2. Introduction - Why are we
here?
To discusses systems that enable us to answer
these simple questions that executives ask.
Why can't’ we add this simple feature for our best
customer…. We will make millions….
We have hundreds of people! What is everyone
doing?
Where are the R&D dollars going?
How can we cut 10% from R&D and still grow the
company?
THughes@valnetventures.com 2
3. Chaos to order—
Conclusions
Resource management is vital in the current
high paced market place.
RM can create material savings in the R&D
budget
High levels of visibility of fundamental data will
drive good behavior in the larger teams
A light weight process is possible and essential
Auditable data protects & serves the needs of all
major groups from finance to marketing to
engineering.
THughes@valnetventures.com 3
4. Chaos to order - My
Journey
We sat in a hotel room deep into due diligence
Simple questions needed to be answered …
Six months later post merger yet another hotel
How do we integrate all of these acquisitions…
○ 4 development centers
○ 400 People
○ 120 Projects
I made the mistake of having an idea… next
thing you knew I owned the problem.
THughes@valnetventures.com 4
5. Chaos to order - My
JourneyEver changing yet the same – Customers
…Hit the release train or you're out…
…We need the new product in 3 qtrs…
…I do not care what it cost to make we need price reductions
based on time not volume…
Ever changing yet the same – Management
…Can we do this… only 6 new features…tap tap tap well…
…What did we spend on supporting those releases last
year?...
…We have to take 10% out of R&D but still hit our revenue
numbers…we need your plan by tomorrow…
THughes@valnetventures.com 5
6. Chaos to order— First steps
Single sheet, shared spreadsheet.
Practical for up to 10 projects and 50 resources
Limited skill sets and development locations
Situations where auditable data not needed
THughes@valnetventures.com 6
Reports limited
Error Check non existent
Wide visibility not possible
7. Chaos to order—Second
steps
500+ resources
50-100 projects
Elemental cross tabs
Error checking
THughes@valnetventures.com 7
(Mother of all spread sheets)
8. Chaos to order - Second steps Our
business was successful and
growing
Background:
500+ projects and growing; grouped into
100+ programs; using close to 1000
resources. Spanning 7 Development centers
and many time zones.
Results:
Programs approved with no staff; staff
double counted and double booked. People
assigned to critical programs promoted out
or others Riffed or reassigned…Chaos…
THughes@valnetventures.com 8
9. Chaos to order - Big problem…
THughes@valnetventures.com 9
…There was a fundamental lack of confidence
and buy in on the final data …
10. Chaos to order—Enterprise
Level
THughes@valnetventures.com 10
Our organization has
great assets – Staff;
sales growth; valued
by our customers.
But we had grown
faster than our
systems could
support….
We simply needed a
small time out – to
clear the decks a bit.
11. Chaos to order—Enterprise
Level
Early universal agreements:
Auditable…Highly Visible… data owned by
all.
The data will serve as bed rock for future
planning and product decisions.
Must be a light weight process
The infrastructure had to be very reliable
○ Made IT the infrastructure owner
THughes@valnetventures.com 11
12. Chaos to order—Enterprise
Level
Decisions…
We quickly decided to scrap our spread sheet
system – as brilliant as it was… it was time to
grow up….
We would keep a familiar Excel like interface to
minimize training and support.
It would sit on top of an Oracle database
infrastructure.
Searched the market – tried many systems from
$50K to $1,000K; Interviewed many peers at
other companies – Made a Selection
THughes@valnetventures.com 12
13. Chaos to order—Enterprise
Level
Implementation from start to a functional
process took under 2 Qtrs.
Mapped all of the historic data into the new data
structures
Cross functional project team meetings reached
agreement on key cross tab fields for staff and
projects.
Cross functional management meetings
established norms and rules for supervisors
use.
Training and work instructions ala ISO written
and approved
THughes@valnetventures.com 13
14. Chaos to order—Enterprise
Level
The power of Auditable data…
Visibility to the balancing of demand &
capacity drives good behavior
Regulatory compliance for revenue
recognition (SOP 97-2 Revenue recognition
rules)
End the endless arguments and emotional
pitches
THughes@valnetventures.com 14
…Data driven governance…
16. Efficiency of R&D spend
52 Month study period
FTE @ 250k $/Yr
THughes@valnetventures.com 16
Acquisition
2%
Other
7%
Successful
12%
Strategic
7%
Canceled
14%
Sustaining
15%
Active
43%
Development Cost
A measure of Product Life Cycle efficiency.
154 million or 36+% of all R&D dollars was spent
on strategic, Canceled or Sustaining projects.
17. The Innovators Dilemma
17
Un allocated expenses
drive poor product
roadmap & portfolio
decisions.
Current
Product
Platform,
$47,974,133
Unallocated,
$29,469,366
New Product
Platform,
$21,392,165
Development dollars for currently served
markets
THughes@valnetventures.com
20. THE TURNING POINT
Credible Accuracy won the Day!!
THEN: Employees didn’t believe the data
NOW: Employees now believe, value and
act on the data
THughes@valnetventures.com 20
21. Chaos to order—Conclusions
Resource Management is Vital in
this Current, High Paced Market
Place
It results in material savings in an R&D
budge
The high levels of visibility of fundamental
data drives good behavior in large teams
A light weight process is possible and
essential
Auditable data protects and serves the
needs of all major functions from Finance to
Marketing to Engineering
THughes@valnetventures.com 21
Build chart….. The sub bullets are the reasons why…. Last bullet because… it ends the debate spoken word to close…..
Open up with there are 4 points to watch out for.
I am going to tell the story….
Bought time in start up phase – but only practical if the data set is quite small and limited linkages are present.
Talk about resource man
Mother of all spread sheets—A labor of love…. My child… DRAMA
Multi sheet Xls work book based on elementary DB structures
Partition of key data – resource, projects, effort
Macros to check and limit data entry
“Shared mode”
Pivot tables provide some level of cross tabs
Charting functions available
Define Enterprise class – we had to grow up to be with the big boys
Setting the straw man up here
Give two or three reasons why this was true
Everything else becomes play acting… if no one believes the data…. How could there be anything worse than this….
The conversion of ideas to stable revenue streams do follow a general flow –
We brought in a consultancy to help drive us to a common view of what processes we had to firm up in this case it was PRTM
A cross functional team of VOLENTEER managers and leaders was brought in – Each major area was assigned an Executive sponsor reporting to the office of the CEO. I owned the resource portion
PRTM independent facilitators with extensive subject knowledge – Enabled the team to drive to closure faster than if left alone. Fostered debate and backed it up with knowledge on what is best in class in the different environments.
Minimize training
THughes@valnetventures.com
Crescendo effect – Under 2 qtr is amazing…. Thanks to the consultancy
Locked and loaded – smoken fast….
Define what you mean by beginning at the end…. This is where our work ended up… it shows direct value…. This is an announcement….make it strong… I will show some direct outputs of the new systems and then walk us through our path that got us there….
Stress Accurate – a level above simple accurate-- Visible
More than I just explained… from the previous slides.
Emotional pitches gone….
Explain SOP 97-2 Requirements He thinks this is a big take away… for the audiences. Tie it to hardware… it will be a takeaway… I will be he only person that mentions the 97-2 rule so expand on it….
Do not – say I know you cannot read it… do not apologize for it being small….
What you can see is a graphic view showing the structure of the data…. Produced in mins. Not days and is accurate….
Define – strategic projects; Canceled and sustaining
Sell the slide, sell the graph…. Do not just say it… this is an important point meant to wake people up.
With out auditable data this analysis is useless it is what makes it actionable data….
The yield you get from canceling projects earlier….
With this data you are able to see how budgets can be modified
Once the data was structured we found…
Our product portfolio was choking out new developments the tendency to spend on the current platform not on the new
The tendency of all R&D dollars to drift to our current customers and markets out all other developments
Most of our RD dollars was going into current products, customers and markets. Making Incremental improvements but not opening up new sources of revenue.
We were spending less than half as much on developing new platforms even in our current markets
And, most of the decisions to go forward with incremental projects was based on analysis that did not allocate 30million dollars of R&D dollars. Drivers, common infrastructure
Once we put into place systems to allocate ALL development dollars we plainly saw that a number of the incremental developments should be defunded.
As you will see on the next side this data drove substantial changes to our product portfolio - The system we put into place passively drove a more productive product portfolio
http://www.linkedin.com/in/thugheselx
THughes@valnetventures.com
Effective resource management
Development dollars against program
Because auditable data we were able to see that we were spending far less on break troughs then we thought
new markets
Many developments were at best new platforms for old customers
http://www.linkedin.com/in/thugheselx
THughes@valnetventures.com
Make points on the general environment
Where data came from
The need for data to drive on cycle and Off cycle reviews…. Need the ability for off cycle
Need actionable and accurate data….
Most of us here are running portfolios of products
Concentrate on the continumium. Portion
Chaos to order----Conclusions
Resource Management is Vital in this Current, High Paced Market Place
It results in material savings in an R&D budget—WHY?
The high levels of visibility of fundamental data drives good behavior in large teams—WHY?
A light weight process is possible and essential—WHY?
Auditable data protects and serves the needs of all major functions from Finance to Marketing to Engineering—WHY?
