Friday, June 18, 2021

Everyday Work in the Way of IT Innovation

IT administrators and workers are so busy addressing operational issues,

they don’t have enough time to be innovative, according to a recent study

from A.T. Kearney, a management consulting firm.

In fact, the study says that only 20 percent of the IT budget is

allocated toward innovation, which is a 30 percent drop since 2002. As if

this wasn’t bad enough, 30 percent of business executives think the IT

budget is wasted.

To address these perceptions, IT must address process and applied

innovation requirements.

Applying Controls

The operations teams are concerned with supplying infrastructure services

that are required for competitive parity. If you will pardon the analogy,

these are the people who need to keep the plumbing working according to

defined service levels. To do this, the various functional areas must

adopt process models and quality improvement methodologies.

To elaborate on the need for process improvement, studies show 80 percent

of the problems IT encounters are created by human error, and IT

operations expense budgets are consumed with unplanned work levels as

high as 45 percent. In other words, human error isn’t just creating

incidents, it is one of the largest, if not the largest, underlying

causal factors for budgets being blown and innovation on the decline.

If people are constantly firefighting, then they don’t have time to do

other things. As management witnesses expenditures that don’t further the

business, a spiral can set in where less money is allocated toward IT.

And with even less total funds to spend, IT will react by cutting

innovation even further just to try to stay afloat.

If the organization is staffed for reactionary firefighting versus

proactive engineers, then the organization may very well have the wrong

resources to go to the next level.

The answer isn’t to get better at fighting fires — the goal must be to

prevent the fires in the first place.

To begin addressing human error, organizations must implement change

management as more thoroughly covered in the IT Process Institute’s

Visible Ops Handbook. Without a doubt, stopping human error from entering

the production environment is one of the largest improvements that an IT

operations group can make.

Switching Teams

For development groups to meet expectations, they need to understand

strategic objectives, be tightly involved with the business and they also

must be effectively managed in terms of how they go about developing new

products and services. This requires project management processes and

formalized development through the use of well-thought-out System

Development Life Cycle (SDLC) methodologies.

These two areas are integral as project management provides a control

wrapper within which the SDLC functions. If we listen to the Standish

Group and their Chaos Report, the overwhelming majority of projects fail

for non-technical reasons. By adding controls through the use of

formalized project management and a well-thought-out SDLC, management can

mitigated risks confronting the creation, testing and deployment of new

systems.

But what about innovation?

For most businesses, raw innovation isn’t what matters.

IT must work with the business side to truly understand what risks and

opportunities are out there. From there, the groups must work together to

identify where to invest time, resources and money. There must be an

understanding by all parties that force multipliers are key and need to

be focused upon. Borrowing the ”force multiplier” term from military

parlance, the intent is to identify areas where the return is in

multiples of the investment.

Some may call this obvious low-hanging fruit, but it goes beyond that.

Low hanging fruit may bring tremendous results in a short amount of time

but doesn’t necessarily mean the returns are sustainable or worthwhile

over time, unless some form of time value of money (TVM) analysis is done

as part of the business case. For example, cutting the operating budget

in half without careful analysis may cause earnings to rise but is

unlikely to be sustainable.

To identify force multipliers, teams must recognize that a relative few

processes truly create value and drive the organization towards its goal.

This inequality is often labeled as the 80/20 Rule, which says that a

relative minority of inputs (20 percent) generates the majority of

outputs (80 percent). Whether it is 15/85, 30/70, or whatever the exact

outcome, the point is that statistically, the minority or processes we

perform — projects we are involved with personally and at an

organizational level — really drive value.

These precious few must be carefully identified and focused upon. If

customer service is a vital differentiator that creates repeat sales, go

after it. If driving down cycle times in one area of manufacturing is

vital, go after it.

To really drive this home, imagine a critical path on a project GANTT

chart. If tasks are accomplished that are not on the critical path, then

the completion date doesn’t change. However, if a task on the critical

task list is completed, then there is real movement toward completing the

project. Even better yet, if tasks are completed early or resequenced and

done in parallel to pull in the completion date, then the objective is

realized sooner.

In short, understand the goals of the business and determine what can be

done to propel the organization toward its goals faster. This means

watching both ways to add value and methods to manage risks. A path with

high rewards but also high risks must be carefully considered.

There are two major points to take away from this.

First, operations and development need the proper processes and controls

to ensure that risks are managed and expectations are met, resulting in

lower unplanned work and more resources to work on planned work.

Second, raw innovation isn’t what is needed. Innovation that benefits the

business while properly balancing risks and rewards is what is needed.

For this to happen, IT must work with the business side to identify both

opportunities for improvement and potential solutions that address those

opportunities.

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