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June 3, 2010

IT is starting to eat itself

News that IT redundancies will, after all, be part of a planned job cull at recovering financial services giant RBS is troubling in a number of ways, says Gary Flood.

By CBR Staff Writer

We say ‘after all’ as essentially the £32bn group is backtracking on earlier commitments: the 500 posts being shed from the bank’s wealth management division over the next three years were earlier specifically flagged as non-technical.

Where it all gets a bit fuzzy is that the losses were originally flagged as coming from RBS brands Coutts & Co, RBS Coutts and Adam & Company, not the main RBS body. But apparently, that’s no longer true.

And we say ‘troubling’ as the justification for the move is a need to make further investments in… IT. The bank plans to fund “a major investment in processes and technology” in the affected division, a move it has reassured the press will mean “better service and a wider choice for our clients”.

This had something of an echo for some of us of HP’s planned 9,000 headcount reduction announced earlier this week, which was again justified as being part of a move to free up more capex for technology investment.

If you have just entered the IT profession, this may not strike you as at all odd or even noteworthy. But for anyone who’s been a part of the industry for a while, what we are seeing here is a bit like the famous chickens coming home to roost.

Basically: we use IT to get rid of endless armies of admin, secretarial, back office and old ‘clerk’ style positions. Or rather, we used to. They’ve basically all gone… so now we need to cannibalise IT itself to get the very last drops of efficiency savings.

Too stark a view? Too lilly-livered, pinko, non-Milton Friedman for you? Well, let’s be honest, we none of us cared a jot (substitute phrase here perhaps that a family newspaper like ours would blush to run) in IT about all those cohorts of staff we have helped obviate the need for over the years. Why should we? Getting rid of them was what paid our wages and business-cased a move to automation and the end of paper processes.

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Now, automation has a different meaning. It means automating IT – which with its nice face on is ‘The Cloud,’ which is sort of fuzzy and fluffy, and with its hard face on is ‘P45 as many IT people as we can do without’.

Of course, we don’t need to worry about that socio-economically, as redundant IT people can easily move into the City… er. OK, try again, they can work for call centres… but they are all in India now. They could have a go at becoming Sky TV installers… only everyone’s got a dish now. I know – the public sector! Eeek. And so on.

Another way to think about this is a rewind to the 1990s and the doctrine of Business Process Re-engineering (ask your Dad). The argument was that we needed to flatten organisations and all that great stuff to create agility, re-invent companies; doubtless you remember all the great ‘corporate hits’ of the day.

The reality was it was a way to nuke whole layers of middle management. For a lot of white-collar jobs, this was what had already happened to blue-collar jobs in the 1980s, note. And by the way, IT was pig-happy with all this, as, again, it meant more ‘automation’ and more servers.

Now the servers don’t need so many IT people any more. Maybe you too will soon vanish into the dustbin of history, like an earlier entire employment category in high-tech called operators – who even had their own fun IT magazine, Computer Talk, which revelled in fantastic tabloid stories along the lines of ‘Plane Crash – Computers Involved’!

There’s a logic at work here – and I hope you don’t think I am being Karl Marx to suggest ultimately it’s not really always going to work necessarily to your advantage.

 

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