Many IT departments walk a fine line between being a needed cost center, a necessary evil, and an absolute money pit. In a few rare occasions, they’re able to deliver enough value to become profit centers(Sony Vaio VGN-FZ battery).

One of the key factors in determining whether an IT department is delivering ROI has to do with the development efforts occurring within that department. Here are 10 of the most common ways IT departments waste money on development(SONY VAIO VGN-FZ4000 Battery).

1: Communication problems

Communication issues are one of the biggest causes of project failure. These issues are magnified with internal projects. Just because the “customer” works in the same building and has their paychecks signed by the same person as you doesn’t mean there won’t be communication problems(Sony VGP-BPS13 battery). In fact, internally facing projects are often worse than projects for paying customers because internal customers don’t have to adhere to a contract, and no tangible value is placed upon the work(Sony VGN-FZ150E battery).

In these situations, there is little incentive for the customers to work well with you, and if communication breaks down, they complain about how “IT is stonewalling us.” The result is wasted time and money due to things being delivered late, delivered wrong, or not delivered at all(Sony Vaio VGN-FZ18M battery).

2: Process issues

To the rest of the company, internal IT is like the nephew you can order to come mow the lawn when needed. This is no way to run development projects. All too often, the IT department eventually tires of it, tries to establish some sort of process to put on the brakes, and gets initial buy-in from leadership(Sony VGN-FZ61B battery). Then, when the other departments think “IT is stonewalling us,” leadership changes course and rescinds their buy-in without telling IT. The next thing you know, every minor meeting becomes a shouting match about who is adhering to what process or how the process is not working — even though the meeting might be about the feature list. Broken, ineffective, and unenforced processes are a major waste of time and money(Sony VGN-FZ180E battery).

3: Refusal to go live and iterate (aka: insistence upon perfection)

How many times have you seen a project that is 99% done not get deployed because one of the customers isn’t 100% happy with it? And then from there, it seems like you spend almost as much time tweaking a few minor issues as you did building the application in the first place(Sony VGP-BPS14 battery).

This is where I am in 100% agreement with the Agile folks. If the project is even 90% complete, go ahead and deploy it. You know there are a few bugs and that some things are not “just so,” but that’s okay. Get actual users to work with it(Sony VGN-FZ11S battery). Who knows? Maybe they’ll like it as is, or maybe they’ll have ideas that are even better than the features that were not delivered. But no matter what, having an application mostly done and not deployed means that it’s going to take even longer to see ROI on it(Sony VGP-BPS18 battery).

4: Penny wise, pound foolish

All too often, leadership doesn’t think that it’s worth investing money in internal IT development projects. Their thinking goes something like this: “We won’t see revenue from it, so how can we see ROI?” Well, if the project won’t deliver value, why do it at all? As many mothers have told their children through the ages, “If something is worth doing, it’s worth doing right(Sony VGP-BPS15 battery).”

This doesn’t mean that every developer needs a dual CPU desktop machine with a pair of 30-inch displays, cable TV with all of the premium channels, and a chauffeur so they can write code on their morning commute. But it does mean that if a developer needs a tool and can demonstrate that need, it should be bought(Sony VGN-FZ290 battery). I can’t count the number of times I’ve seen a developer with a $70,000/year salary spend three weeks doing something by hand that could have been done in a few hours with a $1,000 tool. Yeah, that was a great way to “save” money, wasn’t it(Sony VGN-FZ220E battery)?

5: Outsourcing missteps

Everyone loves to knock outsourcing, regardless of whether it’s contractors working onsite or offshore workers halfway around the globe. But the leadership team likes looking at the spreadsheet numbers on outsourcing, particularly when times are tight like they are now. The problem is, outsourcing often costs much more than it saves because it’s filled with hidden expenses(Sony VGN-FZ11Z battery).

For example, when you bring in contractors through a staffing agency, how do you think the agency finds workers of a particular skill level, charges you less than it would cost you to hire them directly, pays their overhead (such as that well-dressed salesperson and their recruiting department), and makes a profit(Sony VGN-FZ11M battery)? Easy — they misrepresent the talent. Oftentimes, the staffing agency doesn’t have superstars “on the bench” waiting for the next hot assignment, they run an ad on a job board and fill your seats with the cheapest people they can get on two weeks’ notice. Anyone sitting around in the job pool just waiting to fill that position is probably not a choice employee(Sony Vaio VGN-FZ31M battery).

Offshore workers are an entirely different issue; it’s extraordinarily difficult to manage a project that’s developed offshore. Chances are, you’ll need at least one employee for every couple of your offshore workers just to manage them and keep track of what’s happening. You might assume time zone, cultural, and language difficulties would be small problems, but they aren’t. Just try to do your job efficiently when you need to wake people up if you want to talk to them after 1:00 PM(Sony Vaio VGN-FZ31Z battery).

I’m not saying that outsourcing is always a losing proposition. But a hastily thrown together outsourcing plan is a great way to throw tons of money down the drain and lose a lot of time in the process(Sony Vaio VGN-FZ38M battery).

6: “The Longest Yard” (documentation and user training)

While issue #3 (refusal to go live and iterate) keeps the product from ever reaching the users, what happens if the users never get documentation or training? Unless your application is as easy to use as, say, a phone book, it’s unlikely anyone will ever use it(Sony Vaio VGN-FZ31S battery). Unused applications are the biggest waste of time and money possible because you went through the whole development cycle for nothing. You could have paid your team to sit at home playing video games and have gotten the same results(Sony VGN-FZ11L battery).

If your project plan doesn’t provide the chance to put together documentation, or if no one has put together a training program, you might as well take your development budget and use the cash to light the BBQ grill(Sony VGN-FZ15G battery).

7: Developers used as support staff

If you ever worked support, do you remember what you earned? Now, are you earning a multiple of that income as a developer? Same here(Sony VGN-FZ190 battery).

Developers are extremely expensive compared to support staff. Not only are the salaries higher, but the tools, training, etc., are too. The support team will need to work closely with development, especially for a new product. But developers should not be used as support staff unless the project is very small and/or bug free and self explanatory — it’s just too expensive(Sony Vaio VGN-FZ21S battery).

8: Poor foundation for development

Many companies aren’t set up well for development, especially if there are only a few developers on staff. There is a lot more to working on code than having a standard desktop PC with an IDE installed and a few books on the desk(Sony Vaio VGN-FZ18S battery).

There should be version control systems and bug tracking applications for all but the smallest of shops, for example. Developers will probably need additional support from IT, such as test machines (physical or virtual), database servers isolated from the production servers, and maybe a section of the network set aside to contain disasters if needed(Sony VGN-FW11 battery).

When developers don’t have the necessary resources to work safely and effectively, their work is slowed down, or it affects the rest of the company in negative ways. Think about it… if a developer’s faulty test code blows up a database server, wouldn’t you rather it didn’t blow up the one that the accounting system is also running on(Sony VGN-FW11M battery)?

9: Failure to know the business

Internal developers should know enough about the business so they can follow along without needing every little thing explained to them, and the customers should know enough about their own work so that they can actually explain it. All too often, someone realizes halfway through the requirements gathering process that the customer doesn’t know their own process(Sony Vaio VGN-FZ31B battery). It’s even worse when the project is given to the customer for review, and they say, “We don’t work this way; why does this application work this way?” And then you show them the specification they signed off on, and they say, “Well, we thought we did things that way, but we really don’t.” What a colossal waste of time and money(Sony Vaio VGN-FZ31J battery )!

As soon as it’s clear that the customer doesn’t really know their own process, you should stop development and tell them they need to figure out what they do before you can continue. Also, remind the customer that you’re a developer not a process engineer, so you’re not going to help them figure out their process(Sony VGN-FZ62B battery).

10: Neglecting to calculate project ROI

There is a fundamental flaw with many IT development projects: No one tried to calculate ROI before giving the go-ahead. Yes, ROI calculations tend to be overly optimistic and difficult to get right (or even close to right), even after the project is in production. Yet some projects are clearly a waste of money(Sony Vaio VGN-FZ21J battery) .

Think of how much time you need to save a department of $10/hour administrative personnel before it pays to have a $60,000/year developer devote three months to writing code. Sure, if it saves those personnel 10 minutes a day, and you have 50 of them on staff, the project makes sense(Sony VGN-FZ11E battery). But if it merely replaces a well-organized and well-understood filing cabinet and saves three workers two minutes a day, the project shouldn’t even be considered without a strong external reason behind it (such as a legal or a customer requirement) (Sony VGP-BPS13B/B battery).

There is nothing dumber than throwing away good money on a project that is guaranteed to not have any payoff.

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