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September 10, 2012

Guest blog: CIOs in danger of the pseudo-IT footprint

Paul McGolpin, MD at consultancy and managed services provider GlassHouse, writes for CBR on how developments such as cloud computing are changing the way CIOs operate

By Cbr Rolling Blog

Reducing an organisations’ IT footprint is a topic that is fast making its way back up the CIOs agenda and for a number of reasons. The last five years has seen a bigger shake up in IT than ever before. This is in part due to the economic downturn, which has resulted in severe cuts to IT budgets across all sectors and the rise in scalable services such as cloud computing, which has been a game changer for many organisations, allowing them to offer seamless and flexible services via the cloud.

The popularity of cloud computing services has escalated due to increasing financial and regulatory pressures. Customer demand for increased flexibility, performance and responsiveness is also driving the need for cloud based services.

To meet these pressures and to become a better service provider to its customers, IT can benefit from having an infrastructure that can scale up during peak periods and down when services are not required, ensuring that capacity and services are available when needed, but minimising the cost when they are not needed.

These financial, regulatory and consumer pressures create a number of challenges for CIOs.

Although cost can act as a barrier, one of the main downfalls to the success of cloud and other IT projects is overlooking how a company’s organisational dynamics will impact the success of the project.

For example when implementing a cloud-based service, it is relatively easy to deploy cloud hardware and software. But determining what services will be available in a service catalogue, or determining a competitive price for those services, is difficult and requires a change to the organisation’s cost allocation and chargeback policies.

Equipping users with a self-provisioning capability can improve service levels, but unless the organisation’s authorisation procedures are changed to fit this new model, costs can explode out of control.

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Aligning security policies with this new service delivery model is critical to ensure that security is not compromised at the same time that flexibility and responsiveness are not limited.

Another challenge for CIOs is over-provisioning, which occurs as a result of isolated technology purchases and capacity planning that does not take into account other plans which are often happening simultaneously, as well as other requirements of the business.

Carrying out isolated technology purchases without having the "bigger picture" as to how these technologies may impact other areas of the business invariably leads to increased costs, wasted efforts and inefficiencies, as well as newly deployed systems that are in conflict with each other and that may compromise established data security and service levels.

Additionally, cloud deployments that enable self-provisioning can exacerbate the over-provisioning problem if procedures are not modified to ensure that systems are taken off-line once they are no longer being used. Further compounding the problem, many IT teams over- provision to ensure that IT budgets are not cut even further. This obviously increases costs but also creates an imbalance of spend on technology, not allocating enough budget to management or maintenance costs.

Therefore the real challenge for directors and CIOs is to look beyond the technology and address the more difficult policy, process, and organisational issues that companies face.

For sectors such as financial services which are heavily regulated and with dispersed IT systems and departments, having a holistic view of all of these issues can be extremely difficult.

In having a holistic view of a company’s organisational dynamics and the factors that may impact an IT project, directors and CIOs must ensure that they are taking a neutral and non-biased approach. Often, it is difficult for those within a company to spot the areas that are inhibiting progress and require change; typically this is much more difficult than identifying what technology is best suited for a project.

These issues and challenges can create a pseudo effect when looking at a company’s IT footprint, making it difficult and in some cases impossible for a director or CIO to see how an IT footprint can be reduced and where IT can be consolidated.

Working with a third-party, whether it’s a consultancy, analyst house or vendor, can help to ensure that a fully holistic view is being taken when assessing a company’s IT requirements.

In many cases, there isn’t a need to deploy more technology, and often it becomes apparent that the necessary technology is in place but isn’t being used to its full potential because of policy, procedural or human dynamics. With many cloud deployments using only a fraction of their capability, ROI and IT sustainability is poor.

Directors and CIOs faced with the challenge of reducing a company’s IT footprint must start by taking a step back and trying to understand the company’s organisational dynamics.

It is absolutely critical that a comprehensive and holistic plan be developed to avoid having the organisational dynamics undermine the success of IT initiatives, and often it is most effective to rely on an independent third party to provide the necessary objectivity.

Paul McGolpin, MD at GlassHouse.

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