Capturing Savings Versus Innovation

I work in a challenging environment. Unlike small information technology environments this environment is very, very large, which creates a lot of the challenges. You see as an IT and IT operations team becomes very large it also becomes very cumbersome.

Over time, very large IT environments (VLITE) slowly shift into more and more focused groups providing services to their internal customers. As this specialization grabs hold in the enterprise, individual contributors and management loose track of the big picture. And that big picture is to provide efficient and cost effective computing resources, hardware and software, that enable business matter experts the ability to execute in the marketplace.

Many VLITE’s over time become slow and incapable of delivering innovative technology that actually makes the company money. How many times have you heard a business executive murmur “Damn, IT says it will take six months to make the modification to my application and then when they deliver it is all wrong.”  

There are many reasons for this failure. Some of the problem resides solely with IT. They become so large that senior management looses touch with what is really going on five levels below them. Some of the problem is due to the short-sighted, share-price management mentality pervasive in Fortune 100 companies. An frankly, a lot of the problem is the result of bad thinking and execution due to the “momentum” effect.

In the future I’ll write more about the share-price management mentality and the momentum effect. But this writing centers on the words capturing savings.

What is exactly “capturing savings.” Well, it is a buzz word that executives like to throw around when they’ve been asked to reduce operating costs in their organizations. In very large corporate companies, the best easiest brainless most effective method for capturing savings is to lay off personnel. Layoffs are the last ditch action taken because it shows instant savings and if all other “cost savings” initiatives fail, laying people off is a sure bet for the non-thinking executive and will ensure the executive will receive his yearly bonus.

Without digressing to far, the problem with layoffs is more to do with the problem of hiring. I’ve found in my anecdotal experience that if a company has great hiring and firing practices, they generally don’t have to conduct annual layoffs.

In my honest opinion, executives need to remove the two words “capturing savings” from their vocabulary. Replace those words with one word and one vision — INNOVATION. No matter what your position in a business may be, you should always look for ways to innovate what you do. “Capturing Savings” is a mentality that people have when they know they have not been executing their responsibilities effectively and they know they need to go back and get it right.

If you do it right the first time, then their shouldn’t be any savings to capture unless a new technology comes along that renders your old methods obsolete.

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