Opportunity costs and the daily ICT grind

Distractions keep CIOs and their staff mired in the everyday business of providing ICT service

We all know that, at first for IT directors and now for the whole of the IT function, there is a drive to reduce operational activity and do more in strategic areas. The goal is to use IT to help drive the business.

To do that, you have to automate functions and outsource non-core areas of activity. You have to take a torch to operational spending and find better ways to deliver services to users to, in turn, free up budget for new development.

You have to build agility into your IT fabric, perhaps through Service-Oriented Architectures, and you have to improve quality, perhaps through using ISO or other standards.

Once you have done all that, you will have a lean IT shop that spends most of its time thinking about the future rather than the present — and the latest crisis.

Well, that’s the general idea, but of course it’s hard to escape from operations, particularly when new demands, unexpected demands, are placed on IT.

Okay, let’s have a show of hands — come on people, don’t be shy. How many of you budgeted for system changes resulting from changes to daylight saving time? How many budgeted — or budgeted adequately — for KiwiSaver or for the changes expected to the scheme as a result of the upcoming budget?

I’m counting ...

Not many, if any, would be my guess.

That’s one of the great issues with IT: dealing with the unexpected. Theoretically, if we had truly agile IT we’d take these things in our stride, but the reality is we don’t. Changes such as these require somebody to bury themselves in the code, to research patches and fixes and to install them across a whole range of software.

Now, I’m not suggesting either of these issues are a new Y2K. What I am saying is they are another distraction, just like the latest collapsed file server or virus or spam attack or whatever.

And these distractions keep CIOs and their staff mired in the everyday business of providing ICT services rather than using technology to produce change and competitive advantage.

I’ve never read this anywhere, but it occurred to me there is an opportunity cost in all of this as well. It’s not just the cost of fixing issues such as daylight saving changes, but the cost of what you could have been doing instead. What you could have been contributing. And it’s the same with project failure. We sometimes see figures attached to projects that have gone off the rails, but those figures are usually a simple tally of the direct financial cost compared with the original budget.

The true cost of project failure is much higher than that, because there is an opportunity cost there too. Where would your organisation have been if it had invested that money elsewhere?

Anyway, once we get these latest changes sorted out, we can really crack on with that new online stuff we were talking about. Right?

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