Dick Stark's Blog

At BMC yesterday, you could hear the celebrations and picture the fist pumping and high fives a long way away.  For BMC accomplished something that no one had else ever done: They reached the pinnacle of IT’s holiest of holy places, the upper right corner of the Gartner Magic Quadrant.  And when they looked around, they found their closest competitors, CA, HP, and ServiceNow, lagging behind in the challenger’s quadrant.

Does BMC deserve this higher ranking or has the competition become worse?  And what does this mean for RightStar and other BMC service providers?

The specific quadrant under discussion is the Magic Quadrant for the IT Service Desk. It focuses on “enterprise-class vendors that address the needs of enterprise customers seeking functionality for incident, problem, change, knowledge, self-service and service-level agreement (SLA) management.”  It does not focus on BMC’s Service Assurance and Service Automation product families.  Nor is this about BMC Service Desk Express. The product line of focus is Remedy ITSM, which has been the market leader in this space for years. 

What makes Remedy so great is that it has evolved from the ground up to an integrated tool set of integrated ITIL modules. (This is in contrast to CA and HP which bought disparate modules and cobbled everything together as a single offering.  The recently released Remedy-on-Demand product line also looks very strong. We kick off our first Remedy on Demand (RoD) job on Monday, but anticipate just the usual glitches and gottchas common to any enterprise software implementation. Expect RoD to give ServiceNow a good fight especially as the product gains install base and user acceptance.  Interestingly, there is still plenty of hope for Remedy on-premise solutions. The Gartner article pointed out that organizations looking to save money using an on-demand solution may actually end up spending more as long as the ITSM solution is in place for more than three years.  Gartner also said to prepare for large increases as on-demand pricing has artificially low pricing to spur demand

While BMC currently sits atop the pyramid, in reality they really aren’t that far ahead of their closest competitors.  But look for more good things to come from BMC as the ITSM market matures.

As a result of the economic slowdown, many firms are very carefully watching how they spend every dollar.  This means that there is more scrutiny than ever by our prospects regarding our consulting and implementation proposals.  In fact, in an effort to cut project costs, our proposed project management time (or a significant amount of time) often ends up on the cutting room floor.  Why? The usual excuse is that project management “just doesn’t matter,” or “doesn’t matter that much.”  Does project management matter?  And how much project management is necessary for project success?

Last Sunday, the Washington Post reported on a recent Stanford University paper, Does Management Matter? Lessons from India. In this study, large textile manufacturing plants were given free best practice management consulting and compared with a control group. According to this study, project management does matter.  The consultants increased the average plant’s productivity by about 15% and profitability by 24% per year. I strongly believe that this studytranslates directly to project management, and when properly applied, is a necessary and critical component of any project, no matter what size.  

As a Project Management Professional (PMP), I’m obviously very passionate about properly applied project management and careful adherence to Project Management best practices or PMBOK. Published by the Project Management Institute as the Project Management Body of Knowledge (PMBOK), it lays out project phases, processes, and knowledge areas. At RightStar, we apply these best practices to ensure that projects are completed in the allocated time. Of course, we could do everything right and still end up with an unhappy customer. We still need to demonstrate though leadership throughout the project.

How much project management time is necessary?  At RightStar we will plan for 10% of the total hours for small one to two week projects and up to 20% for larger projects. For a small project, the PM should set project objectives, build the project plan, assist with the kick-off meeting (remotely), follow up with the consultant daily and communicate with the customer at defined intervals, at least mid-week, end-of-week, and at project acceptance time.  The PM should also be available for any troubleshooting.

For larger projects of more than two weeks in duration, the PM should participate in person at the kick-off meeting and communicate at least daily with the project team and customer.  The PM should also track the earned value project status.  Earned value measures project status in an objective fashion.  It is much more than saying, “we have used 90% of the project dollars, therefore we must be 90% complete.”

As an IT consultancy, RightStar is dependent on consulting and implementation service revenue. Careful attention to project management best practices is a critical success factor and we need to push hard to ensure that project management time stays in the project.

I attended the annual Inc 5000 conference October 1 at National Harbor, outside of Washington, D.C. It presented several business seminars and networking opportunities and for the nation’s fastest growing private companies and entrepreneurs. RightStar has made the list for three years in a row, which is an accomplishment to be proud of. There were a number of interesting sessions, but in my opinion the most intriguing of the conference was a debate over people vs. profits.

On one side was George Cloutier, who wrote Profits Aren’t Everything. They’re the Only Thing. Cloutier is a small business guru and regular commentator on national television. His book has a very simple premise: profits are all that matters. To a large extent he’s right—RightStar’s valuation as a company is primarily based on a multiple of earnings. That is, the higher the profit, the higher the valuation. Profit is required for us to grow and expand. Cash is strongly linked to profit and is critical, since it allows us to make payroll and pay our vendors.

Despite record revenues, RightStar is just slightly profitable so far this year. That’s because RightStar is investing in three areas that I think will be very important to our future: Service Assurance, Process Consulting and Training, and ITBM.

The other viewpoint was presented by Paul Spiegelman, author of Why is Everyone Smiling? Spiegelman is CEO of Beryl, a call center organization. He strongly believes in a corporate culture that promotes employee loyalty and satisfaction. Beryl treats its employees well and, as a result, has a happy workforce that in turn treats customers well. Spiegelman argues that this leads to improved customer satisfaction, repeat business, and greater profitability. It’s hard to underestimate the importance of intimate relationships with customers and suppliers, based on personal contact and mutual commitment to delivering on promises.

So who’s right? I think they both are. At RightStar we’re in business for the long haul so we have to focus on our people. At the same time, we need to invest and grow, so RightStar must be profitable. As of last month we have reorganized by department. Each department will track profit and loss and be measured on department profitability as well as overall company success.