In these times of austerity, IT departments find themselves under pressure to cut costs. Eventually they will reach a point where everything that can be done within the walls of IT has been done. But, the relentless drive for savings will keep them under siege. Now is the time for IT departments to form their battle plan and break out of the cycle…
Stage 1: Defence
The first part of the battle plan is ensuring that IT can defend its position. This means demonstrating that all possible cost savings within IT have been achieved. The checklist for IT defence includes:
- all IT tools, assets and environments are standardised
- all internal IT processes have been assessed with activities, and
- tasks have been automated, eliminated or transferred elsewhere (self-service, offshoring) wherever possible.
The upshot is that IT is as efficient as it can be, based upon the constraints that the business environment imposed upon it.
Stage 2: Intelligence
The second stage of the battle plan is gathering intelligence. This requires looking across each business unit to identify inconsistences. Specifically, we are looking for where the same function is being performed in each business unit but in a different way, thus causing IT to deviate from a standard operating model. This is common in organisations which have grown through acquisition or where the organisation dispersed globally (multiple apps doing the same job). IT needs to articulate that if the business standardises its Operating model, further efficiencies can be achieved. Standardisation also enables the business to share its services to create saving, improve quality and time to market. There may be good reasons for business units to operate differently depending upon local markets; however this should not stop IT from questioning the need for variation.
Stage 3: Engagement
The third stage – engagement – is the most delicate part of the battle plan. Getting it wrong will reinforce the siege position. There are two tactics to consider, either collaborate with each business unit working to help standardise their operating model (getting the business units to drive the change), or executive top-down driven change where business units are directed to adopt a standard business operating model. The key here is to find out where the real drive to cut cost is coming from – the business units or the executive. In either case the story is the same; “IT has done all it can do. To do more means to changing the way things are being done by the business…. and here is the evidence….”
Stage 4: Momentum
The fourth stage is about building and maintaining a change in momentum. This means creating a transformation plan and building the capability and capacity required to make the change. This will require investment in people, tools and, if necessary, external expertise.
When IT is under siege, the best defence is a good offense. In this case, IT needs to go on the offense against hidden costs caused by non-standard operating practices inside business units. Going further, IT can identify opportunities that will move the conversation from cost to value, such as Applications Modernisation, Re-hosting Services and Applications Portfolio Rationalisation.
You can always check out our previous Knowledge Matters articles on the HP Applications Services blog.
About the author
Gary White, Managing Consultant, Business Transformation and Value Management, Hewlett Packard Company
Gary White is a Managing Consultant and thought leader for Hewlett Packard’s EMEA Industry Transformation Consulting practice. He has 30 years of operational and consulting experience in the application of Value Management and Management of Change. Gary has worked in a variety of industries including Defence, Healthcare, Department of Work and Pensions, Transport, Criminal Justice, Manufacturing and Energy.