As a part of their activities Farrell & Associates consultants spend time in researching various areas of management principles, techniques and methodologies. This research is documented in the form of white papers which are then peer reviewed and refined to provide the marketplace with the latest concepts on management and emerging trends in the marketplace.
The following are some of the research papers which have been produced as a result of this research:
IT Outsourcing: Facts & Fantasies
Information Technology (IT) Outsourcing has become a multibillion industry worldwide in the last ten years. Almost every organisation either has outsourced its IT or is looking at the possibility. It appears however that outsourcing may not be the panacea that many organisations had been promised. Over the last few years there have been numerous reports in the media about the problems that organisations have found when they did pass control of their IT to a third party.
This paper explores the concept of IT outsourcing and identifies just what are the major problems, issues and concerns that organisations face when they outsource all or part of their IT.
Strategic planning is recognized as vital to the effective management of all organisations It is normally applied at the highest level and progressively applied throughout all levels of the best run organisations. This overview introduces some of the broad concepts underlying strategic planning to outline the important foundation on which Strategy Reengineering is based.
This paper is the result of several years of research into the problems of strategic planning and the development of a methodology which turns strategic planning from an art form into a proven, disciplined method. In addition the paper discusses the development of a software product which provides automated support to Strategy Reengineering.
|The Strategy Blueprint||
is said that a picture is worth a thousand words. If all the words that go
into describing a strategic plan could be converted meaningfully into
pictures, it could then be viewed and analysed far more easily, saving
days and possibly weeks of analysis.
The Strategy Blueprint does exactly that. Using Strategy Reengineering (see the paper above) strategic planners have the ability to represent the strategic plans of the organisation in a graphic form - called the Strategy Blueprint. Similar to an architect's blueprint of a building, the Strategy Blueprint can be viewed by the business managers to ensure that all their strategic planning requirements have been included, are represented correctly and are in the right place. This paper outlines how the Strategy Blueprint can represent an organisation's strategic plans graphically, and be used to quickly and easily identify strategic gaps
Most organisations consider that strategic planning is a linear process with a documented strategic plan as its final outcome. With the rapid rate of change in business today, together with the ever-changing technology, such a process is flawed. By the time the plan is complete its usually out of date.
S3 analysis overcomes this by treating planning as a circular process involving structure, strategy and systems. This paper describes the process.
|Benchmarking IT Services||
One of the difficulties that many organisations face when outsourcing their IT services, is ascertaining whether they receive value for money from their IT services supplier. A major problem with benchmarking IT services is that it is rarely an apples-for-apples comparison. IT services can vary substantially from one organisation to another, not only in the processes and procedures involved in the service delivery, but particularly in terms of the response and resolution times required by the organisation.
In early 2002, Farrell & Associates conducted a benchmarking study into the fees charged by IT suppliers for IT services in Australia. The aim of the study was to ascertain the range of market prices for IT services that were being charged by IT suppliers as part of their outsourcing strategies, and to provide organisations with a guide as to whether the fees they were paying for their IT services were comparable with the marketplace. This paper provides an outline of the benchmarking study.
|The Next Wave of Outsourcing||
is not new – its been around for centuries. Its just that we’ve only
called it outsourcing since the late 1980s when the first large
outsourcing deals were made - Kodak and Enron. The impetus for these outsourcing deals was the “oil
shock” of 1988 which impacted many organisations’ cash flows.
This method of outsourcing enabled organisations to take all their
IT infrastructure off balance sheet and restore much needed capital and
the 1990s new technologies were appearing which would fundamentally change
the way organisations did business. The growth in computing power
continued as it had for the previous 30 years, doubling in power every two
to three years. These
new technologies required whole new skills which were not readily
available in the marketplace, and created whole new problems in managing
the organisation’s information technology or IT as it was now being
called. Outsourcing, which was already gaining popularity, was looked at
as being the way to overcome these problems.
By the mid to late 1990s however, IT was being considered more as a strategic part of the business. Organisations were now looking at how they could align IT to the goals and objectives of the organisation. The present concept of outsourcing didn’t fit this model and so by the beginning of the 21st century new forms of outsourcing began to surface. This paper discusses the origins of outsourcing and presents the framework for what is being called "The Next Wave of Outsourcing".
|Best Practice versus Good Practice||According to the
supporters of Best Practice, organisations must adopt Best Practice
techniques in everything they do if they want to gain competitive
advantage, lower costs, streamline processes, increase profits, etc. But
is this necessarily true, and just what is "Best Practice"? Our placement of the term “Best Practice” in
inverted commas is deliberate. We
have found it extremely difficult to pin down “best practice” –
different organisations have different views about what it is.
Furthermore, "Best Practice" seems to be a moving target
– as soon as you think that you’ve got it well and truly fixed someone
comes out with a new improved version!
According to Michael Porter: "Best practice competition eventually leads to competitive convergence, with many companies doing the same things in the same ways". In other words, if all organisations adopt best practice, we will eventually have an undifferentiated and unprofitable marketplace.
The paper below discusses the concept of Best Practice versus Good Practice. In more than a few cases with organisations, we consider that "Good" is better then "Best". We would be interested in your comments.
|Outsourcing & "Demerging" Traps & Opportunities||Outsourcing has
become part of many organisations' corporate strategy. At the same time,
as economies wax and wane, and markets continue to be volatile, many
organisations are using other strategies such as corporate restructuring
as part of their grab-bag of strategies. The danger is that, without
proper planning, these strategies can in fact work against each other. For
example, as organisations divest their non-core entities ( or demerge, as
the new buzz word describes it), this divestment can have severe
repercussions on an outsourcing agreement. Recent government legislation
is making demerging more tax effective and thus more popular, and even
government departments are getting into the act (watch for demerging of
the government clusters in the near future)
The paper below describes this phenomenon and the traps and opportunities that exist for both organisations and IT vendors.
|Defining IT Services||According
to a wealth of research going back to the mid 1990s, one of the main
reasons for the failure of outsourcing agreements is due to organisations
not fully defining their IT requirements. In other words, if organisations
do not fully and concisely specify the IT services they require, then
there is little hope that an IT services supplier will be able to deliver
those services as required. In many cases this results in confusion and
disagreement between the organisation and the supplier over what was said
versus what was meant in the outsourcing agreement. Typically, this ends
up with the supplier stating that, if a particular service wasn’t
explicitly stated in the outsourcing agreement and the organisation
required it, then it would be considered “out of scope” and thus
additional charges would apply.
These “out of scope” items are one of the main reasons for outsourcing costs exceeding the original budget. In some cases we have seen them consume almost the entire IT budget for the organisation. This paper introduces a methodology for defining IT services, developed over the last ten years. Organisations who have used the methodology to define their services have told us that using properly defined IT services had provided enormous benefits to the organisation, eliminating misunderstandings between them and their suppliers. In many cases it had saved the organisation considerable costs, as there were no longer any of the “out of scope” problems they had encountered previously.
|Costing IT Services||One
of the problems with outsourcing IT services is that organisations don't
always know how much the services cost before they outsource. This leads
to problems when they discover that outsourcing has not save the
organisation money, and IT costs increase rather than decrease, even when
those services have been defined (see the paper above: " Defining IT
Traditional accounting methods and other methodologies such as Activity Based Costing (ABC) have not been able to capture all the costs of services, due to the very different nature of how a service is comprised, compared with the way a product is manufactured. Another methodology developed during the 1990s, Services Based Costing™, has been successful in calculating the true cost of services. This paper discusses the nature of services and introduces the concept of Services based Costing™.
|Stress and the Workplace||Recent
research indicates that workplace stress is a major contributor to ill
health in workers.
It has been estimated that stress-related absences may cost
organisations ten times as many lost working days as does industrial
NSW the recent change in legislation has put the onus of responsibility
for occupational health & safety (which includes such things
as workplace stress)
fairly and squarely on the shoulders of the directors and
management of the organisation.
stress however is preventable. There are numerous changes that can be made
to the average workplace to eliminate or at least minimise stress. The
first step is to recognise the signs & symptoms of stress and what is
causing the stress ("the stressors"), and then take steps to
eliminate the stressors in your workplace. This paper highlights
|IT Alignment Thesis||This is an extract
of the thesis that our founder, Jonathan Farrell, submitted to Macquarie
University for his Doctorate of Business Administration. It documents his
research into the alignment of an organisation's IT with its corporate
objectives, a task which took over five and a half years to complete. This
extract includes the first and last chapters of the thesis, plus the
bibliography. Dr Farrell was awarded his doctorate in October 2003.
|The MBA Keyword Generator||The MBA Keyword
Generator is a light-hearted way of helping people to improve the quality
of their reports, emails, memos, etc. by giving them a way of sprinkling
their documents with impressive phrases such as: creative marketing
management, modern portfolio theory, global strategic correction, and the
like. The resulting document will look like its been written by an MBA
graduate, but you won't have to spend the thousands of dollars on getting
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Caution, be careful using it on someone who does have an MBA. They will either be very impressed with the document, or they could ask you to clarify your creative reporting behaviour.