Modern Middle Manager
Primarily my musings on the practical application of technology and management principles at a financial services company.
2004 In Review

Wednesday, December 29, 2004  

Now that I've got some energy & time, I'd like to commit my thoughts on the year in review. Yes, there are two days to go...who says I can't be early?

What did we do right? How did the efforts of seven people and the spending of $2 million on IT benefit our company? Did we waste it? Did we accomplish anything? Are we in a better position this year than last year? Have we aligned ourselves with the business? There are many ways to view our results. Here's a report card for our company from a spending and project management perspective:

Where the Money Went:

Personnel Costs (incl. contractors): 30%
Leased Equipment (3 yr. lease, 10%): 29%
Maintenance: 11%
Outsourced Imaging Systems: 10%
Voice & Data: 8%

What We (Mostly) Bought:

1. Upgraded network capacity & redundancy.
2. Additional & upgraded hot site equipment.
3. Upgraded desktop equipment for merged division.
4. Additional physical servers.
5. Microsoft licenses for new servers and merged division.

Why We Bought It:

1. Upgraded network to continue to provide uptime to banking clients. So far, so good -- we've been solid and banking has added numerous new clients. Revenue for that line of business is projected to be $17 million this year. Deposits are up to about $300 million.

2. Hot site required several upgrades to keep pace with growth of production site. I hate spending the money for idle equipment, even with most of our servers virtualized. However, better safe than sorry.

3. We acquired a sister division and found that their desktops were about 4-5 years old and unstable. We fixed that. We also virtualized their servers and brought them into the fold -- that required #4.

4. Additional physical servers were added partly because of the merger and partly because of additional projects, mostly banking related.

5. Oh, and we found out that the sister division could not account for most of their Microsoft licenses and got stuck holding the bag.

Supporting the Business:

1. Infrastructure is a big deal, not for a solid return I can point to when things go right as much as the damage I can point to when things go wrong, such as slow client access, lost connections and unavailable resources. Am I spending too much money on infrastructure? Not when measured against the likely potential business risk.

2. Much of what we accomplished this year to add revenue was done with open source software riding on near-commodity hardware. I expect to see us continue to build most of our internal applications with LAMP and J2EE using clustered middleware provided by JBoss. The return on those applications has been fantastic. Now if open-source grid computing would get here already...

3. The upgrade to our CRM platform will put us in a better position to integrate data from several applications and display it in the new, web-based Onyx. However, I suspect the first such requests will be frivolous monkeying with the interface rather than any sense of getting "one true view" of the client. We'll see if I'm right.

4. A hidden expense in the budget is my department's staff and how they are deployed. My goal is to continue effectively reducing operational costs (both man-hours and money) without sacrificing the smooth running of our infrastructure. Personnel is then freed up to pursue projects that add value to the organization and implement those projects in less time. I am not yet satisfied with the gains we've made so far, but we have definitely made progress over the beginning of 2004.

What Could Be Better:

1. The cost of our outsourced imaging system is looking excessive. The current percentage includes some post-conversion programming as well as operating costs, but I'm concerned about the amount of money spent. I'm not sure we're seeing the return we expected vis-a-vis our old platform. On the other hand, the quality of indexes and scanned images appears to have improved. This requires some wait-and-see over the first two quarters of 2005.

2. As I alluded to above, I think we should be completing more projects. This is partly because the operational duties of my staff have increased as we've increased the number of servers, networking equipment and other infrastructure components. I think it's also due to knowledge gaps on my staff that I'm attempting to backfill. There are some interpersonal dynamics within my staff that need addressing as well, although the dysfunction is not so great as to warrant radical changes. It's similar to how drag affects an aircraft -- it slows down flight but doesn't cause the plane to crash without other influences.

Report Card:

Overall Project Execution: B- (still have some lingering one-man projects)
Overall Project ROI: C+ (cost savings & added revenue were OK)
Total Spending: B (within 15% of industry standards)
Overall Grade: B-

Concluding Thoughts:

2004 was a good year in which we got a lot done and executed on some reasonably large team projects that cut costs and added to the bottom line of the organization. Unfortunately, some one-person projects still linger, leaving us a a little behind the curve. Costs are generally within industry standards with some categories looking a little worrisome.

For 2005, I expect to see larger projects realized, especially those that contribute to the bottom line of the company.

posted by Henry Jenkins | 12/29/2004 05:53:00 PM

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