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ATOMOperate versus Innovate
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When it comes to figuring out your IT capital budget requirements for the next five years, do you know where the big bucks will be spent?
Will they be invested in new systems and applications that will enable your business to target new customers, expand its geographic footprint and launch new products and services - or will the bulk be spent on keeping existing systems operational?
For most companies, the latter scenario is closer to the truth, says Chris Gabriel, head of solutions at Logicalis. In his experience, only a handful of exemplary organisations manage to divert as much as one-third of the IT budget into innovation.
At the best, that has a direct and negative impact on the progress of new initiatives, such as establishing and developing a service-oriented architecture (SOA) or migrating users to unified communications (UC). Simply put, it's difficult to achieve IT project budget justification for new projects, when yesterday's initiatives are still so resource-hungry.
Efficient IT practices can go a long way to help in saving money from the IT budget to devote to innovation, says Gabriel. "Projects like SOA and UC can reap tangible benefits, both in financial and operational terms, and many organisations are keen to get working on them - but they quickly find out that the resources simply aren't there to support such complex initiatives," he says.
By contrast, those companies that are masters of IT innovation are typically those that place efficient IT high on the agenda, according to Gabriel. "They don't blow their whole budget on simply ‘keeping the lights on'. Instead, they get their existing systems fighting fit, saving time and money that can be devoted to forward-looking IT projects that drive strategic value for the business."
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Your Comments and Questions
Chris Gabriel, 3 months ago
Trevor, sorry for the delay. Desktop Power Management is now a well written about subject. Microsoft themselves have beefed it up in Vista, but, my personal knowledge lies more around Verdiem (www.verdiem.com) and they have some excellent white papers and calculators on their. I am pleased to say that Logicalis are putting it in internally and paying full price, based on our expected savings and an ROI of about 14 months. I will keep up all informed if we get our return any faster.
Trevor Howard, 4 months ago
Thanks for your response, Chris. Can you tell me anything about end point power management - are there any articles on this site where I can find out more about it, for instance?
Chris Gabriel, 4 months ago
Trevor, yip, I think Server sprawl is the first one to tick off, followed closely by storage. However, if you want a really quick win and you have enough PC's then end point power management is a winner. It's not huge financial savings, but its a big % number of 30-40% and its achievable within weeks. But, its servers as the starting point.
Trevor Howard, 4 months ago
Fair point. If I wanted a quick (ish) and easy (ish) win to show my FD the benefits of investing in more efficient IT, what would you suggest tackling first? Would it be an analysis of my server capacity to see if I'm making the most of what I've already got in place?
Chris Gabriel, 4 months ago
This is going to be the question of 2008. I think every IT professional will be able to argue for investment in Innovation if they are able to prove that what they are doing today is as efficient as possible. What I think will be difficult will be to argue for investment in innovation when existing systems and processes are not delivering to at least a minimal measurement of performance. Obviously this will be especially true of IT departments where budgets have been good over previous years but where the existing infrastructure is not delivering value to the business. My view is that we must start to apply the same measurement to IT as we do to any other supply chain. The measurement might be taken from other supply chain methodologies such as SCOR (Supply Chain Operations Reference Model Copyright PRTM) or be looser in-house models. If you haven't fixed the basics or received maximum return from existing investments then I think the request for investment will be challenged.
Trevor Howard, 4 months ago
If the economy does nosedive, any tips on how I can argue my case to the finance director for investing in IT innovation this year?
Archie Dean, 4 months ago
Do you think even fewer companies will choose to spend their IT budget on innovation if the economy heads downwards, as many analysts are predicting, this year?