About George Goodall

George Goodall is an Senior Research Analyst at Info-Tech Research Group.

I’m reading Taleb’s Antifragile (finally). Well, I’m not really reading so much as listening to it as an audio book which really gives me the opportunity to completely ignore those parts of the work that irritate me while revelling in some confirmatory bias.

Antifragile certainly isn’t an easy book but it does provide a variety of interesting frameworks for consideration. The root of Taleb’s argument is that fragility is bad and that robust (or resilient) is sub-optimal. Instead, we need to exploit the ability of certain things to get stronger due to stress. Nature is a good example as evidenced by the human body. We apply stress to the body (e.g., with some heavy deadlifts), we are broken down, and the body develops additional capacity.

In an attempt to fully grok his ideas I’m attempting to break them on the wheel that I know best: IT. So what, exactly, is antifragile IT? It seems that many of our IT practices are effective for removing fragility and building robustness. We increase resiliency and exploit models that give us more (capacity, redundancy, etc.) at a reduced cost. But is that really antifragile?

I’ve been working on a project that considers the nuances of IT cost cutting. It’s not difficult to cut costs from IT but those costs will often result in infrastructure and capabilities that are more fragile. For example, we lose the ability to respond to business change and — seemingly inevitably — we have to increase our reliance on manual business processes. The black-box optimization algorithms of our ERP systems wither in the face of business change and concede to the trinity of Excel, file shares, and email. This solution is likely less efficient and seemingly becomes more fragile because it lacks standardization or repeatability.

But is this transition a bad thing? In many ways Microsoft Excel is a wonder of antifragility. I’m amazed at how it persists and permeates all enterprises and gets used for all manner of odd things. Furthermore, its shortcomings actually lead to informal continuous improvement processes. Business units develop standards and training programs. All users become power users through the mystery of tacit knowledge exchange. Where our IT-driven IT processes become rarified and fragile, Excel persists and generally gets better. Excel is perhaps more than just a technology; it is a community and a practice.

Of course, this is just an idea for how the notion of antifragility applies to IT. I could be completely off base.

I would love to hear your ideas.

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George Goodall
George Goodall
Senior Consulting Analyst
Info-Tech Research Group

Develop a strategy and roadmap to best identify, capture and use your knowledge effectively.

Join me and subject matter experts on Thursday, May 15, at 4 p.m. EDT for a webinar on “Knowledge Management: Do you have a strategy to manage knowledge?”

Go Here to Register for this Webinar
(A video of this Webinar will be available at this link after the event)

We will be discussing:

  • Knowledge management trends
  • Knowledge management goals and strategy
  • Challenges facing knowledge management
  • Process of identifying and capturing knowledge
  • Building knowledge management practices into people’s workflows
  • The future of knowledge management

Info-Tech Research Group webinars occur during the early weeks of our research projects. We want to work closely with our members and potential members as we build out our research to ensure we are thoroughly meeting your needs. Attendees will weigh-in on several key polls and will be able to pose questions to the group.

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Mobilizing-ERP-Infographic-ICO
Click on this image to see Info-Tech’s Mobilze ERP infographic and to go to the project blueprint “Mobilize the Workforce by Mobilizing ERP” (Click View Blueprint button).

Organizations looking to exploit the mobile trend will typically look first at customer facing applications. But the biggest gains can be realized from mobilizing internal business processes such as enterprise resource planning (ERP). Here is how one such organization realized significant cost savings from mobilizing ERP.

Kawasaki Motors Manufacturing Corp, USA (KMM) is located in Lincoln, Nebraska and Maryville, Missouri. As on one of Kawasaki Heavy Industries’ key production facilities, process optimization is essential for KMM’s continued success. In 2005, KMM implemented a new ERP and realized savings, centrally in the administrative business processes. Production would be next key business process KMM plans to optimize with their ERP.

KMM, like many large manufactures in the world, runs a lean production system. The organization embraced lean tools and techniques and operates on a just-in-time basis as their inventory management philosophy. A key tool that minimizes the inventory buffer at KMM is the Kanban card system. Kanban, Japanese for ‘sign’ or ‘billboard’, uses cards to monitor inventory levels at different production stations. In its simplest form, Kanban cards trigger inventory replenishment when a part is low at an individual production system while simultaneously monitoring the overall level and speed of inventory turn.

The Kanban system was heavily manual before KMM embraced mobile ERP. Each individual card was printed. Cards were handled by up to 8-10 employees in every Kanban cycle. Production workers had to monitor the level of inventory at their own station and make the decision whether to trigger the Kanban process to replenish their stations inventory.

kanban card
Figure A: The traditional Kanban card process

KMM saw the potential value mobile technology could deliver by optimizing the Kanban process. Using their existing IBM i-Series developers and infrastructure, KMM used a third-party platform provider to build a native iOS mobile application to manage the Kanban process. Native applications are notoriously difficult to build and manage. KMM, however, realizing their mobile development maturity level was low used their third party providers to help train their existing developers on native application development.

eKanban card
Figure B: eKanban card user interface
Imgae Source: Longrangemobile.com (see below)

The new eKanban process has dramatically streamlined the process. Previously, a FTE had to prepare each box of inventory by cutting a slit in the box for the Kanban card. There is no longer the need for an individual to perform the preparation process. Data about inventory levels is transferred instantaneously to the ERP system which has generated inventory savings. Lastly, the automated process has reduced the amount of labour needed to analyze the inventory levels and prepare supplier purchase orders.

ekanban card process
Figure C: The eKanban card process

For a total estimated investment of $450,000, KMM was able to generate a payback of less than 6 months. Due to the high transactional nature of the Kanban card process, eKanban delivered marginal process cycle time improvement but deep overall value. Process value was delivered by eliminating 10 seconds of card handling time per employee. The conservative estimate yielded $747,000 per year of savings by the elimination of these 10 seconds. A total of $202,500 was eliminated by the reduction of buffer inventory and reduction of inventory analysis time.

mobile ERP case
Figure D: Estimated business case for mobile ERP at KMM

process maturity ladderKMM is now pursuing mobile ERP options in other key production processes such as quality control and receiving. KMM now also has the internal capabilities to pursue further mobile development opportunities and further climb the process maturity ladder to “optimizing”. Get your ERP mobilization evaluation going.  Use our  “Mobilize your workforce by mobilizing your ERP” project blueprint.

Info-Tech researched the Kawasaki case study in developing our project blueprint Mobilize your workforce by mobilizing your ERP. For more on this case study see the following sources:

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Cloud computing conceptIT leaders are quickly getting up to speed with the ABCs of cloud computing. It’s not the ABCs, however, that are causing grief; it’s the ERPs.

Cloud-based ERP is rapidly becoming an area of key interest for IT leaders and other decision makers. The challenge is that the term “cloud ERP” is a better marketing term than IT strategy term. There are really four different types of ERP:

  • On-Premise where a particular enterprise owns and maintains the ERP instance and the associated databases and servers.
  • Software-as-a-Service (SaaS) options where all users share a single instance.
  • Proprietary cloud models where a particular ERP vendor maintains an instance of the ERP system in its own data center. This model is similar to traditional managed services arrangements but the vendor may offer subscription licensing terms instead of up-front-plus-maintenance terms.
  • White label cloud options are particularly challenging. In this scenario, an ERP provider – typically a VAR or reseller – offers to host the ERP system in a third-party hosting center.

Each of these models varies widely in terms of benefits, costs, and risks. In many cases, on-premise software may offer a wide range of potential benefits but have high up-front licensing costs. Conversely, a SaaS solution may offer attractive up-front licensing but present inappropriate risks. These assumptions are not, however, universal. The cost of SaaS can be shockingly high over the entire lifespan of a solution. Similarly, on-premise solutions aren’t necessarily low risk if the IT department lacks the sophistication and maturity to effectively manage it.

The solution to the cloud ERP dilemma is to use Risk-Adjusted Cost Benefit (RACB) to assess different ERP options. Every deployment scenario has a different RACB. Consider the existing solution and compare it to different hosted and on-premise options. RACB provides a way of comparing apples with oranges.

For more information, see Info-Tech’s solution set, Determine if Cloud ERP Lies in the Future.

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The longest day of the year did not bring the end of the world. It did, however, bring an exciting announcement from that consistent purveyor of acquisition news: Oracle.

Oracle is acquiring Eloqua for $871-million in cash.The move marks Oracle’s commitment to two emerging areas of its application portfolio. The first is marketing automation. Eloqua’s core tools assist marketing departments create and manage campaigns. This functionality will augment Oracle’s existing Customer Experience solutions like the Oracle Sales Cloud, the Oracle Commerce Cloud, and the Oracle Service Cloud. The Eloqua functionality provides one book end to Oracle’s existing customer functionality. The other bookend is built from the tools it acquired from FatWire in 2011.

The other emerging area is — no surprise — cloud. Oracle has made a strong commitment to cloud-based tools with the introduction of Fusion Applications and two other key acquisitions: Taleo for human resource management and RightNow Technologies for customer support.

The acquisition calls to mind a number of concerns. The first, of course, is execution. Oracle is no stranger to integrating new tools and employees and it has developed considerable experience in maintaining cloud-based applications. The Eloqua portfolio does, however, represent considerable overlap with existing Sales Cloud and Service Cloud functionality.

The other concern is how the rest of the applications market will respond. SAP has also invested heavily in cloud applications with SuccessFactors but hasn’t made recent moves into the sales or service market. The other Oracle competitor that will take careful notice is Salesforce.com. It has well-developed sales and service products but may feel the need to acquire a specialist to bolster its client list. Vendors like Silverpop and Marketo may be the beneficiaries.

It’s tempting to say that we will see no more acquisitions this holiday season. Keep in mind, however, that the holiday season doesn’t traditionally end until Twelfth Night on January 5th. As Shakespeare himself noted, Twelfth Night is also a time when things are turned upside down and the low are made kings (at least for a night). Silverpop, Marketo, Salesforce.com, or SAP might just find a role in this emerging drama.

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