Starting to Feel Like a Contractor Again

I don't know if I'm alone in this, but I have to tell you, I feel like a contractor again. I was a good contractor. I worked hard, and for that I was rewarded. I had bonuses, I was given all the training I could swallow, and the company I worked for billed me out at a good rate.

But ultimately, the instability of the life of a contractor wasn't for me. I remember living through the loss of a contract. I landed on another contract with more authority but we would eventually lose that contract about 9 months later. I hated those meetings on Friday when we would all be called together and told that we should not come to work on the following Monday unless we hear from person X. This happened on the last Friday of the month for like 3 months and we kept getting these 1-month extensions.

So I left that world for the stability that a career in federal service could offer. And let me be specific, I don't just enjoy the stability, I like that I am making a difference, and really helping people. But make no mistake, the motivation for me was stability.

I tell this story because I feel like I'm living it again, only this time as a federal employee. On I think Feb. 25 we were looking at the possibility of a government shutdown only to be averted in the last week by another continuing resolution. The next shutdown was scheduled to occur on March 18, only to be averted at the last minute again. Now we have until April 7 to get a budget or shut down again.

It occurred to me that this feels exactly like that time that I was a contractor. I feel like I might be without work, and more importantly income. That is bad when I am the primary breadwinner in the family.

** Update - I have to resubmit my timesheet because the accounting code used to pay my salary is out of funds, which is weird because I didn't get a raise this year, cost of living or otherwise. Just another example of this stalemate over the budget spilling over into other things.

Outsource IT

At the Center for the Management of Information Technology (CMIT) at the University of Virginia conference March 11 on the Consumerization of IT and Enterprise Innovation a lot of the discussion in the afternoon session was built upon the foundation of outsourcing as much as possible. I think it was Professor Austin who had the line, something like, 'Document it, Standardize it, Outsource it and Retire it.' Something like that, I'm probably messing up the line, but it was catchy and nobody even bothered to question it.

The quote I do remember was that outsourcing IT will have a positive effect on G & A (general and administrative expenses on a balance sheet).

And that my friends is what I would like to discuss today.

I agree with that statement 100%. If you outsource IT functions you will see (especially for a listed company) an impact on the balance sheet and that will likely translate into an upward shift in the stock price. But there is a problem with that scenario.

Let's outsource something like servers. We'll put everything in the cloud. We won't have to worry about babysitting those servers anymore. In the short-term and mid-term this works out. We don't have to worry about the servers and whoever we outsourced to has an economy of scale and scope and can deliver that service at a lower price than we were paying our own people. But this short and mid-term benefit will likely lead to long-term issues.

The people who performed that work will either leave or transition to other activities. After 5 or 6 years we will have nobody with the skills to effectively monitor the delivery of that service. This exposes a risk in the quality of that service.

Additionally the vendor will presumably know that we don't have people with the technical knowledge to effectively monitor and they will do things to increase their profitability at our expense. Just like the analogy of the frog and a pot of boiling water, the vendor won't drop us (the frog) in a pot of boiling water. Instead they will put us into a pot of water and slowly bring up the heat. We won't know what is happening until we are already cooked. But eventually they will have us.

When I say that they will have us, what I mean is that we will be locked in to that vendor. They have increased the switching costs, or provided us with a type of service that makes it painful to switch to a different vendor or bring that service back in-house. But by this time, bringing it in-house is nearly impossible because we don't have the expertise to even monitor the effectiveness of this service, let alone perform it ourselves.

So yes, I think that outsourcing IT provides a positive effect on near-term G&A but the long-term consequences can be crippling. But some outsourcing is necessary. I'm not just against outsourcing in general. The problem is that organizations need to be strategic in what is outsourced and figure out a way of retaining the expertise needed to effectively monitor and innovate and decide when the situation has changed enough that the question of outsourcing a particular service needs to be reconsidered.

The Cost of Data Loss

Last week I mentioned what a good time I had at the CMIT event in Charlottesville, VA. Walter Mossberg was there and some of his ideas I agreed with and some... not so much. He can be a lightening rod, which is a good thing because it stirs the debate. I say that because I suspect that was his intent when he said something that I thought was rather controversial. He said, and I'm paraphrasing here because my stenography skills aren't too good, that organizations over value the cost of lost data.

Someone brought up the issue of security and we were talking about data loss and how best to try to protect data as an organizational asset. The peanut gallery was essentially saying that we had to have a limited number of platforms and software so that we could concentrate our defenses. Walt was responding that idea with the concept that people are the value creators for the organization and they know best how to be good at what they do. As such there shouldn't be any constraints placed on them from a technology perspective.

So the question is, do organizations have a tendency to over-value the cost of data loss? Walt thinks they do. I disagree with him on this issue. In fact, I think organization are still undervaluing the cost of data loss. My point is, that let's say we lose 400 social security numbers. There is a real actuary type of response to identify the cost of the lost SSNs. It will be some dollar value times the number of instances it was lost. But then the organization has to add to that the amount of good will lost.

In a market economy, if you take a company and add up all of the assets, intellectual property and cash you identify the value of the company. If you take the number of shares available and multiply that by the share price then you will identify the market value. In a lot of cases the market value is bigger than the value of the company. When that occurs the outstanding value is called good will.

I would argue that the loss of a bunch of SSNs has that first level cost of the loss of each number. But I would also say that they second level cost is in good will. So if, for example a bank lost a bunch of data then it would have to pay the damages to the people whose data was lost but then they would also likely take a hit in the stock price because people will lose confidence in the organization.

For an agency like mine we don't have a stock price so it is difficult to estimate good will. But I do know what it looks like to break the public trust. Look at the Veterans' Administration. A few years ago they had several high profile breeches of SSNs. If the public doesn't trust them to safeguard that information then it hampers the organization's ability to perform in its mission.

So I would argue that the public trust aspect, especially with a government organization, but also with a bank, a hospital, anything that is held in that regard, that public trust is paramount. It is key to continuing as a going concern for a company, and to survival as a government agency. If anything, I would say that we are undervaluing the cost of data loss, not over valuing it.

Net Neutrality

I participated in the Center for Management of Information Technology last week at the University of Virginia. It was a great session on the Consumerization of Technology and Enterprise Innovation. One of the presenters was Walter Mossberg, a columnist for the Wall Street Journal. His columns and blogs have a lot of power, some would say too much power, because a good review from Walt can send your products into the stratosphere, be a bad one will likely kill it.

I won't be disagreeing with him in this post, that will probably be next time, because the guy can be a lightening rod for stirring the debate. But he used a particularly good metaphor in describing net neutrality. He said that we should think of the Internet like the electrical grid and hair dryers. You plug in your hair dryer and turn it on and it just works. But imagine if someone wanted to the electrical grid to favor one hair dryer over another, and they were willing to pay to have, for example, the Acme hair dryer get a better level of power over the Bigco hair dryer. The power company says, 'Sure, when someone plugs in a Bigco, they'll get the regular power, but when someone plugs in an Acme, we'll give them the juice.'

That is what we're looking at with respect to net neutrality. Your HP laptop might work faster than the Macbook if HP worked out some agreement with Verizon and AT&T etc. Or of they all wanted to gang up on Netflix, they could choose to slow down the Netflix downloads, putting pressure on their business.

I think Mossberg's metaphor of the electrical grid and hair dryers is perfect for driving the point home.

PowerPoint Killer

I attended the Center for Management of Information Technology (CMIT) conference last Friday, and I have to tell you about this one note that I took. My note reads, "what the heck is this thing that is going to kill PowerPoint?" Apparently I wasn't the only one with this question because someone else asked the presenter what she was using.

It is called Prezi and I'm not kidding this thing is cool. I kind of consider myself to be a king of PowerPoint. I will be so bold as to say that there is no capability in PowerPoint that I have not used myself. So it takes a lot to knock my socks off and Prezi did it. I doubt that I will ever use PowerPoint ever again. It is that much of a game changer.

Update on the Browser Wars

Last week I wrote about how the Browser Wars were heating up again. I ended the piece wondering why anyone would sink a lot of money in making a browser when the lock-in for the search engine was so temporary. My answer came today when I attempted to download the new Internet Explorer 9. I got a big (put on your best western accent) "No can do partner." Apparently in the aftermath of the disastrous releases of Windows ME and Vista, Microsoft is betting on their newest operating system, Windows 7, because if you want IE 9 you have to have some OS that is newer than what I have at work (XP). But therein lies the payoff, at least for Redmond. The browser will trigger OS sales, especially for big institutions. So now I see the expected return on the IE investment. I expect that Google will make a Chrome browser that is tuned to work better with the Chrome OS in the future.

Puppies 4 Sale

It was just a few weeks ago that I wrote about the pleasure of work. Well, here I am again writing about something at work that was just inspirational. We had a guest speaker, Dan Clark. He wrote the book Puppies for Sale, which is one that read years ago.

Anyway, this guy was just inspiration in a jar. I was sitting in the second row and I have to tell you there was about 10 people sobbing by the end of his talk. His stories just take you on an emotional ride. There were a couple of real nuggets that I thought about and digested afterwards.

One of the things he said was that 'it isn't what you do when the coach is watching, it is what you do when the coach isn't looking that counts.'

That one kind of stuck with me because, as I have mentioned before, Pacesetting is my natural leadership style, but it isn't sustainable in the long term. Now, here is a guy who is saying that, essentially, being a pacesetter is what you need to do to be authentic. He was saying that you have to meet that pace by yourself if you expect others to try to match it. He used an allusion to illustrate the point. He had some athlete jump over a line that was 12 inches above the ground. The athlete had the ability of a 20+ inch vertical leap but only jumped slightly above the line. He performed below his capability.

That's the thing that stuck with me from this session; that I, you, everybody can perform at that high level all the time. Don't do it to show off, but do it for yourself, because if something is worth doing it is worth doing it well.

Browser Wars are Getting Hot

There is likely going to be a shakeup in the next couple months with respect to which web browser you use and prefer. You may have missed it, but Google just came out with Chrome 10. Chrome is my browser of choice, and I have to confess, the difference between Chrome 10 and 9 is lost on me. Chrome has always been fast.

The news though is in the browser dogs. Firefox is coming out with a new browser that, well maybe it doesn't surpass Chrome, but it will likely be respectable enough that you would need a special device to measure the difference in milliseconds. But in even bigger news Microsoft is coming out with IE 9 and the rumor is that it is blowing the pants off of Chrome 10.

The funny thing is that this war has a lot less meaning than it did 4 or 5 years ago. Because of all of those lawsuits against Microsoft over the past 15 years, the net result has been that your browser can't really lock you in to any particular search engine over any other. I don't necessarily want to call it neutral or independent, but IE will come with Bing as the default, Chrome comes with Google, and FFox comes with Google. 10 years ago it was difficult to change that default search engine, but today, that is not a problem.

So these companies are fighting this war, and I have to confess, I don't really understand why. The issue is the ad revenue from using Bing or Google. But with it so easy to switch, why does Microsoft care if people use IE versus any other browser? Or why does Google care if people use IE? The default search engine lock-in is over. Unless they are counting on some .4% of the population who can't figure out how to change the default provider, I just don't see the benefit. My opinion is that a lot of money can be spent in this arms race by all sides, but nobody will gain any distinct or sustainable advantage.

So go ahead, use any browser you want. If any company creates an innovation in this space, you only have to wait about 20 seconds before every other browser has that same feature.

Getting Government out of the IT Business

I read an article today in which the OMB CIO said that the federal government could subsidize a portion of the cost for personal mobile devices and use them for work. He identified $2000 per year. This got me thinking about an old idea that I heard from someone.

Every agency is probably on a 3-year +/- technical refresh plan. So as an agency, we replace about a third of our computers every year. Doing this is an expensive endeavor. We have to spec out the computers, order them, take delivery, image them, issue them to people, make sure that they have property passes, make sure the user knows how to use them. We have to get monitors, mice, keyboards, speakers, all the peripherals. And you know what the crazy thing is, each of these people, myself included, has a better computer at home.

So what if we took Mr. Kundra's idea and applied it to more than just mobile devices? We could figure out the per-employee cost of acquiring and operating his or her computer over a 3-year term. Let's say that it is hypothetically $3,000. Instead of procuring, receiving, deploying and maintaining a computer for the employee to use during that period, what if we gave the employee the money and said, "Go out and get your own computer. " The employee would be responsible for maintaining it and acquiring and installing the software to perform his or her job. The government would not provide people to troubleshoot issues or problems. If the employee has a problem then he or she would have to call Dell or HP, or Apple, wherever the computer came from. The Agency would still operate a network with the network resources and systems, but the employee would be responsible for everything on his or her machine.

My opinion is that this would represent a net gain for the government. We should be able to move pc-support personnel onto other things, and employees would have better equipment that is tailored to their specific needs. It would also help innovation and ensure that applications are able to run on a variety of systems. If you are really hard on your equipment and you want to get a cheap $1000 computer every year, so be it. If you want to get the new Macbook, go for it. These choices are up to the individual employee.

There is still an opportunity to drive an economy of scale too. Instead of taking 3 months to evaluate and negotiate with HP on a device that will already be a generation out of date when it ships, we negotiate a sweetheart deal with the makers that will allow government employees to spend their stipend and get better than market value. Think about it, if we as the largest consumer of computers in the world, suddenly adopted this model then HP and Dell and Apple would want to get the largest possible share of that business. We could leave it to the industry to innovate in a way that would entice people to spend that money on one versus another. For some companies it may be some special service plan with a real live geek-squad type of service that will fix my problems during that 3-year period. Maybe it is some auto-replacement thing. I don't know and can't predict the types of innovations beyond the fact that I am sure there would be many.

I know this is not something ripe for this year or next year, but someday we'll be doing this.