Leveraging Your IT Resources-The $mart Way

Save money without sacrificing your trusted IT infrastructure

By Robb Dongoski

I am often asked by IT executives, "Is there a way to control IT costs while ensuring that my IT infrastructure will continually function at the level my customers, partners, and stakeholders demand and have come to trust?"

Unfortunately, there is no single or easy answer to this question. IT resources, infrastructure, and investment continually grow. According to the Information Technology Association of America (ITAA), in the next year alone, companies will hire approximately 900,000 IT professionals. A recent ITAA survey states more than 10.4 million people's jobs focus on information technology. This statistic is for large corporations only and doesn't even include positions in government, not-for-profit organizations, or small entrepreneurial firms.

The managers in all of these organizations - especially in view of the recent economic slowdown - have one thing in common: They're being asked to do more with less while maintaining a high level of trust with customers, partners, and stakeholders.

Most executives look at their IT organizations and ask, "Are we seeing the ROI that we had identified?" or "Are we deriving the maximum business value while maintaining control of costs?" Arriving at an unqualified "yes" is quite often a leap of faith.

The advent of the Internet, and all the variations of e-business that it has created, has made businesses rely more heavily upon trusted IT infrastructures now more than ever before. Effective IT infrastructure management is critical to enable your business to change and grow in the connected economy. Even with the best strategies, if you and your customers, partners, and stakeholders can't connect to your outside suppliers, if your network crashes, or if one of many databases fail, all the great marketing, well-conceived products, and cutting-edge R&D won't help you.

Using the correct IT infrastructure management approach - viewed as part of an overall enterprise systems management (ESM) strategy - can help enable all aspects of your business.

LOOKING AT THE PITFALLS

Time and time again, organizations implement IT infrastructure management solutions that focus primarily on automating current business processes by purchasing cutting-edge technology solutions. Many companies have yet to see the ROI originally identified when they first formed their strategy.

One of the most common pitfalls of an IT infrastructure management solution is overlooking the underlying processes that the technology is intended to improve. Without allocating the time, effort, and expertise to analyze the processes, major pieces of a costly suite of software can wind up being ineffectively deployed, or worse yet, shelved because of lack of perceived value.

The most effective IT infrastructure management strategies focus on:

• Optimizing the core processes
• Establishing clear measurements
• Integrating the updated processes
• Leveraging best-of-breed technology to enable the restructured processes.

This approach takes a "big-picture" view and includes all the elements of people, process, and technology management. It focuses on business value by seeking to optimize the entire IT infrastructure - not just the technology tools. In other words, it emphasizes fixing the business and enabling the changes through technology.

PROPERLY FRAMING THE CHALLENGE

One common scenario is when senior executives searching for ways to reduce costs arbitrarily instruct business and IT managers to cut, for example, 10 percent out of all infrastructure costs. This request, which may be the right approach in theory, is usually an unrealistic request that turns out to be the wrong stimulus for pursuing meaningful and achievable cost savings.

To achieve these goals, business and IT executives would be better off identifying specific areas of improvement that are most in need of reengineering - before they automate or "cure" important and possibly essential components of the infrastructure.

BUSINESS VALUE CONSEQUENCES

People undertaking these projects are usually looking for a significant payback within 12 to 18 months. This approach, which targets the highest value areas first, tries to satisfy this need for immediate results in order to ensure executive sponsorship and the success of future projects.

The three most significant areas in which executives who are experienced with ESM see immediate and long-term value are in managing IT assets (hardware and software life cycle management from procurement through disposal); improving IT customer service management (including problem and change management and optimizing the help desk); and automating user and security administration.

LOOKING FOR THE SIGNS

In order to effectively identify potential areas of improvement, you should look for organizational or process symptoms that may suggest a correction is needed. Although these problems may not always be appropriate as indicators, they are good signs of broken processes, lack of an organized strategy, or remnants of failed IT infrastructure improvement. Table 1 (right) shows some of these issues.

Generally speaking, at the start of a project, you should determine where your organization is in the life cycle of IT infrastructure management. The continuum of events, or stages, in the life cycle can be boiled down to envisioning the correct solution, analyzing the current processes, designing updated processes, implementing the enhanced solution, and measuring to ensure agreed-upon ROI.

Most companies don't need to start building a trusted IT infrastructure from scratch. Rather, they need to concentrate on reenergizing their efforts on high-value areas. The infrastructure management solution you pursue should be flexible and scalable, so you won't have to reinvent solutions within different parts of your organization later and can concentrate on building a foundation for sound business growth in the future.

These pressures, combined with the demands of the changing e-commerce environment, the influx of large numbers of PDA-type devices, and the imminent explosion of the wireless device market, create an ever-changing environment in which trusted IT infrastructures must continue to grow and address the business needs they were built to support.

The organizations that successfully create the IT infrastructure that meets their needs are seeing returns of 50 to 200 percent on their original investments. Creating the correct IT strategy is no longer a luxury and a sizable opportunity to save - it's more and more an essential part of staying ahead of the competition and delivering trust and value to your stakeholders.

ROBB DONGOSKI [robert.dongoski@ey.com] is the technology management and infrastructure leader for Ernst & Young LLP, based in the firm's Boston office. He works with CIOs and other executives of Fortune 500 and midsized companies.

RESOURCES

Related Articles on IntelligentEnterprise.com:

"Bridge of the Enterprise," March 20, 2000

"Agents Are Watching," September 8, 2000