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|In: Career Management|Last Updated:

Mark Twain missed the big one.

As he pointed out, lies, damned lies and statistics can certainly give people the wrong impression. But if you really want to convince someone that up is down, they’re flimsy tools compared to the really big deceiver: Surveys.

I’m not talking about the well-understood practice of asking biased questions, like Burger King’s famous, “Would you prefer to eat a delicious hamburger, cooked from a quarter pound of fresh ground beef on an open flame, or a disgusting, greasy, fried, hockey-puck-like mess?” (I might have the exact phrasing wrong — I’m working from memory) that led to its not-very-effective “The Whopper beat the Big Mac” ad campaign some years back.

Sure, it’s a useful technique. It’s simply second-rate compared to one exemplified by a recent Gartner survey, reported in the January 14th issue of Processor magazine in an article titled, “The End of the IT Department as We Know It.”

The survey asked the popular question, “What’s your biggest frustration — something you’re supposed to accomplish but don’t, or something someone else is supposed to accomplish but doesn’t?”

The exact phrasing was a bit different. Gartner asked corporate executives to identify what gets in the way of strategic change in their companies, and IT failures beat out changing the culture. Since the culture changers are themselves and IT is someone else, the response is less than surprising.

Perception, of course, is reality, so you need to pay attention to this, especially since Gartner sells the perception to the executives with whom you work, also sells its solution, and, unlike you, has a paid sales force and PR machine. According to the article (and to be fair, it’s possible Gartner’s actual findings had fewer logical holes than the article that presented them) what’s going to happen is:

New technologies, that deliver pre-packaged workflows to businesses, and let businesspeople reconnect the process flows by manipulating visual tools and pushing a button (Ta-Da!!!) will fundamentally change the responsibilities of IT departments.

Since today most IT organizations spend the bulk of their budgets on operations and applications, something fundamental needs to change. Mix in outsourcing and the end of IT is at hand.

Oh, and the career solution for technical professionals? Get an MBA.

Let’s deconstruct this, shall we? First of all, suggesting that IT should spend most of its budget on something other than applications and operations is a bit like suggesting that Toyota should spend most of its budget on something other than designing and manufacturing cars. Applications are what people use to do their work. What, other than running the applications you have while enhancing them and delivering new ones, are you supposed to be doing? Raising chickens?

Second, workflow tools (just another class of application, by the way) don’t automate work. They automate the process of assigning work. Once the work arrives at employees’ desks, they still need business applications to help them do it.

Maybe the point is that businesses will start to view internal processes as commodities. Instead of figuring out how you want to run your business, you’ll just buy best-practice processes off-the-shelf, pre-automated and pre-integrated, with no work required from IT other than to install them and no work required from anyone else other than training the end-users.

Yeah, that’ll work. Your COO will buy Wal-Mart’s supply chain processes, Nordstrom’s customer relationship management, Amazon.com’s e-commerce, and Dell’s build-to-order. Voila! Like magic, out will come a lean, mean, fighting medical-devices, cosmetics, or maybe janitorial services machine.

There’s an old saying in the consulting business: It looks great on the PowerPoint.

So here’s some advice you might find a bit more practical regarding how to keep the joint running, from your old keep the joint runner:

Keep on spending most of your budget on operations and applications. Shift as much out of operations as you can every year — but only what you can shift through improved efficiency and not a penny more.

Spend as much as you can on applications — not just coding, of course, but all the associated disciplines that spell the difference between code that runs and successful business change.

And most important of all, pay attention to the “biggest frustration” that started this chunk of rant ‘n roll. Many IT organizations still haven’t mastered the fundamental discipline of managing projects to successful conclusion.

If you haven’t, perception really is reality, and while your IT department might not go away, you probably will. Soon.

And not under your own steam.

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|In: Leadership|Last Updated:

Some of my mailbag’s contents, and associated random thoughts:

The latest edition of Keep the Joint Running arrives. As you start to read it, you imagine you hear Amazing Grace playing on the bagpipes. You read that sometimes, it makes sense to view the rest of the business as your customer, and the music suddenly stops.

“NOOOOOOOOO!!!! Now I feel like the last (un-morphed) guy in Invasion of the Body Snatchers,” longtime reader Chris Dejardins reported.

In another letter, Jim Carroll offered this imagery: “Your KJR of Feb 21 caused a thought to pop into my head (a most unpleasant experience, I might add, at least until the caffeine kicks in). The image of business as bazaar got me thinking of what roles different departments would have in this new and wondrous marketplace — Finance department as moneychangers, complete with slightly inaccurate scales, etc. — when a powerful image came to mind: HR as slave marketeers.”

It’s a terrific thought which I’m going to do my absolute best to pursue no further.

Then there was this, from a correspondent who must remain anonymous:

“I have worked in the land of transfer costs and it was really an eye opener.

“In the business schools it sounds like a good way to keep cost and quality under control, but when it is actually executed things are very different.

“I have received junk three days from the end of the quarter because the supplier, an internal partner in another manufacturing plant, wanted to make their numbers and figured that they would make up the difference at the start of the next quarter. By junk I mean partially assembled, untested, defective and shorted units.

“When this was complained about we were accused of exaggerating, lying and making excuses. They made their numbers and we had no recourse.”

You can turn the music back on — Amazing Grace on the bagpipes, if that’s what you like, Amazing Grace (Used to Be Her Favorite Song) if you’re more of an Amazing Rhythm Aces kind of person. Last week’s column was about chargebacks (“transfer pricing” if you want to be Fully Buzzword Compliant) and their consequences, not about the internal customer as the idea has been promoted for the past few decades.

Your job still isn’t to make end-users happy. It also isn’t to deliberately make them unhappy, just in case you’re of the binary persuasion and were hopeful. In fact, nothing has changed, because your job is still to help the business, and the employees who work in it, be as effective as possible.

There are some businesses whose biggest challenge is the efficient allocation of internal resources. Take the systems integration industry: Accounts must be run as independent businesses anyway; treating internal resources, and other accounts, as suppliers and customers is as good a solution as any for making sure every account gets the resources it needs without some accounts subsidizing others, and without overhead charges from headquarters getting out of hand.

Speaking of overhead charges …

Every company that institutes transfer pricing eventually has to deal with corporate overhead — the cost of all those departments and expenses everyone else wants someone else to pay for: Accounting, Internal Audit, Human Resources, and, all too often, the company’s top executives. Nobody is going to buy their services voluntarily, which means nobody is willing to pay for business functions that are absolutely necessary to the company’s health.

Is it any wonder that in most companies, everyone outside headquarters calls overhead a tax?

Here’s a suggestion: Start calling it “rent” instead. Nobody really likes paying rent, but nobody expects to live in someone else’s building for free, either, nor do they expect the various features of their living space to be charged a la carte.

Let’s close this subject down. There are some situations in which transfer pricing makes sense. Not many, but some. When it makes sense, the company becomes a marketplace; everyone is everyone else’s customer. Done right (a rare event) the result is the efficient allocation of internal resources.

In most companies, though, transfer pricing’s unintended negative consequences vastly outweigh the benefit, which my partner, Steve, describes as full employment for accountants, but which is more commonly described as “Making cost center managers accountable.”

This is simply a different way to describe the efficient allocation of resources. But isn’t it striking that, stated this way, the point is personal and pejorative rather than organizational and about benefit?

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