Current events and you

9/17/2007

And now for one of those current events columns you like so much -- you know, the ones that use "lessons for IT" as a pretext for spouting off (the last for awhile, too -- I promise!):

Topic #1: Global Warming. If you're interested in the politicization of global warming, read The Truth About Denial, (Sharon Begley Newsweek 2007Aug13). It reveals how, over more than twenty years, companies in the energy industry created and disseminated disinformation on the subject -- funding think-tanks, phony grassroots organizations, and pay-for-publication schemes that turned fringe scientists into freelance writers rather than researchers.

If the distinction isn't clear: Research grants require scientists to investigate a topic, not to reach a predetermined conclusion.

Lesson for IT: Yes, there is a lesson for IT -- a real one. An ExxonMobile-funded think-tank offered scientists a paltry $10,000 to write global-warming-denial papers earlier this year. Much more than $10K changes hands when technology vendors subscribe to services from the various IT research firms. Connect the dots.

Topic #2: Funding infrastructure maintenance. Earlier columns on the subject led quite a few readers to suggest there is plenty of money. The problem, they said, is setting the right priorities.

Subtopic A -- Priorities: Those complaining about bad priorities were right on the money, as it were. According to Funding for bridges served with side of pork, (Kevin Diaz StarTribune 2007Sep13) pork exceeded kosher spending in the Senate's transportation appropriations bill by a factor of 1.5 to 1. "Pork served with side of funding for bridges," would have been a more suitable headline.

Lesson for IT: Businesses spend on pork, too. Even barely profitable businesses frequently "invest" in pet projects (earmarks, if you will) whose only value is scratching the itch of an influential executive. If you work in a company that funds lots of earmarks, lobbying for your share is a required skill. Playing this game is bad enough. Losing is worse.

Subtopic B -- Is there enough money? The recent Senate appropriations bill allocated $2.5 billion. That's roughly a quarter of what will be needed annually for the next 20 years, according to the best estimates I've read.

This year's projected federal deficit is $200 billion, not including the government's considerable off-book spending. It's the smallest since 2001. Unless you think there is enough waste to eliminate this deficit we need a serious redefinition of "enough."

Lesson for IT: Business leaders often make the same argument to IT -- "your budget is enough if you just set better priorities."

It isn't only government that's often governed by wishful thinking coupled with rationalization. I recently heard an off-the-record account of a company that turned down IT's request for funding to protect it against data loss. After a bunch of highly sensitive data went missing, guess what the CIO heard? Hint: It wasn't, "I guess we should have funded your request."

Subtopic C -- Asymmetric investment: The cost of overbuilding a bridge is the cost. The cost of under-building a bridge is, as Bill Beery explained in a perceptive letter, the cost of replacing the bridge.

On the other hand, as was pointed out in this space in Cottonwood now or hardwood too late? (Keep the Joint Running 2003Apr28), sometimes a cheap solution is the right answer, as it gets you to business benefit faster. The logic: Get the benefit enough sooner and it more than pays for the cost of rebuilding a better system later on.

Lesson for IT: You can't strike the right balance between investment in infrastructure and investment in immediate business functionality by applying a simplistic rule. Too little infrastructure means business functionality becomes unnecessarily expensive, unwieldy and fragile. Too much infrastructure and the business becomes slow, stodgy, and top-heavy.

Topic #3: Second-guessing can be more important than guessing: Sometimes, forecasting matters less than accurately forecasting the forecast. Commodities traders, for example, don't need to forecast the weather. They need to forecast what the weather bureau will forecast, as former meteorologist and commodities-trading-company employee Steve Kauffman points out. That's because the weather bureau's forecasts drive commodities prices, so accurate forecasts of those forecasts turn into highly profitable trades.

Lesson for IT: CIOs who are good at forecasting the forecast will know whether to spend early or spend late. If you expect a bad year, spend early so they can't take your budget away from you. If, on the other hand, you expect a good year, spend early, because you can ask for more budget later on.

Oh, wait ...

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