Why IT shouldn’t be run as a business…

Need an out-of-the-box opinion on running it? Check “Infoworld’s Run IT as a business — why that’s a train wreck waiting to happen”…

Intro

“If you board the wrong train, it’s no use running along the corridor in the other direction,” said famed World War II German resistance fighter Dietrich Bonhoeffer. We in IT boarded the wrong train a long time ago. It’s the “standard model” of information technology organizations — the familiar litany that says CIOs should run IT as a business [1], meeting the requirements of its internal customers. This refrain has been endorsed by our holy trinity, too: analyst firms, most consultancies, and ITIL.

Some strong quotes

  • There are no IT projects : He likens IT’s proper role to that of an engineer designing a car. “It doesn’t matter if the ‘customer’ asks for the horn on the backseat. Placing it there would meet the specs and ‘satisfy requirements.’ It would also defeat the usability of the horn, render driving the car dangerous, and could lead to a crash that ruins the whole effort.
  • Chargebacks? No! Governance… : Chargebacks are an attempt to use market forces to regulate the supply and demand for IT services. If that’s the best a business can do, it means the business has no strategy, no plans, and no intentional way to turn ideas into action.
  • So what should we do? : Nobody in IT should ever say, “You’re my customer and my job is to make sure you’re satisfied,” or ask, “What do you want me to do?” Instead, they should say, “My job is to help you and the company succeed,” followed by “Show me how you do things now,” and “Let’s figure out a better way of getting this done.”
Advertisements

Wage cut or wage freeze?

Source : Sticky Wages

Check out the above story… It refers to the term “sticky wage” where companies didn’t cut wages in recessions. They just made them “grow slower”… Yet lately there have been actions where wages were cut and it’s an odd move when thinking of the following statements (which are quoted from the article).

  • 1. Employee Morale: Truman Bewley found out that pay-cuts affected everyone’s morale, while firings only affected the minority. I am sure all of you, who have seen layoffs agree that the people left behind, are much more productive than they were ever before. When you see your colleague getting fired, you work extra hard to make sure that you are not next in line. Pay-cuts don’t have the same effect, as everyone is on the same boat, and there is no shock effect to spur employees.
  • 2. Fear of the best people leaving: The job market has slowed down in the recession, but there are still plenty of firms that are hiring. If an employer cuts salaries across the board, it is quite likely that the better workers will find work elsewhere. So, firms which implement across the board wage cuts, risk disgruntling their better employees and have them leave for greener pastures elsewhere. This factor is a major contributor to sticky wages.
  • 3. Get rid of Wally: Not all employees are created equal; some are more efficient than others. In all companies there is some deadweight. Some of your employees will be like Dilbert, some like Alice and then you will have a Wally. If you kept Dilbert and Alice, and fired Wally – your team will still do well, if anything the overall productivity of your team will increase. Even the Pointy – Haired boss knows that it is far better for him to fire Wally, than to take a chance by cutting the salaries of Alice and Dilbert, and risk losing them to Elbonians.
  • 4. Preparing for the turnaround: Another factor that contributes to sticky wages is the hope of a turnaround. I know several people who are hanging around in companies without any work or pay – cuts. While there isn’t much demand for their skills now; their employer doesn’t want to take a chance. The employer is worried that if they let this person go, the competitors will build a strong team in this particular area, and drive them out of business when the market eventually turns.

Basic business money making concepts

These will probably give you a clear sound “Duh, offcourse!”, yet it’s the basics we need to comprehend.

(Source : Personal MBA)

  • Product: make a physical product, then sell and deliver it for more than it cost.
  • Service: provide a useful service, then charge a fee.
  • Shared Resource: create a shared resource that can be used by many people (like a gym), then charge for access.
  • Subscription: offer an ongoing subscription, then charge a recurring fee.
  • Insurance: write an insurance policy against some specific bad thing happening, collect premium payments up-front, then pay out claims only when the bad thing happens.
  • Resale: acquire an asset, then sell the asset to another buyer at a higher price.
  • Lease: acquire an asset, then allow another person to use that asset for a certain amount of time in exchange for a fee.
  • Audience Aggregation: create and distribute information that appeals to a specific set of people, then sell access to that audience (advertising, direct mail, etc.) to an interested third-party.
  • Commission: sell an asset you don’t own on behalf of a third-party, then collect a percentage of the sale price as a fee.
  • Dividend: purchase an ownership stake in a business, then collect a corresponding portion of that business’ profit over time as a dividend.

Quote of the day

“If you provide the servers and workstations and applications for an organization, that’s IT. When they cut your budget and make you responsible for the ‘phones as well, that’s ICT.” posted at “IT Job Satisfaction Plummets To All-Time Low” on ./

Apart from that quote, I do see a lot of truth’s buried in the (other) comments.

  • “As you get older, your priorities shift. Putting in extra hours is something you do because you have to do it in order to do your job well, not because you are enthusiastic. You have other demands on your time, and other responsibilities such as family. So the fact that the IT boom is long gone, job security is low due to outsourcing, and respect for the industries that pay most is at an all time low means you’re not attracting as much new blood.”
  • “So, being an IT guy ain’t what it used to be… at least to the public at large. And I think that lack of respect/not being appreciated for the kind of work that we do/etc is what’s causing a disconnect and a need for professionals to become *consultants*. Because, once you bill at several hundred dollars an hour, people start listening to you a lot more, and respecting you significantly better.”
  • “How many IT jobs today involve compliance? How rewarding is compliance-related work? I bet that some of the lack of willingness to suggest process improvements is somehow tied to the process baggage of IT compliance.”

On the long run, I see a future where IT is seen as a full business aspect where it should belong “process integration”. At the moment I think IT is mostly seen as the “maintenance” departement of companies who should fix the machines when it’s broken.