|
 |
|
General Information
|
Add To My Personal Library |
January 9, 2009
• Vol.31 Issue 2
Page(s) 20 in print issue
|
Meeting Business Expectations
IT Departments Pushed To The Limit
|
Jump to first occurrence of: [WEISMAN]
EVEN THOUGH ADDITIONAL FINANCIAL and human resources are limited, IT departments are being asked to develop, implement, and maintain new business initiatives. This theme isn’t a new one, says Gartner analyst Ken McGee, adding that the topic has become more pressing given the recession’s effect on the economy.
“Being outstripped in their ability to meet demand is not new. What is new is that CIOs for the first time are openly saying it out loud and freely,” McGee says.
Nevertheless, there is a big difference between talking about these issues and making changes so that your SME’s management no longer assumes you can meet whatever expectations they throw at you.
 Are You Kidding Me?
“Since the credit crisis, we continue to ask clients, ‘How would you best describe the current level of activity among your developers? Are they not busy, busy, very busy?’ The overwhelming majority indicates they are very busy. That constitutes one hell of a recession,” says McGee.
The sheer volume of projects unfolding in the midst of a recession makes no sense whatsoever, McGee says. And much of that insanity lies at IT’s feet because IT has failed to communicate to management what the limits are. Because management is not being given enough information to help them make good decisions, they haven’t turned off the demand faucet, says McGee.
“The next time you swipe your credit card you do not first get, ‘Hold on a second; do you realize you’ve already spent $1,500 this month on your credit card?’ You don’t get that, and we don’t do that with our management requestors of new applications,” McGee says. “We are not being fair to managers because we are not saying to them what they are saying to their customers every day. ‘Oh, you want to buy X? Here’s how much it costs,’” McGee says.
Adds McGee: “You look at your kids after they find out that you’re laid off. If they say, ‘Can we still go to Disneyworld?’ [you’ll say,] ‘Are you kidding me?’ Yet that’s exactly what’s going on in business right now. ‘OK, times are tough. Our revenues are down. Can I still have that ERP project?’ Are you kidding me?”
Turn Off The Demand Faucet
Of course, determining which projects to keep and which to scrap isn’t easy even for IT, and many of McGee’s IT clients have said to him that they have saved as much money as they can find. But according to McGee, there is no way all the projects you have on the books constitute business imperatives. McGee recommends taking a zero-based budget approach to again justify all IT projects, a process he believes will reduce much of the demand in this economy.
“We do not depict the true genuine one-time costs or the recurring costs of an IT project before it’s done. In fairness to management, were we able to do that consistently, people would suffer from sticker shock, and perhaps then projects that they deemed so important would not actually be blessed,” McGee says.
Determine Which IT Projects Are Essential
Once you have determined how to stop the sheer volume of projects that are unfolding in the midst of a recession, as McGee has discussed, you then want to determine which of your remaining IT projects are essential to running your SME while the economy is in such a weak state.
For his part, CDW technologist Vic Berger recommends conducting a workflow prioritization plan. This is a process Berger believes all SMEs should do as part of a healthy business continuity and disaster recovery plan; however, this process becomes essential during these economically trying times.
First off, Berger recommends SMEs should examine their IT processes by outlining them and prioritizing the processes accordingly. What processes are most critical for business operations? What IT operations will save your organization money? And which ones are just nice to have but aren’t necessary?
“Draw a line separating mission-critical needs and non-essential IT functions. This line will fluctuate depending on cash flow. Once the performance-critical applications are sorted, wait until the market changes to purchase anything off of that top-line list,” Berger says. “Essentially, focus on the most basic business issues—most specifically, what IT applications do you truly need to run your business?”  by Robyn Weisman
Five Tips To Handling Business Expectations
Gartner analyst Ken McGee recommends that IT take the following steps when determining what IT and data center projects to support.
• Have a business owner or principal next to every project.
• Show to that owner the one-time, all-inclusive cost to implement and complete a project.
• Indicate the annual recurring costs once their project is in place and working.
• Any time a new project is blessed, simultaneously show the CFO the new aggregate total for IT spending by virtue of the project that was thus blessed.
• Have the business people demonstrate through a literal signature that, “Yes, I understand the one-time costs,” “Yes, I understand the recurring costs,” and “Yes, I bless this.” |
Additional Hurdles To Clear
According to CDW technologist Vic Berger, today’s economy necessitates that any IT spending proposal clears three hurdles beyond the traditional needs and benefits analysis:
• The investment purpose and objectives must always be well-defined.
• IT leadership must lay out risks and mitigate them in the funding proposal.
• The anticipated ROI (return on investment) must be above market returns and quickly achievable.
In addition, IT departments must demonstrate the ways in which any project affects:
• Operational efficiencies and productivity.
• Mission-critical capabilities.
• Cost offsets and cost savings.
• The bottom line. |
|
|
