Bad Management affecting your business

Bad Management affecting your business

How to avoid hiring bad managers

Ineffective managers can drive productivity down and turnover up. Here are three ways to make sure the right people get hired or promoted

Several years ago, the catchphrase “people don’t leave companies, they leave bosses,” began to circulate. There is merit to it if we look at survey results.

In a 2015 Gallup poll of 7,272 adults, 50% of respondents said that they left their companies because of their bosses. Aware of this, human resource departments conduct exit interviews when employees leave, and many HR units keep a tally of employee resignations by manager so they can see where the potential management trouble spots are in their organisations.

Sometimes the managers quit on by the most employees have endeared themselves to the organisation as high level technical performers who have been promoted, but who lack people and management skills. Other times, especially in small companies, the culprits are the founder-owners of the business themselves, and there’s not much you can do. In still other cases, companies (and their HR departments) lack the time and resources to tackle attrition and problems with managers.

Just what should be done?

The most obvious step is to develop managers within the organisation who have the ability to not only run projects and departments, but to create a winning culture in their work teams.

These people tend to lead by example, to create open and clear communications, to work collaboratively and not as autocratic leaders, to be approachable, and to generate a sense of purpose in their staffs. Talents like these aren’t always easy to find, corroborated by the same Gallup poll mentioned above, which revealed that only three out of 10 bosses have the natural or coachable talent to become great at managing people.

To improve the odds of finding strong management talent, companies can vet candidates for management positions for their ability to lead and to manage, as well as for their expertise in the departments that they are being asked to lead. If companies can’t find suitable management talent internally, they should get it from the outside—even if there is initial resentment from someone who might be passed over.

A second step is to understand (and make sure that your managers understand) what it is that employees value most from their managers.

In a survey of 500 employees conducted by Korn/Ferry scholar in residence Terry Bacon for his book, What People Want, Bacon concludes that employees want managers who are honest, fair, trustworthy dependable, genuine, participative, responsive and collaborative. On the flip side, employees are less concerned if managers are friendly or chatty.

One way companies can improve management’s awareness of what is important to employees is to have HR conduct internal employee surveys to see what is meaningful for employees in their work environments, in how they do their work and in the work direction that they are getting from their managers. These surveys should be conducted with assurance of anonymity so that employees feel comfortable completing them. To help reassure employees that their answers are confidential, some HR departments elect to use independent outside consultants to conduct the surveys.

Another step that HR departments can take is to perform analytics on what departing employees tell them during their exit interviews. In most cases, HR does ask departing employees questions about the work environment, about their managers and the work direction they received, etc., but all too often this information remains in files and is forgotten. Especially if a company has a serious employee retention problem, it is important for HR to enter the data from these reports into an analytics software that can probe the information and assist in coming up with actionable recommendations.

A third step is to develop metrics that help to reveal where there are disconnects between managers and staffs in the organisation.

One way to do this is by looking at company attrition. If there is a standout department where attrition is inordinately high, this could point to a manager who isn’t connecting well with his or her staff. Departments with troubled management also tend to show reduced rates of productivity (e.g., a finance department with a troubled manager-staff relationship might begin to take four days instead of two to perform the month-end close).

When I was a senior executive at a bank, we looked at attrition rates across the organisation and found that turnover was over 50% in the teller lines at our branches. We initially identified the problem to our compensation package, which was less than what our local competitors were offering, so we fixed that. However, the higher attrition rates continued to occur. When we looked at the situation more closely, we realised that we had managers in the field who stayed in their offices and gave little direction to staff members.

We eventually replaced these managers with individuals who were more collaborative, and also superior communicators. We succeeded in reducing the attrition rate.

It is not always easy to understand why some departments underperform and others don’t—but how managers manage is a definite factor.

“To avoid losing your best and brightest, I suggest a strategy that is aligned with a culture of recognising employees as far more than just function roles, making sure to reward more than we have seen since the 2008 financial collapse”, states Craig Ashmole, Founding Director of London based IT consulting firm CCServe.

Contibutions by Mary Shacklett from Techrepublic

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Breaking bad news to stakeholders

Breaking bad news to stakeholders

8 steps to breaking bad news to difficult project stakeholders

There is no easy way to deliver bad news to anyone, especially difficult project stakeholders. Cushion the blow with clear open transparent PM communication.

Bad news is inevitable at some point during a project—the important thing to remember is don’t try to hide it, because that will only make things worse. Be transparent, be quick about it, and be part of the solution.

When you’re the bearer of bad news to the most difficult project stakeholders, follow these eight steps to make the process easier, to learn from what went wrong, and to develop mitigation strategies for future projects.

1: Identify the root cause

Before breaking bad news to stakeholders, dissect what went wrong. Trace problems back to the root cause, and remember this isn’t about blame. Projects are a team effort, and even if a team member makes a mistake, the result should be owned by the project team as a whole. Once the root cause(s) are identified, it’s an easier path to identify how issues could have been avoided.

This step may take a bit of time, but it is necessary. Stakeholders will ask “what happened?” so be prepared to answer this question.

2: Identify corrective action

Once the root cause and any breakdowns along the way have been identified, work with your team to determine possible ways to resolve any issues that can be fixed. If something can’t be resolved, make sure to identify the reason(s) and the impact to project outcomes.

3: Develop a plan for corrective action

Chart the process, the resources, and the timeline to correct problems at the source, and also identify and document any necessary scope changes. You need to make sure the plan is clear, accurate, and effective in directly resolving the problem, and ensure everyone is on the same page.

4: Communicate the bad news to stakeholders ASAP

Once the root cause of issues and a plan for corrective action have been identified, the difficult task of communicating bad news to stakeholders needs to take place as soon as possible. This isn’t a time to procrastinate; it can make things much worse, and sometimes even result in missing out on a pivotal event.

Having sufficient preparation and information can make the difference between a difficult stakeholder being understanding, or choosing to make life for everyone extremely miserable. Even a stakeholder with a hardened stance is more likely to try to work with project teams when mistakes are made if they have confidence in a project manager who shows they are proactive and part of the resolution. It’s smart to avoid just being the bearer of bad news.

5: Confirm commitment to corrective actions

Now that the news is out, reaffirm buy-in from stakeholders, especially as it relates to corrective actions. Moving ahead without this in place can exacerbate stakeholder frustration. Make sure to document everything from start to finish, including stakeholder discussions, proposed actions, accepted resolutions, and next steps.

6: Keep the communication flowing

Navigating through the previous steps isn’t the end of things by any stretch. To avoid additional concerns and problems, make sure all stakeholders and team members are kept well in the loop, especially relating to issues that prompted the bad news in the first place. Ongoing and transparent communication is one of the most critical steps when it comes to dealing with bad news, working with difficult stakeholders, and maintaining buy-in.

7: Identify lessons learned

Any time bad news surfaces as a result of things that have gone wrong, there’s always at least one lesson that can be learned. Regardless of where the trouble started, these lessons are not just for one individual—they’re useful for an entire team whether they’re impacted directly or not. Spend time with your team discussing these lessons at the time they occur, as well as the close-out of a project.

8: Develop future mitigation strategies

Once the project is complete and lessons learned have been discussed and documented, spend time developing mitigation strategies for future projects. This can save significant stress and strife between stakeholders in the future, and is well worth the effort.

“One of the most difficult things to tell stakeholders is that a project or part of the programme will be late to deliver. There are always valid reasons for delay, but properly managed and transparent openness is key to managing expectations”, states Craig Ashmole, Founding Partner of London based CCServe IT Interim consulting.

Some comments from Moira Alexander

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Is Interim Management Dead

Is Interim Management Dead

Is the market changing the way that we engage and work with the use of Interim Management?

In short, the answer is no, Interim Consulting is not dead!

In fact, perhaps the question we should be asking instead is: “are we all interims now anyway?”

Permanent contracts are still dominant in businesses – and it is set to stay that way for the foreseeable future. But does a senior level “permanent” position really exist in this day and age? How beneficial could it be for us all to adopt an interim mind set – regardless of our actual position?

In an age of business disruption, where there are no certainties – as macro forces combine to place intense pressure on organisations across the spectrum – there is a necessity to be agile. Business leaders have to be prepared to change course at a moment’s notice and progress is often tracked project-by-project, rather than year-by-year.

To survive in this new environment and to create competitive advantage for our businesses, we may all find ourselves needing to take more of an interim approach to leadership.

Amid technological disruption and now Brexit, we are in the thick of a revolution in the business world. This is not necessarily a bad thing, but it can be difficult to adjust to. Even the most gifted of business leaders can find themselves feeling slightly rootless as they face unprecedented changes within and outside their organisation.

So should we all be embracing an interim approach to work?

According to the Institute of Interim Management (IIM): “Interim managers bring well-qualified skills and expertise to bear at short notice, without the overheads and shackles associated with employment. They consult, plan, advise, implement, and embed the lessons, then exit, handling a range of key strategic and tactical interventions. As businesses in their own right, they offer independent expertise, free of company politics, and take responsibility for delivering results, not just offering advice.”

Without doubt, this is an approach that we can all learn from. With higher expectations of pace and impact, reliance on networking and an independent view – an individual working on an interim basis faces intense pressures. They have to make quick, but well-thought-through, decisions within a set timeframe, in order to bring about the desired outcomes. In many ways, this is leadership intensified.

Therefore, interims need to boast specific attributes and these differentiating “hallmarks” of professional interim managers and executives from other types of temporary or fixed-term contract resources are:

  • High-impact: interim managers are practiced at making a significant difference quickly, assessing and working with the company culture and often with little in the way of a formal “brief”. They do not need time to warm up or to settle in, but focus quickly on the work in hand.
  • Independent: they remain outside of company politics and so are able to address issues from a position of neutrality. This can be particularly useful when difficult and unpopular decisions have to be taken. They also act as trusted advisors who tell it as it is.
  • Professional: interim managers are micro-businesses in their own right, usually operating as limited companies. They trade with the hallmarks of business, not employment, such as professional indemnity insurance, business email and, often, their own business website.
  • Senior: operating at board or near-board level, interim managers are managers and executives, who have gravitas and credibility. They are used to leading businesses, functions, and departments. Suitably well qualified, they advise then deliver effective solutions.
  • Transformational: interim management is often focused on activities related to change, transition, business improvement, crisis management and turnaround. Even when their assignment addresses a gap or shortage, they add value and energise the workplace.
  • Wide expertise: with a strong track record of completing a variety of assignments, interim managers typically combine depth and breadth of expertise in their chosen sectors and disciplines. Their agility gives them the wide reaching expertise to deliver results quickly.
  • Time focused: interim managers are available at short notice. Once engaged, they will focus on providing significant value within the agreed fixed-term time parameters, seeing the assignment through and for not longer than needed, to a conclusion.

Source: Guide to interim management (IIM)

“As a relative newbie to some, around 6 years in interim engagement, I very much use the interim mind set in terms of thinking: What does the business need to achieve this quarter? How am I going to get impact on transformation? What are my quick wins? How am I going to get permanent employees to move things forward with me?” states Craig Ashmole, Founding Director of London based CCServe Interim Consulting.

So aren’t these attributes applicable for achieving competitive advantage for a business, regardless of our employment contract?

Teri Ellison from BIE explains: “The interim spell definitely honed my leadership skills faster than would have been the case in a permanent role. To suddenly lead a team of people who don’t look at you as a permanent employee or their manager and to have them follow you to build teams really challenges the way you lead.”

“At the same time, you’re learning to act as a genuine business partner to the client, helping them to think about where they’re growing their business, how they are driving their business and what impact you can have on their success.”
As disruption continues to make its presence felt, the ability to flex and adapt is crucial. What can we all do more of, regardless of our employment terms? Looking to the world of interims for inspiration could be just the tonic business leaders require.

So interim management is very much alive and well – in fact, it’s thriving. As the business world continues to turn on new axes, the skills and mind set of the interim manager can help leaders to adapt to new challenges and flourish. Whether your organisation hires an interim or simply employs their attributes within their working culture, business can all benefit from what the interim consultant brings to the table.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Is contracting the future

Is contracting the future

Is tech turning contract work into the future of employment?

Technology has made it easier than ever for employees to work remotely. This article has gathered comments from experts and CEOs about why more and more companies are using contract workers.

Technology has made working remotely easier than ever. And many companies are taking advantage of this — not just by having workers telecommute, but by outsourcing certain jobs to contract workers. The movement towards contract work — think platforms like Amazon Mechanical Turk, ClickWorkers, CrowdFlower — is part of a larger trend away from regular employment and towards piecing together tasks.

Gartner analyst Diane Morello has been working with companies for years to help them keep up with workforce trends. The movement towards contract work “reminds me of when my immigrant grandparents came to work in New York City and did piece work,” she said.

While the technology is certainly there, she thinks that the success of piecework hinges on the “basics of organisational and institutional competence.”

“It’s about whether or not companies can make this work,” said Morello. “That’s the bigger challenge out there.”
Morello thinks that companies need to catch up with the idea that they need to outsource work. She speaks to 10-12,000 companies around the world, employing about 250,000 people. Among all those companies, she sees “a very small fraction understanding that they can start to break down work into increasingly smaller components and break it apart to some kind of massively parallel processing mode,” she said. “They can have bits and pieces done and then reassemble that onsite.”

There is a trend rapidly moving towards the selling off and outsourcing of utility services.

Most companies she talks to still think of this as outsourcing. “They’re not really advancing their models and thinking around how work is getting done, or more important how technology in this digital technology platform enables them to reach hundreds of people to get work done in smaller chunks in a faster way,” stated Craig Ashmole, founding Director of London based IT Consulting CCServe. “Having spent many years working across the Outsource market and more recently helping business transition elements of their business into better chunks of doing the work, It’s refreshing to see these trends start to move.”

The big difference, is that it’s a shift towards work as a transaction versus a relationship. Not only do business want work done in small pieces, but I see “a consuming audience who wants to do that. Businesses are going back to their core roots by commoditising non-essential utility services.”

“The businesses we talk to who are struggling to find the right talent and the right people say they want the relationship,” he said. “But when you delve into it, what they’re looking for are people who can bring their skills to deliver rapid transition and this comes from experienced Interim management.”

Business owners agree.

“I absolutely see larger companies outsourcing things that are non-core,” said David Chang, entrepreneur-in-residence at Harvard Business School, and previous co-founder of SnapMyLife.

Chang used Trip Advisor as an example, where “the sheer volume of work” created a huge demand for contract work. “At TripAdvisor, we had classifiers who helped with that,” said Chang.

He also sees a distinction between core and non-core functions as important. In core tasks, “the company wants to build up a competency or muscle around a key area,” said Chang. “For Apple, hardware/software is core, so they don’t outsource it,” he said, “while at Microsoft, they happily let others deal with hardware (e.g. Dell, HP).”

It’s all part of meeting a huge demand to complete tasks.

“There are thousands and thousands of companies that are all feverishly looking around for people to do work in the context of information and technology and web design and the like,” said Morello. “This is a channel to get some work done.”

Businesses, Morello believes, will “splinter into two different directions. One will be those businesses that have extraordinary cultures, core sets of values, and taken advantage of all the aspects and ways that they can piece together someone’s expertise in the work,” she said.

The other group “will continue to work with a single pipeline that tends to go through HR. It’s probably not going to operate at the speed that the modern business community is operating at.”

Digital technology, she said, will “blow the employment model apart. It will send people in one direction where there are a lot of users of digital technology to find the expertise they need anywhere on the planet.”

There’s a risk, Morello said, for not taking this seriously.
“You are either leaders or you are laggers,” she said. “Nobody can be in the middle.”

The 4 big takeaways

  1. Platforms like Amazon Mechanical Turk, CrowdFlower, and ClickWorkers take advantage of a remote labour force to get tasks completed.
  2. Outsourcing small tasks is part of a bigger trend that shifts business models from “relationship” to “transaction,” according to Gartner analyst.
  3. Separating core and non-core work is essential to managing flow of work—and many companies are becoming more efficient by farming out non-core tasks.
  4. Business conglomerates are transitioning their utility services to Outsource firms (for efficiency and cost reductions) and keeping their core business in-house.

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Global Employers choose consultants

Global Employers choose consultants

Over 70% of global employers now use contractors to help fill IT skills shortages

A new report found that 40% of US businesses now have a hybrid workforce of permanent and contract IT employees to fill talent shortages and fast-changing technical skill needs.

If you’re running a company in the US, there’s a good chance your next IT hire will not be a permanent member of the team. A new report from Experis found that 40% of US companies now have a hybrid workforce of permanent, freelance, and contract employees — the highest percentage of hybrid workers globally.

Hiring IT contractors has become more popular worldwide, with 71% of employers across ten countries currently using contract talent — likely due in part to increased shortages in skilled IT workers. In the US, just 41% of companies rely solely on permanent IT staff.

“Faced with talent shortages and fast-changing skills needs, companies are getting more sophisticated when it comes to workforce solutions, particularly in IT,” said Sean Costello, senior vice president of Experis, North America. “Having been through the cost-cutting of the recession, many are now re-evaluating and reengineering their workforce.”

Rather than sticking with business-as-usual, companies are recognising the need for more customised sourcing strategies, Costello said. Contractors can offer more efficiency and flexibility for companies working on tight deadline projects and innovative new ideas that require technical skills that are not found in-house, he added.

Companies in each of the 10 nations surveyed varied greatly in in-country IT hiring practices. Not surprising the countries with the highest numbers of permanent employees were:-

  • Germany (63% permanent)
  • India (62% permanent)
  • Australia (58% permanent)

When it comes to hiring IT talent overseas, employers preferred using a mix of contractors, freelancers, and permanent workers, more so than at home, the report found. Companies don’t usually have the same level of legacy infrastructure overseas as in their home market, Costello said. Many find that working with contractors or buying staffing solutions through partnership arrangements offers a fast, efficient way to ramp-up operations overseas.

Hiring contractors

One in 5 US employers plans to increase their use of IT contractors, the report found.

“Having been in the Interim contracting space for a number of years I see how the contractor model appeals to many people, particularly in the IT space,” states Craig Ashmole, founding Director of London based consulting CCServe. “They are looking for greater flexibility and variety in the work they do. These IT roles tend to attract self-motivated individuals who prioritise on-going skills development and like to see rapid results delivered.”

Companies hired contractors most often for development solutions and infrastructure service, the report found — two areas in which the technical requirements shift rapidly and require the most up-to-date skills. If a legacy workforce falls behind the curve, organisations often look to contractors to bring the added technical know-how to get the job done.

Contract work is appealing to companies because of its flexibility, the report found. “With tighter margins and tougher competition, all organisations are looking for ways to be nimbler and shift more easily as markets change,” Costello said. “Contract work offers the ability to quickly ramp-up and test-drive projects without the same level of risk. It is tailor-made for innovation in this period when companies are still a little cautious after the recession.”

These workers can also be more cost-effective: When a project has a fixed timeframe, it is often easier to find contractors that can fill an immediate need, rather than finding and training a permanent employee. Contractors can also be a way to tap underused talent, including minorities, women, and older workers, Costello said.

By implementing a diverse workforce strategy, blending permanent and contingent workers, companies are finding ways to be both more agile and cost-competitive, It’s a new way of thinking about workforce management.

The 3 big takeaways

  1. Use of contract workers is increasing worldwide, with 71% of employers across ten countries currently using contract talent, according to a new report on IT workforce trends from Experis.
  2. Contractors can offer more efficiency and flexibility for companies working on tight-deadline projects and innovative new ideas that require advanced technical skills.
  3. Some 40% of US businesses now feature a hybrid workforce of permanent, contract, and freelance employees, representing the largest such workforce globally.

Companies hired contractors most often for development solutions and infrastructure service, a report from Experis has found — two areas in which the technical requirements shift rapidly and require the most up-to-date skills. If a legacy workforce falls behind the curve, organisations often look to contractors to bring the added technical know-how to get the job done.

Craig Ashmole

Founding Director CCServe

Agile Project Management changing the Business approach

Agile Project Management changing the Business approach

Once considered a fad, Agile has matured into a popular and respected set of PM development methods

The question isn’t who can and can’t be Agile, Everyone can! — The real question however is: How can one make Agile work for you and your organisation?

In fact, you may have seen Agile expanding outside of software development and IT into sectors like banking, management consulting, automotive manufacturing, and healthcare. Companies are moving to Agile methods because the global marketplace demands they bring products to market that better reflect their customers’ needs. Where the traditional “waterfall” approach —with its sequential phases and heavy investment in large-scale, up-front design—lacks the flexibility to respond swiftly to changing markets, Agile approaches offer faster delivery, higher quality, and an engaged development team that can deliver on its commitments.

Agile can improve your efficiency. Instead of designing an end-to-end, upfront solution (a solution that may be infeasible or outdated before it’s even implemented,) Agile teams build the solution incrementally—allowing you to mitigate risks, accommodate changing market needs, and deliver valuable features more quickly. Agile methods have been shown to cut time-to-market by 50% and increase productivity by 25%.

According to a recent global survey from PricewaterhouseCoopers on the state of project management, 34% of you now use Agile PM methods within your companies and a majority of PMs (62%) are certified Agile practitioners.

The only people in danger of losing their jobs from Agile are those who’ve been hiding within the inefficiency of the system (Agile is remarkably good at holding up a mirror to an organisation and exposing its waste, inefficiency, and dysfunction). What matters most in Agile project management is not your title or your role, but your contributions: what you do to add value and keep the organisation moving forward.

Mapping Waterfall Project Management to Agile Practices

Agile and waterfall development aren’t as different as people imagine.

Both approaches recognise the triple constraints of cost, schedule, and scope; where they differ is in the implementation.

  1. First, waterfall development encourages locking down scope requirements so that schedule and cost can be planned, and sees feedback as “rework” — something to be avoided through better planning. Agile, on the other hand, recognises that scope is always variable, and sees feedback as a critical and inextricable part of a planning process that continues through execution.
  2. Second, Agile shuns waterfall’s traditional directive tactics in favour of collaboration and facilitative support—or what’s known as “servant leadership.”

In traditional project management, you—the project manager—are responsible for balancing scope, cost, and schedule, as well as managing quality, reporting, and interpersonal issues. In Agile project management, the whole team commits to shared decisions and collaborates in its work to meet these commitments. Your Agile project management support equips the team to become fully engaged and motivated contributors, who can produce high-quality work at a faster pace.

Despite the differences between Project Management Institute (PMI) and Agile approaches, many of the practices identified in the Project Management Book of Knowledge (PMBOK) are quite compatible with Agile practices. In fact, when followed with discipline and rigour, Agile methods are just as compliant with the Capability Maturity Model Integration (CMMI) as traditional waterfall methods. The differences lie in when and how these practices are executed and the lexicon used by their practitioners as seen in the table below.

Agile v WFall
Agile versus Waterfall PM

The PMBOK identifies Initiating, Planning, Executing, Controlling, and Closing as the process groups within project management. The Agile process phases of Envisioning, Roadmap, Release, Adapting, and Closing are similar to the PMBOK phases, but better reflect the reality of how a project is delivered or software solutions are actually developed.

“The question isn’t who can and can’t be Agile”, states Craig Ashmole, Founding Director of London based CCServe IT consulting services. “Everyone can ! — The real question however is : How can one make Agile work for you and your organisation?

Most large IT departments are typically set in their ways and resist change as it takes individuals out of their comfort zones, especially those hiding behind the wall of, ‘Well IT is working why change.’ — This will be the biggest challenge the CIO office will face.”

Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Cloud Comparison Index

Cloud Comparison Index

The ISG Technology Insights Group Launches the Cloud Comparison Index™

The First Benchmarking Service That Compares Costs of Public Cloud versus Internal IT
Study Shows Usage Matters; Public Cloud Not Always Cheaper
Price Differential Among Public Cloud Providers as High as 35%

STAMFORD, USA ― Information Services Group (ISG), a leading technology insights, market intelligence and advisory services company, has announced the launch of the ISG Cloud Comparison Index™, a new advisory and benchmarking service that offers clients a first-ever view of how public cloud costs differ among providers and how they stack up against those of internal information technology (IT) solutions.

ISG plans to publish in-depth analysis every quarter and make the reports available via subscription to the AccessISG™ on-demand information and consulting service. Future reports will examine the relative costs of using the public cloud versus internal IT for a variety of infrastructure configurations, applications and workloads.

The ISG Cloud Comparison Index™ leverages internal IT cost data from ISG’s proprietary benchmarking database and compares it with the prices of public cloud configurations from the four major public cloud providers: Amazon Web Services, Google Cloud Platform, Microsoft Azure and IBM SoftLayer. The public cloud data is sourced from Gravitant, a global strategic partner of ISG.

“ISG is in a unique position to help clients understand the true cost of moving work to the public cloud, versus performing the work in-house,” said Todd Lavieri, president of ISG Americas and Pacific. “The ISG Cloud Comparison Index™ combines our market-leading IT cost data with public cloud pricing data from Gravitant – creating an incredibly powerful analytical platform that delivers new insights into the relative benefits of harnessing Infrastructure-as-a-Service (IaaS) offerings versus leveraging fixed-cost, on-premises IT assets. This unique combination of data sets offers CIOs and other IT leaders a solid basis for sound decision-making, along with an objective view of the complex and rapidly evolving market for cloud-enabled services.”

First Report Shows Usage Matters in Public Cloud Pricing
The inaugural report of the ISG Cloud Comparison Index™ shows the cost of running an application on an internal IT platform is cheaper than running the same program in the public cloud when compute instance usage is higher than 55 percent, but the pendulum swings in favor of public cloud when usage drops below that mark for certain configurations.

For specific infrastructure configurations, the study found the price of public cloud services varies significantly from one provider to the next, ranging from $811 per month to $1,096 per month at 100 percent usage levels. The cost of internal IT for the same configuration was $548 a month, 32 percent lower than the lowest public cloud price. Cloud instance usage is the percentage of time that a compute instance is running and accruing charges from the public cloud provider.

However, when the average usage level for public cloud falls to 55 percent, the cost of public cloud is at parity with the cost of internal IT. The cost advantage for public cloud increases significantly as the amount of time that instances can be released increases (that is, usage falls), the study finds.

“Pubic cloud is not always cheaper,” said Christopher Curtis, partner, ISG Emerging Technologies, and head of ISG’s Cloud Solutions practice. “It’s largely a factor of usage. High levels of public cloud usage can create scenarios in which internal IT is more cost effective; conversely, the cost advantage of internal IT disappears when public cloud usage is at lower levels, that is, applications can release more resources. The break-even point appears to be around 55 percent for the specific configuration we analyzed.”

Public cloud presents a compelling value proposition for enterprise buyers of IT outsourcing services, Curtis noted. “Think of it: pay for your infrastructure only when you need it, dramatically reduce capital expenditures and virtually eliminate the need for commitment, all while reducing the time to provision servers and storage. For most buyers, that sounds like a pretty good deal. However, buyers are discovering this value proposition applies only to selected applications and workloads, not to entire data centers,” Curtis said.

Other key findings of the inaugural ISG Cloud Comparison Index™ report include:

  • Prices for identical infrastructure configurations vary substantially among public cloud providers. At 100 percent usage, the price differential is 35 percent from the highest cost option to the lowest, with the range narrowing gradually as average usage decreases.
  • Public cloud prices are highly sensitive to usage. The price spread among public cloud providers is twice as wide at 100 percent usage as it is at 50 percent usage.
  • Usage is the primary driver of cost in the cloud, but configurations and features also play a significant role. Different configurations and additional options, often specific to each cloud provider, can dramatically influence the break-even point between public cloud and internal IT costs.

“Enterprises should avoid viewing the public cloud only as a lever to reduce operating costs, as they do with traditional outsourcing solutions,” said Curtis. “Instead, they should view public cloud as a way to reduce or eliminate future capital expense by avoiding over-provisioning of internal IT resources to meet high levels of periodic demand. Public cloud creates significant cost-avoidance opportunities for volatile workloads. Applications with the most wide-ranging usage patterns are strong candidates for the cloud.”

“There are horses for courses in the usage of cloud services and what works for one company may not be the best for another.” Stated Craig Ashmole, Founding Partner of London-based IT Consulting CCServe. “To create viable business cases for workload migration, enterprises increasingly will need a deep understanding of the nuances of various pricing models, as well as how those models relate to specific workloads.”

To read the inaugural report of the ISG Cloud Comparison Index™ in its entirety, click here.


Having spent a majority of my career working with and supporting the Corporate CIO Function, I now seek to provide a forum whereby CIOs or IT Directors can learn from the experience of others to address burning Change or Transformation challenges.

Craig Ashmole

Founding Director CCServe

Tech TBM drives M&A

Tech TBM drives M&A

Technology Business Management Drives M&A

Throughout the entire M&A lifecycle, the CIO is poised to assess opportunities, mitigate risk and develop and executable IT plan rooted in a multidimensional, 360-degree view of the process.

“As merger and acquisition activity heats up, IT leaders need to be prepared to take a more active role in ensuring that value is properly assessed before the transaction is completed,” Comments Craig Ashmole, Founding Partner of London based IT Consulting firm CCServe. “The key is in ensuring that Boards recognise the need for the CIO involvement throughout the integration process that follows”.

With tens of thousands of M&A transactions expected this year, Steven Hall a Partner, of Emerging Technologies Group at Information Services Group (ISG) makes some clear observations around the focus of Technology within the M&A framework.

CIOs will be called on to help the board determine how the deal will grow revenue, decrease costs, and mitigate risk. The effective use of Technology Business Management (TBM), and the collaboration between IT and lines of business that it entails, will not only inform the M&A transaction during the due diligence phase, but it will also lead to a more efficient transition and a better understanding of the costs and anticipated benefits of the deal. Because TBM is a holistic framework that positions IT in a collaborative business role—one that provides data-driven assessments of its value and role—it is the IT leaders themselves, engaged at the outset of the M&A process, and through its completion, who are best positioned to help fully articulate the M&A rationale and deliver a successful process and outcome.

If one considers several M&A scenarios and their associated business objectives, it becomes clear that IT integration approaches are not one-size-fits-all. In an M&A case driven by cost reductions and improved efficiencies within the context of eliminating a competitor, the absorption rationale—although not without its challenges—is straightforward. The acquiring entity provides all IT systems, but even then the implementation or advancement of a TBM strategy requires attention during the integration. If the primary M&A goal is based on R&D, the parallel but bridged IT coexistence is straightforward, too.

An M&A rationale based on geographic expansion to increase market share also seems straightforward, but IT professionals prepared for this M&A challenge are delivering quality data to best guide the M&A strategy development, as well as execute it. That geographic expansion likely requires a hybrid response to IT systems integration with elements of the absorption model, but it also relies heavily on a “best of breed” approach that retains or recombines superior process or functionality provided by the acquired company. Making optimal decisions requires IT leaders to assess the strengths and weaknesses of the target firm’s IT systems, evaluate the portfolios of both, and deliver cost-effective solutions that drive future growth.

Throughout the entire M&A lifecycle, the CIO is poised to assess opportunities, mitigate risk and develop and executable IT plan rooted in a multidimensional, 360-degree view of the process. The CIO operates as an integral part of the organisational team within that lifecycle, but the critical and active role of IT emerges as the parties move from an acquisition and divestiture phase to executing the separation-integration process. Here, the two issues at the forefront of M&A transactions from that IT perspective—a perspective connected in the TBM framework to all other business units and processes—is to ensure that different platforms work together post-acquisition, and how to optimise the new environment and the costs involved. Doing so is not always easy, and resistance from either or both M&A parties is a given. It becomes easier when the IT leader communicates a core business case throughout the process.

Metrics are the basis for building that case, and for creating a meaningful baseline that anticipates growth and measures savings before the deal closes. But metrics are in service to more than the creation of benchmarks, and quality data is as important a communication tool as it is a standard measure for quantifying success. Data tell a story for stakeholders, and provides a common language for discussing and evaluating the M&A process to both its internal and external constituencies. When, inevitably, at some point in the process stakeholders on either side step in and say, “We used to do it better,” data provides a shared understanding between the M&A parties’ expectations and cultures.

Ideally, that data isn’t meant for looking backward or creating reports that do. Identifying data that supports TBM priorities—and designing that data collection into the toolkit—offers the enterprise an opportunity to revisit how it measures success, and maximises the foresight value of that data.

The traditional approach in M&A circles has been all about percentages, and how to achieve a certain percentage as a measure of cost—but we know now that is impractical, and subject to far too many contingencies to offer the most realistic portrait. Reducing costs to a percentage—as opposed to reducing costs with performance metrics in place for a greater understanding—will only lead to greater risks elsewhere. This strategy, moreover, often fails to accurately evaluate specific, real-life scenarios.

If the costs for services are truly understood through a TBM process both comprehensive and focused, then the “big picture” can supplant the percentage mandate and lead to more intelligent decisions and the M&A discussions that surround them. For example, if the costs are understood but still seen as too high, then the discussion is no longer framed as, “Reduce it by another half percent.” More important, the strategic possibilities and conclusions are no longer derived from conversations that fail to capture critical information that the TBM model makes available. The discussion about where to cut or eliminate becomes more focused, and is a more reliable measure of very specific services, or a better evaluation of operational IT choices to move more on-premise to an as-a-service environment. These approaches deliver value during the M&A process, but it’s important to design them to extend beyond the moment.

Steven goes on to state that: From a TBM standpoint, the M&A process itself is not a departure from “normal business,” rather than an expression of it. The CIO and other organisational team members leading through each M&A phase need to design plans that are reusable, support continuous improvement and remain flexible enough for agile and intelligent responses in the changing business environment of the future. Just as IT leaders are tasked with the systems integration that the M&A process demands, so too is a leadership team whose basis in TBM positions the M&A experience itself within the wider data-driven future of the enterprise.

Technology Business Management

The biggest challenge in M&A, is achieving that common language, and this requires a rapid adoption of TBM principles, knowing what is being spent in both organisations, and how they align. Achieving the desired M&A outcome with a clear shared understanding not just from an IT perspective but within a TBM framework creates the optimal environment for success during the M&A cycle.