Demand to deliver – IT infrastructure

August 6th, 2014, Published in Articles: EngineerIT

From sales, operations, finances, procurement, warehousing and distribution through to the executive, IT departments are facing unprecedented pressure to enable the transaction and improve on communications and collaboration.

Service providers and vendors are touting voice, video and cloud-based applications and storage facilities as the Holy Grail.

The internal customer in an organisation’s various business divisions wants more of everything. Demand for 24x7x365 access for all role players, differentiation in the market place, along with hunger for information, and the ability to analyse and use it, is putting pressure on the enterprise’s private virtual private network and stretching the IT department to its limits.

Facebook, YouTube, Instagram, iTunes, streaming media and other social media networks, along with cloud-based storage, are consuming bandwidth faster than the enterprise can roll it out. The bring your own device revolution is disrupting business in ways we are only starting to fully understand. Most businesses are merely playing catch-up. Mobility by way of tablets, smartphones and laptops and social media networks that enable conversations with brands has disrupted the manner in which customers and service providers interact with companies, and enable customers to be far more educated and engaged than ever before.

When I go shopping, for example, I understand what I am buying, what it costs at ten different stores and I have a good understanding of all the specifications long before I arrive at the retail store. I am often better informed than the sales person I am buying from. So whilst the sales person is telling me that their offering is the cheapest in town with the best service levels and the best products, I’ve already done a price comparison online, read customer complaints and compliments, and weighed up the benefits of making the purchase from them or their competitors.

This is true from white goods, through to food, clothes, vehicles, electronics and almost anything you could think of. As a result, the sales person, support agent, receptionist, manager or driver involved in the transaction needs to be empowered to deal with a significantly more knowledgeable and empowered shopper.

In order to empower its employees to deal with these new demands, the enterprise needs to train and up-skill people, retain and distribute institutional knowledge, and collect and analyse the data it needs to ensure better decision-making and to evolve the business on an ongoing basis.

To complicate matters, whilst the cost of bandwidth is coming down, both the consumption of and demand for bandwidth from the end user, along with the expectation of 24x7x365 access is pushing IT departments and their budgets into uncharted territory. Any savings from bandwidth cost reductions are inevitably lost to an apparently insatiable demand for throughput.

This is the cause of some frustration in CEOs and CFOs who do not understand why IT costs are going up when bandwidth costs are dropping. The viewpoint is often that employees want a BMW when they can drive a Golf. This indicates a lack of understanding of ITs role as a business enabler.

Technology is now involved in every aspect of business. All stakeholders in the enterprise are looking to IT to provide the connectivity, the access, the storage, the applications, the collaborative tools and the communication tools that will deliver on this vision – when they need it and where they need it. And the CEO who is not intimately involved in IT decision-making, and who doesn’t understand the competitive edge it offers his business, is missing a significant opportunity to gain an edge on his competitors.

Nowadays the astute CEO is more likely than ever to be involved in IT. The CIO no longer frets alone about IT. The message is getting through to the executive that to ignore the benefits derived from IT as a business enabler is to become uncompetitive, irrelevant or, even worse, to go out of business.

The problem with all of this is that IT is expected to deliver next year’s technology vision on last year’s budget, with the same resources it has always had.

Sharing ITs budget with an enterprise’s divisions and/or branches has always been a tough sell. In today’s evolving landscape finding ways to apportion costs, measure and manage those costs and report thereon just got that much more difficult. Increase costs and you can expect serious pushback. Don’t deliver and you will get serious complaints.

How do the CEO, CIO and their IT manager manage this demand and the associated challenges and cost of delivery? The days when the IT department carried the cost and then apportioned those costs to each user in each department and carried the can for over-spending, are gone. The IT department can no longer hold up the budget for the business on its own.

Whether you are reading McKinsey or IBM whitepapers, or just using good old common sense, you cannot get away from the fact that if IT is to be an effective enabler it needs to work in partnership with the people driving the demand.

Where to start?

• Include all stakeholders in planning, budgeting and implementation.
• Understand the company’s growth drivers and business priorities and gain a thorough understanding of the demand for and consumption of IT services.
• Listen to the company’s divisions and their business need, offer tiered options at different costs and partner with them.
• Build flexible, scalable and cost effective networks, ready to deliver on the business’ needs.
• If you don’t measure it, you will never manage it. Measuring the consumption accurately along with regular reporting to the units on progress, costs, and challenges, will ensure business units buy into the timeframes, solutions and/or services as well as the associated costs.
• Shift the responsibility for managing costs onto the end user. The sub-text being that if you want to consume large amounts of data and have all the bells and whistles, you are going to need to pay for it.
• Ensure that buy-in to a solution includes both a clear mandate to source solutions and/or services and explicitly specifies that the end user is willing to budget and pay for said solution.
• Use the fact that everyone is carrying the IT budget to resource and up-skill the IT department, ensuring that the IT department delivers a great service at a good price.

If you wish your business units to be fully onboard, supportive and willing to pay for what they use, bringing the role players into the design, costing, procurement and implementation phases of solutions/services procurement will stand you in good stead and ensure buy-in, careful use, budget to pay for it and, most importantly, that the solution is relevant to the business need.

When supply equals demand, and all the business units are paying their fair share, the IT department’s role in business will have evolved to the place it needs to be.