new shiny standardised IT-dominated factory processes fail to absorb the variety of customer demand; in other words it becomes hard for customers to get what they want. When customers can’t get what they want they return, especially for public services about which they have no choice, until they do get what they want. I call this ‘Failure Demand’ (demand caused by a failure to do something or do something right for the customer). It represents a massive cost, failure demand can run as high as 80% of all customer demand in industrialised shared services projects, locking in costs for many years
Distributed software development can be productive
This doesn’t mean that all outsourcing of software development is uneconomic. As Jeff goes on to explain in that video, a Dutch firm, Xebia, has successfully grown hyper-productive teams using Scrum that are geographically distributed.
But Xebia’s teams, some in The Netherlands and some in India, are set up in a counter-intuitive way: instead of having complete teams in each country, each team is split between the two places, with half its members in The Netherlands and half in India. The dispersed teams were at least as productive as colocated teams and sometimes more productive than the teams located wholly in the Netherlands.
Apparently splitting the teams geographically forced more conversations among the team about what the client really wanted. Being forced to explain to the developers in India each day what the client wanted helped everyone get clearer and so the teams as a whole tend to become more productive
so co-location isn’t always the best answer – with good management.
Does internal social media/software work? Seems to be working for IBM/ Hat tip to @elsua for the pointer from http://www.elsua.net/2011/08/09/ibms-trip-to-become-a-socially-integrated-ent…
In that period of soul-searching that typically follows any instance of social upheaval, we shall no doubt hear many explanations for the events that overtook the streets of Britain last week. One which will surely elbow its way to the front is the notion that, in some ill-defined sense, the disaffected youth of this country have been denied any “hope”.
What hope is that, precisely? Is it the hope that, despite having set one’s face against the acquisition of even the most elementary formal qualifications in literacy and numeracy, or of basic English language or personal skills, one should be able to find an employer who will offer one employment in preference to buying a fork-lift or taking on a migrant?
Even as late as the 1980s the relative prices of capital and labour in the UK favoured those with low skills and a willingness to work, over expensive machines. That factor-price ratio has now changed, probably for ever. Globalisation, technological advances and a downward rigidity in the wage that is deemed “acceptable” in the UK mean that the mass-produced merchandise that so appeals to street thieves can no longer be produced economically in this country. The relatively low-skill jobs that are involved in such manufacturing are the preserve of people who are willing to work for less than their counterparts in the UK, and to do so more reliably. The future of UK manufacturing will increasingly lie in goods and services embodying training and skills.
Those who wish to have any hope at all should first be clear about their aspirations.
R Rothschild, Emeritus Professor of Economics, Lancaster
Excellent letter from the father of a friend of mine.