We’ll discuss issues such as:

• The CIO’s role in achieving successful projects
• Organizational conditions that lead to success or failure
• Areas in which CIOs need to improve
• The CEO’s impact on project outcomes
• Role played by other stakeholders within IT, the business user community, and external vendors on project success or failure

Given the growing importance of Enterprise 2.0, we’ll also talk about success and failure on social media and collaboration projects.

I will be joined for this event by Chris Curran, Partner and CTO at Diamond, (NASDAQ: DTPI) a strategic management and technology consulting firm. He works closely with senior client management on their most complex and strategic technology issues, helping to define the IT organization, deploy technology governance and management practices, and develop business and technical architectures.

Chris helped spearhead Diamond’s “Digital IQ Study,” in which 456 C-level business and technology executives express their beliefs about IT’s role in economic competition. He also regularly contributes to a variety of industry journals, including the CIO Leadership Forum, CIO Insight, Investor’s Business Daily, Baseline, Optimize, and Insurance and Technology. In addition, he is an active member of the Center for Information Systems Research at the Massachusetts Institute of Technology (MIT) and serves on the MIT Quarterly Executive Advisory Board.

Please attend this interactive discussion and participate in an important conversation about IT success and failure. There’s no cost but you must register in advance.

Date and Time: Tuesday, July 28, 2009, 11:00AM -12:00 PM, Eastern Daylight Time

Registration: Click here to register for this online session

My recent post against Kumbaya-dominated Enterprise 2.0 cheer leading caused several folks whom I respect to respond critically. Here’s a summary of their thoughts.

ZDNet colleague, Oliver Marks, says that generalizing about customer service communities may be a force fit when talking about Enterprise 2.0 as a whole. In a post titled, Enterprise 2.0 ROI Metrics: One Size Doesn’t Fit All, Oliver remarks:

While customer service communities are an important business process subset - interaction with customers - it is just one facet of the individual complex business infrastructure every company has, each of which are as unique as a snowflake.

Many people this year seem to looking for Enterprise 2.0 frameworks and ways to measure results, but the reality is that like shopping for clothes, one size doesn’t fit all.

While Oliver is someone whose judgment and insight I greatly respect, I think his comments miss the target in this case. Sure, in some respects every business process and all companies are different. However, getting Enterprise 2.0 off the ground efficiently requires finding common methods that will work across processes and companies.

Complain as you like about traditional enterprise software failures, most companies rely on packaged software because it’s cheaper and easier than reinventing the wheel. Oliver does not suggest such an extreme position, but he’s heading too far in that direction for my taste.

Susan Scrupski, whom I have called an Enterprise 2.0 superstar, expressed different concerns than Oliver. She Twittered that a Forrester report I lauded is overly focused on vendors:

[F]orrester interviewed vendors, not customers, to generate their ROI model for communities. Then charges $2K for the analysis.

Jeff Dachis, a seasoned entrepreneur and founder of Razorfish, once a high-flying dot com consulting firm, echoed Susan’s remark in another Twitter comment:

I think [Susan] put it best: “Forrester interviewed vendors, not customers, to generate their ROI model for communities.”

I responded to Jeff on Twitter (here and here):

Excellent point, but now there’s a framework to organize/analyze customer interviews. In essence: it remains theory today.

Actually, I think framework part is solid (but will have refinements). The ROI part can’t be accurate w/o cust research.

Jeff agreed with this last point.

I asked Natalie Petouhoff, author of the Forrester report, to comment on charges her data is one-sided:

If you look closely, you’ll find that argument is not correct.

By scanning down the web page for the report you can see the list of end-user companies (both B2C and B2B), we studied. These include: AlterPoint, Carphone Warehouse, DIRECTV, Fair Isaac, Helpstream, Infusionsoft, Intel, iRobot, Lenovo, Linksys, Logitech, NetApp, OSIsoft, Palm, Pitney Bowes, Sage Software, SanDisk, Seagate Technologies, Sprint, Symantec, Verizon, and others.

We studied each company, looking for the trends in the benefits, costs, risks, and so on. We used these trends, and actual client data, to test our hypothesis and create an ROI model based on Forrester’s TEI (Total Economic Impact) analysis framework. We also spoke to vendors and other experts to determine the costs of solutions and understand the trends they had observed.

By carefully examining input from both customers and vendors, we developed an ROI model that works in the real world; it’s not theoretical; the spreadsheet that accompanies it also allows companies to input their own data. The model puts a stake in the ground and is meant to start the conversation among companies, thought leaders, etc…. It can also be customized to reflect a businesses’ specific situation and data.

Susan Scrupski also had issues with Forrester’s price for the report, leaving this comment on Oliver’s post:

What’s really impressive about this report is… Forrester can still charge $1,999 for a 25-page report.

I gave Natalie the opportunity to respond:

Like all Forrester research, this report is available without additional cost to clients.

I’ve tweeted (and many have re-tweeted) this webinar link and this slideshare presentation link so anyone can hear the report webinar and download the slides. I wanted to make sure that everyone could learn, share and grow from seeing/hearing this material. These links offer free, detailed content that explains the paid report.

In the spirit of social media, I am sharing content and a framework to help us all begin a generative and creative process of thought leadership around building a business case. The CFO’s and CXO’s I’ve spoken with seek this in every initiative including Enterprise 2.0. No one can afford the software disasters of the past.

For your convenience, here is Natalie’s presentation:

My take. Enterprise 2.0 intersects people, business processes, and technologies in new ways. Change leads to disruption, which is exciting and confusing all at the same time.

Kumbaya feelings, no matter how enthusiastic, are insufficient to build a successful business case. Enterprise 2.0 adoption will grow to mainstream levels only when realistic, data-driven ROI frameworks are broadly established and used.

[Photo of an out of focus future by Michael Krigsman. The photo suggests present clarity that does not necessarily reflect ability to see accurately into the future. Thus, predictive measurement is important.]

Zombie projects are failures that just won’t die. These monstrosities stick around because they’re a hassle to fix and no one is willing to muster the effort or courage needed to do the final deed.

• Related: 7 tips to safely kill zombie projects

Although it’s not a new topic, a post today on the client k blog does advance our insight and understanding of these nasty beasts. Client k is interesting, because all her posts are written in free style verse (!); yes, it’s weird, but actually does work.

Anyway, I’m reprinting the client k post in its entirety, because it’s short and I don’t want to break the rhythm:

Zombie Projects

I do NOT like zombie projects.
When I hear of
a project rising from the dead,
I immediately become ‘busy’
with something else
(like filing invoices or painting my toenails).

Zombie projects are rarely successful.

Why?

Because
usually
a project gets brought back to life
due to no one having a ‘better’ idea.
That’s not reason enough
to see a project
over the many obstacles
a normal project has to overcome.

And a zombie project
isn’t a normal project.
It has many more obstacles.
This project has already failed.
No one likes to associate themselves with failure.

The second time around,
most of the people who were so enthused
the first time
are now bitter and negative.
The project team is fighting history.
It is not a new never-been-done-before project.
It is a tried-to-do-and-failed project.

Does this mean a zombie project
won’t be successful?
No.
But the odds are not in its favor.

Want to be a hero in your organization? Step up and think through the issues associated with killing your local zombie. Consider the ramifications, develop a plan, gain consensus, refine your ideas, and then take action.

Stopping zombie projects is an essential skill that’s hard to master, even though it may not not bring either fame or glory. But, remember this: anyone capable of killing a zombie (without causing lots of collateral damage) probably also has the ability to manage a complex project successfully.

[I'm glad client k used the term zombie project, since I don't recall anyone (else aside from me) employ that phrase. Hey PMI, you guys should adopt such terminology into the official Project Management Body of Knowledge (PMBOK). Zombie picture from iStockphoto.]

Many participants in the collaboration / Enterprise 2.0 world offer Kumbaya-style enthusiasm without showing concrete evidence of business value. As an antidote to this substance-free clamoring, Forrester analyst Natalie Petouhoff developed a data-driven framework that systematically measures business-oriented ROI in collaboration communities.

• Related: Enterprise 2.0: The Kumbaya irony

Natalie’s report, The ROI of Online Customer Service Communities, presents an ROI model, discusses the business value and benefits, offers concrete examples, and raises a host of implementation obstacles and success factors.

In contrast to less substantive Enterprise 2.0 discussions, where creating good feelings is the dominant theme, this research adopts a more structured and analytical approach. Although Petouhoff focuses narrowly on customer service communities, many of her conclusions are easily adaptable to other Enterprise 2.0 collaboration deployments.

Organizations generally measure ROI by adopting a model that includes specific metrics and applies value to particular results. The best models consider realistic costs based on deep understanding of  the problem, solutions, and risks.

Accomplishing these goals is particularly difficult for Enterprise 2.0, because the benefits of collaboration are inherently difficult to measure. In large part, these difficulties are precisely why so many Enterprise 2.0 adherents discuss good feelings and Kumbaya rather than quantified business value.

The report overcomes these obstacles because the conclusions derive from analytical research into large, mature customer service organizations that have adopted community as part of their offerings. In this case, data overcomes conjecture.

Following an explanation of the Forrester ROI model, the report summarizes several key benefits of online customer service communities:

Next, the report summarizes the costs associated with building these communities. The report categorizes costs as follows:

• Technology startup costs
• People startup costs
• Process management startup costs
• Recurring technology costs
• Recurring people costs
• Recurring process management costs

Grouping costs this way aligns the framework with typical IT project lifecycles. Gaining accurate understanding of any IT-related ROI requires examining costs and risks associated with technology, people, and process.

This chart summarizes the primary costs:

Beyond costs and risks, the report describes a detailed set of analytic assumptions around investment horizons, project size, and deployment best practices.

THE PROJECT FAILURES ANALYSIS

Few observers have yet articulated a framework of failure for Enterprise 2.0 projects, reflecting the relative immaturity of Enterprise 2.0 projects and processes. Exploring Enterprise 2.0 failure is high on my priority list for future blog posts.

Although Natalie’s research is strictly on customer service communities, it identifies five critical success factors that are generally applicable to many Enterprise 2.0 projects:

Paradigms shift; so must you. Customer service professionals must find innovative ways to engage with “social customers” via emerging social media technologies.

Identify the five worst fears early in the process. Categorize the uncertainties into buckets of costs, benefits, and risks and learn from best practices that most social media fears are unfounded.

Focus on improving the customer experience. The most critical step is designing customer experiences first, and then making the subsequent technology choices to enhance the customer experience, not destroy it.

Strategize, strategize, strategize. Determine what you want to accomplish with the community and stay on point.

Choose a vendor wisely. Make sure to interview both the vendor and its client list. And don’t limit your interviews only to the reference-able customers the vendor provides.

I asked Natalie to summarize what she learned in the course of conducting the research:

One of the biggest issues with social media and corporate America is whether there is an ROI. That’s why I decided to spend the time to investigate whether or not there is an ROI. For those of us who are actively participating in social media, there is an intuitive sense that there is. But intuition doesn’t go that far when dealing with corporate executives. I looked at the traditional issues customer service faces and whether adding an online community could lower those costs and/or increase revenue, margins and profit.

My intuition was right. Not only does social media provide the necessary information to transform customer service, it is the first tool/application that I’ve seen in all my years of being in the business world that -instantly melts away the resistance, the politics and the lack of interdepartmental collaboration required to transform the whole company. Not only do I see social media as a major business transformation tool, but it brings out the very best in human nature.

With the down fall of several critical industries at the end of 2008 - the insurance, banking and real estate, its time that business isn’t conducted as usual. Its time the voice of the customer is incorporated into every aspect of the business and that business are held accountable to deliver on their promises. Social media does that and more. I’ll be publishing a best practice research report as well as ten case studies that go into the detail of some of these phenomenon that I have witnessed. It’s a really exciting time to be in business. Change is in the air.

I also asked Paul Greenberg for his opinion. Aside from being a fellow ZDNet blogger and author of CRM at the Speed of Light, Paul is respected as the “Godfather of soul CRM:”

Natalie undertook something that has been very difficult to even ascertain, much less systematize. She successfully describes an approach to social customer service - the use of communities and social media to not only improve agent based and other forms of customer service but even to figuring out how customer communities can support each other.  This is an important piece and moves forward the effort to figure out not the what of social CRM but the “how.”

My take. Enterprise 2.0 technologies will continue to create opportunities for improving work processes and generating high ROI across a range of business functions. However, despite future promise, the market remains immature and needs validation through further research.

This Forrester report offers an excellent foundation for anyone interested in measuring the success of Enterprise 2.0 collaboration communities. I believe this report will quickly become a model for other research efforts in the field.

Seeking to back up 350GB in safe, reliable, off-site storage, I tried Carbonite and Mozy, two of the most respected names in the online backup market. Both products failed miserably to achieve my goals, each one in a perversely different way.

Carbonite offers a simple, set-and-forget solution that should make life easy. In my case, something bad happened along the way because I can no longer restore files reliably. This screen capture shows what happens when I try to restore files using the company’s remote access feature:

As you can see, Carbonite can’t find my selected file. Would this message inspire confidence that your backup is safe?

Carbonite tech support was quite helpful trying to diagnose and solve the problem. However, my luck ran out after support submitted the issue to the developers for further research and fixing. At that stage, support essentially said the developers will handle my issue when they want, with no time horizon and not even a pat on the back.

Based on that interaction, I decided to try Mozy instead.

Mozy takes a somewhat more configurable approach to its backup software, which I like. I transferred the first 200GB of data to Mozy with no problems and reasonably fast upload speeds of 1.5Mbps. Recently, however, my upload speed decreased to a level where large backups are no longer practical. This dialog box shows my current upload rate, which is slower than a dialup modem:

Mozy support is singularly unhelpful, sending canned solutions and ignoring the actual problem descriptions in my emails.

My new backup solution. Since the need for offsite backup remains, I plan to install a remote hard drive at a friend’s house and use a backup program to transfer my data for safekeeping.

Given the economics of software as a service (SaaS) vendors, poor support is hardly a surprise. These vendors survive by keeping costs low, so they can offer inexpensive prices to consumers. Both Carbonite and Mozy charge about five bucks a month, which doesn’t leave much room for in-depth customer assistance.

My lousy backup experience illustrates both positive and negative aspects of cheap cloud computing. When the cloud works, everything is great; but woe unto him (or her) that hits a speed bump.

Update 7/3/09: Following this post, I heard from David Friend, CEO of Carbonite, who was clearly distressed by the state of affairs. He said Carbonite identified the bug causing the problems and will issue a fix.

I did receive a perfunctory follow-up email from Mozy support asking whether their previous suggestions were helpful. I responded by suggesting they read this post.

Last week I attended the Enterprise 2.0 conference in Boston. It’s one of my favorite events, primarily because so many online friends attend from around the world and I enjoy their company. Despite overwhelming good will among participants, the conference exposed gaps between expectations and reality that continue to plague the Enterprise 2.0 world.

Enterprise 2.0 aspirations. Enterprise 2.0 suggests a network of organizational activities involving collaboration, cooperation, and engagement as part of a broader ethos of social interaction in business. Professor Andrew McAfee, formerly of Harvard Business School and currently with MIT, coined the phrase Enterprise 2.0. Andy recently blogged about implications of this new system of thought on managing organizations and leading teams.

Andy’s blog elaborated on a piece in the Wall Street Journal by Gary Hamel, which describes “12 work-relevant characteristics of online life.” The post provides a convenient summary of an Enterprise 2.0 view of management:

Here are some initial thoughts on how to start blending Hamel’s characteristics of online life into current management practices:

1. All ideas compete on equal footing. No ideas are above review or commentary; there are no sacred cows within the organization.
2. Contribution counts for more than credentials. Credentials are not necessary for making contributions.
3. Hierarchies are natural, not prescribed. Some hierarchies are allowed to form naturally.
4. Leaders serve rather than preside. Leaders expand their toolkit by using 2.0 technologies and participating in the resulting communities. They blog, tweet, join social networks, and use 2.0 technologies to show why they’ve ascended to high positions.
5. Tasks are chosen, not assigned.
6. Groups are self-defining and -organizing. Just as with hierarchies, some tasks and groups are self-organizing.
7. Resources get attracted, not allocated. This is a tough one. Current resource allocation processes are highly hierarchical. Even when initiatives arise from emergent work, they get funded officially from the top down. It’s hard to see how to effectively change this. Ideas, anyone?
8. Power comes from sharing information, not hoarding it. One way to become powerful is to share information, refine and improve it, and/or use it to connect people with each other.
9. Opinions compound and decisions are peer-reviewed. Decisions are subject to peer scrutiny. In other words, the crowd has the ability to weigh in on the direction the company is taking. This is very different than giving all crowd members veto power, or even a vote. Enterprise 2.0 does not mean setting up a corporate democracy (even Wikipedia is not a democracy).
10. Users can veto most policy decisions. See #9. I think and hope that individuals will have greater voice within organizations in the future, but not greater veto power.
11. Intrinsic rewards matter most. Companies use 2.0 tools and approaches to tap into a wider mix of motivations – both intrinsic and extrinsic. One note here: it’s important not to confuse intrinsic vs. extrinsic with small vs. big, or monetary vs. non-monetary.
12. Hackers are heroes. Dissenters are valued as long as they do two things: justify their arguments with logic and facts (or at least lay out how to test their hypotheses), and strive to be helpful to others and productive for the organization. “Everything sucks and this place is run by morons” is the stance of a sullen adolescent, not a courageous truth-teller.

This perspective of management and organizational behavior is inspired by interactions online that developed organically among the community of Enterprise 2.0 early adopters. In a sense, the view embodied in this list serves as an archetype for a more humanistic form of consensus-based management than typically exists inside large organizations today.

So far, so good, but there are cracks in this wall.

Evangelists talking to themselves? While these collaborative attributes are certainly desirable, such noble aspirations can form a passionate exuberance in practitioners that reduces critical thinking and risks crossing the line into groupthink.

At the Enterprise 2.0 conference, for example, I thought vendors and consultants, rather than actual corporate customers, dominated the event. Fellow ZDNet blogger and collaboration expert, Oliver Marks, noted that:

The thirst for use cases by attendees at the conference was apparent.

Although Oliver partially attributes vendor dominance to customers’ fear of disclosing confidential information, I wonder whether real enterprise use cases are still generally rare. Fellow Enterprise Irregular and Enterprise 2.0 analyst, Susan Scrupski, strongly disagrees with this point. In conversation, she countered:

The so-called market for Enterprise 2.0 is still in its infancy. This is the third year of the conference, and frankly, I’m surprised there are any customers showing up at this early stage. I found the customer conversations fascinating and abundant.

Kumbaya or business value? Enterprise 2.0 cannot credibly show market maturity unless adherents move beyond good feelings to demonstrate how the new methods of work and leadership create clear business value. Responding to this point, independent analyst, Jonathan Yarmis, advises clients to stay away from the Kumbaya Zone.

I asked Jonathan to explain:

The Kumbaya Zone is where we all sit around the campfire, singing odes to social media, and how important it is to “engage in the conversation.” If I hear that phrase one more time, I think I’ll go crazy. Instead, we need to apply social media strategies with a sound business strategy in mind. Why should I do this? Which conversations do I want to engage in? What outcomes do I hope to achieve from engaging in those conversations?

To place Kumabaya Zone risks into business context, Jonathan created the following diagram, when he worked as an analyst at AMR Research:

Competition or commoditization? Talking with a number of Enterprise 2.0 collaboration software vendors exhibiting at the conference, I noticed strong similarities among many competing products. I believe only a few of these firms will ultimately survive, especially in light of eventual attacks from large competitors such as IBM.

Analyst Sameer Patel wonders whether many Enterprise 2.0 vendors will find themselves victims of self-imposed commodity pricing before becoming profitable:

So the real question for me is: Are we on the path to supersonic commoditization in the Enterprise 2.0 market before even a single vendor has truly broken out & dominated the space?

At the conference, I spoke with IBM’s Bob Picciano, who heads Lotus Software and is responsible for the WebSphere Portal, and Irene Greif, an IBM Fellow who manages the Center for Social Software inside IBM Research. These conversations made clear that IBM is serious about the Enterprise 2.0 and social networking market. It’s entirely possible that large competitors, such as IBM, will eventually close off opportunities for the smaller players, further accelerating the commoditization about which Sameer writes.

Hopes, dreams, and ironic realities. Although the Enterprise 2.0 market is maturing, there are still many examples where promise and present fact diverge. Even Andrew Mcafee faces turtle-paced tradition at the hand of Harvard Business School Press. It’s ironic that a prime mover behind Enterprise 2.0, which emphasizes speed and agility as key virtues, can’t get his own publisher to move rapidly on a book that’s obviously time-sensitive. The situation would almost be amusing if it didn’t symbolize the uphill battle that Enterprise 2.0 adherents still face inside their own organizations and extended business networks.

My take. Despite ingrained skepticism, I do believe strongly in the future promise of Enterprise 2.0 systems, methods, and supporting tools. That said, it’s time for reasoned arguments and case studies of adoption in real organizations to replace Kumbaya optimism. As to Harvard Business School Press, I suggest they re-read Mcafee’s book and internalize its lessons.

[Kumbaya Zone illustration copyright by AMR Research. Photo of ghosts singing Kumbaya around a campfire from Syracuse.com. For the lyrics to Kumbaya, click here. Harvard Business School Press did not respond immediately to my request for comment.]

First, here’s a photo of the session announcement board at HP’s Software Universe 2009 conference, held at the Sands in Las Vegas. Note, this is a Sands issue and has nothing to do with HP:

…and a cropped, rotated version showing the error:

Looks to me like hardware failure caused the computer not to boot. What do you think?

Second, this photo is from an American Airlines display board at O’Hare airport in Chicago:

… and the detail:

It’s hard to read, but the dialog title box says, “Operational Applications” and “Select an item to launch from the list below”.

While on the subject of travel, this tweet sums up my experience with American Airlines last week.

To understand the company’s PPM product direction, I spoke with four folks representing HP’s views on features, strategy, and customer implementation:

• Paul Muller, VP for Strategic Marketing
• Ken Cheney, Director of Products, IT Financial Management
• Bruce Randall, Manager of Product Marketing, PPM
• John Wills, Practice Principal for HP’s Business Intelligence Solutions group

HP’s primary strategic message about the future direction of PPM involves helping IT departments improve their ability to quantify project costs, benefits, and derived value, which Paul described this way:

We automate the spreadsheet Kung Fu that IT often uses to analyze financial data. Our goal is reducing decision-making cycle times and creating transparency that quantifies the business value of IT operations.

Ken Cheney elaborated on this message:

Many organizations find it difficult to get an accurate handle on IT costs. We link IT with the business services it delivers and assign value to help IT appropriately price these services. The future of PPM is helping organizations clearly see the total cost of ownership of all IT services.

HP’s strategy positions PPM as a building block in a broader IT financial management offering, as the following diagram illustrates:

HP’s intention is to provide software and services that help its customers operate IT with the same level of business oversight and operating efficiency as practiced by other, usually non-technical, business areas.

THE PROJECT FAILURES ANALYSIS

This IT financial management strategy makes logical sense but also contains certain pitfalls about which potential customers should be wary.

In general, most non-IT organizations are well equipped to manage and analyze the costs they accrue and the benefits, or value, associated with those costs. ROI analysis is a standard measure of value, although there are certainly others, that aligns business investment with performance and outcome.

In contrast, IT has historically had a more difficult time than other corporate functions measuring value derived from investment. I suspect this arises both from IT’s inherent complexity and its relatively recent entry as technologist to the corporate world. Computers are a recent development compared to double entry accounting, for example, which originated in the 15th century. Only in recent years has IT started achieving a level of process maturity approximating what already exists in other departments.

HP is taking a logical step toward helping IT professionalize its role in the business. These steps go beyond traditional commodity PPM. A Gartner project and portfolio management report dated, June 2, 2009, describes the commodity aspect of core PPM software functions:

[T]his year’s Magic Quadrant reflects a transition from core PPM functions (now identified as commodities) to the connection of core PPM functions with a broader range of activities, and events incurring additional IT expense and consumption of resources and related to the support and maintenance of existing applications and IT services.

To gain additional perspective, I spoke with Brian Sommer, a project portfolio management expert and market analyst who’s also a fellow blogger for ZDNet:

Although vendors have demonstrated new business models and delivery options, such as software as a service (SaaS), PPM software as a category has generally been lacking innovation in recent years. HP is innovating by helping IT better calculate and articulate the relationship between investment and value delivered back to the business.

Risks. Although HP’s strategy is sound, it’s not a silver bullet. As I spoke with HP customers at the conference, it became clear some are confused about the roles of software tools and organizational process in accomplishing their goals.

It’s far easier to market and sell packaged tools than it is explain the organizational changes required to make best use of that software. Brian is concerned that not all customers possess the financial sophistication required to take advantage of HP’s vision:

Some IT organizations will be hard-pressed even to understand how to use these tools, let alone implement them properly. Achieving desired results from software requires good source data, which has always been the Achilles heel of project management solutions. In that sense, not much has changed.

Although you can’t automate financial savvy and good business capabilities, this solution will be very helpful to those who understand the financial issues. HP is going in the right direction.

My take. HP offers broad capability and solid infrastructure for mature organizations possessing the financial understanding and willingness to invest in people and process. Most organizations, especially smaller ones, will prefer to take bite-sized steps and implement pieces of the solution, perhaps growing their deployment over time. HP offers resources to help committed customers achieve the organizational maturity required to take full advantage of this offering.

[Disclosure: HP reimbursed my out of pocket travel expenses associated with attending this conference.]

The Pentagon canceled Northrop Grumman’s Kinetic Energy Interceptor program amid accusations by Defense Secretary, Robert Gates, that the system’s design would not accomplish key military objectives.

It’s not an IT failure, per se, but certainly a great example of poor fit-to-purpose between technology and business requirements, leading to project abandonment and failure. Northrop Grumman had completed approximately $1.2 billion of work at the time of cancellation.

The Pentagon said it terminated the project for the “convenience of the government” and not because of problems with Northrop.

Northrop Grumman describes the system:

KEI is the Ballistic Missile Defense System (BMDS) element that is being designed to destroy enemy ballistic missiles during their boost and early midcourse phases of flight. It is also the first ballistic missile defense weapon system to be developed without the constraints of the Anti-Ballistic Missile Treaty.

Reuters said Gates stopped the program because:

Gates and the Missile Defense Agency said the system had limited capability, would have been difficult to fire from ships because of its large size, cost too much and would have to have been launched from close to the target.

To make sense of the termination, the Preventing Project Failure blog compares Department of Defense rhetoric with that of Northrop Grumman:

Based on this brief comparison, it’s obvious that substantial expectation gaps existed between the technical supplier and its “business” customer (in this case, the government).

The Tribune-Democrat, a local newspaper in Pennsylvania, where Northrop has a facility, notes the cancellation took effect before the government even tested the system:

Rep. Jerry Lewis, R-Calif., grilled Defense Secretary Robert M. Gates about the administration’s decision to kill the project.

“Six years of development and testing, with most of the more than $1 billion of funding spent to date, was to culminate in the first booster flight in the fall of ’09,” Lewis said. “With the issuance of the stop-work order, the department is walking away from this investment without benefit of knowing what the technology has to offer.”

There are funds available in the 2009 budget to complete the test, Lewis continued.

“Why would the department kill a program four months before its booster flight?” he demanded. “Why not allow the program to execute the (fiscal-year) ’09 funds?”

The Kinetic Interceptor Program was on its way out before Obama took office, Gates told the subcommittee.

Besides the slow-developing technology, Missile Defense Agency leaders saw deployment logistics issues, he said.

“A big part of the problem with this program is that it needs to be close to the launch site to be able to be effective,” Gates said. “The only potential country where it could have a role with some confidence would be North Korea. It has poor capability against Iran and virtually no capability against either Russia or Chinese launch facilities. And so you have a very limited capability here at considerable cost.”

Despite differing views between vendor and customer, one thing is certain: the government wasted over a billion dollars before deciding this system didn’t meet requirements.

This missile program parallels the experience of many IT projects in the private sector, despite the large numbers involved. I suspect that failures driven by the “alignment gap” between technical and business groups are far more common than one might think.

[Image showing advanced technology from Gizmodo.]

TechCrunch, the opinionated startup-focused blog network, has launched a low-cost analytic research service. Given the company’s high profile, this research offering cannot be ignored. However, does this new TechCrunch initiative provide value to buyers or threaten established analyst firms?

TechCrunch describes its 1Q 2009 Report report this way:

[It] provides key take aways and statistical support for the major trends of Q1. The report covers trends in start-up foundings, products, financings and exits across a variety of technology sectors: consumer media and entertainment, social networking, cloud computing, mobile communications, search, advertising and ecommerce, consumer electronics and clean tech.

The report costs $149 and partially overlaps the outstanding, web-based MoneyTree Report, which is free and has been around for years. PriceWaterhouseCoopers and the National Venture Capital Association sponsor MoneyTree.

THE PROJECT FAILURES ANALYSIS

TechCrunch keeps its finger on the pulse of startups, writing with a colorful (some say arrogant) tone and style. This formula has propelled TechCrunch’s popularity and influence among those following technology startups and investment.

Given TechCrunch’s immersion in the world of startups, anyone seeking raw data and high-level conclusions about startup investment will probably find the TechCunch data useful and compelling, especially at the low price.

However, should TechCrunch decide to go beyond supplying data into offering real strategic analysis, the company’s personality-driven approach would raise serious questions about its objectivity.

I disagree with an assessment of TechCrunch Research’s impact on traditional analyst firms from the Sway blog, which covers “influencer relations” (emphasis added):

The implication for analysts who cover tech and mobile start-ups is serious new competition for the coveted role as a trusted and well-known expert. TechCrunch Research is promoted across the TechCrunch network — a network that garners 5.5 million unique visitors each month and is wildy popular with VCs, start-ups, early adopters and C-level tech execs. Name an analyst firm that can compete with that kind of audience on this particular market segment. In an attention economy, TechCrunch Research looks like a winner.

Trusted advisor relationships do not arise merely because a firm is popular or supplies data. Primarily, being a trusted advisor means offering sound judgment, clear objectivity, and high integrity. Meaningful trust cannot exist without these fundamental attributes.

To be clear, I am not suggesting the TechCrunch brand lacks such qualities, but these attributes are not a function of number crunching alone. Rather, they only accrue over time based on market perception, and are rooted in the totality of an organization’s entire body of work.

The best traditional analysts (the real trusted advisors) bring insight, interaction, and experience to their clients. These rare folks put client interests first, even to their own detriment. Unfortunately, some well-established, traditional analysts seem to be little more than technology vendor shills, pushing the party line to whomever pays the most. It’s worth noting that one sees the same behavior among some journalists. I guess every industry has its bad apples.

Does TechCrunch Research matter? If you seek data about the company’s startup-oriented sweet spot, the answer is definitely yes. Expensive, data-driven research firms in this space should rightfully feel threatened by TechCrunch’s low cost and broad reach.

If you seek a high-touch, trusted advisor to help guide strategic decision-making, then look elsewhere. The TechCrunch trajectory doesn’t go there.