Tuesday, February 13, 2007

Camping sites not slums!

Thanks Todd for an elaborate response to my earlier post. In the context of city planning analogy for SOA that we are discussing, we agree that

  1. Slums do get developed
  2. Slums are undesirable
  3. Slums need to be contained and eventually removed.
  4. SOA helps containment and removal of slums

Only point of disagreement is about effective governance. Todd argues that effective governance can make sure that slums don’t spring up in first place. Conversely if slums are springing up, governance is in-effective.

My contention is that such a governance mechanism may be difficult to establish in some cases. Todd has rightly pointed out that different governance models need to exist for organizations with different focus (viz. squeezing value v/s growth). However the organization I was working with was in both these modes simultaneously. It is an organization created out of many m&a in very short time frame. It is common (well this is my opinion and I have no data) for these organization to use one part of merged entity to grow another part of merged entity, while squeezing value out of first part. Moreover value creation (growth) is not always driven by normal value chain (viz. design >> build >> sell >> service). In this particular case a clever business person had figured out a financial engineering plan to release some (millions of dollars) value away from the normal value chain and IT support was required to hasten this plan.

In such cases it appears that it is really difficult to have governance mechanisms reconciling both these (growth and squeezing value) situations. What we had was a 'squeezing value' focused governance mechanism. So many IT asset were created (which were really growth focused) outside of normal (squeezing value focused) governance. There was a danger that these assets were then further utilized by normal (squeezing value focused) projects. So we had a slum and danger of creating an ecosystem that would be developed with slum as its center.

We could avert dependency on slum by some governance scheme. But then there were debates about not utilizing this slum that was already there. The projects not using the slums were seen as redeveloping those capabilities 'unnecessarily'. The slums creation got away without governance controls imposed on it, because it was part of 'growth' focused effort and evaded 'squeezing value focused' governance. But later projects not using the slum were caught in a debate because they were under 'squeezing value' focused governance.

The key questions then is how to have a reconciled governance catering for growth and squeezing value, which will then enable transition assets from 'growth' governance model to 'squeezing value' governance model?

My belief is that answer to this question will provide effective governance as suggested by Todd and SOA will be part of that answer. Then instead of developing slums we'll develop temporary camping sites which do provide some capabilities and are governed. These are transient capabilities waiting to be mainstreamed and made permanent, if required.

If it is not too late, I would love to hear Todd touch upon some of these issues in his upcoming webinar.

2 comments:

biske said...

Vilas-

I've read over this entry a few times, and I still come back to my original opinion- the problem was created by the ineffective governance that attempted to both grow by acquistion while putting severe cost controls on everyone else. If I can't put food on the table for my kids, but I decide to build an addition onto the house, that's creating a problem.

You asked a question at the end asking about transitioning assets, and I think your answer is correct: SOA has to be involved. SOA should be involved in the original acquisition to help understand the integration costs, otherwise, how do we even know what redundancy exists? Governance is about policies, and many policies must change over time based upon the conditions around us.

-tb

Anonymous said...

I realize that you are using a metaphor, but slums are necessary in the life of a city. Slums are part of the cycle of real estate that allows people to make money. Without decay and rebirth a city would grow outward endlessly like they do out west, but then transportation becomes the limit. Poor people must live within a reasonable distance from those served by the poor. They won't live on the same street.

If you are talking code, there is an economic limit around how much one can test. Beyond this limit is the hacker. So bugs will live somewhere. They are not going to disappear. Only our ability to find them hides them.

Tuesday, February 13, 2007

Camping sites not slums!

Thanks Todd for an elaborate response to my earlier post. In the context of city planning analogy for SOA that we are discussing, we agree that

  1. Slums do get developed
  2. Slums are undesirable
  3. Slums need to be contained and eventually removed.
  4. SOA helps containment and removal of slums

Only point of disagreement is about effective governance. Todd argues that effective governance can make sure that slums don’t spring up in first place. Conversely if slums are springing up, governance is in-effective.

My contention is that such a governance mechanism may be difficult to establish in some cases. Todd has rightly pointed out that different governance models need to exist for organizations with different focus (viz. squeezing value v/s growth). However the organization I was working with was in both these modes simultaneously. It is an organization created out of many m&a in very short time frame. It is common (well this is my opinion and I have no data) for these organization to use one part of merged entity to grow another part of merged entity, while squeezing value out of first part. Moreover value creation (growth) is not always driven by normal value chain (viz. design >> build >> sell >> service). In this particular case a clever business person had figured out a financial engineering plan to release some (millions of dollars) value away from the normal value chain and IT support was required to hasten this plan.

In such cases it appears that it is really difficult to have governance mechanisms reconciling both these (growth and squeezing value) situations. What we had was a 'squeezing value' focused governance mechanism. So many IT asset were created (which were really growth focused) outside of normal (squeezing value focused) governance. There was a danger that these assets were then further utilized by normal (squeezing value focused) projects. So we had a slum and danger of creating an ecosystem that would be developed with slum as its center.

We could avert dependency on slum by some governance scheme. But then there were debates about not utilizing this slum that was already there. The projects not using the slums were seen as redeveloping those capabilities 'unnecessarily'. The slums creation got away without governance controls imposed on it, because it was part of 'growth' focused effort and evaded 'squeezing value focused' governance. But later projects not using the slum were caught in a debate because they were under 'squeezing value' focused governance.

The key questions then is how to have a reconciled governance catering for growth and squeezing value, which will then enable transition assets from 'growth' governance model to 'squeezing value' governance model?

My belief is that answer to this question will provide effective governance as suggested by Todd and SOA will be part of that answer. Then instead of developing slums we'll develop temporary camping sites which do provide some capabilities and are governed. These are transient capabilities waiting to be mainstreamed and made permanent, if required.

If it is not too late, I would love to hear Todd touch upon some of these issues in his upcoming webinar.

2 comments:

biske said...

Vilas-

I've read over this entry a few times, and I still come back to my original opinion- the problem was created by the ineffective governance that attempted to both grow by acquistion while putting severe cost controls on everyone else. If I can't put food on the table for my kids, but I decide to build an addition onto the house, that's creating a problem.

You asked a question at the end asking about transitioning assets, and I think your answer is correct: SOA has to be involved. SOA should be involved in the original acquisition to help understand the integration costs, otherwise, how do we even know what redundancy exists? Governance is about policies, and many policies must change over time based upon the conditions around us.

-tb

Anonymous said...

I realize that you are using a metaphor, but slums are necessary in the life of a city. Slums are part of the cycle of real estate that allows people to make money. Without decay and rebirth a city would grow outward endlessly like they do out west, but then transportation becomes the limit. Poor people must live within a reasonable distance from those served by the poor. They won't live on the same street.

If you are talking code, there is an economic limit around how much one can test. Beyond this limit is the hacker. So bugs will live somewhere. They are not going to disappear. Only our ability to find them hides them.