Why SMEs find it difficult to scale up

After working with SMEs for last few years, one of the reasons why most SMEs are not able to scale up their operations is because the day is usually spent in firefighting. A typical day may start at 8.30 AM or 9.0 AM with messages from customers, vendors etc. By the time, the person reaches his office, his day is almost cut out for him. He has to find resources and soothe his customers. I describe it as “Vicious Circle”

One of the reasons why SMEs struggle is because they lack a team. A team that can take responsibilities and deliver them instead of taking on tasks. This is due to many factors. One is poor risk taking appetite where the entrepreneurs. Some entrepreneurs do not want to incur or want to avoid cost of learning. Some are very hands on and find it difficult to delegate. So they typically end up working with under-qualified staff.

But increasingly I am finding that they realise that they have reached the critical mass but now cannot scale up as their employees are not confident to take responsibilities. The cost of new hires with relevant skills becomes a deterrent for the entrepreneur. (S)he is afraid of the new hires not delivering.

This vicious circle can be broken only once the entrepreneur starts developing a business plan. Take time off, reflect and work on the roadmap for next two to three years with an operational plan for the first year. This also provides clarity of thought on manpower and other resources required, expectations from them and a framework ( how to monitor and when to monitor) to gauge company’s progress and monitor performance of the employees. The “Vicious Circle” would not turn to “Virtuous Circle.

Planning, developing robust systems that are customised to the culture they want to develop and needs of their business can help the business men scale their companies.

Simplifying Agile Story Points

Tags

Agile Technology, Management, Software Development

One of my client was struggling with a huge backlog. His teams were not able to prioritise their tasks. The estimations were going haywire and productivity was low. The concept of story points (used in Agile Technologies) did not help them much as it was too abstract for them. Each story or task was different and hence they were not able to relate them in levels of difficulty. Because the idea of story was abstract, it was also not easy for them to compare stories with same points in different sprints.

Then I developed a framework to understand the stories and improve time estimations. The three parameters used were

1. Understanding of business needs
2. Complexity of tasks
3. Difficulty of task and volume of work

The easiest tasks to estimate are the ones that are fully understood both in terms of what the customer wants and in terms of steps to be taken to complete the tasks. A task where the customer himself is not sure of what he wants or a technical task for which the engineer himself is not able to develop a road map would need more time in analysis. Either way the estimations for the time would be way off. Effort and time would be required in analysing and breaking the task into smaller tasks or sub-tasks.

Once the tasks are understood and broken into task with steps needed to accomplish it are defined, the estimations would be a function of difficulty and volume of work.

It works actually like story points does in Agile. The stories can be placed on matrix based on story points. It would be easier to develop time estimates for stories with lower story points and hence they are prioritised to be picked up. The above model can also be used for prioritising projects in case of a clogged pipeline. The teams would also be able to compare stories across sprints based on difficulty level.

Please do wait for an illustrated example of this in next blog post.