Does IT really matter? Is that the right question?

Does IT really matter?

 

There has been a lot of debate over the importance of IT. Does it really matter? I think the real question should be, is the underlying business process being supported key to your organization. This leads to the second important question, who is responsible for this process. I have been in IT for a couple of decades now. In that time I have seen many manual processes automated. Many times these processes were turned into black blocks when they were automated. The users understanding of what was going on started and ended at the screen and keyboard. It was the IT wizard or programmer who really knew what was going on behind the curtain. The business rules were all contained in the programming logic.

This system worked well in those early days of IT. Then software companies started offering packages that could perform different business processes. Companies started buying solutions and depended on the software companies to have experts who would maintain these new black boxes. For example, I use Microsoft Word’s grammar checker. I depend on someone at Microsoft to understand English grammar and to keep up to date on proper use of grammar. When an organization buys a package it is doing the same thing. The organization needs to be able to depend on the software company who produces the package to have the subject matter experts who can truly understand the business processed the package is automating.

Now some companies see an advantage in buying a package and customizing it or creating their own software. They create it and put it in production and everything goes well once the bugs are gone and it is up and running. This is the point where they fail to understand that someone must be responsible for understanding what is going on inside the black box. Business is seldom a static environment. Change should be expected and the ability to handle change is required. This applies to the processes that are taking place inside the IT black boxes also. Someone has to be able to understand the processes taking place in the customized or custom programming logic. Unfortunately many in management do not seem to understand this. I have heard many times that “ you do not need to be able to do the employees job you need to be able to manage them”. These same managers take this approach to their IT assets. So long as they can find someone who can hack code in the language they were written in then they think they are managing these resources.

Well the managers who do not need to know the jobs of their employees has to depend on their employees knowing their jobs. Many times when they bring in someone new, training is on the job. Experienced employees who know how things are done being are given the responsibility of transferring knowledge to these new employees so they can perform their jobs. When tasks are automated this transfer of knowledge has to take place by someone truly understanding what is going on inside the black box or code. Unfortunately, for many organizations a high level of understanding was created in the creation of the asset. It tended to reside in documentation and people who worked on the project to create it. This asset then may be turned over to a support staff who may or may not have been involved in its’ creation. Over time changes take place and documentation tends to become outdated or no longer reflects the current system. People in the support staff come and go with knowledge being transferred based on many factors. Support costs money and developing a deep understanding of the processes one supports requires time. Since most of the support issues and minor updated will not require a deep understanding it is easy to believe that a adequate level of resources has been devoted to supporting this automated process. When in reality the process is under supported and the organization is really just depending on no major issues developing in the business processes being supported. The organization may be assuming risks it is not even aware of.

How do companies get into this state? In many organizations IT is seen as an expense. Since it is an expense the focus in on keeping expenses down and cost savings. This can lead to a focus on tangible Rio’s. I can buy X package for twenty thousand or I can buy Z package for five thousand and customize it for another five thousand. The tangible ROI on the Z package looks better so that the solution selected. Unfortunately what was not considered is that the company who supports X package can support your key business process with little customization. If they are a “Sound Company”, they will have employees who are subject matter experts on the processes the software is supporting. By buying their package you are depending on knowledge transfer through their employees. You depend on company X to maintain this deep level of understanding within their organization. They can afford to do this because they are in reality supporting this business process for many companies. This makes it profitable to maintain subject matter experts who have deep understanding of their packages and the business processes their packages are supporting. Purchasing package Z and customizing it means that someone in the organization will need to become the knowledge expert on the customized system.

As the company who produce Z makes upgrades this level of knowledge will be key to the continued functioning of the customized package.

 

The same thing can also happen with custom software developed in-house. I have spent the last decade of my life maintaining legacy systems. I have had contact with many IT people who are doing the same. There is a tendency in the business world today to keep IT costs down. One of the main costs that business focuses on is maintenance of legacy IT assets. It is now not uncommon for targets to be set for the amount of the IT budget that should be devoted to maintaining legacy systems. The theory generally is that resources not spent on supporting existing systems can be put into projects that will provide new ROI’s. These projects are then prioritized and managed under the eye of executive staff. Since these projects are now high profile they are also the avenues to advancement inside many organizations. If I work on a high profile project I can shine in the eyes of management and be on their minds when they are thinking about filling an opening they may have in the near future. While the guy who is making them money supporting their legacy systems never shows up on upper managements radar unless there is a problem impacting the business. This situation is not right or wrong; it is just how things are. It also explains why IT workers become outdated in their skills. The company needs legacy systems supported in order to keep making money. If an employee obtains new skills and move away from supporting legacy systems then the organization will have to find another resource to support the legacy system. It is many times easier to just bring in new employees with skills required for a new project then to train existing staff and have to replace them. This pattern is sometimes broken is when the legacy systems themselves are replaced. In which case there are sometimes efforts made to retrain IT workers on the new systems.

The net result for organizations is that there tends to be a lack of knowledge transfer when new technology enters the door in the form of a new IT projects. It is the rare organization that sees the value in cross training experienced IT employees into new technology. It is even rarer to see an organization develop a system of business knowledge transfer that allows a continual cycling of IT workers while maintaining depth of knowledge in the KEY business processes IT is supporting. Such a system requires truly understanding black boxes within IT and managing knowledge transfer as part of the organizations HR effort.

 

So does IT really matter? I think the question should be do your business processes matter. If so then you have to ask yourself who and how are these business processes, buried inside software, being managed and by whom. If they are truly critical to the functioning of you organization you really should be able to answer this. For they are either being managed by you, or you have placed their management in package suppliers hands, or you are assuming unknown risks because they are not really being managed.

As I watch my fellow baby boomer begin retiring it is an issue that will have important implications for many businesses.

A way to save time sharing your experiences.

Dr.Dobbs group pointed a Service developed by IBM. It is worth noting on this Blog because it offers improved opportunities to people who are sharing experiences, such as their romantic picnics.

CoScripter is a system for recording, automating, and sharing processes performed in a web browser such as printing photos online, requesting a vacation hold for postal mail, or checking bank account information. Instructions for processes are recorded and stored in easy-to-read wiki on the CoScripter web site, so you can share them with others. This is a great example of saving time and addressing denied value. Thanks to DrDobbs for pointing it out.

The Dark Side – The reprimands will continue until motivation improves.

First, I would like to worn all of you doing research to NEVER EVER read Dilbert before going over research material. It can really twist your interpretation on the material you are reading. Case in point I was researching a subject and came across some training material that some company had produces several years ago. The material talked about the developmental levels that people go through as they gain experience at their jobs. It showed that motivation tends to drop to its lowest point after a person learns enough to be able to effectively to their job. After that point motivation tends to increase as people continue to develop and contribute to their company.

Now here is where the Dilbert part comes in. The material I have is likely incomplete because it then jumps into praising and reprimanding people. If you have just read Dilbert you can read this, as people should be reprimanded if they have the necessary skill but temporarily lack motivation. Now we all know that there is many reasons people lack motivation. Many of them are factors that are really outside the control of the employee, such as being challenged in their current assignment. But because I was reading Dilbert I could not be the line “The beatings will continue until moral improves” out of my mind.

 

The other Dilbert factor was the material telling when someone should be praised or reprimanded was missing. My Dilbert warped mind led me to think that these poor people using this training material were being given enough information to be dangerous. That they were to become like the manager Dilbert has. Well anyone familiar with “DEMING’S RED BEAD EXPERIMENT” knows that there are factors that affect the performance that an employee may have no control over. (For those of you who do not know this experiment Google it, and shame on you for not knowing) They may be above average one period and be below average the next and still be within the acceptable constraints that the processes they are forced to use allowed. Being above or below average due to variable beyond their control does not warrant praise or reprimand. Management in the 50’s understood this. Again, I blame Dilbert for twisting my view of the material I was reading.

 So heed my warning, NEVER EVER read Dilbert before trying to do meaningful research.

In the world of Web 2.0 beware the not-so-silent minority!

Retail wire has a interesting discussion “Prediction Markets Foretell Online Trends”

David Biernbaum is a consumer packaged goods specialist in the field of marketing, retail sales, and business development. Points out something the everyone should be really understand because one can apply it to most of Web 2.0 

“Online prediction surveys get a more passionate and committed response than the traditional telephone survey, however, I think we should take with a grain of salt any supposed reliable results because passionate opinions might also be the not-so-silent minority, and it might not truly reflect the right predictable numbers where consumers and retail are concerned.”

Always remember that there are many times two groups in Web 2.0.
A) Those who are active participants.The ones who create content and make their voices heard.
B) Those who are passive participants. Many times the majority, who consume the content of the active participants.

More on Retail is not a zero sum game – IT

Eweek has identified five disruptive factors that Gartner analysis claims could force enterprises to change the way they attack their prospective markets. If these claims are true then retailers may want to develop strategies to respond to the changes these technologies will create in their business environment. The real question is do you respond or can you leverage these technologies to change your business environment.

Understanding these technologies can allow one to see how these technologies could allow business processes to be modified or allow the creation of new processes.

 As one slide states: “Web 2.0 communities have paved the way for new startups offering alternatives to technology incumbents, such as Microsoft and IBM. Traditional businesses must embrace these new models or risk losing market share.”  Are you asking yourself how an alternative to Microsoft and IBM could benefit you?  Are you looking to see what these new technologies would allow you to do that you cannot do now? Questions like these are the difference between responding and changing ones environment.

There are two important customers in social networking.

I would like to give a plug to futurelabs for pointing out what others seem to be missing. In their blog they point out what everyone in retail should know by heart. That is you need to take care of your best customers. In the world of Social Networking this is no different. The 80 / 20 rule still applies. With few people providing the content that is in most demand. The only diffence is that you have two issues.

1)  The customer who creates the valuable content. The few.

2) The customer who attracts the advertising dollars. The many.

These two groups are not the same and are not motivated by the same wants, needs, and denied values. Failure to understand this fact will lead to a failed Web 2.0 effort.

Open-source products accounted for a 13 percent share of the $92.7 billion software market in 2006, but should account for 27 percent of the market in 2011

That is the claim made in this eweek article. If this is true then this is changing the business environment. Such a major change will require companies to decide how they will respond to this change. For the major IT player the question becomes how can I lead this change.

More tales from the Dark Side. Would you sent an employ a E-Mailed Pink Slip?

That is what happened in this article about a survey of 752 workers conducted by Harris Interactive for the Marlin Company, a North Haven, Conn., employee communications company, they found that this was happening.

This is just a case of bad management. They are either afraid to do their job or they just view their employees a commodities. In IT your people are your greatest asset. However, effective management of this human resource is one of the big failures of IT.

If you look at the history of IT you see a clear pattern of this. IT is a stressful and demanding job many times. Much of it is project based, demanding evenings and weekends to make the project work. Many times support is a 24/7 job.

If you look at some of the historic trends in IT you can see that many trends did not favor the employee.

First a IT worker was an hourly employee, then it was decided to make them salary to save all the overtime costs due the weekend and evening time they put in on top of their 40+ hour work week.

Next IT turned people into contractors to save benifits. No more health cost, etc. It also made them easier to replace. Workers came in the door one day as XYZ employees and entered the same door the next day a ABC employees.

Then technology changed and it was found easier to hire new employees with the skill sets in the new technology then retrain existing workers. You were now responsible for keeping yourself marketable. If you did not have the skill set it was your own fault.

Then outsourcing really took off. Jobs left the U.S. for India. The big focus was again to save costs.

Today companies such as Microsoft are complaining about not enough students entering IT. This is like shooting your parents then asking for the judge to go easy on you because you are a orphan. IT companies were responsible for creating this environment. They are also the only ones who can begin to change it.

Outsourcing its all about saving money right? Wrong!!!

Are you really saving money with outsourcing? A recent study seems to indicate no.
From the study
* 68% say outsourcing is overrated as an IT cost-cutting strategy.
* 67% say the total cost of using domestic outsourcing vendors has been as or more expensive than doing the same work in-house.
* About half (48%) of companies below $1 billion say the same thing.

I have been seeing simial studies for years now but it seems to have not impact on this trend. Why do they keep doing this? The diffinition of insanity is doing the same thing over and over again and expecting different results.

Do you need a change agent.

In McKinsey article “Building an effective change agent team” the case is made for change leaders who can cross the silos and functional areas that exist within organizations. I would like to give you my take on this. If you have read my past blogs then you realize I believe that one way to define strategy it the responding to changes in ones environment or creating changes to ones environment. This is primarily done by modifying business processes or creating new business processes. Since business processes commonly cross silos and functional area a method must be in place to do this. Change agent teams can be one way of doing this. What did not seem to be stated exactly by McKinsey was that the two main functions required are:

1)      Communication, communication, communication. The Change agents become an important channel of communication that fills in the gaps that may exist between functional units and silos. They act as the facilitators to collaboration.

2)      Shared understanding. Many times you have a blind men and the elephant situation. Each silo or functional area sees the business process from his or her own worldview. The Change agent transcends these views. The functional areas and silos create a common understanding of the whole elephant through the change agent.