IT
Fools ignore complexity.
Pragmatists suffer it. Some can
avoid it. Geniuses remove it.
THE FLEXIBILITY IMPACT
The relationship between complexity and flexibility often forms a
vicious circle. The more complex the system landscape, the harder
and more risky changes become. As a result, flexibility decreases.
Flexibility gained by adding new functionality and new technology
quickly drives up complexity.
THE POWER OF QUANTITATIVE METRICS
‘Measurement is the first step that leads to control and eventually to
improvement. If you can’t measure something, you can’t understand
it. If you can’t understand it, you can’t control it. If you can’t control
it, you can’t improve it.’ (H James Harrington)
Complexity has become an overused word in the IT field. It is
used with increasing frequency in publications and elsewhere to
describe how management views decision-making broadly, as well
as in relation to specific functions across and within industries, such
as IT and risk management.
All CIOs have biased opinion based on experience. Many decisions
are tied almost exclusively to experience and straightforward
financial analyses, such as project costs and estimations. CIOs and
IT leaders need a transparent, objective framework to augment the
experience they bring to decision making. Such a framework can
aid in articulating and communicating decisions both across and
outside the organisation, an increasingly important requirement as
corporate directors and regulators expand their scrutiny of business
and technology decisions.
HOW TO MEASURE COMPLEXITY
The observation offered above by leading performance and quality expert H James Harrington highlights the central role that measurement plays in addressing complexity. To address these issues,
Commerzbank and Capco developed an IT complexity model and
management decision tool. In its current state, the model applies to
the application landscape: single applications, application clusters,
application domains and the entire application landscape.
The model consists of several complexity indicators covering
relevant dimensions of application complexity. Capco and partner
clients have statistically validated these complexity indicators
through quantitative research using real-life data on approximately
1 000 applications over three years.
The complexity indicators of the model cover four dimensions:
functional, interface, data and technology. Each indicator measures
a relevant aspect of complexity. According to Capco, these mea44
THE BANKER
Edition 3
sures become most useful if considered in conjunction rather than
in isolation.
IMMEDIATE APPLICATION AND BENEFITS
A complexity model can be applied to important IT decisions at
any financial institution after some calibration and data gathering.
The model can also help educate IT leaders, and it can foster dialogue
between the IT department and the business units it serves.
Decision and trending analysis: IT executives will immediately
be able to use it to analyse the impact of decisions and perform
trending analysis. This will help them understand how their decisions
might affect future cost, quality and flexibility of IT projects.
IT architecture: perhaps most interesting is the notion of
looking for complexity across the overall architecture. This will
support conclusions regarding the impact of change on the entire
infrastructure, including networks and other aspects.
Bridging the gap between business and technology: an
addition to informing decision making within the IT organisation,
a complexity measure should help IT executives to better explain
and provide an objective basis for discussing their decisions with
business, helping CIOs articulate implications of initiatives, costs
over time and so forth. By articulating complexity in this way, CIOs
will be able to strengthen inter-company partnerships and create
new opportunities to achieve measurable results.
Business processes: in many instances, technology canno