Knowing What You've Got

Knowing What You've Got

"For technology executives to become business executives, they need to have a firm handle on both fiscal and human resources"

Part 1 of CXO Priorities | Resources

The typical IT executive at a Global 2000 company is responsible for managing IT resources for the entire supporting infrastructure to run a modern enterprise. That can run to many thousands of user accounts, computers, networks, applications and systems. As Gartner points out, given the complexity inherent in a system with thousand of interconnected nodes, quantifying and maintaining the IT inventory can seem like a Sisyphean task.

And it can lead to costly and embarrassing under- and over-estimations. For instance, a few years ago as part of an IT Infrastructure Library (ITIL) implementation project, British Telecommunication PLC audited its IT assets and discovered it had 20,000 more computers than it thought. Avoiding such major IT resource and asset management problems, representing millions in underused corporate assets, is clearly a major CIO responsibility.

Fortunately, a properly implemented configuration management database (CMDB) system can solve such problems and improve IT service delivery effectiveness with a minimum amount of management overhead. Yet Gartner says it is a mistake to imagine an IT asset management system is useful only for hardware or capital assets.

A good CIO has to know not only what he has in terms of physical and investment capital, but also human capital

"To realize the most benefit from any asset tracking application, think of a company's total IT assets as a portfolio of managed resources cutting across the enterprise," Gartner says. "A good asset management system will root out redundant systems, extra network circuits, legacy hardware, unused software licences, underutilized staff and other costly overhead expenses, while providing the financial department with the tools to accurately capture the corporate IT inventory for audit and reporting purposes. A CMDB framework is used to develop just such comprehensive database and analysis tools to quantify the effectiveness of the existing resources and to pinpoint areas for spending adjustments to meet IT and business productivity goals."

The CMDB framework has always been an essential part of ITIL Configuration Management best practices.

Gartner says organizations with a properly implemented CMDB can expect substantial cost savings, but that given the cost, industries with high IT capital investments like telecommunications and financial services will experience a better ROI than retail or manufacturing, where corporate outlay on IT infrastructure is traditionally low.

So for the fiscally responsible IT executive, a CMDB initiative can represent either an opportunity to finally stop a major source of costly IT asset shrinkage or prove an expensive layer of unnecessary overhead, depending on the level of schema sophistication and vendor willingness to embrace the emerging standards. The bottom line is that as asset management methodologies become more consistent and automated, the implementation ROI becomes higher. "If vendors can create the proper framework, CMDB will deliver the information that allows corporations to become more effective in the marketplace," Gartner says.

Aligning Resources with Objectives

The most critical function of a business leader is to direct, align and coordinate resources in accordance with the objectives of the organization, says PricewaterhouseCoopers CIO and business solutions leader Graham Andrews. This is often a lot harder than it sounds, Andrews says, as the underlying culture and mission of an organization needs to be coupled with the articulated strategy or objectives. When the real objectives of an organization aren't even articulated in the first place or are commonly ambiguous or are subject to rapid change - as is often the case -- it is up to business leaders to understand the "pulse" of the overall organization

"For example a CIO may hear the objective of the business is to grow revenues or market share, but the CIO needs to understand it is not growth at any price, in any market, from any given product or service," Andrews says. "Without a deep understanding of all the business drivers involved, a CIO or any other business leader cannot align resources to the true objectives of the organization."

True business leaders have a role not only in delivering the business priorities but in determining exactly what these should be in the first place, he says. Internal and external factors come into play here and would generally include opportunity and risk identification having regard to factors such as customer expectations, globalization, competitor activity and so on.

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