• rm@rmbastien.com

The Silo Skyline

The Silo Skyline

Silos have existed forever, in organizations of all types. Controlling the perverse effects of people working in a vacuum is probably high on your leadership priority list. It is worth understanding how silos materialize in the case of the IT function. There are three types of silos that contribute to the poor state of your digital application portfolio and the non-agility and un-adaptability that ensue. These are (1) line of business silos (LOB), (2) ITs own internal structure, and (3) a silo that is seldom mentioned: the project-orientation of IT.

LOB Silos

Many organizations are divided into what I loosely call lines-of-business that usually align with the highest levels of the organization chart. The allocation of IT budgets is often aligned with LOBs and that’s what creates silos that are hard to cut through. There is a process, often called Investment Process, where sponsors from different places in the organization present their business projects which inevitably include information technology portions or the totality. There’s nothing wrong with this except one very important point: digital technologies are not aligned with lines of business.

Data and Applications Don’t Belong to an Org Chart

Although some applications can be mapped to one and only one department, the reality under the hood is quite different. The systems that collect, process, and store your business data do not follow the arbitrary lines of the organizational chart. Well-designed digital platforms and information systems have to cut through these silos. Not doing so lowers the ability of these systems to evolve, augments the maintenance costs, and creates all sorts of technical problems.

Unfortunately, most investment governance processes empower the business decision-makers to influence where IT investments will be spent in order to align them with business strategies.  But how solutions should be built is rightfully not on the agenda of this type of committee.

Don’t Touch My Stuff

Unless this funding is part of a bigger, cross-enterprise program that spans all lines of business, chances are the sponsor has no immediate interest in doing anything that pertains to other lines of business. In other words, the sponsor is measured on the effectiveness of their investment and the bottom line of their own LOB.  Helping other LOBs, teams or divisions is fine and noble, as long as there is no foreign hand in the wallet, no risk on delivery dates and no impact on expected results.  The issue here is that making something work for a given LOB, and only for that one, will always cost less than making it work transversely for several business units. The former strategy always wins over the latter.

IT Functional Silos

The IT organizational structure may also be modeled to lines of business.  As such, the IT teams and their managers are assigned — loosely or strictly— to specific lines of business to support finite portfolios of business applications.  

Serving Their “Customer”

Each business application in your portfolio of assets has been created or put in place by a team that now maintains and enhances it.  The size of these teams can range from one or two experts to a whole floor of busy folks.  Regardless of the magnitude of the team, they probably view the IT application they are supporting as their baby. 

Don’t Touch My Baby

Like any other baby, an IT baby entails attachment as well as a skewed opinion about the value of the asset, its place in the corporate landscape, and the evolution path the asset should go through. Without revisiting the distribution of decision rights regarding the destiny of applications and technologies, the internal IT structure silos will slow down any cross-application endeavors and any streamlining effort and as such, perpetuate the complexity factory

Project-Oriented IT

If organizations want to successfully tackle IT change, they must enforce the systematic use of a sound project management practice. 

Conduit for Change

Projects appear in the landscape because an investment process has allocated some funding to a change endeavor. That makes them the preferred conduit for major change when not the only one. However, managing all forms of IT change through project management practices only, without proper counterbalancing mechanisms, has major drawbacks. It has become so entrenched in some organizations that all management decisions become skewed towards project priorities and prerogatives. At some point, everything becomes a project, at the expense of the systems that are put in place by those same projects.

A Well Guarded Silo

The issues with projects are the same as with other silos: any factor that spans across multiple projects faces a barrage of structural constraints. A project is a temporary endeavor and has to be managed as such, which means excluding any consideration that is prior to or after the project. A project has its own timeline and budget; the project manager’s performance is at stake if anything happens that would jeopardize their attainment. However, the need remains to create quality systems that share data or reuse existing assets. Doing so requires to cut through projects and see applications and systems as enterprise resources, not as project outputs. To get a better feel of the impact, check this article.

Hundreds of Silos Renewed Yearly

Project silos are more damaging than other types of silos because of their sheer number. When viewing projects as silos, we now have hundreds of pockets of work potentially done in a vacuum. Worse, because they are temporary, they keep popping up and disappearing with different names and different faces.

Necessary Evil

We all know that silos are an effective and natural way to cut through complexity, to divide and manage, and to focus. They’ve always been there and will continue to be successfully used for what they are good for. They require strong and effective communication, collaboration, and coordination mechanisms to reduce the perverse effects of people working in their bubble.

As you continue in your journey, you will realize that the usual mechanisms that reduce the risk of individual silos going in directions that are detrimental to the overall enterprise mission or the desired outcomes are either absent or severely impaired by the current corporate IT engagement model.

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