Design by Constituency

By Ken Phelan
Posted in Uncategorized
On November 06, 2015

Every business builds itself around the needs for three constituencies - customers, employees, and owners. The CEO acronym is an easy way to remember them. There is always a balance, but generally one of them has a priority role.

Customer-driven businesses start with customer experience as their priority. A lot of retail organizations have this focus. Nordstrom’s comes to mind. Service industry’s often make employees a priority, knowing that a good employee will make the service product shine. Starbucks is a good example of an employee-driven focus. Most large public companies are run for ownership first, looking to maximize quarter-over-quarter profits.

IT departments and IT products are also designed and managed with constituencies in mind. In IT, our constituencies are customers, finance, and operations (CFO).

Our customers are the business units and end users. They’re looking for performance, availability, and agility in IT offerings. It should always be there when they need it with good solid performance. But, they also want the agility to have offerings changed and added as necessary. This is the core of consumption-based IT.

The finance team needs to minimize the cost of IT. The majority of IT is seen as an infrastructure cost which does not contribute directly to the bottom line. Availability is important because we don’t want people sitting around with nothing to do, but generally, the less spent on IT the better.

Operations teams are the internal IT groups running the solutions. They need reliability and simplicity in the offering. For them to make finance happy, they need cost effective, highly automated delivery. To make users happy, they need consistent availability. And it wouldn’t hurt to design IT such that operations staff can do their job in less than 60 hours a week. It might seem at first blush that no one would prioritize operations, but it actually does happen. Much like how Starbucks value flows from their employees to owners and customers, I’ve seen exceptionally proficient IT operations that add value to finance and customers.

Obviously, some of these core constituency values are complimentary but many are in opposition. Agility and simplicity are not easy to achieve simultaneously. And constant financial pressure doesn’t make for great performance or 50 hour work weeks.

Here are some handy points to help determine which constituency drives design in your organization:

Our IT budget is under significant pressure. (F +1)

We have a thriving BYOD offering. (C+1)

We’ve had layoffs in IT in the last three years. (F +1; O -1)

We have approved initiatives around IT management toolsets and automation. (O +1)

We’re moving as much as we can to public cloud offerings. (C +1)

We have a strong IT Governance model that enforces standards. (O +1)

Much like the CEO decision, there isn’t really a bad CFO decision. I think it helps to know who you are though. If there’s a lot of talk about IT as a Service, but you’re really more of an F culture than a C culture, that’s going to change the way you implement. If your IT Staff is spending a lot of time looking at internal IT management and provisioning tools but you’re not an O, you may be wasting your time.

Take some time to map out your CFO priorities and plan accordingly. You probably can’t change the way the river is flowing, but best to figure it out before you start swimming.

Ken Phelan

Ken Phelan

Ken is one of Gotham’s founders and its Chief Technology Officer, responsible for all internal and external technology and consulting operations for the firm. A recognized authority on technology and operations, Ken has been widely quoted in the technical press, and is a frequent presenter at various technology conferences. Ken is the Chairman of the Wall Street Thin Client Advisory Council.