Don't cut, innovate!

The Royal Bank of Canada (RBC) has been in the news lately because of a planned layoff of a number of its IT staff. The kicker is that, before they leave, they have to train their replacements and their replacements are supposedly "temporary foreign workers" who will eventually leave Canada and go back to their country of origin (I'm not being coy; I want to keep this post a bit more general than what's been reported in the media). This, of course, has caused an uproar.

I teach a course on E-Business/Managing e-Commerce at McGill University and one of the topics we discuss in class is outsourcing and its relative advantages/disadvantages, costs/savings, etc. I've worked for an outsourcer before. I also advocate it under the right circumstances. Maybe there is a part of your operations that is not core to your business. An example of this might be server management, or some other aspect of your business for which you have no expertise such as security, or a new regulatory requirement that can be addressed by a highly specialized firm.

So, why am I on this soapbox? Because this is going to eventually become an issue for organisations who are taking or will take advantage of cloud computing and their service providers. At some point, a CIO, CFO, or VP of Finance will realise that there are cost savings associated with cloud computing and decide, "Well, we don't need an IT department of [insert number of IT staff here] people anymore, let's cut [insert number of employees to lay off here]."

This is, without a doubt, a knee jerk reaction (albeit a difficult one according to those doing the cutting) and absolutely the wrong decision. Yes, some organisations justify the cuts based on the bottom line and revenue promises to futures markets, and sometimes this is justified, but it should not be the first choice by any stretch of the imagination.

Those employees, who know your core business, have been trained by you, and are more than likely competent individuals, should be retasked. That's right, not only should you find them comparable work, but give them a goal to help create value for your customers and your organisation; these individuals no doubt have some idea(s) how to improve some aspect of your business.

[Aside: Incidentally, RBC has backpedaled and announced publicly that they would offer comparable work to the individuals affected by this latest round of outsourcing.]

The US and Canada are suffering from a drain on jobs that are leaving for cheaper climes. How do we continue to maintain living standards when decent paying jobs are being cut? The answer is to promote innovation.

The 'O' word is greatly feared by employees. It is humiliating, upsetting, and demoralizing to be 'let go', or to be told that 'the business has decided to go in a different direction' and that 'your services are no longer required'. Before getting to that point, ask them: what can you do to help the organisation; do you have any ideas that can improve our business; are our processes as efficient as they can be; can you take on an innovative new project? I think you'd be surprised by the answer.

Don't cut, innovate!

TDWI Cloud BI Solution Summit Roundup

Last week, I attended the TDWI Cloud BI Solution Summit as a speaker. I was fortunate enough to sit through some of the other presentations and I learned something interesting about the market place for Big Data and Cloud: not everyone is ready for it. This may sound like a given; American organisations are way ahead of Canadian organisations, but I found that there are still some fairly big fish out there that are still grappling with these concepts in the US.

Initially, I figured that the audience, composed mainly of senior IT people, middle managers, and executives, was up to speed with cloud computing and that its use was a forgone conclusion. This was clearly not the case.

There were questions from attendees such as:

"What is cloud BI?"
"Where is the data?"

And, a response to informal polls showed that:

• The majority of organisations represented did not have a "cloud BI solution".
• Few were considering moving their BI to the cloud.
• Licensing is still a concern.
• Performance is a concern.
• Data lifecycle management in the cloud is a concern.

So, it would seem that, while Cloud Computing (well, at least IaaS and SaaS; PaaS is coming into its own) has entered the vernacular of IT departments and some executive level suites, Big Data is still not there. Gartner has Big Data *just* entering the phase they call the "Peak of Inflated Expectations" which means that we are now looking to Big Data as a means of increasing our competitiveness without necessarily having the skills and knowledge of how to do so.

This leaves us in an interesting situation: if we can't do it ourselves, we have to subcontract to those who can. What are the costs? How is this agreement governed? If there are no stellar insights, whose fault is it? Is it even someone's fault? The fact that these questions exist is interesting because we're at the same stage we were at when the web came to prominence, when e-commerce was new, when the concept of outsourcing caught on, and more recently, as Cloud Computing became a new IT service delivery model.

The evolution of Big Data and its adoption will be interesting to follow. But one thing is for sure: look for Big Data to leverage public, low cost, commodity compute resources, and for more and more public cloud service providers to offer such services. After all, AWS has already launched such a service...

City of San Diego Reported to Outsource IT Services

GovTech reported that the City of San Diego is ready to outsource some IT services including help desk functions, laptop, desktop, and database server management.

Within the article, the City reportedly consolidated five email systems into one. Oddly, there is no mention of migrating any services into the cloud as various city and state governments have already. It would seem that migrating to a SaaS model, such as Google Apps, would generate a cost savings by simply reducing removing  license fees/maintenance contracts and person-hours required to maintain on-premises servers and productivity apps on upwards of 10,000 desktops and laptops.

That said, the article doesn't mention whether the City's licenses are up for renewal nor the asset lifecycle. So, it is entirely possible that such a migration is being considered. We may yet see an announcement to that effect in the near future.