Tag: Outsourcing
What is the biggest threat to internal IT Departments?
What the hell do all these IT people do all day anyway?” That’s a great question often posed by staff members, CEOs, CFOs and line-of-business managers. As a senior IT executive or manager, can you answer that question?
The Problem
I often see IT staffers engaged in ridiculous pursuits that provide no value to an organization — printing business cards, acting as intermediaries for support calls to external vendors, repairing equipment that is under a service contract, and generating reports that should be created by end users. Moreover, I see too many menial, repetitive tasks like patch management being performed by expensive humans rather than by automated systems. Many IT directors either don’t recognize the dysfunction or see it as a way of keeping their overstaffed empires intact.
Even worse, IT staff members often engage in activities for which they are not even remotely qualified, but which they insist on performing because of some misplaced DIY (do it yourself) philosophy. Such activities are often part of what I call a wild-west management style where IT staff members decide for themselves which activities are of value to the organization. I recently had an encounter in which an IT minion told me that TCO (total cost of ownership) information I was requesting as part of an audit was “not going to provide value to the organization.” Huh!
What is important to your organization?
Services that are valuable to one organization may be of little or no value to another. Establishing what services will provide value to your organization is a critical business activity in which you and your executive leadership team should be fully engaged. These decisions shouldn’t be left to the whims of minions. Unfortunately, this sort of strategic planning occurs in few organizations. If you are working for one of the majority of organizations not following any best practices for IT service delivery, this conversation with your leadership is even more important. There is really no such thing as an IT problem, but management issues abound.
As a manager, one of your primary functions should be to “make resources productive” (as Peter Drucker wrote in The Practice of Management). Are you doing that? Can you instantly produce reports and metrics demonstrating that your IT operation is delivering real business value to your customers? Can you summarize exactly what services and value your IT operation provides? “Serving the needs of my customers” isn’t a good enough answer. Trying to be everything to everyone generally results in being useless to everyone.
The biggest risk to an internal IT operation isn’t external contractors; it is poor customer service. Let’s discuss how to reduce that risk.
Solutions: Start with the basics
Do you know what your staff members are working on? Are they using a clearly defined service catalog, adhering to a service-level agreement (SLA) and using a professional services automation (PSA) system? These are basic governance documents and operational tools that should be in deployed in even the smallest IT operations but they are often absent even in large, well-funded IT organizations. Indeed, smaller organizations with scarce resources would benefit most from these tools.
Instituting just a few of the basics will dramatically improve your IT service operations. Let’s take a look at three best practices you should be using. We can think of them as a poor man’s ITIL (IT Infrastructure Library), but you don’t need a full-blown ITIL implementation to improve the efficiency of your operations. Use common sense, a structured approach and a cycle of continuous improvement. The perfect time to begin is right now!
Service catalog
A service catalog is “an organized and curated collection of any and all business and information-technology-related services that can be performed, by, for or within an enterprise.” (Wikipedia)
The catalog should be developed with your executive leadership so a clear and universal understanding of the services you are providing is available to your customers. Which services are provided internally and which will be performed by external contractors? How much do they cost? When are they available? There is a downside to service catalogs, but this can be managed.
Focus on high-value services that you can realistically support. Strive for quality rather than quantity. Doing a few things well is preferable to doing many things poorly.
Service-level agreement
SLAs are often treated as requirements for external vendors, but why shouldn’t internal service providers be held to the same standards as external ones? CIO provides good discussions here, here and here.
Once you have an SLA in place, it must be enforced. You are the manager, so do your job and start managing.
PSA system
An overarching problem in our industry is that end users often complain that IT is not responsive to their requests for service. Is that really true? Did they really report a problem to IT or did they just go home and tell their cat? Or did they casually mention their problem in the break room? All encounters between IT personnel and end users should be fully documented in a highly automated PSA system that has audit trails and escalation policies.
Lack of a PSA system is my biggest IT pet peeve. There is no excuse for not having such a system, and they are downright cheap compared to the cost of IT labor. In an IT assessment or audit, the lack of an auditable system to manage service requests can bury you — the vulnerable CIO or IT director. The reports and data from such a system can prove what a super manager you are. Or they can demonstrate your total incompetence.
You will incorporate your catalog of services and SLA into your PSA system.
It’s no accident
Providing superb, high-value IT customer service doesn’t happen by accident. By following a few relatively simple steps, and having discussions with your executive team, you can dramatically improve the quality of your operations.
© Copyright Jeffrey Morgan, 2016
This article was first published at http://www.cio.com/article/3126384/leadership-management/what-is-the-biggest-threat-to-internal-it-departments.html on CIO.COM.
by 
Foreign IT Workers and The Cultural Divide
Culture Matters
I lived and worked in the Republic of Korea in 1986 and 1987 and spoke half-way decent Korean. I also spent 3 months in Thailand and learned enough Thai to go down to the market and bargain with vendors. I have spent time in other Asian countries as well.
One of the big lessons I learned was that even if you speak the language, cultural concepts and even body language often can’t easily be interpreted or translated using verbal communications. Even talking about basics like the color of an object can be difficult.
Does yes really mean no?
At one point in Korea, I was acting as an interpreter for a meeting between American and Korean General Staff. The two sides couldn’t come to agreement on an issue and the American General blamed the lack of agreement and acquiescence of the Koreans on my abilities as an interpreter. The real problem was cultural rather than a lack of communication or understanding. What I clearly understood was that the Korean General was giving off all the cultural cues that said NO without actually stating it verbally – something he would have considered to be rude. The American General couldn’t comprehend this because American officers are trained to say NO most of the time. Saying NO isn’t necessarily considered rude in our culture. Also, the American General was changing the pre-defined plan at the last minute. Maybe things have changed now, but at the time, that kind of entrepreneurial change of plans at the last minute wasn’t something that would be rewarded in Korean culture, least of all in the military.
Xenophobia vs. Business Decisions
I frequently recommend strategic contracting and outsourcing to my clients, but contracting to people whose native language is not English from half way around the world is not what I am proposing to them. When I recommend outsourcing, I am suggesting that they contract with a local or regional professional services firm with people who have a shared cultural perspective.
Language isn’t the only problem. Culture can be a huge problem too. This isn’t xenophobia; it’s a business calculation. I have lived and worked all over the United States and the cultural differences between South, North, West, and East are vast. From a cultural point of view, California, New York and Texas are in many ways different countries, but we do share language and to some extent, culture. Conducting business when all the players don’t share language, culture, and common goals can present insurmountable obstacles.
The high price and hidden costs of cultural collision
I worked on a disastrous project in the late 1990’s that resulted in an 8-figure loss to taxpayers and several wasted and frustrating years for hundreds of people. The project was a top-down initiative from the highest levels of state government to implement a state-wide social services case management application. The software development was contracted to a firm from half-way around the world. The entire concept of the project was flawed from inception and the project, stakeholder, and communication management were poor.
The workflow was cumbersome and illogical and I always suspected that the workflow probably made sense if your brain had been wired differently based on language. It was clear that no one had bothered to consult case workers in the field about how they collected, managed, and entered data in the field. Everything was wrong with this project and there was plenty of blame to go around – especially blame for the executive management at the state level. However, communication with the foreign programmers and support personnel was a significant problem. The communication problems were both cultural and linguistic. Even the concept of what constitutes “customer service” has significant cultural ramifications and the idea of “social services” is not something universally understood around the planet.
There are cultural differences between companies as well, even if all the players are native English speakers from your region or your local community. If you are considering strategically outsourcing some aspect of your IT operations, cost shouldn’t be the only consideration. There is a value to cultural compatibility. The company culture of a potential vendor may or may not be a good fit with your organization, even if their office is right down the street. Cultural fit is an essential component of a successful business relationship and determining that fit should be part of your procurement process.
If you need help procuring appropriate contracted services for your organization, send me an e-mail at jmorgan@e-volvellc.com. Read more about IT Governance at http://blog.e-volvellc.com.
Copyright © Jeffrey Morgan 2016, 2017
by Information Technology Staffing Models
There be more ways to the wood than one and the methods for managing your organization’s Information Technology needs run the gamut from 100% contracted services to a full-service, in-house IT shop with help desk, software developers, and and other support including network and security engineering. All of the variations between these two extremes can work if they are strategically planned. Which one is best for your organization? That depends on your business requirements, goals and objectives, industry, organizational culture, and budget. Key elements that will contribute to whether or not the model you choose is successful include a Strategic Plan and and highly specific contracts and service level agreements.
Cost Vs. Value
Before we perform a summary examination of some specific models, let’s stipulate that this is a business project. Cost is important, but so is value. In order to determine which model will best suit your needs, you will have to make your own calculation of the Cost vs. Value equation for your organization.
How Much Does IT Cost?
How much does your operation cost now? And what value is being provided right now? Surprisingly, very few organizations can concisely and immediately answer these questions. IT costs are often buried in departmental budgets and sometimes linked to inappropriate budget accounts. Shadow IT Staff, staff members not technically part of IT but performing IT functions under a different title, are often unaccounted for in a summary of IT costs. Moreover, the cost of IT equipment has gotten so low that much of it is expensed under office supplies or something similar, so it doesn’t show up as a fixed asset or an IT line item. Unless you have very strict accounting rules, it is possible that accurately calculating the cost of IT may be difficult or impossible. This entire discussion might bring up another question: What exactly is an IT cost? Sometimes, the simplest questions are the hardest to answer.
Before we look at specific models, let’s talk about one more thing. What do you want? What are your business goals and objectives? Do you want a Help Desk to answer the phone and provide assistance with applications like Microsoft Office? Does it make sense to pay for that service? Do you require in-house server and network support to get immediate response? Or is a contracted service with a 1 or 4 hour service level agreement good enough? Are you looking for the development of institutional knowledge in-house or can a long term contract provide that security?
The secret to an efficient operation is good management that focuses on quality of service regardless of the model. A Service Level Agreement (SLA) is always required to define the scope and services to be provided by both in-house staff and contractors.
100% Contracted Services
This model is commonly used in small organizations but it can easily scale to relatively large operations. If you choose this model, I would recommend that you separate duties so that the vendor who sells and installs “stuff” is different from the vendor or consultant who is providing direction, design and planning services. In this way, you can eliminate the conflict of interest that may encourage a vendor to oversell or over spec. Consultative selling is big in the IT market and many vendors who sell solutions will provide honest advice on the best direction to take, but why risk it? Moreover, the sales people and techs whose job it is to sell products and services may not understand the minutiae of your business operations, goals, and objectives especially if you have highly specialized lines of business.
Contracts in a fully outsourced model may have some combination of a fixed rate for fixed services as well as an hourly rate for additional, incidental services. As with all contracts, close monitoring is required to keep costs in check.
The Technology Coordinator Model
One popular model is the use of a single Technology Coordinator. The position might have different names, but the general idea is that a single employee manages the strategic plan, coordinates services and manages all the contracts.When using this model, it is important to avoid the scope creep that can result from using the Coordinator as a front line fix-it person.
Hybrid Models
Most medium to large entities use some sort of hybrid model that includes a combination of in-house staff and contractors. Again, service level agreements are essential and the in-house staff can easily grow to gigantic proportions without careful management. I have seen medium sized operations with 20 or more IT FTE’s where a few staff members and strategic contracts would have been a more economical and efficient solution. In some industry sectors, a large staff may justified. However, in something like a typical medium sized municipal operation, a hybrid model with a bias toward contractors makes a great deal of sense. If your contracts are well-written, it is easy to get rid of an under-performing contractor, but eliminating or replacing employees can often be a nightmare.
Full Service Models
If Information Technology is a core business function for you, a full-service, self contained IT operation may be appropriate, but this scenario is rare if you are truly basing your decision on objective business criteria. Even the largest organizations strategically contract some services. If you are currently responsible for a large, full-service IT operation maybe it is time to do a cost-benefit analysis of other options.
Some Generalizations
In a medium to large manufacturing operation with a dynamic network, network and security engineers may be required. In a static operation of a similar size, it might make more sense to contract these services since they will rarely be required. In-house software development is similar. Some organizations might require full-time software developers, but for more static organizations, purchasing Commercial-off-the-shelf software is far more efficient and cost effective than custom software development.
If you require assistance evaluating staffing models for your organization, send me an e-mail at jmorgan@e-volvellc.com. If you would like to read more about IT Governance, check out http://blog.e-volvellc.com.
Copyright © Jeffrey Morgan 2016
by 
Recent Comments