IT Management

Feedback from ‘Best practice business information technology’ presentation in Townsville

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I’ve now received feedback for my session ‘Best practice business information technology’ presentation I gave to the Queensland Country Conference in Townsville on May 16 2008 (the second day of the conference).  Again in the interests of honesty, integrity and transparency I’m posting the feedback.  One of these days I’ll get some really negative feedback and the test then will be whether I post that :).

CPA Australia apparently aims for a rating of 4.2 (Very Good to Excellent).  43% of the attendees responded.

My overall rating was 4.20, with a ‘Technical Content’ rating of 4.20 and a ‘Presentation Material’ rating of 4.19.  All ratings are out of 5.

Comments made were:

  • The most beneficial session so far.  Can relate to speaker & he addressed core business everyday issues.  Very informative.
  • Information on IT strategic plan was very useful.
  • Very informative – great general technological advice along with specific planning procedures.
  • Certainly offered a higher level of overview and advice on the topic.  Which was very useful!

I’m pretty happy with that – particularly for the comment about ‘core business everyday issues’ – it can be very easy to fall into the trap of being too academic, so I work hard to give practical advice when I can (whilst still being robust).

By the way, here’s the Mercure Inn in Townsville – very nice and practical venue. 

While we were there there was a special function for Army Veterans, I believe – the place was packed to the rafters with khaki and blokes with assertive voices.  That probably shouldn’t be a surprise in Townsville, should it?

CPA Australia ITM CoE meeting

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Well I’m off to Melbourne again this morning for the first face-to-face meeting of the ITM Centre of Excellence this year.  In some ways we’ve been a bit slack this year – but our work plan is still cranking out because we’ve got the dance card aligned. 

There’s a major publication coming out on the business management of IT (that is very, very excellent and I love Chris Gillies’ and Jan Barned’s work on this one – you’ll be able to buy it online very soon), a research publication on telework has come out (thanks John Campbell from University of Canberra and Jon Heales from UQ- read it on the weekend and it looks good), there’s been an article for the CFO Software Guide that comes out next month (on social networking – thanks me!), and there are two forthcoming articles on the impact of social networking on your career and business (June and July issues).

These last two are for InTheBlack and again, thanks me!

There is also a major publication coming up that is a guide to ICT Outsourcing, which wraps up a stream of work that has been around for a couple of years now. 

CPA Australia has also commissioned me to write a policy and procedure guide to social networking.

As well as that I believe there is a ton of work coming through on the telework research front, and I am down to give three presentations at CPA Australia PD sessions in the next four months or so (Townsville, Brisbane, and Sydney and Melbourne, and Brisbane again). 

As well as continuing on with the IT Specialists assessment panel. 

There is also a total review of the websitre, and our content has been, finally, rebranded as “IT Management” rather than eBusiness, and as well as that we came up with some points to go to the 2020 Summit with.  However I don’t know that that produced very much :). 

So when I say ‘slack’ I actually think I may mean it in the ‘quite busy’ context. 

I think our work plan is still going strong – that will be the focus today and to align the dance card for the rest of the year.  April is a bit late for our first face-to-face meeting but no doubt it will all come together.

On another note – I’m thinking about setting up a video blog on this blog – technically, it’s all sorted.  I just need to find something to say.

IT Management and the philosophy of Dr Seuss

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I got news today that CPA Australia changed the title of the IT area on its website to “IT Management” here:

http://www.cpaaustralia.com.au/cps/rde/xchg/SID-3F57FECA-8F43E1DA/cpa/hs.xsl/877_ENA_HTML.htm

I thought some bad business poetry might be in order:

And there was cheering in the street,
Jan had done something that simply couldn’t be beat
The website not for ebusiness meant
Had its name changed to IT management.

(sorry, too much Dr Seuss in this household).

In-House Developed Software

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Overview

A significant amount of in-house developed software is often created by the in-house IT area.  A key symptom is a proliferation of Microsoft Access databases. 

Although the positive results can be significant from developing in-house software, and this approach often removes the need to purchase very expensive software (and software in some cases that does not exist), several issues should be taken into account before developing in-house software.

Technical Issues

The use of Access databases may not always be technically appropriate. In particular, it becomes difficult to integrate Access databases and maintain software application versions across a network without affecting network speeds .

Stepping Outside the Budgeting Process

Often, the systems developed appear to be undertaken as requests from end users for software that cannot be funded from the budget. Software may be developed that address the required business functionality, meet the users’ needs, and save significant up-front investment costs. However, the application of resources (i.e. a staff member’s time) is not allocated according to a business need – the IT area spends its own resource (time) for another department to save resources (budget).

It is often difficult (but not impossible) for an internal application development team to consider the issues objectively and to act in accordance with the enterprise’s best interests. As part of the same enterprise, they can face internal pressures to develop information systems that would not be developed were the arrangement at arms’ length (as would be the case with a third-party software developer that must charge fees to be economically viable).

Uncertainty of Outcomes

When software is built in-house, the cost of doing so may initially appear to be less, as there is no profit component included and any overheads are considered to be ‘sunk’ costs.

However, the likelihood of achieving the benefits is less certain. Therefore, the benefits should be reduced by this risk factor when considering in-house systems for development (or alternatively, the costs of the project can be increased by the risk factor) in order to consider properly the business case of the application development. It is not appropriate to say “this database will save $10,000 on the cost of a new off-the-shelf system”. The potential benefit needs to be discounted by the risk factor that applies.

Additionally, the long-term support and maintenance of the developed information system is often not given proper consideration in the business case. Once the application is developed, there is a need to provide support and maintenance for that system in the long term and, without an extended user base (i.e. other businesses to share the costs with – as is the case with a packaged solution), the costs can be considerable.

Staff Retention

Linked with the issue of support and maintenance is the difficulty of attracting and retaining in-house application development staff. Application development staff generally prefer to develop new information systems rather than maintain existing systems. Retaining that corporate experience with the information system over the life of that information system with an in-house application development team can be difficult if the ability to challenge and extend the skills of the internal staff is limited.

In this case, a single person has created a significant number of database software applications. Although the software development environment chosen may be relatively mainstream (e.g. Java, Microsoft Access, Microsoft.Net), the risk exposure remains that future maintenance and development will fail due to staff turnover, or at least of the limits on that staff member’s available time.

Software Development Lifecycle

When a packaged application is purchased, it is expected that the software developer will carry out future research and development such that new technologies will over time be integrated into the product. With an in-house application, this is unlikely to occur – rather the system will tend to be redeveloped or have new technologies integrated only when the functionality loss is too much to bear, or at crisis points in the system’s lifecycle (e.g. when it suddenly stops working).

Risk-Adjusted Cost/Benefit Analysis

For all of the preceding reasons, there should be reservations that the benefits of in-house application development can be achieved.

Accordingly, it is suggested that any consideration of an in-house application development project take the approach of a Risk-Adjusted Cost/Benefit Analysis. Here, the business case for the development of a new in-house application solution for member management needs to incorporate a risk-adjustment factor in consideration of the costs and benefits, and provide a range of costs/benefits for consideration. That is, the uncertainty of actual costs and the uncertainty of actual benefits being realised is factored into any consideration of an in-house application development project.

Strategic Grid

Consideration of the following strategic grid in evaluating new information systems for external purchase or internal development may be of assistance:

Important questions for consideration include:

  • Identifying existing in-house applications;
  • Identifying existing applications that are appropriate (and developing technical documentation for these applications); &
  • Migrating from existing applications that are not appropriate to new solutions.

It is often valuable for a business to develop a policy for the development of in-house application development of software solutions that takes into account the strategic grid outlined, and the risk-adjusted cost/benefit analysis.

Getting IT Right!

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This is an article that was written for the February issue of the Queensland Business Review.  It is partly promoting an upcoming ‘Getting IT Right!’ seminar to be held at BDO Kendalls on 21 February 2007.  More information is available on the BDO website www.bdo.com.au.

Introduction

Stories of failing information technology (IT) projects, IT teams that just ‘don’t understand’, lost spreadsheets that contain critical business data, and critical applications that seem to crash for no apparent reason are all too common scenarios. Information technology promises a great deal to all businesses, but often fails to live up to expectations.

These problems cause frustration for all concerned. Unfortunately ‘getting IT right’ cannot be achieved with a simple wave of a magic wand. The current skills shortage shows no signs of abating, and it is important for a business to use its staff effectively. Good business support from information technology is one of the keys to unlocking this effectiveness. Four essential business tactics exist that can assist:

  1. Understand the business strategy
  2. Have the right people
  3. Use standard processes
  4. Use the right technology

These tactics will have a positive impact on the success of your business in the context of the support received from information technology.

Understand the business strategy

An understanding of the business strategy, and the involvement of business in IT decisions, is necessary to avoid an IT team working on the unnecessary projects.

This common problem usually stems from a lack of understanding of the goals and vision of the business when it is tempting to implement technologies that seem to be the correct decisions at the time. Sometimes these decisions are right; frequently, they are not.

A business’s main strategy can be focussed upon product innovation, customer relationships, or operating excellence. Identifying the predominant strategy removes trivial distractions for the IT team. There is little point to significant investment in a customer relationship system where the main focus of the business is upon delivering the best products at the best price. Conversely, for a business focussed upon customer relationships, the priority will be to deliver and operate a customer relationship system.

The business strategy must be clearly communicated to the IT team. A written statement of the business IT strategy is useful (vision, mission, and objectives, together with supporting initiatives and milestones. Even more useful is a cultural emphasis on the importance of the role of IT in achieving the
business vision. Such a cultural emphasis can be achieved through concrete actions (e.g. declining projects that do not support the business strategy) and regular adherence to and acknowledgement of the IT strategic plan.

Aligning information technology to the business strategy will reduce distractions that arise through not having a clear direction of the role and purpose of IT in supporting business goals.

Have the right people

A common problem facing IT teams is that the staffing ratio is all wrong. The wrong staff are doing the wrong jobs for the wrong reasons. For example, a business that employs four network administrators and only one help desk person will likely have a network that works very well at a technical level. Unfortunately, there will be many frustrated end users not receiving the desktop support they require. The result can be business chaos.

IT roles that do not directly support the business strategy should be considered for removal or outsourcing. IT teams regularly have ‘legacy’ roles from the past that are no longer needed or appropriate. A regular review of the roles in the IT area and their alignment to business strategy is a potentially valuable approach.

In addition, end users need the training and skills to use the technology that is provided. Frequently no training is received by IT teams, or end users in the software on their computers, and – especially in the case of upgrades – continue to use the software as it has always been used, without using new features. Adopting a formalised and documented approach to training can be beneficial, but even recognition of the need for training through ad hoc opportunities will bring benefits to the business.

Use standard processes

Often IT teams have only one person who can resolve a problem. Or worse, each team member will resolve the problem in their own way. When the staff member leaves, no-one else can fix the piece of equipment. The end result is chaos and delays for the valuable staff member.

If the same task must be done more than once, the potential for developing a standard process exists. No IT team should be without good help desk software, and ensuring a discipline around managing problems and documenting resolutions will pay dividends. There are free help desk management tools available (e.g. open source solutions) and new social networking tools (e.g. ‘wikis’) for documenting and storing processes and procedures that are inexpensive, simple to use, and easily maintained.

Reviewing the use of help desk management software, and writing procedures for standard tasks (starting with the most common tasks) will repay the business handsomely.

Have the right technology

Technology that is simply wrong for the task at hand, or obsolete, costs businesses a great deal. Excel spreadsheets will frequently be used for tasks that really require a database. Or many technologies will be used where a single technology product would suffice. It is crucial that the right technologies are used for the task at hand. This does not mean that the ‘latest and greatest’ gadgets and gizmos should be adopted, but for a business that is reliant upon IT, it is necessary to have all technology covered by parts replacement warranties.

Technologies that are still supported by the original developers or manufacturers are fundamental to ensuring that the IT team is effective. Limiting the number of technologies to support will also help. Approaches to ensure that the right technologies are used include a statement of the preferred technologies to be used (e.g. identifying a single preferred database technology such as Oracle compared to SQL Server), maintaining warranties on all important business technology equipment, and limiting the use of customised and in-house developed software.

Conclusion

Effective information technology requires that the IT team be provided with the skills and equipment necessary to deliver upon the business strategy. Likewise, the business needs to provide strategic direction and input into decision-making for business information technology.

There are many more tactics that can be adopted by businesses to ensure that IT can deliver upon its promises. This article has highlighted those tactics that are common to most businesses and will have the most positive results. Nevertheless, there are many other tactics that can be adopted that are unique to individual businesses, and must be considered in light of the specific circumstances of the business.