Author: Rob Grant, Vice President of Technology, Crocs
Striking the right balance of employees, managed services, consultants and contractors within your IT organization.
One of the challenges of any IT team, unfortunately, is that sometimes we are seen as overhead who is only around to fix stuff when it breaks. A former “unnamed” CEO used to refer to IT as “scum-sucking overhead.” In many cases, it’s expected that the technology in a company should function like the lights in the office, where you flip the switch and it should just work. The only time that the users actually see IT is when something isn’t working as anticipated. Don’t let that perception bring you down though, because we are more than just fixers; we are innovators, we are differentiators and when things are done right, the work that IT does helps enable the success of our companies, and drives value in a variety of ways.
We have shrinking budgets and increasing complexity with our technologies, all compounded by the influx of dynamic security threats that ebb and flow with complete irregularity. This isn’t “your dad’s IT” anymore. So here is the challenge that we all face: how do we build an organization that can properly architect, build and run such a dynamic environment? In the “old days” most organizations would simply hire employees to fill all the roles that were needed, and use contractors in certain roles to handle capacity fluctuations.
In today’s world, that isn’t always a viable solution. A competitive job market has driven up salaries and reduced the available skill pool we are able to fish from. The effort and cost to retain valuable employees have climbed, and as technologies transform, once valued skillsets can become yesterday’s news. So how can you build a team that is talented? An IT organization can strike a great balance with managed services, contractors, consultants, and full-time employees (FTEs). The key to success is having a strategy that maps back to the organization’s goals. Here are a few tips that I use when building the IT organization for a company.
1. Decide what you want to be really good at
Your business will help you determine what you need to have as a “core competency” within your organization. You realistically can’t be great at everything, so you need to decide what it is you need to be really good at and where you need to be adequate. You also need to know how often you need a certain capability – 365 days a year, or 2 months out of the year, for example.
I approach many aspects of team building through lessons learned playing sports. For instance, if you are a football team who pass the ball and score a lot of points, you would build your team with a focus on having top talent at key positions like QB and receivers. You might then find lower tier players to fill in at less critical positions, and you might use the lowest priced option for a kicker because you won’t use them very often. On the other hand, if your goal is to be a strong running team that rarely passes, you might invest more money on some running backs and defense players. And, a kicker may be more important to you so you could spend more there.
In business, it is the same thing – the business defines the goals and needs, and IT finds a way to support that vision. At Crocs, we need to be excellent in planning, analysis, design of shoes, distribution, and e-commerce. The security of our IP is critical as well as our ability to take credit cards and protect our customers PII. Because much of what we do isn’t mission critical (remember we make colorful/comfortable shoes for a living), we may not need to be the world’s best IT Help Desk or be the best “patchers of servers” in a data center. As long as we are doing an adequate job at this, we are meeting the business expectations.
2. Understand what each “type” of team member brings to you
Each type of team resource – managed services, consultants, contractors or employees – bring different capabilities and have different motivators for working with you.
3. Find the right mix to meet your objectives
The culture of your company, along with the drivers the business defines, will help you determine how to build the team. Some companies just don’t like the concept of offshore services or having another company supporting their users, and they like to have the atmosphere created by employees in an office working together. Other companies are very headcount constrained or have a lot of change in the business that drives the need to increase/decrease spending and capacity quickly and frequently.
You need to decide what you need your core competencies to be internally and where they can handle variability in services. This will help you decide where to spend your money. I try to budget monies by function based on priority, therefore I can look at various options to deliver that service and the impact on my business. For instance, if I have a $20m budget and budget $1m of that for the IT Help Desk, I can look at the various ways to spend that money to get the most value for that investment.
At the beginning, I think that the core of any IT team always starts with the FTEs that you have. They will set the standard for “how” the organization will work, then you can determine how to build around them. Going back to my sports analogy, how a football team approaches filling positions translates well to the business world. Some teams go after a few very high-priced all-stars, blowing through their budget and then must go after average players to fill out the team. You can’t afford to have all-stars at every position, even in business. Other teams will decide to spread the budget more evenly, and staff each role with above average talent across the board but no real superstars at any one position.
I like to approach hiring a core group of FTEs by making sure that every person that we hire is really good in at least one thing that we need. They don’t need to be great at everything. For me, the absolute minimum I would look at for FTE roles would include ones where I need to rely on key decisions being made on processes, technology solutions or spending money. I would staff FTEs in roles that have regular interaction with key users on a business analyst level, or roles that need to have a deep understanding of the business and how our technology supports them. I would also staff FTEs in roles that make decisions or have access in areas that include security, compliance and Intellectual Property for the business. After that, I would look at my options and where I need levers.
Consultants, Contractors and Managed Services may provide an easier lever you can pull when you need to make quick or frequent changes to the team. If you have a high percentage of FTE staff doing all this work, that means you may need to lay people off or restructure your organization and it becomes messy. In transition time, a business can probably operate around 30% staff and 70% consultants and managed services. A very stable environment for a business that is not transitioning could be the opposite, and it still would give enough options to reduce costs if needed without layoffs.
On the other hand, you may decide that FTEs are the right solution for you because your environment is stable, you have a need for people to have ownership and commitment to your company and you want to instill your culture into the organization as opposed to another company bringing their culture into your company with their people and service.
4. Prepare the business organization for your approach and strategy
This is about setting expectations within the organization; for instance, clearly communicating that if someone has an IT issue they should log a ticket and they should expect a response within 1 hour. Or that when they need to work from home, they will need to use a secure connection with 2-factor authentication in order to protect the company’s technology. If you don’t set clear expectations, people will set their own expectations for your performance, and their expectation will always be higher than what you can deliver. Figuring out a method to share business-focused metrics with the users can be helpful for their understanding of what is being provided, and what normal expectations should be.
To summarize, building the right team that delivers the right level of service for the right amount of money can make your job easier, but you need to have a plan mapped out, and you need to work the plan to ensure the ultimate success of your organization.