Tony’s article sets out a new IT supplier strategy, based on flexible very short term contracts designed to give public sector CIOs the option of changing suppliers at the drop of a hat.

I look forward to seeing more details of the strategy. However, my initial reaction to the description in Tony’s article, is that there are serious flaws associated with the concept of letting short-term/ instant monthly contracts on a per user/month basis.

This would be fundamentally flawed because of the practical issues of chopping and changing services, with large volumes of data involved, let alone any contingent security concerns.

But we must realise that there would be substantial cost and unnecessary risk involved in such flipping.

Of course, the idea of switching suppliers for poor service is attractive but some performance issues do need time to resolve and the potential discontinuity of service would open the door to diminished accountability when problems arise, possibly on both sides.

It always takes two to tango so I am very concerned that this new Government strategy does not reflect the necessary bi-lateral commitment to mutually beneficial outcomes. The threat of losing a contract within weeks is not conducive to effective resourcing of essential IT services by the providers.

I am not endorsing poor service, or long lock-ins either. But taxpayers and IT pros deserve better and properly joined-up-management, especially in straitened times like these.

Working with a gun against your head is not a recipé for effective partnership.

You may also like to read:

• Cost of Government IT is a smoke-screen
• CxOs get caught in the crossfire
• Every CIO’s Guide to Demonstrably Outstanding Performance

We may think that we have a rigorous approach to risk management but very often this is simply a fragmented picture of the enterprise, with some key pieces of the jigsaw either absent or yet to be identified.

Very few organizations can see the full picture – why?

Because very few organizations have an efective view of themselves; they will have organization charts and may well have some ‘architectural’ drawings of process and technology. But unless these are brought together into a meaningful and accessible systemic descripton, the organization will not be able to see the Systemic risk they are carrying.

What is Systemic risk?

Within the organization, Systemic risk is the risk of the whole enterprise collapsing. Beyond the organization, Systemic risk is the risk that the higher level(s) will fail, due to the collapse of participants [sub-systems].

Why is Systemic risk the silent killer?
Because it sneaks up on the organization – and associated stakeholders, up, down and across ‘value chain’ connections. Paradoxically, in an increasingly joined-up-world, many of these connections are invisible and therefore ‘silent.’

An example of Systemic risk
The world financial crisis which exploded in late 2007 is a clear example of Systemic risk on a massive scale; well explained in the following talk by David Harvey,distinguished Professor and Marxist, and brilliantly illustrated by RSA Animate:

How can we guard against Systemic risk?
The first step is to recognise that Systemic risk affects every organization, directly and indirectly.

The next step is to establish an effective regime for managing Systemic risk; this is likely to be quite different from your existing risk management approach. You will need to build a meaningful and tangible Systemic view(s) of your organization and connections.

The most important step is to realise that effective Systemic risk management is not a programme but a lifestyle choice for the truly sustainable enterprise.

Colin Beveridge can help you deal with Systemic risk, please click here to contact him.

You may also like to read:

• Enterprise Aliens
• Groupthink: the danger of compromise
• a cure for corporate dyslexia?