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|In: Career Management|Last Updated:

This week it’s all about me.

As of today, IT Catalysts will no longer accept new clients. That’s because as of today I’m rejoining my old compadres at what used to be Perot Systems and is now Dell Services. And while I received the actual offer one day before Michael Dell took the company private, there’s no truth to the rumor that he did so to make sure the deal got done before investors learned I was joining the firm and panicked.

Well, I’m pretty sure there’s no truth to it …

Here’s what’s going to change:

Keep the Joint Running isn’t going to change very much. Except for this: My affiliation with Dell means I’ll be biting my digital tongue from time to time, refraining from industry commentary when any appearance of conflict of interest might taint it. Aside from that, KJR will cover its usual topics: Anything and everything about business and IT leadership, management, what they’re supposed to accomplish and how they can best accomplish it.

Advice Line will change a lot more. Namely, it’s going to go away. This is painful for both me and for my friends at InfoWorld. It’s like this, though: The Advice Lines I write that get the most attention are industry commentaries. They’d have the same conflict of interest taint in InfoWorld as in Keep the Joint Running, only in InfoWorld they’d taint the entire publication, not just me. We couldn’t figure out a way around this, so after sixteen years I’ll no longer have a weekly presence there.

Email correspondence: No change here. Write if you’re in the mood. If you agree, compliments are always welcome. If you don’t, pointing out what I’ve missed is even more welcome.

If you need advice, my newfound association with Dell Services doesn’t mean I can’t give it to you without charging you. It does mean that when the help you need goes beyond what we can handle in a bit of electronic back-and-forth and it’s time for a more formal consulting relationship …

Consulting: The coverage isn’t going to change all that much, on the grounds that my expertise hasn’t changed just because my corporate affiliation has. If you need help and I seem to be the logical source for it, email me just as you would have before and I’ll get the ball rolling.

I’ll now have all the resources of Dell Services to draw on, so if you need help that’s beyond my personal areas of expertise, instead of calling on “the people in my network” I’ll be calling on my colleagues at Dell Services.

I no longer set my own rates and terms of engagement, though.

That’s about it. Personally, I expect to be working more in teams and on larger engagements than previously, and I’ll have to adjust to the strange sensation of reporting to someone instead of reporting only to my clients. I’m sure you have lots of empathy for me on that score …

Anyway, I figured I’d better say something here, operating on the well-known theory of business communication: Ask the question, “Who should know about this?” and include whoever is on the list in whatever message you’re delivering.

You’re on the list.

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|In: Career Management|Last Updated:

IT management and business leadership often think differently about investing in the business. How about you?

Here’s an exercise worth doing for any IT leader:

Canvas your company’s top executives. The question: They have $1 million to allocate. They can invest it in revenue enhancement, cost reduction, or risk management — the three bottom-line metrics for any for-profit business. How much do they put in each category.

If you have an IT Steering Committee and its members aren’t the company’s top executives, ask its members, too.

Finally, ask your IT leadership team members the same question: If they were running the company, how would they invest?

Average the results for each group and graph them. They’ll probably look something like the figure.

What’s going on? In my experience, business executives tend to focus more of their attention on cost-reduction than anything else. That’s because it’s generally possible connect the results of a project that’s supposed to reduce costs to actual cost reductions.

Projects that are supposed to increase revenue? Unless it’s a direct marketing campaign, a website change tested through the use of software that presents the old view to one set of visitors and the new view to a different set, or a new product, it’s embarrassingly difficult to prove that any particular action a company takes results in more revenue.

Strange to say, investments in revenue are riskier than investments in cost reduction.

Entrepreneurs are different: They tend to emphasize revenue enhancement more than cost reduction.

And risk management? For both entrepreneurs and business executives, investments in risk management are beyond risky. Here’s why:

There are three ways to invest in risk management: Prevention (aka Avoidance), which reduces the odds of a bad thing happening; mitigation, which reduces the damage done by a bad thing that happens; and insurance, which spreads the cost if a bad thing happens.

If a bad thing doesn’t happen, there’s no way to know if it didn’t happen because of the company’s prevention efforts, because there was no risk in the first place, or the company was just lucky.

If a bad thing does happen, there’s no way to tell whether, without its risk mitigation efforts, the cost would have been higher or not.

It is true that if a bad thing happens then at least the company knows whether it insured for the right amount. But if a bad thing doesn’t happen then the money paid for insurance that year was wasted. Maybe the risk isn’t high enough to warrant the cost of the insurance.

Or maybe the company was just lucky this year. There’s no way to tell.

IT’s investment profile tends to be quite different. IT tends to get beat up all the time about What Technology Costs. More, since businesses first started to invest in computers the rationale has mostly been increased productivity — information technology is supposed to reduce costs. It’s no wonder IT management tends to focus heavily on cost reduction.

But even though we get beat up about What Technology Costs, that doesn’t hold a candle to the extent we’re beat up about when something bad happens to our technology. Whether our systems are hacked, a virus invades, or the systems are down for some other reason, we get beat up. And even if we don’t, we expect to get beaten up.

So IT management’s instinct is to invest in risk management more than in anything else.

That, coupled with what’s invested in cost reduction, doesn’t leave very much to help increase revenue.

Go through the exercise — make the numbers real. If your company’s business executives and IT management line up well, good for you. You’ve achieved “IT/business alignment” and are ready to take the next step: Business/IT integration, if you haven’t already.

If not, it would appear you have work to do.

One place to start: During each business planning cycle, suggest the strategic plan include investment targets for each of the three categories of investment: Revenue, cost, and risk.

You might even guide everyone involved through the exercise of listing the major ways to invest in each of them to get to a finer-grained level of investment planning.

However you approach this, your goal is to get everyone thinking about this subject the same way.

Because if you don’t succeed at this, it doesn’t matter what anyone said. The moment something bad happens … the moment a risk turns into a reality … all bets are off.

That’s when the blamestorming starts.

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