultant A, and the project, you would have already made over $20,000,000 from the results you would have from choosing Consultant B, who provided their results quickly, effectively, and with added value to the basic project proposal.

The following graph shows a comparison of the scenario described above, showing the net cost or benefit to the company of the results-based consultant (B Net), who quickly delivers a beneficial result, versus the hourly consultant (A Net) who lacks motivation for a quick result, and perhaps never delivers the desired result.

 

 

Consultant comparisons

Comparison of the benefit of a results-based consultant versus an hourly consultant. Note that the results-based consultant's benefits quickly grow, while the hourly consultant's trend negative.

 

 

 

The following graph shows the same scenario, but the hourly consultant delivers after 24 months on the project, versus 2.5 months with the added value of the results-based consultant. Note that the hourly consultant’s results will never exceed those of the results-based consultant, even after the hourly consultant has delivered the project.

 

 

Results based consultant versus 24th month delivery by hourly consultant.

Results based consultant versus 24th month delivery by hourly consultant.

 

 

Even if we consider the following scenario, where the results based consultant delivers on the 24th month, the same as the hourly consultant, the client still comes out ahead since the results based consultant had an incentive to implement changes that benefit the client, and was not charging fees until results were delivered. Note how the hourly consultant’s client benefit drifts negative, while the results/value-based consultant’s value is never negative. Also note that the hourly consultant’s results never cross the results based consultant’s.

 

 

Hourly consultant and results based consultant deliver at the same time

Hourly consultant and results based consultant both deliver on the 24th month.

 

 

I hope this illustrates how results/value-based fees benefit both the client and the effective consultant. They align the consultant’s interests with those of the client. An efficient and more effective consultant will earn more for better results, as they should. The client benefits by always receiving positive value for any money paid, along with receiving better results than they would receive from an hourly fee arrangement.

 

This article was written by Doug Spencer, a technical and business consultant who helps companies utilize technology to improve business operations. Doug’s experience spans many industries, company sizes, and technologies. A public example of Doug’s results is in his suggesting and implementing infrastructure changes that enabled the United States Postal Service to approximately double their online sales annually, while sharply reducing recurring operating costs, and improving availability of online services. Revenue to USPS from their online offerings now exceeds $650M annually, with peak days exceeding $4.7M. Doug has provided similar successes for many private sector companies.

Doug helps companies to realize their potential by utilizing his experience to improve revenue and save costs. Doug can be found on LinkedIN at http://www.linkedin.com/in/dougspencer


Is your company retaining the most helpful people?


Science Daily published an article about a study by a Washington State University social psychologist regarding who gets excluded from a group first. They found that there is a psychological propensity for people to get rid of those individuals who were most helpful and unselfish, even if keeping them around would have benefited the group more than letting them go. Reasons cited for letting a helpful team member  go included “the person is making me look bad” and that they “raise the bar of what is expected for everyone else.”

Given the innate psychological predisposition to distrust and get rid of those who are most helpful to a group, it is interesting to consider if companies would do better by rationally and objectively considering their staffing decisions. Would a company staffed with mostly helpful people do better than one that sheds them based on co-worker feedback about who makes the other employees “look bad” by excelling in their work? It’s an interesting question.

When I have observed this phenomena, it has generally been with mid-level staff. Newbies typically realize they don’t have the knowledge, and are often willing to learn new skills if they have an interest in the subject matter. Experts typically got their knowledge by taking advantage of available learning opportunities to improve their skills and abilities, and accept new knowledge readily. The mid-level people sometimes reach a plateau in their skills and abilities, then become unmotivated to improve beyond that level, and turn to territoriality to maintain the status quo they are comfortable with.


Funny because it’s often true?


Consulting poster from http://despair.com

This Despair, Inc. poster shown above is true far too often. A surprising number of people I talk with have had past experience of paying a consultant hourly fees for what seems like a never ending project.

Why work with a consultant whose primary goal is to gain more billable hours? I avoid that scenario by offering results based fees. I put my money where my mouth is, billing only for results. As a result, my clients always receive value.


Are you lazy enough to be a great system administrator?


Sisyphus

I often see people who work very hard at system administration. They devote a lot of hours. They drive in to visit their systems in the data center regularly, almost as if they were a loved family member staying at the hospital. They stay up late tending to outages and updates. Their commands are hand crafted, one by one, for each individual machine.

That method certainly results in a lot of effort, but it isn’t an efficient way to deliver results. In fact, it is typically adverse to results. The work becomes an unfulfilling Sisyphean task that is tedious, monotonous, time consuming, and what amounts to rote repetition. People dread working in those conditions, so it leads to problems.

How to improve this situation? Become lazy. Think about ways to make processes more efficient. Standardize your systems, so each is as similar as possible. Automate tasks and deployments, using provisioning systems and scripts. Implement high availability and redundancy to avoid unscheduled outages and updates that keep you up at all hours of the night. Develop a testing and rollback plan for failed deployments to avoid long outages. Each of these items reinforces the others. Standardization complements automation. High availability is easier to implement well with standardization, and helps to avoid long outages.

I have worked projects where I have been able to reduce manual tasks to less than 10% of their original effort. This sometimes worries employees, who feel their manual efforts will be replaced by automation, resulting in less job security. I have found the opposite result to be true. Improvements in how a company uses technology often leads to a increased willingness of management to expand their use of technology in new and interesting ways once it is viewed as a valuable key to the company’s success and competitiveness. Companies that use technology as a benefit, and enable  their personnel to do more interesting, cutting edge, and unique work, reap the rewards of high morale, employee satisfaction, and a workforce that wants to help the company in ways that improve the company. This is a win-win situation for employees and employers.

This article was written by Doug Spencer, a technical and business consultant who helps companies utilize technology to improve business operations. Doug’s experience spans many industries, company sizes, and technologies. A public example of Doug’s results is in his suggesting and implementing infrastructure changes that enabled the United States Postal Service to approximately double their online sales annually, while sharply reducing recurring operating costs, and improving availability of online services. Revenue to USPS from their online offerings now exceeds $650M annually, with peak days exceeding $4.7M. Doug has provided similar successes for many private sector companies.

Doug helps companies to realize their potential by utilizing his experience to improve revenue and save costs. Doug can be found on LinkedIN at http://www.linkedin.com/in/dougspencer


What is an expert?


  • The book Outliers: The Story of Success, by  Malcolm Gladwell postulates that it takes a minimum of 10,000 hours of practice for someone to become a true expert at a specific task.
  • As an example, world class athletes train for years, often starting at an early age, in order to deliver a flawless, apparently effortless performance.
  • Hours are an input to success, not a result.
  • An expert will efficiently deliver better results than someone who is not an expert, because an expert has already dedicated the significant time required to become an expert able to deliver that successful result.
  • An expert will be passionate, interested, engaged and often obsessed with their area of expertise.

I have been asked regularly how I learned my skills. I started with an obsession with science and technology, along with an interest in expanding my overall knowledge. I used to check out a stack of 30+ technical books from the library and devour the information they contained, learning all that I could, then put that knowledge to use in real world ways by writing programs, building projects and devices, solving problems. Some of my school book reports were about technical manuals. I recently estimated that I’ve devoted over 80,000 hours to my interest in technology. This dedication, passion, and tenacity for my work is why I am able to deliver results that are difficult or impossible for others. I still enjoy technology, and applying my knowledge and expertise to delivering real-world results. Being able to do work I enjoy, and help clients in ways they that benefit them greatly is always fun for me.