Office Best Practices - Expenses & Purchasing System

After taking a stroll through these pages, you may tell that I once commanded quite a large IT budget, in quite a large company.  I worked throughout the UK, into North Africa and out across Eastern Europe with them... There were Four levels of expenses in that organisation:

1. Capitol Expenses (> £10,000)
2. Red Band Expenses (<£10,000)
3. Blue Band Expenses (< £1,000)
4. Green Band Expenses (< £50)

Each department had a cost code, and various levels of staff were able to order on various levels of expense.  This worked brilliantly, lets go through a couple of examples:

Billy in stores needs a new roll of tape for boxing up equipment, he gets out his Green Band expenses sheet, fills it out, hands it to accounts payable, whom check Billy can use Green Band, which he can, he is listed.  They pass the purchase order to purchasing, and the item arrives at Goods In, and is taken to Billy.

Perfect for small items, it lets routine business be carried out, without fuss, you have accountability, and you don't need a senior; highly paid; person taking time out of their day to check and sign every little order, there is a cap limit on an order, and only certain people are assigned the location, and there are two points at which these orders are checked & summed, accounts payable and purchasing.  If there is any "fiddling" going on, both those points can independently check the other, and both check poor old Billy is not getting a kick back on the company.

Purchasing can also try to seek the best price, and accounts payable can handle taxes and other considerations.  At any point these orders could be sent back, for example, one system I personally worked to implement was a link between accounts & purchasing to the stores database (a FoxPro database at the time - yeah, you remember that!!) and it let them query if anything they were about to order was in stock!  Simple, and for my time it saved the company about £8,500 a year in sundry purchases as we stopped being up to the ears in paper clips, biro's and printer paper!

The other various levels of expenses in this system did need other security measures, so on Blue band, which is where I started as a member of staff, you needed to get a managers signature.  There being three levels of managerial staffing:

1. Managing Director/CEO
2. Director
3. Manager

Each manager had between six and thirty people working for them, each director had between two and five managers, and there was one guy at the top... Well one woman at times, to be honest, and she was better... Any how...

So, a blue band raised by me, went to my manager, then was ordered....

A, Red band, raised by me went to my manager or he raised it, went to a director and was  triple checked.  Very rare were these, so people often knew they were coming, and they were planned for and adhered to the strict budgets in the accounts department.  Us lowly minions ordering the stuff, we put out business case on the form, people knew what was being talked about, and so we knew what was happening, we knew whether someone was just lining their nest with kit, or whether there was a genuine business need.

And when this very business was in trouble and being bought out by a rival in the US, we saw these requests drop and drop, the budget fall and fall, it was easy to understand where the company stood, where everyone stood.  It aided transparency, which made the staff; even in the face of the company being taken over; feel assured there was a plan, and someone was in control.

Finally, a Capitol Expense, I only saw these twice, when I had to buy a company car contract for myself... I loved that Audi... And then when we actually purchased a building, yes a whole building.

They went to the top, were discussed a lot, and got the job done.

This layering, might today seem strange, but I bring it all up, as a history lesson.  This system worked, it wasn't perfect, but it was regulated, it was transparent, it was not based on whom liked whom, or who knew who, it was based on a form, going through a process and getting a result.

Exactly the sort of thing a computer is very good at, and all this today could forego the forms and be an online purchase request system for a company, you log on, you put green's straight through, you put blues to an assigned manager... etc.

So, why the history lesson?  Because today, I've sat for four hours, with not one but two broken HDMI to DVI leads, both my main lead and the spare were broken, and broken in the same way.  I suspect the spare had actually been taken by someone else and their faulty one left in it's place in my cabinet.  But whatever the reason, I had two faults, and two machines down and sat struggling without the target platforms I'm deploying to.

No-one else in the company had any cables of this type, they all generally just use VGA, I'm the exotic one with DVI and HDMI.

So I go to find my boss to ask for cables, I work directly for the Director of Technology, he's a busy man, he's an expensive man to employ I'm sure, so why should he take time out of his day not only to listen to my needing cables, but to carry out the ordering himself?

It beggars belief, he has to find the item he wants me to have, not the item I prefer or have identified, he picks what he wants me to have, he raises the purchase order and he places the order, letting accounts know later.  Then the item may, or may not, come straight to me, it may sit in goods in until I gee them along and ask where the cables are.  Or it may just get sent straight to the very busy Director himself and it'll sit until he has time in his very busy day to open it.

The net result?... Delays and confusion.  The system is a black box.  I believe the idea behind this is that ordering things is seen as an expense, and the ability to order something within the company is seen as a traditional expensive thing.  This maybe because this is a nearly 55 year old company, and they're stuck in very old fashioned attitudes.

There is no need for this cloak and dagger approach, security through obscurity may leave those at the top of the chain feeling secure, but it leaves those of us trying to get the job done stuff waiting.  During the time we sit waiting, I've pondered the risk to reward for the company...

Now, not wanting to let out how much I earn, but lets just say the costs of the items I've needed over the last fortnight would total about two hours of my paid working hours.  How many hours have I spent waiting, stuck, not able to work whilst the kit was ordered by one busy person?... Five.

This is not the "how long to wait for the delivery", this is not "how long to get purchasing to order them", this was just how many hours from my raising the request with the busy Director and his actioning looking for the items and then letting me know they'd been purchased; he in fact didn't let me know, so I just take the difference in time between the end of the first day and the next when I had the mail confirming the order CC'd to me.

Five hours, versus two hours, meaning, if the company accepted, developed or adopted a Green Band expenses policy like the one above, almost tantamount to what might have once been called "petty cash" then they'd save money.

But of course no-one is looking at this holistically, they look at the price of the item, the amount of cash you could be spending on ordering items, and they see a LARGE chunk of money.  The company credit could rack up a lot of items on an order, and they'd be accepted by the suppliers because we're in good standing; and I understand this, I understand the need to secure that process or ordering.  That security should be the responsibility of accounts and purchasing, not the Director of Technology, and not me.

For you see, as much as the cost of ordering items tallies up for the company, and the accounts show that easily, less easily expressed is the cost of an hours time on a salaried worker.  We are a fixed cost, and probably less than the total purchasing power of the whole company.  So it gets ignored as a non-cost.  To leave me sat here waiting costs nothing extra.

Of course however, it does, it leaves me wondering about topics like this, about how the process works, about why I'm locked out of this trivial ordering task; when I used to command huge budgets, why am I not trusted to order a cable now (and I've worked here for a very long time); and if I'm not trusted, am I considered expendable, am I considered a joke.

It's the simple self-analysis of Office Paranoia, and it all begins because of a lack of transparency in ordering, and a lack of forethought as to how much it costs to "risk" letting people order trivial, petty, items as opposed to having an expensively paid Director be comptroller of order slips.

Selling Infrastructure Today, to the Mindset of Yesteryear (IT Provisioning Talk)

Today, I'm going to talk about presenting, or selling, an idea to internal management.  How to sell them the idea of a capitol level expense without having it rejected.  Because in 16 years of professional development, I've seen the world change, when I began working the age of the Internet was in full swing, the dot COM boom was about to burst, but in infrastructure the world had two sides of a divide, "big iron", with big costs or PC's which were relatively cheaper.   Today however, that same PC class hardware (though in a different form - the wrack mounted server) is ubiquitous in the work place, however the costs for major infrastructure are ever growing.  To sell a purchase is a challenge, and this is how I've dealt with that challenge, and would like to continue to challenge it in my office today - if only I were given chance to help.

If you work in an environment where those above understand the value added to a business by having decent infrastructure, then you need not read any further nor know anything more than I envy you!

In a large business, or situation where funds and a core understanding for the need to invest in your IT infrastructure is understood, it is very easy to justify and secure funding for the right storage solutions to suit the business needs, be that a decent Network Attached Storage solution in a small office, or a large scale Storage Attached Network at the capitol expense level.  The key to getting either end of that scale of investment is not really explaining the hardware & what it does, though that is very important, but instead it is communicating multiple smaller pieces of the over-all jigsaw as to how this investment will impact and improve the company.

One can cherry pick topics, or even name drop them, "total cost of ownership (TCO)", "return on investment (ROI)", you can demonstrate the value of IT, the value of this hardware investment to justify the cost, and how integrating it with the business will potentially improve performance.

Anyone whom has tried to explain this the lay man, or just a stubborn audience, can find themselves on the loosing end of the battle, even with added credibility (such as your being ITIL certified), if your audience doesn't understand, nor buy into your vision of the future, or even if they're the kind of work collegue who likes to see the world burn, then you are going to struggle to put your point across.

This is something I wish to discuss with you today, for it's something which dogs the infrastructure around me, both professionally and personally.

We all understand that spending money today is hard, but those of us looking at what needs buying, sometimes we do know more than those who just look at the bottom line cost.  So seeing the price of new equipment as a cost, rather than an investment is the first hurdle to cross.

Before any jargon, before any numbers go on spreadsheets or slide shows, you need to set the mind of your audience into the correct frame, and this needs careful phraseology from yourself, and careful use of easy to handle concepts.  A practical example is also of good use.

Always when approaching this topic, I begin by never speaking of costs, or expense, I always talk about investment and better yet expansion.  Sometimes you may want to create a whole new system, such as a Storage Attached Network, this maybe many thousands of pounds, and if your audience has no idea what a storage attached network is your task is made more difficult.  So, immediately drop any technojargon, a none-technnical audience is going to feel more at ease with simple phrases and careful handling.

Introduce the technology later in your presentation, but initially talk about Storage over the network, or storage over the wire, talk about internetworking the machines in your company and a pool of storage.  Then explain the pool is to be stored on equipment known as a Storage Attached Network Array.

This jogging with the facts, and altering the terminology thrown out makes you appear less as though you are educating, rather you are introducing old thinkers to something new, and doing it gently.  All this introduction should take two to three minutes, no more, and have a big picture.

The best case scenario you can assume occurring is that they simply are looking at the price, the worst is that they think they know what you're talking about and that they know how much it should cost, by abating their feeling antagonised by your testing their knowledg with techno-jargon, you immediately stop their feeling alien from presentation.

Plus, they will one-day be one of the users of your new infrastructure, to include that, and the benefits of going the extra mile now in the implementation will improve their working environment for three, five, maybe ten years is worth keeping in their minds eye.

Once you have explained to them what is the target of your investment, you need to quickly give them a price break down, I recommend starting with the solution you want, it's cost, and a maximum of three bullet points about why... For example:

SAN unit, twelve disks, giving all the storage we need:

* Easy maintenance

* Brilliant Performance

* 3 years vendor provided assistance & service

Don't yet put the price, next give the maximum price example, and make sure you include the price as a negative, so they become aware you have checked above the realistic price point for a good solution...

Gold plated magnetic frizbee

* Again Easy Maintenance

* Best in class performance

* Most expensive solution

State boldy, this most expensive solution has no benefit over the previous mid-priced example... Remember you're trying to sell the idea more than the hardware, you're the buyer of this equipment, and you will be using it to furnish IT Service to the audience you are now addressing, they must realise they can pay more for something better, even if you do not want this top of the range performance and costs.

Finally, you should give a lowest spec variant, this should however, still be something you can manage, but do point out the added costs of your having to be there to trouble shoot, to coax it along, to keep it on the straight and narrow.  In todays world we do run a multi-facetted high availability model of computing.  Unfortunately in many middle of the road businesses the funds come from staff who's experience and idea of large scale computing is just that, large!  They remember the era of Big Iron of mainframes, they do not understand why a 1U sized server should cost multiple thousands of pounds, and they don't care for you explaining it.

But they do care that you show due dilligence in researching the costs of these items, and what you want to sell them is the idea that they are picking your best option.  So make sure there are more negative points with the least performant option...

Stone Tables

* Extremely slow to store data

* Difficult to source new media for

* Will require constant monitoring by staff to operate

The next piece of your presentation should focus on the price, but still avoid calling it a cost, a price is the "price of success", or the "price to deliver", never ever call is the "cost of ownership" or the "cost to the business", I believe this is the most erroneous part of courses such as the ITIL qualification; and yes I understand you need to explain the "cost" to a business of their IT services, but calling them a cost when you are trying to get investment in them from those above is ludicrous, address the costs of running later, today talk about the price, get the price out there as simple as possible.

A table is a good solution, the options you present in the order presented left to right, with your preferred column highlighted a slight different colour.

Include yearly maintenance, hardware maintenance, licensing & your estimated costs in salary terms, don't be specific with that last item, just let them know:

SAN Frizzbee Tablets

Capitol Investment £8,500 £11,850 £2,300

Maintenance/year £250 £530 £1,200

Additional* £500 £1,200 £2,400

Staff Overhead** £2,400 £3,800 £4,500

* One off costs related to installation or delivery

** Annual cost, estimated against staff time & pay grades, to operate the system in house.

Make it clear that you are presenting the best solution for not only the performance of the services being provisioned, but also in your own time, you are trying to make sure you are free to help the business expand.

The maintenance/year costs is also an area you should leverage, make it clear to the audience that you want to provide a continual improvement program, include that value here, and call it a value, never a cost.  This is one of the good clear items within the ITIL concept, that you have a continual cycle of improvement, if you never factor that into the cost of modern infrastructure, then you are as guilty of living in the past as those member of your audience stuck on the idea of "big iron".

To conclude your presentation, recommend your desired solution, explain you have gone both above and below the price point selected, and state this is the best solution for the business, make reference to specific things within your business process; and if you find yourself wondering what the business process is, then scrub your talk, you are not ready to deal with any queries regarding the business yet!

So, why am I talking about this?... Well, this is a problem relayed to me second hand from the office, there's a current effort to upgrade the whole network.  The server infrastucture has already been done, without my input, however, the next item is all about the network which is very much in my sphere of interest.

There are highspeed, high availability SAN's available on this network, however the back-bone is a mix of gigabit and megabit unmanaged switches, there is no separation of departments with VLans, there is a domain which I believe needs rebuilding as it sometimes struggles and there is a lot of network chatter all the time, from myriad devices.

All problems which could be solved with decent wiring and decent switching equipment, managed smart switches being one of the key infrastructure requirements... Are we getting decent switching equipment?... Unfortunately not.  And the poor soul who had to try and fight this good presentation fight, and whom lost, was simply beaten down in their request by old-hat thinking, indeed the quoted reply when they asked for managed versus unmanaged switches was "They all do the same bloody thing".

A bloody minded reply which pretty much set the tone of what was being delivered, for this being perhaps only the third major network infrasturcture investment in 53 years it's extremely disheartening to see the investment only going as far as replacing like-for-like, instead of actually leveraging value for the investment.

Is going from a mix of unmanaged switches going to solve all the problems in the business, no.  Is it going to solve some of them some of the time, yes, but only with lots of staff input still.  Would fully managed switches been worth the investment?  Yes!  Would they have saved on staff over head and solved more of the business challenges at hand?... Yes.

Unfortunately, and ultimately, the presenter of the idea was not talking to an audience whom were on the side of the technology, nor an audience willing to buy equipment for seemingly its own sake.  The audience was hostile, they were firmly of the belief that the problems would best be solved by working around them with a human, rather than with better equipment.

How do you argue against mind-sets like this?... Being qualified is one way, having qualifications to back up your argument is fine, but it only goes part of the way, and in my experience to go all the way with these arguments, you have to approach them in the manner we've talked about today, to bring the potentially hostile over to acceptance, and do it gently, do it by stroking their ego and making them feel part of the process, that they're really doing more than you ever will to benefit the company, by their accepting your advice, for the greater good.