I&O Organizations: The Right Services at the Right Costs

Posted 05.27.14 in Uncategorized by Nlyte Software

This year is shaping up to be one of the most transformative years in IT’s history. Sure, I know you’ve heard it all before. In fact it seems everyone always says ‘this year is going to be different’. You may have heard it before, but most likely NOT from ALL of the vendor players all at the same time. Ask your VP of IT or CIO and I am sure that they will agree, THIS YEAR REALLY IS DIFFERENT since the fundamental basis of IT is being changed in all respects right under their feet! There are simply so many moving parts technically; free-air cooling, ARM chips, BYOD, Cloud, Modular, Wireless, all coupled with a tremendous amount of quantifiable business goal-setting being added on top.

I was presenting a session two weeks ago in Washington D.C. to a large federal audience. My thesis for the discussion was that efficiency must be tangible to be recognizable. To be able to become more efficient at doing something, a unit of measure of that ‘something’ must be identified and I suggested that the ONLY real units of measure (that mattered in 2014) were those values that touched their customers or constituents. I suggested that every organization has a unit of work that benefits their customers and could be measured. Adopting this thought process, each IT organization must first think long and hard about what their unit of ‘value’ was and what work would be needed to deliver that unit of value. In essence, what was the bounded ‘transaction’ that they are chartered to deliver which would have direct value to THEIR constituents or customers? Many people in the audience didn’t think about ‘transaction’ as something that they could articulate, but my main point was exactly this and really was the task at hand. At the IRS for instance, the unit of work could be processing a 1040 tax form. Or at the Census Bureau it could be to count and verify an American citizen. In the commercial world, it could be the cost of an email message or to sell an item in a storefront. Every organization has a unit of delivered work, and in the BIG picture, reducing the cost for IT to handle that unit of work (at the same quality and reliability) is a good thing. It’s really simply math and yet it’s not just about buying lower cost servers, or building a data center in Oregon where power is lower priced. It’s about the entire burden that the IT structure adds to the cost to do work. It’s technology, people, process, culture and a litany of other factors that can be quantified, rolled-up and then calculated to determine if the whole thing is getting more efficient on a per unit of work basis.

Gartner I&O Summit

Change I&O Today to be Indispensable Tomorrow

Gartner is having a 3 day I&O event which calls attention to this transformation already deeply underway, in key areas such as Creating Value, IT culture change, Metrics, Prioritization and Investment strategies, and Improving I&O Maturity. From Gartner’s write-up on the upcoming I&O conference being held mid-June in Florida, “Successful digital enterprises cannot be built upon a brittle Infrastructure and Operations (I&O) foundation – now is the time for I&O leaders to reject outmoded operating models, antiquated structures and technologies, and declining business relevance, and assume a key position of influence over the digital future of your enterprise“. I couldn’t have said it any better myself. There are simply so many ways to make real progress in reducing the cost to deliver services to the business and most of them are complementary. Most of them will deliver real quantifiable value but many of them DO REQUIRE CHANGE. New ways of doing things, new technologies, new goals.

For those of you keeping a pulse on the business of IT, this is just another aspect of IT Service Management. Service Management is the ability to deliver services at the right level and adding modern economics into the traditional definition, delivering those services at the right cost per unit. “Services” to you can be anything that is quantifiable. Service Management when viewed from the top-down, takes into account all of the direct and indirect costs. For example, to deliver a “transaction”, a certain amount of server equipment is needed, but just as important is the need for bandwidth to move the transaction. Power is needed to power the servers, switches and storage. What about the costs to cool those devices and the real estate cost per square foot? How about the costs of warranty and repair? Perhaps the overhead associated with billing and collections, remediation and administration. And don’t forget the costs associated with resiliency and/or redundancy.

Did I forget anything? You bet! There is a fundamental need to keep the entire IT structure ON THE CURVES of technology. What we used to call “Tech Refresh” becomes critically important today since staying on ALL OF THE CURVES reduces the cost of processing each of those transactions. That is one of the most overlooked opportunities for the NEW IT management chain to realize… just how important it is to keep the whole infrastructure as close as possible to the modern production curve. The highest value of a server is in the first 3-4 years of its life and everything after that period COSTS MONEY. Same thing with a switch or storage array. So while all the technology moving parts present themselves individually, the challenge is how do you create the processes to take advantage of them all in a production world? That my friends is the REAL task at hand: Designing and implementing the processes needed to stay on the curve. (Shameless plug: Call Nlyte. That’s what WE DO for our customers.)

This year really *IS* different, and I expect to hear a wealth of information about these topics in Florida. If you are going to be at the show, stop by the Nlyte booth and say Hi!

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