Dan Stroot

Can you Spot an Underfunded Technology Department?

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5 min read

People go into technology because they love building new things, solving business problems, and making businesses operate better. The last thing on earth most technologists want to say is “no”.

There are unintuitive signs that indicate a technology team might be overwhelmed or underfunded, such as buying premium support contracts, or using expensive consultants. When your technology team starts telling you no, or stops answering email, it's likely they are feeling overwhelmed. At their core they really do want to help.

Here are the telltale signs of an underfunded technology organization. If you recognize these signs in your own technology organization, you should be concerned:

  • No Seat at the Table: Technology is not valued/strategic, so the CIO will report into a Chief Operating Officer, or worse the Chief Financial Officer.

  • Outdated Technology: Due to lack of investment, it is likely running older technologies. You know, things like mainframes, older datacenter technologies, older networking, older storage. One company I know of in 2019 had an employee who told me “when I started, I expected to receive a laptop. It’s been seven years and I am still waiting”.

  • Outdated Skills: Personnel may have not have kept their skills current. This could be due to lack of investment in training, but also lack of need/desire on the part of the employees. They don’t need current skills to be successful managing older technology. Those that do keep their skills current may eventually leave for better opportunities elsewhere.

  • Mediocre Hiring: It will be challenging to attract strong, capable technology talent at the “practitioner” level for obvious reasons - who wants to join an underfunded organization that runs old technology? Existing employee skills may be stale, and therefore it harder for them to evaluate and attract talent with current, market relevant skills.

  • Mediocre Leadership: Likely to indict its technology leaders for not doing their jobs keeping things current. There will some truth there because strong leaders may have already left for better opportunities. Since existing leader and employee skills may be stale it will likely decide that outsourcing is the best path forward, driving out remaining capable technology talent.

  • Less Innovative: In an underfunded technology organization R&D is often the first thing to be cut. Newer technologies require investment, experimentation, the ability to try things that ultimately don’t pan out. Experimentation doesn’t happen because employees don’t have the time (they aren’t allowed to work on things that aren’t “of the utmost priority”).

  • Less Proactive: If the technology team cannot keep up with demand today what hope do they have to think ahead and prepare proactively for what may be coming in the future? "Being proactive" means they have time and space to think ahead and they will anticipate future needs and propose solutions. "Not being proactive" usually means they don't have the opportunity to be proactive. In most cases they would like to be proactive more than you might imagine because to them everything feels like an urgent emergency.

  • Lots of Consultants: In an underfunded technology organization, paradoxically, executive/senior management will use expensive external consultants for technology advice because they don’t quite trust the technology leadership (who are managing older technologies using employees with stale skills who aren’t very innovative - so it makes perfect sense when you think about it).

    “When hiring a management-consulting firm, clients do not know what they are getting in advance, because they are looking for knowledge that they themselves lack. They cannot measure the results either, because outside factors, such as the quality of execution, influence the outcome of the consultant’s recommendations.”

    - Clayton Christensen, Professor, Harvard Business School
  • Few(er) Business Analysts: There will fewer business analysts who can help the business users define their needs and coax out cohesive well thought through requirements. Instead, the business will just lob requests directly to the development teams. This of course leads to missed requirements, poor quality solutions, and too much rework. The business side will complain that the technology team "just doesn't get it". The technology team will complain that the business users don't grok technology. This is the space that business analysts fill beautifully to meld the two sides together. In an underfunded technology organization they just can't afford them.

  • Increasing Technology Debt: Technology debt refers to the “catch up” investment that will eventually be required. This is usually invisible to senior management until it manifests in some very obvious and destructive manner. Think “Texas power grid” after years of underinvestment - the problem manifests itself at the worst possible time in a significant, visible way. This ultimately drives a substantial “catch-up” investment which could have been avoided if the right level of investment was made all along, or the company becomes irrelevant (Kmart, Xerox, MySpace, Hitachi, Sears, The Sharper Image, Nortel, etc.)

  • Increasing Shadow Technology: Shadow technology is known as technology that is being practiced outside of the technology organization. It can be beneficial, but it can also be suboptimal. In any case, in an organization with an underfunded technology organization it’s almost certain that “shadow technology” is increasing. Areas will attempt to solve their technology problems with or without the technology organization’s help.

  • Zombie Projects: In an underfunded technology organization, paradoxically, executive/senior management will not have a rigorous method to defund technology programs that aren’t delivering value. Programs are rarely killed. This is counterintuitive, but since dollars for programs are rare the programs tend to be some senior or executive manager’s pet project and/or they take on a life of their own. Like in politics, these programs tend to attract some “pork”. Funding for programs is rare, and technology debt is high, so in many cases additional unrelated work somehow gets added into the program. A program that is not delivering value is more likely to be attributed to the technology organization underperforming rather than actually taking a hard look at the reasons why (and if the program still makes sense). Unfortunately, in many cases the underfunded technology organization has weak or inexperienced program managers, or none at all – they are supplied by an external PMO, or expensive consultants making the issues worse.

  • Focus on "Run": The technology department is likely spending significant time, energy and resources on risk, compliance and security rather than delivering new business capabilities. This is frustrating to business partners who will think the technology department is no longer “business focused”. It is also very likely the technology employees would vastly prefer to be working on delivering new business capabilities rather than closing security or compliance findings too – they just don't have the resources to do both.

  • Premium Support: There will be low usage of open-source technology and high usage of vendor software with premium level support contracts. This is because they want to be able to “call the vendor” when something goes wrong, rather than expect (or rely on) their own employees to figure it out.

  • The Department of "No": The technology department becomes known as the department of “no”. Because technology employees become world class experts at saying no to requests for more capabilities or better technology. Not because they want to, because they have to be able to grow this skill to survive.

Resource constraints cause many types of unwanted behavior. Resource constrained warehouses might on skimp on buying fire insurance, resource constrained restaurants might skimp on sanitation, Resource constrained power companies might skimp on line maintenance and cause a fire or power outage.

Resourced constrained technology departments mainly just want to say "yes" to your requests. The last thing on earth most technologists want to say is “no”. Give them enough resources so they can say "yes"!

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