Archives for September 2010
I admit that printing and all things related are not topics that kept me awake, at night, or any other time of the day. Printers are necessary background worker bees, that should just work. And this is largely what happens. What also happens is that companies spend vast quantities of money on printers, paper, and ink cartridges. In the current climate of saving, the dull topic of printing takes on a brighter sheen – if only reflecting the glint on the dollars saved.
To understand the cost of printing, and the value of any saving, ponder for a moment on these facts, courtesy of the Economist:
- A European worker prints an average of 31 pages day
- Printing in the US equates to 68KG of paper per worker per year
- Inkjet ink costs more than seven times as much millilitre for millilitre as 1985 Dom Perignon champagne
- Duplex printing can cut costs by 38% over life of a printer
Our recent research into the willingness to outsource (to be published in Q4) shows that paper-related activity is not seen as a differentiator (65%), and is high on the list of processes to outsource. Almost 80% of respondents are completely willing to outsource printing and mailing. And it will come as no surprise that reducing costs/expenses is one of the chief reasons for this decision to outsource.
When we asked about what people thought of the vendor capabilities, 60% rated print/mail capabilities as strength on the outsourcing industry. This was 25 points higher than the second perceived strength in call centres.
Outsourcing is clearly one way of reducing costs in this area. Before looking to outsourcing, there are several cost reduction exercises worth undertaking including duplex printing, and encouraging a culture of not printing. Another clever tool is changing the font. Fonts such as Century Gothics (as the Economist notes) are thinner and require less ink. And one step further, there are new fonts from companies like Ecofont that literally have holes in the font which require less ink.
So I find myself thinking that printing and fonts are actually rather fun, and can contribute to real savings in the organisation. What’s not to like?
*Thanks to the Economist and it’s enlightening article on printing in 4th September edition.
Many people believe that the Hippocratic Oath states that a doctor is not to leave a patient in worse condition than before they treated them. While it doesn’t state that explicitly, it is clearly a goal of any conscientious doctor. Enterprise architects should follow a similar mantra of not leaving a system in a worse state than before they attempt a fix. While there are many differences between doctors and architects (hopefully a doctor wouldn’t consider amputating an arm and replacing it just because a mechanical one could serve better), there are many similarities when architects plan for a core system fix or modernization.
Many architects are quick to consider rip and replace solutions for core system legacy systems. Today’s distributed applications are integrated with other supported or process-related systems; or leverage legacy components or systems used by other applications. Similar to treating a body ailment, there are many dependencies and complications that can arise if the entire picture is not taken into consideration. I am reminded of the series “House”, in which in many episodes the patient becomes much worse before they truly understand what the ailment is and are able to fix it. In these shows, the patient is already in critical condition and the doctor didn’t have the opportunity (or time) to research and do the advance planning to understand all the implications of decisions made in the hope of healing the patient. Many architects are placed in the same position when a premium bearing application goes down. However, this should not be the case during design.
Similarly, there are too many instances in which architects and developers jump on the latest and greatest bandwagon, trying to force everything into the new standard or methodology, when the existing solution works just fine. When modernizing a new core system, upgrading most of the interfaces is a fine objective and can provide great benefits, especially through re-use. But there are instances where leveraging an existing point-to-point solution as-is works just as well and is much less costly. As the Hippocratic oath does explicitly state, “I will prevent disease whenever I can, for prevention is preferable to cure.” Used in the right circumstances, this should apply to architecture as well.
One of the frequently referenced benefits of transitioning to a modern automation platform is the ability to have some amount of system maintenance moved out of programming areas. In some organizations, this means having business analysts make changes to systems; in others, end users in business units perform selected modifications. Lower cost and shorter cycle times are claimed as the advantages of this approach.
However, it has always been difficult to quantify this opportunity. During a recent consulting project, we discovered a technique that helped clarify such a benefit.
The client was a large insurer with multiple divisions. The unit in which we were working used a forty year legacy administration system. In a sister operation, a modern, rules-based system performed a similar function. We asked a business analyst who worked with the modern system to review the current outstanding work list of the legacy system and make a determination which items would be handled without programming assistance in the more modern system. After reviewing 70 items, he determined that 28% of them could be accomplished without involving programming resources.
While this is not a controlled experiment, nor a statistically relevant sample, it did allow the client to more effectively gauge the opportunity. It allowed us to have a much more meaningful discussion of a future state since we could reference actual work items and outline how they might be accomplished differently.
If your team is looking for a way to quantify the promise of end user maintenance, search across your organization and to see if existing experience with modern solutions in other parts of the company can contribute a focused and meaningful perspective.
The financial crisis gave pause to many investment plans in technology but 2010 has seen vigorous interest in core system replacement in the general insurance industry. But a perennial problem of poor backoffice systems remains. As the saying goes, there are many ways to skin the legacy modernisation program. These include outsourcing, upgrading to a current version, replatforming, wrapping /extending, or the ever popular approach of rip and replace.
In conversations, many folk appear puzzled as to why insurers, particularly large insurers choose the rip and replace approach. Our view is that this appears, at least on the surface to be conceptually an easier approach than say wrapping/extending. This latter approach also requires the insurer to have a skill set in architecture and design.
We’ve seen little in the way of system replacement in life insurers and this is due to the thorny problem of data migration. CIO’s quake at the idea of migrating 30 years of data – and who wouldn’t. The complexity of this task is far greater than that faced by P&C insurers – who at worst case, can ignore data migration and move data across at renewal by hand. Failure for a life insurer doesn’t just mean some annoyed customers. It can bring down the wrath of the regulator.
The success or failure of these projects have seen the abrupt halt to the career of more than a few CIOs.
An alternative for the life insurer is to put an aggregation layer on top of the existing legacy whilst turning down the functionality of the old systems to that which they are best – core system of record. This aggregation layer affords the front office customer service functionality more suited to 2010. I expect will see more of this approach in the future.
We wrote on this topic in 2008 and will be updating this research in the coming months. We’ll focus on where people are on their journey, and how attitudes to approaches have changed, if at all. Watch out for more on this topic. And if you have any interesting stories, please reach out to us.