Performance management using metrics and measurements can help companies save money in the ICT department, according to one analyst.
Speaking at the CIO Summit 2012 in Sydney, IDC Australia research director, Mike Lafford, told delegates that while performance measurement can take anywhere from three to six months depending on the complexity of the organisation’s IT environment, it was worth doing, especially in harder economic times when companies are looking to reduce costs across the business.
“What we can expect to see in 2012 and beyond is more reasons why we have IT in place and how it is delivering value,” he said.
In addition, Lafford predicted that more and more businesses will have IT services delivered through outsourcing or through a hybrid service delivery channel that may involve software as a service (SaaS) or another Cloud offering.
He then ran through a services deal methodology using performance management where CIOs and IT executives could look at indirect and direct costs.
“Do you think the [hardware] vendors will give you transparency on all of their pricing across multiple bundles?” Lafford said.
“You may think you have the best relationship possible with your key strategic supplier but I can guarantee that if you are taking services across multiple products there will be an element of bundling going on,” he said.
According to Lafford, there are multiple types of service deals which require different performance analysis.
“Is your outsourcing or insourcing deal being structured to save money or is it a technology migration and are you looking to apply new skills that you don’t have in house already?
“In order to offer effective comparisons of your standard environment, the true value of a measurement benchmarking is understanding the competitive position. For example, how do you sit within your industry and across different industries that have a similar platform,” he said.
Lafford added that measurement could help with the wider business strategy. For example, the enterprise’s management team might be looking at growth over the next three years through acquisition.
“Understanding your current IT costs can be critical in terms of re-allocating those services to support growth through new technology and systems,” he said.
Follow Hamish Barwick on Twitter: @HamishBarwick
Follow CIO Australia on Twitter: @CIO_Australia
Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.