April 24, 2023 • 41 mins
Neil Wagner graduated with a B.Comm in 1976 and an MBA in Finance from Concordia University in 1978, and went to work at Bell Canada in Ottawa, where he quickly applied his financial and quantitative skills to write the first financial plan for the Computer Communications Group of Bell. After 2 years, Neil was recruited by an old professor from Concordia to teach Finance at the University of Calgary and spent four years as a full-time faculty member at the university before switching back to business.
Neil made the switch from Finance to Technology in 1985 when he joined Keyword, an early technology startup funded by TransAlta Utilities. He quickly established himself as the leader of their Technology Advancement Centre, developing business relationships with military and commercial companies interested in custom application of Keyword technology. It was in this time frame that Neil gained early and powerful experience in Document Management Systems, and he extended that expertise after he left Keyword and continued to sell his expertise in this area.
Neil’s consulting experiences have led him to many substantial and successful engagements. He has been responsible for guiding the design and implementation of highly sophisticated and complex budgeting and consolidation systems at Wawa Food Markets in Pennsylvania, and Hancock Insurance in Boston. He has implemented document management / knowledge management, Engineering Information Systems and budgeting and consolidation systems in such diverse industries as Oil & Gas, Health Care, and others. Neil also enjoys leading IT groups, where he can help guide the organization through a re-focusing of efforts so that they become a serious and reliable service provider to the business.
In several of his engagements, Neil has been an award-winning designer of complex systems, recognized for his creativity and abilities to deliver complex programs on time and budget. In the Non-Profit world, Neil is a recognized ‘go-to resource’ in Calgary and has held several senior strategic engagements advising a variety of agencies on technology change and advancement!
As a believer in giving back to the community Neil is the Volunteer CIO for the Calgary Counselling Centre, a world leading not-for-profit counselling and educational institution, where he has guided the implementation and adoption of a highly sophisticated technological footprint designed to tightly support the organization’s business & research goals. Neil was also long-serving member of the Deans Advisory Committee for the Computing in Business program at Mount Royal University in Calgary.
Neil has been married to Robbie for 44 years. Robbie is the CEO of the Calgary Counselling Centre and a PhD graduate from the University of Calgary School of Social Work. Neil & Robbie have two sons – Steven, who is a PhD in History & Military Intelligence from Oxford University, currently teaching at Brunel University, and Daniel, who recently completed a PhD in Health Economics at University of Calgary.
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Episode Transcript
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(00:11):
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(00:39):
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b y ntk pioneer k.org.
Hi everyone, my name is Neil Wagnerand I live in Calgary, Alberta,
Canada. So where is that? You might ask,
(01:01):
Calgary is about 60miles for you Americans,
east of the foothillsof the Canadian Rockies.
I would say that there are two interestingthings that people would be aware of.
Number one, Calgary is wherea lot of the TV series,
the last of us was film. Alot of people don't know that,
but I'm hearing a lotof references to that.
(01:22):
Not that I've ever seen that any ofthe shows yet, but it was filmed here.
Secondly, Calgary was also thehome of the 1988 Winter Olympics.
The field I work in, I work in technology,
I work as a CIO for some organizationsthat are usually not for profit
organizations and I workas a senior strategist
(01:43):
slash program director and sometimesproject manager in the for-profit world.
At the moment,
the organization thatoccupies most of my time is a
not-for-profit called theCalgary Counseling Center.
And I would also tell youthat my most fantastic job
slash work experience was as a dockboy when I finished high school
(02:05):
in Quebec. You finished highschool in grade 11 and yes,
I worked at a yacht club forthe summer. It was a fun time.
We're here today to really discussthe challenges organizations,
apparently doesn't matter the scaleor breadth of an organization,
the challenges they have withdigitizing their organization or
(02:27):
having a strategy in any ofthat to get technology done.
Neil is here and he's gonna tell ussome kind of behind the scenes what he's
seen and things that he'sobserved. So Neil, tell me,
what's the saddest thing you ever sawin an organization just does was not
doing their technology? Well.
The saddest situation that I'veseen happen just recently in,
(02:51):
in the last six months where I wasengaged with a organization trying
to do what I do, um, a for-profitcompany, very successful in what they do.
When I asked the CIO actuallysuggested that it was actually
time for them to put a stake in theground and state what their IT strategy
was. I was told that now's notthe time to establish a strategy,
(03:14):
which you could have knocked me overwith a feather because it explained
everything in, in one sentence.
It explained the chaos that wasoccurring at that organization and why
it took so long for everything toget done and why everybody questioned
everything.
So if you're getting pushbackfrom somebody at that level,
at the command level that says,
we don't have time to worryabout a strategy right now cuz we're too busy being
(03:37):
us, you're just the tail wagon, the dog.
Yep.
It was astonishing is the onlyword that comes to mind..
It's the only word because, youknow, we all have grand ideas about,
hey, we should have ahybrid cloud solution.
We should be in Amazon only.
(03:59):
We have facilities across North Americaand I think networking should work
like this. And somebody says, oh no,
I think networking should be workinglike that. And then somebody says,
why do we still have handsetsand why are we still running,
you know, traditional telephony,why isn't it all integrated? Well,
they're all great questions, butwithout a strategy in place. Hmm.
(04:22):
There's no answer to any of thosequestions and there's no direction to.
Go. I would have to assumethough, the strategic piece,
you don't have to be hugeto have a good strategy. Oh.
Hell no.
You don't. Right? Uh, and so, I mean,
and we're not talking about 400 pagesand a three ring binder. I mean,
if you had one pager would be helpful.
In fact, if you can't, in my view,
(04:44):
if you can't summarize your strategy inone page, I don't care how big you are,
if you can't do it in one page,
you failed because the rest is thedetail as a strategy. You can say,
I am not buying one more serverever again., that's valid.
Right? That's a strategic statement.
Whether you host your iron in Azure or
(05:07):
Oz or Oracle data centers is irrelevantto that. Yeah. That's tactical.
Yeah. Putting your stake in the ground.
I could tell you that one strategythat worked for some organizations for
smaller organizations, especiallythe not-for-profit world,
was a long time ago when we said wecan't buy PCs, we can't afford them.
(05:28):
PCs are a thousand in Canada, a thousanddollars at the time, plus a monitor.
Boy, oh boy, that's expensive.
Why don't we just buildthat big PC on the server?
And everybody gets a thinclient and thin clients,
you just run till they break and youthrow 'em away and you put in another one.
That was a strategy I didn'tcare about the brand of server,
I didn't care about thebrand of thin client,
(05:50):
the clients cared about was how thehell are we gonna run this organization
in a cost effective manner and stilldeliver everything we need to deliver?
Yep. Right. That's the big question.
That's the one that you have toanswer first. So like I said,
if you don't have astrategy stated in one page,
you haven't thought through your problems.
What is the biggest challenge for anorganization right now that granted you
(06:14):
just named a big one, if youdon't have the rudder on the boat,
you're just floating along aimlesslyand taking whatever hits you get.
If the rudder is made of the strategy,
then what direction shouldcompanies be looking at?
Now I I say that because the futureproof of an organization is a costly
measure. Regardless, the resource costis always gonna be there, so suck it up.
(06:38):
It's, it's mm-hmm.,it's always gonna be there.
So don't be shockedmm-hmm. when,
when the next price tag comes out, becauseyou know what? It's the next thing.
So you either gonna getalong or you're not.
What keeps the boat goingin the right direction?
Well, that's the leadershipand governance question.
I think that's what you're asking.You've set your strategy right.
That means that you've pointed, uh,
(06:59):
and it's kind of a nice way to talk aboutit because I'm, I love going sailing.
I go on an annual sailing tripwith some friends. Perfect.
You've pointed your boat, takena heading, and off you go, well,
whose job is it? Is it the Helmsman'sjob to steer that heading? Not exactly,
that's your staff,
but do your staff understandwhy you are on the heading
you're on?
(07:20):
And what controls have youput in place to manage so that
we don't drift off of thatheadache? Uhhuh.
And some of it is reallykind of mundane stuff.
Some of it is all about who authorizesthe purchase of capital assets,
the CIO or equivalentin your organization who
is responsible for technology.
(07:42):
Somebody can purchase equipment withoutyour signature and without your knowing
about it, you're in a bitof trouble. Right..
Because you won't be able tohold that heading. Right. I mean,
I'm boiling this down to somereally simple issues. Yeah.
But I've seen it happen.
We all read DeLorean's book abouthow we built the factory at GM and
finally had to go to the boardfor approval for a smoke stock.
(08:04):
It was the one item that exceeded the, his spending authority, uh,
when he was at gm. Well, it's kind oflike that, right? Except in technology.
You need a really firm hand on the redder.
And I've been with someorganizations where it was exactly so
that the strategy was stated. Okay?
And we all knew we wereliving in Azure from then on.
(08:27):
When somebody came and said, we have tobuy all these servers for such and such,
and they have to be on-prem, theanswer was, go jump in the lake.
That's not happening.
There were people in the organizationwho had a signing authority that could
have authorized it.
But it's all aboutmaking sure as the leader
of technology in your organization,that you have control over these things.
(08:49):
Yeah.
They really create other moreimportant problems to resolve.
It goes like this. In one conversationI had this year, somebody said to me,
well, we're going Amazon. Everybody'sgonna be in Amazon. And I said, oh, that,
that's great, but how, how didyou come to that decision? Well,
just because,and the answer is, yeah,
that's not a great way to cometo a decision because this is all
(09:13):
dependent upon what business applicationsyou're gonna be putting up in those,
whether it's Amazon or Azure orwhatever. In the direct comparison,
if I talk about Amazon versus Azure,
some applications lend themselves reallywell to the Amazon environment and
not to Azure and possibly the other wayaround. So look, where's the inventory?
(09:33):
You have broken a mental sweatand figured out what you have,
what you're going to be using in thefuture, and where is the best home for it?
How do you pick vendors? In the casewhere one of my clients said, yep,
it's all Azure all day long,
when we went to pick applicationsor add new ones or replace them,
the big question was,
(09:55):
do I have to spin up some virtualservers in Azure or can this
be run platform as a service orsoftware as a service? However,
however you describe it, which is wayless costly than spinning up servers.
And so suddenly, you know,all of the things being equal,
you were dealing with vendors who wereselling platform as a service and not
(10:16):
software,
traditional software that you had toput on a virtual server somewhere.
You've brought us to a juncture,
and I wanna interject here becausenow we're talking about operations,
now we're talking about functionprocesses and operations of whatever the
organization's supposed to be doing.
The C T O or c o haspart of this effort to
(10:37):
at least stake a claim in hopefullydesigning a network infrastructure,
enterprise solution that matches orexceeds whatever the requirements are
and or future proofing of theorganization's work processes.
How do we get there first?
That's not all on the CTO to figure outbecause somebody in operation's gotta
be, oh, wait a minute, you know, thesales force is going this way and, uh,
(11:00):
year two, and how do youmerge all of that mess?
Yeah. It's, it's, it's a layered problem.Go it, it kind of goes like this.
When you're a larger organization,I'll bet you that, well,
I know there are a lot of organizationshave a pretty heavy duty investment in
Citrix farms, for example.
Some other organizations have a heavyinvestment in Microsoft Hyper V on
(11:22):
prep, right? As an example,
one of the things that you come torealize is you're going to bump into
an accountant who says,
we haven't extracted the value yetof our investment in those things.
So it's not time to move. Of course,
being the classicallytrained economist that I am,
(11:43):
I listen to those arguments andI go, that's yesterday's news.
We don't make decisionsbased on sunk costs. Yeah.
People have this emotionallyattachment, I can't explain it way,
it's not rational, it's emotional. Right? We just, two years ago,
we spent a million and a half dollarsbuilding at that Citrix farms.
Are you telling me we're throwing itaway? And the answer is. Yeah,
(12:04):
probably.
Because you're not going to generatethe returns you want until you change
course. So, so you run,that's a classic example of,
of what you see. You know,when covid hit as an example,
there were companies who hadalready invested heavily in cloud
technology. Everything was either inAzure or about to be in or, or Amazon.
(12:26):
They were somewhere. Access by employeesto those systems was unaffected.
They could cope. There were a lotof companies who had Citrix farms,
for example, that were oversized andtheir staff had no trouble working
remotely.
And then there were some where theskid marks to prevent them from going o
you know, around over the cliff asthey went around the curve were,
(12:48):
were stupendous. The pressuresthey put on the vendors. You know,
I need more servers, I needmore there. And of course,
right away it's the accordioneffect in a cartoon, right?
One thing after another slams into yourrear end as you're trying to figure out
how to negotiate what wasunthinkable became deal with it.
So that's a classic example.
(13:09):
I think another kind of examplethat you'll run into is,
let's get rid of this and letsomebody else run it for us.
And I'm gonna pick on my favorite. Okay? My favorite item.
And that's the help desk because, andthere's some big names out there, right?
Who do help desk and boy oh boy, theywant you to outsource everything.
(13:30):
They wanna deliver your,your PCs to your desktop.
They want to keep them updated.
They want all this business and theywanna respond to help desk tickets.
A lot of organizations buy intothat and think that if they lay
off all of this help desk staffand let somebody else do it,
that they're suddenly gonna save a lotof money. You know, that's a mixed bag.
(13:52):
I think some organizations havedone okay with that strategy
and many others have had to go, well,this didn't work. We have to hire people.
Back. Well, there's a qualityproblem. And a lot of that,
you look at the dollars and cents andsomebody's on somewhere with a slide scale
says, Ooh, look at the savings, that'sgreat, let's do that. Oh my gosh.
But then the quality goes to thefloor and you got angry customers now,
(14:16):
so that impacts sales and la la,la. Like it just keeps going.
How does an organization, now, we'vebeen talking about the big dilemma,
the big technological elephant in theroom for all organizations that have to
face and deal with, if they'regoing to progress in the future,
how does an organization decideif you're gonna hire it out
(14:38):
or you're gonna hire in somebodythat has that brainiac or
that technology powerhouse tocome in and be your employee
or outsource it? I mean, it's just, it'sgotta be a, a tough road either way.
Yeah. It's not simple. Ilike to look at it this way.
There are a few deciding factorsabout whether something stays,
(15:01):
something like help desk stays in-houseor not. One of them is culture,
because culture trumps everything.You know, the old saying, man,
mark Andreesen said softwareeats everything and he's right.
Except that culture eatseverything else. including,
including software.So here's what I mean by that.
Is the problem at hand inimicable tothe success of your organization, right?
(15:25):
So it not, in other words, you can'tcost it, you can only sense it. Yeah,
of course when the accountantsget involved, they only know cost.
They don't know sensing at all.
But you have to digseveral layers deep into
the working innards of anorganization to start figuring out why
something cannot or shouldnot be separated. Hmm. Uh,
(15:47):
a lot of it is a misunderstandingamongst the leadership of
the service-oriented nature ofthe business they're in. Okay.
If they don't get thatand if they don't care,
or if they service is notpart of their culture,
then suddenly these kinds of systemsbecome easy candidates to punt. Mm-hmm.
, right? Really easycandidates to punt. The second question I,
(16:09):
I always like to ask is, okay,culturally we know what we need to do.
The next question I ask is, let'ssuppose that we outsource something.
Everybody understands what aracy chart is, right? Or mostly,
and you've heard it by different terms,
RA r aci or are A S C I even forgetwhat the S stands for when they do that.
But who's responsible? Who's accountable?
(16:32):
Who do we consult withand who do we inform? Yep.
That's what those letters stand for. Okay.
Really big in the project managementworld, we all, we, we live by that chart,
right?
It's one of the first things you do toidentify who are the players involved in
this. Take that up afew notches, you know,
cuz you can have many peopleresponsible for something.
There are a bunch of doers, right?
(16:52):
But only one person canhold an A only one, right?
Because that's accountablein the hardest look,
the board's gonna look to the person whois accountable and say, this was you.
Why did you do this this way?
Or some director lower down or manager,
why did you do this? Why did you wantthis? You are being held accountable.
(17:15):
So when you outsource something,
you can't outsource the A ever.
And companies just sort of slide bythat issue every time. Like they,
they just don't kind ofbreak a mental sweat over,
I'm making this decisionto outsource this thing.
Help desk being the one of themost common. Is it the right call?
(17:35):
I'm accountable for this. Do Ireally understand the implications?
Because you know,
one of the things that happens is whenthe outsourcing discussions start to
happen,
your organization is typically floodedwith a bunch of people from the company
who's gonna do the outsourcing and they'reattending meetings and listening and
trying to learn and allof that's wonderful.
(17:56):
But suddenly when the court is cut,
those folks are gone and theydon't want to understand anymore.
All their motive istheir only motive is to
deliver the service at acost that's less than the
revenues they're charging for.That is their only motive.
I don't think there is anyincentive program in the world that
(18:20):
can be reasonably calculated. Oh,
to motivate the outsourcerto provide better service
for a bonus. They think theycan, but I don't think they can.
I just, maybe I'm just notcreative enough. I think that's a, that's a big wish.
A big.
Dream sounds like a challenge.
And I would think there's probably aprofit share kind of concept that could be
(18:42):
tagged, but I don't understandhow you would rate something,
especially like helpdesk. How doyou calculate sales to help the,
you know, I, I don't know. Butyeah, you're, you bring up.
A, you know, you can, let's.
Skip over the help desk cuzthat's a good place to start,
but let's move up the ladder now.
So how does an organizationget that function of a CTO C
(19:03):
or at least somebody that's accountablefor the technology of an organization?
Should they outsource thator should they hire on.
It? Again, it's a multilayered problem.
When you talk aboutoutsourcing your technology.
If you're talking about goingto somebody else's data center,
cuz you don't wanna run the floor space,
you wanna own your serversfor whatever your reasons,
(19:24):
you wanna own your servers, but you don'twant to be the guy running them. Well,
okay,
there's lots of hosting centers aroundand you can do that and there's a whole
bunch of costs that comeinto play. You know,
you may not have the real estatein your building to host it.
You may not have the power to deliverall the air conditioning required.
(19:45):
You like all of these things, right?
And there's lots ofcompanies like that around.
If the belief is that you have towrap your arms around your servers and
manage it that way, that's an easycall. But the next question is,
well who's servicing those machines?
Who's planning for upsizing computers?Who's planning for maintenance outages?
Who's planning, like suddenlythat's a whole other deal.
(20:08):
And that's sort of the IToperations side of the house. Yeah,
maybe you could outsource that tooand maybe you could do that, you know,
less expensively than doing it yourself.
My impression is if your business isreally steady state and with not a lot of
change, maybe you can get away withthat. But we've all lived with,
and I think this was the biggest sellingfeature of going to either Amazon
(20:32):
or Azure. The biggestselling features are,
well I don't have to spend$2,500 on a failed desk.
I, yeah, my machine is neverobsolete. If suddenly I,
we gotta jump in business, I throw moreRAM on it and I throw more disc at it,
I can't even upgrademy CPUs. But you know,
in 15 minutes lateryou've got capacity. Well,
(20:54):
for a lot of companies that'sjust huge. That is beyond huge.
And not only, not only is it huge onthe upside, but huge on the downside.
Oh you wanna scale back,
scale back and there's nothing in anyof these contracts that you signed with
these folks. There's nothing preventingyou from doing that. In fact,
it's encouraged. It'spart of their sales pitch.
(21:15):
And what I find to be themost interesting part of all
this, these are what Icall the knock on effects.
You've made this decision to go thisway and you understand as a senior
this is,
there are all kinds of hidden benefitsor knock ons that you can't articulate,
but they're there. A lotof companies don't see it.
(21:36):
One of the classic conversations I had,
that was years ago when I washelping an offer profit migrate to
Microsoft mail, exchange mail onlinewhen before it was called Office 365,
but the product was there and I wassitting there with the CEO of an offer
profit,
the IT services vendor who wassupporting their existing server
(21:57):
infrastructure.
This vendor was just shocked when Isaid we're gonna lock stock and barrel,
it's, it's going over to Microsoft. Andhe said, why this is working perfectly?
And I said, well that's not thepoint but yeah it's, it's free.
And I said, no, it's not free.He says, oh yeah, it's free.
(22:18):
And I looked at the tech, right?
The service tech who was sittingthere with the vendor, I said,
how many hours a week do you spend Karenfeeding on this exchange server? Oh,
one to two hours a week. So it'snot free. Right? It's not free.
And they're like, but don't I have to dothat if you go to, no you don't. Right?
So that's a tiny, tinyexample of what's involved.
But think of it on a much larger scale.
(22:40):
And what I think is happening in the techworld that people are really starting
to take advantage of isif I remove all these jobs
around what I call serveroperations, right, server expansion,
memory power, a, all of those things,
what do I get to spend my money on? Andthe answer is higher level functions.
(23:02):
You know,
suddenly it starts to sound likethe job of a server engineer is
going away. And maybe it is, I don't,
but maybe it's actually turninginto a much more knowledge,
inten intensive kind of job where younow have to have the skills to manage a
virtual environment. Yeah. Which bythe way is no small thing, right?
(23:22):
Somebody has to know how todo that and and done wrong.
You're just as exposed security wise orworse than you ever were with your stuff
on premise.
We can pretty much bet that complexitywill continue to expand in this realm.
But also capacityexpands as well as things
change, capacitieschange, processes change,
(23:43):
abilities change.
I think keeping the surfboard going inthe right direction. Another nautical,
let's stick with an nautical.
If you're on a surfboard andyou're trying to ride that wave,
you gotta keep judgingand moving and adjusting.
And the classic agile mentality ofjust trying to stay on the board.
But here again,
(24:04):
I'll ask how does anorganization help themselves?
Let's say we're talking a small tomid-size nonprofit that has been
poking along and doing great for 20 years,
but they're really at a scale executionpoint where they really gotta start
their strategic plan on technologyand looking at it serious.
(24:25):
Cuz now they're starting to really grow.
What's the first and second thingthey've gotta have in place other than
strategy? Well we've nailed that.
Some minutes ago I mentioned governance,but maybe there's a better word.
Maybe the word is discipline. Back when,
when I was a young lad startingout in this business
(24:45):
last week.
At the yacht club. Yes.
Oh, PCs hadn't been invented when I wasat the odd club, I gotta assure you.
But you know,
the kinds of like best practices thatwere drilled into us in those days was
users don't get to pick products.
They get to tell us what theirrequirements are. And you know,
(25:06):
that's a very big statement,very big and very impactful.
The reason why it's impactful is,
and again I have the livedexperience of sitting with
a C E O of a not-for-profittrying to explain to this person
that there are two applicationsin their portfolio that have to be
(25:26):
dumped. And the reason why iscost, they're just too expensive.
And the first pushback I gotwas, but we like these tools.
.
Okay,
I agree you might like them but youdon't know what you're also going to like
when you change. Right.
And if I could promise youthat we could carefully
(25:47):
detail all the things you like,
all the requirements in other wordsthat you're meeting and maybe the ones
that you're ignoring that you know youhave, that you're not dealing with.
And we found something that was, Idon't know, $30,000 a year cheaper.
Would you be interested?
And I have had a range of responsesto that question at times.
(26:09):
Hmm. One organizationjust was flat out, no,
I think we're just gonnastay with what we got.
Which to me was almost insultingbecause this was an organization that
was not, what's the word I'm lookingfor? Well, not social enterprise.
They had no invoicing going on. Theywere dependent on grants and donations.
So what you're telling me is thatyou don't steward your donor's money
(26:30):
as well as you think you do becausethere's a solution for less.
And I, I've had that same issue.
In their case it was two applicationsand one of them was, you know,
I think it's time to put this one oneto sleep. It's it's end of life anyway.
The vendor's gonna changeit for something else.
You might as well bite the bulletin your planning. And again,
(26:51):
your migration won't be that hardbecause you're not invoicing,
you're not a social enterprise. This isjust all about managing what you got.
It was the same kind ofpushback. It's like yeah.
Even though you put thenumbers in front of them,
you can show them line for line whatthey are spending and going to spend.
Maybe they'll do it and maybe theywon't, some jump all over it. Right?
Don't get me wrong, someare quite rational about it.
(27:12):
But in terms of how do you get there?First you have to start with culture.
And in this case, the culture is, listen,
I wanna know everything aboutwhat you need for your job.
Like everything don't hold back.Start with a blue sky, right?
Clean sheet of paper. Tell me whatyou need but you don't get to pick.
I've actually had those same discussionsin the for-profit world and the expense
(27:36):
was a lot larger and the clientskept coming back to me with,
we want a product like such and such.
And the product they wanted thatthey were comparing themselves to,
what they thought they wanted wastechnologically and security-wise and
feature-wise unfit for what they wanted.But they liked that wizzy interface.
They thought that was really cool.
Cool. We love it. Yes.
(27:56):
And how am I gonna explain to these folks?
I could go head-to-head and feature forfeature and show 'em that there's no
match. Okay. And Iwould get nowhere. Yeah.
But the way you I succeeded inthat conversation was to figure
out, okay, here's thesolution we need today.
I've got something that works for todayand let's postpone that other decision
(28:17):
until a little later on. Yeah. Right.
And they went with that cuz therewas no time. I had time on my side,
not theirs. I had to execute. The secondpiece of what I had to do was again,
start gently, gently pushing the mantra,
not directly from me but fromseniors. We need requirements.
But there are so many othercomplexities around security and
(28:39):
supportable technologies that itwill make the final call. Yeah.
But as long as we meet yourrequirements, you're good to go.
And that was hugely successful.
And I don't think that organizationhas ever looked back and said, okay,
now we're gonna go to that other,
they haven't looked at thatand they'll never be allowed to. Right.
, there's a lot of power insaying how about we table that for now
(29:00):
and let's get back to that. Wehad a friend that used to say,
let's just let that rough end drag for abit. You know, just, just don't, let's,
let's just let it and we'll,we'll come back to it.
And sometimes it just evaporates allby itself and you didn't have to do a
thing. Right. But like you say,
when you get emotions involved andpeople got pushback and you're like, uh,
you know, and now you gotcultural issues where people are,
(29:23):
have expectations of what they think.
I used to work in a line of businesswhere sales was the primary,
what my primary job was.
And they taught us before weeven sold that we had to help the
buyer get on the road to the sale.
And that our job was tojust ask questions because
their concept of what they thoughtthey needed was either driven by an
(29:47):
ad for something and ohwow, that looks great,
but they don't know all the details.
So you're just kinda like playingcolombo and just, well so, uh,
you're just asking all these questionsand you're helping them get to a
solution without you helping them getto this. Just kind of quiz 'em and.
Oh, I totally understand. I mean it's abeautiful, let me, lemme tell you. Good.
(30:10):
The Colombo analogy isone that I actually,
I used to mimic the guy exceptwithout the trench coat.
And I recall very clearly when,
because I also was in sales at one pointand I was taught you're here to solve
your customer's problems and if you'renot here to do that, you're not in sales.
Like you're not gonna win. And I,
I was running this project fora very large insurance company.
(30:34):
We were trying to build out this,
I don't wanna leave anyidentifier information here. So I,
we were trying to build out a solutionbecause of a major change in the
way they conducted business. Okay.
And it literally meant crawling throughtheir chart of accounts on the expense
side and getting an explanationon each line. Oh line, okay,
(30:54):
where do these numbers come from?What's the process? Right? Yeah.
Line by line before we couldfigure out what to wow do with it.
Cuz it could be many sources.Right? Right. You know,
I had a great team and I would literally,I'm a slouch in a chair anyway.
This is what I naturally do unless I'min the racing position about to go for
the kill.
Mostly I'm listening and I'm slouchedback and my eyes are literally half closed
(31:17):
and they said X early on in the,
that day's conversation and15 minutes later somebody said
the opposite on a different lineand suddenly I'm doing the colombo.
Wait a minute, I got one more question.
. .
Hold on here. Hold on. Not cuz I wantedto catch them out. No, that like,
it's not, it's not about that. No.Yeah. But what you want to do is,
(31:40):
are we all on the same page here?
Because I can't give you a solutionif you're telling me X and y coexist.
They can't. And that, thatwas the classic actually.
And I remember after thatmeeting my colleagues co going,
that was the best colomboin imitation ever..
It's effective. You know,
I think it really disarms the peoplearound the table because then you can get
(32:02):
more towards the actual essenceof the mission or the problem set
or you know what I mean?It just kind of Yep.
Deflates some egos a bit youcome off with. Yeah. Oh, I,
I don't know O would, yeah. Let's,let's wrap today's discussion up with,
we've talked about technologyin a very grand scale.
We've talked to it in application andhow an organization is challenged with
(32:25):
the internal versusoutsourcing kind of concepts.
If you had to sit down with a 30something that's gonna do a startup,
what would you tell them reallyas solid advice going forward?
Because they don't know yet.It's an untried at this point.
Get back to that strategic cause I knowyou're gonna say you gotta build the
rudder first. You gotta know whatthe hell the direction we're going,
(32:47):
but what would you give them as a on thespot today you're at the bus stop and
you're just talking to this kidand boom, you're like, you know,
the thing I would not doand the thing I would do is.
Yeah, okay. Um,
it doesn't matter to me whetheryou're talking about building out the
infrastructure for company operations oryou're building out the infrastructure
(33:09):
for a company idea, right? Likesome tech idea doesn't matter.
Which my first piece of advice would be,you're not ever going to buy a server.
You will pick somebody's hostedservice and you're not gonna pick
Joe blog service from around the corner.
You're gonna pick one ofthe majors, Microsoft,
(33:29):
Amazon, Google, Oracle, Dell.
One of those guys isgonna have it for you.
Cost is a big factor and you shouldbe able to price this out so you know
exactly what you're getting into.That's the beauty of these things.
The one thing that you can't reallycost are transaction volumes because
a lot of stuff you do, you'rebuilt on the transaction volume.
(33:51):
So that's the first thing I would do.
My direct experience withAzure is detailed enough now
that I would say youbetter also establish a
very traditional chart of accounts fortechnology in your accounting system.
And the reason why you want to do thatis because that is how you're going to
(34:13):
know what you're spending and whichapplications you're spending it on. Right.
Down to transaction movements,
integration costs for one of my clients,
my revised chart of accountsfor it is listed out by
major application. Soyeah, there's the whole,
there's a bucket for Microsoft 365but it breaks it out into security and
(34:35):
office applications for example.There's sub-accounts there.
Interesting as examples, whenI look at application support,
I know who my vendors are that supportthese applications and they get
posted into accounts andsub-accounts unique for that
application. Then when I look atmy subscriptions from Azure, okay,
(34:55):
what's going on in Azure,
they break out the same way so thateverything posts into accounting
in such a way that if I'm lookingfor my costs for client relationship
management for example, I knowongoing support costs are,
I know what the development costs are,
I know what the subscription costs arecuz it's running as platform as a service
and Azure like,
and I can summarize it that way andwhich is really important because one day
(35:20):
somebody in your organization'sgonna ask you mm-hmm,
how much does X cost? Andyou know, the old saying,
you have to know your numbers. It'snot hard. This took me, you know,
this is a pretty complicated organization.
It probably took me offand on three weeks of
experimentation to figure out exactlyhow to do what I wanted to do.
(35:40):
So it's not hard, but if youdo it from the start with, uh,
this is the way we'regoing to do it later on,
you're golden because you can answerthose questions and nobody can tell you,
oh, your help desk system is tooexpensive. Exactly. Oh, hell no. I know.
Exactly. You know, what,are you kidding me? That's,
(36:01):
that's not where we spend our money.
It's interesting you're bringing thisup because it sounds like there's a
challenge for most organizations,
CFOs to know all of that levelof fidelity you're talking about,
right? Because I,
I assume that there's a capitalexpense somewhere and you're like, oh,
we gotta spend $60,000 on X, wegotta up, okay, so the C of, okay,
(36:24):
we got that, that budget lines in there,
but I can't imagine they've goneto all these little teeny details
of tracking all these little minutethings that add up to the big number
because one,
nobody's probably actually followedthe trail down like you did. And two,
the expectation's probably not thereeither. You know, it's like well,
(36:46):
well it's a monthly service feeand you know, or transaction Yeah.
Easy to overstate and under show.
I I hear you. And, and the answer is,
I'm making it sound maybesimpler than it really is. Yeah.
For smaller companies, youknow, this is very easy to.
Do. Yeah, yeah.
When you're a big company and you have3000 applications in your portfolio,
(37:08):
you know, you don't want 3000 line itemsin your chart of accounts, right? Just,
just for piddly applications.Yeah. That don't cost very much.
So you do end up with like a commonbucket for a lot of things. Okay.
No question. Okay. Um, but some ofthat is actually tied as well.,
this is what's so crazy. Well,
what mechanisms are you actually goingto be implementing to accept invoicing
(37:31):
from your vendors? Because ifyou haven't automated that,
well you're still in the soup, right?Yeah, yeah. And don't tell me, well,
you got a fax or an emailaccount to pick a piece these in
invoices, that's no good, right? Yeah.
Like that's the news of20 years ago, you know,
and I don't care if it's blockchain orif it's REBA network's kind of solution,
(37:55):
but you gotta do something right topick that up because nobody should be
touching those thingsfrom the data entry side.
Somebody has to be reviewingit to make sure it's right.
But nobody should be hand bombinganything that when you're a large
organization that that's hard,right? That becomes a problem.
But with a huge payoff.
(38:16):
Don't think for a minute that that's oneof those problems that should just be
kind of, well, it'll be, youknow, we'll just hire clerks.
Hiring clerks isn't the answer The answer is the cost of
managing points of data can get very,
very high if you don't figure out its life
from beginning to end. We are inthe technology business anyway.
(38:39):
If we can't figure out how toautomatically move that data along,
we don't deserve our jobs.It comes to that. So the,
that's the advice I would givesomebody. You actually need a strategy.
You actually need a CFO whounderstands something about technology.
But by the way, your c o should not ever,
ever report to your C F O. Don't, don'tbe that, don't do that. That's like,
(39:03):
I don't know. I, I'm, I'mtrying to think of, uh,
an analogy that would makesense and none comes to mind,
but there's such vastly different rolesand one is not subordinate to the other.
They are complimentary. You know,
the old days where CIOs reported toaccountants was because, well, you know,
that was the biggest line item in thetechnology expense and the accounting data
(39:24):
was the biggest chunk ofdata. So sure that made sense.
You the accountant owned all that crap.That's not true anymore. And in fact,
the fastest way to not be able toextract value from your financials
is to give it to a traditionalaccountant who has no idea what you want
as a manager, as a director for amanagement report. Right. They don't know.
(39:45):
Yeah. And, and do they want tolike, the bigger the organization,
the less they're inclined toeven want to know about that.
That's a totally differentpatch of problems. So you're,
you're infrastructure had better be setup in such a ways to accommodate both
those guys. Right. YourCIO and your c Thanks.
For sharing all thisgreat and nautical advice.
I appreciate the technologicaladvice and the inside mind
(40:08):
of Neil Wagner in his vastexperience and doing lots of things
and I appreciate it, Neil.
Hey, when this is always fun to be withyou. Always fun. Thank you very much.
Take care.
You have just finished our latest becauseyou need to know a public service of
Pioneer Knowledge Services.
(40:28):
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b y ntk pioneer k.org.
Hi everyone, my name is Neil Wagnerand I live in Calgary, Alberta,
Canada. So where is that? You might ask,
(01:01):
Calgary is about 60miles for you Americans,
east of the foothillsof the Canadian Rockies.
I would say that there are two interestingthings that people would be aware of.
Number one, Calgary is wherea lot of the TV series,
the last of us was film. Alot of people don't know that,
but I'm hearing a lotof references to that.
(01:22):
Not that I've ever seen that any ofthe shows yet, but it was filmed here.
Secondly, Calgary was also thehome of the 1988 Winter Olympics.
The field I work in, I work in technology,
I work as a CIO for some organizationsthat are usually not for profit
organizations and I workas a senior strategist
(01:43):
slash program director and sometimesproject manager in the for-profit world.
At the moment,
the organization thatoccupies most of my time is a
not-for-profit called theCalgary Counseling Center.
And I would also tell youthat my most fantastic job
slash work experience was as a dockboy when I finished high school
(02:05):
in Quebec. You finished highschool in grade 11 and yes,
I worked at a yacht club forthe summer. It was a fun time.
We're here today to really discussthe challenges organizations,
apparently doesn't matter the scaleor breadth of an organization,
the challenges they have withdigitizing their organization or
(02:27):
having a strategy in any ofthat to get technology done.
Neil is here and he's gonna tell ussome kind of behind the scenes what he's
seen and things that he'sobserved. So Neil, tell me,
what's the saddest thing you ever sawin an organization just does was not
doing their technology? Well.
The saddest situation that I'veseen happen just recently in,
(02:51):
in the last six months where I wasengaged with a organization trying
to do what I do, um, a for-profitcompany, very successful in what they do.
When I asked the CIO actuallysuggested that it was actually
time for them to put a stake in theground and state what their IT strategy
was. I was told that now's notthe time to establish a strategy,
(03:14):
which you could have knocked me overwith a feather because it explained
everything in, in one sentence.
It explained the chaos that wasoccurring at that organization and why
it took so long for everything toget done and why everybody questioned
everything.
So if you're getting pushbackfrom somebody at that level,
at the command level that says,
we don't have time to worryabout a strategy right now cuz we're too busy being
(03:37):
us, you're just the tail wagon, the dog.
Yep.
It was astonishing is the onlyword that comes to mind.
It's the only word because, youknow, we all have grand ideas about,
hey, we should have ahybrid cloud solution.
We should be in Amazon only.
(03:59):
We have facilities across North Americaand I think networking should work
like this. And somebody says, oh no,
I think networking should be workinglike that. And then somebody says,
why do we still have handsetsand why are we still running,
you know, traditional telephony,why isn't it all integrated? Well,
they're all great questions, butwithout a strategy in place. Hmm.
(04:22):
There's no answer to any of thosequestions and there's no direction to.
Go. I would have to assumethough, the strategic piece,
you don't have to be hugeto have a good strategy. Oh.
Hell no.
You don't. Right? Uh, and so, I mean,
and we're not talking about 400 pagesand a three ring binder. I mean,
if you had one pager would be helpful.
In fact, if you can't, in my view,
(04:44):
if you can't summarize your strategy inone page, I don't care how big you are,
if you can't do it in one page,
you failed because the rest is thedetail as a strategy. You can say,
I am not buying one more serverever again.
Right? That's a strategic statement.
Whether you host your iron in Azure or
(05:07):
Oz or Oracle data centers is irrelevantto that. Yeah. That's tactical.
Yeah. Putting your stake in the ground.
I could tell you that one strategythat worked for some organizations for
smaller organizations, especiallythe not-for-profit world,
was a long time ago when we said wecan't buy PCs, we can't afford them.
(05:28):
PCs are a thousand in Canada, a thousanddollars at the time, plus a monitor.
Boy, oh boy, that's expensive.
Why don't we just buildthat big PC on the server?
And everybody gets a thinclient and thin clients,
you just run till they break and youthrow 'em away and you put in another one.
That was a strategy I didn'tcare about the brand of server,
I didn't care about thebrand of thin client,
(05:50):
the clients cared about was how thehell are we gonna run this organization
in a cost effective manner and stilldeliver everything we need to deliver?
Yep. Right. That's the big question.
That's the one that you have toanswer first. So like I said,
if you don't have astrategy stated in one page,
you haven't thought through your problems.
What is the biggest challenge for anorganization right now that granted you
(06:14):
just named a big one, if youdon't have the rudder on the boat,
you're just floating along aimlesslyand taking whatever hits you get.
If the rudder is made of the strategy,
then what direction shouldcompanies be looking at?
Now I I say that because the futureproof of an organization is a costly
measure. Regardless, the resource costis always gonna be there, so suck it up.
(06:38):
It's, it's mm-hmm.
So don't be shockedmm-hmm.
when the next price tag comes out, becauseyou know what? It's the next thing.
So you either gonna getalong or you're not.
What keeps the boat goingin the right direction?
Well, that's the leadershipand governance question.
I think that's what you're asking.You've set your strategy right.
That means that you've pointed, uh,
(06:59):
and it's kind of a nice way to talk aboutit because I'm, I love going sailing.
I go on an annual sailing tripwith some friends. Perfect.
You've pointed your boat, takena heading, and off you go, well,
whose job is it? Is it the Helmsman'sjob to steer that heading? Not exactly,
that's your staff,
but do your staff understandwhy you are on the heading
you're on?
(07:20):
And what controls have youput in place to manage so that
we don't drift off of thatheadache? Uhhuh
And some of it is reallykind of mundane stuff.
Some of it is all about who authorizesthe purchase of capital assets,
the CIO or equivalentin your organization who
is responsible for technology.
(07:42):
Somebody can purchase equipment withoutyour signature and without your knowing
about it, you're in a bitof trouble. Right.
Because you won't be able tohold that heading. Right. I mean,
I'm boiling this down to somereally simple issues. Yeah.
But I've seen it happen.
We all read DeLorean's book abouthow we built the factory at GM and
finally had to go to the boardfor approval for a smoke stock.
(08:04):
It was the one item that exceeded the
when he was at gm. Well, it's kind oflike that, right? Except in technology.
You need a really firm hand on the redder.
And I've been with someorganizations where it was exactly so
that the strategy was stated. Okay?
And we all knew we wereliving in Azure from then on.
(08:27):
When somebody came and said, we have tobuy all these servers for such and such,
and they have to be on-prem, theanswer was, go jump in the lake.
That's not happening.
There were people in the organizationwho had a signing authority that could
have authorized it.
But it's all aboutmaking sure as the leader
of technology in your organization,that you have control over these things.
(08:49):
Yeah.
They really create other moreimportant problems to resolve.
It goes like this. In one conversationI had this year, somebody said to me,
well, we're going Amazon. Everybody'sgonna be in Amazon. And I said, oh, that,
that's great, but how, how didyou come to that decision? Well,
just because
that's not a great way to cometo a decision because this is all
(09:13):
dependent upon what business applicationsyou're gonna be putting up in those,
whether it's Amazon or Azure orwhatever. In the direct comparison,
if I talk about Amazon versus Azure,
some applications lend themselves reallywell to the Amazon environment and
not to Azure and possibly the other wayaround. So look, where's the inventory?
(09:33):
You have broken a mental sweatand figured out what you have,
what you're going to be using in thefuture, and where is the best home for it?
How do you pick vendors? In the casewhere one of my clients said, yep,
it's all Azure all day long,
when we went to pick applicationsor add new ones or replace them,
the big question was,
(09:55):
do I have to spin up some virtualservers in Azure or can this
be run platform as a service orsoftware as a service? However,
however you describe it, which is wayless costly than spinning up servers.
And so suddenly, you know,all of the things being equal,
you were dealing with vendors who wereselling platform as a service and not
(10:16):
software,
traditional software that you had toput on a virtual server somewhere.
You've brought us to a juncture,
and I wanna interject here becausenow we're talking about operations,
now we're talking about functionprocesses and operations of whatever the
organization's supposed to be doing.
The C T O or c o haspart of this effort to
(10:37):
at least stake a claim in hopefullydesigning a network infrastructure,
enterprise solution that matches orexceeds whatever the requirements are
and or future proofing of theorganization's work processes.
How do we get there first?
That's not all on the CTO to figure outbecause somebody in operation's gotta
be, oh, wait a minute, you know, thesales force is going this way and, uh,
(11:00):
year two, and how do youmerge all of that mess?
Yeah. It's, it's, it's a layered problem.Go it, it kind of goes like this.
When you're a larger organization,I'll bet you that, well,
I know there are a lot of organizationshave a pretty heavy duty investment in
Citrix farms, for example.
Some other organizations have a heavyinvestment in Microsoft Hyper V on
(11:22):
prep, right? As an example,
one of the things that you come torealize is you're going to bump into
an accountant who says,
we haven't extracted the value yetof our investment in those things.
So it's not time to move. Of course,
being the classicallytrained economist that I am,
(11:43):
I listen to those arguments andI go, that's yesterday's news.
We don't make decisionsbased on sunk costs. Yeah.
People have this emotionallyattachment, I can't explain it way,
it's not rational, it's emotional
we spent a million and a half dollarsbuilding at that Citrix farms.
Are you telling me we're throwing itaway? And the answer is
(12:04):
probably.
Because you're not going to generatethe returns you want until you change
course. So, so you run,that's a classic example of,
of what you see. You know,when covid hit as an example,
there were companies who hadalready invested heavily in cloud
technology. Everything was either inAzure or about to be in or, or Amazon.
(12:26):
They were somewhere. Access by employeesto those systems was unaffected.
They could cope. There were a lotof companies who had Citrix farms,
for example, that were oversized andtheir staff had no trouble working
remotely.
And then there were some where theskid marks to prevent them from going o
you know, around over the cliff asthey went around the curve were,
(12:48):
were stupendous. The pressuresthey put on the vendors. You know,
I need more servers, I needmore there. And of course,
right away it's the accordioneffect in a cartoon, right?
One thing after another slams into yourrear end as you're trying to figure out
how to negotiate what wasunthinkable became deal with it.
So that's a classic example.
(13:09):
I think another kind of examplethat you'll run into is,
let's get rid of this and letsomebody else run it for us.
And I'm gonna pick on my favorite
And that's the help desk because, andthere's some big names out there, right?
Who do help desk and boy oh boy, theywant you to outsource everything.
(13:30):
They wanna deliver your,your PCs to your desktop.
They want to keep them updated.
They want all this business and theywanna respond to help desk tickets.
A lot of organizations buy intothat and think that if they lay
off all of this help desk staffand let somebody else do it,
that they're suddenly gonna save a lotof money. You know, that's a mixed bag.
(13:52):
I think some organizations havedone okay with that strategy
and many others have had to go, well,this didn't work. We have to hire people.
Back. Well, there's a qualityproblem. And a lot of that,
you look at the dollars and cents andsomebody's on somewhere with a slide scale
says, Ooh, look at the savings, that'sgreat, let's do that. Oh my gosh.
But then the quality goes to thefloor and you got angry customers now,
(14:16):
so that impacts sales and la la,la. Like it just keeps going.
How does an organization, now, we'vebeen talking about the big dilemma,
the big technological elephant in theroom for all organizations that have to
face and deal with, if they'regoing to progress in the future,
how does an organization decideif you're gonna hire it out
(14:38):
or you're gonna hire in somebodythat has that brainiac or
that technology powerhouse tocome in and be your employee
or outsource it? I mean, it's just, it'sgotta be a, a tough road either way.
Yeah. It's not simple. Ilike to look at it this way.
There are a few deciding factorsabout whether something stays,
(15:01):
something like help desk stays in-houseor not. One of them is culture,
because culture trumps everything.You know, the old saying, man,
mark Andreesen said softwareeats everything and he's right.
Except that culture eatseverything else.
including software
Is the problem at hand inimicable tothe success of your organization, right?
(15:25):
So it not, in other words, you can'tcost it, you can only sense it. Yeah,
of course when the accountantsget involved, they only know cost.
They don't know sensing at all.
But you have to digseveral layers deep into
the working innards of anorganization to start figuring out why
something cannot or shouldnot be separated. Hmm. Uh,
(15:47):
a lot of it is a misunderstandingamongst the leadership of
the service-oriented nature ofthe business they're in. Okay.
If they don't get thatand if they don't care,
or if they service is notpart of their culture,
then suddenly these kinds of systemsbecome easy candidates to punt. Mm-hmm.
(16:09):
I always like to ask is, okay,culturally we know what we need to do.
The next question I ask is, let'ssuppose that we outsource something.
Everybody understands what aracy chart is, right? Or mostly,
and you've heard it by different terms,
RA r aci or are A S C I even forgetwhat the S stands for when they do that.
But who's responsible? Who's accountable?
(16:32):
Who do we consult withand who do we inform? Yep.
That's what those letters stand for. Okay.
Really big in the project managementworld, we all, we, we live by that chart,
right?
It's one of the first things you do toidentify who are the players involved in
this. Take that up afew notches, you know,
cuz you can have many peopleresponsible for something.
There are a bunch of doers, right?
(16:52):
But only one person canhold an A only one, right?
Because that's accountablein the hardest look,
the board's gonna look to the person whois accountable and say, this was you.
Why did you do this this way?
Or some director lower down or manager,
why did you do this? Why did you wantthis? You are being held accountable.
(17:15):
So when you outsource something,
you can't outsource the A ever.
And companies just sort of slide bythat issue every time. Like they,
they just don't kind ofbreak a mental sweat over,
I'm making this decisionto outsource this thing.
Help desk being the one of themost common. Is it the right call?
(17:35):
I'm accountable for this. Do Ireally understand the implications?
Because you know,
one of the things that happens is whenthe outsourcing discussions start to
happen,
your organization is typically floodedwith a bunch of people from the company
who's gonna do the outsourcing and they'reattending meetings and listening and
trying to learn and allof that's wonderful.
(17:56):
But suddenly when the court is cut,
those folks are gone and theydon't want to understand anymore.
All their motive istheir only motive is to
deliver the service at acost that's less than the
revenues they're charging for.That is their only motive.
I don't think there is anyincentive program in the world that
(18:20):
can be reasonably calculated. Oh,
to motivate the outsourcerto provide better service
for a bonus. They think theycan, but I don't think they can.
I just, maybe I'm just notcreative enough. I think that's a, that's a big wish.
A big.
Dream sounds like a challenge.
And I would think there's probably aprofit share kind of concept that could be
(18:42):
tagged, but I don't understandhow you would rate something,
especially like helpdesk. How doyou calculate sales to help the,
you know, I, I don't know. Butyeah, you're, you bring up.
A, you know, you can, let's.
Skip over the help desk cuzthat's a good place to start,
but let's move up the ladder now.
So how does an organizationget that function of a CTO C
(19:03):
or at least somebody that's accountablefor the technology of an organization?
Should they outsource thator should they hire on.
It? Again, it's a multilayered problem.
When you talk aboutoutsourcing your technology.
If you're talking about goingto somebody else's data center,
cuz you don't wanna run the floor space,
you wanna own your serversfor whatever your reasons,
(19:24):
you wanna own your servers, but you don'twant to be the guy running them. Well,
okay,
there's lots of hosting centers aroundand you can do that and there's a whole
bunch of costs that comeinto play. You know,
you may not have the real estatein your building to host it.
You may not have the power to deliverall the air conditioning required.
(19:45):
You like all of these things, right?
And there's lots ofcompanies like that around.
If the belief is that you have towrap your arms around your servers and
manage it that way, that's an easycall. But the next question is,
well who's servicing those machines?
Who's planning for upsizing computers?Who's planning for maintenance outages?
Who's planning, like suddenlythat's a whole other deal.
(20:08):
And that's sort of the IToperations side of the house. Yeah,
maybe you could outsource that tooand maybe you could do that, you know,
less expensively than doing it yourself.
My impression is if your business isreally steady state and with not a lot of
change, maybe you can get away withthat. But we've all lived with,
and I think this was the biggest sellingfeature of going to either Amazon
(20:32):
or Azure. The biggestselling features are,
well I don't have to spend$2,500 on a failed desk
I, yeah, my machine is neverobsolete. If suddenly I,
we gotta jump in business, I throw moreRAM on it and I throw more disc at it,
I can't even upgrademy CPUs. But you know,
in 15 minutes lateryou've got capacity. Well,
(20:54):
for a lot of companies that'sjust huge. That is beyond huge.
And not only, not only is it huge onthe upside, but huge on the downside.
Oh you wanna scale back,
scale back and there's nothing in anyof these contracts that you signed with
these folks. There's nothing preventingyou from doing that. In fact,
it's encouraged. It'spart of their sales pitch.
(21:15):
And what I find to be themost interesting part of all
this, these are what Icall the knock on effects.
You've made this decision to go thisway and you understand as a senior
this is,
there are all kinds of hidden benefitsor knock ons that you can't articulate,
but they're there. A lotof companies don't see it.
(21:36):
One of the classic conversations I had,
that was years ago when I washelping an offer profit migrate to
Microsoft mail, exchange mail onlinewhen before it was called Office 365,
but the product was there and I wassitting there with the CEO of an offer
profit,
the IT services vendor who wassupporting their existing server
(21:57):
infrastructure.
This vendor was just shocked when Isaid we're gonna lock stock and barrel,
it's, it's going over to Microsoft. Andhe said, why this is working perfectly?
And I said, well that's not thepoint but yeah it's, it's free.
And I said, no, it's not free.He says, oh yeah, it's free.
(22:18):
And I looked at the tech, right?
The service tech who was sittingthere with the vendor, I said,
how many hours a week do you spend Karenfeeding on this exchange server? Oh,
one to two hours a week. So it'snot free. Right? It's not free.
And they're like, but don't I have to dothat if you go to, no you don't. Right?
So that's a tiny, tinyexample of what's involved.
But think of it on a much larger scale.
(22:40):
And what I think is happening in the techworld that people are really starting
to take advantage of isif I remove all these jobs
around what I call serveroperations, right, server expansion,
memory power, a, all of those things,
what do I get to spend my money on? Andthe answer is higher level functions.
(23:02):
You know,
suddenly it starts to sound likethe job of a server engineer is
going away. And maybe it is, I don't,
but maybe it's actually turninginto a much more knowledge,
inten intensive kind of job where younow have to have the skills to manage a
virtual environment. Yeah. Which bythe way is no small thing, right?
(23:22):
Somebody has to know how todo that and and done wrong.
You're just as exposed security wise orworse than you ever were with your stuff
on premise.
We can pretty much bet that complexitywill continue to expand in this realm.
But also capacityexpands as well as things
change, capacitieschange, processes change,
(23:43):
abilities change.
I think keeping the surfboard going inthe right direction. Another nautical,
let's stick with an nautical.
If you're on a surfboard andyou're trying to ride that wave,
you gotta keep judgingand moving and adjusting.
And the classic agile mentality ofjust trying to stay on the board.
But here again,
(24:04):
I'll ask how does anorganization help themselves?
Let's say we're talking a small tomid-size nonprofit that has been
poking along and doing great for 20 years,
but they're really at a scale executionpoint where they really gotta start
their strategic plan on technologyand looking at it serious.
(24:25):
Cuz now they're starting to really grow.
What's the first and second thingthey've gotta have in place other than
strategy? Well we've nailed that.
Some minutes ago I mentioned governance,but maybe there's a better word.
Maybe the word is discipline. Back when,
when I was a young lad startingout in this business
(24:45):
last week.
At the yacht club. Yes.
Oh, PCs hadn't been invented when I wasat the odd club, I gotta assure you.
But you know,
the kinds of like best practices thatwere drilled into us in those days was
users don't get to pick products.
They get to tell us what theirrequirements are. And you know,
(25:06):
that's a very big statement,very big and very impactful.
The reason why it's impactful is,
and again I have the livedexperience of sitting with
a C E O of a not-for-profittrying to explain to this person
that there are two applicationsin their portfolio that have to be
(25:26):
dumped. And the reason why iscost, they're just too expensive.
And the first pushback I gotwas, but we like these tools.
Okay,
I agree you might like them but youdon't know what you're also going to like
when you change. Right.
And if I could promise youthat we could carefully
(25:47):
detail all the things you like,
all the requirements in other wordsthat you're meeting and maybe the ones
that you're ignoring that you know youhave, that you're not dealing with.
And we found something that was, Idon't know, $30,000 a year cheaper.
Would you be interested?
And I have had a range of responsesto that question at times.
(26:09):
Hmm. One organizationjust was flat out, no,
I think we're just gonnastay with what we got.
Which to me was almost insultingbecause this was an organization that
was not, what's the word I'm lookingfor? Well, not social enterprise.
They had no invoicing going on. Theywere dependent on grants and donations.
So what you're telling me is thatyou don't steward your donor's money
(26:30):
as well as you think you do becausethere's a solution for less.
And I, I've had that same issue.
In their case it was two applicationsand one of them was, you know,
I think it's time to put this one oneto sleep. It's it's end of life anyway.
The vendor's gonna changeit for something else.
You might as well bite the bulletin your planning. And again,
(26:51):
your migration won't be that hardbecause you're not invoicing,
you're not a social enterprise. This isjust all about managing what you got.
It was the same kind ofpushback. It's like yeah.
Even though you put thenumbers in front of them,
you can show them line for line whatthey are spending and going to spend.
Maybe they'll do it and maybe theywon't, some jump all over it. Right?
Don't get me wrong, someare quite rational about it.
(27:12):
But in terms of how do you get there?First you have to start with culture.
And in this case, the culture is, listen,
I wanna know everything aboutwhat you need for your job.
Like everything don't hold back.Start with a blue sky, right?
Clean sheet of paper. Tell me whatyou need but you don't get to pick.
I've actually had those same discussionsin the for-profit world and the expense
(27:36):
was a lot larger and the clientskept coming back to me with,
we want a product like such and such.
And the product they wanted thatthey were comparing themselves to,
what they thought they wanted wastechnologically and security-wise and
feature-wise unfit for what they wanted.But they liked that wizzy interface.
They thought that was really cool.
Cool. We love it. Yes.
(27:56):
And how am I gonna explain to these folks?
I could go head-to-head and feature forfeature and show 'em that there's no
match. Okay. And Iwould get nowhere. Yeah.
But the way you I succeeded inthat conversation was to figure
out, okay, here's thesolution we need today.
I've got something that works for todayand let's postpone that other decision
(28:17):
until a little later on. Yeah. Right.
And they went with that cuz therewas no time. I had time on my side,
not theirs. I had to execute. The secondpiece of what I had to do was again,
start gently, gently pushing the mantra,
not directly from me but fromseniors. We need requirements.
But there are so many othercomplexities around security and
(28:39):
supportable technologies that itwill make the final call. Yeah.
But as long as we meet yourrequirements, you're good to go.
And that was hugely successful.
And I don't think that organizationhas ever looked back and said, okay,
now we're gonna go to that other,
they haven't looked at that
(29:00):
and let's get back to that. Wehad a friend that used to say,
let's just let that rough end drag for abit. You know, just, just don't, let's,
let's just let it and we'll,we'll come back to it.
And sometimes it just evaporates allby itself and you didn't have to do a
thing. Right. But like you say,
when you get emotions involved andpeople got pushback and you're like, uh,
you know, and now you gotcultural issues where people are,
(29:23):
have expectations of what they think.
I used to work in a line of businesswhere sales was the primary,
what my primary job was.
And they taught us before weeven sold that we had to help the
buyer get on the road to the sale.
And that our job was tojust ask questions because
their concept of what they thoughtthey needed was either driven by an
(29:47):
ad for something and ohwow, that looks great,
but they don't know all the details.
So you're just kinda like playingcolombo and just, well so, uh,
you're just asking all these questionsand you're helping them get to a
solution without you helping them getto this. Just kind of quiz 'em and.
Oh, I totally understand. I mean it's abeautiful, let me, lemme tell you. Good.
(30:10):
The Colombo analogy isone that I actually,
I used to mimic the guy exceptwithout the trench coat
And I recall very clearly when,
because I also was in sales at one pointand I was taught you're here to solve
your customer's problems and if you'renot here to do that, you're not in sales.
Like you're not gonna win. And I,
I was running this project fora very large insurance company.
(30:34):
We were trying to build out this,
I don't wanna leave anyidentifier information here. So I,
we were trying to build out a solutionbecause of a major change in the
way they conducted business. Okay.
And it literally meant crawling throughtheir chart of accounts on the expense
side and getting an explanationon each line. Oh line, okay,
(30:54):
where do these numbers come from?What's the process? Right? Yeah.
Line by line before we couldfigure out what to wow do with it.
Cuz it could be many sources.Right? Right. You know,
I had a great team and I would literally,I'm a slouch in a chair anyway.
This is what I naturally do unless I'min the racing position about to go for
the kill.
Mostly I'm listening and I'm slouchedback and my eyes are literally half closed
(31:17):
and they said X early on in the,
that day's conversation and15 minutes later somebody said
the opposite on a different lineand suddenly I'm doing the colombo.
Wait a minute, I got one more question.
Hold on here. Hold on. Not cuz I wantedto catch them out. No, that like,
it's not, it's not about that. No.Yeah. But what you want to do is,
(31:40):
are we all on the same page here?
Because I can't give you a solutionif you're telling me X and y coexist.
They can't. And that, thatwas the classic actually.
And I remember after thatmeeting my colleagues co going,
that was the best colomboin imitation ever.
It's effective. You know,
I think it really disarms the peoplearound the table because then you can get
(32:02):
more towards the actual essenceof the mission or the problem set
or you know what I mean?It just kind of Yep.
Deflates some egos a bit youcome off with. Yeah. Oh, I,
I don't know O would, yeah. Let's,let's wrap today's discussion up with,
we've talked about technologyin a very grand scale.
We've talked to it in application andhow an organization is challenged with
(32:25):
the internal versusoutsourcing kind of concepts.
If you had to sit down with a 30something that's gonna do a startup,
what would you tell them reallyas solid advice going forward?
Because they don't know yet.It's an untried at this point.
Get back to that strategic cause I knowyou're gonna say you gotta build the
rudder first. You gotta know whatthe hell the direction we're going,
(32:47):
but what would you give them as a on thespot today you're at the bus stop and
you're just talking to this kidand boom, you're like, you know,
the thing I would not doand the thing I would do is.
Yeah, okay. Um,
it doesn't matter to me whetheryou're talking about building out the
infrastructure for company operations oryou're building out the infrastructure
(33:09):
for a company idea, right? Likesome tech idea doesn't matter.
Which my first piece of advice would be,you're not ever going to buy a server.
You will pick somebody's hostedservice and you're not gonna pick
Joe blog service from around the corner.
You're gonna pick one ofthe majors, Microsoft,
(33:29):
Amazon, Google, Oracle, Dell.
One of those guys isgonna have it for you.
Cost is a big factor and you shouldbe able to price this out so you know
exactly what you're getting into.That's the beauty of these things.
The one thing that you can't reallycost are transaction volumes because
a lot of stuff you do, you'rebuilt on the transaction volume.
(33:51):
So that's the first thing I would do.
My direct experience withAzure is detailed enough now
that I would say youbetter also establish a
very traditional chart of accounts fortechnology in your accounting system.
And the reason why you want to do thatis because that is how you're going to
(34:13):
know what you're spending and whichapplications you're spending it on. Right.
Down to transaction movements,
integration costs for one of my clients,
my revised chart of accountsfor it is listed out by
major application. Soyeah, there's the whole,
there's a bucket for Microsoft 365but it breaks it out into security and
(34:35):
office applications for example.There's sub-accounts there.
Interesting as examples, whenI look at application support,
I know who my vendors are that supportthese applications and they get
posted into accounts andsub-accounts unique for that
application. Then when I look atmy subscriptions from Azure, okay,
(34:55):
what's going on in Azure,
they break out the same way so thateverything posts into accounting
in such a way that if I'm lookingfor my costs for client relationship
management for example, I knowongoing support costs are,
I know what the development costs are,
I know what the subscription costs arecuz it's running as platform as a service
and Azure like,
and I can summarize it that way andwhich is really important because one day
(35:20):
somebody in your organization'sgonna ask you mm-hmm
how much does X cost? Andyou know, the old saying,
you have to know your numbers. It'snot hard. This took me, you know,
this is a pretty complicated organization.
It probably took me offand on three weeks of
experimentation to figure out exactlyhow to do what I wanted to do.
(35:40):
So it's not hard, but if youdo it from the start with, uh,
this is the way we'regoing to do it later on,
you're golden because you can answerthose questions and nobody can tell you,
oh, your help desk system is tooexpensive. Exactly. Oh, hell no. I know.
Exactly. You know, what,are you kidding me? That's,
(36:01):
that's not where we spend our money.
It's interesting you're bringing thisup because it sounds like there's a
challenge for most organizations,
CFOs to know all of that levelof fidelity you're talking about,
right? Because I,
I assume that there's a capitalexpense somewhere and you're like, oh,
we gotta spend $60,000 on X, wegotta up, okay, so the C of, okay,
(36:24):
we got that, that budget lines in there,
but I can't imagine they've goneto all these little teeny details
of tracking all these little minutethings that add up to the big number
because one,
nobody's probably actually followedthe trail down like you did. And two,
the expectation's probably not thereeither. You know, it's like well,
(36:46):
well it's a monthly service feeand you know, or transaction Yeah.
Easy to overstate and under show.
I I hear you. And, and the answer is,
I'm making it sound maybesimpler than it really is. Yeah.
For smaller companies, youknow, this is very easy to.
Do. Yeah, yeah.
When you're a big company and you have3000 applications in your portfolio,
(37:08):
you know, you don't want 3000 line itemsin your chart of accounts, right? Just,
just for piddly applications.Yeah. That don't cost very much.
So you do end up with like a commonbucket for a lot of things. Okay.
No question. Okay. Um, but some ofthat is actually tied as well.
this is what's so crazy. Well,
what mechanisms are you actually goingto be implementing to accept invoicing
(37:31):
from your vendors? Because ifyou haven't automated that,
well you're still in the soup, right?Yeah, yeah. And don't tell me, well,
you got a fax or an emailaccount to pick a piece these in
invoices, that's no good, right? Yeah.
Like that's the news of20 years ago, you know,
and I don't care if it's blockchain orif it's REBA network's kind of solution,
(37:55):
but you gotta do something right topick that up because nobody should be
touching those thingsfrom the data entry side.
Somebody has to be reviewingit to make sure it's right.
But nobody should be hand bombinganything that when you're a large
organization that that's hard,right? That becomes a problem.
But with a huge payoff.
(38:16):
Don't think for a minute that that's oneof those problems that should just be
kind of, well, it'll be, youknow, we'll just hire clerks.
Hiring clerks isn't the answer
managing points of data can get very,
very high if you don't figure out its life
from beginning to end. We are inthe technology business anyway.
(38:39):
If we can't figure out how toautomatically move that data along,
we don't deserve our jobs.It comes to that. So the,
that's the advice I would givesomebody. You actually need a strategy.
You actually need a CFO whounderstands something about technology.
But by the way, your c o should not ever,
ever report to your C F O. Don't, don'tbe that, don't do that. That's like,
(39:03):
I don't know. I, I'm, I'mtrying to think of, uh,
an analogy that would makesense and none comes to mind,
but there's such vastly different rolesand one is not subordinate to the other.
They are complimentary. You know,
the old days where CIOs reported toaccountants was because, well, you know,
that was the biggest line item in thetechnology expense and the accounting data
(39:24):
was the biggest chunk ofdata. So sure that made sense.
You the accountant owned all that crap.That's not true anymore. And in fact,
the fastest way to not be able toextract value from your financials
is to give it to a traditionalaccountant who has no idea what you want
as a manager, as a director for amanagement report. Right. They don't know.
(39:45):
Yeah. And, and do they want tolike, the bigger the organization,
the less they're inclined toeven want to know about that.
That's a totally differentpatch of problems. So you're,
you're infrastructure had better be setup in such a ways to accommodate both
those guys. Right. YourCIO and your c Thanks.
For sharing all thisgreat and nautical advice.
I appreciate the technologicaladvice and the inside mind
(40:08):
of Neil Wagner in his vastexperience and doing lots of things
and I appreciate it, Neil.
Hey, when this is always fun to be withyou. Always fun. Thank you very much.
Take care.
You have just finished our latest becauseyou need to know a public service of
Pioneer Knowledge Services.
(40:28):
Please join us on LinkedInand find us@pioneerks.org.
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