Chronodebt governance reversal

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Funny thing about Chronodebt: It stands IT governance conversations on their heads.

Chronodebt, you might recall if your memory extends beyond 4/29 (otherwise click on the link), is the money IT owes to the god of time.

It’s the accumulated cost of remediating all IT assets that aren’t what engineering standards say they should be. It includes the costs of: Updating out-of-support software versions to current ones; replacing hardware that’s approaching its expected lifespan; exchanging applications whose vendors aren’t financially viable for something more mainstream; and consolidating redundant applications added to the portfolio during mergers and acquisitions.

The reason Chronodebt stands most IT governance conversations on their heads is that most IT governance conversations are about business benefit. They’re about return on investment: If we spend $1 million today on the Internet of Things we can expect to generate an additional $500 thousand in profits next year, the year after that, and the year after that.

Chronodebt conversations are only like that to the extent you count not being evicted as a benefit of paying the mortgage.

There are those in business who figure everything is negotiable. When they can’t or don’t want to pay what’s due they cheerfully tell their creditors what they’re willing to pay — an amount just barely better than the net of full payment minus the cost of collecting it.

This sort of business executive, faced with a Chronodebt conversation with the CIO, will try to negotiate it.

But negotiating Chronodebt is trickier than negotiating financial debt because Chronos doesn’t negotiate. Try for an extension on replacing your car’s bald tires and Chronos collects by way of a blowout at highway speeds.

Do the same for aging server hardware and Chronos collects by way of an outage that cripples business operations. Refuse to migrate from a CRM package whose vendor is in decline and Sales and Marketing will suffer the death from a thousand cuts as their frozen-in-time application increasingly limits them from selling and marketing as well as their competitors can.

While you can phrase Chronodebt conversations in terms of benefit, Chronodebt isn’t fundamentally about benefit. It’s about inevitability. It drives pay-it-now or pay-it-later conversations where paying it later costs a great deal more than paying it now, even taking discounted cash flow into account.

(In case you aren’t familiar with cash flow discounting, it’s why a dollar tomorrow is worth less than a dollar today: You can earn interest on a dollar you have today. That is, a dollar today is worth, say, $1.05 a year from now; reversing the calculation, the expectation of a dollar you receive one year from now is only worth ninety-five cents right now.)

Chronodebt has a lot in common with preventive maintenance: The company will spend what it needs to spend to keep a conveyor belt running. It can either spend it now preventively or spend it later to fix the belt when it breaks.

The big difference between preventive maintenance in the factory and Chronodebt in IT is that everyone involved in these decisions can easily get their minds wrapped around the idea of a conveyor belt and the consequences of one failing.

That’s compared to the IT logic of updating, say, its Windows 2003 servers. Yes, they run right now. Yes they’ll still run tomorrow. But when the hardware they’re running on fails there’s no guarantee Windows 2003 will install on new server hardware.

“But don’t we virtualize our servers?” a tech-savvy CEO might ask. Yes, but that just means there’s no guarantee Windows 2003 will install and run on VMWare virtual machines.

Oh, and by the way, everything that needs to run to satisfy the company’s information security requirements isn’t guaranteed to run on out-of-support operating systems either.

Not only that, but the application development tools IT programmers use to develop applications only run on supported Windows versions, which wouldn’t matter except that the business is growing and needs to add more developers. So yes, the developers you have can continue to use out-of-date tools. But the next ones you hire will need their own licenses, and the old versions aren’t for sale anymore.

By now, while the CIO is delivering the clincher, the CEO’s eyes have glazed over.

Which is one reason so much of IT’s success depends on the CIO’s working relationship with everyone in the executive suite. A bad relationship means the CIO is on the defensive, and nobody cares about the evidence and logic of the situation.

With a positive relationship the CIO can explain, with serene confidence, “You have two choices. You can trust me, or I can explain it to you.” It’s Hobson’s Choice with the CIO playing Hobson.

Comments (3)

  • Nice article.

    But, it seems to me the concept also applies to one’s relationships people that one feels an emotional attachment to.

    Each of these relationships has a Chronodebt that has to be paid or the relationship deteriorates. What took me decades to learn was that this deterioration process is involuntary, no matter how much you love that person or that they love you. No matter how important you are to them or they are to you, your Chronodebt must be paid by them, no matter how strong you think you are.

    Sometimes sadly, sometimes not, it can’t be negotiated.

  • With hardware, there are severe issues. With software, the issues are somewhat less severe. COBOL is still here. And the reason is your reason for chronodebt.

    You cannot make a business case to replace all of your old software with brand-new software at the cost of $$$$ while ensuring nothing at all changes about your business (except for taking a hit against your profit to pay for the upgrade).

    And since COBOL is still here, it shows the middle way of trying to sneak under the costs while maintaining systems that everyone hopes will get replaced or die naturally but no one can afford to pay for the change.

    • COBOL? IMS is still here. And you’re right – the standard benefit-based approaches to building a business case don’t work well for Chronodebt (capitalized in honor of the god of time – it’s “debt to Chronos”). That’s always been the problem with pay-it-now-or-pay-it-later issues: With luck, paying off the debt will be Someone Else’s Problem.

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