Outsourcing IT is Strategically Stupid

The Royal Bank of Canada (RBC) has received much publicity about its use of foreign workers to replace Canadian IT staff. While the storm has been about bad PR and the reaction of Canadian RBC clients, there is another reason to question the judgement of Gord Nixon, President and CEO of RBC and RBC's senior management. You might want to sell your RBC stock because their  IT outsourcing strategy is economically short sighted and bad for the long-term.

I wrote about this in 2009 in "What I have Learned from IT". 

Here's what RBC's senior management does not understand about the strategic importance of IT:
"The pathway to innovation and business improvement leads through IT: Every time a CEO announces a new innovative way to do business, the people affected hear the message and turn to .........   their computer. If they can't find the supporting tools and information there, the innovation is stillborn. The innovation or the process improvement isn't real until it shows up in the tools that people interact with." (What I have Learned from IT).

So if  RBC is anticipating new innovations in its bank processes, IT will be deeply involved. In fact, the failure to keep IT intimately involved with client and staff processes is the reason most new system rollouts become crash and burn (or more likely limp and stagger). So this leads to my follow-up point about outsourcing IT.

"The business management guru that came up with the concept of IT outsourcing should taken out and shot: If the people who work most closely with business units in improving their business processes and developing the underpinning software supports for business innovation have their work outsourced to ...... India??? What about intellectual capital that the organization needs to keep close for competitive advantage? Isn't that at work here?" (What I have Learned from IT).

Organizations that outsource IT don't get "knowledge management", business process management and organizational intellectual capacity. If managers understand the role of IT as the key principle business enabler (and how can they not in the banking industry with on-line banking, social media and smart phones for purchasing transactions), why would you not keep the organization robust in its IT capacity and the intellectual capacity of IT staff close.

Every organization that I watched outsource its IT function has eventually wound up led around by its nose by its  3rd party outsourcing firms, frozen in its capacity to respond to emergent business trends (fundamentally IT trends, e.g. Big Data) and ultimately strategically stupid.

Gord Nixon and RBC have a bigger problem than bad PR.

Information Pyramids: Actionable Information

Information Pyramids are a concept that Ron Weisenburger invented in 2002 when he was working with forage and beef cattle researchers in Agriculture Canada and the western provinces in Canada.

This article explains information architecture design for websites that need to guide customers to best information, current best practice and detailed information in a way that does not result in information glut and over-reliance on search. Foragebeef.ca and landuseKN.ca are two websites that are structured on Information pyramids.  

Ron's challenge was that some of the researchers were about to retire. Concerned about keeping really good information visible for ranchers and cow-calf producers in the Canadian western prairies, the researchers wanted a website that summarized the best information they had on different issues on growing grass and hay and raising beef cows and calves.

As the Chief Knowledge Officer for Alberta Agriculture and Rural Development, Ron Weisenburger's invention was to propose an information architecture that featured three layers of information on the website.

Layer 1, the top of the information pyramid, is the knowledge nugget or knowledge summary. It is a checklist of issues are immediately relevant to current circumstances. They are the issues a well-informed customer should be paying attention to.  The knowledge summary is actionable information because the community of experts who produce them summarize in a sentence these key actions as:

• What You Should Do
• What You Should Avoid
• What is Coming Over the Horizon

I contend that your value to your organization and your clients is realized when  you regularly produce knowledge summaries that clearly cover these three topics. If you don't, why are you an expert and why would anybody care what you do?

The knowledge summary is a checklist of actionable information

Knowledge summaries are at the core of good advice. And like good advice, they have a "Best Before" date stamp on them. Circumstances change and so should the knowledge summary. You usually don't see knowledge summaries written down (I will say more than I can write down). That makes them even more valuable when they are and when they are regularly updated to stay current with changing circumstances.

Ron Weisenburger's vision was that in the knowledge summary, you could click on a topic you should be paying attention to and get directed to Layer 2, the factsheet that describes "How To" do the current good practice you need to learn more about (or refresh your memory on).

 The factsheet on "How To"

The 3 to 5 page factsheet, that in layman's language explains and illustrates (pictures and graphics are important) what to do step by step, takes a community of experts to develop. It becomes a best practice guide. The most efficient way to develop checklists and factsheets is have someone write the strawdog (it will be about 80% right) and then have the community edit the draft. You will see communities of practitioners (CoPs) do this in wikis. The key is to tailor the factsheet to the level and tools that the target audience uses. With the emergence of mobile devices, shrinking good practice guides down to photos, illustrations and short text makes for in-field guides that reside on the hip and are more accessible than printed guides. Good practices guides are more static than checklists. They tend to have a lifetime of 3 to 5 years before changes in technology or research require updating.



The Details, Layer 3, presents the research articles, manuals, reports and regulatory instructions that are judged most useful by the community of experts. Information pyramids do not cover all the information on a topic, just the most relevant, robustly useful and foundational to the topic. Links from the How To factsheet bring the customer to this level if they need the detailed step by step instruction, the background research that supports the practice or the regulatory details that shape the current good practice.

The Details are the manual, research article, research report or regulatory instructions, standards and codes of practice.

Ron Weisenberger's information pyramid was a revolutionary concept in delivering really good information in a small footprint. The links allow a user to journey down to the material he/she is unfamiliar with. It also provides the opportunity to remind users to pay attention to fundamentals or key learnings they may have forgotten.

A second advantage of information pyramids is that they don't have to deliver all the information on the website. Really good detailed information can reside on other websites (e.g. factsheets or the details (reports, manuals, regulations)) and the information pyramid just links to to that information.

Today, an expert's tweet can be the one sentence line that highlights a currently relevant checklist topic. The blog can be the short introduction to the How To factsheet. And the Details can reside wherever the community of practitioners find access the easiest. Information pyramids are a different twist on the concept of news agregators. The toughest task is getting a community of practitioners to regularly review and update the checklist of currently relevant "Things to Do" today and "Things to Watch Out For".

The concept of information pyramids is introduced at foragebeef.ca
in their section "About Foragebeef.ca". Information pyramids also are a key structural element in the Alberta Land-use Knowledge Network's landuseKN.ca website. The article, "Information Pyramids, Presenting Really Good Information to You" on landuseKN.ca is more detailed on how to construct information pyramids.

At the core of this is a community of practitioners who take on the task of constructing the information pyramid and then weeding and maintaining it. Without their attention, the checklists quickly become out of date. Knowledge requires the active participation of knowledgeable practitioners.

It's About the Design: Knowledge Networks

Dr. Kirby Wright has brought new design concepts to the idea of knowledge networks (the evolution of communities of practice). The practical, visible version of what Kirby is thinking about for knowledge networks can be found at landuseKN.ca.

And you can hear Kirby talk in detail about these new design concepts on Tuesday, Sept. 11, 2- 4 pm at 10155-102 Street, Commerce Place, Edmonton, 4th floor, Room 4L. Kirby's presentation launches the Edmonton KM Network's fall seminar series on New Website Design Perspectives to Engage Customers in Knowledge Networks.

Kirby defines the design concepts for knowledge networks in "Website Design Concepts, Alberta Land-use Knowledge Network" and he talks about them in this YouTube video.

landuseKN.ca is the website for the Alberta Land-use Knowledge Network (ALuKN), under the management of the Foothills Research Institute. I work with Kirby Wright in developing the partnerships and creating the connections to actionable information (Kirby's definition of knowledge) for land-use practitioners and policy makers. The Alberta Land-use Knowledge Network helps with effective land use planning, analysis and decision making by:

• Providing access to high-quality, relevant, trusted and accessible information and knowledge resources
• Supporting the many networks, organizations and individuals involved in land use issues
• Providing technologies, resources and information management to land use professionals and organizations
• Facilitating conversations and dialogues to explore land use challenges and issue.

 
In Kirby's introduction, he says: "The key for the ALuKN web presence is to focus on ideas and issues. These ideas are selected because they are topical and relevant. Land-use issues encompass environmental, economic as well as social dimensions; land-use issues are multi-dimensional and varied. To reflect this diversity, the ALuKN site will need to be continually renewed and updated as new issues are introduced and profiled."

I will talk more about our journey into supporting a knowledge network on a very large issue (land-use in Alberta, Canada) that started a year and half ago in March 2011. 

Knowledge, Hype and Opinion, the Blackberry Playbook

The Summary, in My (Humble) Opinion:

• I have one. And I bought an additional 2 Blackberry Playbooks for my daughter and son.
• The new operating software (OS2.0) makes the Blackberry Playbook a powerful, functional tablet.
• I have found it a useful business tool (I am a consultant at lots of conferences and meetings).
• At its current price point ($200-$300), the Playbook is a steal of a deal.

For Canadians, it's been with a bit of consternation that we have watched the reputation and stock price of Research in Motion decline through 2011. Regarded as Canada's flagship in high tech, RIM's decline from the "must-have" technology has been hard to watch. And when their tablet came out in 2011, the rush to proclaim the Playbook as half-baked was universal.

There are some lessons here. Much has been written about RIM's struggles to be innovative. But little has been written about the analysts doing the analysis. So as a new user of the Playbook and a technology watcher, here are some observations.

The Herd Mentality about New Technology and Gartner's Hype Cycle (2011):
 

Here's the rub. Tablets are just coming down off the peak of inflated expectations. What will tablets do? Everything a laptop can do, plus a camera, plus a game console, plus an e-book reader, plus a music player ... How about frying eggs as a griddle? And from the time that the Apple iPad broke the ground, the expectations are that every new entry will do marvelous new things. At the beginning of 2011, at the peak of the hype cycle, the Blackberry Playbook didn't move the yardsticks as technology reviewers expected (iPad3 by RIM). And then the piling on began.

As every engineer will tell you, simple takes work. Sometimes you get complicated at the start of technology. Hence the trough of disillusionment.

Now a year later, with a new version of the operating system, is the hype (or continuing derogatory commentary) about the Playbook justified? Here's my perspective. Note this my opinion but it comes out of a consultant who uses the tablet for business.

What works well on the Blackberry Playbook:

• Documents to Go. Word, Excel and PowerPoint files can be transferred to the Playbook and edited easily. And then transferred back to my laptop. File overwrites happen seamlessly.
•  The keyboard. Easier to type on than my laptop's keyboard (or even the USB connected full-size keyboard I use every day). And word predictions speed up the typing. 
• Web mail. Contacts. Calendar. Easy to get to. Easy to update. Actually more convenient to work on than laptop.
• Video Chat. Some people think the Playbook should come with Skype. I don't use video in Skype because the service problems over my high speed cable connection. And even audio breaks up. But Video Chat over the same connection had smooth video and audio. 
• File Manager lets me get to documents that were attached to emails. And then edit them on the Playbook.
• Size is right. I can sit in a lecture room with their minuscule writing surfaces and take notes easily. I have stopped using my notepad binder for writing notes at meetings. The Playbook slides into an unobtrusive zipped binder (15 X20 cm) that I got years ago from a conference. I am not in a panic to leave it unattended.
• Price Point is a No Brainer: Canadian prices are $200 to $300. A good USB 32GB storage drive costs $60. When a tablet gets over $500 I question whether the tablet offers enough to compete with a similarly priced notebook computer. The Playbook does enough of what I would expect of a decent laptop in situations outside the office and at a significantly lower price.

With WiFi everywhere, I usually can browse easily and if there is no WiFi, the Bridge connection to my Blackberry Phone means I carry on as usual.

I don't play games. I don't shoot photos or videos with my cell phone.I am a grandfather so I do carry photos and videos of my grandson on my Playbook. I have checked out the Apps store and regard 85% of the offerings as clutter. No, I do not need "Angry Birds" on my Playbook.

The Playbook lets me work in situations where a laptop would be awkward and a cell phone verbotem. And it cost me less than $300.

I am not comparing the Blackberry Playbook to other tablets. But I think right now most of the commentary about the Playbook and RIM constitutes negative hype (and herd mentality).

Simple takes work and the Blackberry Playbook got simpler.

A Network of Networks

There has been some chatter in some KM circles about emerging trends. The focus is usually around new tools or processes. But the most interesting trends are those that affect behaviour. That is why I need to share Perry Kinkaide's journey into building a network of networks. For those familiar with the concept of Communities of Practice, Perry takes that idea to a whole other level.

Perry is a retiree who couldn't retire. So he decided to become an angel investor to technology start-ups. In the process of trying to decide which start-ups merited funding, Perry reached out for advice from experts he trusted. As the group of advisors grew, the start-ups realized they were getting valuable advice during their funding presentations; the advisors realized they were learning too and the group started to meet because of the knowledge sharing.

The evolution of the Kinkaide Enterprises Inc. Network into the Alberta Council of Technologies (ABCtech) is detailed in "The Origins of ABCtech". In short, as the network outgrew Edmonton, Perry realized that by connecting with other networks, ABCtech could foster emerging technologies in Alberta.



ABCtech began to run half day events to explore the interest in an emerging technology. If enough interest emerged, then ABCtech would hold larger events where the recognized experts in the technology would demystify what was really going on. The emerging community of start-ups, local experts and investors would begin the dialogue about how to build capacity.

ABCtech worked behind the scenes to build an alliance to connect the existing networks within the technology space. Once an alliance was formed, ABCtech supported the alliance through its early days until the alliance was self supporting.

All of this was done by volunteers. The only funding came from workshop and conference revenues.

How transformative has ABCtech been? There is now an alliance in Alberta of the disparate industries that form Clean Technologies, from biogas, solar to wind power to green buildings (LEED). The Alberta Clean Tech Industry Alliance (ACTia) launched its website in May. The Alberta Cell Therapy Alliance concluded a series of workshops in Edmonton and Calgary in May. Five years ago, there was not even awareness of Alberta's capabilities in these technologies.

Driven by Perry's vision of a network of networks, ABCtech is a new model of knowledge sharing, collaboration and capacity building.

So can you take the concepts of Communities of Practice and drive innovation and economic development at the community scale and beyond? Yes, you can.

If you want to experience what ABCtech is about, "Twilight in the Meadows" takes place, Thursday, June 23, 4:30 PM to 8:30 PM in the Edmonton river valley. Peter Hall, V.P., Export Development Canada is the keynote speaker. Register Here for the event,

The Client Inside the Organization

The “wired” patient"

Organizations are already struggling with the "client inside the organization".

Who wants to be the specialist or intern or nurse who meets with this patient in the next half hour?

Thomas Stewart has an really interesting commentary about "the client inside the organization" in this video clip from the Association of Managing Consulting Firms' The Lords of Strategy discussion panel.

Of course, what Thomas Stewart is talking about the connectivity that comes with the Internet. Marshall McLuhan’s maxim: “The medium is the message” is at play. In the early days of the Internet, we thought the Internet was about easy access to information. It is. But we are now learning that the Internet and its associated technologies are about “connectivity”.

This has profound impacts for organizations when we discover that the client that used to wait in the salesroom for the new car to arrive is now inside the organization. “The client inside the organization” behaves much like the “wired” patient inside a hospital. The Internet connected patient today has access to as much information (and sometimes more easily) and interacts with business processes as much as the specialists and hospital staff who are caring for the patient. The specialist is no longer the expert. The conversation about the best course for treatment is disruptive and complex. And of course, the client is right. The choices are about her. She has emergent information that she wants considered.

And we get this result because we don’t have management processes to manage the “client inside the organization”.

The Internet changes the way customers behave. The Internet changes the way organizations organize themselves. And we have to get away from business centred processes to people centred processes. Because that is how people who are easily connected to each other and easily connected to information are going to behave.

If this is not good news for business processes that require efficiency based on acceptance of the expert's opinion (e.g. the medical and law professions), guess what is going to happen to the mass merchandising models at work today. The notion that they are "all about the customer" is going to get turned on their heads.

Knowledge Management "Killer" Success Stories

Linked-In has a discussion group for chief knowledge officers. A discussion thread was started on the topic of "killer" stories where knowledge management had created value. The request came from a consultant who was trying to answer the skeptical senior executive's questions about the value of KM. Below is my contribution to the discussion. KM success stories are not widespread these days because high performing organizations have done KM long enough that the practice and the successes are embedded and part of the organizational culture. So I shared what I think are Canada's best examples of KM success stories.

By the end of this, if this sounds like advertising for the Conference Board of Canada's Knowledge Strategy Exchange Network (KSEN) ..... it is. Any organization in Canada serious about KM would get significant value by joining KSEN. I know I did.

The Conference Board of Canada has a KM CoP (Knowledge Strategy Exchange Network) that includes the big four accounting firms, KPMG, Deliotte-Touche, Ernst & Young, PriceWaterhouseCoopers (PwC), plus the Bank of Canada, the Auditor General of Canada, Hydro Quebec, the Business Development Bank of Canada and Farm Credit Canada. There are also law firms, various departments of provincial governments and cities involved in the network. The network started in 2001 and with a reorganization in 2003 has supported the exchange of practices and strategy for KM in these organizations in Canada.

As long time practitioners of KM, most of these organizations have significant KM success stories. You don't get continued investment and resources to KM year after year unless senior managers judge that there is value for the organization.

Some of these firms have world class initiatives in KM. For example, Farm Credit Canada has Communities of Practice that evolved to be a key feed of information for strategic planning. Think about it. Who is exploring what is coming over the horizon (for clients, for the practitioners in the CoP, for their organization)? A good CoP will be doing this. The impact of CoPs on executive culture led to a restatement of cultural values and an employee code of conduct. That's just Farm Credit Canada. Hydro Quebec has a deliberate and organizational wide focus on succession management that has driven their KM program. If the deep expert on trouble shooting electricity power line malfunctions leaves the organization, the North American east coast may be at higher risk of a brownout. So Hydro Quebec has had success getting middle managers to pay attention to KM in their work units.

KM is an attribute of high performing organizations and as a result, I doubt that you will find studies that can show definitive rates of return solely to KM. You will also find those high performing organizations paying attention to innovation, project portfolio management, employee recognition, business process improvement, organizational learning and corporate values.

Good organizations consciously do KM (even if they don't call it that). Less effective organizations do KM poorly. But in some fashion they all do KM.
"Killer" KM success stories are out there. But the organizations who are successfully doing KM are not bragging about it because "It is the way we work".