Tag Archives: The Organ

Our brand is worth everthing

I don’t know how many times I’ve heard that statement. Too many, I expect. Unfortunately it usually means that engaging with the root cause of the problem we’re trying to solve is too awkward or uncomfortable, so it’s time to reach for the magical (technological) pixie dust. The glib, absolute statement thrown onto the table is a flag that the root cause of the problem is cultural, or even a leadership issue. Solving the problem is going to require a bit more than a little technology delivered by smiling consultants.

Every couple of years I seem to come across another glib “Our brand is everything”. (Though, at the moment the rise of cloud computing is providing more “but its not secure” glibness than anything else.) I’ll be sitting around a table with some senior IT and business folk talking about a broken manual process. More often than not it will involve a workflow based on emailing spreadsheets around the team.

The risks are fairly obvious. Aside from the double entry problems and the risk of lost orders, there’s always the chance of litigation over an implied contract in some casually sent email (or tweet). There’s also the risk for a disenchanted insider sending something they shouldn’t to someone they should not.

After wandering around the issue for a little while, we start discussing possible solutions. My first question is usually something like “What resources are you willing to commit to solving the problem?” It’s at this point that the comment is thrown onto the table; usually in earnest. “Our brand is worth everything.”

Rather than go to the effort actually trying to engage with the problem we’re dealing with, the statement indicates the desire for a magical cure-all. If we sprinkle magical technology pixie dust over the problem then it will just go away.

Technology can only ever go so far to solving a problem. We can use technology to speed something up (swapping paper shuffling for bit shuffling). Or we can use technology to stop specific things from happening (i.e. enforcing governance policies). We can’t use it to prevent something we never imagined.

Most interesting problems — like the manual workflow example — are rooted in peoples’ behaviour, and only have a small technology element. While the action, the bad event might change in each instance, the intent behind the action is probably the same. Even if we were given a blank cheque (which is probably the next thing I should ask for), we can’t hope to make more than a small dent in the problem. It’s like squeezing a ballon in your fist. Each time we push in one bulge, another one (or two) pops up in a different gap.

If we want to have a significant impact, then we really need a mandate to change the way the organisation works. Are the organisations own policies actually incenting employees (or partners, or customers) to work against the best interests of the organisation? (Like the point guard mentioned in the No-stars, all-star{{1}} article.) Do the existing IT solutions cause more problems than they solve? Just why did the problem happen in the first place?

[[1]]The no-stars all-star @ The New York Times[[1]]

Even a mandate has its limits though. Ultimately the behaviour of an organisation is determined by the behaviour of its leaders. The behaviour that caused the problem was a result of the culture created within the organisation.

The most useful tool to solve this sort of problem is the time and attention of the leadership team, along with a willingness to admit that no one is perfect, that mistakes will happen, and a sincere desire to improve the organisation.

When someone drops “Our brand is worth everything” on the table these days, I like to point out that bad things can happen, and will always happen. We can use technology to trap a few things, but the only long term solution is to create an environment when everyone involved — all the way from employees through partners, channels and customers — is naturally inclined to do the right thing.

Yelp seem to be learning this the hard way{{2}}. Accidents will always happen, and speedy and considerate response is acknowledged as the best we can do. However, creating a culture where “doing the wrong thing for the wrong reason” is accepted will eventually get you in trouble that you might not be able to get out of.

[[2]]Inside Yelp’s “Blackmail” Lawsuit: CEO Stoppelman Seems to Hate His Advertisers[[2]]

And hence we arrive at the real problem. A brand’s worth, after all, is a measure of what people think of an organisation; both customers buying your products or services, or the investors who want to know where you”re going. When bad things happen, and sometimes they happen quite regularly, the only real long term solution is to change the way we manage the organisation so that the root cause is no longer present. This means the people at the top need to change what they are doing. And give that the rules of IT have changed{{3}}, and we need to change with them.

[[3]]Some new rules for IT[[3]]

The IT department we have today is not the IT department we’ll need tomorrow

The IT departments many of us work in today (either as an employee or consultant) are often the result of thirty or more years of diligent labour. These departments are designed, optimised even, to create IT estates populated with large, expensive applications. Unfortunately these departments are also looking a lot like dinosaurs: large, slow and altogether unsuited for the the new normal. The challenge is to reconfigure our departments, transforming them from asset management functions into business (or business-technology) optimisation engines. This transformation should be a keen interest for all of us, as it’s going to drive a dramatic change in staffing profiles which will, in turn, effect our own jobs in the no so distant future.

Delivering large IT solutions is a tricky business. They’re big. They’re expensive. And the projects to create them go off the rails more often than we’d like to admit. IT departments have been built to minimise the risks associated with delivering and operating these applications. This means governance, and usually quite a lot of it. Departments which started off as small scale engineering functions soon picked up an administrative layer responsible to the mechanics of governance.

More recently we’ve been confronted with the challenge with managing the dependancies and interactions between IT applications. Initiatives like straight-through processing require us to take a holistic, rather than a pieces-parts, approach, and we’re all dealing with the problem of having one of each application or middleware product, as well as a few we brewed in the back room ourselves. Planning the operation and evolution of the IT estate became more important, and we picked up an enterprise architecture capability to manage the evolution of our IT estate.

It’s common to visualise these various departmental functions and roles as a triangle (or a pyramid, if you prefer). At the bottom we have engineering: the developers and other technical personnel who do the actual work to build and maintain our applications. Next layer up is governance, the project and operational administrators who schedule the work and check that it’s done to spec. Second from the top are the planners, the architects responsible for shaping the work to be done as well as acting as design authority. Capping of the triangle (or pyramid) is the IT leadership team who decide what should be done.

The departmental skills triangle

While specific techniques and technologies might come and go, the overall composition of the triangle has remained the same. From the sixties and seventies through to even quite recently, we’ve staffed our IT departments with many technical doers, a few less administrators, a smaller planning team, and a small IT leadership group. The career path for most of us been a progression from the bottom layers – when we were fresh out of school – to the highest point in the triangle that we can manage.

The emergence of off-shore and outsourcing put a spanner in the works. We all understand the rational: migrate the more junior positions – the positions with the least direct (if any) contact with the business proper – to a cheaper country. Many companies under intense cost pressure broke the triangle in two, keeping the upper planning and decision roles, while pushing the majority of the manage and all the do roles out of the country, or even out of the company.

Our first attempt at out-sourcing

Ignoring whether or not this drive to externalise the lower roles provided the expected savings or not, what it did do is break the career ladder for IT staff. Where does you next generation of senior IT personnel come from if you’ve pushed the lower ranks out of the business? Many companies found themselves with an awkward skills shortage a few years into an outsourcing / off-shore arrangement, as they were no longer able to train or promote senior personnel to replace those who were leaving through natural attrition.

The solution to this was to change how we brake-up the skills triangle; rather than a simple horizontal cut, we took a slice down the side. Retaining a portion of all skills in-house allows companies provide a career path and on the job training for their staff.

A second, improved, go at out-sourcing
A second, improved, go at out-sourcing

Many companies have tweaked this model, adding a bulge in the middle to provide a large enough resource pool to manage both internal projects, as well as those run by out-sourced and off-shore resources.

Factoring in the effort required to manage out-sourced projects
Factoring in the effort required to manage out-sourced projects

This model is now common in a lot of large companies, and it has served us well. However, the world has a funny habit of changing just when you’ve everything working smoothly.

The recent global financial criss has fundamentally changed the business landscape. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order. Many are even talking about the emergence of a new normal. The impact this will have on how we run our businesses (and our IT departments) is still being discussed, but we can see the outline of this impact already.

Companies are becoming more focused, while leaning more heavily on partners and services companies (BPO, out-sourcers, consultants, and so on) to cover those areas of the business they don’t want to focus on. We can see this from the global companies who have effectively moved to a franchise model, though to the small end of town where startups are using on-line services such as Amazon S3, rather than building internal capabilities. While this trend might have initially started as a cost saving, most of the benefit is in management time saved, which can then be used to focus on more important issues. We’re all finding that the limiting factor in our business is management time, so being able to hand off the management of less important tasks can help provide that edge you need.

We’re also seeing faster business change: what used to take years now takes months, or even weeks. The constant value-chain optimisation we’ve been working on since the 70s has finally cumulated in product and regulatory life-cycles that change faster than we can keep up. Nowhere is this more evident than the regulated industries (finance, utilities …), where updates in government regulation has changed from a generational to a quarterly occurrence as governments attempt to use regulation change to steer the economic boat.

Money is also becoming (or has become) more expensive, causing companies and deals to operate with less leverage. This means that there is less capital available for major projects, pushing companies to favour renting over buying, as well as creating a preference for smaller, incremental change over the major business transformation of the past.

And finally, companies are starting to take a truly global outlook and operate as one cohesive business across the globe, rather than as a family of cloned business who operate more-or-less independently in each region.

We can draw a few general conclusions on the potential impact on IT departments of these trends.

  • The increase reliance on partners, the broader partner ecosystem this implies, and an increasingly global approach to business will create more complex operational environments, increasing the importance of planning the IT estate and steering a company’s IT in the right direction.
  • The need to reduce leverage, and free up working capital, is pushing companies toward BPO and SaaS solutions, rather than the traditional on-premisses solutions, where the solution provider is paid per-seat, or might even be only paid a success fee.
  • The need for rapid project turn-around is pushing us toward running large portfolios of small projects, rather than a small number of large projects.
  • A lot of the admin work we used to do is now baked into web delivered solutions (BaseCamp et al).

This will trigger us to break up a the skills triangle in a different way.

A skills/roles triangle for the new normal
A skills/roles triangle for the new normal

While we’ll still take a slice down the side of the triangle, the buldge will move to the ends of the slice, giving it a skinny waist. The more complex operational environment means that we need to beef up planning (though we don’t want to get all dogmatic about our approach, as existing asset-centric IT planning methodologies won’t work in the new normal). A shift to large numbers of small projects (where the projects are potentially more technically complex) means that we’ll beef up our internal delivery capability, providing team leads with more autonomy. The move to smaller projects also means that we can reduce our administration and governance overhead.

We’ll replace some skills with automated (SaaS) solutions. Tools like BaseCamp will enable us to devolve responsibility for reporting and management to the team at the coalface. It will also reduce the need to develop and maintain infrastructure. Cloud technology is a good example of this, as it takes a lot of the tacit knowledge required to manage a fleet of servers and bakes it into software, placing it in the hands of the developers. Rumor has it that that a cloud admin can support 10,000 servers to a more traditional admin’s 500.

And finally, our suppliers act as a layer through the middle, a flex resource for us to call on. They can also provide us with a broader, cross-industry view, of how to best leverage technology.

This thinning out of the middle ranks is part of a trend we’re seeing elsewhere. Web2.0/E2.0/et al are causing organisations to remove knowledge workers — the traditional white collar middle layers of the organisaiton – leaving companies with a strategy/leadership group and task workers.

Update: Andy Mulholland has an interesting build on this post over at the Capgemini CTO blog. I particularly like the Holm service launched by Ford and Microsoft, a service that it’s hard to imagine a traditional IT department fielding.