Keeping the Ship Running

Over the course of a year, I typically spend time in 50 to 60 banks. Quite often the CIO asks about planning staff resources. Many CIOs are struggling to effectively manage unplanned demand that occurs each year. Examples of “unplanned demand” include acquisition of another bank, moving telephone and computer facilities to a temporary location during repair of a damaged branch, and installing a new application purchased by a business unit. Business units complain about lack of support and long lead times to complete information technology-related projects. Sound familiar? Let me describe a characteristic activity to help you understand this issue.

Have you ever taken a cruise on a large passenger ship? The experience is all about indulgence – in everything. Non-stop activities cater to nearly every interest. Exercise, skeet shooting, bowling, swimming, Internet browsing, live music and dancing are among the many available pursuits. Do you like to eat? Four planned seated meals plus endless buffets, snack bars, outdoor lounges and more will easily meet the most demanding appetite. Lest I forget, you can participate in all of this around the clock.

The brochure describing the passenger ship details the passenger capacity and crew staffing level. Take notice that the number of crew is typically the same as the number of passengers. Large staffing outlays for food services, recreational activities, housekeeping, laundry and other services seven days a week, 24 hours a day are necessary to keep the ship running. Most of the crew is required to provide the planned services and activities. However, some additional crew members are on board to meet those unanticipated demands. Passengers requesting unplanned services or activities can be accommodated with the “intentional” over-staffing. The trick is to carefully balance additional staffing cost with demand. Understaffing results in dissatisfied passengers, overstaffing in reduced profits.

I’ll be the first to admit banking information technology services are not on the same par as the pleasurable activities available on a cruise ship. However, the analogy between the two functions is important to understand. Like the cruise ship, IT must first determine the staff levels required to keep all systems and services running smoothly. Every staff position beyond this level is an estimate of staffing required to provide additional services. Like the cruise line, it is a balance between an upset user and reduced profit levels. Let me describe what the typical IT group controls.

• Desktop computer hardware
• Local and wide area network hardware
• Servers and mainframe hardware
• Specialized hardware such as kiosks and teller devices
• Physical security equipment including card entry and surveillance devices
• Telephone and telephone switch hardware, now including PDAs and cell phones
• Printing hardware, including receipt printers, laser printers, etc.
• Data communications hardware
• Operating software for all computer, security and communications equipment
• Application software, typically numbering 100 or more discrete products not including the core banking systems

Activities to support all the equipment and applications can include the following:

• Repair computer equipment
• Support and testing for operating system software including application of updates, patches and releases
• Help desk support for employee questions including core systems, ancillary and productivity systems
• Move, add and change support for computers and telephone equipment
• Operation of all centralized equipment including servers, network, communications and mainframe computers
• Design, implement, test and operate data and system recovery services
• Design, implement, test and operate regulatory required changes including privacy, Patriot, Sarbanes-Oxley, and related acts.
• Monitor and protect the network from intrusion by hackers, now increasingly perpetrated by professional thieves

Staff resources to perform these functions are determined using historical demand, numbers of devices, etc. Support hours often span eight-hour work days and more frequently can be 24 hours, seven days a week. Totaling the staff requirements yields the amount required to “keep the ship running.” As noted in the cruise liner example, this is the level needed to meet expected demand. My preferred name is “base staffing level” or perhaps “staff required to keep the doors open.” Whatever this metric is called, it is the minimum staffing level that can be sustained without materially impacting IT service delivery.

Surprisingly, the IT base staffing level is rarely known or understood outside the IT organization. Bank staff doesn’t understand that most IT staff is necessary to keep the ship running. My work with bank IT organizations often reveals that nine out of 10 IT employees are part of the base, leaving only one of 10 to perform the unexpected. Dissatisfaction over IT performance most often centers on staff inability to meet unplanned activities.

Due to the imbalance in bank staff to IT staff, a median of roughly 32 to one for outsourced banks and 28 to one for in-house banks, demand for IT services will always outstrip supply. Therefore the discussion of IT staffing levels should be divided into two components:

1. Determine the base IT staffing level, communicate with management and gain concurrence on the human resources necessary to keep the ship running.
2. Staffing for the unplanned activities should be negotiated between the business units and IT.

One GonzoBanker CIO has a very efficient solution to this challenge. Staffing above the base level is determined by each business unit. The business unit is required to justify the additional positions. Support staff identified in this manner are organizationally within the IT function but support their respective business units.

Because the business unit defines and provides the desired level of support, arguments about the level of IT support vanish. This is a creative solution to a nagging problem.

Do you know the base staff level for your bank’s IT function? Perhaps you never asked. Or, more likely, the information was neither known nor communicated. When you start work on the 2005 budget, be sure the IT base staffing level is known and communicated. Now you can focus on the real issue: how many additional staff should be planned to meet those unexpected activities.
-caf