A couple of decades ago a plucky character called Paul Strassmann produced a paper called “Outsourcing: A Game for Losers”. Now Strassmann had been CIO of Xerox and would later be CIO for part of the US Defense Department, so he was quite a high profile figure. I knew Paul quite well at one time, and he was first and foremost a numbers man. His analysis of outsourcing had revealed that in many cases IT outsourcing is a fairly reliable signal that a business is in financial trouble. And as Strassmann points out, the IT function is viewed with suspicion by senior management, and so any excuse to just give someone a fat cheque and have the problem go away is grasped with both hands. In any case, these outsourcing deals can be massive, and senior management can be “incentivized” in many ways to sign on the dotted line.
So we come to British Airways, and like many commentators, I really do not believe that a “power surge” caused IT mayhem for almost a week. Sounds more like gross incompetence, and the left hand not knowing what the right hand is doing. BA made the tragic error of only outsourcing part of its IT function. Anyone who has worked in a business where IT is split down the middle between outsourcing and internal resources, will have experienced the nearest thing to hell. Political games will infest the least action, with each side laying traps for the other. The outsourcing company wants the whole pie, and will do almost anything to get it. Internal staff on the other hand have absolutely no incentive to collaborate with the outsourcers. It gets very nasty, very quickly, and so we should not be too surprised if things start going badly wrong – and of course they do.
BA was unlucky, in that the crippled system communicated with the outside world. This kind of cockup happens all the time, and senior management keep a lid on the whole thing simply because it only affects internal operations. In fact I’ve personally witnessed large banks losing hundreds of millions and withdrawing from various capital markets because of cockups of this nature. These events never hit the headlines because no one outside the business knows. So poor unlucky BA, its senior managements’ ineptness broadcast for all to see. It does of course raise the question of the rest of the IT operations in this business – the systems outsiders will never see. Ignorance might be bliss here.
I have to admit that this BA fiasco caused me some personal sadness. I remember dealing with people from BA when the Dynamic Systems Development Method (DSDM) was born. It was initially owned by my business, but we gave it to the IT community so that it could grow. The people who came from BA were very bright and very enthusiastic, and it saddens me to think that clumsy, ham-fisted management might have lost these people.
We can expect IT fiascos to be regular news because of something called Putt’s Law. It states:
Technology is dominated by two types of people: those who understand what they do not manage and those who manage what they do not understand.
In other words, IT decisions are typically made by managers who do not have a clue what they are doing, and the people who do know what they are doing have no power. With the rise of data science I think we are in for much more fun. If senior management view the IT function with suspicion, then data science is already in the dock. If the business does not hit sales forecasts – blame data science. Much material here for Dilbert.