In an effort to help CIOs struggling to justify IT’s business value to their bosses while, simultaneously, reducing waste and cost, Forrester Research analysts Phil Murphy and Andrew Bartels decided to put together a list of the best practices they, and their peer analysts at Forrester, think would offer the most help.
What they come up with was a Top 20 list of things that IT can do today to gather new metrics, shore up outdated processes, show the business that IT is (or maybe isn’t) pulling its weight, and start the ball rolling to improving IT’s ability to support the business. These best practices will also help beleaguered CIOs and IT managers begin to reduce the amount IT spends on keeping the lights on (80% of the typical IT budget today) verses funding new initiatives that will help the business become more competitive (currently about 20% of the typical IT budget).
In 2004, these numbers were slightly better at 74%/26%. In 2005 the comparison was 76%/24%. In real-world terms, what these numbers means is, because of the amount of legacy IT still being maintained, “lights-on IT” is “crippling” the ability of IT to help business innovate, be more competitive and agile, said Murphy.
“We’ve sort of reached this critical mass where (IT) is so big we can’t do the easy changes anymore. Faster processing doesn’t help you compete with a new global threat that wasn’t there before the internet came around. So there’s an ugly trend there. Cleary, it’s something that needs to be addressed.”
Now, to be fair, most companies have some of the Top 20 already in place or are working on many of the initiatives Murphy and Bartels et. al. came up with. And most companies probably don’t need all 20. But, the idea behind the list and its associated scorecard, is to give CIOs a big picture overview of what’s available out there, today, to help them control what Bartels has termed “IT MOOSE”, or spending to Maintain and Operate the Organization, Systems, and Equipment the business needs to survive.
“There’s a ton of these things out there,” continued Murphy. “At least take an inventory of what you’re dong and what you’re not doing and be aware there are this many things and rate yourself on what you’re dong and what you’re not doing because changing that could help you.”
So, without further ado, the Top 20:
1. Adopt ITIL and other frameworks like COBIT and ISO 17799 to bring discipline and efficiency to IT operations.
2. Use IT systems performance management audits and software to increase application throughput and manage costs.
3. Utilize server consolidation to cut hardware, software, staff, and other costs.
4. Implement data center automation to reduce operating costs.
5. Install server virtualization to lower hardware costs and reduce administrative burden.
6. Embark on application rationalization to help IT shed duplicate applications and infrastructure.
7. Get improved data on application resource usage so you can make better use of maintenance staff.
8. Use application portfolio management (APM) tools to develop metrics to drive maintenance effort and cost reductions.
9. Use software change and configuration management tools and processes to reduce outages.
10. Undertake IT asset management initiatives to optimize usage of software and hardware.
11. Install the current generation of service-desk tools keep IT support costs down.
12. Employ enterprise architecture groups to drive standardization of the software portfolio.
13. Use your vendor and contract management teams to squeeze more value from vendors.
14. Utilize contract life-cycle management tools to help optimize the savings from supplier contracts.
15. Use formalized and aggressive IT sourcing practices to cut ongoing depreciation and maintenance fees.
16. Employ eSourcing and services procurement tools help secure more competitive vendor bids.
17. Keep selective outsourcing options on the table that may lower costs and improve IT.
18. Implement IT operations scorecards to track and drives improvements and reduces cost.
19. Give IT leaders dual roles as business relationship managers and IT activity managers.
20. Create a funding pool to pay for IT MOOSE management initiatives.