Manage IT Costs and Culture

Potential of IT

Homeland security organization chart from Wikimedia commons

Information Technology’s (IT) ability to add value to organizations is significant and growing. It is estimated that organizations typically leverage less than 40% of current technology. With such a powerful vehicle running at half speed, IT must remain the highest priority in increasing productivity and innovation.

But with any substantial and multi-faceted tool, IT is as often misapplied as it is under utilized. Ignorance and impatience play a role. But the potential lies deeper than further education. Systemically, our departmental hierarchy model is inadequate in utilizing a resource that should pervade every business process, product and project in which we engage.

The question quickly becomes how to change the paradigm in order to shift IT into high gear. The answers are synergistic.

First, replace traditional IT metrics with the organization’s strategic list of operations and projects. It is only from the organization’s perspective that IT can meet its potential. IT projects are more appropriately viewed as components of business initiatives; they are subsets of strategic initiatives and should be treated and measured as such.

Second, given the pervasiveness of technology’s potential, IT professionals should be embedded in every organizational endeavor. While each situation must be considered individually, most IT members should be actively working under dotted line authority for other operating and support groups. RFP’s and department silos are not adequate to the task of continual improvement and innovation by a specialized field. Emersion is the only answer.

Integrated technology can contribute to virtually every circumstance. IT must come out of the back room and participate in every group on the front line where they belong.

The Issue of Hierarchies

Departmental divisions regardless of their reasoning form an increasing challenge as organizational tentacles grow; ignorance, misunderstanding, incivility, lack of communication, priorities, culture, grand standing, politics, personal ambitions, etc. all tend to create obstructions. But no animosity or indignity is needed to reduce their synergy.

The systemic effectiveness of command and control hierarchies is inversely proportional to an organization’s size and complexity. Size increases the distance between departments and complexity acts as a barrier to entry between them. This is a foundational issue of large organizations exemplified by government programs with multiple delivery systems to the same customer all blissfully unaware of each other and their cumulative effects. It could be said that all federal measurements of poverty and their programs are rendered inadequate because they do not measure the totality effect of programs and the ineffectiveness of their disconnected disparity. Only a large organization can afford to ignore multi-channel effectiveness.

IT and legal departments are especially prone to becoming bottlenecks in organizations since multiple divisions and departments tend to depend on them because of their high rate of change (one through innovation and the other through proliferation). If we’re not careful, the whole organization ends up waiting in line like patients at a doctor’s office.

The doctor’s office analogy extends to the stimulus response cycle as well. Like the patient, departmental hierarchies depend on the lay person to decide when they should request help of specialized personnel. There are two problems with this model. First, the person with the least knowledge is initiating the contact. Ideally for the consumer it should be the doctor or specialist who decides when they can add value and only then should the billing begin. Doubtless doctors get paid more money by charging for petty consultations (like wiping runny noses), however organizations do not. Surprisingly enough, the doctor-patient analogy does not break down here because it is a third party transaction while the IT-department relationship is internal. The challenge in both cases is the same; lack of information.

Doctor visits imply the second issue with the model; the inefficiency of the stimulus or request for proposal (RFP) itself. In addition to opportunity costs (think doctor visits), RFP’s are also intricate and time consuming (especially if they are denied, like the useless doctor visit). Perhaps most importantly they are purely a function of the isolated silo hierarchy in the first place, since their primary purpose is to educate IT on the finer details and purpose of the organization. IT, like the doctor, is not close enough to have sufficient information. The time spent formally communicating and educating increasingly complex issues to departmental support staffs can quickly become enormous in project definition and execution. Put another way, as our prescriptions become more sophisticated, so does our need for information.

The issue gets worse. It is impossible to determine how much time middle management and other associates spend educating, negotiating, pleading and otherwise waiting for inter-departmental aid. Eventually the organization loses both speed and productivity. Soon it affects morale, and the organization learns to settle and complacency sets in. Now the organization sits on the precipice of bureaucratic hell, moving slower with lowered expectation, and running the risk of reduced engagement and therefore input and innovation. At least the patient in the doctor’s office in our analogy has their own health concerns to remain motivated.

How shall we address the organizational issue as it grows? See the next article in the series to to see alternatives.