Friday, November 11, 2005

"You want a system to do what now?"

Tony Lock writes an excellent article in this week's newsletter, highlighting the communication gap between IT departments and their customers. A new survey by Coleman-Parkes found that amongst 214 FTSE 750 organizations, only 18 percent held weekly meetings between business managers and the IT teams. The research also indicated that 31 percent of those surveyed claim that they never or hardly ever have such meetings. In large corporate IT departments there can be a culture of avoiding contact with "users", who always seem to have strange and unreasonable demands that don't fit into the perceptions of the IT department. The atmosphere can become quite hostile if IT departments set themselves up as "consultancy" organizations that charge themselves out to their internal customers. The internal customers resent being forced to use an internal service that they often perceive as unresponsive, and can be outraged to find themselves being charged at similar rates to external service providers. Some of this is not reasonable - those same customers are forced to use internal legal counsel and are charged through the nose, whether or not they like it. However there is a peculiar frustration with many business users over their IT departments that can boil over when discussing charge-back mechanisms and service level agreements.

Over-elaborate internal billing systems can cause unnecessary cost and frustration. I recall when I was at Exxon seeing an instructive project to review internal data centre charges. The existing system was extremely elaborate and charged based on mainframe usage, disk storage, communications costs and a whole raft of items. Most users didn't understand half the items on their bills, or played games to try and avoid hitting arbitrary pricing thresholds. None of this added one iota of revenue to Exxon. The project manager, a very gifted gentleman called Graham Nichols (on his way rapidly up the organization), successfully recommended replacing the entire system with a single charge once per year. This saved a few million pounds in administration and endless arguments, and people's tempers were much improved all round.

Perhaps some of the problem is when an organization grows very large, it is difficult to keep perspective. Shell employed around 10,000 IT staff in the 1990s, directly or indirectly, so it perhaps not surprising that the IT staff concentrated on their own internal targets and objectives, rather than troubling themselves too much to align themselves with the objectives of the core energy business. At a time when the oil industry was struggling with oil prices heading down towards 10 dollars, and so with serious cost-cutting going on all round, the internal IT group, living through the internet boom, was hiring to keep up with demand e.g. dealing with the Y2K problem. Seeing redundancies going on in engineering and marketing at the same time as a hiring boom in internal IT, tempers became frayed, to put it mildly.

Clearly senior internal IT staff do need to spend more time with their business customers, and find out how they can help them achieve their objectives. Moreover they need to communicate this throughout their organizations. How many internal IT staff know the top three business objectives of their company this year? Without even a vague idea of the goals that the business is pursuing, it is hardly surprising that business leaders become frustrated with internal IT groups. Those 31% of internal IT groups who never or hardly ever meet with their customers need to change this attitude or get used to living on a Bangalore salary in the future.


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