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Will dev gain at IT’s expense?

Among the essential forms of dread is the dread of the boss’s trip. It is not the trip so much as the fair chance that the boss will read a magazine article on the flight and discover a Major Initiative -- be it Web services, SOA or what have you -- and throw the department into fevered action around some newly percolating technology.

On a recent West Coast swing, I kept an eye out for those Major Initiatives and they became a topic of conversation as I hooked up with software vendors, development managers and, especially, the able team of analysts at Gartner’s Application Development (AD) Summit in Los Angeles.

In the area of Major Initiatives, an AD manager’s radar is sometimes highly honed. As Parasoft’s Gary Brunell noted when we met in the firm’s Monrovia, Calif., offices, some especially savvy AD managers have the prototypes brewing before their managers debark from their flights. To know which new buzzing technology to employ, you simply figure out which magazines are provided on the route management will be taking.

Radar aside, what is going on during this especially tough budget season? The stories one hears have a similar tenor: Roll-up, Visibility and Predictability.

These are all things CEOs suddenly need more of. And to whom do they turn -- application development. Gartner’s research, which was on display at the L.A. conference, suggests that while the days of “no new projects” may be over, at least for a while, predictable corporate processes are an area of primary interest.

Before going further, I want to mention an article I read on the plane to L.A. (Such knowledge may be useful in your AD planning.) Entitled “Can tech untangle Sarbanes-Oxley?,” the rather eerie article appeared in the Sept. 29 issue of Fortune. Coming in the wake of corporate governance scandals such as those at Enron and MCI Worldcom, Sarbanes-Oxley legislation is intended to ensure checks and balances, as well as tracking and monitoring of corporate financial activity. It can be accomplished with roving teams empowered with clipboards, notes Fortune writer Ellen Florian, but some of the compliance steps can be automated.

As Florian makes clear, software companies are eager to prove their mettle here. Sarbanes-Oxley plays to the general problem of budgeting and predicting what will happen — the task that just now pressingly haunts executive management. But it is a minefield as well, because Sarbanes-Oxley plays to a software vendor’s tendency to repurpose tired and arcane software in the form of magical solutions. Can anyone say “Y2K?”

Whether it is a case of build or buy — and, as usual, it will end up a case of build and buy — it looks like a job for application development. And the job will require extra effort that may come at the expense of other efforts.

* * *

Budgeting time. Application development managers preparing for a new budget season will need to focus on a few key areas to win in the corporate-wide planning game, attendees were told at the Gartner AD Summit.

Cost reduction, productivity improvement, strategic efforts and security assurance are the areas to concentrate on, said Paul Strassman, a long-time IT industry voice and determined productivity authority, at the opening session. Most of Strassman’s concerns are familiar to development managers. But budget arguments in this day and age must be particularly crisp and centered on these concerns, he indicated.

“Survival means you have to begin steering IT in areas of value,” he said. And while obtaining operating efficiencies has always been a trait of IT, “this is not good enough today,” Strassman noted. “We must move out of the shell of IT. The value in IT is in IT people upgrading themselves” to deal with strategic business issues, he warned.

Strassman and other speakers told conference attendees that they will need to apply software more and more carefully to justify new expenditures. Most new expenses will have to be offset by savings elsewhere. That means a better understanding of the corporate software portfolio is needed.

“You must show that you are able to take IT costs down 7% to 8%,” said Strassman.

That is a tall order. Like Strassman and many others, we’ve taken time recently to debunk the creeping notion that IT is dead (see “Harvard experts put hurt on IT,” ADT, July 2003, p. 64). We still hold that as a principle. But there are practical matters to address. As Strassman said, managers will have to find areas in IT to cut, while still expanding its use for strategic business purposes.

In a personal note, Strassman showed those assembled how challenging “corporate visibility” may become. Strassman recently ended many years of government service, leaving a consultant position at NASA. There, in the wake of the Columbia accident, e-mails became important pieces of evidence. In the push to try to retrieve such documents, IT staff gained new battle scars, he indicated. Though the stakes for Fortune 1000 IT shops may seldom carry the weight of human life at stake, the specter of accountability will increasingly influence development and operations.

It is almost like our high-school days, when we worried about all the things that would go into our “personal records.”

Note: Strassman, as you’d expect, had a lot more to say, and presented a lot of interesting data points on budget issues. We will offer a version of this Reporter’s Notebook on http://www.adtmag.com that includes links to Strassman’s Gartner AD Summit presentation and other related data.

***

Get up on the downtick. The trend for application development that Gartner sees is an increase in budget for new, postponed or mandated efforts. But that move will not be associated with an overall upturn in IT budgets. Therefore, we might guess that AD upticks mean operation downticks.

The upshot is that this would be accomplished by outsourcing appropriate targets within both IT and AD. Meanwhile, as through the whole history of computer technology, managers will still seek software that cuts labor expenses, especially in AD and IT operations. Mainframe [read: “legacy,” read: “anything that works”] application renewal will be a big part of this.

Sales people pushing tools that tune processes will get a hearing, but the onus will be on AD and business managers to create corporate processes that work well enough to be tuned. The best tools in inept hands are for naught, Gartner analysts again emphasized.

All this will come as a handful of vendors profit from a major supplier consolidation, according to Gartner. At the top of the software world, Gartner places IBM, Microsoft, Oracle and SAP, with Siebel and PeopleSoft both contending to join those august ranks. That’s a mixed bag for buyers. Big providers will dependably deliver what is needed, but prices may tend to rise and solutions may be quite general. AD managers could have far fewer best-of-breed vendors to consider, and more need to do home-grown customization to achieve advantage.

***

What price outsourcing? Sometimes outsourcing looks like a good quick fix for IT’s woes. Sad to say for someone who desires full employment on these shores, but it may truly be a fix in fact. But depending on the amount of innovation involved in the project, the amount of business process knowledge needed and other factors, moving development jobs overseas may not be the most cost-effective solution after all. As usual, the thoughtful squad at Gartner has done some estimation in this area.

When companies consider outsourcing AD efforts, they often do “very simple math,” Gartner’s Joseph Feiman told conference attendees. While he agreed that beleaguered state-side AD managers will move more work outside the organization, Feiman said a sophisticated analysis of skills issues is needed to achieve the goals behind the drive to outsourcing.

Off-shore outsourcing can be good, he said, but managers should also contemplate “on-shore” outsourcing. Overseas shops can surpass the U.S. in some areas of technology development, but they lack the in-depth knowledge of the actual business that state-side corporations display. And in some cases, language can be a barrier. “Do not rush into outsourcing to India,” Feiman said. “Consider Indiana also.”

Beyond estimates of cost savings, one should consider the importance of communications and effectiveness of development, he noted.

In fact, Gartner has created a model that measures such communications and effectiveness. Proximity and common language, analysis shows, has benefits. For developers, the ability to walk into a nearby cube and solve a problem with another worker is beneficial, Feiman said. “Communications directly affect the cost of a project,” he said.

But overall, the skills needed in development today are expensive to obtain in the U.S. Feiman is noted for his work to measure the cost of obtaining Java and J2EE skills, whether it means going on the open market or retraining programmers versed in Cobol and other traditional languages. In this, and in CMM, Indian shops, particularly, have begun to shine.

“Do not base sourcing decisions solely on the offshore pay advantage,” Feiman emphasized. “You must account for communication and effectiveness factors as they affect project staff and duration,” as these result in higher costs and reduced savings, he concluded.

Days of future past. The Gartner AD Summit was not without its silliness. Maybe, given the overall seriousness of the proceedings, that is okay. Personally, I could have skipped guest James Canton’s keynote on the future of application development. It was pretty heavy on futurism in the form of animated passages depicting the wonders of nanotechnology and quantum computing. Give me a copy of the Sarbanes-Oxley act, a bowl of popcorn and a VHS copy of the science fiction classic Fantastic Voyage, starring Stephen Boyd and Raquel Welch, any day. That there’s what I call exciting adventure and colorful special effects.


Related Links:

More on James Canton at Future Guru.com: www.futureguru.com

Paul Strassman’s presentation from Gartner AD Summit 2003: www.strassmann.com/pubs/gartner/howto-budgets.pdf

Letters [including one by Paul Strassman] to the HBR editor on IT’s future: harvardbusinessonline.hbsp.harvard.edu/b01/en/files/misc/Web_Letters.pdf

Press release on Joseph Feiman’s 2003 work on outsourcing estimation at Gartner: www3.gartner.com/5_about/press_releases/asset_51747.jsp

“Can tech untangle Sarbanes-Oxley?,” Fortune.com. Sept 15, 2003: www.fortune.com/fortune/techatwork/articles/0,15704,485700,00.html

Harvard experts put hurt on IT,” ADTmag.com, July 2003

Fantastic Voyage final script on Tripod.com: http://leonscripts.tripod.com/scripts/FANVOY.htm

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