One Million Dollars or One Year

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ITsHiddenFaceRoeltgenAs we’re nearing the end of the 2010 planning cycle, it’s as good a time as any to reflect on how we plan projects and whether our processes are as effective as they could be. At one point or another, everyone working in IT has asked themselves, “Why is everything so complicated?” Priorities change, projects grow in scope, budgets shrink. All the while, we’re forced to explain to senior management what it is we actually do.

I recently read “IT’s Hidden Face,” a book written by Claude Roeltgen, the former CIO of Credit Suisse in Luxembourg. It explores the inner workings of an IT shop (without a single spaghetti diagram!), and I came away realizing it might be the first time I read a book that talks comprehensively about management process and procedures of IT in a no-nonsense manner. Roeltgen ties several sections of the book together with stories and anecdotes that at first appear to be non sequiturs. But after digesting the content, I found that all the pieces worked together nicely (much like an IT department, no?). Take, for example, a short chapter entitled, “The punchcard sorter,” and his tale of eating lobster for the first time.

IT planning never truly ends and it tends to eat up more time than we think. But if CIOs and their teams are to lead the charge to get leaner in planning, they must also help their counterparts on the business side make sense of the “organized jungle,” a term Roeltgen uses to describe the state of IT in 2009. A jungle of any sort is a challenging environment to map out, but Roeltgen does an excellent job of diagramming the IT shop.

The book devotes significant space to “one million or one year,” the running joke that IT departments reply to project requests with one of two answers (or sometimes both): “It will cost one million,” or “It will take one year.” In my opinion, this section (chapter three) of “IT’s Hidden Face,” is the true heart of the book and I’d almost suggest reading it first. It’s essentially a map for anyone who’s ever wondered about the myriad reasons IT projects can become so expensive and laborious.

Roeltgen describes the notion of near-endless planning in chapter five, “Change is the only constant.” As he writes, change brings instability and, therefore, instability is inevitable and permanent within the IT department – as it is in most facets of business. “It is permanently necessary to solve problems that others have created.” I think we’ve all grown accustomed to this truism, which also gets to the heart of why planning never ends.

IT planning for most companies originates with several IT leaders (with titles like business consultants and portfolio managers) eliciting business requirements for the year, part of a “bottom-up” process. But a CIO needs the ability and the platform within his or her company to say: Here are the 10 projects on our multiyear roadmap and these will guide the majority of our investments, thus greatly streamlining the process. But at the same time, we need to resign ourselves to the fact that nothing we work on today has a great deal of staying power; it’s simply the nature of technology. Roeltgen notes that when we start projects for new systems, we often know from the outset when that project will be decommissioned.

If you’ve read Roeltgen’s book, I’m interested to get your thoughts. Also, in the name of friendly competition, I’ll award copies of “IT’s Hidden Face” to the three best comments about IT’s inner workings or related personal anecdotes about the bizarre world of IT (as judged by me). Please note, this will be more of a subjective “AP Coaches’ Poll” ranking as opposed to the computer jiggery of the BCS rankings.

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  • IT’s inner workings? The recurring one, for me, has to be hearing “we don’t like that estimate”, coming from stakeholders, senior management, etc. Depending on the mood and/or semi-intellectual rigor of the person saying it, the conversation then typically devolves into one or more of the following: a) identifying and removing any hint of contingency (which is of course seen as padding just to make life easier for IT); b) repeated discussion of “what if we double the team size to get it done twice as fast” etc.; c) scrutiny, one by one, of the bottom-up estimates (“it won’t REALLY take three days to test THAT feature”); d) volunteering resources (usually less than qualified) to “help”; e) scheduling full-time work for all remaining weekends and holidays between now and the desired launch; f) frequent use of the phrase “why don’t you just …”

    This is not an exaggeration. It rests on the CIO’s shoulders most of all to cut these “solutions” off at the pass.

  • IT’s inner workings? The recurring one, for me, has to be hearing “we don’t like that estimate”, coming from stakeholders, senior management, etc. Depending on the mood and/or semi-intellectual rigor of the person saying it, the conversation then typically devolves into one or more of the following: a) identifying and removing any hint of contingency (which is of course seen as padding just to make life easier for IT); b) repeated discussion of “what if we double the team size to get it done twice as fast” etc.; c) scrutiny, one by one, of the bottom-up estimates (“it won’t REALLY take three days to test THAT feature”); d) volunteering resources (usually less than qualified) to “help”; e) scheduling full-time work for all remaining weekends and holidays between now and the desired launch; f) frequent use of the phrase “why don’t you just …”

    This is not an exaggeration. It rests on the CIO’s shoulders most of all to cut these “solutions” off at the pass.

  • My experience with the inner workings of IT departments in large organisations is, sadly, well in line with your excerpts from this book.

    Part of the problem is project governance. Don’t get me wrong, I am a very vocal supporter of formal governance – it’s just that there are not usually *appropriate* levels of governance around IT in large organisations.
    What I have observed are the startup costs (forming committees, lobbying for executive approval, and other such formalities) combined with delivery costs (arm’s length handover to the outsourcer, user training, and sufficient documentation) mean that no project of significance can be completed in under 6 months. In terms of time, the actual build phase is often under 25% of the total project duration when you consider the time from idea inception to production deployment.

    Another part of this problem is on the cash side of the equation. Each organisation has what I call a “terminal velocity” for project expenditure. No matter how things are scaled up, the amount of change that can be implemented flatlines after a certain expenditure. Increasing the project size beyond the terminal velocity doesn’t actually net any extra speed.

    I have found that organisations are often aware of the inadequacies of their project governance arrangements but are unable to see how they can change them (“too hard”) or are unwilling to challenge them (“it’s always been done this way”).
    I have not found many organisations who are aware of their terminal velocity, despite having a lot of evidence from previous projects.

    However when I point out that, historically, projects over a certain size tend to be considered failures within the organisation, people are often amazed that they had not noticed that trend before and are now open to new ideas.
    The root causes of this terminal velocity are often hard to change but armed with the awareness, projects can be kept under this danger threshold.

  • My experience with the inner workings of IT departments in large organisations is, sadly, well in line with your excerpts from this book.

    Part of the problem is project governance. Don’t get me wrong, I am a very vocal supporter of formal governance – it’s just that there are not usually *appropriate* levels of governance around IT in large organisations.
    What I have observed are the startup costs (forming committees, lobbying for executive approval, and other such formalities) combined with delivery costs (arm’s length handover to the outsourcer, user training, and sufficient documentation) mean that no project of significance can be completed in under 6 months. In terms of time, the actual build phase is often under 25% of the total project duration when you consider the time from idea inception to production deployment.

    Another part of this problem is on the cash side of the equation. Each organisation has what I call a “terminal velocity” for project expenditure. No matter how things are scaled up, the amount of change that can be implemented flatlines after a certain expenditure. Increasing the project size beyond the terminal velocity doesn’t actually net any extra speed.

    I have found that organisations are often aware of the inadequacies of their project governance arrangements but are unable to see how they can change them (“too hard”) or are unwilling to challenge them (“it’s always been done this way”).
    I have not found many organisations who are aware of their terminal velocity, despite having a lot of evidence from previous projects.

    However when I point out that, historically, projects over a certain size tend to be considered failures within the organisation, people are often amazed that they had not noticed that trend before and are now open to new ideas.
    The root causes of this terminal velocity are often hard to change but armed with the awareness, projects can be kept under this danger threshold.

  • So you can disqualify my comments if you like, I’m a vendor, but what I have seen is that just giving a CIO visibility into where resources are, how much things are costing and giving him the ability to make smart choices when under pressure or resources are constrained is 50% of the battle. Of course you will see through me right away and know I’m trying to position Clarity PPM for IT, but the point is Clarity or whatever, seeing what’s going on is so incredibly important to informed decision making and any governance process, it would surprise me if they don’t have such a tool or contemplating one. But money is tight and PPM costs bucks and its a luxury right now, not a must have. Here I say, nope…PPM has incredible tangible benefits. Let me tell you a quick story: Pharma CIO in LA was called up by his CEO and told, cut 20M out of the budget now. CIO was completely freaked out because he had just let hundreds of people go and was down to the bone. So he pulled up his brand new Clarity dashboard, figured out what was absolutely essential and what wasn’t, killed 6 projects and found the 20M. Now does that sound like a nice to have luxury tool. Absolutely not. In fact our studies from MIT have shown that proper ITG in general have dramatic impacts on the overall profitability of a company. Failed projects are the worst. I used to be in IT, and I can tell you, everyone from IT to business hated that feeling. Anyway, that’s my story. Visibility is empowerment and gives the CIO’s the decision support they need. Hope that wasn’t too “salesy”, but I’m pretty passionate about helping customers. And this one in particular was very gratifying. Joanne

  • So you can disqualify my comments if you like, I’m a vendor, but what I have seen is that just giving a CIO visibility into where resources are, how much things are costing and giving him the ability to make smart choices when under pressure or resources are constrained is 50% of the battle. Of course you will see through me right away and know I’m trying to position Clarity PPM for IT, but the point is Clarity or whatever, seeing what’s going on is so incredibly important to informed decision making and any governance process, it would surprise me if they don’t have such a tool or contemplating one. But money is tight and PPM costs bucks and its a luxury right now, not a must have. Here I say, nope…PPM has incredible tangible benefits. Let me tell you a quick story: Pharma CIO in LA was called up by his CEO and told, cut 20M out of the budget now. CIO was completely freaked out because he had just let hundreds of people go and was down to the bone. So he pulled up his brand new Clarity dashboard, figured out what was absolutely essential and what wasn’t, killed 6 projects and found the 20M. Now does that sound like a nice to have luxury tool. Absolutely not. In fact our studies from MIT have shown that proper ITG in general have dramatic impacts on the overall profitability of a company. Failed projects are the worst. I used to be in IT, and I can tell you, everyone from IT to business hated that feeling. Anyway, that’s my story. Visibility is empowerment and gives the CIO’s the decision support they need. Hope that wasn’t too “salesy”, but I’m pretty passionate about helping customers. And this one in particular was very gratifying. Joanne

  • Chris – I’ve just stumbled across your blog, and this is a great review and sounds like a great book. I think that too many people are in search of the “perfect” answer to common problems such as PPM, organizational structure, process improvement, and service delivery. These are all areas where there is no “destination” – just a journey of continuous improvement and adaptation. No goal is an end goal – every goal is a milestone on the journey.

    I will definitely add this one to my reading list. Thanks.

  • Chris – I’ve just stumbled across your blog, and this is a great review and sounds like a great book. I think that too many people are in search of the “perfect” answer to common problems such as PPM, organizational structure, process improvement, and service delivery. These are all areas where there is no “destination” – just a journey of continuous improvement and adaptation. No goal is an end goal – every goal is a milestone on the journey.

    I will definitely add this one to my reading list. Thanks.