The truth, however, is that many large companies do not have a complete understanding of what is going on within their organisation. This is not only from a technology point of view, but also in relation to the business, which is what really counts. In other words, in terms of costs, efficiency, response times, user experience, compliance with service level agreements, etc.
Indeed, CIOs and the managers of the different areas into which this department is usually structured generate reports. These are detailed, albeit partial, reports about the capacity, configuration and operation of the infrastructures and applications. However, they lack value in terms of their messages for the CEO, the CFO and the increasingly common technology committee reporting to the Board of Directors in large companies.
Professionals in these positions understand that there will be a cost to keeping the machine running without compromising operations, but they are not willing for this to be at any price. They also understand the strategic importance of innovation, but there is no way they should pay for experiments just because a particular technology or model is trendy, unless it can also demonstrate tangible results.
In this last respect, we can mention, for example, the many trips to the cloud taken by large companies that have not even remotely brought the companies the expected results, if there is any clarity at all about what these results actually are.
I will say it again, the truth is that many large companies do not know how much it costs them to run their on-premises environments, let alone those in the cloud. What they, especially the financial managers and, of course, the hyperscalers, do know is that the cloud involves paying a monthly bill and that all too often the size of that bill is not only not what they expected, but is actually much higher. As a result, companies that had procrastinated about the journey to the cloud, and had been on the back foot for years, are now celebrating their caution.
In other words, at most large companies there is no transparency about technology costs and no clear correlation with the asset or service generating them, beyond the well-worn digital transformation, which has become a bottomless pit, or the almost mesmerising journey to the cloud.
As in the tale of “The Emperor’s New Clothes”, CIOs are dealing with skilled tailors who know the latest fashions and are willing to make the best clothes, in exchange for the necessary money, of course. Garments that can also only be appreciated by those with certain qualities, which, of course, no one will admit to lacking. That is exactly why our customers value us, because we tell the truth. Not innocently, like the child in the story, but based on real data. The second differentiating value lies in the fact that we are not only able to identify the problem or inefficiency causing the cost overruns, but also provide the solution to resolve it.
Internal resistance that perpetuates blindness
A bit like tailors, technology professionals who consider technology as an end in itself are comfortable with their positions and remain detached from the needs of the business. This situation is a consequence of the tremendous complexity of technology environments, which has led to the aforementioned loss of control. It is also a result of a lack of professionals trained to manage them and, for this and other reasons (which are not the subject of this article), they are often entrusted to third parties, whose actions are not always aligned with the needs and objectives of the customer’s business, but rather with other interests.
What is stopping the development of a performance culture at large companies often comes down to the internal structures of the technology departments themselves, where the diversity of technologies, areas (organisation, architecture, development, operation, security, etc.) and skills means that the responsibility for performance is diluted.
This situation is what really hampers efficiency and prevents the adoption of a performance culture, which forms the basis for continuous improvement. In many cases, professionals fear the possible consequences if they acknowledge shortcomings and prefer to remain reactive.
It is internal resistance that perpetuates the blindness, which is simply a consequence of not having the necessary indicators. To use the analogy of vehicles, large companies have a very large car, but they do not know how fast it is moving and do not have the ability to identify how much it is consuming.
Meanwhile, a good part of the software of large companies changes every year (up to 40% of application components change versions in the banking sector, for example) and errors remain – between 10% and 15% in the case of large suppliers – which negatively impact the business. This has a negative impact on the business. Hidden costs persist (surprise costs in cloud environments), and this turns into cost overruns and hits the bottom line.
No performance culture
The scenario is therefore one of the non-existence or low degree of maturity of the performance culture in technology areas. This prevents the necessary paradigm shift from the classic IT governance model, which is eminently functional, to a model of efficiency, service and control, from a cost point of view, from top down and bottom up, and also considering other truly business-relevant indicators.
Incident-based technological direction is not enough either because, in addition to being reactive, it does not consider the analysis of key concepts such as software rotation or the impact of its deployment in production, both in infrastructures and in architectures and applications.
This is where Orizon, our BOA technology and DevPerOps methodology come in. We are the equivalent of a Security Operation Centre (SoC) in the security domain, but in the performance domain and as a Performance Operation Centre (PoC) we fulfil the role of performance governance, with a focus on efficiency. This is something that does not yet exist in most large companies. We also demonstrate the results: beyond having participated in the last two major mergers of financial institutions, we have success stories in which we have managed to reduce the technology bill by 50% in six months.
This level of optimisation is possible because we are able to find the needle in the haystack. Within the tangled mess, we detect, identify and correlate inefficiencies and problems, rank them by importance and impact on the business and propose a solution. Instead of thousands of alerts, BOA generates KPIs that are essential to both the IT organisation and the business, so that the CIO, CEO and Board know the truth before they make decisions and have the ability to continuously monitor the impact of improvement actions. Last but not least, it allows them to benchmark themselves against their competitors.