Flemish government headcount increases by 7000 ….

You must have seen the article in the newspapers this weekend about the increase in the number of Flemish public officials. More than 7000 additional employees serving the Flemish population over the last 7 years; an increase of 17% … can you imagine? That equals the number of people working for companies like Electrabel. The increases on the Federal level, within the Brussels administration and the Walloon administration are quite comparable. Is there a problem with the efficiency of our Public Services?
Efficiency is apparently less relevant in the Public Sector than it is in private companies. Today “efficiency” is seen as a knock-out criteria for companies to stay in business. If your company is not operating efficiently, you will be put out of business by competitors. Streamlining end-to-end processes, within each department separately but also across different departments within the organizations, transparency in each process step, no duplication of work, stable, reliable and traceable information … all elements which are a necessity in private companies. ERP solutions like SAP played an important role in enabling this in the private sector. How about the Public sector? Do they have the same drive to organize their operations and processes? Do they have the same tools and systems to do so?

The other element that attracted my attention is the fact that the Public Sector was lacking actual and crucial information on their employee file. A “study” had to be executed to know how many people were actually working for the Flemish government, while capturing insight in age, sexe, education level and other indicators on headcounts. I have the impression that lots of private companies equally lack ready available insights on key information on what they call “their most important assets”. Do private companies have the intelligence available to answer questions like “what is the evolution of personnel turnover in the last 10 years, eg. per education level?”, “how many people will retire in the next 10 years?” … I have personally the impression that Business Intelligence on personnel information is less developed than it is on topics like inventory levels, customer information or available production capacity. The personnel data is easily available in a well classical Personnel Administration system like SAP HR. Maybe there is a large opportunity to improve the insight and supply company management with relevant KPIs on personnel matters. Something companies will welcome when having to make decisions on headcounts evolutions these days.

How serious is 2.5% decline?

Just consider the following reasoning: Lots of companies would find a 2.5% decline of their 2009 turnover compared to 2008 as "acceptable". Most companies would consider a 3.4% drop in bottom line results not good, ... but also not bad in today's economic uncertainty.

Today most companies are delivering much worse result than that. But imagine the average of all the companies in Belgium would be like this, would the "National Product" (BBP in dutch) than decline by more than 2.5% and the deficit of our country be more than 3.4%? I wonder ...

http://www.trends.be/nl/economie/finance/4-231-52398/imf-verwacht-terugval-belgische-economie-met-2-5-procent.html

The story of the hammer and the nail

It is a human behaviour that when the only tool you have/know is a “hammer” that you look at everything like a “nail”. Hitting a nail with a hammer is OK, … at least, most of the time. And for sure if you are using the right hammer (a sledge hammer for a small nail will for sure not deliver the expected result). But just imagine, you are trying to get a screw in a piece of wood or in a wall with a small hammer. The results will not be good: the wood might get damaged and the plaster from the wall might come off. The right tool (a drill, a screwdriver, a hammer …) for the right job will get the right results. It is a fact that with a hammer you can do lots of jobs, and maybe solve the issue partly (with so-so results). Having the right tool, and using it in the right way is the only guarantee for good results.

Similar reasoning goes for software solutions. Depending on the job to be done, the right “tool” and solution needs to be used. The biggest problem is that software companies tend to simplify problems to the “tool” or “solution” they are offering. E.g. not every companies does have a cash management problem, or needs to improve working capital, or has to low inventory turns, … The wrong solution will not get the job done.

The great thing about SAP is that, the “toolkit” of SAP is large. There are lots of different solutions, to help to tackle different kind of challenges/issues. For sure one can find lots of solutions within the SAP solution portfolio. And even then, one needs to use the “tool” in the right way to assure the proper result.

The value of a company

There was a time that I believed it was possible to objectively determine the "value" of a company. I learned at the University and later during my post-graduate education about "valuation models". I have to admit that "projections" about the future cashflows are key to determine the value, and that these projections are not an exact science and biased by the "estimated" future results. So somewhat it is logical that there is a "unknow" (should I call it subjective ?) factor in this.

Today, D-1 for an important Fortis decision, I have difficulties to understand how it is possible that for certain analysts a Fortis share is worth 1 Euro, while other value a share at 10 Euro. (both take a "NO" vote as the basis for their calculation).

For sure somebody will be more "correct" than somebody else, but it puts the whole "valuation" models/techniques/principles once more in a bad daylight. And that after the turbulent period in which we had to admit that for certain assets valuation was basically not possible.

I wonder why I spend time studying this kind of stuff in the past. And if even for me, the whole valuation is hard to understand, I wonder how non-economically educated people look at this?

And the winner is ...

Ever since I was a young kid, I have been confronted with the competitive mind of lots of the people around me (this is probably the reason why I have a competitive nature myself). I found it normal that I tried to be best at school, best in doing sports, best at the scouts. And I was proud when I was "the best" or at least among the bests ...

I have discovered that also in business envrionment, people (and organizations) are trying hard to be the best, or at least to be recognized as such. This probably explains why "elections", "nominations" and "rankings" are so popular also in business environments. If you just see the number of people attending the "manager of the year", the number of votes for "CIO of the year", or the publicity awards like Data News Awards get ... then one can only conclude that "being the best" is really driving people.

In any management book you can read about the importance of "recognition". Being "nominated" or "elected" is a pure form of recognition and for most people a recognition of their performance and achievement. So let's not get rid of all the "top" lists, "awardcompetitions" and " elections". It is important for people, also in business.

"Software @ your services" or SaaS?

When looking through my pile of brochures and commercial mails since the beginning of the year, I noticed that there is considerable amount of initiatives around topics like "IT governance", "CIO-CEO collaboration", "Business-IT connection" ... Reading the background and driver for the seminars, roundtables, publications ... I could only conclude that the real topic is about "the need for business applications and solutions (or IT in general if you wish) to be more or better at the service of the company's business".

The underlying reasoning has to do with the level of maturity of IT organisations. It is exactly the "lack of maturity" that is still quite often the painpoints of IT organizations and that feed the need for these "governace" initiatives.
I personally use a very simple kind of "maturity model", that basically scale IT organisations on a 0 to 3 scale of maturity.

• level 1 means that IT strungles with requirements like stability, availability, reliability. The basic level of service for the business is not for granted. This is a situation where the IT manager is a firefighter, trying to keep the systems and applications running (and not more than that)
• For a level 2 IT organization stability is not the problem. The infrastructure and applications are running, the system do to a large extend what is needed (at least what was requested at a certain point in time). The main characteristics here are re-activeness and the fact that IT consumes lots of resources, both in money and time, to adopt and evolve as is requested by the business (slow and expensive)
• The highest level of maturity is 3. An IT organisation at this level drives process changes and improvements for the business. The IT team is a key player to steer innovations or operational efficiencies for the business. Fast, easy and real impact ... are characteristics of such an IT organization.

To put it in other words, in a level 3 IT organization, the enterprise applications or the software is at the service of the business; fast and flexible. IT is an enabler and a partner of the business. In this ultimate level of maturity, the solutions are serving the business to be "best run".

In lots of publications these days, software as a service is put forward as the solution for IT organizations. Aside from the installed landscape, the existing platform and portfolio of applications, ... a SaaS solution is supposed to bring speed and flexibility. Without neglecting the positive elements from a SaaS solution, one can of course question how to deal with topics like long term sustainability, integration, integrity and yes "flexibility" is a longer term.

I can only conclude that IT organisations and IT suppliers, tend to come with technology solutions (and acronyms) as a solution for everything. Whether SaaS, or technology solutions like SOA, enterprise architecture ... will facilitate the communication between business and IT is questionable. One thing is for sure, there is a need to better "link" business and IT. So we should all be happy to see the mutitude of initiatives to bring IT and business closer together. Maybe topics like how enterprise software (business applications), can facilitate the collaboration and communication and help IT organizations to grow their level of maturity, rather than explaining the next big things ...

Crisis is like driving in fog

When one drives with a car in foggy circumstances late night on a dark road, there are acouple of golden rules. Actually these golden rules might help a business leader when he has to deal with today's economic situation. There are lots of parallels

• don't drive too fast : Visibility is less than in regular weather conditions, so you better be carefull, slow down and take care; watch out for things you might not have seen coming near to you.
• don't brake : if you panic and hit the brake, you might be hit by other drivers on the road, and even create more panic. Accidents in fog generate chaos, more than during regular circumstances.
• pulling over and waiting will not bring you anywhere : since it is hard to predict how long the fog will stay, you better proceed at the appropriate speed, without taking too much risk. If one is unable to drive during foggy weather, one can question whether the driver should get a drivers licence at all.
• putting too much lights on might have a contra-productive effect; fog does not go away by lots of lights. Adapt you speed and visibility, but do not overreact.
• neglecting the fog and driving like normal is dangereous: driving in foggy situations does not necessarily cause more accidents if one adapts to the situation.

Drive careful, wear a safty belt (like always), stay focused and control your speed (there are limits). The fog will disappear sooner or later.