Aristotle once said: “For that which is common to the greatest number has the least care bestowed upon it.” These words, written more than 2,000 years ago, still ring true today—that is, if a recent USA Today article about air travel is any proof. Its headline, “Airlines Need to Reduce Overscheduling,” glared at me one morning as I waited for a flight that was, of course, delayed. The article quoted the outgoing FAA administrator’s grim pronouncements about egregious overscheduling at congested airports across the country. Naturally, none of this is news to anyone who flies on a regular basis. The problem gets worse daily as harried travelers crowd onto overbooked planes and wait on overcrowded runways across the country.
Garrett Hardin also addressed this issue in his 1968 essay, “The Tragedy of the Commons.” Historically, the commons refers to a limited but commonly held resource, such as a field or pasture owned in common by various individuals, each of whom also owns animals that graze there. As long as there’s grass for grazing, each person continues to pursue his or her own self-interest, until the capacity of the commons is exhausted. By the time this happens, however, everyone’s sheep has suffered.
Today, whether the commons is an overcrowded pasture, a busy runway or a company’s IT infrastructure, the principle is the same. When a group shares a resource, in reality no one owns it, and everyone has a selfish interest to use as much of it as they possibly can for as long as they can.
TRUE COSTS
The dilemma that collective ownership presents in IT projects is evident. When the user is detached from the cost of using a resource, the resource appears to be both free and limitless. If unaware of the true costs shared or centralized in the IT department, business users will clamor for more IT projects and resources. And why not? The resources are there and they’re free, right? It’s a situation that virtually guarantees opportunism, conflict and frustration.
Business users are experts about their products, their customers and their competitors. But as long as IT is the keeper of the IT dollars, business users will be surprisingly uninformed and careless about one of the most important costs of doing business. The result can be strained relations between business and IT, not unlike the troubled relationships among airlines, airports and their hapless customers.
Unfortunately, there doesn’t appear to be an end in sight to the long waits in airports. However, there are some straightforward ways that can make it easier for business and IT to work together on planning and paying for IT resources.
THE SOLUTION
First, business leaders need to be directly engaged with IT leaders when evaluating technology projects and investments. Verifying that IT projects align with the company’s strategy and goals, and applying consistent analytical rigor to this evaluation, will help ensure the company invests in the right IT projects before people and funds are committed. Examining how IT projects support the company’s goals, and assessing whether the anticipated return on investment is in line with the company’s hurdle rate (the required rate of return on a discounted cash flow basis), is the only objective way to stack the benefits of a project against the cost.
Although a cost-benefit analysis is clearly important, one additional factor needs to be considered to avoid an IT “Tragedy of the Commons.” The costs of IT projects must be aligned with business areas so that business controls the purse strings and the bottom-line impact of doing (or passing on) particular projects. Cost alignment forces financial accountability, and sharpens the focus on the project’s cost, benefits and return on investment.
Making this change can be controversial for an organization that has traditionally housed IT dollars in the IT budget. The change needs to be well planned and executed to avoid disruption of ongoing projects and related funding. But it does have one clear advantage: it tasks the users with developing the best plan for allocating the company’s IT resources.
Hardin wrote, “freedom in a commons brings ruin to all.” Ruin in the context of IT projects may sound like a bit of an overstatement, but making the user of any resource accountable for its preservation and optimal use better serves the greater good, whether that resource is a finite supply of land or corporate technology resources.
Linda Bambacus is a senior consultant at Dallas-based Robert E. Nolan Co.
