Saving Energy Step 1 ? Implementing a Management System

There has been much hype down the years regarding whether management is art or science. Thankfully, where people are concerned the pendulum has swung away from standard times in sweatshops in the west. However, when it comes to measuring physical things like harvest per square meter and the amount of energy consumed there is no substitute for scientific measurement, and this implies a system.

Managing energy cost and consumption down is like any other strategy. American engineer / statistician / management consultant W. Edwards Demming may have passed on in 1993. However he was as right as ever when he said:

  1. When people and organizations focus primarily on quality, this tends to increase and costs fall over time.
  1. However, when people and organizations focus primarily on costs, costs tend to rise and quality declines over time.

Demming believed that 90% of organizational problems arise from systems we put in place ourselves. This can be because we are so accustomed to them that we fail to notice when they are no longer relevant. The currently prevailing laissez faire towards energy is a case in point. What is managed improves and what is not, deteriorates. We know this. Let us take a look at how to apply this principle to energy management.

First, you need to get the subject out the closet and talk about it. How often do you do this is your boardroom, and how does energy rank against other priorities? Good governance is about taking up a position and following through on it. Here is a handy checklist you may like to use.

  • Do we use a consistent language when we talk about energy? Is it electricity, or carbon emitted (or are we merely fretting over cost).
  • How well engaged are we as a company? Looking up and down and across the organization are there points where responsibility stops.
  • How well have we defined accountability? Do we agree on key performance areas and how to report on them.
  • Are we measuring energy use at each point of the business? When did we last challenge the assumption that ?we’re doing okay?.
  • Have we articulated our belief that quality is endless improvement, or are we simply chasing targets because someone says we should.

A management system is a program of policies, processes and methods to ensure achievement of goals. The next blog focuses on tools and techniques that support this effort.

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The Cloud: Changing the Game for Small Businesses

There is a consensus among cloud experts that the onset of cloud computing will benefit small organisations the most. In fact, many even go as far as saying that the cloud and small businesses are a match made in IT heaven. How much of this is true and how much of this is merely part and parcel of the hype surrounding cloud computing?

The Cloud as the Great?Equaliser

If you closely examine the essential characteristics of cloud computing, particularly public cloud services, you will see why small organisations would be very interested in the cloud, and would eventually flock to it, like moths to a flame. And why not? Cloud computing is turning out to be the weapon that can allow small and medium organisations to compete on a more level playing field against large enterprises.

Here are some cloud computing benefits that may just close the gap between the two.

  • Significantly lower IT spending. With little to no investment at all on hardware infrastructure and practically zero maintenance costs, SMBs that would have required substantial capital for IT are now finding it easy to get a business started from scratch or develop and test out new products by using the cloud as the backbone of their IT set-up. The pay-as-you-go pricing scheme that cloud computing offers allows companies to start small and scale up as needed, or when the revenue starts coming in.
  • Higher employee productivity. Licensing fees for software applications can run high even if you don’t have a large staff. Good thing there are now a host of cloud-based office tools – word processors, spreadsheets, presentations, accounting systems, etc. – that can boost employee productivity without the corresponding costs that small businesses can ill afford. Plus, team members in remote locations can continue to collaborate with the rest through any internet-connected device in real time.
  • Easier, better communication. The easy accessibility of communication apps has also changed the way employees interact with fellow employees and more importantly, with customers. Whether through email, instant messaging, or social networks, cloud services have given individuals and businesses more ways of giving and getting feedback. The best thing about it is that most of these services don’t cost much or are even free, giving SMBs ample tools to create better products and improve service.
  • A Look at the Figures Many small businesses are already seeing the potential in the cloud, with SaaS (Software as a Service) applications most commonly used among the early adopters. These services include email and other communication apps, file sharing, and backup.

In a February 2012 Edge Strategies survey (commissioned by Microsoft) of 3,000 small businesses in the US, the following data came to light:

  • The number of small companies with 2 to 10 employees using paid cloud services will triple in the next three years;
  • Current cloud users report purchasing an average of 4 services in the cloud now and expect to use 6 in the future;
  • Fifty percent agree that cloud computing is going to become more important for businesses such as theirs.

Further, a survey of 323 SMBs recently released by social business site Spiceworks and sponsored by EMC reveals that from 48 percent at the start of 2012 and 28 percent a year ago, 62 percent of the businesses surveyed now use some type of cloud app.

What these numbers show is that cloud adoption among small and medium enterprises is starting to gain ground and for sure, more will do the same as understanding and awareness increase. Yes, these businesses should still perform their due diligence as there is no one-size-fits-all cloud solution. But for those companies who have managed to find the right cloud apps and services for their needs, it’s all sunny skies up ahead.

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Which Services to Share?

It often makes sense to pool resources. Farmers have been doing so for decades by collectively owning expensive combine harvesters. France, Germany, the United Kingdom and Spain have successfully pooled their manufacturing power to take on Boeing with their Airbus. But does this mean that shared services are right in every situation?

The Main Reasons for Sharing

The primary argument is economies of scale. If the Airbus partners each made 25% of the engines their production lines would be shorter and they would collectively need more technicians and tools. The second line of reasoning is that shared processes are more efficient, because there are greater opportunities for standardisation.

Is This the Same as Outsourcing?

Definitely not! If France, Germany, the United Kingdom and Spain has decided to form a collective airline and asked Boeing to build their fleet of aircraft, then they would have outsourced airplane manufacture and lost a strategic industry. This is where the bigger picture comes into play.

The Downside of Sharing

Centralising activities can cause havoc with workflow, and implode decentralised structures that have evolved over time. The Airbus technology called for creative ways to move aircraft fuselages around. In the case of farmers, they had to learn to be patient and accept that they would not always harvest at the optimum time.

Things Best Not Shared

Core business is what brings in the money, and this should be tailor-made to its market. It is also what keeps the company afloat and therefore best kept on board. The core business of the French, German, United Kingdom and Spanish civilian aircraft industry is transporting passengers. This is why they are able to share an aircraft supply chain that spun off into a commercial success story.

Things Best Shared

It follows that activities that are neither core nor place bound – and can therefore happen anywhere ? are the best targets for sharing. Anything processed on a computer can be processed on a remote computer. This is why automated accounting, stock control and human resources are the perfect services to share.

So Case Closed Then?

No, not quite. ?Technology has yet to overtake our humanity, our desire to feel part of the process and our need to feel valued. When an employee, supplier or customer has a problem with our administration it’s just not good enough to abdicate and say ?Oh, you have to speak to Dublin, they do it there?.

Call centres are a good example of abdication from stakeholder care. To an extent, these have ?confiscated? the right of customers to speak to speak directly to their providers. This has cost businesses more customers that they may wish to measure. Sharing services is not about relinquishing the duty to remain in touch. It is simply a more efficient way of managing routine matters.

What Is Technical Debt? A Complete Guide

You buy the latest iPhone on credit. Turn to fast car loan services to get yourself those wheels you’ve been eyeing for a while. Take out a mortgage to realise your dream of being a homeowner. Regardless of the motive, the common denominator is going into financial debt to achieve something today, and pay it off in future, with interest. The final cost will be higher than the loan value that you took out in the first place. However, debt is not limited to the financial world.

Technical Debt Definition

Technical debt – which is also referred to as code debt, design debt or tech debt – is the result of the development team taking shortcuts in the code to release a product today, which will need to be fixed later on. The quality of the code takes a backseat to issues like market forces, such as when there’s pressure to get a product out there to beat a deadline, front-run the competition, or even calm jittery consumers. Creating perfect code would take time, so the team opts for a compromised version, which they will come back later to resolve. It’s basically using a speedy temporary fix instead of waiting for a more comprehensive solution whose development would be slower.

How rampant is it? 25% of the development time in large software organisations is actually spent dealing with tech debt, according to a multiple case study of 15 organizations. “Large” here means organizations with over 250 employees. It is estimated that global technical debt will cost companies $4 trillion by 2024.

Is there interest on technical debt?

When you take out a mortgage or service a car loan, the longer that it takes to clear it the higher the interest will be. A similar case applies to technical debt. In the rush to release the software, it comes with problems like bugs in the code, incompatibility with some applications that would need it, absent documentation, and other issues that pop up over time. This will affect the usability of the product, slow down operations – and even grind systems to a halt, costing your business. Here’s the catch: just like the financial loan, the longer that one takes before resolving the issues with rushed software, the greater the problems will pile up, and more it will take to rectify and implement changes. This additional rework that will be required in future is the interest on the technical debt.

Reasons For Getting Into Technical Debt

In the financial world, there are good and bad reasons for getting into debt. Taking a loan to boost your business cashflow or buy that piece of land where you will build your home – these are understandable. Buying an expensive umbrella on credit because ‘it will go with your outfit‘ won’t win you an award for prudent financial management. This also applies to technical debt.

There are situations where product delivery takes precedence over having completely clean code, such as for start-ups that need their operations to keep running for the brand to remain relevant, a fintech app that consumers rely on daily, or situations where user feedback is needed for modifications to be made to the software early. On the other hand, incurring technical debt because the design team chooses to focus on other products that are more interesting, thus neglecting the software and only releasing a “just-usable” version will be a bad reason.

Some of the common reasons for technical debt include:

  • Inadequate project definition at the start – Where failing to accurately define product requirements up-front leads to software development that will need to be reworked later
  • Business pressure – Here the business is under pressure to release a product, such as an app or upgrade quickly before the required changes to the code are completed.
  • Lacking a test suite – Without the environment to exhaustively check for bugs and apply fixes before the public release of a product, more resources will be required later to resolve them as they arise.
  • Poor collaboration – From inadequate communication amongst the different product development teams and across the business hierarchy, to junior developers not being mentored properly, these will contribute to technical debt with the products that are released.
  • Lack of documentation – Have you launched code without its supporting documentation? This is a debt that will need to be fulfilled.
  • Parallel development – This is seen when working on different sections of a product in isolation which will, later on, need to be merged into a single source. The greater the extent of modification on an individual branch – especially when it affects its compatibility with the rest of the code, the higher the technical debt.
  • Skipping industrial standards – If you fail to adhere to industry-standard features and technologies when developing the product, there will be technical debt because you will eventually need to rework the product to align with them for it to continue being relevant.
  • Last-minute product changes – Incorporating changes that hadn’t been planned for just before its release will affect the future development of the product due to the checks, documentation and modifications that will be required later on

Types of Technical Debt

There are various types of technical debt, and this will largely depend on how you look at it.

  • Intentional technical debt – which is the debt that is consciously taken on as a strategy in the business operations.
  • Unintentional technical debt – where the debt is non-strategic, usually the consequences of a poor job being done.

This is further expounded in the Technical Debt Quadrant” put forth by Martin Fowler, which attempts to categorise it based on the context and intent:

Technical Debt Quadrant

Source: MartinFowler.com

Final thoughts

Technical debt is common, and not inherently bad. Just like financial debt, it will depend on the purpose that it has been taken up, and plans to clear it. Start-ups battling with pressure to launch their products and get ahead, software companies that have cut-throat competition to deliver fast – development teams usually find themselves having to take on technical debt instead of waiting to launch the products later. In fact, nearly all of the software products in use today have some sort of technical debt.

But no one likes being in debt. Actually, technical staff often find themselves clashing with business executives as they try to emphasise the implications involved when pushing for product launch before the code is completely ready. From a business perspective, it’s all about weighing the trade-offs, when factoring in aspects such as the aspects market situation, competition and consumer needs. So, is technical debt good or bad? It will depend on the context. Look at it this way: just like financial debt, it is not a problem as long as it is manageable. When you exceed your limits and allow the debt to spiral out of control, it can grind your operations to a halt, with the ripple effects cascading through your business.

 

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