Edward T. Mullin's Blog

 Although much of what I do revolves around technical strategies for businesses, I often find that my value as “objective observer” is as valuable as my “strategic IT advisor” skills.  I good example of this is spotting “Help the bookkeeper” projects.  These are projects that are based on productivity and efficiency logic that seems to make sense, but really doesn’t if you apply a little basic math and common sense.  It goes something like this “We’ll get all the salespeople to enter their information in this multi-page form so that when it gets back here in accounting everything will be very easy to enter into the system.  In fact, if the sales folks could look up all this XYZ information then that will allow the bookkeeper to skip several steps.”  And it’s not far from this conversation to the discussion about how to automate this with software and that’s when they make a call to the IT department.

I often think the major difference between an IT manager and a CIO revolves around the skill of politely asking “why the heck would you want to do that?”.  Many IT projects are well intended but are more about automating poor practices then major productivity improvement.

So in the example above, you have to ask “How many hours will this save the bookkeeper?  How many hours will it add to the Salespeople’s task load?  How much do these folks make?   And do these employees have the right skillset to do this type of work? “.  Often it comes down to an equation where the project is going to save 8 hours of a week of a $20 an hour bookkeepers time ($8-9,000 a year) and it’s going to do that at the cost of 20 sales people x 2 hours a week at $100 an hour ( over $200,000).  When you take in opportunity costs of lost sales time and the fact that sales people are generally not good at clerical tasks, you begin to get an idea of how a good idea can have terrible implications. 

So why do these projects get approved over and over again in corporate America?  Several reasons :

1. It seems like a time/cost saver at first glance.
2. The bookkeeper works for the CFO who has an office right next to the CEO.  This proximity and implied fiscal authority often causes a skew in logic.
3. The return on investment (RIO) calculation is not taking all factors into account (like opportunity costs).
4. The IT leadership is not stepping into the business strategy conversation and questioning the logic of the RIO. 

The last reason is the one that troubles me the most.  Some IT Managers view their job as “order takers” and “solution providers” to the business users.  They would be much more valuable as business partners who had ownership in the corporate strategy as a whole and had the skill set to effectively help the organization at that higher level.  But how does an IT Manager take on this higher role?  Sounds like a good concept for a future blog post.

This entry was posted on Monday, July 5th, 2010 at 9:18 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.