Thursday, 8 September 2016

A model of inefficieny

There's nothing like a personal anecdote to bring clarity to a political point of view. In those times when I am usefully employed by society I am a database consultant. I specialise small to medium scale systems usually to plug a capability gap left by mainframe systems.

In nearly all such instances, creation of these software tools and processes is frowned upon by central IT departments because in the end it lumbers them with a a legacy system they have to look after. Corporate governance also tends to frown on unofficial solutions. The problem for them is that when one demonstrates what a system does and why it exists they often reluctantly accept that development must continue.

And that's the nature of corporates. They like to know what is going on, they don't like activity that falls outside of their remit and they do not like arms of the business acting independently. They want standardised methods and tools and they definitely don't like developers outside of the command structure of the corporate IT department. It's the same dynamic as the inter-service rivalry in the armed forces. The RAF does not like the other services having things that fly.

The problem though is entirely of their own making. Some departments do a specialist job and necessarily have to work in a way that is different to that which is prescribed but there is a bureaucratic insistence on not deviating from the software tools deemed fit for purpose by remote management, most of whom will never have consulted the end users and see no need to.

This is the level of management usually in hock to sales reps from all the big database companies like SAP. SAP provide a safe, secure, stable platform which is customisable but usually profoundly useless and slow. That does not matter to the corporate body though. Compliance matters more than getting the job done.

Eventually systems become so ossified that departments use the main system as a secondary administration task while using guerilla tools to perform the primary function. That's where I come in and that's how I make my living. In the corporate world I am a black marketeer peddling unofficial merchandise.

As time goes by the system eventfully has to flex and reluctantly appreciate that guerilla tools are a fact of life if corporates want to get anything done - and so a base level of corporate subsidiary is allowed - but with a great many constraints. The destination of this cycle is that the unofficial becomes quasi-official and tolerated but on the understanding that corporate governance will move in at the first opportunity to shut it all down and powers and rights are revoked.

And this is exactly how I see the EU. An inflexible and immovable bureaucracy making plans and building policies, institutions and structures without consultation for purely doctrinal reasons and does not tolerate independent action except for when it is momentarily convenient. Latterly, as soon as it can gobble up any remaining sovereignty over decision making, it absolutely will.

In the corporate world, eventually you get to a state where the inherent inefficiencies of these structures mean that completing work in house becomes too expensive and work is then outsourced to to external suppliers who do a good job of pretending they comply with all the governance requirement but in actual fact break all the rules in the book to get things done and cream off the operating surpluses as profit.

And again I see considerable parallels with the EU with "partner nations" adopting a shadow of the EU's regulatory regime, qualifying for recognition but in actual fact still get to import garbage into the EU. The cheap Chinese tat that came into the country during the credit boom was nothing close to the durability and build quality western consumers were accustomed to.

Manufacture of goods went to China and IT systems and customer services went to India - mainly to save on manpower costs. But then if you've had any dealings with offshored Indian IT then you know it to be substandard and late and while you're waiting they'll tell you everything's fine. So while things notionally get cheaper, they get worse. Managers are praised for their ingenuity but in fact have delivered a worse product to a worse standard - which ultimately costs a good deal more when corrective action must be taken after an audit.

Large corporates are a perfect model of the EU and the cycles are alarmingly similar and equally predictable. And there's a good reason for that. They work in the same way. Top down managerialism where ground level divergence and innovation is considered a threat rather than an asset. In a properly capitalist model such inefficiencies would soon result in a lack of competitiveness and ultimately bankruptcy and renewal.

But then in the West we have corporate welfare where aerospace, defence and banking corporates are deemed to big to fail and too politically contentious to let go of. So we end up constantly bailing out zombie companies which limp from crisis to crisis, posting loss after loss. It doesn't matter just so long as they can keep kicking the can down the road without having to bite the bullet. Does this sound at all familiar?

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