The bad news for a smart-alecky blogger is that it’s getting harder to find examples of companies that handle their IT function foolishly. But that’s good news for the IT industry!
In a piece from 2012, I shared a little of my “personal agile journey.” The post includes brief descriptions of a couple of examples of sloppy and expensive thinking in the IT department. Rather than ask you to go and find that text in the longish post, I’ll just quote it here:
In one case, the analysts had spent four months charting out swim lane diagrams and so forth for a proposed system to support the sale of vehicles the bank had claimed as collateral for auto loans in default. At the time, there was a dip in the economy and a lot of people defaulted on auto loans. Most of them declared bankruptcy and would be out of the credit market for the next seven years. Others learned a lesson and weren’t interested in high-end loans for cars. There was no need for a new system. It was only a temporary bump in workload for the collateral sales department. I suggested the manager of that department should just hire a temp for a few weeks to put the cars on eBay. Problem solved. Savings: $8 million. The analyst group hated me viscerally for that.
In another case, the analysts had proposed that a certain department implement an enterprise-class fax system to handle inbound loan documents. They had spent four months charting out swim lane diagrams and so forth for the new solution. When I visited the work site, I learned that relatively few documents arrived via fax. Of those, all were received on the same fax machine and picked up by the same middle-aged woman. She had to walk about 50 feet to the fax machine and 50 feet back to her desk a couple of times daily. That was the business problem to be solved. I unplugged the fax machine, placed it on her credenza, and plugged it in. Problem solved. Savings: $2 million. The analyst group hated me viscerally for that.
That company can no longer serve as a bad example. Why? I wish I could say it was because management finally realized they were in the information age and not the industrial age. No such luck. They got themselves into such a poor financial position that a competitor was able to buy them out. They don’t exist anymore.
There are two other examples I think I blogged about, but I can’t find the posts anymore. In any case, one was a company that I thought represented the archetype of a nightmare traditional IT organization. They did everything wrong you can possibly imagine, and they were proud of it. They were a great example of an industrial era IT department lost in the information age. They inadvertently made themselves available for buy-out, and a competitor picked them up. If the buyer was wise, they kept the engineering department and dropped the IT department. They are no longer available to use as a bad example.
The other example from that misplaced post was a company that I thought represented the archetype of a nightmare “fake agile” IT organization. People were required to smile all the time and to “celebrate” everything, although teams rarely ever delivered anything to production, and engineering practices were nonexistent. It was an emotionally brutal, dehumanizing place. Working there was like living in a Harlan Ellison story. They avoided a buy-out, but their IT department was reamed clean and they started over. Good riddance. They are no longer available to use as a bad example.
Are there any general ideas we might draw from these examples? They came from three different industries: One was a financial services company, another a cable TV provider, and the third a clothing retailer. Their technology stacks were all completely different. They were located in three different cities in the US. The organizational cultures were all very different.
The only obvious common denominators are structure and size. All three were structured monolithically and managed hierarchically, and each had between 1,000 and 1,500 people in the IT department. There are only three data points and there was never any intent to try and analyze the similarities and differences, but on the surface the pattern lends credence to the idea of a federated corporate model in which relatively smaller working groups collaborate to achieve larger goals. Businesses organized that way seem to be doing well, and this approach may become a significant trend going forward.