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
..
Subject:
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Draft MFR on Communication Metrics
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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...
- 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.
..
- 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.
..
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.
..
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.
..
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.
..
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.
..
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?
..
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.
..
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.
..
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.
..
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.
..
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.
..
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.
..
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.
..
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.
..
Sincerely,
Mr. Thompson F. Keesling, Architect
Assistant Chief
Construction Operations Division
tkeesling@spd.usace.army.mil>