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Ironies of enterprise information technology

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Introduction

On one of my random walks through Google Scholar, I stumbled on an interesting paper entitled, Ironies of Automation.  The main message of the paper is nicely summarized in its first few lines:

The classic aim of automation is to replace human manual control, planning and problem solving by automatic devices and computers.  However… even highly automated systems, such as electric power networks, need human beings for supervision, adjustment, maintenance, expansion and improvement. Therefore one can draw the paradoxical conclusion that    automated   systems   still   are man-machine systems, for which both technical and human factors are important. This paper suggests that the increased interest in human factors among engineers reflects the irony that the more advanced a control system is, so the more crucial may be the contribution of the human operator.

These lines were written over thirty years ago, but are ever more apt today – such paradoxes are rife, not only in automation, but in any field in which technology plays an important part. To illustrate my point, I highlight a couple of ironies drawn from a domain that is likely to be familiar to many readers of this blog: the world of enterprise IT. I also present a brief discussion of how these ironies of enterprise IT can be avoided.

Ironies of enterprise IT

In the last few decades information technology has found its way into diverse organisational functions. This trend has been accompanied by an explosive growth in new technologies. As a result of this, corporate IT infrastructures have become  ever more complex and the costs of maintaining them have burgeoned.  Quite naturally, the focus has thus turned to taming both complexity and cost. The favoured approaches to tackling this problem are standardisation and/or outsourcing. However, as I discuss below, both   often lead to ironic outcomes.

An  irony of standardisation

Enterprise IT environments tend to evolve rapidly, reflecting the many demands made on them by the organisational functions they support. This is good because it means that IT is doing what it should be doing: supporting the work of the parent organisation.  On the other hand, this can result in unwieldy environments that are difficult (not to mention, expensive) to maintain. One way to address this is to impose of standards relating to processes  (such as ITIL) and infrastructure (such as SAP or any enterprise application). 

The question is, how well does such standardisation work in practice?

In his book entitled, From Control to Drift, Claudio Ciborra pointed out that IT infrastuctures in organisations tend to drift – i.e. they escape processes, plans and standards, and take on a life of their own. The reason they drift is that they are subject to unpredictable forces within and outside the hosting organisation. The imposition of standards may slow the drift but cannot arrest it entirely. Infrastructures are therefore best seen as ever-evolving constructs consisting of systems, people and processes that interact with each other in often unforeseen ways.  As he put it:

Corporate information infrastructures are puzzles, or better collages, and so are the design and implementation processes that lead to their construction and operation. They are embedded in larger, contextual puzzles and collages. Interdependence, intricacy, and interweaving of people, systems, and processes are the culture bed of infrastructure. Patching, alignment of heterogeneous actors and making do are the most frequent approaches…irrespective of whether management [is] planning or strategy oriented, or inclined to react to contingencies.

The essential message here is that standards and processes overlook the fact that enterprises are complex social systems that are subject to internal and external influences which cannot always be foreseen.   Dealing with these, more often than not, entails the implementation of hacks and workarounds that violate the imposed standards and thus nullify the benefits of standardisation.

In summary, “standardised” IT environments often end up have a plethora of non-standard hacks and workarounds that are necessary, but are generally messy and expensive to maintain.

An irony of outsourcing

One of the main reasons for outsourcing IT is to reduce costs. Yes, I am aware that many decision-makers claim that their primary reason is to reduce complexity rather than cost, but the choices they make often belie their claims.  The irony is that in their eagerness to control costs, they often end up increasing them because they overlook hidden factors.  I explain this in brief below, drawing on my post on the transaction costs of outsourcing.

The basic idea is simple – it is that the upfront fee quoted by the vendor is but a fraction of  the total cost that will be incurred by the customer.  Some of the costs that are generally not included in upfront costs are:

  1. Search /selection costs: these are the costs associated with searching for and shortlisting vendors.
  2. Bargaining costs: these are costs associated with negotiations for a mutually acceptable contract.
  3. Costs of coordinating work: these are costs associated with coordinating external and internal work. This is particularly important in the case of software-as-a-service because the effort required to interface cloud applications with in-house systems is often underestimated.
  4. Costs of enforcement and change: These are costs associated with enforcing the terms of the contract and those associated with change.

The point to note is these costs are rarely if ever mentioned by the vendor, but almost always show up in one form or another. It is therefore important for the customer to try and get a handle on these before entering into any commercial agreements.  The problem is, some of these costs (particularly 3 and 4 above) are hard if not impossible to figure out upfront. For example, if the relationship turns sour the only solution might be to switch vendors. The cost associated with this is often significant and is borne entirely by the customer.  A lack of awareness of such costs associated with outsourcing will invariably result in ironical outcomes.

In summary: attempts to control costs by outsourcing IT can have the contrary effect of increasing them.

Avoiding ironical outcomes

So how does one avoid ironical outcomes?

I have only one piece of advice to offer here: when planning IT architectures or outsourcing initiatives, use an incremental or emergent approach that avoids big designs or commitments upfront. Using an emergent approach not only limits risk, it also provides opportunities for learning.  Most important, it enables one to verify that the envisaged benefits are not just wishful architect or manager-level thinking

Below I outline what such an approach might entail for the two ironies discussed earlier:

  1. For infrastructures/systems:   avoid grandiose system designs that attempt to span the “enterprise” – remember that one size will not fit all of your users. . Consequently, enterprise architectures and governance systems should provide guidelines, rather than detailed prescriptions.  As Anders Jensen-Waud  puts it in this post: they should foster resilience and adaptability rather than conformance,
  2. For outsourcing:  start small, possibly with a small project or system. This will help you get a sense for how outsourcing would work in your environment and help you figure out whether the vendor you have selected is really right for you.  Remember, no two environments are identical so others’ lessons learned may be considerably less useful than you think. Finally, if you’re going to the cloud, be sure to factor in costs and technical challenges associated with interfacing external apps with in-house ones.

Yes, there’s nothing particularly profound here, it is just common sense…but you know what they say about the commonality of common sense.

Conclusion

In this post I have highlighted some ironies of enterprise information systems and have briefly outlined an emergent approach to avoiding them. I believe but cannot prove that ironical outcomes are almost guaranteed if one takes a monolithic, enterprise-style approach or a let’s-outsource-it-all attitude to enterprise information technology. Such a view overlooks the messy little details and differences that trip up big designs and grandiose plans. In the end, the only way to avoid ironical outcomes is to start small, learn from experience and incorporate that learning in an incremental manner in whatever you’re building or doing. Yes, you might end up with something you did not envisage at the start, but you will have learnt much along the way. More important, perhaps, is that you will be able to rest assured that it works.

Written by K

August 26, 2014 at 8:40 pm

Heraclitus and Parmenides – a metalogue about organizational change

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Organizations are Heraclitian, but Parmenides is invariably in charge.” –Stafford Beer (paraphrased)

Heraclitus: Hello Parmenides, it’s been a while!  What have you been up to since we last met?

Parmenides: Heraclitus, it is good to see you my old friend. You’re not going to believe it, but I’ve been doing some consulting work on managing change in organizations.

Heraclitus:  [laughs] You’re right, that is beyond belief, particularly in view of your philosophical position on change. So, have you recanted? Have you now come around to the truth that everything changes and nothing stands still?

Parmenides: Ah, yes I am familiar with your views on change my friend, but I hate to disappoint you.  My position remains the same as before:  I still believe that the world is essentially unchanging. The key word here is “essentially” – by which I mean that the changes we see around us are superficial and that the essential properties of the world do not change. Indeed, as paradoxical as it may sound, understanding this unchanging essence enables us to manage superficial changes such as those that happen in organizations.

Heraclitus:  I’m not sure I understand what you mean by unchanging essence and superficial change...

Parmenides:  OK, let me try explaining this using an example. Let us consider the case of a physical law and a real world situation to which it applies. A concrete instance of this would be Newton’s Law of Gravitation and the motion of a spacecraft.  The former represents the unchanging essence while the latter represents one of its manifestations. The point is this:  the real world (as represented by a moving spacecraft) appears to be ever changing, but the underlying unity of the world (as represented by Newton’s law) does not change. If one understands the underlying unchanging laws then one has the power to predict or control the superficial changes.

Heraclitus:  Hmm….I don’t see how it relates to organizations.  Can you give me a more down to earth illustration from your work? For example: what is the “unchanging essence” in organizational change?

Parmenides:  That’s easy: the unchanging essence is the concept of an organization and the principles by which they evolve.  Consultants like me help organizations improve performance by influencing or adjusting certain aspects of their structure and interactions. However, the changes we facilitate do not affect the essence of the entities we work with. Organizations remain organizations, and they evolve according to universal laws despite the changes we wrought within them.

Heraclitus: Ah Parmenides, you are mistaken: concepts and principles evolve in time; they do not remain constant. Perhaps I can convince you of this by another means.  Tell me, when you go into an organization to do your thing, how do you know what to change?

Parmenides:  Well, we carry out a detailed study by talking to key stakeholders and then determine what needs to be done.  There are a host of change models that have come out of painstaking research and practice.  We use these to guide our actions.

Heraclitus: Are these models  akin to the physical laws you mentioned earlier?

Parmenides:  Yes, they are.

Heraclitus: But all such models are tentative; they are always being revised in the light of new knowledge. Theory building in organizational research (or any other area) is an ongoing process. Indeed, even physics, the most exact of sciences, has evolved dramatically over the last two millennia – consider how  our conception of the solar system has changed from Ptolemy to Copernicus. For that matter, even our understanding of gravity is no longer the same as it was in Newton’s time. The “unchanging essence” – as you call it – is but a figment of your imagination.

Parmenides:  I concede that our knowledge of the universe evolves over time. However, the principles that underlie its functioning don’t change.  Indeed, the primary rationale behind all scientific inquiry is to find those eternal principles or truths.

Heraclitus: It is far from clear that the principles are unchanging, even in a so-called exact discipline like physics.  For example, a recent proposal suggests that the laws of physics evolve in time.  This seems even more likely for social systems: the theory and practice of management in the early twentieth century is very different from what it is now, and with good reason too – contemporary organizations are nothing like those of a century ago.  In other words, the “laws” that were valid then (if one can call them that) are different from the ones in operation now.

Parmenides:   You’re seduced by superficial change – you must look beneath surface appearances!  As for the proposal that the laws of physics evolve in time, I must categorically state that it is a minority view that many physicists disagree with  (Editor’s note: see this rebuttal for example)

Heraclitus: I take your point about the laws of physics…but I should mention that history is replete with “minority views” that were later proven to be right.  However, I cannot agree with your argument about superficial change because it is beyond logic. You can always deem any change as being superficial, however deep it may be. So let me try to get my point across in yet another way. You had mentioned that you use management principles and models to guide your actions. Could you tell me a bit more about how this works in practice?

Parmenides:  Sure, let me tell you about an engagement that we recently did for a large organization. The problem they came to us with was that their manufacturing department was simply not delivering what their customers expected.  We did a series of interviews with senior and mid-level managers from the organisation as well as a wide spectrum of staff and customers and found that the problem was a systemic one – it had  more to do with the lack of proper communication channels across the organisation  rather than an issue with a specific department. Based on this we made some recommendations to restructure the organisation according to best practices drawn from organisational theory.  We then helped them implement our recommendations.

Heraclitus: So you determined the change that needed to be made and then implemented the change over a period of time. Is that right?

Parmenides: Well, yes…

Heraclitus: And would I be right in assuming that the change took many months to implement?

Parmenides: Yes, about a year actually…but why does that matter?

Heraclitus:  Bear with me for a minute. Were there any significant surprises along the way? There must have been things that happened that you did not anticipate.

Parmenides: Of course, that goes with the territory; one cannot foresee everything.

Heraclitus: Yet you persisted in implementing the changes you had originally envisioned them.

Parmenides: Naturally! We had determined what needed to be done, so we went ahead and did it. But what are you getting at?

Heraclitus: It’s quite simple really. The answer lies in a paradox formulated by your friend Zeno: you assumed that the organization remains static over the entire period over which you implemented your recommendations.

Parmenides:  I did not say that!

Heraclitus:  You did not say it, but you assumed it.  Your recommendations for restructuring were based on information that was gathered at a particular point in time – a snapshot so to speak. Such an approach completely overlooks the fact that organisations are dynamic entities that change in unforeseen ways that models and theories cannot predict. Indeed, by your own admission, there were significant but unanticipated events and changes that occurred along the way.  Now you might claim that those changes were superficial, but that won’t wash because you did not foresee those changes at the start and therefore could not have known whether they would be superficial or not.

Parmenides:   Well, I’m not sure I agree with your logic my dear Heraclitus. And in any case, my approach has the advantage of being easy to understand. I don’t think decision-makers would trust a consultant who refuses to take action because every little detail about the future cannot be predicted.

Heraclitus: Admitting ignorance about the future is the first step towards doing something about it.

Parmenides: Yes, but you need to have a coherent plan, despite an uncertain future.

Heraclitus: True, but a coherent plan can be incremental…or better, emergent –  where planned actions are adjusted in response to unexpected events that occur as one goes along. Such an approach is better than one based on a snapshot of an organisation at a particular point in time.

Parmenides:  Try selling that approach to a CEO, my friend!

Heraclitus: I know, organizations are ever-changing, but those who run them are intent on maintaining a certain status quo. So they preach change, but do not change the one thing that needs changing the most – themselves.

Parmenides: [shakes his head] Ah, Heraclitus, I do not wish to convert you to my way of thinking, but I should mention that our differences are not of theoretical interest alone:  they spell the difference between being a cashed-up consultant and a penurious philosopher.

Heraclitus: [laughs] At last we have something we can agree on.

Further reading:

Beer, Stafford (1997), “The culpabliss error: A calculus of ethics for a systemic world,” Systems Practice, Vol 10, No. 4. Pp. 365-380. Available online at: http://rd.springer.com/article/10.1007/BF02557886

Note: the quote at the start of this piece is a paraphrasing of the following line from the paper: “Society is Heraclitian; but Parmenides is in charge.”

Written by K

August 14, 2014 at 7:52 pm

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