OK – so I’m climbing on the latest news headlines – forgive me, but I do see an analogy that is important for IT leaders to be aware of. Current business conditions mean this is a great time for CIO’s to clean up their back yards, and aggressively “kick the IT legacy problem in the teeth” as one of my Scottish clients used to say. Also, it’s Spring, and a great time to do some Spring Cleaning of the house of IT.
What Are IT Toxic Assets?
I’m using the term to cover any IT asset or capability that is a net drain on value – i.e., the net cost of keeping it is greater than the business value it delivers. Toxic IT assets can include:
- Hardware (computers, servers, printers, storage, routers, power supply equipment, etc.)
- Software (applications, tools, system software, etc.)
- People (anyone on the IT budget)
Let’s take hardware first. We tend to get lazy when it comes to replacing hardware that is no longer delivering enough value to cover its cost. Old Fred in accounting likes using the ancient fax machine because he’s never bothered to learn how to use the neat new scanner that sits right next to the fax. So, rather than fight with Fred, we leave the behemoth machine there, taking up space, consuming electricity and giving off heat the equivalent of a small town, and needing non-standard and expensive paper roll supplies. Or the old PC’s that nobody is using, or is ever going to use, but that sit around gathering dust because… well because it’s easy to let them sit there.
Just like in our private lives, we accumulate “stuff” and don’t clear it out until we move (perhaps not even then!) Or until some exceptional event is upon us that motivates the clear out. And, boy does it feel good when we’ve finished! And so does the Salvation Army or whatever needy cause you’ve donated the stuff to!
Software is a similar problem. First, there’s licences and maintenance fees we are paying for stuff that is not being used. There’s excess fees we are paying for “premium services” or “extended editions” that aren’t needed. We put the full MS Office Suite on every PC, whether it is needed or not. Second, there’s the legacy stuff who’s functionality was replaced long ago by an ERP or whatever, but that still has one or two users of an old report. Those users could get a virtually identical report using the ERP’s report writer or query tool, but they can’t be bothered to learn it.
Then there’s the people. Dr. Judy Bardwick, occasional research associate of mine, and noted author, speaker, and management consultant specializing in the psychology of the corporate environment, has written and talked extensively about the “entitlement culture,” and IT is by no means immune to this. IT professionals sometimes tend to attach themselves to specific systems, feeding and taking care of them. There’s always tweaks to be made, and end users are always asking for enhancements. Some of these tweaks and enhancements are essential, but from my experience, many are “nice to haves” rather than “must haves” and nobody is really figuring out the full life cycle costs and value to determine if they are really cost-justified. I guess that may be OK when times are flush (though I don’t really believe it’s responsible use of resources) but under the current economic climate, it borders on criminal behavior!
A classic example of a toxic policy is the “unfunded mandate” from headquarters.
In an effort to streamline accounting, all divisions and functions must align to the new Corporate Chart of Accounts. Please see the policy document CP10478xPP04921z dated February 1, 2009, and please bring your accounting codes into compliance by June 1, 2009.
To the person in accounting who came up with the policy, it makes all the sense in the world, and will save their department a quarter headcount. To the IT organization, who is being hit with unfunded mandates such as this from different corporate folk every week of the year, they add significant headcount, and/or detract from higher value generating activities.
Other toxic policies include too liberal a provisioning of personal computing devices (people getting devices that don’t need them, or getting way more device than they need).
So, What’s a Poor CIO To Do?
Rule 1 – be ruthless! Don’t be a victim! Take control! Use the economic climate as air cover to do some serious toxic asset remediation. One strategy I’ve seen work well is to pick a target – say 15% of the total asset base, for example – to eliminate over a 6 month period. Enlist your business partners in the effort – it can be a good way to create some goodwill in those key relationships.
Rule 2 – leverage business-IT governance to ensure you really do have the air cover you need to make the changes.
Rule 3 – create motivation among the IT organization to help find and eliminate the toxic assets. Create a competition, with some kind of reward (need not be financial) and recognition for (a) finding target opportunities, and (b) eliminating these opportunities.
Rule 4 – this is a great opportunity to experiment with Social Networking – to make the targeting and elimination of toxic IT assets a collaborative exercise!
(Image courtesy of Investorshub)