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IT as a Service

|In: Industry Commentary|Last Updated:

As a nation, we’re less suffering from an epidemic of entitlement, let alone generational entitlement, than from a surplus of blame-shifting. As suggested in this space a couple of weeks ago (“Equivalencytown, 6/27/2022), the Embedded Technology Generation (ETG, aka Generation Z, Digital Natives, and the iGeneration), aren’t so much entitled as they are better negotiators than their predecessors.

If we’re going to take a group and stereotype it as entitled, we all might benefit by buying a mirror, because business managers, as a group, might deserve the term more than the generational cohorts they manage or aspire to managing.

Entitled managers think they’re entitled (hence the name) to employees who are highly self-motivated, resolve their frictions with other employees without managerial involvement, deal with barriers to getting the job done on their own, cheerfully work unpaid hours … they’re classified as “exempt” … because they’re committed to their department’s success, and accept without complaint annual salary increases less than the rate of inflation because the company standard raise for staff-level employees and front-line supervisors has been set at 2% and there’s nothing to be done about it.

Put another way, the Entitled Manager (sounds like a book title, doesn’t it?) is a problem in recursion: failing to take responsibility for fixing what they complain about.

At its roots, managerial entitlement comes from failing to understand the role leadership plays in managing employees effectively.

Management, as a profession, is the organization as machine. It’s about organizing the work, establishing mechanisms for tracking and control, and dealing with administrivia. As a shopworn metaphor accurately describes the situation, employees are, from the perspective of managing, cogs in the machine.

Leadership, as long-time readers (and especially those enlightened souls who have read Leading IT: <Still> the Toughest Job in the World) know, is about building an organization that succeeds on its own, without the leader’s day-to-day involvement.

Good managers recognize the importance of leading well because it’s leadership that results in individuals and teams bringing their A Game to the party thrown by management every day.

In particular, effective leaders recognize the pernicious effect of treating individuals as stereotyped members of a labeled group.

Stereotyping individuals doesn’t just demotivate the members of the group on which the stereotype is conferred. It demotivates the manager as well.

Because if one of my team members is Generation H (to pick a letter at random), why should I even try to motivate them. It’s hopeless.

Which becomes a vicious feedback loop, where the manager doesn’t try; because the manager doesn’t try the GenH-er doesn’t think the manager cares and so doesn’t make much of an effort either; and because the GenH-er doesn’t make much of an effort the manager doesn’t try. Rinse and repeat.

Bob’s last word: There’s an easy, two-step way to break the stereotyping that causes this vicious cycle. The first step is to get to know people as individuals instead of as members of a group. If you do this you’ll gain an understanding of what they actually want out of their job.

The second is to think of what you now know they want, not as a symptom of their entitled selves, but as the opening salvo of an ongoing negotiation.

The difference: Entitled people think they deserve something. Negotiators understand how to deserve something.

Bob’s sales pitch: Most weeks I root around in my KJR topics cellar, looking for something to write about. It might be something I ran across once upon a time, liked, and decided to share. Other times it’s something that annoyed me enough that I kicked it down my mental basement stairs.

But I’m not such a victim of the Not Invented Here By Me syndrome that I’m closed to subjects other members of the KJR community liked or were annoyed by.

So if there’s something you’ve run across you’d like me to give the KJR treatment to, please don’t hesitate to share it. And when you do let me know if you’d like credit for pointing it out.

You will, that is, be entitled (this is the sales pitch part) to the fame and fortune that comes with it.

Currently running in the CIO Survival Guide: “The XaaS trap: ‘Everything as a service’ isn’t anything IT really needs.”

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|In: ITaaS|Last Updated:

You get what you pay for.

But not often. It’s what mathematicians call an upper bound, and writers call a cliché.

Our topic this week: CIOs running IT as a business. That’s the cliché part, and I suppose we should support the attempt to de-cliché it with a new buzz-phrase: “IT as a Service” (ITaaS).

Now for the mathematics part — how IT should price its services and charge its internal customers.

Chargebacks.

For ITaaS to work your service catalog will have to be a catalog: It will need prices. Which means you have to understand something you should understand anyway: What IT’s products and services cost, and why.

Drop IT’s costs into three broad buckets: (1) overhead costs (the cost of turning on the lights); (2) per-capita costs (those driven by the number of employees who need support); and (3) metered costs (costs driven by utilization of one or more resources).

Everything else is detail — irritating and tedious, so borrow a financial analyst from Accounting to help you. That’s what they’re for.

Now you’re ready for chargebacks.

Overhead

With exceptions (departments whose employees make little or no use of information technology) allocate IT’s overhead costs to cost centers in proportion to each cost center’s budget. This isn’t perfectly fair, but it’s supportable and simple. The cost of the physical data center goes here. Enterprise systems too: Even if a department doesn’t make direct use of the company’s ERP system, for example, it makes indirect use, and piece-mealing per-module costs to “owners” throughout the company is a pointless headache. Worse, it encourages each department to substitute a cheaper alternative, increasing the cost of integration … and who’s going to own that?

A popular alternative is to take overhead costs as a percent of the total IT budget and add that percentage to per capita and metered costs. This approach has only one gotcha, but it’s a big one: Forecast volumes wrong and you’ll over or undershoot your spending, possibly by a lot.

Better to keep fixed costs fixed.

Per capita costs

These are relatively easy. Fully provisioned PCs, for example, have a known cost of purchase and require a set amount of labor for acquisition, configuration, quality assurance, and dropping them onto an employee’s desk.

Metered costs — non-labor

Metering the costs of physical resources is easy, assuming you have the proper tools for data collection. Storage, for example, costs what it costs (if you capitalize it, use the depreciation amount rather than the purchase price). Tally up who uses how much and you’re done.

Don’t get too granular, though. In principle, for example, the cost of the electricity needed to run the equipment in the data center should be metered — the more computing a department does, the more electricity it uses. In practice the difference between the metered number and the number you’ll arrive at by lumping it into the data center’s overall cost allocation isn’t worth the aggravation.

Metered costs – labor

Where chargebacks get ugly is when the resources are human.

What to charge isn’t hard. Whether it’s the number of physical or virtual servers a sysadmin can support, how many incidents of a given degree of difficulty a service desk analyst can handle in a day, or how much business analyst and programmer time it takes to develop a module of a given degree of difficulty, all you need are accurate timesheets. (Yeah, I know …)

IT can tally time and report it, but demonstrating to anyone’s satisfaction that this is how much time and effort the job should have taken?

That’s where ugly happens.

Some CIOs defend their numbers with industry benchmarks, which are fine except that they’re worthless. Worthless?

Imagine, for example, your programmers take longer than the benchmark says they should. That’s a problem, unless your programmers produce cleaner code than average, at which point it isn’t. Or, maybe your business users change their minds more than those in “average” companies. Think anyone benchmarks that? Think again.

This is an unsolved and probably unsolvable problem. My advice: Use last year’s numbers as your benchmark and make improvement your goal.

Preparing the invoices

The critical balancing act is dividing costs into fine enough categories that IT’s invoices are meaningful, without so much precision that the invoices are too complicated to understand.

Because if a manager can’t understand the invoice, the result will be an argument and a damaged relationship, and won’t be a business manager who understands how to manage IT costs better.

That’s a cure that’s worse than the disease.

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