Killing IT Costs

In such times of crisis, cost cutting is the most frequent question to be dealt with by a CIO. Business unit managers and CEO would like to get back as much money as possible to preserve strategic company investments and operations. Each manager is keen to show how best he is in company strategy support, so CIO.

Then it is time to have ideas.

Should companies appoint a CTO ?

Strictly speaking CIO extent is around company information asset management, even if he encompasses often operations management as well. Larger companies which would like to lead processes on its own, may feel better with a second IT manager dedicated to technology, this is a CTO. According to company main stakes, this manager could be outside IT department, where he reports to COO or CEO, or inside and then he reports to CIO.

Productivity in IT Divisions

I thought some years ago that Enterprise information system growth was more or less linear, according to a size factor. But getting experience, I soon discovered that inserting a new application in an existing information system comes to the same thing of creating a kind of turbulence which will take several months before to be stabilized.

Indeed, when counted in a stabilization process, applications may undergo several changes which do not change their initial function points count. Also when enterprises acquire or reengineer some of their information system parts, they use to implement COTS which are difficult to assess in function points. It results that measuring information system size is allways difficult and, even done, it will be a poor predictor for change which is rather related to business optimisation pace.

IT Strategy is not enough, what’s about men ?

A recent survey commissioned by the Society for Information Management gave the following concerns for CEO, CIO and enterprise top managers :

1) IT/business alignment

2) Building business skills in IT

3) IT strategic planning

4) Attracting new IT professionals

5) Making better use of information

6) Manage change

7) Reduce the cost of doing business

Improve IT quality

9) Retaining IT professionals

10) Security and privacy

Among the high ranked points, 2-4-9 regards human resources management. Indeed, if you have not the right men able to implementing your strategy you ‘ll probably loose most of your bets. Successful companies like Google, Microsoft, Apple,…  have build their success on human asset.

If you transform, align

I already wrote in a previous post how the number of papers discussing IT alignement suprised me. Indeed, for me, priority should be given to deciding, to planning and to setting up Enterprise Change.

Formerly, 15 years ago, Enterprise Change was contemplated by planning and launching big projects which frequently crashed. Then, best practises of IT led to break down big projects into pieces managed locally. It results an higher rate of success, but with some pieces left behind. By this time, Enterprise was rather a collection of stovepipes with more or less communication in between.

Some of us attempted to glue stovepipes with EAI and business process automation. They get a pretty complicated system which never had the expected flexibility required to follow users business changes.

IT vision and IT Strategy what is the difference ?

In my previous post, I addressed the point of view that IT Strategy is not only business alignment, but should rely on a strong vision of IT role in the company.

Then, in this post, I propose to address the points of IT vision utility and how to build it with respect to IT Strategy.

Unfortunately, in the business world, few situations support to undertake no move, because usually stakeholders are facing externalities which raise questions on the way the company business is done. Beside, business undergo internal pressure when, for example, company reach poor execution performance in some areas.
The same happen for IT, if you choose to not move when all your environment is changing, you are quickly out of the business, or if you perform poorly you out your buiness at risks.

IT Strategy and IT alignment

Holidays ending up shortly, it is time to rise up a little bit our views and to start discussing about Strategy.

When reviewing papers regarding IT Strategy, they often talk about IT Strategic alignement. Most of them seems to assert that the only acceptable strategy for IT is to be aligned with Business. Despite this general point of view, when rewinding the tape, some messages looked questionable.

For instance, when considering strategy you deal with long term goals and action plans. As it seems obvious, the spreading of strategic planning methods like Balanced Scorecard (BSC) has set the long term line to next year which is pretty short. Are we really still in strategy ?

Is organisation the raw material for enterprise architecture ?

I use to read Yves Caseau’s blog on which the author scans enterprise organisation issues, tries to identify appropriate optimisation levers, and tests models which helps to validate control efficiency. Involved in Enterprise Architecture which is expressed by organisation, Y Caseau has already identified 5 levers for organisation efficiency :

• meetings
• hierarchy
• matrix structure
• lean and mean
• competences

Should this list be closed or requiring new entries ? Although some people think that organisation is far less important than strategy, it deserves to be properly studied since without well shaped organisation it becomes harder to achieve a strategy. Basically it is Enterprise Architects message.

Services management and SOA infrastructures may be the best investments for IT

At a UK IT conference, a senior IBM analyst provided some clues on what IT services will become in the future which were in short :

• 70% of 2005 CIO budget was labour
• Operations labour will be 73% of CIO labour budgets by 2008
• Application development will decline at –10% CGR to 2008
• If this trend continues, there will be not development budget left by …2012!

The first one recalled me a discussion I had with a senior consultant in France who defended the view that the best IT performance indicator was staff number. By this time I was not really convinced since I expected that IT value might curb staff importance in the discussion.

Hewlett-Packard, one step beyond again ?

The $13,9 billion acquisition of Electronic Data System (EDS) by Hewlett-Packard (HP) and is qualified by Gartner as the biggest computing services company acquisition never done. After the hard experience of Compaq merging, what HP is looking after in playing the devil once more time ?