Resources - money, time, people,
etc - whatever is required to effect a transformation.
Requirements - the resources
associated with satisfying the requirement of the work.
Guidance - the Resources
associated with satisfying the things that guide and influence how we satisfy
the Requirements. Things like Principles, Policies, Standards, etc, but also
things like conforming to the structures and methods imposed on us.
Required Resources - the
Resources that are required to satisfy the Requirements and conform to the
Assigned Resources - the
resources that are actually provided - which are always less than those that
Don’t forget that Governance & Lobbying happens at each
level of the Transformation cascade and therefore each level has to conform to
(or lobby against) the guidance (Structural and Transformational) from the
The Perfect World
In the perfect world, the Assigned
Resources (what we are given) would always equal the Required Resources (what we need). But that never
The Real World
In the real world, the Assigned Resources
very rarely equal the Required Resources.
From the point of view of requirements, this is usually
managed as any requirements that will not be met are usually identified and
either resource is brought to bear to satisfy them, or they are “de-scoped”.
This is not where most of the problems that derail
Transformation efforts lie.
The problem comes from the Guidance or rather from the fact
that appropriate resources are not available to satisfy the Guidance. Even more
correctly one can say that the problems arising from this Non-Compliance is
largely hidden and therefore ignored. In fact many Enterprises take a very dim
view of exposing these problems. There may very well be valid business reasons
for this, but a lot of the time this restriction can be pretty arbitrary.
“There is never time to do it right, but always
time to do it over.”
“A short-cut is the longest distance between two
I have personally worked on countless projects that had drop
dead go live dates that, if missed, would mean the world would end - but in
reality it never did. I have also worked on countless projects where the money
required was not made available - again for some pretty arbitrary reasons - but
in reality those restrictions meant the project ended up spending far more. I
am sure you have too.
Restriction of resources tends to be the very simplistic
(and ultimately severely damaging) control mechanism that management uses in
relation to Enterprise Transformation, as well as the simplistic management
style of always asking for more for less. This leads people to produce inflated
estimates (assuming that they will be cut) and management not believing them
(assuming they will be inflated).
For most Enterprises that’s where it stops. People have to
muddle through somehow - put their nose to the grindstone - work as team -
forge ahead - think positive thoughts - don’t be negative, etc. Perhaps some
lip service is paid to this gap - some entry in a risk register that is never
used for anything - but that’s about it. There will be implications, but those
implications are not known and will only be discovered later when nothing can
be done about them and those that could have done something about them have
moved on to far more important things.
But, let us be clear.
Not providing what is asked for is not the problem.
Ignoring the implications is.
The Pragmatic World
In the Pragmatic world, things start off the same as in the real
world i.e. the Assigned Resources very rarely
equal the Required Resources. However, in the Pragmatic world we accept this inconvenient truth
and do something about it. We recognise that there are three things to expose
Cost of Compliance - What is
preventing the Enterprise from complying with the guidance and what is required
to allow the Enterprise to comply?
And, assuming what is required is not provided…
Cost of Non-Compliance - What
issues and risks going forward will this non-compliance create for the
Enterprise? (Transformation Debt™)
Cost of Remediation - What will
it cost the Enterprise to become compliant in the future.
This Transformation Debt™, is what it will cost to service
the debt and what it would cost to bring the work being done up to the same
standard as would have been produced if the Assigned Resources
had been provided. Notice that the Cost of
Remediation is bigger than the difference between the Required Resources, and the Assigned Resources. This is because it will always
cost more to do something one way and then change it to another than it would
have cost to just do it right the first time.
A Business Decision is then made to either provide what is
required to comply (Cost of Compliance) or to accept the implications of not
doing so (Cost of Non-Compliance + Cost of Remediation). If the Business
decision is made to not provide what is required to comply, this Transformation
Debt™ adds to overall Enterprise Debt™.
Enterprise Debt™ is a measure of the resources that would be
required to pay off the debt. But Enterprise Debt™, like financial debt, also
has to be serviced in the form of interest payments, for example increased
support costs. Like interest payments on a loan, this is a recurring cost and
will continue for as long as the Enterprise Debt™ it is servicing exists.
In addition, if the thing that was transformed now needs to
be transformed again, there will also be an increased cost to effect that
change. This change also requires resources and if the Assigned Resources for this change does not equal
the Required Resources for this change we are
introducing even more Enterprise Debt™ into the Enterprise - a double whammy!
This is akin to taking out another loan to pay the interest on a current loan!
However, it’s not all doom and gloom. If it is recognised
that we need to do some remedial work, (or more likely, things just get so bad
the Enterprise has no choice but to do some remedial work) this reduces Enterprise
Debt™ and is therefore akin to paying off (some) of the debt.
Recognising and managing Enterprise Debt™ provides a simple
and extremely effective control mechanism for management to get back in control
of their Transformation initiatives and for those working in them to produce
quality work (and to be able to sleep at night!)
Enterprise Debt™ is not an exercise in making sure that the Assigned Resources always equals the Required Resources.
Enterprise Debt™ makes sure that when the Assigned Resources does not equal the Required Resources (most of the time) that the
implications are exposed so that management can make informed business
decisions in the light of that information.