Monday, June 4, 2012

Poor Track Record


The company internal I.T. department unfortunately suffers from a poor track record. The track record is framed with a number of commonly acknowledged character flaws. These flaws have become so overtly part of the fabric of the department that Scott Adams turned it into an “official” satire with his comic strip named Dilbert
Failed Promises

The I.T. department is plagued by failed promises, pointless complexity, questionable business value, control envy, and an out of place executive. It lives in a self indulgent and self induced twilight zone that is ripe for being challenged.
Corporate I.T. is plagued by failed promises. The promises of prosperity and doom have over the years made a mockery of the I.T. department. If it is not failed project delivery, it is overstated benefits. While the I.T. department was quick to grab and integrate formal project management as a discipline during the nineteen eighties, it still suffers from systemic problems in this area. CIO.com cites a Dynamic Markets survey of 800 IT managers in 2008, reporting that 62 percent of IT projects fail to meet their schedules. 49 percent suffered budget overruns, 47 percent had higher-than-expected maintenance costs, and 41 percent failed to deliver the expected business value and return on investment (ROI).
This wouldn't be so bad, CIO.com notes, if it weren't for the fact that the numbers haven't appreciably improved over the past decade. In some cases, they've gotten worse. One of the main reasons for this scenario is the disconnect between the I.T. department and the business owners who sponsor I.T. projects. The two often have very different ideas as to what they want. From the business owner side, they are often more enamoured of demos than technology. This is sometimes good but also just as often bad, because while the feature set may be enticing, the technology providing it may be rotten. Other times, it's the IT department that leads with technology and overlooks business owners' requirements. This is the classic “I.T. knows better” syndrome where the I.T. department considers themselves the saviours and gatekeepers protecting business owners from themselves.
Not meeting the functional demands is interpreted as unintended features or consequences. I.T. often positions a technology that it justifies instead of it being user justified. When users don’t like it and don’t use it, then the fault is usually blamed on the business user not being appreciative or willing to change. Costs hardly ever stay within expectations. This is not only a project delivery issue, but also a day-to-day operational issue. Gordon Moore’s Moores Law has been used in vain to explain a number of corporate I.T. achievements and highlight more deficiencies over the years. One of the earlier misguided uses was to explain how a company’s I.T. costs should decrease as a result of computing efficiencies introduced by technology improvements. 
Large outsourcing organizations penned multi-million dollar, decade long infrastructure outsourcing contracts with expected annual cost reductions based on this belief. Only, to discover that while Moore’s law holds true for transistor capacity growth, and some other elaborated applications, that the consumption expectation of said growth will succeed in outpacing this exponential phenomenon regardless. Because computers have more capacity, users will find a way to use it, and will demand even more over time. Computing consumption and cost does not decrease over time. It increases. Yet, the corporate I.T. department still beats the cost reduction drum every time they justify an investment in a new solution or platform.
From an outsider’s perspective the benefits rarely justifies the enormous investments demanded. Enormous software deployments distract companies for years. Infrastructure refreshes fails to keep up with demand, and every year the I.T. executive dreads asking for more resources to merely keep up with the company's basic requirements.  
The I.T. department can barely keep up with technology evolution. The same enormous software deployments that were distracting organizations for years are now being replaced with new solutions in much shorter timeframes of months. For a while the battle was raged between standardized solutions and the level of company customization required to introduce a new system into an organization. Custom won over standardized. Every company thought themselves special and demanded to have the same reflected in their technology. The result was that the more customization took place, the less flexibility and opportunity the company had for upgrades and future platform enhancements, and the more it costed to grow the solution with changing corporate demands. The new battle is no longer how fast new solutions can be procured and implemented, but rather the tempo and appetite for solution adoption. Implementation life-cycles are being replaced with adoption life-cycles. 
Technology and solutions were typically amortized over five to ten years before it faced obsolescence. More recently periods as short as twenty four months apply. The software refresh cycle has advanced faster than infrastructure. The appetite for expensive and complex customizations is fast evaporating due to this increased cycle of innovation. 
Nowadays, a business barely has the solution implemented and they are already facing an upgrade thanks to faster evolving technology and applications. While fighting an ever increasing battle of obsolescence, the I.T. department still goes from meeting to meeting with an overly optimistic outlook that their next wave of technology or new tool will be the answer to the most recently discovered or maybe even long standing problems with prior solutions. Corporate I.T. appears to observers as out of step with the harsh realities of real business. 
The I.T. department cannot count anymore on soliciting sympathy for their position. For long I.T. was a closed garden with only the initiated and the anointed in the know. They were considered the experts and were treated as such, Now, with matters rapidly spiralling out of their control, and with fewer answers than the questions demand, they find their traditional approach more and more being challenged by straight thinking, common sensical business executives. The I.T. department is forced to acknowledge that maybe, they just don’t have all the answers after-al. 
This is not a problem. No one has all the answers. The I.T. folk has to come clean and take a new approach of facilitation to their responsibility. Instead of working for the business stakeholders, they have to work alongside business stakeholders to help unlock access and value from information and its ever changing technology. This also points towards a required change in the approach of the role of the C.I.O. to become a more business focussed strategist. 
Most recent research confirms that the C.I.O.’s role is being elevated in companies. The percentage of midsize company C.I.O.’s reporting to Chief Executive Officers (C.E.O.), jumped to 47% in 2009 from 38% in 2008. At large firms, 44% of C.I.O.’s report to the C.E.O., up from 35% last year (2008). The CIO’s average tenure is 11 months longer than it was 2008, and three months longer than in 2007. Small company C.I.O.’s stay in their jobs the longest: six years, one month. Which, is a direct response to the more strategic role that is expected from smaller companies that can be less tolerant of its I.T. not meeting expectations. The most notable shift in this research came from 70% of C.I.O’s saying that long-term strategic thinking and planning is the leadership competency most critical to their role, up from 56% from 2008.
Complexity

The I.T. department is plagued by complexity, yet it relishes in the false authority this affords its disposition, and the margins this offers those in the know. 
There is no argument that information technology and its tools are complicated. It takes hours, days, months and years to understand the extent of some technologies, and to get it to work. Technical people can spend a lifetime mastering a complex platform and suddenly find their knowledge obsolete the moment a new vendor redefines the solution. However, complexity doesn’t serve any useful purpose outside a controlling I.T. department. The expectation is for I.T. to seek out simplicity and practicality, amongst the chaos of information, technologies, methodologies, models and analyst hot air.
Information technology trades in ideas. Ideas are in the software, the process, and technology. Most importantly, the ideas relate to the application of a solution. For example: how a solution should be applied for a specific business objective or outcome. Ideas are and should be freely available. 
Technology need not be free, but the application should not be made proprietary. The I.T. industry has over the years acquired a taste and incentive for creating “false” scarcity around ideas. A scarcity that is now challenged more than ever with the proliferation of information and ideas over the Internet. In doing so, the industry could justify an economy with inflated margins. Scarcity forms the basis for economic margin. For example: While a new software solution holds substantial promise for improved business outcomes, a vendor typically walks a tightrope between getting the solution or idea widely adopted in a market, and at the same time securing high margins for its workers who are most “qualified” in its configuration and implementation. 
Every consultant offers another methodology or variation on a prevailing one as "the" answer that will solve their client's problems. Because they hold “the” answer, they can demand a price for this “scarce” commodity. The scarcity of skill working with the solution offers higher returns for the vendor, ecosystem, and the following it creates. Only the consultant and its collaborators have the "knowledge" required to make their methodology work. 
These higher margins in return promises further incentives for the ecosystem to promote the adoption of the solution. In some cases the ecosystem, made up of resellers and value added resellers (VAR),  further perpetuates the opportunity by adding modules or components to the original solution or idea. In doing so, they succeed in breathing more life into an opportunity to capitalize on the scarcity of "understanding". 
This phenomenon not only plays out in solution vending, but also in the countless frameworks that profess to direct “best practices” in the way that I.T. is managed and implemented. 
The proliferation of frameworks are followed quickly by education and certification programs that further serve as rites of passage for consultants wishing to participate in the newly created economy that is being unleashed on non-suspecting corporate I.T. departments and their stakeholders.
Identity Crisis

All this takes place while the corporate I.T. department is struggling with its own identity. On the one hand the department tries to satisfy its desire for recognition in the I.T. industry as leading the charge in good solutioning, with a very important stamp of approval from the industry "wailers". 
These "wailers", or more commonly known as the Industry Analysts, protects and underlines what it perceives to be "good" practices, industry "trends", and "leading" solutions. The I.T. department procures the "recommended" solutions, deploys the "underwritten" methodologies and yet still fails in soliciting appreciation from it's backers. Things still doesn't turn out as expected. 
On the other hand the department must serve its true purpose of doing the right thing for its business stakeholders, without appearing to be out of step with the "Jones' ". If it is found that an I.T. department is not towing the line of the industry, it's executive risks standing alone during times of hardship when the technology fails to live up to expectations, the projects run late, and the costs spiral out of control. If he or she didn't buy the industry "recommended" snake oil, then he or she must be no-good. 
Time to find a new "guy". The dichotomy exists between doing what is industry prescribed and advocated versus what common sense dictates. If common sense fails, many a C.I.O. used the industry recommended course of action as fallback to justify their actions and save their jobs.
With the Research Analyst’s support, the I.T. department has the backing from the “experts” when justifying their course of action investing in a particular technology or tool. At the same time the “experts” are fuelling the economies created by vendor ecosystems, through underlining their professed “value” to customers they appear to be serving. Customers in this case can easily be confused. Is it the I.T. departments, or the vendors?
This identity struggle further manifests itself against a backdrop of I.T. staff that is also confused between underwriting vendor economies, versus doing the right thing for their employer. Staff recognize the importance of tool and platform knowledge and certifications for their personal marketability. Therefore, they will easily support a technology that maximizes their future earnings potential, over a technology that is right for the job. 
Getting into the right ecosystem can mean the difference between being employed or not. It may be a cynical view. But, it may also be one of the main reasons why employers are more and more declining technical training. As soon as staff has the training or certification they usually move on to higher paying opportunities elsewhere as new member of the "club". This has other unintended consequences which is better suited for a later discussion. 
This dilemma of false complexity, scarcity and a subculture ecosystems mentality became so culturally ingrained in the I.T. industry that it is the modus operandi for the way of the I.T. department too. The I.T. department is considered by it's business counterparts as “special” with “proprietary knowledge” and a “secret language” and “information” that only the initiated understands. They play by different rules, and when they are challenged can quote chapter and verse of analyst supported industry “best practice” to justify their actions. They appear untouchable, yet somehow fail often to live up to expectations.
Control

The last nail in the coffin comes from a control culture where the I.T. department sees itself as the guardians protecting business users and the company from themselves. Technology and tools are off limits, unless it is sanctioned by the I.T. department. If no better excuse exists for this behaviour, then the trump card of security, or the lack thereof, is played by an I.T. department desperate for control. This obviously doesn’t help for relations with other parts of the company and fellow business stakeholders that relies on access to these very tools to get their jobs done better.
I.T. appears to be in a parallel universe that mimics the corporate landscape. It has all the tools for the business, appear to know it better, has all the answers, and yet it is not the business. The I.T. department’s contribution to business value is regularly questioned when costs seems to only be increasing without an appreciation of the contribution it makes proportionally to improved business practice and strategy realization. 
Costs appears to be mostly vendor directed, and the benefit to a business' operation is hard to quantify. Justification is founded on industry cost comparisons instead of common sense. However, not quantifying value is fatal for every C.I.O. against a twilight of a misdirected, and until now, tolerated subculture.
The C.I.O. appears to be out of place at the executive table. On the one hand, the role is not recognized as business enough to have a say in the strategy, business practices and imperatives of the company. It is sometimes relegated to a support role slightly behind the Human Resource department, and barely above the janitor. 
On the other hand the role cannot be important enough when things go wrong. Then it is easy to blame the C.I.O. and I.T. department for the troubles of a company not able to execute its strategy, not able to balance the books, not having the data, or when the cost structures are spiralling out of control.
The C.I.O. navigates a thin razor’s edge between unsatisfied business stakeholders who has little drive to understand, nor appreciate the difficulty of delivering the information and technology for the company. Yet, as C.I.O. is expected to have a full and unending telepathic grasp of the business’ needs and wants from their information and technology. 
Business stakeholders easily criticize the role of I.T. but are not willing to recognize their dependency or fragility as a result of their information technology dependence. The I.T. department is a supplier with a captive audience. There is no chance to escape from its business stakeholders for a better, more understanding and more appreciative customer. Its chance for overall success is limited. Yet, a business customer has every opportunity to seek their information technology services elsewhere, and many do. 
This is Called Outsourcing
On the other hand, the C.I.O. is plagued by technical complexity, an ever changing platform landscape out of cycle with his or her business’ demands. Added to this is a vendor landscape that appears to only be fixated on this financial quarter’s sales targets, and its focussed plans to change the game on its competitors. 
Your company’s investments in its technology are merely collateral damage on their journey for dominating the next round of technology innovation.  But wait, they have an answer and a deal for you that you cannot refuse. Being an I.T. executive is indeed a tough job today.
Hendrik van Wyk

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