Put a price on IT - and a value
By Simon Bisson & Mary Branscombe in Editorial
Posted in virtualisation, People, Applications, Enterprise, Server, Business, HP on
It’s time for IT to have its own ERP and CRM, according to HP. That’s what the business technology optimization tools it’s developed are for. Today that’s the product name, but it’s such a good phrase that Tom Hogan, the senior VP and global manager of HP software (and, since he bought EDS, services), is thinking of coming up with some other name so he can keep it as a description. It’s meant to make you think of business process optimization, where you discover the way your company does everything has been wrong all along and it’s going to take an expensive stint of consultancy to fix it.
The way most companies do IT is hand to mouth, piecemeal and manually intensive. Imagine a car assembly plant that hand-wrote scripts to control the robots every time a new part had to be made. If IT departments really were the cobbler’s children they’re often compared to, they’d have been barefoot so long they’d be placed in foster care. Most IT departments can’t add as much value to the business as the technology companies tell us their technology can deliver and that’s not just the gap between hype and reality. In a survey that the Economist Intelligence Unit just carried out for HP, an “overwhelming majority of both CEOs and CIOs” believe that “technology is integral to the success of their company” and 88% of CEOs and 90% of CIOs say they “share similar visions for how technology can deliver business outcomes at their company” - which is close enough that they must be at least on the same page. So what’s the problem? As usual, money.
The 70-80% of the budget most IT departments have been spending on maintenance rather than innovation has only just gone down to 60% according to a new survey in CIO magazine. If you’re doing really, really well, you’re only spending 35% keeping the lights on and if you’re supremely ambitious you want to get that down to 20%; maybe that’s the 7-10% of companies that Tom Hogan guestimates have already got their IT automated.
After all, why should the majority of your budget go on doing the same thing over and over again so that the business can stay where it was last month? You should have the routine automated; it will stop you losing staff to sheer and utter boredom too. But once you plug everything in enough to automate it and track it - not just in terms of transaction throughput or whether the next laptop you buy will trigger a discount if you buy it from vendor H instead of vendor I but who has a problem, who’s about to have a problem, who’s working on it right now and who has already spent how long fixing what on what annual salary - you can also start to put a value on it.
The next time you ask for a new server, you can show how much it’s costing to chug along on the old one - and what difference you’ve made with the last budget you were allocated. You can show which SLAs the IT team has met and what that means in cold hard cash. When you get asked to do too much with too little, instead of sucking your teeth like a builder you can say exactly what it will cost to do properly and what they can get for the money they want to spend. You can even tell the business what projects are a bad idea before you plug in a single server.
It’s not rocket science; a good project has high value to the business, a small cost to implement and a low budget requirement. The IT department spends the whole year putting in systems that let the rest of the business evaluate business ideas and existing services in those terms; isn’t it about time you had that for yourself too?
-Simon
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