Wednesday, August 23, 2017

APQC Acquire, Construct and Manage ASSETS and Mega Project Management Meetup Summary

The business group met at its usual place and had a good turnout. The topic was Acquire, Construct and Manage Assets and I wanted us to explore 'mega projects'.  It was summertime and I hadn't promoted the event much but we had some old faces show up and some new blood as well.  In the house for the first time was Sri, a friend of Richard Webb's, and an incredibly sharp and talented management consultant.  Our topic for the evening was 'Mega Project Management Techniques' and it was within the context of APQC PCF's Acquire, Construct and Manage Assets category.  For fun, Richard and I sat on opposing ends of the large table so we could battle.

We had a $150 + tip minimum we had to meet so attendees were encouraged to eat and drink to their heart's content.  I enjoyed two IPAs and even sprung for the Filet Mignon (medium rare, of course), which was served with broccolini and I got fries and there was a slight truffle flavor happening somewhere on the plate, which was good.  Overall the meal was quite good, although the filet did not compare to the quality available at Jak's.

And so our discussion of ASSETS began and Richard, as is somewhat typical, took the lead and shared what he knew and thought about the topic.  Also in attendance were yours truly (Eric Veal), Bruce Follansbee, Thomas Mercer, James Murray (thanks for showing up, James!), Alan Andersen, Steve Kubacki.  Richard's friend Sri arrived toward the end as we were closing up shop.

Thomas offered that assets were rent producing.  We were working on a definition of asset that we could all get behind and I was also preparing for the recording in early September of the AppsJack Capable Communities Podcast on the Asset Management topic.  We wondered if assets were investments and thought they may need to have a positive ROI.  I suggested that assets created passive income.

We discussed the modes of acquiring assets: with cash, by making them, and by financing them through other means.  Richard talked about two main classes of assets: Cost of Doing Business Assets (like printers, for example) and Intellectual Property assets.  We wanted to keep drilling down on the definition of assets and more fully understand their properties and methods. So we did: we wondered if assets had a property of technical debt and we spent quite a bit of time considering if technical debt was an essential property of an asset (since assets, like anything, are probably not perfect).

The conversation shifted from technical debt (bad design and things requiring rework, really anything imperfect) to the role of the architect as the key person who creates and hands over assets.  Richard, who has been an IT architect for years had many things to say about the topic.  Richard shared some stories with us including a multi-million dollar project where he and the team dropped off a very large stack of documents off to the client about how to make a data center.  He described the pile of paper being feet-tall and the 'thud factor' of dropping off all that intellectual property to the client.  Richard pointed out another distinction in that 'only humans create IP'.  He described assets as an object with a unique ID, that they are "sellable" and containerized.  Assets have clear scope and their boundaries (what they are and are not) are well defined.  Richard wondered if there could be an Operating Expense asset and we discussed the new billing models with the cloud where people are renting services.  We also spoke about the cloud as a utility and some issues relating to the regulation of the cloud providers by providing some sort of efficiency index.

Examples of Goldman Sachs' position in the market came up for the second time in as many weeks.  On the last podcast episode, guest Mark Mueller-Eberstein made some guesses about how Goldman could enter into the crypto-currency space. Studying more about Goldman could be a good thing as for innovation.

James pointed out that business brokers use the formula EBITDA x Risk to get the business value.  So risk (in our case technical debt, for example) is a fundamental aspect of reducing the value of a firm.  Getting to a reasonable risk quotient is a trick.

We debated issues of "boutique services" and wondered how one-to-one services like Alexa and Google Home would be regulated in the future.  Richard shared about three key properties of modern software services, a subclass of asset: UX, Adoption, and Consumption.  The consumption part is what is metered in modern systems such as Microsoft Azure and Amazon Web Services (AWS).

Bruce cited the book Fumbling the Future about Xerox's fall from its central role in office automation.  The group also had a long and detailed conversation about practices at Boeing.  Someone in the group stated that, "Boeing doesn't make ariplanes, it moves money."

Join us soon for podcasts on the Managing Assets topic and join us at the meetup in September when we will discuss Risk, Compliance, Remediation and Resiliency.