IT Focus Area: Strategy
July 31, 2012
Speed IT Up
IT plays a major role in how fast a business can go.
From speed-to-market, to speed-to-decision-making, to speed-to-implementation, a business can only go as fast as IT infrastructure supporting it can be scaled and modified.
At the same time, business units today expect secure, highly available infrastructures built on demand. They also have opinions about the technology being chosen.
There is no doubt that technology is a big part of a business’ value proposition, and everyone can agree that there are greater expectations being placed on IT. This pressure is forcing IT to speed up. It is requiring IT to be ready for the unexpected and to quickly respond when it happens.
Chief information officers fear receiving that phone call from the chief executive officer that the company is making an acquisition, needs to divest a business unit, needs to change course, needs to enter a new market or needs to downsize to contain costs. IT organizations can’t anticipate every change in direction. That is why it is so important to have an IT strategy that provides an agile and a dynamic IT infrastructure. An IT organization should be ready to quickly respond to whatever direction the business decides to go—in a secure way.
The IT Shift: From Monopoly to Marketplace; Provider to Broker
IT used to be the only game in town when it came to the business seeking help to build IT infrastructure. Today, that is not the case. The business now has a marketplace of IT choices for computing sources and end-point tools. These choices include the traditional in-house delivery of compute power on demand, IT-as-a-service (ITaaS), platform-as-a-service (PaaS) and software-as-a-service (SaaS). The most successful IT organizations today have assumed the responsibility for presenting IT choices to the business, and take a proactive role in ensuring the business chooses cost-effective and optimal opportunities. In essence, they are the service brokers for internal and external IT services.
Business units should be comfortable going to their in-house IT team to explore the universe of options available and see what the best infrastructure is for a specific application. IT is no longer the sole provider of information services, but is instead the broker of these services. So, whether an application is built in-house or sourced, IT organizations should help the business determine the best option for their IT needs.
How to Make Faster Decisions
To make faster decisions and be an effective services broker, IT leaders should:
Develop a deep understanding of the company’s business model and the five key elements that create, deliver and capture value for the organization.
1. Customer value proposition — how an organization addresses customer needs;
2. Value chain — how a company’s processes, partners and resources come together to deliver the organization’s value proposition;
3. Profit formula — how an organization makes money;
4. Competitive strategy — how a company will compete against its rivals and defend its position in the value network; and
5. Growth strategy — how a company is going to grow (organically or through mergers and acquisitions or a combination of both).
How Each Element of Your Company's Business Model Affects IT
How does each one of these elements affect the IT organization? For example, a retailer should be able to handle thousands of transactions on Black Friday, the busiest shopping day of the year, or they may go out of business. A financial trade exchange should be able to handle hundreds to thousands of trades per second, or they are going to lose money. An IT organization should know how to optimize the dollars they have to spend. Ultimately, every IT strategy should align with the business strategy.
Create and implement a realistic and viable cost-justification model.
A pre-determined model for making financial decisions to optimize spend will help ensure that there are no bottlenecks. This cost-justification model speaks to the real costs of IT services to the business. Once a cost-justification model for a company is created, then a cost-benefit analysis for any requested IT change is conducted more quickly and more easily.
Know which foundational issues cannot be ignored.
What kind of availability and operational resiliency does the company need? What are the service levels that the business requires? What are the recovery time objectives and recovery point objectives? What are the security and compliance requirements? For example, financial services organizations have payment card industry data security standard (PCI DSS) requirements, and healthcare organizations have Health Insurance Portability and Accountability Act (HIPAA) requirements that protects the security and privacy of health data. Knowing what fundamental business and technology issues can’t be ignored will help the organization make quicker decisions.
Make decisions based on what the IT organization is trying to accomplish at a service or business systems level.
Solutions should not be driven by the technology or the vendor, but rather by the optimal solution to meet specific business objectives. IT leaders may not have all the answers, but they can make decisions based on what they do know. Whatever the requirements are for the business, an IT organization should identify the optimal hardware, middleware, security, tools and processes they need to make quicker decisions based on facts and data.
How to Speed Up the Development of IT Infrastructure
An IT organization can take specific steps to more quickly and effectively serve the IT infrastructure needs of the business. It is important to mention that these steps focus on the infrastructure and do not address actions that may relate specifically to the application portfolio.
Audit and assess current IT infrastructure.
An IT organization should know what they have today and what those capabilities are. This step will help an IT organization make better decisions faster, determine where the current environment stands, where they want to be in the future and what technology they should invest in first. Also, this will help identify the gaps that can be filled to make you more agile and responsive.
Select technology that integrates well.
Understanding how a new technology infrastructure purchase integrates into the rest of your IT infrastructure is important. The technology selection process is just one, but a very important component, of a larger IT supply chain.
Remove any potential roadblocks.
These roadblocks could be a multitude of items such as implementation, sourcing, decision-making, budgets, legal issues, contracts, non-disclosure agreements and service-level agreements. To remove these potential roadblocks, you may need to automate implementation and develop and implement a strategic sourcing strategy to help with supply chain optimization and procurement. You may also need to prioritize your security threats or realign assets to pave the way for new technology purchases.
Address the undeniables.
Depending on your business objectives and industry, there are certain things that can’t be delegated or deferred. For example, there are security and compliance policies and requirements, and business continuity and disaster recovery standards for how quickly your organization can recover from an outage. There could also be architectural standards such as selecting and updating the right mix of technology alternatives so that service levels are meeting expectations. By understanding, identifying and addressing the undeniables, you can more quickly respond to changes in your business.
Prepare for change.
Determine what you need to do to prepare for changes in your business. IT organizations should understand their current state of what they can control, so that when tasks that they can’t control come their way, they are ready to quickly respond and provide strategic direction to the business. They should be able to automate what they can, create a runbook for any activity that is expected to be repeatable, have a model for addressing exceptions and have established partnerships with experts in the field they can call on at a moment’s notice.
Build Around Business Plan Not IT Budget
Savvy IT leaders understand that the only constant in today’s business environment is change. They anticipate it, so they respond quickly when the demand arises. They understand that their business doesn’t have a crystal ball to predict the future, but they also know that IT is expected to have a deep understanding of what drives the business. The most successful IT organizations today are built around the business plan, not the IT budget.