Data Centers

You better understand the 3rd R


Although it is not a saying you hear much anymore, success

in school used to be qualified by making sure you understood and were

proficient at the three R’s -- "readin', ritin', and rithmatic." And

while it isn’t politically correct to reference them in that way today, the

individuals who spouted that phrase were actually on to something --

particularly when it comes to IT management.

You are probably going "huh?" about now, so let me

explain. The first 2 R’s when it comes to IT management are about

communication. I have written often on the importance of communicating well and

often with all those that are consumers of your services. So I won’t beat a

dead horse on this issue (although I am sure I will come back to it again in

the future -- it’s that critical).

However, neglecting the third R is what can get you into

real trouble. In terms of IT management, that third R means budgeting and

knowing the numbers for your operations inside and out. This can make or break

you as an IT management professional.

Once upon a time, IT was mysterious and magical -- the

proverbial black box. Flawlessly running operations with little or no downtime

was both an art and a science. And as long as you did just that, most people

were pretty satisfied with your performance.

Times have changed, however, and people (your customers and

management) have come to expect IT services to be just like a utility -- always on. Of course, the difference

between your IT department and a utility is that you are not a monopoly; there are not a million suppliers of

electricity and water out there knocking on doors and offering to sell them

cheaper and with the same level of service – but there are for IT services.

There is always someone telling your management that they can provide the same

services as you better AND cheaper.

To make matters worse, your customer’s budgets are getting

squeezed ever so tightly and, guess what, you are just an expense, my friend.

No matter that you provide the best service possible -- it’s just business, and

Frank here says he can do better than you.

So…with that set of expectations, you had better be good at

"rithmatic." What does that mean? Management expects three things

from your numbers concerning your operations: Transparency, Clarity, and

Consistency. They want to be able to see how you arrive at your numbers, they

want to understand the methodology you used to arrive at those figures, and

they want your numbers to be consistent over time -- meaning that you are not constantly

changing your methodology and accounting practices.

Management may not always agree on how you arrive at your

numbers, nor your methodology for calculating costs -- but those are things

that can be argued and defended.

What gets you into hot water is when your numbers don’t meet

the TCC test (transparency, clarity and consistency). Failing the TCC test

creates doubt -- doubt in your ability to manage the operations, in what you

are charging them, and doubt regarding whether there is any dishonesty

involved. If people think your figures are fishy, you have a problem.

So what does all this mean to a typical IT organization?

That bookkeeping and performance metrics are critical to your operation -- not

from the stand point of how well your operation performs (although they play a

part), but in how your operation is funded and, just as importantly, how your

own performance is judged.

So as a manager, what does this mean for you? If this is a

weakness of yours, you need to get up to speed or find people to help you who

are well-versed in budgeting and accountability -- preferably both.

What you should not do is bury your head in the sand or be

too "busy" running the operation to take care of these things

because, buddy, not knowing your third R will come back to bite you and HARD.

Here are a few resources to give you a start while you scour the Internet, your peers, and mentors for help.

Performance Dashboards:

Measuring IT Costs and Value:

IT Metrics Planning Pack:

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