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In some sense, departments in a large company develop an institutional resistance to IT centralization efforts as a defense against the inevitable next reorg. O

In some sense, departments in a large company develop an institutional resistance to IT centralization efforts as a defense against the inevitable next reorg. Or rather, departments that don’t have this resistance didn’t survive the last one. Though I wonder, if large companies are routinely this inefficient (which matches my limited experience as well), how do they survive? Naively put, why isn’t every large company killed by a startup next week?

cosmie 7y ago
> if large companies are routinely this inefficient (which matches my limited experience as well), how do they survive? Because every other large company is as equally inefficient. When it's par for the course, it's not seen as an issue (or even seen at all). Efficiency is also usually not the metric that gets optimized towards - other dimensions such as predictability, reliability, longevity, consistency, stability tend to take precedence. Take the loyalty program vendor mentioned in the article - sure it's limiting their flexibility for what they want to do now, but it still exists. So depending on your viewpoint, that was a pretty solid choice in vendor. Also, large companies have the scale to absorb the costs of their inefficiency with fairly minimal impact on their unit economics. And if a startup does pop up and gain traction with a much more efficient operational model, BigCo can write whatever check is necessary to gobble them up before it becomes a risk.
- jacques_chester 7y ago
  > Because every other large company is as equally inefficient. I think there are commonalities in pathologies. After all: humans are humans and large enough groups of people will exhibit regression to the mean. But the exact details can vary so much that I am often reminded of Tolstoy's observation that: > Happy families are all alike; every unhappy family is unhappy in its own way.
badpun 7y ago
Large companies thrive in areas where effects of scale are necessary or at least very beneficial, which happen to be most of them.
asark 7y ago
Information is very poorly distributed. It's hard to overstate how bad this is. Yes, that's contrary to what's required for a well functioning market. That markets function even a tiny fraction as well as they're supposed to on paper is practically a miracle, given, you know, reality. That they often wreck everything or are much more awful than we might expect or do weird crap like letting large orgs be astoundingly inefficient is unsurprising, given this. This is relevant because it means it's damn hard to evaluate a vendor aside from "they're big and everyone's using them so they're probably fine?" So big companies get big contracts, even when they suck, especially from other big companies (and governments). Making a big organization work well probably requires a bunch of highly-paid people to take on personal responsibility and make judgement calls where the buck stops with them. No-one wants to do this. It's personally risky and there's a kind of game everyone plays where they know everyone's avoiding this and it's considered fine as long as you fake Doing Manager Stuff and bring the Big Four in when you can't avoid making a decision, so you can blame them if something goes wrong. The same attitude infects the entire organization, unavoidably. If the big contracts are rolling in anyway (see above) there's little incentive to take personal risks. It's an example of success breeding success, purely for its own sake.
lkrubner 7y ago
As the article says, SuperRentalCorp was aggressive about buying up the startups that it felt posed a real threat.

cosmie 7y ago

> if large companies are routinely this inefficient (which matches my limited experience as well), how do they survive? Because every other large company is as equally inefficient. When it's par for the course, it's not seen as an issue (or even seen at all). Efficiency is also usually not the metric that gets optimized towards - other dimensions such as predictability, reliability, longevity, consistency, stability tend to take precedence. Take the loyalty program vendor mentioned in the article - sure it's limiting their flexibility for what they want to do now, but it still exists. So depending on your viewpoint, that was a pretty solid choice in vendor. Also, large companies have the scale to absorb the costs of their inefficiency with fairly minimal impact on their unit economics. And if a startup does pop up and gain traction with a much more efficient operational model, BigCo can write whatever check is necessary to gobble them up before it becomes a risk.

jacques_chester 7y ago
> Because every other large company is as equally inefficient. I think there are commonalities in pathologies. After all: humans are humans and large enough groups of people will exhibit regression to the mean. But the exact details can vary so much that I am often reminded of Tolstoy's observation that: > Happy families are all alike; every unhappy family is unhappy in its own way.

badpun 7y ago

Large companies thrive in areas where effects of scale are necessary or at least very beneficial, which happen to be most of them.

asark 7y ago

Information is very poorly distributed. It's hard to overstate how bad this is. Yes, that's contrary to what's required for a well functioning market. That markets function even a tiny fraction as well as they're supposed to on paper is practically a miracle, given, you know, reality. That they often wreck everything or are much more awful than we might expect or do weird crap like letting large orgs be astoundingly inefficient is unsurprising, given this. This is relevant because it means it's damn hard to evaluate a vendor aside from "they're big and everyone's using them so they're probably fine?" So big companies get big contracts, even when they suck, especially from other big companies (and governments). Making a big organization work well probably requires a bunch of highly-paid people to take on personal responsibility and make judgement calls where the buck stops with them. No-one wants to do this. It's personally risky and there's a kind of game everyone plays where they know everyone's avoiding this and it's considered fine as long as you fake Doing Manager Stuff and bring the Big Four in when you can't avoid making a decision, so you can blame them if something goes wrong. The same attitude infects the entire organization, unavoidably. If the big contracts are rolling in anyway (see above) there's little incentive to take personal risks. It's an example of success breeding success, purely for its own sake.

lkrubner 7y ago

As the article says, SuperRentalCorp was aggressive about buying up the startups that it felt posed a real threat.