Cloud adoption and use

Many IT departments have a less than sterling reputation. Outages are frequent and costly. Projects are unpredictable and over budget.

A survey in 2011 of small business owners found 77% had experienced downtime that caused productivity to suffer in the previous year. A Symantec study found SMBs average five outages a year, with a median loss of $14k a day. Larger organizations have larger impacts, of course, with a Ponemon Institute finding $5k a minute for data center outage with an average of 2.5 outages a year.

It is more than outages that hit the pocketbook. IT projects, those engines of value creation, are often at risk as well. In fact, a good 73% of IT management believes projects are doomed right from the get-go. Usually or always, there are problems from the start. From the same survey, by Geneca, 80% of the IT teams surveyed spend at least half their time in rework. Another survey, by PM Solutions, finds that an average SMB company has $74m in at risk projects yearly.

Ouch. PM Solutions lists five top causes of project failures. Curiously, these map very closely to the top causes of data center outages. From the ZDNet article:

• Requirements: Unclear, lack of agreement, lack of priority, contradictory, ambiguous, imprecise.
• Resources: Lack of resources, resource conflicts, turnover of key resources, poor planning.
• Schedules: Too tight, unrealistic, overly optimistic.
• Planning: Based on insufficient data, missing items, insufficient details, poor estimates.
• Risks: Unidentified or assumed, not managed.

What’s wrong with the requirements? Quite likely, the person gathering the requirements and defining the scope did not have enough experience with the problem domain or knowledge with the solution domain. Put differently, the person didn’t quite get the industry they were in or the technology they were using. Resources and schedules? Same thing. The people doing work that was not scoped out sufficiently, and perhaps subsequently getting burned out and leaving the firm. Identifying risks, providing good estimates, and producing quality results all requires experienced and knowledgeable professionals.

Training and tools. It is all about getting the right folks, giving them the right training, and providing the right tools. Recognizing, too, that what is right today is wrong tomorrow. This is an ongoing process.

It is more than tools. When people ask how my team is able to run a complex infrastructure with 9 folks when it used to take 26, a good emphasis is placed on virtualization and automation. That is appropriate insofar as good tools are a vital component of the strategy. However, giving me a stone Hearth Deck oven along with the utensils and ingredients puts me no closer to having a tasty artisan sandwich. That requires training and experience.

It was disappointing, therefore, to see the State of IT Skills survey that hit last week. “9 in 10 business managers see gaps in workers’ skill sets, yet organizations are more likely to outsource a task or hire someone new than invest in training an existing staff.” That does not fill me full of confidence. I outsource a number of commodity services today. I have to tell you, I am rarely impressed by their support or maintenance. I call outsourcing McDonald’s IT for a reason. You get what you pay for.

90% of IT managers are running their departments into the ground. That is my take on the State of IT Skills survey. Projects continue to come in late and over budget. Outages continue to occur. The studies above are talking about tens of thousands, hundreds of thousands, to millions of dollars in losses. Perhaps at one time, IT departments could get away with such things. There was not as much on IT, of course, and there was not much competition.

Today, IT is dial-tone. Today, competition is a telephone call away to the nearest cloud vendor. Tomorrow, if we continue on a path of equipping our teams for failure, perhaps only 10% of internal IT departments will remain. Those are the 1 in 10 IT managers who hire and retain the right people, and who train and equip their teams.

Local hamburger shops cannot compete head-to-head with McDonald’s. Clothes stores cannot compete head-to-head with Walmart. Local book stores? Yep. They, too, cannot compete head-to-head with Barnes and Nobles. Makes sense.

Why compete head-to-head with cloud (IaaS, PaaS, SaaS) providers? *

Take a look at thriving local restaurants, groceries, shops, and book stores. What do they have in common? It is a single-minded dedication to customer service. These thriving businesses do not complete head-to-head. Rather, they carve their own niche within the market and create a monopoly within that niche.

The second step in managing an IT team is to define and carve that niche. This begins by having a very clear understanding of our firm’s industry, organization, business units, and professionals. How does the firm compete in the industry? How are the goods bought and sold? Who are the people on the critical path, and what can our IT team do to improve their abilities?

When was the last time an IT team discussed these questions? For me, it was about two weeks back. During a knowledge sharing meeting, a teammate reviewed how my firm’s products are bought and sold, and how the technology he was building impacted that process. How about your team?

No one can understand an organization and its people better than the internal IT team. McDonald’s does not make a custom crafted burger for you. Walmart cannot custom stock products just for your needs. The same goes with Barnes and Nobles, and the slew of cloud providers tackling the commodity IT market. No one knows you like those closest to you.

The competitive advantage the IT team must cultivate and sustain is customer closeness. Know the people, know the business, know the industry. Then leverage commodity services while out competing on value-add services. Be the bistro to the cloud’s McDonald’s.

Wolfgang

* Now a good argument can be made that cloud providers do not actually cut costs. In particular, this seems apparent with IaaS providers. Check this out for yourself. Price out two servers that can host 16 vms with HA. Now take your lease rate for, say, three years. Add in your price for power and hosting. Compare that price with your IaaS vendor of choice. I find IaaS for consistent loads to cost almost four times that of a DYI infrastructure. But it does require a three year lock-in and cannot scale up and down with load demands. This finding gets to the “own the base and rent the spike” strategy.

Klint Finley on SiliconAngle put up a good article last week on what he calls the “Emerging Anti-Stupid Movement“. He quotes Linda Musthalher as saying, “There is a shortage of companies willing to invest in the training and development of enthusiastic and committed employees.” What is anti-stupid? Investing in your team to support and enable them in producing quality work.

Check out the article. Finley has some interesting stats; such as the average IT pro putting in 71 hours a week and about 1/3 of the IT pros dissatisfied and looking for another job.

I talk a lot about how my team works. My management style comes from years of running small consulting teams. My style is people-centric and focuses on the value proposition.

I talk a lot about it. But as was recently pointed out to me, I do not write a lot about it. Practically nothing, actually. Over the next few weeks, I am going to do a series of Management Monday posts. Perhaps the time is right to build on this “Anti-Stupid Movement“.