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The Writing On The Wall – Real Example #2 August 8, 2009

Posted by wrivkin in Enterprise Architecture & Business Transformation, General Creative Thinking.
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Here is another real-life example of how a chain of methodologically wrong decisions led to a massive and dramatic shift in Information Processing for one of the major telecomm providers.  About a year ago they outsourced ~90% of their IT to an external vendor. It was before the recession, this US subsidiary of this multi-national corporation was the most profitable that year, and the IT-supported Customer Care of this company was recognized then as the best in the industry. So, why did they outsource their IT? They did it because their new CEO made this decision. Why? Because he came to do it and he could! He came just to stop the entire headache associated with the internal IT. Ten years ago he would not have done that, because he could not! But now he could and he did, unfortunately, as we shall see further, also without deep methodological considerations.

As a result, 80% of IT employees lost their jobs. Was it predictable? Absolutely! I have observed, from the outside, their architectural chaos for the last four years, and it indeed became worse and worse. They meaninglessly flounced back and forth from one technology to another without any methodological clue about why they were doing what they were doing.  They were buying Weblogic, TIBCO, Siebel, SAP; they invested millions of dollars in new technologies, tools, training, and migration trauma only to throw each new technology away or to misuse it. Why? Because they chose to ignore the writing on the wall that clearly said: TECHOLOGY DOES NOT MATTER ANYMORE; PAY ATTENTION TO METHODOLOGY! So, they ultimately got a more understandable and undeniable message from their CEO: MY OWN INTERNAL I.T. DOES NOT MATTER TO ME ANYMORE; GET THE HECK OUT!

A year has passed since that transformation, and they seem to be OK so far, like they never even had their internal IT. Now, as I said before in this post, having absolutely agreed with this CEO in WHAT he did, I have my doubts about HOW he did it. It seems that he now has very tightly (possibly fatally) coupled his company’s Business Processes to this one external vendor. He got the first contract, evidently, cheap enough, but what will happen when the term of this contract is up? What would his company do if their service provider triples the price then? They will have nowhere to go. Then he can discover another truth: WHILE TECHNOLOGY DOES NOT MATTER, INFORMATION PROCESSING VERY MUCH DOES! Nobody can do now without Information Processing (I.P.), especially a company whose Business Model is to provide information! And you better be free in choosing by WHOM, HOW, AND FOR HOW MUCH your information is processed, or you might find that you have another headache, this time around caused by your neck being in a tight noose, with its end in the hands of your IT service provider. Now, isn’t that simple? Evidently, not for everybody.

Returning to our case study, it is very probable that this company will ultimately find out how costly and deadly methodological and architectural mistakes are. They could’ve changed their IT architecture to make it more open and flexible, when it was in their hands. It would’ve been methodologically right! Now, all architecture is in the vendor’s hands, and no vendor is so stupid as to invest money in a serious, costly client’s architecture change just to make it easier for the client to go to another vendor! So, as the client company inevitably sees their Business Model and their Information Processing growing more and more complex, with their vendor adding more and more point-to-point integrated functionality, they may find themselves doomed to use the services of this particular vendor forever, bound to pay whatever price it would ask, unable to set themselves free.

OK, now the $64K question: “Could they have done better?” Absolutely, and it was this very case that made the author of this post once develop and publish his Enterprise Cloud-Oriented Architecture concept and framework explaining how it is possible to do better . Why then didn’t they do better? It is because among those 80% fired and 20% kept technologists, including their so-called Enterprise Architects, there were no methodologists, who would’ve been able earlier to stop this costly technological madness, or, later, to explain to their CEO how to create a viable Enterprise Cloud-Oriented Architectural Framework, allowing them to avoid the later fatal methodological mistakes. They did not care (exactly as you, my reader, do not), and then it was too late. Instead, they hit the road, looking for another technological job, with the recession coming. May God help them. Not all of them were on the Methodology level, but their managers and architects must’ve been. It is their ignorance that has let the technology people along with their company down.

Are you and your company the next? Are you able to read what is written on the wall?