About Christopher R Goldsbury

Delivery is about making it happen. Persistent, and tested through practical experience, I'm a creative problem solver that seeks to balance the cutting edge with practical application. I believe in getting to success, rather than calling it done. Follow my thinking and reach out for business opportunities at www.pragilematic.com.

Custom Built Software Is a Depreciating Asset

Custom built software.  It occurred to me this week that this ‘asset’ as it’s categorized by GAAP is a depreciating asset, much like a car or piece of capital equipment ( machinery ).

Does it derive value?  Yes….indirectly.  But ultimately it’s value is underutilized, and quickly de-valued.

Imperfect as it is…there is little alternative….FOR NOW.   So what’s the best strategy for investing in this ‘asset’?

Minimize it.  The less you put in.  The less you lose.

Find the cheapest way to accomplish your custom software needs and invest in that first.  Any other investment strategy invites disappointment, and reduced expectations in the future.  This strategy, however stark, also recognizes the truth…..big things start small and simple.

Prove it out with a minimal project and then decide whether additional value could be derived.

KTTW

Productivity can get lost in the haze of doing.  We often mistake the furious completion of many tasks in short order as an example of accomplishment.  Proudly, we mark it ‘done’ and then triumph in our ability to execute so well.

But productivity that counts means getting key things done effectively.  Always striving after the low hanging fruit yields many trees in need of further, incomplete harvest.

Agile rekindled the power of the time-boxed effort for teams.  Through an iteration we discover a game of sorts, an artificial finish line.  By the team committing to some set of work within that iteration there’s a bond of ownership and determination to complete.

While agile does this on a team level, the application is just as effective on a personal productivity level.  KTTW ( Key Things This Week ) is an example of this.

How does it work?

Friday Before You Leave Work:

Make a list of the key things you need to complete next week.  You define ‘key things’ by answering these questions:

  1. By completing this task this week will I move my project, team, company forward significantly?  Will it make a difference?
  2. If I don’t complete this task next week what’s the worst that would happen?
  3. Will completing this task move me closer to success?

Key things should answer yes to question number 1.  Each key thing should move your project, your life, or your company forward in some significant way.  I’m not suggesting you should complete a 6 month project in a week, but the question focuses you on what will make a difference versus what’s just keeping you floating along.

Question two validates in the opposite way.  If you never actually complete this task…what would happen?  Would you be let go?  If so…better do it.  If it’s low value work that can get done later…then save it for when you’ve completed the key things for the week.  Then you can knock out a handful of these low hanging fruit, and you won’t feel like you’re avoiding the 1000 pound white shark  in the room.

In the last question you define success.  Notice, I’m not asking if it gets you closer to done.  Who cares if you’re done. Lots of people get ‘done’, but how successful is their completion?  What matters is success.  Here’s where being effective comes in to play.  It’s not about just being efficient, it’s about getting the right things done to achieve success.  Your answer to this question should be ‘yes’ if it’s a key thing.

When you start up work on Monday…. break out your list and start tackling your KTTWs.  Your commitment should be to getting this list done by Friday irrespective of your other work.   Commit to this no matter what. What order?  Doesn’t matter. How much time should you devote to each key thing? You decide. Should I use a tool to track them? If you want.

KTTW is a light, time-boxed personal productivity tool.  I’ve used it effectively for many years, and can attest to it’s power in consistently focusing my mind, and effort to what truly needs to be completed to achieve success while at the same time weeding out the nonsense which clutters my day.

 

Getting to Success Instead of Getting to Done

Projects are about getting things done…right?

Uh-Uh.

They’re unique, collaborative, human efforts endeavored to achieve success.  Success is can be defined with certain goals.  Success has a point, a place we reach and can say “Ah-ha!….we did it!”.   There’s a finish line.  Done, on the other hand, is never done.  Excuse the pun.  And the rhyme.

Done is an endless backlog.

Done is a never ending series of requests.

Done is code that’s never perfect.

Done is test cases that still need to be refined.

The fog of “Done” can envelop the project and the minds of our teams.  It obscures the truth.  We’re not looking to get everything “done”.  We’re looking to succeed.  Within success there is room for variation on “done”.

Go After Your Dream…

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Virtual Currencies – Where Next?

Introduction

There’s a rush and excitement around virtual currencies.  Much of it is being driven by social media giants, and the expected virtualization of everyone’s wallet that NFC will soon bring.  But which virtual currencies have the greatest potential and do these pose any threat to the fiat currency regimes of the physical world?  This article looks at these topics in more detail.

Growth

“Measured in real-world U.S. dollars, virtual transactions total $2.1 billion a year in the U.S. and $7.3 billion globally, according to Sometrics’ founder and chief executive, Ian Swanson. That is up 61% since 2008.” ~from Bank Technology News.

Many companies, not just start-ups, are getting into the virtual currency market.  Facebook, Visa, American Express and even the big banks see the possibilities of owning, controlling and growing private digital currencies.         But what’s fueling this rise?  What is everyone getting so hopped up about?

Arbitrage –  The most obvious eye popping opportunity is exemplified by the rise and fall of BitCoin.  The graphic below comes from Wired Magazine, and shows the phenomenal investment opportunity you had for in 2010.

Tax Shelters –  Corporations, the rich, pension funds, hedge funds, and others with too much money are always looking for some way to hide their capital gains from the taxman.  What better way than to invest in digital assets using a virtual digital currency?  Talk about off the books.  But wait…. is that legal?  Well it’s not regulated, at the moment, but governments around the world are aware of this phenomenon and many are watching it closely.

Deflation/Inflation Hedge –  Particularly pertinent today, the potential for fiat currency de-valuation or appreciation in the face of mounting debts and uncontrolled deficit spending has given everyone with significant wealth an interest in finding a liquid, hedge to the big 3 ( dollar, yen, euro ).  Gold has been the traditional favorite in this spot, but with gold prices soaring and the threat of a bubble looming….the need for alternatives is strong.

Power – Less obvious on the radar is the sheer power that comes from managing an entire economy’s money supply.  A currency in isolation isn’t much.  The dollar without the U.S. economy is little more than paper.  What people find valuable in the dollar is the ability to buy goods and services from the single largest economy on earth.  For that reason the dollar provides a very stable store of value and means of exchange.  Similarly if a private virtual currency were to achieve such economies of scale…..say….dominating the global internet commerce business, then one could imagine the influence available.  Even large physical economies like the EU and Japan ( and their respective central banks ) would need to listen to the issuer of such a currency.

Who Will Lead?

So there are three types of virtual currency players in the market today:

The Wildcats  – These are the Ven and Bitcoin makers ( among others ).  They’ve built their virtual currencies and are asking people to adopt it.  It’s a hard road, with little incentive to convert your hard earned dollars, euros, or yen outside of arbitrage….it seems unlikely they’ll gain wide adoption.

The Closed Social Media Economies – With a captured market that has goods only purchasable using their currencies, these companies have modeled the very structure and incentives that make our modern physical economies today.  The challenge is extending this concept outside of Facebook ( or whoever ) to other sites.  But, the base is there.

The Banks – Ah….the banks.  Long ago, private currencies were common place in Scotland and the Wild West of America.  But when a bank went belly up…so did its currency….leaving all its depositors and paper holders staring down an empty well.  Banks have a ready made market in their dealings with the wealthy, corporations, hedge funds, pension funds, etc.

The Transaction Grabbers – This is PayPal, Google, and maybe Isis. They’re seeking a sliver of the transaction fee market from their mobile payment platforms.  But there’s no reason these players couldn’t introduce a virtual currency of their own.

So which group has the highest potential?  My money would be in Google Dollars and Goldman Sachs Coins.  This isn’t to say innovative new players won’t spring up, but the transaction grabbers and the banks already have the real audience needed to leverage a virtual currency and the financial wherewithal to make it a reality.  Clout is important here.

Challenge to Fiat Currency

Private digital currencies at the moment pose no threat to the world’s central banks.  But innovation has a way of challenging commonly held assumptions….especially ones as stodgy and long standing as government issued currency.  The internet has flattened the economic landscape and opened opportunities for global domination.  The digital, internet economy is owned by no country, no government.  There are no regulations guiding which currency an e-commerce site should use.  There’s nothing to stop someone from trying to capture this global digital economy and manage its money supply.  Therein lies the opportunity for those quick enough, connected enough and risk-averse enough to realize it.

Summary

Virtual currencies are still evolving, but growing fast.  Watch for the Transaction Grabbers and Banks to start making big moves in this space as near field communication and e-wallets become ubiquitous. Historically wildcat banking thrived in the lawless west….today it is thriving in the unregulated digital frontier.

The Root Cause of Water-Scrum-Fall

Introduction

Water-Scrum-Fall is the norm in many organizations today.  Despite the attempts of scrum coaches and consultants, the weeds of waterfall grow back into the agile garden.  What causes this?  This article looks at the root cause for the water-scrum-fall phenomenon and makes a suggestion about how to address it.

The Root Cause

Water-scrum-fall’s reality is not the result of people being unwilling to adopt scrum.  It’s not the result of a lack of passion for agile processes and practices.  Nor is it caused by a lack of executive support.  The cause?

Capital budgeting

In companies that produce software for internal use water-scrum-fall finds it’s greatest adoption.  Internally used software is strictly accounted for by the regulations in SOP98-1 and this financial machinery is what guides the need to plan up front.

Capital projects are investments.  To determine an investment’s return you need to know the estimated initial cost, and estimated revenue ( or savings ) the project will create.  These things are estimated up front so that a decision can be made on whether or not to pursue the investment.  The up-front nature of capital budgeting compliments waterfall and BDUF. It is a core financial business process guided and regulated by FASB.  Think about that for a moment…and then read on.

Scrum practitioners run up against a wall with capital budgeting.  It doesn’t fit their operational practice for developing software.  Under scrum….we shouldn’t be designing, estimating and crafting the project up front.  Instead we should approach it incrementally.  The problem with this? It ignores how enterprise software development projects ( capital investments  ) are funded.  The result is that everyone compromises and innovates.  Water-Scrum-Fall is the child of this compromise.

The Challenge

Scrum and other agile practices pose a challenge to enterprise software development efforts and the capital budgeting process.  Indirectly they say “Why are we funding this as a capital investment?  It’s not.  It’s an ongoing operational cost and should be accounted for that way.  If we don’t plan on funding this software development effort for the long haul…then why are we doing it?”  Funding a software development effort as an operational expense, as is done within software companies, does fit the scrum operational practice better.  But again…the difference between a software development effort being labeled CAPEX or OPEX is guided by FASB.  It’s not up to the company.

How Do We Fix Water-Scrum-Fall?

I don’t think there’s a silver bullet here.  But in my last article, Is There a Better Way to Estimate Capital Projects? , I threw out a suggestion for how to estimate a capital investment using tolerances.  This bypasses the need for an up-front detailed analysis of what the the LOE ( Level of Effort ) would be for the project, but still gets the business what it needs: an initial funding point and resulting NPV that augments decision making.

Summary

So water-scrum-fall is a pragmatic reaction by agilists and IT professionals to work with the business and its financial processes.  Did the originators of scrum not understand the capital budgeting process?  Were they oblivious to the financial architecture of the businesses around them?  Maybe…but to their credit; they weren’t trying to address this.  Their focus was on how to do software in an adaptive fashion so that it more organically addressed the operational realities of manifesting a complex vision.

Stoos – Some Thoughts

Much of what has been written about Stoos is nebulous.  For those of us looking to latch onto something concrete….we’re left befuddled.  Rather than a deliberate bullet list of actions; the Stoos group posted a wishy-washy communiqué that seems more like a summary of their meeting and a regurgitation of their personal feelings and war stories.

So what’s the point?  Is there one?

References to the agile manifesto abound with Stoos.  And like the agile group….they were meaningfully vague.  In this lap dance of ideas it appears their point was just to get us all thinking again about how organizations work.   Fair enough.  Things start with questions and wonder-ings.  Nothing wrong with that.

Perhaps the only shrivel of ideological meat that provided some sustenance for us definitive types was this from Jurgen Appelo:

For me the most concrete outcome is the core idea of seeing organizations as “learning networks of diverse individuals creating value”

This gets the wheels rolling a bit.  Maybe he’s onto something here.  Perhaps, with social media, mobility, and agile thinking its time for a new type of organization.  A virtual one where human ingenuity is rewarded handsomely  and it’s not about doing a job….but seeking, driving and growing value and profiting from it.  Meaningfully.

Those of us who work on the virtual cube-o-sphere today know that it’s not about showing up 9-5 and pleasing a boss.  If you’re a freelancer, 1099, contractor, inventor or entrepreneur you know it’s about finding your passion, networking and growing your value/brand.  Traditional organizations define what you should do for a salary.  Perhaps in the new Stoosian organization you define what you’ll do and share in the value it creates for the organization.  We dump stability for growth and a life’s mission.