Month: April 2010

Agile Manager on the risk of a Lean IT Financial Crisis


“Accounting rules dictate that inception has to be funded out of SG&A. What this means is that before we can spend out of a capital budget, we must spend some SG&A money first. It’s also important to bear in mind that the same is true at the other end of the delivery cycle: last mile tasks such as data migration can’t be capitalized; they also must be funded out of SG&A.

In effect, our SG&A budget (also known as operating expense, or OpEx) is leveraged with capital expense (CapEx). A contraction of OpEx proportionally reduces the CapEx accessible to us.”

And then the likelihood and mitigation:

“This “perfect storm” is more common than you might think. Mitigating exposure is done through a variety of different mechanisms.

One is to hedge the project portfolio by bringing several investments into the early stages of delivery and then putting them into operational suspense. This creates a deliberate OpEx expenditure at the beginning of a fiscal cycle (before risks of OpEx impairment are realized over the course of a year) to multiple project inceptions, and then rendering some of those investments dormant. This diversifies the IT project portfolio, allowing IT capability to shift among different projects should one or more of those projects be cancelled.”

Thought of the day

Incentives beat intention.

— Post From My iPhone

‘New’ to MWT – ‘business intelligence’ is bunk

As I sometimes do, I’m adding a new subject to this blog. It’s in a group of topics that I would vaguely classify as ‘business topics that are a good idea until they get co-opted by IT vendors’.

Note that it’s IT vendors that break these concepts not IT. In many cases the concepts themselves have been formalised by the IT industry and should be seen as positve contribution that the IT industry has made to an understanding of organisational value – but then they ‘jump the shark’ and turn into bullshit.

I’m talking about Business Inteligence, Customer Relationship Management, Enterprise Resourse Planning, Master Data Management, etc.

For the first installment, of check out this link:

Agility is Sensible is a great resourse and the above post is no exception. The question is why are organisations stuck doing BI when they should naturally be planning for more opperational intelligence and realtime analysis?

– Posted using BlogPress from my iPhone

Location:Eton St N,Sutherland,Australia

Powered by WordPress & Theme by Anders Norén