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Planning for Disaster

I just bought a new pair of winter boots, guaranteed waterproof and warm to -20C; I stood in the store and swore to the sales clerk that I was not going to have cold, wet feet this year (I probably sounded a bit melodramatic, like Scarlett O’Hara declaring that she’d never be hungry again). For those of you who have never been to Toronto, you may not realize that some people make it through the winter without proper boots, just by avoiding the great outdoors on the few days when it is really cold or snowy. We only have a few weeks each winter as cold as -20; we only get a few big snowstorms; most of the snow usually melts within a day or two; and many days hover around the freezing mark so the bigger danger is cold slush leaking into your boots rather than the frigid air. However, every few years we have a colder-than-usual winter, or mounds of snow — like a few years back when a metre of the white stuff fell in two days, closing the city and causing sightings of cross-country skiers in the downtown financial district — and many people (including myself) aren’t properly prepared for it.

In my case, business still has to go on: being self-employed, I can’t just stay inside when the weather is foul, but have to get out there and continue with my day-to-day business of seeing clients and whatever other activities are on my schedule. In other words, the “weather event” occurs, and my business continues, although in a somewhat uncomfortable and restricted manner. There are many natural disasters that are a much greater challenge to business continuity, like the tsunamis, hurricanes and earthquakes that we’ve seen all over the world in the past year, in addition to manmade disasters and even biological events like a flu pandemic: a recent article in the Economist (subscription required) states that Gartner has advised their clients to consider the effect of 30% of their staff not showing up for work due to the flu, which would certainly fall into the “disaster” category for many businesses.

I spoke briefly about business continuity and BPM at a conference last week, and am doing a more comprehensive analysis for a client in the upcoming months. For me, it comes back to thinking about one of Tom Davenport’s nine steps to process innovation: geographical, or more specifically, location independence. BPM is one of the key technologies that may allow a process, or part of a process, to be located anywhere in the world, as long as the communications infrastructure and trained local staff exist. This has been a large driver behind the move to business process outsourcing, a controversial trend that is rejected outright by many organizations, but many people miss the fact that outsourcing also provides some level of business continuity: if you can move some of your business processes to a remote location, then you can just as easily have them at two locations so that there’s a fallback plan in the event of unforeseen events. I’m not talking about replicating systems here — that part’s relatively straightforward, although expensive — I’m talking about what is often forgotten by the IT disaster recovery team: people. If you have a single site where your human-facing business processes take place and something happens at that site, what’s your plan? Where do your people work in the advent of a physical site disaster? How do you reach them to coordinate them? Can you easily reroute client communications (phone, email, postal mail) to the new location? Are people trained at all locations to handle all processes? Can you reroute only part of the process if you have a partial failure at your main site?

Earthquakes are going to happen on the Pacific Rim; hurricanes are going to happen in the southern US, and it’s going to snow in Toronto. I’ve got my boots, are you ready?

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Dumbing down outsourcing

Methinks the simplification of the workplace has just gone too far: The Complete Idiot’s Guide to Successful Outsourcing.

Davenport article in HBR

If you missed Tom Davenport’s excellent article “The Coming Commoditization of Processes” in last month’s Harvard Business Review, they’ve published an excerpt to entice you to buy the full reprint. Mr. Davenport, as always, has brilliant insights:

“Despite the trend toward outsourcing, however, most companies have remained in do-it-yourself mode for most processes… Because of a paucity of process standards, it would be risky to do otherwise…

However, a new world is coming, and it will lead to dramatic changes in the shape and structure of corporations. A broad set of process standards will soon make it easy to determine whether a business capability can be improved by outsourcing it. Such standards will also make it easier to compare service providers and evaluate the costs versus the benefits of outsourcing. Eventually these costs and benefits will be so visible to buyers that outsourced processes will become a commodity, and prices will fall dramatically. The low costs and low risk of outsourcing will accelerate the flow of jobs offshore, force companies to look differently at their strategies, and change the basis of competition. These changes are already happening in some process domains, and there are many indications that they will spread across virtually all commonly performed processes.”

The full article contains a lot more detail than the excerpt, including using CMM as a great example of a standardized process that has enabled software development outsourcing. Less technical business processes are quickly following.

I’ve been mulling over thoughts about business process outsourcing (BPO) for some time, collecting ideas for an article (or even just a blog post), and this has really started me thinking about outsourcing. One of my recent customers provides BPO services for financial transaction processing (as do several other less-recent customers), so Mr. Davenport’s final words apply directly to them:

If your organization provides process services, you may have mixed feelings about the development of process standards. Standards will lead to commoditization, more competitors, and lower prices for the services you offer. However, the move to process standards makes so much economic sense that it is probably inexorable — whether or not your company gets involved. It’s better to help shape a standard than to be put out of business by it.

Legacy attitudes

I work mostly with large financial services clients, which means that there’s a lot of legacy software around. They seem to be pretty good at updating the hardware to avoid the threat of an unsupported system outage, but most of the custom software just keeps getting older and older. In many cases, large portions of the software aren’t even used any more, but have been superceded by functionality of newer systems or processes; however, no one has the time or budget to go in and prune all that unused code out of the production systems. Very much of an “if it’s not broke, don’t fix it” attitude, but unfortunately that results in a lot of unmaintainable garbage that still, somehow, has to be maintained.

As big of a problem as legacy code is, the bigger problem in some organizations is their legacy attitudes.

One example of a legacy attitude is that regarding corporate software standards. There have been huge benefits for companies that standardize on a small number of software vendors, such as licensing deals (at first) and IT training costs, but somewhere along the line, the practice of barring all vendors except those on a rigid corporate standards list is going to come back and bite these companies where they least expect it. Not only are they potentially blocking best-of-breed vendors from coming to the table with business solutions, they’re potentially blocking new delivery mechanisms such as software as a service. As Chris Lindquist, CIO Magazine’s technology editor, recently wrote:

The big problem for these [software as a service] providers until recently has been mindset — software as a service just sounds dangerous to a lot of companies that have built themselves on foundations of millions of lines of customized code wrapped around software from a handful of vendors.

There’s a lot of other legacy attitudes out there, from IT career paths (why would a company force a brilliant technical mind to become a mediocre project manager in order to advance?) to the use of IM (if someone is responsible in their communications and corporate safeguards are in place, why does the medium matter?).

Challenge legacy attitudes at your own risk, however; in many cases, the people who put them in place are now in management positions, so tread lightly when you call their baby ugly.