Link To Strategy

Link To Strategy

If your strategy to optimize IT doesn't connect all the way up to business goals, how do you know where to focus?

The drive for IT optimization is inevitable. META Group research finds that four out of every five IT operations groups have already launched an initiative of some kind to improve operations. But META also projects that three quarters of those initiatives will run into "significant inconsistencies" with their projects—which means they won't achieve the desired results.

How to avoid such a fate? By synthesizing the approaches of CIOs, analysts and consultants, a pattern for successful optimization becomes clear. Some recommendations:

First, synch up with the business. Without processes to continually ensure that you're delivering the value the business needs, you could be optimizing areas you don't need to—or not optimizing areas where you have the biggest opportunities. Dick LeFave, CIO of Nextel Communications Inc., the $8.7 billion, Reston, Va.-based wireless provider, is adamant: "The alignment part of IT helps optimization," he says flatly.

As part of that process, infuse IT staff into business units to gain a better understanding of business-unit constituents. And make sure business units volunteer their own team members to help with IT projects, and make sure they take an ownership stake in their technology initiatives. "We do no new initiative here without a business owner," says LeFave.

Next, manage IT as a portfolio of projects. Portfolio management is critical for understanding the demands continually placed on IT, says Tony Roby, partner for global architecture and core technologies at Accenture. Don't forget outsourcing as a key part of the IT portfolio, so you'll be able to distribute risk outside the organization and ensure you're always delivering IT services for the best possible value. "The IT organization of the future is going to be much more a manager of services rather than the sole provider of all those services," says Roby. Be sure to do your homework first. "Before you outsource, optimize," advises Mercury Interactive's Klein. "That way, you're going to get a better deal."

Finally, hire and train for the "optimized" mentality. Wherever you can, use seasoned professionals who know how to squeeze costs out of everything they do. Make sure their compen- sation is aligned with your efforts, rewarding them for their ability to execute and save money.

Tell Your CFO:

  • Our cost-management efforts must be linked to business strategy, so let's put the processes in place to ensure we're cutting correctly.

    Ask Your Staff:

  • Have we squeezed all possible costs out of the operations we're considering outsourcing, before asking for bids?

  • This article was originally published on 09-01-2003
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