Racing IT – Introduction
Formula 1 (or Grand Prix) is the leading motor sport competition in the world. It is a global competition, consisting of 11 teams competing against one another at 20 different international venues. Formula 1 is a glamour sport where actors, politicians and other famous personalities associate themselves with the teams and the sport. The top teams have budgets of hundreds of millions of dollars. Ferrari, the longest running and most valuable team in Formula 1 is worth more than a billion dollars in terms of merchandise, intellectual property and sponsorships.
Formula 1 is a high stress environment where the teams are under constant scrutiny by the media, supporters and business partners. Week in and week out the teams need to stay competitive while managing this stressful environment. A single mistake can end a campaign leaving the team open to criticism and failure. Good management and teamwork is of the essence to ensure a winning and successful season. It is a highly innovative sport where continuous improvement to the car is the difference between staying competitive and just taking part. While the current racing cars are continuously improved, the teams must also manage the design and testing of their cars for the next season.
Formula 1 is the sport with the closest resemblance to the modern IT environment. Both environments need strong leadership and good teamwork. Both environments depend on continuous innovation and constant change. Both environments are highly competitive with tight budget restrictions, where the current environment must be maintained while work is in progress to improve the environment. By using the lessons learnt in Formula 1 in the management and organisation of a team, and implementing those changes in an IT environment, we can create a more agile and efficient IT environment. IT must be able to adapt better and be more agile than ever before while increasing its levels of service to business.
Leadership, Strategy and Accountability
A big budget does not guarantee Formula 1 success: Toyota spent more money than any of the other teams in Formula 1 and were still a failure and consequently are not part of Formula 1. Leadership, strategy and accountability are the differences between winning teams and runners-up. A successful leader in a Formula 1 team is able to make instant decisions while still being able to change with the environment. Many IT projects lose momentum because of an inability of management to make decisions when required. When a project loses momentum it can be cancelled as it will be late, over budget and won’t meet customer expectations.
At the start of the season a Formula 1 team sets a goal which is divided into smaller race-related goals. With each race a strategy is put in place to achieve the goal for that race. As the weekend progresses the strategy may change to adapt to the environment. Business should focus on long-term strategies which would then relate to goals for the IT department to achieve. These goals would then translate into projects with a plan on how to achieve the specific goal. In a goal-orientated environment there will be a bigger focus on accountability and teamwork, which would translate into greater ownership and a better quality solution.
The most important lesson that IT can learn from Formula 1 is specialization. Each Formula 1 team is comprised of different specialised teams, in which each team member is a specialist in his or her own field. examples of specialised teams are logistics, mechanics, analytics, etc., and examples of specialist team members are stress/structural engineer, mechanical design engineer, composite design engineer, etc. The secret to having these teams perform at their optimum level is the amount of collaboration between these teams. There is only one team responsible for all logistics, a team responsible for the gathering of data, etc. All teams have at least 2 drivers, each with his own car, but track conditions and performance of the car is shared between the teams. Too often IT is a disparate organisation where similar solutions are maintained for different business units. In many cases an organisation will have different IT departments for different business units with no sharing of resources between them. This does not only add extra expenses to the bottom-line of the IT department, but over-complicates the infrastructure that must be managed and maintained.
A Grand Prix car has 200 or more sensors measuring every aspect of the car, from tyre heat to gear performance. While the car is on the track, whether in a race or practice, this information together with the driver feedback is gathered and interpreted by a team of specialists. This information is then used by the team manager to make decisions on race strategy. The information is also sent to the engineering department at the company headquarters, where the data is analysed in a wind tunnel, and improvement suggestions are sent back to the team at the race track.
IT must evolve to the point where exact costs are tied to systems and processes. This cost must include everything from the utilities to licensing fees and maintenance. Only once these costs are in place, can improvements and enhancements take place. If the cost of a specific process or software implementation cannot be quantified, there cannot be a business case for replacing or improving that process or software implementation. If the actual cost of downtime cannot be calculated a DR (Disaster Recovery) environment cannot be shown as cost effective or even needed. Better utilization of the available budget is only possible when a proper system exist for self analysis. Every enhancement done to a Formula 1 car is done to safe a milliseconds around the track, in the same way an IT department must be able to show a saving with every enhancement or improvement to their environment.
Know your customer
Although the product associated with Formula 1 teams is the racing cars, it is not the product that is sold to sponsors. The racing car serves as an enabler which allows the team to sell different services and platforms to their various sponsors. The type of sponsor, or customer, largely dictates the type of engagement model that would exist between the team and the sponsor. The engagement model defines the level of collaboration and the type of services available to the customer. The brand name sponsors that want their logo displayed on the car are buying a marketing platform. The tyre and engine sponsors are buying a testing platform. IT departments should change their focus from selling hardware and software solutions to providing services and platforms.
The role of the IT department needs to be clearly defined in the organisation in order to better understand the different customers in business. Each business unit is a different customer and would need its own unique engagement model. The model should take into consideration the level of collaboration the customer requires as well as the services, platforms, reports and service levels. All these elements make up the engagement model and the type of solution for which the customer will pay.
Sponsors play a big part in Formula 1 and are the reason that the teams have the money and ability to keep on racing. However, the sponsors do not run the team; that is the responsibility of the team owner. The sponsors that are more intimately involved in the team can help, advise and play a big part in the decision-making process, whilst the ultimate responsibility for making the decisions still lies with the team owner and other team members. In the same way business should allow IT to make decisions on technology and the IT roadmap, while the business focuses on selling more products. Business can be involved in the decision making process, especially where money is involved for new systems, but ultimately the decisions and accountability should be with the CIO and other members of the IT department.
Experts, Teamwork and Continuous Innovation
Formula 1 teams measure success in milliseconds: it is the difference between being champion and runner-up. Teams actively search for the best expert resources available which not only include the drivers but also the mechanics, IT people, logistics people, engineers and anyone that can improve their chances of winning. In this world of experts, teamwork is of the essence, whether it is between people that are involved with the team for years, or consultants being brought in for a single race. Friction between team members is very visible on the track performance of the team.
It is often the case in IT departments that teamwork is based on political alliances and not on expert knowledge. People are more worried about building little empires than thinking about what is best for the customer. Innovation in these types of environments is either slow or non-existent, and business is always frustrated with the level of service it receives. Instead of making outside consultants part of the team to gain from their knowledge and experience, they are viewed as outsiders and are kept at arms’ length. The only way to provide the customer with proper support and innovation to increase market share is by working together as a team. At times this team will consist of only internal resources; other times external consultants or vendor resources should be included.
There are many similarities between Formula 1 and IT. Due to the competitive nature of Formula 1, structural and organisational experiments that do not work are discarded quickly to be replaced by something that does work. We can look at Formula 1, learn from their mistakes, and implement what works for them. In the following articles I will explore these synergies in more detail, with suggestions on how to quickly and easily make some changes in the IT environment.
Racing IT is not about new technologies but on optimizing and changing the current IT environment to provide business with the best possible solution in the most economic manner. The focus is on structures, management, collaboration, accountability and most importantly, providing business with a platform they can leverage to drive sales.