ZDNet roundtable: transforming on a small budget

IT budgets aren't getting larger, but the amount of work that IT departments are expected to do keeps growing. How are companies keeping their balance sheets in the black?
Written by Suzanne Tindal, Contributor

For companies attempting to transform their businesses on a small budget, consolidation and simplification is key, which in many cases means dropping the IT department's traditional heavy focus on infrastructure.

ZDNet Australia held a roundtable at the end of last month, talking to businesses about how they have been coping with the need to transform their businesses with minimal budgets.

Many of the businesses are getting stuck in the trap of spending all of their time on infrastructure.

"A lot of CIOs are still chief infrastructure officers," Macquarie Telecom group executive Chris Greig said. He added that they spend 80 per cent of their time keeping the lights on when they could instead be managing service-level agreements with infrastructure partners.

Antoinette Ienco, head of IT for Pepkor Australia, which owns the Best and Less brand, also sees the need to step away from infrastructure to be able to move on to project work.

"When I started with Best and Less, the IT manager that had been there for a while had been very infrastructure focused; not a lot had happened outside this infrastructure," she said.

"When I got there, IT, especially to the end user, was basically falling apart."

Ienco needed to make the way in which the company was dealing with this infrastructure more efficient.

"In the few months I've been there, it's been on so many fronts around reorganising the team and being more productive around the run and maintain component."

She was then able to build a team to innovate and work with business heads to prioritise business needs.

"That was the most difficult part; actually prioritising where the business needs were," she said.

Rondo Building Services general manager of IT Services Andrew Paton had a slightly different problem. His company had spent a lot of money and time on a core business system, while the IT infrastructure fell apart around it.

"We had a big investment in our ERP system ... we had very good integration with the manufacturing floor and getting that data off the floor and into a business intelligence system. But the rest of the IT infrastructure was completely forgotten about," Paton said.

"We had people walking around with laptops that were eight years old, servers that were dying because of hard-drive failures."

Paton decided that the company couldn't continue to manage infrastructure in-house.

"I said, 'We can't upgrade this, we don't have the budget to upgrade this, so we're outsourcing all our infrastructure.'"

General manager of operations at Konica Minolta Business Solutions, Graham Spoard, agreed.

"Give the problem to someone else," he suggested.

Westpac transition and transformation portfolio and program manager at Westpac, Youssef Moussa, said that outsourcing provided Westpac with the ability to focus in-house resources on new challenges. Westpac outsources via IBM, amongst others.

Yet, sometimes it's not that simple. Benevolent Society CIO Assine George wanted to clean up the telephony and connectivity services, and then outsource them, but was worried that handing over its unconsolidated 70-odd fragmented business systems would lead to disaster.

"We were very conscious not to actually put any business solution in the cloud just yet until such a time that we have gone through the whole process of achieving that integration layer," she said.

"If I do that, it'd be totally fragmented into different spaces, the HR system somewhere, finance system somewhere else.

"Simplification, consolidation was key in our mind."

Once a common architecture was set, she said it would make sense to have a private cloud servicing the not-for-profit sector.

Companies have been able to do more with a small budget not just by consolidating applications, but also by using particular business applications.

Rondo's Paton said that right now, many people in the company aren't using a business intelligence product that one of the executives brought in. "The rest of the leadership team, they don't understand what they can get out of it," he said.

"Our business intelligence consultant tells us that we're only using this much of our business intelligence solution."

It's all about buy-in, and showing the team what they can do with the tool, he said.

George said that she plans to deal with a similar problem by going to each department and explaining how they might find a tool useful.

Once you've convinced executives that a project is worthwhile, you might even wheedle more budget from them, said LEK Consulting CIO Johan Sulaiman. He didn't even have to push the case for a bring-your-own-device (BYOD) policy, he said, as the executives were crying out for it, and they provided the necessary budget almost immediately.

Westpac's budget has been very slim while the bank completes its strategic investment projects, which have involved the investment of millions of dollars. Moussa has coped by prioritising exactly what he wants to spend money on and what he doesn't.

"It's irrelevant how much your budget is ... it's still important that you prioritise what you do have," he said.

For example, Moussa said that the bank's data needs have exploded, especially since the phrase "big data" began to be bandied about. But he didn't want to pay to store useless data. The key is knowing which data you can delete, he said.

"You've got to filter," he said. "There's certain data that you keep, and certain data that you don't keep."

Unless you manage to get rid of old, unnecessary data, 80 per cent of your effort will go into maintaining it, he said.

Macquarie Telecom's Greig pointed out that data is something that you can move to cloud providers, tapping into their economies of scale.

Moussa agreed, but said it is still necessary to reduce the level of data from the outset as much as possible.

"If you can prevent it from being so big from the outset — prevention is better than cure."

Paton provided an example of when a company could reduce the data being saved: employees of his company overseas take a photo to prove to customers that their order is on the truck. However, these photos then stay on the file server, even after the invoice has been paid. Paton wants to make sure that this doesn't continue.

"We're about to go down a big path of data clean-up. I'll be taking it away and I'll be waiting for people to scream," he said.

"I could guarantee I could delete 90 per cent of what's on our file server, and no one would care."

It is exactly this kind of storage that makes no sense, according to Riverbed's Australian and New Zealand managing director Ian Raper, despite the falling cost of storage.

"It's almost like the definition of insanity," he said.

"I'll just keep putting more and more server resources on-site, because the server commodity item, the hardware, gets cheaper — but what people forget is the IT cost and the flexibility, the other things you'd like to do, just keeps getting higher."

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