While writing the previous true story about the real world of IT financing, I was inspired to share another horror story that I’ve encountered in my years in IT. It begins with being sent in to sort out a major counterparty risk project in one of the banks that was supposed to be delivering a solution for Basel 2 compliance. What the project was is probably irrelevant to the story but anyone spending money on a project that at that point had been running for 18 months and not delivering anything – spending in excess of 10 million Euros per annum – must ask serious questions. It quickly became clear that the project had only 4 internal staff with more than 50 externals. Cynically, one could say that the externals were milking the programme for whatever they could get. Slashing the project to 15 people delivered more in 6 months than 60 people had in 18. Adding a proper steering committee and asking real questions rather than the previous “nodding dogs” meant real focus on value for money.
Working with a mixture of companies of all sizes I have seen everything from the demands of the immediate fail-over always on, fault tolerant architectures of the real time trading businesses to one mid-sized client who had the servers in a cupboard at the office and regularly used to lose their systems when the cleaners unplugged them to vacuum the floor (and I am not joking!)
Many many institutions large and small return from the summer break to a frantic quarter looking at the budget for the following year. Sometimes I am stunned at how unprepared departments and managers are for this annual event.
Here we go with another organisational analogy, this time, visualising your organisation as being a house made of LEGO.
Typically, there should be large rectangular bricks underlying the business structure as a foundation. The finance systems for example, the payroll, and even the IT infrastructure services, can be visualised as long oblong bricks at the bottom of the value chain, the structure upon which the rest is built. However, it is amazing how often this structure is full of gaps, holes and misalignments. These problems lie in various sections of the business, whether specific locations, parts of the process, or product areas. Naturally, without a solid underpinning foundation, the business will have issues. Like a child building a LEGO house without looking at the instructions, the result may be rather shaky if not collapse entirely. Do you know whether or not your business structure has a solid foundation?
Following on from my last post about getting funding for your strategy, I am going to explore one of the big barriers to approval that you can face.
Strategy plans will often involve some kind of consolidation process; whether it be centralising a common service, or realigning architecture processes. This can often run into what I call the allocation conundrum. Typically, different areas in a business, whether departments or locations, will receive a cost allocation for the IT services they consume. In terms of technologies and their champions, winners and losers will emerge from every consolidation programme; there will always be risk-takers and risk-adverse parties in any organisation. Where the challenge comes, is in handling the costs. The last remaining customer cannot be expected to carry the cost allocation of the whole service.