Shop Talk

Aging IT

This past week I have listened to a common topic of conversation with several different clients including oil/gas producers, pipeline, agriculture and services.  The common theme is aging IT infrastructure, end of life application, unlicensed and unsupported solutions, all as a result of capital cut backs several years ago.  This is resulting in a demand for enterprise architects and solutions leaders who can understand the whole technology picture and determine the priorities.  The roadmaps these experts produce help the organization plan and manage the spend required to recover from years of underinvestment.  What can we invest in now and what can wait. We are experiencing a high demand for these type of specialists.

Business Intelligence Discussion – Helping Each Other

We had a great session this week with a diversified group of Managers in charge of Business Intelligence and Reporting.  All of them use Microsoft Power BI and have user groups ranging from 10 to 900.  The Managers shared insights and experiences on what is working well, challenges and things they want to do differently.  It was a great opportunity for individuals with similar responsibilities to connect and help each other without vendor advertising or influence.

SAP Peer Group

Today, Taleo hosted its ongoing another successful SAP peer roundtable discussion group.  Lead SAP Managers from various companies in Calgary met to discuss their current challenges and exchange insights.  It is always a great opportunity for such managers to meet with each other and candidly share and explore issues, concerns and opportunities within the SAP space.

Today’s conversations focused on:

·         Integration with SAP

·         Mobility

·         Usability/user experience

·         Upgrading – enhancement packs/support packs and S4

·         Cloud

·         Costs

We enjoy hosting and facilitating these and other peer discussion groups, which include PMO, BA best practices and Cyber Security. If you would ever like to join us for breakfast contact me at mhillhouse@expertsinfit.com

Taleo places 20th on PROFIT 500

Taleo has placed 20th on PROFIT 500 Canada’s Fastest-Growing Companies. We want to thank our clients, our business team and our team of over 500 amazing practitioners who made this success story happen!

We ranked #1 in the category of professional services!

www.PROFIT500.com

PMI Golf Tournament – Antics

We had a great time sponsoring this year’s event, maybe too good a time.  Through skill and practice no animals were harmed during this sequence of fun.  Only do this with a professional, money winning golfer!  Click on link below:

Clip IMG_0242

THE LOWEST PRICE GETS THE JOB… BUT DO THEY GET THE JOB DONE

Such tough times in our province right now:

·       70,000 jobs lost in last 14 months

·       Unemployment close to 8%

·       Significant increase in availability of professional consultants/contractors

·       Contractor hourly rates continue to decline under immense pressure from Calgary companies

·       The amount of resumes being submitted on opportunities to hiring managers has increased approximately 300%

We are all aware of these and other sad statistics.  It is a challenge to land work if you are a contractor “sitting on the bench”. I have also been noticing a strange trend in the contracting market – the inclination to hire based on the lowest hourly rate.

Lets face it; there is an immense supply of available contractors now compared to 18 months ago.  As a result, many contractors are willing to significantly drop their rates in order to get work and “beat out the other guy” chasing the same opportunity.  While this may be helpful for companies it does trigger a new and perhaps undesirable behaviour working against the companies ultimate objectives.  Companies still want quality; in fact when it comes to contractors they want even higher quality than in the past.  Companies and their hiring managers are being asked to stretch their capital dollars (which they now have less of) even further – get more done with less. Looking to bring on great contractors who can do great things with less capital money.  It’s a fair request and reasonable given the times.

BUT here is the undesirable part, hiring managers are extremely tempted by low priced contractors and when there are so many low priced contractors available it is tempting to start excluding higher cost contractors from being assessed or interviewed.  So what can happen is that managers may hire cheap, while maintaining rich expectations in terms of contractor performance and end up disappointed.

What’s to be done?

Please understand I am not encouraging higher contractor rates in this market.  Far be it, I believe in the laws of supply and demand. I just do not want them to blur our eyesight while we seek quality people.

As a hiring manager all I am suggesting is that you are aware that the lowest cost may or may not provide the best result.  Managers must 1) understand what they need to be successful, 2) they must ensure they are being understood by the talent firm and the potential candidates on what they need, and 3) they must comprehensively assess if this person (whether low cost or not) can accomplish what they want.

 

 

Performance Pay – A Slippery Slope or a Silver Bullet

A question for you – how can a firm that charges time and materials incorporate a performance/risk pay element into their fee structure? There has been some discussion about this recently in the industry.

 

Typically, firms provide contractor services to customers on a time and material basis. If the firm’s contractor missed delivery, the firm still got paid and the customer assumed all the risk.

 

Now what about a scenario where the customer paid only a portion of the regular time and material fee and the remainder would be held back until the agreed to metrics were achieved. In this scenario, if a firm’s contractor missed delivery they would not get paid the hold back therefore both firm and customer assume the risk.

 

Is this a good idea? Will it lead to better outcomes? What are the pros and cons?

 

My biggest concern with a performance pay scenario is the potential for unintended perverse behaviour. I have studied the literature on incentives and there is a great new book, which my colleague shared with me called “Drive” that is relevant to this topic. Influencing motivation in a strategic, targeted manner isn’t easily done. Here is an overly simplified example of how it can go wrong. A firm arranges a 30% rate hold back with the customer and agrees that it will be paid if the project schedule is achieved. With this incentive in place the firm’s contractor will be motivated to achieve the schedule in ways that may not be in the customer’s best interest. Imagine if during the assignment new benefits emerge that are in the best interest of the customer to deviate from the original emphasis on the schedule. This could be adding scope to the project, stopping the project, delaying the project, moving the contractor to a more important project, etc., yet they choose not to examine these factors due to the binding schedule.

 

I argue we should give up on a performance pay scenario; it’s too complicated, has heighten risks and defining perfect metrics is almost impossible. It will not yield the right behaviour on a project and could even trigger the wrong behaviour. If a customer is seeking out ways to improve the probability of success and reducing risk on an assignment here is a different solution. Select a better firm and forget the body shops. Make use of a firm like Taleo, which has a proven methodology that leads to better outcomes. Taleo’s approach involves constant communication and support to our contractors by seasoned, senior project advisors. We have developed this practice through years of experience delivering on thousands of assignments. Best of all, these practices are part of how we do our work everyday; you don’t have to pay extra or offer a hold back structure to receive this service.  In this way you get the benefit of a proven methodology, reduced risk, and better outcomes without the need for a complicated performance pay structure.

 

Have some ideas on performance based pay structures between firms and customers? Please share with me at mhillhouse@expertsinfit.com

Growth in a Downturn

Sadly, our local economy continues to struggle and recently a number of companies have reported more downsizing. In Calgary this month, City’s housing starts are down 53% and our unemployment rate is up to 6.6%. The worst rates we had seen in recent years, was a peak at 7.7% unemployment in June 2010.

I am happy to report despite the prevailing circumstances, that Taleo has grown 21% since March 2015.

This is due to new clients joining our portfolio and an increase in demand from our existing client base. The right marketing pitch at this point could say “how we are the best and do it better than our competition”. However to be specific I know the majority of this growth is due to the amazing team of consultants and business staff, who continue to take the absolute best care of our existing and new customers. During a period when there is even greater scrutiny of consultants, their quality, and the tangible value they bring to a client, Taleo has expanded. Through commitment, diligence and service focus, our team continues to succeed, we are being asked to provide more services and the value add success is triggering new word of mouth referrals.

A big thank you to the Taleo team for making this happen!

Golf Tournament 2015

 

Golf 2015

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