Creating an Upturn
19 December 2002
by Michael Mah
At a recent IT conference, a colleague of mine who helps companies negotiate large-scale outsourcing deals posed a question to the audience. He mused, “Have we squeezed all the productivity there is to squeeze out of IT?”
That’s a good question. Part of the reasoning behind it has to do with the endless wave of cutbacks from the last two years of this recession. Another analyst at the same conference voiced concerns that companies outsourcing offshore only care about shopping the lowest labor rates to the exclusion of everything else. At some point, paying the lowest possible wage comes to an end, unless you get programmers in India working for free.
It may be the case that we’ve squeezed the last buck out of our now- anorexic IT departments. Last month, I wrote about metrics research and suggested that productivity gains may have hit a wall (“Continuous Partial Attention and Software Productivity,” 14 November 2002). Productivity losses may be occurring from the combined effects of IT burnout and the continuous partial attention (CPA) phenomena. If there’s nothing more to squeeze out of an overstressed IT organization, the focus now has to be on growth as we prepare for 2003. We have already cut to the bone and then some.
I remember the good old days when the creative juices that we fostered in our industry yielded terms like “killer app.” These were the truly innovative applications (software inventions) that turned conventional wisdom on its head and created entirely new ways of doing things, creating value where it did not exist before.
The Cutter Council Opinion “Returning to Growth” challenges us to return to this top-line focus. So did Cutter Senior Consultant Rob Thomsett in his writings for the Agile Project Management E-Mail Advisor (“Agile Project Management in Action — Part 6, Added Value Analysis ,” 29 August 2002. Rob urged us to think of not just output of IT (the productivity paradigm), but also outcome (the benefits paradigm). He described the IRACIS model, developed by Gane and Sarson , which outlined three classes of benefits:
Increase revenue (IR) — the objective directly leads to an increase of cash inflow or revenues
Avoid costs (AC) — the objective directly leads to an decrease in cash outflow or costs
Improve service (IS) — the objective directly leads to a quantifiable improvement of service to the organization’s internal or external customers/organizations
I say let’s use this encouragement to foster a revitalized energy and mindset for invention. If we’re about as productive in building code as we’re going to get with our current tools, methods, and skill sets, then it’s time to sharpen our focus on building the right systems and applications that are going to grow us out of this economic downturn. Perhaps the IRACIS model is a good place to start. What executive would argue against creating applications that would explicitly target any one of these three objectives? Returning to growth can begin here.
More important, we can encourage a crucial psychological and emotional shift, the equivalent of “consumer confidence” in our IT world. Let’s call it “IT confidence.” It’s a shift that moves beyond the “scarcity thinking” — born out of fear during economic hard times. We’ve seen the bottom, and we’re still here. Now we can turn our attention to carving out a new role in the (hopefully imminent) post-recession world.
Cutter Business Technology Council Fellow Ken Orr argued that this is a good time to add staff. This would be a gutsy strategic move for forward-thinking executives. There are a lot of good people out there. It may indeed be a time to capitalize upon an opportunity, capture unique skills, and create new teams with knowledge assets that can turn their focus on creating killer apps. We can do that by becoming proactive advocates for growth led by IT — like a phoenix rising from the ashes.
— Michael Mah, Senior Consultant, Cutter Consortium
© 2002 Cutter Consortium. All rights reserved.