Wednesday, December 19, 2007
Enterprise Budgeting Antipatterns
Two years ago, James Governor of RedMonk and I had an interesting conversation on how much money large enterprises waste on software licenses. Sadly, there was no great way to understand waste when one purchases enterprise licenses. I have been thinking about what he said which made me think of many antipatterns though...
Every year about this time, venture capitalists and software vendors alike ping me in order to gain insight into how large enterprises procure software. The intriguing thing is that this remains an enigma for even enterprisey insiders such as myself as there is much repeatable or disciplined about it as it relies heavily on the notion of influence. I wonder if influence is a best practice for enterprise architecture or will be its downfall?
Anyway, here are three antipatterns in terms of enterprise budgeting and software procurement:
If you know of other budgeting antipatterns, please share...
| | View blog reactionsEvery year about this time, venture capitalists and software vendors alike ping me in order to gain insight into how large enterprises procure software. The intriguing thing is that this remains an enigma for even enterprisey insiders such as myself as there is much repeatable or disciplined about it as it relies heavily on the notion of influence. I wonder if influence is a best practice for enterprise architecture or will be its downfall?
Anyway, here are three antipatterns in terms of enterprise budgeting and software procurement:
- I dont understand and therefore it is not important: Nowadays, budgeting is no longer done locally and many hands touch the budgeting process. A local manager may have clear understanding of the need for a piece of software and has articulated this need up the chain. The problem becomes that if communications are linear yet decision-making isn't, it will result in disconnects. Someone not in the food chain may see the budget line item and not have an understanding of its importance and therefore decide that it is unimportant by removing it from the budget. They may also do so without communicating it to the person who put it into the budget originally.
- Playing with Dead Snakes: Folks continually step in the governance and that even if it made the budget and has been justified, it will be constantly revisited. The same presentation may need to be made several hundred times at stages such as getting the funds released, contract procurement, major milestones and so on. Managers and the vendors they work with both wrongly conclude that one a decision is made that it is somehow conclusive.
- Process over People: The stuff that usually survives the budgeting ceremony is the stuff related to process. While we know that initiatives that Todd Biske discusses such as exposing services to your customers are game changing and more important than internally focused insular initiatives discussed by Robert McIlree, the process weenies continually win. The sad fact is that in order to build SOAs or Portals to solve for customer issues tends to take a lot more effort, involve many more parties than simply proposing process oriented initiatives such as CMMi, ITIL or PMI. Delivering process is more of a matter of plaigarizing someone elses playbook than the innovation required to do SOA correctly and hence will feel like lower risk even though it will not have any real ROI.
If you know of other budgeting antipatterns, please share...
