Showing posts with label cost-benefit. Show all posts
Showing posts with label cost-benefit. Show all posts

July 25, 2019

Lasting Decisions

So it's a funny thing about decisions...

Decisions are supposed to represent the conclusion of a process involving the following steps:

- Research of the problem
- Decide on the scope
- Discover the requirements
- Determine viable alternatives
- Evaluate costs, benefits, and risks 
- Do some soul-searching
- And then resolve and commit on a way-ahead

While these steps are typically formalized in a work-setting, they may be done informally in our personal lives. 

But even after all this, we need to remain adaptive to changes in the environment that would cause us to reevaluate the decision and alter course. 
So a decision is a decision until we revisit the decision. 

The problem is that in some highly complex, unstable/turbulent environments, or ones where there are a lot of disagreements among stakeholders (such that there was perhaps not a consensus on the original decision to begin with) then "decisions" may be short-lived.

In this case, decisions may be half-baked, not even last until the ink is dried, and certainly not have a chance in hell to be executed on or seen through to determine whether they actually would've worked. 

In a way a decision that is so temporal is not even really a decision, but sticking your toe out to feel the temperature of the water, and any commitment of resources can and probably will be a complete throw-away.  

We've got to do the investment in the upfront work, really make a good data-driven (and inspired) decision, and give it an opportunity to blossom. 

Yes, we need to remain agile and change as we sincerely need to, but too much change and for the wrong reasons leads to going nowhere fast.  ;-)

(Source Photo: Andy Blumenthal)
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May 4, 2019

Getting The Biggest Bang For The Buck

So I had the opportunity to sit in on a colleague teaching a class in Performance Improvement. 

One tool that I really liked from the class was the Impact-Effort Matrix. 

To determine project worth doing, the matrix has the:

Impacts (Vertical) - Improved customer satisfaction, quality, delivery time, etc.

Effort (Horizontal) - Money, Time, etc. 

The best bang for the buck are the projects in upper left ("Quick Wins") that have a high impact or return for not a lot of effort. 

In contract, the projects that are the least desirable are in the lower right ("Thankless Tasks") that have a low impact or return but come at a high cost or lot of effort. 

This is simple to do and understand and yet really helps to prioritize projects and find the best choices among them. ;-)

(Source Graphic: Andy Blumenthal)
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July 19, 2014

Risk In The Eye Of The Beholder

Should I do it or is it too risky?

That's a question we ask ourselves many times a day.


- Open our mouths at work or keep a lid on it.


- Run to catch that train or bus or slow down and go more carefully.


- Eat that greasy burger and fries or opt for a salad and smoothie.


- Invest in that highflier stock or put your money in the "G" fund.


The Wall Street Journal presents risk management as both quantifiable and qualitative. 


For example, a MicroMort (1 MM, and sounds like micro fart) is "equal to one-in-a million chance of death."


An average American has a 1.3MMs chance of a "sudden, violent end" on any given day. 


However, climb to the base camp at Mount Everest (at 29K feet), that's over 12,000 MM, base jump at only 430 MMs per jump, parachute 7 MM, and go on a roller coaster at only .0015 MM. 


So there you have it--statistics tell the risk story!


But not so fast, our risk calculations also take into account our qualitative values. For example, we tend to lower the risk in our minds of postpartum depression (10-15% or higher) because we value having a baby. 


Similarly, we tend to think driving (1 MM per 240 miles) is safer than flying (1 MM per 7,500 miles) because we believe we are in control of the automobile, as opposed to a passenger jet flown by a couple of pilots. 


The result, "Scariness of an activity isn't necessarily proportionate to its risk."


That means that you can easily make a mistake and underestimate risk, because of your personality or cultural and social biases. 


Rock climb at your own risk...BUT do you really understand what that risk even is or are you driven to do something overly dangerous and maybe stupid. ;-)


(Source Photo: Andy Blumenthal)

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December 8, 2012

Go Safe or Go For It?


In_it_to_win_it
I came away with some thoughts on risk taking watching this scene from the movie "Lies and Alibis."

The girl says: "Simple is boring."
The guy answers: "Boring is safe."
The girl responds: "Safe is for old people."

(Note: nothing personal here to the elderly. Also, hope I didn't get the who said which thing wrong, but the point is the same.)

Take-a-way: Very often in life we aren't sure whether to take a risk or not. Is it worth it or is it reckless? And we have to weigh the pros and cons, carefully!

- We have to ask ourselves, where's the risk and where's the reward?

We have to decide whether we want to try something new and accept the potential risk or stay stable and go safe with the status quo that we already know.

At times, staying with a bad status quo can be the more risky proposition and change the safer option--so it all depends on the situation. 

- We also have to look at our capabilities to take chances: 

For example, in terms of age appropriateness--it can be argued that younger people can take more risk, because they have more time to recover in life, should the situation go bad. 

At the same time, older people may have more of a foundation (financial savings, built-up experience and education, and a life-long reputation) to take more chances--they have a cushion to fall back on, if necessary. 

- In the end, we have to know our own level of risk tolerance and have a sense of clarity as to what we are looking for and the value of it, as well as the odds for success and failure.

It's a very personal calculation and the rewards or losses are yours for the taking. Make sure you are ready to accept them!

Finally--always, always, always have a plan B. ;-)

(Source Photo: Andy Blumenthal)

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October 12, 2012

Cloud $ Confusion

It seems like never before has a technology platform brought so much confusion as the Cloud.


No, I am not talking about the definition of cloud (which dogged many for quite some time), but the cost-savings or the elusiveness of them related to cloud computing.

On one hand, we have the Federal Cloud Computing Strategy, which estimated that 25% of the Federal IT Budget of $80 billion could move to the cloud and NextGov (Sept 2012) reported that the Federal CIO told a senate panel in May 2011 that with Cloud, the government would save a minimum of $5 billion annually.

Next we have bombastic estimates of cost savings from the likes of the MeriTalk Cloud Computing Exchange that estimates about $5.5 billion in savings so far annually (7% of the Federal IT budget) and that this could grow to $12 billion (or 15% of the IT budget) within 3 years, as quoted in an article in Forbes (April 2012) or as much as $16.6 billion annually as quoted in the NextGov article--more than triple the estimated savings that even OMB put out.

On the other hand, we have a raft of recent articles questioning the ability to get to these savings, federal managers and the private sector's belief in them, and even the ability to accurately calculate and report on them.

- Federal Computer Week (1 Feb 2012)--"Federal managers doubt cloud computing's cost-savings claims" and that "most respondents were also not sold on the promises of cloud computing as a long-term money saver."

  - Federal Times (8 October 2012)--"Is the cloud overhyped? predicted savings hard to verify" and a table included show projected cloud-saving goals of only about $16 million per year across 9 Federal agencies.

  - CIO Magazine (15 March 2012)--"Despite Predictions to the Contrary, Exchange Holds Off Gmail in D.C." cites how with a pilot of 300 users, they found Gmail didn't even pass the "as good or better" test.

- ComputerWorld (7 September 2012)--"GM to hire 10,000 IT pros as it 'insources' work" so majority of work is done by GM employees and enables the business.

Aside from the cost-savings and mission satisfaction with cloud services, there is still the issue of security, where according to the article in Forbes from this year, still "A majority of IT managers, 85%, say they are worried about the security implications of moving to their operations to the cloud," with most applications being moved being things like collaboration and conferencing tools, email, and administrative applications--this is not primarily the high value mission-driven systems of the organization.

Evidently, there continues to be a huge disconnect being the hype and the reality of cloud computing.


One thing is for sure--it's time to stop making up cost-saving numbers to score points inside one's agency or outside.

One way to promote more accurate reporting is to require documentation substantiating the cost-savings by showing the before and after costs, and oh yeah including the migration costs too and all the planning that goes into it. 

Another more drastic way is to take the claimed savings back to the Treasury and the taxpayer.

Only with accurate reporting and transparency can we make good business decisions about what the real cost-benefits are of moving to the cloud and therefore, what actually should be moved there. 

While there is an intuitiveness that we will reduce costs and achieve efficiencies by using shared services, leveraging service providers with core IT expertise, and by paying for only what we use, we still need to know the accurate numbers and risks to gauge the true net benefits of cloud. 

It's either know what you are actually getting or just go with what sounds good and try to pull out a cookie--how would you proceed? 

(Source Photo: Andy Blumenthal)

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July 8, 2012

To Die or Not

Yesterday, I read in the Wall Street Journal (7-8 July 2012) about end of life decisions. 

With healthcare costs spiraling out of control, driven especially by the care given to those in their final year of life, as a society we are confronted with horrible decisions.

When do you do "everything possible" for the patient's survival and when do you make the call to "pull the plug." 

The article was about one man specifically--age 41, I think--who needed a heart transplant--which was expensive but successful, but then infection and complications set in over the course of the year and resulted in doctors removing part of his lung, his left leg above the knee, his gallbladder, and with the patient eventually living off of a ventilator. 

The medical staff described the patients wincing in pain and the horrific image of at times with the tube down his throat, his screaming with no sounds coming out. 

Doctors and the hospital's ethical counselors spoke with the parents of the man (as his wife had divorced him prior) about discontinuing care.

Part of the conversation was about the practically futile attempts to keep the man alive, the pain of the patient, but subtly there was also the notion about the high cost of care and the patient having reached Medicare limits.

When the father was told that the nurses were having ethical questions about treating the man, the father wanting to keep his son alive at virtually all costs said, (rather than his son being taken off of the medical care he was receiving) maybe these nurses who had an issue with it shouldn't be working on his ward!

The patient died within the year and at a cost of something like $2.7 million dollars (and the man leaving behind a 9 year old son himself). 

There is no question that we want to provide the best care for our families and loved ones--they mean everything to us. 

But when does the greater cost to society (i.e. the greater good) outweigh the benefits to the individual?

Yes, can we come up with hard and cold actuarial calculations about what a person contributes into the system, how much value they bring the world, what the anticipated cost is to keep them alive, and what are the chances of success--and then we can draw a line of what as a society we are willing or able to spend to save this person. 

That is very matter-of-fact--objective, but practically devoid of feeling, compassion, and hope. 

What if the calculation is wrong and the person could've been saved, lived longer, at lower cost, and/or would've been a great contributor to society--how do we know how to really figure individual life and death decisions.

And what of the cost--the meaning--to the family that relies and loves this person and needs him/her--the cost is priceless to them.

But what about others who don't, can't, or won't receive proper care because others ended up taking more than their "fair" share--aren't they also human beings deserving as well of proper care--and to their families are they not also invaluable?

From an ethical standpoint, this is one of those horrible dilemas that plague our consciousness and to which answers do not come easy. 

An almost insane question-- but can we be, in a sense, too giving to an individual, too generous societally, and with some things trying too hard to be ethical? 

Like we are seeing now with the financial decline of the European Union and the frightening fiscal challenges ahead for America--how do maintain the traditional "safety net" (Medicare, Medicaid, Social Security, and more) without bankrupting the system and underlying society itself? 

In essence, what happens when in our effort to be humane to people and give them a basic standard of living and care, keep our country safe, drive research and innovation, and secure human rights and democracy around the world--we overextend ourselves.  

Like many a great society before us that flourished and then declined and even disappeared--do we get overconfident, overly ambitious, and ultimately become self-defeating?

No one--a family member, a compassionate and caring human being, and especially an elected politician wants to say "no" when these decisions hang over us.

But the reality is we will soon be faced not only with the life and death decisions of today, but also generations of built-up overspending and borrowing to finance generous, and yes even corrupt, spending habits.

This will affect present and future generations requiring harder and longer work lives to get a lower standard of living and care, and could even result in our noble society's decline.  

The result is we not only face individual life and death decisions every day, but we also are facing a potential existential threat to our way of life.  

Expect gut-wrenching decisions over the next decade(s) and prepare for life to change in painful ways for all of us--on and off the deathbed.

While no one wants to face these questions and make the hard decisions, this is exactly what will need to happen--sooner or later. 

Fiscally-speaking, there is no longer one way to freedom, but through a collective fight to secure our nation's future. 

(Source Photo: Andy Blumenthal)

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May 27, 2012

The Truth About Lying

House MD said it first "Everybody lies; the only variable is about what."

This weekend's Wall Street Journal (26-27 May 2012)--states that research confirms this as truth.  

"Everyone cheats a little right up to the point where they lose their sense of integrity."

According to the article--"very few people steal to a maximum degree, but many good people cheat just a little here and there."

They pad their billable hours, underreport their earnings to the IRS, claim higher loses on insurance claims, pocket a little from the cash register, walk out of the store without paying, copy test answers, plagiarize someone's intellectual property, and the list goes on and on. 

Already in the Ten Commandments, we see the fundamental precept of "Thou shalt not bear false witness against thy neighbor."

Yet according to the research, people's dishonesty is enabled by their disposition to:

- Rationalize away the crime.

- Overshadow it with previous immoral acts.


- Excuse the behavior by stating that everyone does it.


- Minimize the significance of the wrongdoing.


- Claim it is necessary or for the greater good.


Interestingly, factors that we would think would have a big impact on dishonesty, don't--such as either the amount of money to gained or the probability of being caught. 

Apparently, the cost-benefit calculus is not the driving factor in wrong-doing, but rather the absence of "moral reminders" and of enforcement/supervision is what creates the fertile ground for people to do the wrong--whether because they can, for the thrill of it, or because in their minds it "levels the playing field."

Everyone has the capacity for evil and to do wrongdoing, but the vast majority of the people with the right moral guidance will do mostly the right things.  

"Except for a few outliers at the top and bottom, the behaviors of almost everyone is driven by two opposing motivations"--these are greed and fear. 

One one hand, greed drives people to push themselves and work hard, but it can also be used to go overboard to the point of acting dishonestly--to take what is not theirs and to lie about it.  

On the other hand, fear of losing our integrity keeps people's unbridled desires in check and perhaps even motivates us to give back to others, but fear can also can inhibit people from giving it their all. 

The ongoing interplay between greed and fear long known to drive financial markets are the underpinnings for our own moral tug-of-war. 

Balancing greed and fear is a powerful embrace that can propel humankind powerfully forward with drive and motivation or undermine its very existence through inhibition and dishonesty.

Reading the article and the underlying research was upsetting to me to see that so many people can be swayed seemingly so easily to have such little integrity.

And while most situations in life are not "black and white"--they are complex shades of gray--people can be tempted to rationalize even when they really know what they are doing in misguided. 

This is the ultimate personal challenge for all of us--to maintain our integrity in the face of all temptations and readily available excuses out there.

G-d speed in making good moral and productive choices. 

(Source Photo: here with attribution to Gerard Stolk)


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August 12, 2011

To Follow Or Not To Follow

Theskystallione

Twitter is a great streaming feed for news and information, but what you get depends on who you follow.

While Twitter does provide suggestions based on whether they are "promoted" or who you already follow (i.e. follow Joe because they are "followed by" Julia), it doesn't tell you a lot of information about them except their Twitter handle, short profile, location, basic stats, etc.

A new service called Twtrland helps you decide who to follow by providing lot's more information and displaying it in an organized fashion--simply plug in the Twitter handle you are interested in knowing more about and you get the following:

1) Basic Info--Picture, profile, stats on follow/follower/tweets

2) Top Followers--Let's you know who else (from the who's who) is following this person.

3) Advanced Stats--Provides measures on how often he/she gets retweeted, tweets per day, retweets, etc.

4) Graph of Content Type--Displays in pie chart format the type of content the person puts out there: plain tweets, links, pictures, retweets, replies and more.

5) Samples of Content by Category--Examples of this persons tweets are provided by category such as: famous words, plains tweets, pictures, links, retweets, and mentions.

I like the concept and execution of Twtrland in organizing and displaying tweeters information. However, I cannot really see people routinely taking the time to put in each Twitter handle to get this information. Making a decision a who to follow is not generally a research before you follow event. The cost-benefit equation doesn't really make sense, since it doesn't cost you anything to follow someone and if you don't like their tweets, you can always change your mind later and unfollow them if you want.

Overall, I see Twtrland more as a profiling tool (for research or interest) by getting a handy snapshot of what people are doing/saying online in the world of micro-blogging, rather than a decision support system for whether I should add someone to my follow list or not.

(Source Photo: Twtrland Profile of Sylvester Stallone, Rocky!)

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November 26, 2007

The "Right" Way to Introduce New Technology and Enterprise Architecture

I came across some interesting lessons learned on rolling out new technology (from the perspective of franchisers/franchisees) that apply nicely to user-centric enterprise architects (adapted from The Wall Street Journal, 26 November 2007):

1)
Partner with the user--"if you can get a franchisee really excited about the new technology, it's a lot simpler to get it rolled out...if I can convince you, and you can see the difference, you will be my best spokesman."

2)
Testing it first--"finding a guinea pig...we have a lot of people telling us they have great concepts. We want to see that it works with our customer base, our menu, our procedures first."

3)
Show the cost-benefit--"an enhancement may look promising, but if its payback is years away, the investment may not compute." Why fix it, if it ain't broke.

4)
Keep it simple--"most franchisees are focused on their business, not technology...so they're not looking for something to complicate their lives." Also, focus the solution on the operators in the field and not on the headquarters staff, who may not be completely in tune with the realities on the front lines with the customers.
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