IT shared services improve IT's ability to deliver services while cutting costs

As part of the play-nice-together movement between IT departments and lines-of-business in larger enterprises, the IT shared services trend is gaining steam.

IT shared services goes beyond centralization to recast IT from a cost-center to a powerful support system for business imperatives and general productivity. The shift is much more than semantics, it involves a customer-focused approach to providing IT internally, places an emphasis on efficiency without redundancy, and allows enterprises to gain flexibility on their future sourcing options for delivering IT services globally. It also dovetails nicely with SOA.

To delve deeper into what IT shared services is and what the pay-offs and challenges are, I recently moderated a sponsored BriefingsDirect podcast that taps into the insights of two Hewlett-Packard executives, Peg Ofstead, the worldwide solution lead for HP’s IT Shared Services and IT Consolidation Services unit within HP Consulting and Integration, and Ewald Comhaire, director of the global practice for Next Generation Infrastructure and Technology at HP.

Some excerpts:

"We see still quite a few surveys that show that IT has some issues with showing its value to the business. That's typically a clear sign. We also still see companies that choose to outsource their IT, which also means that they are not at the right level of maturity or cost effectiveness that the business would like. And, finally there are also complaints on the transparency of the costs. Why does IT charge me this amount of money and what does that money give me as a value, are still often questions. IT shared services provides a framework or a model to help answer these questions in a better way." ... From Ewald Comhaire.

"I think that the cost issues of the past years have forced a lot of companies to look at their models. They've been in a situation where lines of business would have a new application and they would buy servers dedicated to development and testing of that application, and then another set of servers for production. That tended to be a very constrained and ineffective approach. Utilization tended to be low on a lot of those servers. So, with new virtualization capabilities, companies are looking at models where servers are shared and virtualized. The only problem is: What does that do with the model where the line of business is buying the servers for specific application? They are at a point where in order to take advantage of technology, they have to look at different governance models anyway. I think that has led a lot of them to explore these kinds of alternatives." ... From Peg Ofstead.

For more, have a listen to the 37-minute podcast, or read the full transcript. Sponsor: Hewlett-Packard.