opsschool-curriculum/soft_skills_201.rst

Soft Skills 201
***************

Soft skills at the 201 level attempt to inject higher level business
awareness and practices into an otherwise sound technical operations
person to create a senior operations engineer.

Soft skills at the 201 level include positioning, budgeting and the
financial process, using metrics effectively, demonstrating impact,
risk management, managing customer preference, and thinking
strategically.

Business Acumen in Operations
=============================

What is business acumen? Business acumen as a leadership competency simply
defined as a general understanding of business principles that leads to an
organization's success. While operations professionals do not need to be senior
executives, development of business acumen as applied to operations can help to
bridge the gap between the organization's senior leadership and the operations
team. Business acumen as applied to operations works on multiple levels. In
many organizations, operations is a service unit within the larger organization
but it also serves the needs of the organization as a whole. The savvy
operations person will look at operations within that context, applying the
following skills to appropriately position operations and act with the best
interests of the greater organization in mind. This also helps when trying to
make the organization DevOps friendly.

Distilling the definition of business acumen for operations yields the
following important skillsets:

* Understand the role of operations within the context of the organization to
  correctly position operations.
* Think broadly about decisions and act decisively.
* Support and promote change as needed.
* Develop basic business skills that allow operations to communicate within the
  executive suite.

Understanding the role of operations
====================================

Under any of the operations professions, the most fundamental role
of the operations person is to deliver services to a set of customers.
To build upon this further, the operations person maintains existing IT
infrastructures, translates customer requirements into tangible and
actionable solutions, assists in the protection of customer information
and services, and advises stakeholders on application of technology
under existing limitations of time, money, or capabilities.

By thinking of operations as a business unit instead of a forgotten
office within the organization, the operations engineer is already
thinking at the correct level to assess how to support the needs
of the organization.

Understand how the organization competes within its industry.
Commercial entities, non-profits, educational institutions, government
agencies all measure success in some way. For commerce, it will be sales
and profit. For educational institutions, it might be numbers of
incoming students and retention rate of students. For a non-profit it
might be the number of people willing to give to support the work of the
organization and the number of people who use its services.

All of this leads to correct positioning of operations within the
organization.

* What are the core competencies of operations and how do they serve the
  internal business units and the organization as a whole?

* What core competencies should operations develop in order to better support
  the organization's mission?

Maintaining Existing IT Infrastructures
---------------------------------------

The most visible role of Operations is to maintain the status quo.
For the system administrator this means maintaining servers and
processes such as logging, monitoring, backups, authentication, or
naming services. For the network administrator it means maintaining
routers, switches, the edge network, gateways, or the relationship
with the corporate Internet Service Provider (ISP). A security
engineer might be responsible for maintaining a vulnerability
scanning capability, incident response policy and processes, intrusion
detection systems, firewalls, and a customer security awareness
training program. Operations may also be responsible for maintaining
access to internal services (e.g. financial systems, corporate content
management systems, procurement systems, etc.) that may impact the
various business units within the organization. These roles are
distinct but there is sometimes overlap between them in smaller
organizations where fewer people serve in multiple roles.

Translating Customer Requirements
---------------------------------

Operations roles are customer service positions. These careers
require a level of customer interaction because the services delivered
by the Operations professional must be driven by customer needs.
In this case, customer is used to mean the business, organization,
or other entity that is employing the Operations professional. Some
questions to ask to help the Operations person understand requirements
from the customer perspective:

* What is the core mission of this organization?
* How does Operations support, hinder, or allow the organization to innovate
  for the mission?
* Who are the core customers (internal, external, or both)?
* What does the organization need from the Operations professionals?
* Why should this organization come to these Operations people for this service
  or solution? What is the value proposition for Operations within this
  organization?
* How could Operations provide more value: higher level of competitiveness,
  faster service delivery, stronger security, or other benefit that aligns with
  the mission?

Translating customer requirements is key to focusing the efforts
of Operations. Operations work can be a slippery slope where the
professionals are spreading themselves too thin on projects and
deliverables that do not serve the organization's mission. One way
to focus the efforts of Operations is to answer these questions and
to ensure that the Operations organization, whether insourced or
outsourced, is delivering services that provide the most value.

Protection of Information and Services
--------------------------------------

Often the Operations professionals in an organization are the people who most
completely understand the technical risk to organizational assets from an IT
perspective. Senior management within an organization will usually understand
risks related to financials, competition, manufacturing, etc. but they often do
not understand IT enough to make an informed decision. Operations professionals
are the ones with the deep technical expertise required to comprehend risks,
threats, vulnerabilities, and countermeasures. They use this expertise to
express their concerns in a way suitable for senior management. This is another
area where the Operations professional is communicating with the organization's
leaders to advise on appropriate actions to address IT security where it makes
sense for the organization.

Areas where organizations need the Operations professional
to advise on IT security could include threats to data from internal
and external sources, hardware failure, site availability or
resilience, data preservation, and information integrity. Again,
these areas are dependent on the organization's mission.

For example: an ecommerce organization will most likely want strong site
availability and protection of customer personal information. The operations
professionals might build a site with high resilience and availability
including use of Content Delivery Networks (CDNs); strong encryption (not only
for the ecommerce session but also data at rest); role-based access for
internal employees accessing customer information, to reduce access to only
those people who need it. Organizational leaders often do not understand how
these solutions are implemented so it is up to the Operations professional to
communicate the threat, solution, cost, impact to the organization of
implementing the solution.

Advising within Current Limitations
-----------------------------------

The Operations professional who advises an organization must also consider
limitations that impact the potential solution. Cost, timing, expertise within
the organization, available time of the people who would implement the
solution, or IT security issues may be considerations. For example, decision
makers within the organization will need to know what is possible and at what
cost so they can decide how to spend the organization's money. Good, fast, or
cheap (pick two). It may be the operations professional's responsibility to
explain this concept from an IT perspective.

Thinking broadly
================

Broad thinkers can look at a problem from the viewpoint of other
people and business units within the organization. Instead of insular
thinking, they approach problems with a broad-minded perspective.
How do decisions impact other areas of the organization and,
alternatively, how does the organization view this particular issue?
Those with strong acuity for business will see the big picture and
be able to understand the implications of a decision on more than
just operations.

In some cases it may not be a problem, but an opportunity that injects
potential life into an organization or recalibrates it. Business
leaders, stakeholders and customers often don't understand what
technology can do for them. Operations should understand the
organization well enough to see where technology can support
innovation. This leads into change as a constant.

What would it take to make this happen? What are the missing ingredients
for success?

Promoting Change
================

The operations world changes rapidly, more rapidly than other sectors.
Operations people cannot afford to cling to a specific operating
environment, hardware platform, or technical solution because the
industry has already started moving toward the next innovation.

Once operations understands how the organization competes to stay viable
in its marketplace, operations can leverage technology to support those
needs. Operations may be the first business unit to grasp the
importance of a technology innovation that would improve the mission
work of the business.

Identifying that change is only the first step. Next operations
must be able to demonstrate the benefit of the innovation to the
organization's leaders in a meaningful way to promote change.

Building basic business skills
==============================

Basic business skills include simple tasks such as learning to use Excel
to build a basic budget and navigating internal business systems
such as procurement, capital expenditures (CapEx) and contracts. Some
skills are the same everywhere (e.g. Excel) and some require study of
the internal organization (e.g. procurement). Understanding CapEx
means being able to understand what is or isn't a capital expenditure
(e.g. some hardware purchases may be) within your organization and
knowledge of your organization's depreciation process.

Budgeting and Financial Skills
------------------------------

A basic knowledge of Excel includes formulas, formatting for
readability, using multiple worksheets and importing external data.
More advanced Excel knowledge includes use of macros, pivot tables and
pivot charts.

Some operations folks use other Excel-like programs such as OpenOffice
or LibreOffice spreadsheet programs. Use caution when using something
that the senior leaders do not use. If the whole organization has
adopted LibreOffice as the standard spreadsheet application, that works.
The problem occurs when the boss wants to share the spreadsheet with
some of the organization's senior leaders and the file format doesn't
translate exactly or the file is unreadable to them. In this case,
try to bridge the gap between operations and the executive suite by
using the same tools. Formats do not always translate between two
different spreadsheet programs.

Building a basic budget requires institutional knowledge. How is
employee labor computed? Understand operations' income and where
it comes from. Are any employees billable to other projects? Is
there a flat budgetary structure with a single cost center for all
labor or are there multiple cost centers. Is there any income that
has special restrictions? How are purchases handled: things such
as parts, services, software, contractor services? Does operations
have to account for overages or money not spent at the end of the
fiscal year?

Generally, organizations have financial people who can provide reports
for various cost centers. If operations fits neatly within one or more
cost centers, these reports can help build a budget. If
operations is combined with other projects or business units, then the
work of separating operation's budget becomes a bit more complex.
Starting with these reports is a good first step.

To really understand how these reports work, understand how
operations is paid and how it spends within the organization.

How is operations funded?
^^^^^^^^^^^^^^^^^^^^^^^^^

Where does operation's base funding originate?

* Is Operations billable or do they have constant funding from year-to-year?
* Does someone need to request this money or is it always there?
* How are pay increases funded?
* Is there only one source of money or are there multiple income streams?

Does everything come out of one cost center or are there multiple cost centers?

* If multiple, are they broken down by project, type of expenditure (labor,
  contractors, services, supplies)?

Is any of the money special?

* Does it expire?
* Does it come with strings/hooks to specific projects or billables?

How does operations spend?
^^^^^^^^^^^^^^^^^^^^^^^^^^

* How are employee salaries computed to include benefits and overhead?
* How are contractors paid?
* Are there special rules for obligations? In some organizations, some kinds of
  money must be allocated up front and cannot be reclaimed even if not spent
  until after the contract or service has completed or the fiscal year has ended.
* How do operational purchases work within the organization (parts, services,
  software, training, travel, supplies)? Who pays for these purchases? Who tracks
  these expenses?
* Does the organization have a CapEx process and where does that money
  originate? Does depreciation impact the budget?
* Are there any hidden costs?

  * Service fees from internal organizations?

Answering these questions and looking at reports from within should
provide most of the answers. Operations may have to implement
tracking to get some answers if they aren't easily identified in
the reports.

Why would any sane operations person want to go through all of this to
assemble a budget?

* Operations is understaffed and wants to ask senior management to hire more
  people
* There has been staff turnover and operations needs to fill those positions.
  How much is available and what opportunities exist to do something different?
* Senior management is asking hard questions about the operations budget (e.g.
  why do we spend so much on operations, where does the money go?).
* Operations is considering a student hire or contractor to help with some
  short-term work but operations cannot move forward until demonstrating that
  they are spending wisely.

Budgeting for impact
^^^^^^^^^^^^^^^^^^^^

Just putting numbers in a spreadsheet isn't budgeting. What do the
numbers show? Is operations spending too much on senior people?
Equipment? Vendor maintenance? Where is the majority of
spending (commonly it is labor)? An easy to present budget can
also help to understand if operations is well managed.

Take that same view of the budget that gave visibility into
operations and use it to support a request or a claim to senior
management.

As an example: consider a senior person leaving the organization.
Operations needs to fill that slot with a new person to avoid getting
overwhelmed.

* Does this vacant position present an opportunity?
* Does operations need to hire someone with specialized experience in a new
  area?
* Could operations benefit from hiring two junior level people using the same
  salary slot as the former senior person? Does that work mathematically within
  the organization's hiring rules?
* Could operatoins reduce the overall cost of operations to help the
  organization by hiring one junior person and growing that person?
* Could operations hire a junior person and use the remaining money to refresh
  hardware or invest in a new technology to help the organization?

See how to make some of these arguments mathematically in a
spreadsheet. The part that is missing is the "why" and that's where
the impact comes in. Senior management may believe that operations
needs to reduce overall costs. This is when operations needs non-numerical
supporting evidence to persuade management that operations does
need to hire a specialist or make the case for an apprentice that
would achieve a cost savings but would reduce capabilities until
the person came up to speed within the operations team. Budget
decisions have consequences: make sure those impacts are clearly
illustrated within the numbers but also be prepared to explain the
non-monetary impacts. This includes risks to the organization such
as reduction in capabilities.

When preparing for a big budget presentation where operations is asking for a
decision that will impact operations, consider the following supporting
strategies:

* Enlist customer support. Customers are asking for improved capabilities,
  better response, new technology. How can they provide input to management that
  operations needs more or different resources to serve them better?

* Find out if there are any new initiatives within the organization that would
  rely on specific expertise or additional operations resources. This
  demonstrates a tangible need (e.g. Project X will require 50% of someone from
  operations to implement their technical plan).

Using these additional supports requires knowing the organization and
having a good relationship with the customers. Ideally, customers come
to operations in the planning stages of new projects in order to get
feedback on potential technology issues before they begin work. That
makes this step a bit easier. If not, then begin reconnaissance by
talking to project leaders or middle management within the organization.

When researching organizational needs, start with some basic questions:

* Planning anything new in the next year?
* What projects is the group starting?
* What technologies are not in use that would make the unit more productive?
* Does operations provide the right level of support to the division?

**Exercise:**

Choose a budget scenario from above or make up your own.

* How would you build a basic budget to persuade senior management on your issue?
* What would be important to highlight?
* What non-monetary supporting information would help your cause?

The cost-benefit analysis
-------------------------
The cost-benefit analysis, or CBA, provides senior management with
concise proof that operations has done its homework when proposing a
solution.

The first step in the CBA process is to know the audience. The
higher up the organizational chain, the less detail required. Before
presenting a CBA to management, prove that the solution is the best
one.

Before detailing the cost of a solution, operations needs to know existing
expenditures without it. What is the cost of not doing anything? This is where
the benefits of performing a solution would need to outweigh the status quo.

Building a case
^^^^^^^^^^^^^^^

Everything in a CBA should be represented in the same units, the most
common being money. Consider benefits to the solution in terms of savings,
efficiency, increased income to the organization.

Cost should include anything that explicitly adds to the total cost of
the solution:

* Employee labor
* Contractor costs
* Maintenance fees
* Up-front costs and licensing
* Hardware
* Depreciation
* Facilities costs (outfitting a space)
* Provisioning or migration costs
* Networking

Benefits should include anything that is an outcome of the solution:

* Increased productivity
* Increased organization efficiency
* Increased income to the organization
* Increased capabilities that enhance the organization in another way

Putting it all together
^^^^^^^^^^^^^^^^^^^^^^^

.. TODO:: Might give an example here. Need to write more explaining how to assemble the pieces.

**Exercise**

Put together a CBA for a recent project or task you worked on or
encountered:

* How would you estimate costs that are not known?
* How do you monetize benefits that are not explicitly monetary?
* What does the result tell you?
* How could you sell this idea to non-technical people using the CBA?


Navigating the capital expenditure process
------------------------------------------

The Capital expenditure (CapEx) process is used by organizations to
purchase assets that have value across multiple tax years. In operations
CapEx usually means new equipment or equipment that extends the useful
life of existing equipment beyond the existing tax year.

CapEx allows an organization to depreciate an asset over the estimated useful
lifespan of that asset. How is this valuable? On the organization's balance
sheet, only part of the total expense is counted for a specific tax year. The
amount of the expense depends on the type of depreciation used.

Straight Line Depreciation
^^^^^^^^^^^^^^^^^^^^^^^^^^

With straight line depreciation, assets are depreciated at an equal
amount each year. A piece of equipment with an estimated useful
lifespan of 4 years would be depreciated 25% per year on the
organization's expense sheet.

Accelerated Depreciation
^^^^^^^^^^^^^^^^^^^^^^^^

Accelerated depreciation usually frontloads the depreciation costs. This
method may more accurately reflect the value of equipment because there
is a greater depreciation at the beginning of the cycle. An example of
accelerated deprecation might require a piece of equipment to be
depreciated over 4 years at a rate of 40 percent per year. There would be
a greater expense in the first year, calculating 40% of the total
value of the asset as depreciation. In the second year, compute 40%
of the remaining value, and so on until the fourth year at $0.

An analogy to help explain Accelerated depreciation might be the
purchase of a new car. The car depreciates the moment it leaves
the lot. Even if the owner were to sell the car soon after purchasing
it, the car has already significantly decreased in value.

Building a business case
^^^^^^^^^^^^^^^^^^^^^^^^

.. TODO:: write this section.

Distilling information for impact
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

This skill goes hand-in-hand with budget but it is also an excellent
standalone skill. Operations deals with complex implementation of
technology. To the non-technical person, the architectural diagram
on the whiteboard looks like a Rube Goldberg machine.

The further up the management chain, the more distilled information
should get. Senior leaders do not usually need or want deep
technical detail. When presenting a complex solution, it is fine
to have one diagram that is completely unintelligible to them as
long as it is only used to to demonstrate that operations did more
than throw a blade in a rack and spin it up to achieve the solution.
The most important part of the presentation is the part where
operations answers the questions in the heads of senior leaders
even before they ask them.

What are their questions?

* What are we trying to accomplish?
* What do we do today and how is this better?
* How do we know this is the best solution?
* Do we have the right people to make it happen?
* How much will it cost?
* How long will it take?
* What is the benefit if we do it?
* What is the risk if we don't do it?
* How do we know if it worked?

**Exercise**

Take an idea you have and use the questions above to try to build a case
for senior management to fund this idea.

Specific Examples
=================

Below are some specific examples to demonstrate the importance of soft
skills in operations. In each example, soft skills closed the deal
because they enabled the operations person to see the situation from
other perspectives and communicate the needs of operations in terms of
the organization as a whole.

Selling system changes and new proposals
----------------------------------------

Negotiating budgetary constraints vs. need/want requirements
------------------------------------------------------------

Evaluating a product offering
-----------------------------