Systemic impacts of information technology (IT) infrastructure investment

Just yesterday (June 26 2013), the UK chancellor announced plans for investment in the UK infrastructure.  Roads, trains and some flagship projects (on energy also) will finally be given a go-ahead or a positive nod in terms of funding.

There are already some critics, citing that there is a missed opportunity to revitalise the construction industry by borrowing cheaply and making available much more funding.  Lack of long term vision is also cited and above all, serious commitment.

Just imagine if this 'lack' of vision and commitment is applied to an organisation's IT infrastructure.  

To many this is unthinkable. Reducing IT infrastructure investment is out of the question.  We teach our students that  when you invest in IT you are investing in a strategic asset.  True, it is expensive and painful, but ere are very good examples to show that IT can provide a long term return on investment, plus better customer service, new business opportunities, rapid product development, etc. e infrastructure is the backbone over which your applications and communications reside.   Networks, hardware, data centres, they are all part of the infrastructure.   Investing in infrastructure is investing in  the organisation's future health.

This is what IT professionals hold as true.  And many managers also do it. 

But let us go back to the criticisms to the UK chancellor.  If we are to believe that there is a short mentality in investment, I am afraid to say that is is also the case for IT. And more specifically with the new cloud computing fashion. 

For an organisation, Cloud computing is becoming the antithesis of IT infrastructure investment.  It is sold as "Pay as. You use" IT service. No more expensive infrastructure.  It is up to the cloud computing providers to invest. Your focus is on your business, let the IT providers care about theirs. 

Sounds nice, but we are relinquishing control of the IT infrastructure to a third party. They are obliged by contract to make sure that the service that they provide is of high quality, and to do that they should invest in their IT infrastructure.  We just but the front end part of the infrastructure (tablets, pcs and the like). 

So what could be the systemic effects of investing or not investing in the IT infrastructure?

I do not have the full answer to this as I am not a visionary or a prophet.  But I could say that these effects are related to the assumptions that will guide the decisions of those that will (not) invest in the infrastructure.  

If these assumptions are guided by short economic gains, or economies of scale (and you can ask cloud computing providers about this), I find it difficult they would fully cater for something that has to be there but might not report the expected benefits.  Cloud providers would surely plan their infrastructure capacity but will think twice in investing beyond what they need; it is hard to predict growth in IT services as it is has been the case before.  Like a property landlord that lets the property to tenants, the cloud computing provider might not buy the most expensive furniture.  Or if they do, they will charge a premium.  Just to make sure they balance the numbers.

Like every other business. 

Even if cloud computing providers invest in infrastructure, they will have to work together with others who would have a different perspective on investment.  We need to remember that cloud computing is a mixture if services from different companies.  And even if there is consensus, there is another issue at needs to be looked at.

It is the infrastructure of energy that is required to supply computing grids with the electricity they need. Who is going to invest in energy infrastructure ? The government?

I really hope the UK chancellor thinks about this last point, because roads and trains need energy.  

And I hope that IT managers think of who is doing what in new ecosystem of cloud computing services worldwide.  We need to think systemically on the consequences of (not) investing appropriately in infrastructure. 

Making the best of the online and offline worlds, not just (screw) fixing them!

In my previous post I mentioned a construction materials company that has decided to increase the number of stores in the UK.  

I now remember the name of the company: Screwfix.  I remember the name because a few days ago when I went to withdraw money from a cash machine, I saw an advert in the machine stand (clever way of marketing themselves!), announcing that they were about to open one of these new stores in the town where I live.

The advert also stated the opening hours.  Before I could read it all, my jaw dropped:  They were going to open the store from Monday to Friday only! 

So my first thought was, what about people like you and I who work from Monday to Friday?  Cannot we go to the shop on Saturday or Sunday? Again, Britain's 9 to 5 no-weekend shop culture in the era of globalization (and still standing in the economic recession) came to mind.  I thought, they should open on the weekend, if not extend their opening hours during the week.  Of course this might prove 'expensive' and 'unfeasible', but then why are we then opening new stores? Just to gain a few customers when you could gain them all?  

The memory of this advert came back to mind a few days later when I was watching TV.  Once more, the name Screwfix came on the screen.  This time I just had a glimpse of the advert, and could notice they were showing the wonderful mobile phone application that they have, with which you can browse the catalogue of products.  

So I wonder, if you are a mobile phone user, in the middle of a building job, which could take place on a Saturday (or even a Sunday, but then luckily for Screwfix this might be the odd case, also considering Britain's culture of not having any building work on Sunday unless it was the Olympic park), and you see something that you need, but the store nearby is closed on the weekend. What would you do?

Screwfix might say, well you can drive to another store, and we might have one of these open during the week end.  I would think twice before spending more on petrol, also because the costs are transferred to me.

So instead of 'fixing' the offline world to I do not know what sort of business model, and making online applications sophisticated for the 'user' (in terms of navigation, and the like), Screwfix should really think outside of the box and ask itself:  What does a customer really need? 

In this way we should be making the best of the online world by making it more compatible with the offline world. Online and offline worlds are systems, they interact together, so whatever you do in one will have impacts in the other. 

Screwfix could also think of delivering products in additional hours to customers who really need them.   I am sure there are many customers that are willing to pay an extra fee and avoid the hassle of driving to a store or waiting until the next working day.  The 'problem' could be, as many if not all UK companies that provide home delivery, they rely on third parties. But that could be solved by having, in addition to 'open' stores, some vans.  

Well, Screwfix might say, we have done an analysis of our 'standard' customers (probably after a careful segmentation driven by financial indicators), and this is what they want.  For sure, that is an answer that gets many companies off the hook.  By focusing on the 'standard', you then lose customers.  In hospitals, 'losing a customer' means losing a human life.  I leave it to you to judge this.  But I remember Edward Deming, the quality guru, who warned us about focusing on the 'standard' as a sign that we lose quality, customers and even the company!

Ps: I checked the website of Screwfix just after finishing this post.  They have opening hours during the weekend, and during the week they open until 8pm.  Some good news but not what I was expecting (for instance I was expecting them to open early on Sundays, not just at 10am which is now standard practice for pharmacies and supermarkets). Some of the suggestions of this post still apply when it comes to serve customers.  They should also review the design of the website.