Key issues

There are 10 basic categories of mistake that are often made when attempting to manage IT departments by managers who come from outside the IT field. Not everyone is guilty of all of these, of course, but too many people make at least one of these mistakes.

■     Mistake #1: Falling for the hype. Being too ready to believe the journalists’ stories that appear in non-technical magazines, and thus vulnerable to swallowing the technical hype that appears.

■     Mistake #2: Viewing the wrong channels through your crystal ball. Making wrong guesses as to the future – slightly different from the section above, with an examination of cloud computing – at the time of writing, one of the really hot-button topics in enterprise IT.

■     Mistake #3: Inertia. The opposite is also a mistake – assuming that the past will continue with- out changing. Hanging onto past practices for their own sake is as much of a mistake as embracing change for novelty’s sake.

■     Mistake #4: Promoting the wrong people. Staffing IT departments at managerial level (and even below this) can be a difficult proposition for managers who are not familiar with the ins and outs of technology. Some of the staffing issues discussed in this section are unique to IT departments.

■     Mistake #5: Seeing outsourcing as a cost-cutting silver bullet. Outsourcing  and offshoring are common terms, and these practices are often seen as easy ways to save money within the enterprise. Often, though, a careless implementation  of these can end up costing more, rather than less, money and end up being a liability to the bank.

■     Mistake #6: Mistaking biggest for best: Brand names are big in IT, and the temptation is always to go with the most common names in order to minimise risk. Though there are usually advantages to doing things this way, there are often alternatives that can be more cost-effective than the ‘tradi- tional’ choices.

■     Mistake #7: Going it alone. By contrast, going your own way, rather than following the estab- lished route can also land you in trouble if the common-sense rules are not followed.

■     Mistake #8: Expecting the world to be the same all over. It’s very tempting to assume that the world is just like the place where you have your headquarters. However, there are many differences that you may discover as soon as you start to take your business overseas, and not all of them are listed in the guidebooks.

■     Mistake #9: Believing computers are infallible. Trusting too much in the power of technology to do things right every time can be a terrible mistake. This section explains some of the ways in which the risks associated with over-confidence in technology can be mitigated.

■     Mistake #10: Believing in IT project plans. Projects are notorious for their complexity, their late deliveries and their cost overruns. Many of these undesirable characteristics can be avoided if you know the danger signs.

Contents

Introduction
What’s in the report?
A cautionary tale
The moral of this story
The purpose of this report

Mistake 1:     Falling for the hype
Moral
Summary
Introduction
The myth  generation machine
The world is smaller than we think
Social media
Lessons from social media
Smoke and  mirrors?
Product leaking
Beware the “good idea”
The seduction of new ideas
Example – a bank bites the Apple
Early adoption – The dangers of 1.0
Risk aversion  can pay off
Key points summary  

Mistake 2:     Inertia  
Moral
Summary
Transient  technology
Hard disks
Backup technology
Changes in management and  development practices
Database systems
Farewell Novell
Application  development – changes to the model  
The dilemma of change
Example: Bank looks through wrong Windows
Vendors drop support
The 2008 challenge and  beyond
IT staffing issues
Potential  IT  budget issues
Conclusions
Key points summary

Mistake 3:     Viewing the wrong channels on your crystal ball
Moral
Summary  
Seeing the future
Example: A bank backs the wrong technology horse  
Expensive blind alleys
Cloud computing
Advantages – flexibility, efficiency, cost
Risks – security,  compliance, business,  operations, reputation
Worst-case  scenarios
Continuity management
Example: A sudden break in continuity
Conclusions
Key points summary

Mistake 4:     Promoting the wrong people
Moral
Summary  
Why does  IT not  follow the rules?
Mismatching competences: technicians vs. managers
Wider effects
Certification is not  necessarily  the answer
Non-technical certification  
Particular issues for the financial sector
Advanced  IT requirements and  their implementation
Industry  scrutiny  and  oversight .
One solution: Microsoft’s “Distinguished Engineers”
Lessons for financial services  
Promotion “creep”
Conclusion
Key points summary  

Mistake 5:     Seeing outsourcing as a cost-cutting silver bullet
Moral
Summary
The three  types of outsourcing
Specialist consultants
Project teams  
Routine functions
The individual consultant  
The job security trap
Example: The embedded consultant  
Bringing in a specialist team  
Potential  problems
Language skills
Ultimate  responsibility
Outsourcing the whole function  
Security issues
Offshoring  
Chain of command issues  
Differences in business style and customs
Example: Bank’s systems lost in translation  
Conclusions   
Key points summary  

Mistake 6:     Confusing biggest with best   
Moral
Summary  
Case study: Microsoft Word
A technical Indiana Jones
Alternatives
Other “big” dinosaurs
Microsoft vs. Apple
Pricing models
Linux
Vendor inducements
Alternatives can offer a better deal
Some implications for financial institutions
Other minority  supplier  issues
Conclusions  
Key points summary  

Mistake 7:     Going it alone  
Moral
Summary  
Financial institutions and IT innovation
Invent the wheel, but not  the bearings  
Disadvantages to carving  your own path
Resources
Maintenance
Example: Reinventing a bank’s payroll system  
Why do people do it?
“Off-the-peg” can be a good fit  
Open source  is not  a sticking plaster
Beware the “dead end”  trap
So where  does  innovation come  from?
Innovation carries responsibilities for banks
Conclusion
Key points  summary

Mistake 8:     Expecting the world to be the same all over
Moral
Summary  
Living and working  abroad
Local differences in the IT world
Language
External suppliers
Just because they speak English, it doesn’t mean you should  hire them
Example: A little local language difficulty
Global standards
What’s in a name?
Different ways of working
Example: Fire regulations
Asia ex-Japan
Conclusion
Key points  summary

Mistake 9:     Believing computers are  safe  and reliable
Moral
Summary  
Computers can cause  their own problem areas
Example: The Tokyo Stock Exchange  
The case for IT audit
Documentation is vital  
Testing
Programming prototyping and language
The dangers of objects
Objects – an example
Excel errors
Conclusions
Key points summary

Mistake 10:     Trusting IT project plans
Moral
Summary  
“Creeping featuritis”
Bill padding  
Under-specification  
Example: Bank’s application too complex for purpose
Is programming an art or a science?
Throwing programmers at project overruns
Speed  for its own sake
Scheduling testing and  debugging into the project
Don’t forget  documentation
Conclusion
Key points  summary

Summing up
Scaling up
Staffing
Globalisation
Understand the other side

Author

Hugh Ashton has lived in Japan  since 1988, when  he arrived from the UK to take up a position with a Japanese documentation  company. Since then, he has worked with a variety of financial institutions, both international and domestic, chiefly working as a consultant documenting and assisting with the definition and implementation of processes and procedures governing IT operations in those institutions.

He is the author of several reports on retail financial operations in Japan, as well as wealth management operations in Japan and Asia. His reports on Japanese industry and business are regularly published on Web sites and in print. His techno-financial thriller, At the Sharpe End, set in 2008 Tokyo against the background of the Wall Street crash, has received critical acclaim.