Tail that wags the dog….

October 4, 2009Blog Standard

Many enterprises today have unwieldy IT departments who have a hetrogeneous infrastructure and application landscape accumulated over a period of time.

Of all the large IT departments I have come across so far, two challenges seem paramount and common amongst all.

First – A large percentage of the IT budgets are still spent on “keep the lights on” expenditure with lesser scope than desirable for innovation or transformation related projects.

Second -The disconnect between business priorities and IT spend. Often the IT systems are not really aligned to business priorities and business processes have to be realigned to fit with IT systems.

IT departments in these enterprises are akin to the “tail that wags the dog”.

As the economy goes through the tough times, enterprises will take this problem head on.
So as the dog decides to take control and wag the tail, we will start seeing a significant shift in the way businesses prioritise their IT spends and force IT to get aligned to busienss realities.

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Nice to see you alive and kicking out thoughts!

Anirudh Joshi

A response I received on email from VDM – a veteran in IT business.

"Unfortunately the IT department has come to be regarded as the
enterprise's Achille's heel , of late. While there could be an element
of truth to it, the problem has to be seen in the larger context.

Here are the ground realities .

1.The CIO is often measured by cost and cost alone.
This puts innovation in the backseat by definition – if at all
there is one it is geared towards reducing costs. I remember my
days at Telco when the IT department comprised of the brightest minds
in the company – reason – IT did everything from product management to
implementation not only for Telco but for the other companies.

Gone are those days. Today's IT is vendor infested.Oracle runs their
ERP,HP their hardware, EDS manages their back office operations,
Infosys their implementation and so on. In such an environment,
pray, what core competence does IT possess ?

Innovation must come from building systems ground up not from
buying it, if the IT department has to survive and maintain a
modicum of respectability within the enterprise. NTT , Japan ;
Pidilite,India and IIT,Mumbai are some of the examples that I know of where
bottoms up innovation is practised. Unfortunately the regulatory restrictions in a public company impede the use of open source
software and encourage a paradigm where "Nobody got fired for choosing
IBM or Oracle".

I would conjecture that the purchase and deployment of packaged
ERP systems was more out of 1.Risk transference to the vendor and hence indemnification of themselves by IT management 2. Peer pressure.

For all you know , those who remained steadfast in their loyalty for home grown systems might emerge the winners in this downturn !
Reason – those IT departments still maintain complete control over their
costs and more importantly have retained their core competence.

The cost paradigm is dangerous. If you try to reduce costs below a
certain level, you put the system in grave danger. An inexperienced
DBA for example may mess up the performance of a database or a
cheap programmer may deliver shoddy code. No talented individual may
want to manage such resources and hence the management layer would be
mediocre. The chain goes on until you have put the system to a grave

My advice to the CIO's —

1. Have the top management change the way you are measured.
Measure yourselves by value not by cost.

2.Every person inducted into the ecosystem – either employee ,
contractor,consultant or vendor's employee must meet certain
requirements of aptitude,motivation and credentials.

Acharya Rajneesh said "Pseudo teachers create pseudo disciples.
Those pseudo disciplies then become pseudo teachers and create
more pseudo disciplies."
The CIO has to safeguard the ecosystem from this phenomenon –
a tall order given today's reality but the availability of
high talent in today's downturn should help overcome it.

3.Users are lead innovators. The CIO is closer to the user's needs
than the vendors. Take advantage of it and monetize the needs by
building systems around them.

4.Don't let the vendors infest your department. It is not only a
question of the IT department but about a profession called system
design. System design requires thought and action leadership –
do not outsource it at any cost.

5.Stand up to the business. Its got to be a relationship among equals.
This can only happen if 1 through 4 above are achived"

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