Magazine article Mortgage Banking

I/T Core Principles

Magazine article Mortgage Banking

I/T Core Principles

Article excerpt

In January, this column focused on myths about information technology (I/T) that were prevalent in the business community. The theme of the column was that we should move away from myths and deal with the reality: Building, selecting, implementing and maintaining information systems is difficult, often tedious work that requires close collaboration between the business unit and the I/T department. This month, I will cover some of the principles upon which that collaboration is based.

The first core principle is to recognize that all I/T work is project work. We deceive ourselves when we have a list of major projects and assume that constitutes the bulk of I/T activities. Business managers see the same projects on the list for months at a time and wonder why so little progress is being made. In reality, two-thirds of most I/T departments' time is spent doing minor enhancements, maintenance, production support (including help desk), and infrastructure (software and hardware upgrades, moves and changes). These are not typically what the company thinks of as projects, yet it all takes resources and all must be accounted for. This is the invisible workload, the work that's required just to maintain the status quo.

The second core principle is that the demand for I/T resources is infinite while the supply is not. Most I/T departments have project backlogs of 18 to 24 months. That means that, even if the number of developers were to double, it would still take a full year to complete all the projects currently identified. And new projects are identified every day. Therefore, a company has to have a reasonable set of expectations about the level of I/T investment that it wishes to make and advise managers of the implications of that decision.

This means, for example, that staff is allocated by function: system maintenance, document updates, hardware support, help desk and so on. Target service levels are set for each function, communicated to the business and then monitored. For example, a firm may decide to dedicate one individual to document updates. If the average update takes three days, then the target service level is seven documents per month. If a firm wishes to introduce more products, or products that require more document changes than this, it must find an additional resource.

The introduction of new products is largely an internally generated decision. Other demands for I/T resources come from external sources and cannot always be anticipated. Regulatory changes, or those generated by trading partners such as HUD, the government-sponsored enterprises, credit, mortgage insurance, title and so forth frequently arise at the last moment. That is why I/T departments turn to outside contractors for assistance. This brings up the third core principle: I/T resources to be managed include external suppliers and contractors.

Companies make a mistake if they choose to manage internal and external I/T resources separately. If departments can budget for contractors, it can easily lead to a "my programmers vs. your programmers" contest. It's often easy for the external resources to look good because they often don't have to adhere to the same standards as in-house staff. Moreover, they are designing systems in a vacuum and don't have to worry about integrating that system with the rest of the I/T infrastructure. This results in rework when the in-house staff has to do that integration. Another outcome of dual I/T resource pools is that a department turns to "its" programmers to do the work that it realizes is unlikely to be considered a corporate priority. …

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