Why IT departments are so inefficient

Nov 13, 2013
Sogeti Labs

Do you ever stop to think about the IT organizations you have been a part of and wonder why most of them are so inefficient? It is a running joke among business users that to ask IT to do anything will, at best, take forever and, at worst, take forever and result in a contraption you did not ask for. This is an important factor in the growth of Shadow IT that was written about in an earlier post.

Why is this so? Surely there’s been plenty of process improvement and there are “best practices”, standards, and maturity frameworks that are widely published and even broadly adopted. But are CMMI level 4 or 5 organizations any better than level 2 in terms of ability to deliver results faster and more efficiently? Are organizations that have high levels of project management maturity any more efficient? Perhaps, but not necessarily.

As IT organizations grow, specialization takes place and IT gets “cut up” in functional groups, specialties etc. So, you have testers in the testing organization, all sorts of developers specialized in different technologies, business analysts, infrastructure guys, project managers, architects, etc. This specialization has led to the thinking that is prevalent in IT that everything that needs to get done is somehow a “project” that requires putting together the individuals with the requisite skills following a project plan to execute. Most IT organizations have many (sometimes hundreds) of active projects being worked on simultaneously. Resources are always scarce and allocated to more than one project at the time. This organizational principle has proven to be highly inefficient in most other industries and it is also the cause of incredible inefficiency in IT. Here are some of the reasons:

  • Through partial resource allocations, most projects are dependent on other projects. Projects get completed through expediting at the expense of other projects.
  • Enormous amounts of Work in Process (WIP) get created by starting work and taking a very long time to complete it, tying up capital.
  • Low utilization of productivity tools for SW development, because these tools tend to take “too long” to set up for smaller projects, which happens to be the vast majority of the portfolio.
  • “Fences” are created between functional groups with input and output criteria for work that impede overall throughput.
  • One-size-fits-all processes and methods are prescribed that are often cumbersome and not applicable to the specifics of the situation.

A direct result of IT’s project thinking is that it measures the wrong things to improve performance. For example, most IT organizations monitor resource utilization and resource cost, and measure if projects are completed on time and on budget. If these metrics come out ok, all must be well. But, consider that the budget and timelines of the projects already account for the known inefficiencies, on-time and on-budget performance does not equate to efficiency. Just like the ETA on your GPS has already factored in the traffic congestion on your route. While this ETA may be accurate, nobody would argue that standing in traffic is efficient!

Resource utilization as a metric is also problematic. In other industries, shops where all resources are fully utilized have been shown to be highly inefficient, creating lots of WIP and having low throughput. IT is really no different as evidenced by the enormous amount of WIP and low throughput in IT organizations that achieve high utilization of resources.

As you think through this and take a virtual walk through your own experience, I’m sure you can come up with ten or so more reasons why the delivery model followed in most IT organizations is inefficient.

So, what’s the solution? We will discuss this in a following post, but I’ll just give one hint: start thinking in terms of flow and accelerating throughput of work. Contemplate the implications of doing that on the organizational model.

 

This article was written by Kasper de Boer, guest-blogger.

About the author

SogetiLabs gathers distinguished technology leaders from around the Sogeti world. It is an initiative explaining not how IT works, but what IT means for business.

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