Monday, July 13, 2009

Operating web and IT in an abundance mindset

Chris Anderson, the owner of Wired, recently wrote a very thought-provoking article about the need for organisations to consider how to operate within an abundance mindset rather than a scarcity-based one in his article, Tech Is Too Cheap to Meter: It's Time to Manage for Abundance, Not Scarcity.

Chris uses one example of how Wired used to restrict the email and file space provided to every staff member, with the IT team prompting staff regularly to delete files so as not to fill up the server.

One day he asked his ICT team how much file storage space Wired had for staff and was told that they had 500Gb - half the size of the 1 Terabyte hard-drive in the home computer he had recently bought for his kids. As he said,
My children had twice as much storage as my entire staff.
I have had a similar experience in various organisations I've worked at. Despite falling storage and computing costs, organisations often place heavy restrictions on staff computing power - for what reason I'm not sure.

Cost probably isn't a good reason for this scarcity mindset. If, for example, a 5,000 person organisation only allowed each staff member 200Mb in file and email space, that would mean the organisation had limited itself to 1,000Gb (1 Terabyte) of storage for staff.

Looking quickly at hard-drive prices, a 2 Terabyte commercial quality hard-drive costs about AU$500.

In other words, now you can buy twice as much staff file storage as the example organisation above for only $500 - and the price is going down.

Now consider the staff side of the equation. Files keep getting larger, as do emails. If you assume that each staff member spends 10 minutes each month reorganising their file space to prevent them from going over the organisation's limit, that's a cost of 50,000 minutes or 833 hours each month.

Assuming that each hour of staff time is worth around $50 - including wages, equipment and overheads - that lost time costs the organisation $41,650 in productivity, or $499,800 each year.

To put this in perspective, if the organisation removed the limit on file space and compensated by spending $500 (2 Terabytes) on extra storage it would save $41,650 in staff productivity costs - each month.

That's an ROI of 833% - each month.

Naturally there would be some other costs - servers, redundancy, electricity and the need for effective search technology. However the outcome would remain the same, the organisation is better off investing in more storage than in enforcing a 'scarcity' mindset.

File storage space is only one example.

I've also seen organisations struggling on low bandwidth, slowing down applications and internet services - therefore hindering productivity. With the ability for ISPs to provide adaptable bandwidth there's not really much excuse for this type of approach.

Equally organisations often provide their staff with outdated equipment and applications, which also reduces productivity. In many cases staff now have cheaper and more powerful systems and software at home.

While sometimes software is 'held back' to older versions due to security concerns (or lack of staff to check and approve security), the reality is that most modern software is more secure than older versions of applications.

Restricting software and hardware for security purposes can result in the opposite effect - reducing the organisation's security. If staff are forced to send work home to finish it, or go home to view websites and use online applications, this can raise the risks to the organisation.

Again this type of approach reeks of scarcity and cost-focused thinking, rather than an abundance and productivity-focused approach. It probably costs less for an organisation to employ contract staff to security-assess vital applications than it costs the organisation in lost productivity. Even though upgrading the applications may be expensive the net productivity and security gains for the entire organisation can be significant.

Another example is around the use of web services, which are extremely low cost and easy to test and trial. Organisations need to allow staff to experiment with these tools in appropriate ways, rather than requiring them to always follow tender-based processes to procure expensive custom-built alternatives, or have them coded in house (also at significant opportunity cost).

Finally organisational websites are often managed on a scarcity approach, with limited bandwidth and storage space, or with information cut-down from what is provided in print publications.

Again this applies a scarcity mindset. Domains are cheap, storage is cheap, bandwidth is cheap and an appropriately organised website can have great depth of content at relatively low delivery cost (certainly much lower cost than phone, mail or face-to-face).

So, in conclusion, at least in web and IT matters organisations need to consider an abundance mindset rather than a scarcity one.

They have to consider whether their policies and procedures aid or harm staff productivity and whether the cost of managing and policing some restrictive policies (such as file storage) is worth the productivity hit.

1 comment:

  1. I can relate from both sides of the fence regarding this subject. Whilst storage is cheap, this may only apply to household level hardware. As you mentioned, there are also other factors such as network load, disk performance, additional storage for backup, etc... What I find amusing is that it seems to be a common occurrence that staff are faced with these common limitations whilst ICT are always driven by the dollar of it all, and yet there are a dozen examples of questionable decisions on whether spending three large LCD TV's, set up box, and other multimedia gear was a good one just so people can watch sports.
    The other common thing I found is laziness. People are simply lazy, if it means more work, excuses will be made why it isn't a good option. Unfortunately where I work, the people in the position of power fall into this category. They are highly skillful in speech and could sell ice to Eskimos. Unless bottlenecks are removed from the equation, we can expect a slower than expected movement in moving forward.