Posts Tagged ‘Life Cycle Asset Management’

Global IT Function

Global IT Function

Given the many potential advantages of increased coordination across the global enterprise, it is essential that the IT function be organized to enable and support global information management, technology infrastructure, and business applications. Deciding how to organize and manage IT in a way that overcomes any natural resistance toward coordination (e.g., local entrepreneurial spirit, the “not invented here” syndrome) can be challenging. For many multinational corporations, attempts to globalize IT have been disappointing. The key to success seems to be in finding the right “hooks” of intrinsic value for the local business entities, as well as the corporation at large – in other words, answering the question, “What’s in it for me?”

The first step in developing the right “hooks” is not in reshuffling the boxes on IT organization charts, but rather organizing IT globalization projects so that the results are clearly understood and committed to. Organizing for results includes two major elements of communication. First, the globalization initiative must progress from a set of clearly defined business outcomes, owned by senior executives, that serve as the strategic rationale for the investment. Second, the project must be owned and staffed jointly among regional IT organizations, the appropriate business process owners, and line executives. A detailed project plan – with all major events, milestones, responsibilities, dependencies, and timelines indicated – is also crucial to success. Characteristics of an effective project plan include:

  • Clearly articulated business outcomes, with metrics and accountabilities.
  • Joint responsibility for business change with business process owners and line executives.
  • Detailed project implementation tasks – with major decision “tollgates” identified.
  • Pilots for operational testing and evaluation of measured business results.
  • Delegation of decision making, with clarity of scope and the process for escalation of issues (e.g., to global process executive sponsors).
  • Continuous communication and collaboration with international counterparts.
  • Executive management actively engaged in defining the outcomes and measuring results.

As a team effort, and a business priority, the IT globalization initiative then has the visibility, the access to expert business resources, and most importantly the legitimacy to proceed to success.

Global IT Management Teams

The CIO plays a key role in the organizational success of IT globalization by ensuring that the proper level of IT leadership is in place across the corporation. Regional or line of business IT executives must contribute to the global initiatives as a team. Ideally, the regional IT executives will report to the regional presidents. At a minimum, the regional IT executive must have access to and be in a position to influence the regional president and his or her direct reports. The global IT council, composed of the senior IT leadership from corporate headquarters and the regions, will then be in a position to play a key role in establishing programs, priorities, standards and support capabilities across the enterprise. Objectives of this global IT council will typically include:

  • Build and promote the global IT vision.
  • Determine the major components of the global applications portfolio.
  • Set technical and process standards for systems implementation.
  • Define responsibilities for implementation and support at the global, regional and local levels.
  • Drive maximum application commonality, balancing unique local requirements with the global business process models.
  • Demonstrate leadership in the transfer of business process models, templates and best practices in system implementation, and other organizational learning.
  • Seek economies of scale in IT, leveraging partnerships with key suppliers globally and pursuing shared services where it makes sense.

Typically, the corporate IT organization will own primary responsibility for IT vendor management, “product management” of the global solutions, applications integration and portfolio management, and IT infrastructure. Technical and user support will typically be marshaled to meet local coverage and service-level needs. Mobile implementation teams are often utilized at both the corporate and regional levels. The global IT council will seek the proper balance in local and regional user support services.

The global IT council also contributes to the “internationalization” of solutions and services by:

  • Recruiting the best business and IT professionals for the global process teams.
  • Ensuring regional representation on global technology teams charged with development of detailed standards (e.g., communications networks, email and collaboration tools, e-commerce technologies).
  • Assessing candidates for advancement in corporate or other regional IT leadership positions.

The members of the global IT council can also play a pivotal role in bringing regional business insight to the IT leadership team, and in influencing regional general management.

Early in any globalization effort, the IT council should resolve the primary responsibilities among corporate, major business units, regions, and local sites. The responsibility “boundaries” will evolve over time, but early classification can prove very productive in speeding discussions



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For Individuals in IT

IT Folks

My research produced a major and disturbing discovery that must be of concern to corporate managers, IT clients, and IT managers if they do regard focusing IT on business results as important. Stated bluntly, our findings are that most IT professionals are not interested in making the change:

  • By and large, they are satisfied with what they do now and prize their autonomy and the opportunity to focus their skills and efforts on traditional areas of IT expertise: development and technology.
  • There’s very little incentive and formal reward for moving into the ambiguous area between the business and IT and few guidelines for what to do to be successful as an Account Manager.
  • The “hybrid” skills do not offer meaningful career paths.

I believe the organizations and individuals I worked with are reasonably representative of IT in large organizations. The following data suggests strongly that the major force against change is IT itself.

  • The top five career interests (from a list of 10 options) for IT professionals as a group: IT management, applications development, IT architecture, business process support, and project management. These are the traditional IT career paths. Client services/relationship management is sixth and Internet service seventh.
  • Self-rating of skills today (from a list of 22): the weakest five skills include electronic commerce, international business, mobile communications, Internet design, and Web design. These are core business results growth areas.
  • Importance of skill areas today: End user support ranks 8 out of 10 and electronic commerce is not on the list.
  • Importance of skill areas tomorrow: No change in the top 7 of 10. End user support drops off the list and EC comes in at number 8.

These findings suggest strongly that most IT professionals simply do not see any meaningful payoff for themselves from becoming more business-oriented. Yet, for IT professionals who are interested in management positions or in Account Management responsibilities, there is little likelihood of their becoming successful without a much deeper knowledge base of how business decisions are made.

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Most information systems and technologies, once installed, are treated as sunk costs – and as assets to be milked indefinitely to recover those sunk costs. This leads to retaining technology and applications far beyond their original purpose and design. Along the way, the systems lose touch with business needs, and the queue of maintenance and enhancement requests grow endless. In extreme cases, prolonging the lives of obsolete systems consumes the majority of available IT resources, yet delivering minimal business return and in fact robbing the business of resources that could be deployed profitably. It’s like running on a treadmill instead of toward a destination.

Lifecycle Management

Lifecycle Management

Instead, the business and IT must together adopt an asset management approach. Start with the expected life cycle of an application or technology, and then along the way determine when to repair, repurpose, replace or retire it – and when to reallocate IT resources. And let sunk costs be sunk: if the resources used to maintain the old asset can generate higher business return doing something else, then redeploy them. Effective asset management results in a continuous focus of IT resources on business value.

Many projects that have consumed many IT organizations for the past several years represent a failure in asset management – the applications were neither kept healthy nor retired until doing so became an absolute business necessity under a fixed deadline. In a sense, more information technology asset management has been done in the last few years in the name of reducing costs than had been done in the previous 30. The good news is that these culling cost efforts have given many corporations a relatively fresh foundation of assets, plus recent experience in the value and challenges of asset management. Don’t lose this momentum. Instead, asset management must be an ongoing business activity. That way, precious IT supply will not be wasted on the false demand of obsolete assets.

Article by Shaun White http://www.sacherpartners.eu Contact Shaun for more information

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