Yes, I could devote every article to the pervasiveness of bad IT management and it’s chilling effects on business, but it depresses me and it’s time to move on, so we’ll wrap that up today. The next article will be on how to fix IT gone bad… tips anyone can use to restore the value of an IT department.
To sum up the shape of IT today… the old computing Director has retired along with his punchcards and VAX system. In response to the larger role of IT in the business, the need to deal with increased regulatory and legal pressure, etc… the new IT leader is a slick, middle aged MBA who has some historical experience related to computing. The primary vision is to reduce cost with fewer, cheaper employees… to commoditize every day computing. IT management functions have been distributed throughout the organization – not generally by choice – to cope with the realities of the work. The IT group “appears” to be no worse for the wear on the surface.
How it hits you in the wallet –
There’s a common economic term, “Opportunity Cost“, which is what you lose as a function of choice… i.e. if I have property and I build a condo, I can’t use the land to build something else.
A related term that everyone knows more personally is the “Hidden Cost“, or that which, by definition, is an unforeseen cost of a choice, one that often leaves you feeling like a jackass. If you’ve ever bought a device, only to find out you need several accessories to make it work, you know the feeling.
The ideal in life is to have all your choices governed by evaluating opportunities instead of dealing hidden costs. But converting what you can’t foresee to that which you can, is all about knowledge and creativity. So if you’ve read the previous IT articles, you’ll see where I’m going with this:
Those who make IT decisions based on a wide base of technical knowledge are less likely to fall prey to hidden costs.
In fact, if you didn’t understand the title of this article… you may be part of the problem.
“Commodity computing means that you spend X, with no expectation of improving Y… and that’s why it offers no value.”
“Failure is the default.” –
Currently, the most obvious source of hidden costs are in large project undertakings, where a poorly conceived request for proposal can doom a project from the start. I challenge anyone to show a multi-$Million ERP project on the planet that has NOT incurred major costs that could have been mitigated through competent technical oversight.
But the less obvious, and far more costly errors are those that occur as a response to every day questions… little decisions that have seemingly no impact, completely unnoticeable… even to a lot of IT managers. Do you spend money on extra ram for your user’s machines, or a faster processor? Do you conduct a training session on Office, or create a few screen capture videos? Do you spend time automating your systems, remove a service, or expect users to manually accomplish certain tasks?
It may seem like minutia, but you would be shocked at how much money is wasted on poor choices at the most basic levels. It’s not always easy to see this effect behind the closed doors of business, but we get an education on this *literally* every day in academia, between organizations that would otherwise be identical in terms of responsibilities, resources, personnel and cash. Over surprisingly short amounts of time, any two IT groups will wind up at two completely different levels of effectiveness, with vast repercussion on the business and culture of the organization… purely as a function of their approach to common every day IT value questions.
How much impact does it have in the business world? Enough to give thousands of consultants and outsourcing organizations a reason to exist! So don’t ignore it.
The commodity lie –
If very subtle changes to your approach to IT can have multi-$Million consequences, then how does one make the case that there is such a thing as commodity computing? Well, keep in mind that a “commodity” is a concrete term. CEO’s and CFO’s like this term because it puts a specific dollar value on a service.
But, as is made evident above. “Commodity” in IT does NOT mean that you spend X, and you get an industry-standard Y, there is no such thing – and anyone who says so is selling something. Commodity computing means that you spend X, with no expectation of improving Y… and that’s why it offers no value.
There is simply no case for the notion of “commodity computing”… as it makes the assumption that operational questions have simple answers that vary as a function of money. This is clearly not the case, but it is this mentality that defines the state of IT this decade.
In short, few organizations extract value from the IT resources they have at their disposal RIGHT NOW. Not because they wouldn’t jump at the cost savings, but because they literally don’t have the knowledge to recognize, much less evaluate these kinds of choices.
And of course, who’s responsible for evaluating such choices? The IT leader… and so we’ve full circle.
You can tell what advertisers think of their targets in how they advertise. For example, Apple clearly believes that their average consumer is so dim that the difference between a Mac and a PC is best when reduced to culturally stereotypical human icons engaging in inane, but amusing banter.
And of course… it’s the most effective Mac campaign in Apple’s history.
The state of IT decision making can likewise be seen in how vendors advertise. Ever seen a whitepaper from an ERP vendor? Ever delved deep into Dell’s pricing models? Ever negotiated a contract with Oracle? Technology vendors, from software to hardware, are in business to make money, and it doesn’t take a genius to figure out which member of the herd they believe is weakest.
Alright, enough on that. Our IT managers have taken enough abuse for now. I, of course, welcome any comments you might have on the subject, as I think that this aspect of the IT industry just hasn’t received much attention. I’d like to get some dialog going.
And so it blows…