Business is Not All About Measurement

August 31, 2009

Measuring the business is critical for its long-term health - that is a key driver for business intelligence - but we need to remember that business is not all about measurement. If measurement takes priority over operation, then you are in trouble.

A large U.S. government agency recently discovered this. This agency — like many others – had undertaken to consolidate its IT activities. It established a centralized data center and created a program to move all applications an berg d application development under the management of a single centralized entity, located in the Washington D.C. area. The agency is highly dispersed geographically across the U.S.

After two years of work, the Washington leadership had been under the impression that the field had accepted the change and that further development of applications would proceed in a coordinated manner, with field units working with the Washington office. It also believed that it had completed an inventory of existing field applications.

A team gathering requirements for mobile computing blew these beliefs out of the water. The team found that field units had been resorting to using non-agency resources to get their jobs done. In particular, field units were using tools such as Google Docs and personal mobile computing accounts for 60 percent to 80 percent of their work.

Up to this point few Agency employees - and fewer consultants - wanted to challenge the centralization program, as it was a “sacred cow,” driven by a theory that consolidation would save money and tighten security. Instead, it had the effect of driving people in their field to take their work under the radar.

Once the requirements results came out, several employees spoke up. Some of their comments included the following:

The challenge you outline will not be readily or efficiently (and maybe not even effectively) solved with a centralized approach. The leadership that has eyes-on what’s happening with IT/IM are those in the [field operations]. Centralization breeds the expectation that the responsibility for policing up IT/IM discipline has been moved elsewhere; and in turn fosters the laissez-faire perspective that “since I can get my IT/IM solutions easily, quickly, and locally, why should I stop it?

Work falls into the categories of (a) Compliance, and (b) Mission Delivery. I think historically it has been a-lot easier to gain budget for Compliance efforts - the Agency often has a gun at its head. Those kinds of projects got the vast majority of the development money throughout the years and then locked it up in Steady State (maintenance of legacy). Our [portfolio management] process is heavily titled in favor of [Steady State] and therefore the status quo. Field business (mission delivery) automation is a very poor step child in comparison.

NONE of the [Washington provided applications] were effective in meeting [field level] business needs”… I recall [a local manager] saying, ‘the combined total addresses less than 10%’, and that efforts redirected toward the [Washington-provided applications] requirements were one of their larger challenges because they interferred with priorities that had direct bearing on real business targets.

…the [Washington office] has failed to fully comprehend the value of, and opportunity costs of not addressing local systems…The part that truly mystifies me is why we can’t leverage these opportunities and gain more results with the lower costs and faster development I’m convinced we could achieve if we can but avoid forcing absolutely everything through a data center ‘keyhole’ - which of course can’t happen, everyone knows it, and everyone who is accomplishing much is finding ways to work around.”

Wow. So much for the OMB mandates for consolidation of systems, and for increased focus on measurement! The above comments are saying in no uncertain terms that consolidation - at least as implemented by this particular agency - is not working or even desirable. The comments also say that too much focus on compliance-oriented applications - which tend to be those that are designed for performance measurement - causes the budgets for real business applications to be starved.

So does excessive measurement kill the goose? And is centralization a necessary ingredient of measurement? Hardly, but centralization is a first impulse response when increased transparency is called for. It is conceptually simply: put everything in one place, and funnel everything through one group, and direct that group to build measurement systems.

But this simple approach doesn’t work for many organizations - especially large, distributed organizations - as the case above illustrates.

I am not even going to attempt to get into possible solutions in this article, because that is a separate long topic in its own right; but I will provide some food for thought on this: an approach known as a “center-led” approach [1] tends to provide the flexibility that the field needs while providing the centralized resources and expertise that the field can tap to do things in the preferred manner. In my book Value-Driven IT [2] I expound on this approach in the form of a CIO organization that acts as a mentor for the rest of the organization, but does not own IT systems or development.

1. eSourcing wiki article, describing the “center-led” approach in procurement. See
http://www.esourcingwiki.com/index.php/Center_Led_Purchasing#Center_Led_Model

2. Value-Driven IT, by Cliff Berg, 2008.

About Cliff Berg: Cliff Berg is a member of the IT-Finance Connection Advisory Board.

He is a consultant in IT process, methodology, and change management, and a former enterprise system architect. Cliff has written four books, most recently Value-Driven IT, and before that High-Assurance Design. Previously Cliff was founder and CTO of Digital Focus, now Command Information.

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