What would Newton tell today's CIOs
Sir Isaac Newton’s Second Law of Physics posits that Force is equal to Mass times Acceleration (F=M x A). While this factoid is something many of us learned in high school, it is one of those laws that is bedeviling IT departments and one that IT groups want help with in solving.
Look at today’s IT department. A CIO and his/her team are being asked to implement and support an ever-growing array of technologies. In the 1970’s and 1980’s, most IT groups had one main computer and a core group of back office applications to support. In the 1990s, the list of applications grew to include a number of vertical applications, quite a few personal computers and the desktop applications running on them. Today, IT groups manage global networks, Blackberry and other PDAs, VOIP telephony, and much, much more. The MASS in this equation is growing daily.
The MASS is also growing in many firms as the list of constituents they must support and connect grows ever larger. IT groups must connect to suppliers’ networks, to SaaS-based applications (e.g., Salesforce.com), to Internet stores, to IVR systems, etc. The MASS is bigger than ever and it is a drag on IT budgets.
Adding to the problem is the challenge of the increasing speed of business or ACCELERATION. IT shops must also hasten the rate/pace with which they apply patches, upgrades and new hardware/software. When new security vulnerabilities are spotted, they must be patched within minutes not months. The velocity with which businesses change is increasing. New supply chain partners come on board daily. New sales channels and markets open up and contract frequently. Business partners can fail with increasing frequency. Governments and regulators aren’t taking a breather either as these groups keep piling on more and more requirements for businesses. And, on top of this, users are increasing their demands for more and more. How many of you are pressing your IT group to let you connect your iPhone to the corporate email system?
So if MASS and ACCELERATION are both increasing, then IT needs more FORCE (i.e., budget, people and other resources) to meet the challenge, correct? NO! The reality is that IT groups must:
- make do with the budgets and resources they already have - prepare to do more with less as the current economy dictates more belt tightening - flawlessly complete the projects on their plate - avoid any and all superfluous, unnecessary and/or redundant projects - only proceed with those IT projects that meet the corporation’s strategic intent - transfer more support and applications to third parties via outsourcing or SaaS
If these conclusions are correct, then no IT group should operate without solutions that:
- optimize IT resource deployment - prioritize IT projects - identify the degree of alignment between IT initiatives and corporate strategic objectives - minimize the opportunity for unnecessary or non-strategic projects to get launched or stay staffed and funded - identify the proper mix of projects that meet the current, always changing funding levels that IT groups must respond - ensure the highest possible success rates for those projects that do get green-lighted
In a recent Gantry Group study that HP commissioned, the company determined that HP’s PPM (Project Portfolio Management) solution helped customers realize the following results:
• Recouped annual IT budget over three years of $22.28 million • Improved project timeliness of 45.2% • Reduction in IT management’s time spent on project status reporting by 43.2%, reclaiming 3.8 hours of each manager’s workweek • Reduction in IT management’s time spent on IT labor capitalization reporting by 54.7%, recouping 3.6 hours per report • Decreasing the time to achieve financial sign-off for new IT projects by 20.4%, or 8.4 days • Savings of 6.5% of the average annual IT budget by end of year one and 14% (NPV) over a three year deployment period
It’s somewhat amazing to read of large IT departments that still do not possess full PPM solution sets yet companies like HP relate these occurences to me on a frequent basis. These IT groups are spending a lot of energy using lower tech tools (i.e., spreadsheets) to manage their project portfolio, IT resources and budgets. From a management perspective, that’s just primitive. From a business perspective, it is wasteful and impractical, at best, and wasteful at worst. Businesses suffer when IT and IT resources are mismanaged or misapplied.
What should be adding even more fuel to the popularity of PPM today is clearly the current economy. Even though many IT groups defer IT projects during a tough economy, PPM is one toolset that delivers rapid value in an environment where CIOs cannot endure any waste, any failed projects, etc.
See also this blog on HP PPM