Oh how times change! I am reading a good book at the moment called "Competing on Analytics – The New Science of Winning" and I hit one particular quote that I have to share with you. It’s one of those statements that makes perfect sense at the time, but is kind of funny when you look at it in the context of recent world events in the financial markets.

…But in other cases, analytics can permanently transform an industry or process. As Money-ball and Liar’s Poker author Michael Lewis points out in talking about investment banking. "the introduction of derivatives and other new financial instruments brought unprecedented levels of complexity and variation to investment firms. The old-school, instinct guys who knew when to buy and when to sell were watching young MBA’s – or worse, PhD’s from MIT – bring an unprecedented level of analysis and brain power to trading. Within 10 years the old guard was gone".

I love that line "analysis and brain power", given the contribution of derivatives to the prospect of a "teensy weensy" global recession. Mind you, how much ‘analytics’ do you think is going into current decisions and company valuations on the stock market?

Where are those old school guys? I want ’em back!! 🙂

Hi everyone. Some light reading for the weekend 😉

This post is not authored by me (Paul). Instead, my one-and-only darling wife. Apart from being an all-round hottie, she has been studying a post-graduate business course at University. The content of this post is one of her papers that when I read it, found it to be a really excellent piece of work. Her lecturer agreed too – and awarded it a high distinction.

Now the reason that I am posting this to the CleverWorkarounds blog is she really did some serious research, and I ended up reading a lot of the material too. In fact, I used a lot of her reference material when I was writing the global strategy and technology, and “project fail…” series of posts. If you liked that stuff, you may find some stuff here you like also.

Note: If you want to see where our thinking has evolved in this area, I suggest you take a look at my book: The Heretics Guide to Management. That really nails the true skills one needs for global managers!

So without further adieu, I present to you her paper, examining what skills and competencies that global managers require to operate in an increasingly complex and dynamic global environment. Please let me know what you think of it.

Continue reading “Mrs CleverWorkarounds – Skills and Competencies of Global Managers”

Hi all

Welcome to the 7th post on this series delving into the murky depths of SharePoint project failure. I’m sure that even if you haven’t used SharePoint, or been involved in a SharePoint project, most will have experiences of being sore and sorry from a project gone bad and the content presented in this series thus far has been somewhat familiar.

Speaking of sore and sorry, I am writing this post days after buying the kids a Nintendo Wii. I’m not a geek-toy kind of guy, so I’m usually a little behind when it comes to consumer gadgets, but what a brilliant product it is. I am completely addicted to Wii Sports (especially the tennis and baseball), but after two days, I am feeling muscle ache like I have never felt before. I can barely move!

So I’d better stop playing that damn game and get back to business. In the unlikely event that you are hitting article seven for the first time, I suggest you go back and read this series from the start. You will learn all about tequila slammers, why Microsoft is like Britney Spears, Bill Gates selling SharePoint to Sergei Brin and the wonderful land of chocolate where projects never fail.

More recently, we targeted the infrastructure and development geeks in posts five and six. Now it’s time to cast our lens over the guys who control the budgets and get paid way more than you and I. So of course it is the project sponsor and senior management in general 🙂

Continue reading “Why do SharePoint Projects Fail? – Part 7”

This post is going a little off-track from the previous 5 posts around SharePoint project failure and I promise I will get back on track again soon. I felt that I had to talk about this topic while we are looking at the nature of project failure, wicked problems and SharePoint. Not sure if it is really a part 6 so I have made a new, separate interlude in between the project failure series. Why don’t you let me know, reader, if you think this belongs as a part of the “project failure” series!

My wife is studying a business course at university and I have been reading some of her reference books. One book was particularly good and really got me thinking about technology’s contribution to global organisations and how at this scale, most problems likely have a large degree of wickedness.

This edited book is called Global Strategies: Insights from the World’s Leading Thinkers (The Harvard Business Review Book Series), and it is well worth reading – even for you technical geeks.

What it does is look at the strategy, and execution of strategy, that has led some organisations to make the transition from regional to global success story at the expense of their competitors. We are talking corporations with tens of thousands of employees here too, and the CEO perspective really hits home to you – the sheer *mammoth scale* of it all.

Trying to change a culture at an organisation of 20 employees can be an insurmountable challenge. Try 45,000 employees across 15 subsidiaries in 10 different countries. (Makes a SharePoint rollout seem like a walk in the park.)

Continue reading “Globalisation, Strategy, Technology and Organisational Maturity”

This third post in the “Who do SharePoint Projects Fail” series has been hard to write, not because I am struggling with ideas, but because I have too many! It is hard to put all the reasons why SharePoint projects go wrong into a coherent chain of logic.

In the first two posts in this series, we did a basic examination of wicked problem theory.

Part 1 introduced you to tequila slammers, as well as the pioneering work by Horst Rittel and the concept of wicked problems.

Part 2 also delved into the murky depths of academic history to demonstrate that even back in the seventies when ABBA stole the hearts and minds of teenyboppers around the world, at least some people had time to look at wicked problems in relation to building IT systems.

If you take away anything from part 1 and 2, it is this.

• Too many tequila slammers hurt
• Before you blame the product, the project manager, the stakeholders, the nerds, the methodology or anything else in vicinity, go back to the problem you are solving and determine its ‘wickedness’

Now we will finally look at this large, complex, scary beast known as SharePoint. I have no means to quantify how much of a percentage of project problems arise from issues related to “the product”, but it definitely happens. Unsurprisingly enough, it is easy to argue that some of the areas that I highlight below are people issues, but we still get to indulge in Microsoft bashing – and who doesn’t enjoy a bit of that eh?

Continue reading “Why do SharePoint Projects Fail – Part 3”

In 2002, a high profile client asked the company I was involved with what our position/compliance was on ISO17799. The managing director called me up and asked if I could “put something together for him” by the next day.

So I put something to him. Two words to be exact. “Non compliant”.

The irony was that I had actually been trying to win support for adopting *some* ISO17799 principles as a yardstick to measure ourselves, knowing full well that at some point we were going to be asked. But I never was able to get any management behind the idea. Why? Because it was seen as not particularly critical to the business.

Then, they were asked by a client, and heaven forbid, it has to be done by the next day!

What this highlights to me is the general disinterest among many in business of things that are seen as ‘getting in the way’. These days I’m better at appreciating why this is the case and I’m better at providing quantifiable explanation/justification, but it is still disheartening nonetheless.

So I was thinking to myself whether the attitude I experienced was similar at all to the current subprime victim in the news, Bear Stearns.

Continue reading “More on SOX and subprime”

I think SharePoint is an excellent platform for quality improvement, PMO and compliance efforts. But this is a non SharePoint oriented post. I’m sick of writing nerdy stuff at the moment.

In 2001, the supposedly blue chip US multinational called Enron filed for bankruptcy. For you younglings who were still at school, this made pretty big news around the world. Many of the senior executives are still in jail for fraud related offenses. the whole sorry tale is one of greed, corruption, deceit, insider trading, huge theft of workers’ entitlements and massive job losses. As part of the collateral damage, Enron’s auditing firm, “Arthur Anderson” was also obliterated as its reputation dissolved quicker than Paris Hilton’s credibility.

google “enron scandal” – it’s interesting reading

Sarbanes-Oxley (real brief version)

Anyway, one of the things that came out of this and other scandals like Worldcom, was the Sarbanes-Oxley act. Its intent was to:

Protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes.

It did this by creating new standards for corporate accountability, and significantly beefed up penalties for acts of wrongdoing. Boards and executives are now personally accountable for the accuracy of financial statements. There are additional financial reporting responsibilities, with particular focus on the verifiable application of internal controls and procedures designed to ensure the validity of their financial records.

Now executives tend to like spreading the love (risk) around, and if they are going to go down, they like to take others with them. So IT professionals also have to do their bit for the common good. This is because the financial reporting processes of organisations heavily utilise IT technology. As a result, IT controls that relate to financial risk are fair game.

So how to account for IT controls?

COBiT

COBiT is not the only IT control methodology used for SOX compliance, but it’s the only one I am familiar with 🙂 COBiT (Control Objectives of Information and Related Technology) is commonly used as the framework to cover all your IT controls. I won’t get into detail here, as COBiT is a big subject in itself, and I have some information here already.

SOX Criticisms

Was SOX an over-reaction to isolated indecent’s of large scale fraud? It is clear that some believe this to be the case. “Compliance cost is too onerous” is very commonly cited, particularly with smaller affected firms. Most scarily for me, is seeing the term ‘SOX’ being used as a sales tool for products that at best, have little relevance to what SOX compliance is really about. The same criticism can be levelled against service companies as well, who are happy to bag Microsoft’s amateurish use of FUD, yet use disturbingly similar methods to sell products and services that have questionable relevance.

When researching my training material last year, I came across this nugget of information that gave an indication of the level of frustration that SOX has caused.

A global study from European accountants Mazars, found that close to 20% of EU companies are planning to de-list from the US market to avoid complying and more than half feel the costs outweigh the benefits 

But I then found this interesting snippet.

However this has the potential to impact on the cost of credit for such companies as warned in July 2006 by Moodys. “The cost of capital for public companies in countries that choose not to implement US Sarbanes-Oxley (SOX) type corporate governance rules may soon increase to reflect the additional risk premium resulting from companies and their auditors concealing the true level of audit risk” 

So now we come to the point of this post. What did they say above? “Cost of credit”? So Moodys implies that SOX compliance offers a level of assurance to suppliers of capital.

Six Years Later

I liked Moodys’ quote in the previous section. Fast forward to the present and the word “credit crunch” is on the news quite a lot. So is it fair to rate the effectiveness of SOX compliance based on the current turmoil in financial markets?

To answer that question, we have to look at the current problems that have led to the current financial crisis affecting world markets.

Here is a pretty good layman’s summary that explains the sub-prime issue and the problems with stagnant or falling property values. However we need to delve a little deeper here. The New York Times has a great article that goes into the necessary detail but it is large, and I’ll try and paraphrase it as briefly as I can.

In the past decade, there has been an explosion in complex derivative instruments, such as collateralized debt obligations and credit default swaps, which were intended primarily to transfer risk.

These products are virtually hidden from investors, analysts and regulators, even though they have emerged as one of Wall Street’s most outsized profit engines. They don’t trade openly on public exchanges, and financial services firms disclose few details about them 

Among the topics they discussed were investment vehicles that allowed Citigroup and other banks to keep billions of dollars in potential liabilities off of their balance sheets — and away from the scrutiny of investors and analysts. 

Now what was the intent of SOX again? “To protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes”. What do we see above? “potential liabilities off the balance sheet” … hmm

But there’s more..

Credit rating agencies, paid by banks to grade some of the new products, slapped high ratings on many of them, despite having only a loose familiarity with the quality of the assets behind these instruments.

Still others say the primary reason the Fed moved so quickly was to divert an even bigger crisis: a meltdown in an arcane yet huge market known as credit default swaps. Like C.D.O.’s, which few outside of Wall Street had ever heard about before last summer, the credit default swaps market is conducted entirely behind the scenes and is not regulated.

Ratings agencies have similarly been under fire ever since the credit crisis began to unfold, and new regulations may force them to distance themselves from the investment banks whose products they were paid to rate.

If you research into the fate of Arthur Anderson, they were screwed by a sudden and fatal loss of reputation as a result of their association and conflict of interest issues in relation to Enron. Disturbingly, the last quote above criticising ratings agencies reminds me very much of the conflict of interest criticisms levelled at audit firms like Arthur Anderson.

Crystal Ball Time

Since the practices quoted above are not necessarily illegal, and it is too early to determine whether the SOX laws will be used in a punitive sense to institutions caught up in the current crisis. I’m not a lawyer and as a result, my opinion here is naively uninformed. But like the Enron/Worldcom scandals, regulatory authorities and other interested parties will rightfully ask questions about risk management, and therefore the effectiveness of the controls for SOX compliant organisations.

This current crisis makes previous scandals pale into insignificance. A news site that I frequent reports that US investment bank Goldman Sachs  suggests that credit losses will amount to 1.2 trillion US dollars. That is a freakin’ *insane* amount of money and many people affected do not even realise it yet until they see their next pension/superannuation statement.

Consider that the world population is some 6.6 billion people. The above loss is therefore 180 US dollars per person on the planet! … Mind boggling isn’t it.

Notwithstanding the directly affected people who are defaulting on their mortgage, getting margin called, etc. Many, many people will be royally pissed. Politicians will react to this by forming committees to look at how to prevent this from happening again. SOX will be revised, or new regulations will be developed. More checks and balances, more compliance overheads, more disclosure.

Thus, more accountants, more lawyers, more business advisers, more IT security professionals, and of course, smelling a new FUD angle, more snake oil salesmen selling irrelevent products and services.

If companies think that their compliance costs are high now, just wait. I think it’s going to get a lot worse.

I hope that you had a bit of fun with my first “choose your own adventure” story. (Do yourself a favour and read that first!)

Writing that one was most fun. Did you suddenly think of the names of current and former colleagues as you read it? 🙂

Anyway, now it is time for you to sit on my virtual knee and listen to the moral of that story because believe it or not, I actually had a really important point to get across.

Continue reading “Selling MOSS (The moral of the story)”

Welcome to the fifth article in my series on fostering mutual love and respect between those know-it-all smartarse technical geeks and the guys who do their taxes!  This is the final SharePoint scenario that I will cover in this series, but there will be some more articles coming later, as we further look at the financial side of things.

To recap, the first article introduced the financial concept of discount cash flow, net present value and internal rate of return. Next, we discussed how I came up with the three scenarios and the assumptions and methodology behind valuing the scenarios, which placed a specific emphasis on costing the holistic view of governance. The last two articles, here and here, covered the first two scenarios, where we showed the circumstances where the project had a good outcome, and a not so good outcome.

So, for the last time around, we are going to take on a difficult SharePoint scenario. This is the scenario where SharePoint is used as the platform to build a custom web application.

Continue reading “Learn to talk to your CFO: Web Application Scenario – Part 5”

Welcome to the fourth article in my series that attempts to bridge the cultural divide between nerds and accountants. Unfortunately there are more differences to these two strange species than just fashion sense and whether a pocket calculator is in their possession. But despite being poles apart about what pushes their buttons, at the end of the day they are both trying to achieve a positive result.

The first article introduced the financial concept of discount cash flow, net present value and internal rate of return. Next, we discussed how I came up with the three scenarios and the assumptions and methodology behind valuing the scenarios, which placed a specific emphasis on costing the holistic view of governance. .

The previous article to this one was the first of these three identified scenarios, internal corporate collaboration. This time, we are going to take on a popular SharePoint scenario centered around web content management (WCM).

Continue reading “Learn to talk to your CFO: WCM scenario – Part 4”