U.S. Army Corps of Engineers
San Francisco District
333 Market Street; Room 806A
San Francisco, CA 94105 1905


Date: Wed, 23 Dec 1998 12:08:07 -0800 (draft)


Mr. Robert C. Gordon
ROBERT.C.GORDON@HQ02.USACE.ARMY.MIL
Construction and Design Branch, CEMP-EC
U.S. Army Corps of Engineers
Military Programs
Engineering and Construction Division
20 Massachusettes Avenue, N.W.; Pulaski
Washington, DC 20314-1000
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Subject:   Draft MFR on Communication Metrics

Dear Mr. Gordon:

Thank you for the opportunity to comment on your draft MFR. In sum, the initial draft does not reflect our experience using Communication Metrics. Based on new evidence recently received that substantiates cost savings, I recommend consideration to revise the MFR as follows...

  1. Rather than say the Communication Metrics product is not recommended for Corps-wide use, instead recommend study and further pilot testing to evaluate the scope of services for Communication Metrics implemented with the SDS program, based on favorable results reported by the San Francisco District.
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  2. Rather than say there is no comprehensive analysis of cost savings, recommend instead setting out in the MFR that the District submitted analysis of cost savings dated October 7, 1997, and it shows potential for substantial savings that is supported by new evidence. The MFR can offer comment and guidance for further study and pilot testing to substantiate cost savings.
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As a past user of Communication Metrics, I can fully endorse it. About a month ago we received new evidence documenting cost savings dated October 28, 1998 of at least $190,000. This new information supplements our analysis of October 7, 1997 showing that actual and projected savings were much greater, all at a cost of only $50,000, and yielding an ROI of about 10:1 for the government. Savings come from using SDS to link daily events by connecting the dots in a logical manner so that people can see where things are headed in time to take action, and can retrieve the right information to make action effective, rather than rely on memory that is often incorrect.
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Accordingly, the proposed language in the MFR saying...

When questions were posed to Mr. Welch about cost of the software and the amount of training time needed, no firm answers were received. Mr. Welch offered to develop a four to six month test program which would answer those questions, for a cost of $100,000 to $200,000.
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After getting past the infomercial style of the marketing, the method may have value; however, it is currently not in a form that could be bought and, after a short training period, be useful to a manager. When asked about the logistics of purchase, training and use of Communication Metrics, Mr. Welch advised that the best way to answer those questions would be to have him develop a program with San Francisco District, which would take about four to six months, and cost between $100,000 and $200,000. That expenditure is certainly not warranted at this time.
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The figures you cite are for training and support to perform the scope of services for Communication Metrics on the Oakland Harbor project, and for the entire San Francisco District. We spend about $3M per year for project management, about $3M for operations, a similar amount for engineering and construction management. Other districts spend comparable amounts. We have proposed an increased expenditure of about $200K to support these existing activities, and to assist with defense against a $60M claim. Why, at a time of tight budgets, isn't it warranted to invest in improvement for saving money, based on documented cost savings for Communication Metrics? The factor that justifies investment is not the amount of outlay, but rather the return on investment (ROI). We reported ROI of 10:1. You can dispute the calculation by saying the data is thin. We agree that further testing is needed to expand the data. Recent new data showing additional savings of $190K supports revising the MFR to propose additional testing, rather than place the Corps in the position of being penny wise and pound foolish by refusing to test for additional savings.
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You make a good point that Welch has not set a price for the SDS software. Therefore, we should ask the IM people for software to implement requirements for Communication Metrics. What software are other Districts using for performing the CCA guide and FAR requirements to document the record that generates a return of 10:1?
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The MFR properly asks if savings from using Communication Metrics could have been realized by diligent project management in our District and by hiring more managers? The US Air Force Institute of Technology (USAFIT) studied this issue to explain chronic cost overruns on DOD procurement, and issued a paper which was later reviewed on July 7, 1997 in connection with researching your concern. USAFIT found that all management systems degrade to entropy over time. Peter Drucker explains the problem by observing that people have simply given up on trying to improve communication because the task is too complex; nobody can remember how to find relevant information when needed.
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To test your theory about diligence and hiring more people in place of using SDS for Communication Metrics, let me ask you a question. How many times have you gone to a negotiation or meeting where everyone is talking about a conversation, plan, report, contract, regulation, etc., which no one has brought to the meeting, because nobody has time to find anything? Endless arguments occur about who is remembering correctly, until people get frustrated, then get mad and give up. No decision is taken or the wrong decision is made based on who speaks last, shouts the loudest, or has the most authority. Even when there is consensus on what a contract or regulation says, or about work history that drives a decision, we later discover that the official view of reality is not supported by the record, when mistakes cause delay and extra cost from performing rework, as explained in our report to HQ dated October 7, 1997. My guess is this has happened to you more than once, not because people lack diligence, nor because there are not enough people, but because nobody has command of the record (see the explanation in POIMS) using all of the tools and systems we are provided and directed by the Corps to use. Communication Metrics fills this gap with a dedicated work role and tools that give people immediate access to original sources. So, the issue is not whether people are diligent, because that varies, but rather Communication Metrics aids leadership by strengthening diligence to avoid mistakes.
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I realize it is hard for people who have not had experience using Communication Metrics to appreciate advantages based on conversation and marketing explanations on the web, as you point out in the draft MFR. We had the same reaction as shown in the record on November 1, 1996. That is why we prepared a report to relate lessons learned from experience using Communication Metrics. What is important are results, and so we need more study and testing to get more results documenting cost savings independent of sales materials, as related in the recent report on October 27 stating with certainty Com Metrics saved an additional $190K. Added to the initial $320K we reported earlier, this $500K savings was produced with only a $45K investment, which supports our analysis showing ROI is 10:1. This kind of return justifies further investment for further study to realize greater savings.
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Improvement using new technology is always difficult at first, then becomes easier as people learn the system. An example is the recent COE-wide implementation of CEFMS and PROMIS. Both are major shifts in how we do business. Another example is Lotus Notes. More recently HQ mandated using Microsoft Office software to schedule meetings, prepare email, correspondence, reports, and MFRs, like the one you are preparing on SDS and Com Metrics. These changes cause a lot of disruption, and the Corps adjusts hoping to improve our work by creating more information. But, more information compounds the problem reported by USAFIT that people cannot find anything. SDS solves the problem by organizing information into a comprehensible story of daily intelligence for decision support. Links to objectives, requirements and commitments enable people to find relevant information on cause and effect (see lessons learned in our report dated March 3, 1997) in time to get things done correctly, on time and within budget. So, yes, SDS is a new way of working using Communication Metrics that prevent information overload from degrading our work to entropy, as reported by the USAFIT study.
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A lot of people, including contractors, object at first to the process of adding metrics to communication, because continual connections linking everything together into a spreadsheet for knowledge reduces wriggle room for deniability to avoid accountability. Even I was reluctant to use Communication Metrics in the beginning, until my boss gave me a direct order. However, people become acclimated to Communication Metrics because in a few months everybody sees that a timely, accurate record, with everything connected and lined up consistently, saves time and money, and it reduces stress from arguing about remembering differently, and from worry about what is in the record. What was most eye opening for me was when a contractor, who is suing us for millions of dollars, eventually came to recognize that Communication Metrics saves them money by avoiding mistakes. It is a win for everybody.
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The initial set up of SDS is very critical. Rod and I spent a lot of time together developing an organizing structure so that information can be linked and found quickly. This is probably the most critical part of the process. Capturing information from meetings, calls and documents, and lining things up with other sources so there is a feedback loop in our communications is the second thing that Rod did for me. Skill to prepare a simple, well organized story makes it faster for everyone to review and comment. This review and feedback from staff and contractors ensures accuracy and common understanding so everyone is on the same page.
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Adding Communication Metrics is a cost of business for saving time and money, like other tasks we are charged to perform that are paid in the budget for S&A or E&D, depending upon which phase a project is in. FAR and the CCA guide mandate specific work practices that are expected to save time and money. The scope of services for Communication Metrics explains new ways and means we found accomplish this objective. I recommend that the MFR propose further study to evaluate this opportunity.
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The bottom line is that the added value of Communications Metrics is like other methods we are required to use, even though savings are hard to quantify, like Project Management, C/SCSC, RMS, CEFMS and PROMIS. Similarly, orders came down to use Lotus Notes and Microsoft Office. But, there is no analysis to calculate cost savings for any of these methods, yet everyday we spend endless hours and dollars using them. Since recent documented savings for Communication Metrics supports the estimate submitted to HQ on October 7, 1997, further use is justified to determine the range of applicability for improving the Corp's business processes. More importantly, a lot of top people in the District reported in our initial report to the Contracting Officer that our experience shows Communication Metrics can only make us better by more reliable and less contentious communication.
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Sincerely,



Mr. Thompson F. Keesling, Architect
Assistant Chief
Construction Operations Division
tkeesling@spd.usace.army.mil>