The Engineering IT Supply Manifesto


The current global IT standard of performance in hardware/software supply falls far short of what it should be. It is an active and ongoing destruction of company value and improving it is something that requires only a change in mindset.

What I am talking about here is how fast and how well modern IT (or other commodity hardware/software service) departments are able to supply information workers in the companies they work for with computer software and hardware. I submit what I consider the only real acceptable standard for IT hardware and software delivery for modern technology organizations, and describe why it is eminently achievable and why the only things holding us back are false bureaucracy and blind adherence to standard industry practices by unimaginative and mediocre IT managers.

Today, the common service standard for an IT organization is something like the following:

- if you need a new computer or major component (e.g. monitor), you need to give at least 3-5 working days notice.

- if you need a piece of software or hardware, you must choose from a catalog provided by the vendor with whom your IT department has a bulk supply relationship

- if your request for a piece of hardware or software is not in this catalog, it is denied or at best requires special approval from high levels of management to acquire it.

Sound familiar where you work?

Compare this to working in a hypothetical startup. In Silicon Valley there are a lot of such startups, and a common scene is 3-4 engineers and one IT guy who spends maybe half his time taking care of the exchange server and maybe some other things, and the other half of his time getting the hardware and software. Sometimes a startup doesn't have this IT guy, and one of the engineers does it. In any case, in a 5-person startup, the business of procuring work equipment comprises about 50% of one person's time.

The service standard in this situation is approximately the following:

- if someone needs a new computer or monitor, someone drives to the store and gets it.

- if someone needs hardware or software that's not at the local store, they find out where it's sold online and buy it or download it.

- if something someone needs is not in a catalog or store you've been ordering from, they look in another catalog and get it.

In all cases, the turnaround time for getting a piece of equipment (e.g. laptop, monitor, or software) is a few hours. At worst, they may need to order from Amazon or some large online retailer, and it can be delivered overnight. So the turnaround time is basically either an hour's drive to the store or 24 hour overnight delivery. In no cases does it ever occur to anyone to deny any such reasonable (e.g. <$5k) requests.

This is the minimum acceptable performance standard for any IT supply function and that anything less is an egregious destruction of value.

Specifically, a startup is a repeatable, working example of an organization that can fulfill such a standard.

How come then, as a company acquires more workers, more revenue, and more negotiating leverage with vendors that it's considered commonplace and acceptable for the IT equipment supply function to (1) decrease responsiveness and (2) decrease the selection of equipment? It's completely backwards, and usually justified with a couple of terrible reasons:

1) "Cost savings"

Supposedly, IT departments negotiate bulk deals with vendors to purchase in volume and at a discount. This is a terrible reason because it's both undesirable, useless and in the end, totally false:

It's undesirable because the typical discount you get in a bulk deal is between 5 - 15% off what you can get at comparable online retailers. This is not anywhere near worth the tradeoff in delivery speed and limited selection. Imagine if you were to do this with your company's delivery schedule on regular projects. What technology executive would possibly say yes if you said to them, "Hey, we can deliver projects 15% under budget if you let us take 300% - 500% longer?" But this is effectively what IT is saying to information workers when it comes to getting them equipment they need to do these very projects.

Furthermore, the discount is useless. I've perused the bulk discount rates given to IT departments and the discounted prices offered are comparable to what you'd get if you simply shop around on the internet using any of a number of price comparison sites. Yes, it's certainly a discount from what you'd pay if you walk down to your local Fry's or Best Buy and pay full retail, but in that case your time trade-off is even bigger: 2 hours vs 3-5 days - the preposterous tradeoff becomes "We'll deliver this project 15% under budget if you let us take 3600% - 6000% longer."

Lastly, the cost savings are simply false. I maintain that your company does not, in any way, need the cost savings you get from saving money (which a lot of times you don't even save) by using bulk vendors. Why? Because no one is more cash-strapped than a startup, and yet somehow startups survive while paying these exorbitant prices. No startup ever ran out of funding because they were paying too much for their engineers' desktop machines and keyboards (datacenter servers are another matter). If the cash savings aren't material to a startup, they aren't material to a larger company. All this is doing is wasting a company's most valuable and irreplaceable resource - time - while saving minimal amounts of cash.

2) "Efficiency"

Supposedly, ordering from bulk vendors improves service efficiency. It should already be obvious that the high latency in filling an order is an obvious disadvantage of the IT bulk-order method vs the go-buy-it-now startup method, but perhaps it makes large companies more agile, faster, or more efficient?

Again, totally false. Startups are more agile, faster, and more efficient than larger companies, and have this supposedly "inefficient" process of going and getting supplies as soon as people ask for them. No, in reality it's exactly the IT procurement systems like this themselves that contribute to making things slower, less flexible, and less efficient - and in this way, every modern IT organization is actively destroying value in their company.

But what if the IT organization needs to do this because they don't have enough people to go around buying things or logging onto Amazon and ordering them? Well, in most companies, IT spending and personnel make up far less than 10% of total company costs. Yet apparently in a cash-strapped startup, it's entirely affordable to spend up to 10% of personnel costs (the one-half time of the one guy out of five) just procuring equipment! The ceiling on spending the wages to make sure you can get the job done is really actually much higher than most IT departments think they should spend - if you had to, you could hire an intern for every ten people at a company and maintain the same cost structure and thus provide more than adequate service levels.

Not hiring the necessary people to provide startup-grade service levels is merely penny-wise and pound-foolish, and has an opposite effect on efficiency.

If a startup can do it, then for an IT department in a larger company to fail to do it is nothing more than destroying value that could trivially be maintained: Equipment supply isn't subject to the same difficult scaling factors as, say, organizational communication - it's just about getting trivial pieces of stuff to people who need them. The baseline case is "employee drives to the store themselves and buys it," which uses a couple hours but means they can start working right away - exactly as efficient as in the startup case. IT departments that prevent this are thus destroying value by slowing everyone down.

Here's what a real, modern IT department should be doing to fulfill its equipment supply mission:

1) Every request for a commodity piece of equipment (hardware or software) under a reasonable price range ($5k or for industries like CAD/3D where common tools are pricey, higher) is automatically approved.

2) Every single request should be filled within 1 business day (24 hours excluding weekends).

3) Bulk ordering should be used to build up inventory in anticipation of commonly-requested items so that any common request can be filled in the time it takes for an IT person to walk to the shelf and bring the piece of equipment to the person who requested it.

The purpose of bulk order vendors is to enable as many requests to be filled in the timeframe for #3 rather than #2, with #2 being the absolute worst acceptable delivery timeframe. It should not be used to constrain what can and cannot be requested; that's the tail wagging the dog. If you don't have it on-hand, go to the store and buy it!

I submit this Engineering IT Supply Manifesto to the world and I declare to developers and technology executives everywhere, insist on this from your IT department! It is the only acceptable standard of delivery - anything else is destroying value in your company and willful mediocrity! Insist on nothing less than the performance that every tiny cash-strapped startup is already able to meet!

Originally posted here on 2009 Nov 23, by Yishan Wong.