Tight budgets are no excuse. You can optimize it without compromise.
Not Just Money
Optimization isn't just about cutting costs.
In the same way that IT executives who've lived through the Internet boom will one day reminisce about the time when the laws of gravity were temporarily repealed—"Grandpa, tell us the story about Unlimited IT Budgets again!"—so will they repeat tales about the whiplash effect of the bust: how the CIO went from swapping high-fives with the CEO to enduring pencil-level budget scrutiny by the CFO.
The general perception is that somewhere along the line, IT stopped delivering all the business value expected of it. "Our point of view is that IT is in fact pretty broken," says Ken Klein, chief operating officer at Mercury Interactive Corp., a provider of business technology optimization software. "Not all organizations fall into that category, but IT is, we believe, at a crisis point. They're in a situation where they're being asked to do a lot more, and they're being asked to do it with a lot less."
IT's response: optimize. Taffy-pulled by twin pressures, IT departments are trying to transform themselves into lean, mean, business-focused machines intent on delivering the best value for the lowest cost. That doesn't just mean squeezing every last drop of fiscal blood from the IT stone, through strategies like pooling servers, consolidating storage and packing WAN links to reduce bandwidth costs. It means reshaping IT by focusing on efficiently delivering the best possible value to the business—and doing it with the fewest costly people possible.
Garrett Grainger, CIO at Dixon Ticonderoga Co., an $88.6 million pencil manufacturer in Heathrow, Fla., says he's working with half the headcount he had when he joined the company five years ago. He also says his department is running at about 1.6 percent of corporate spending—less than half his competitors' budgets. Yet even after trimming staff, he's been able to increase IT's service delivery by 20 to 25 percent.
How is such a thing possible? It turns out that optimizing IT doesn't mean simply burying your head in the budget with a paring knife. It requires a different frame of mind, instituting processes that stretch from the nuts and bolts of wringing extra packets out of existing WAN connections all the way up to the organization's strategic goals.
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