Tending the Plumbing

Tending the Plumbing

A couple of weeks ago, we returned home from traveling, tired, and grimy after a very long cross-country flight. The only thing on my mind as I pulled into the driveway was a hot shower, a cup of chamomile tea, and my pillow – in that order. As the garage door opened, we could easily see a large puddle of water spread across the floor. The water heater blew while we were away. My heart sank.

It should not have been a big surprise. We had no idea how old the heater was. It was in the house when we purchased it five years ago. I don’t ever recall anyone checking it. It was left unattended. Fortunately, our plumber had an emergency 24 on-call service and they were there the next day to replace the water heater – at a premium cost, I might add. There was no time to shop around. My shower would have to wait.I could not help but reflect on a conversation I had with a client just a few days prior. He sought my help in planning for and messaging a request for funding to upgrade the infrastructure under his care. It was old, it was breaking, and it had been left unattended for too long.

Infrastructure is like that. Despite its large investment, hardware and network equipment does not last forever. Many would believe that outsourced data centers or cloud services have replaced infrastructure services. That is absolutely not the case. According to a 2019 SpiceWorks State of IT Budgets, 20 percent of IT budgets are spent on infrastructure. The Spiceworks research also shows the current reality is that 98 percent of businesses are running their server hardware on-premises.

Despite cloud and outsourcing initiatives, the total infrastructure cost has not changed over the last ten years. As early as 2010, infrastructure accounted for approximately 60 percent of the overall IT budget per Gartner. Cloud computing played a role in internal hosting cost reduction but, I believe consolidation, virtualization and cost of replacements played a more significant role in reducing overall infrastructure budgets. At the same time, Spiceworks research shows that the total cost of infrastructure is still around 70%. 

Why on-premise at all?” some may ask.

On-premise solutions guarantee the maximum level of security and corporate data privacy with an expectation of maximum physical access to any information located on a server in your own data center. On-premise solutions are demanded by medium-sized and large business companies for whom internal data control and security would be the main priority.

The second consideration I see is performance and latency concerns associated with manufacturing control data. As network bandwidth capacity goes up and costs go down, performance should be less and less of a barrier.

Nevertheless, local communication network infrastructure equipment and servers (firewalls, routers, hubs, switched, access points) along with desktop equipment will continue to require on-premise hardware and services.

The bottom line, Infrastructure is here to stay, and infrastructure expense will continue indefinitely – or at least as long as the enterprise remains in business. Just as we replace our automobiles, roofs, and appliances, corporate IT infrastructure has a lifecycle with a requirement to be maintained and refreshed.

Here is the challenge. Small to Medium businesses often find themselves in the position of having to refresh their IT equipment. Very few have an IT Strategy, and the IT leader struggles with how to pull together an IT refresh plan.

I’ve been asked: “What’s an IT Refresh Plan?”

It is a portion of the IT strategy and roadmap that focuses on the IT infrastructure, server, storage, network, telephones, PCs, laptops, printers etc. and sets out when these need to be replaced. This is a plan that is best included in the broader IT strategy.

It purely concentrates on the age of equipment. There may be other reasons that equipment needs upgrading or changing, but the IT refresh plan will always require that you have an essential if not a firm idea of when hardware and software are coming to end of life and will need replacing.

As was the lesson from my broken water heater, it is always better to plan a replacement rather than wait until an essential piece of equipment decides to break down. Not only will you reduce downtime to zero, but systems will also operate more efficiently since computers get slower as they age. You’ll also be able to plan your budgets and negotiate better pricing. Knowing that purchases are imminent, you may be able to take advantage of the end of the sales period or special offers.

Having an IT refresh plan in place will also help with the standardization of your hardware and PC configuration. Standardization removes compatibility and communication problems, improves security, and enables scheduling of updates.

Why Do You Need an IT Refresh Plan?

Investing in hardware and infrastructure does not reap apparent business rewards. It is a utility. It is expected to be there and operating flawlessly when needed. Business leadership commits to funding what they need at the time of the need, especially if there is a promise of new or needed business functionality. Projects are often tasked with supporting the initial cost for equipment or services required to deliver the promised functionality. The process may even “account” for the trailing costs of the project. There most likely is some thought put into the whether you will standardize on Apple, Dell or HP hardware. When it is a new expense (or one they are struggling with), businesses tend to ‘bootstrap,’ looking for the best deal to do what they need at the time. The choice is not always the one with the longest lifecycle.

The need for IT systems grows and expands over time as the business grows. New and additional infrastructure will be added to support the company as well as the addition of new business functionality. Most often, there is little to no planning about what the business might need going forward.

As the original equipment ages, the new stuff (that’s a technical term) is purchased and added. Before long, you end up with a hodgepodge of equipment that can involve hardware from several different manufacturers. You most likely will well end up with several operating systems. Machine specifications can vary wildly, and this can cause issues with the software. This can include getting to the point where systems simply won’t work. To add to the concern and confusion, it is highly likely you’ve not implemented asset and configuration management plans. You most likely are not sure of what you have.

Where Do I Start?

You start by developing an Infrastructure Refresh Plan and Roadmap. If I’ve piqued your interest, come back March 11th when I will lay out the necessary steps to developing an IT Infrastructure Refresh Plan.

Until next time – I am here if you have questions or want to talk!

Regards,
Mary

Mary Patry 
IT Executive Advisor and Leadership Coach   
 480.393.0722 (AZ) 
 Mary.Patry@iteffectivity.com 
LinkedIn: http:// www.linkedin.com/in/mleonardopatry 

Let’s Talk sponsored by ITeffectivity.com an IT Executive Coaching and Advisory practice targeting CIO’s challenge of leading and delivering business solutions with a focus on effective people and process capabilities. Discover the possibilities by scheduling a complimentary strategy session with Mary Patry. 

Pause for Decision Making

Pause for Decision Making

We will pause this week from continuing our Mission Vision Values conversation thread to look back at leading through IT Decisions, focusing on the decisions involving and impacting people.   

We first discussed IT Decision making in the February 6th article: 

 Leading Through IT Decisions 

 In this article, I focused on IT Governance as a structure to help you align your IT Strategy with the Business Strategy. In support of these concepts I shared two reference books for your consideration:  

ITeffectivity IT Governance e-Book 

A month later we discussed the role IT Strategy plays in aligning Business Strategy and IT Strategy   

To Digital Strategy or not to Digital Strategy, is it now still an IT Strategy 

In this article, I provided a highlevel perspective of the relationship of the digital revolution to the creation of an IT Strategy aligned to the business. I further expanded on that perspective with access to an expansion of the IT strategy framework:  

 ITeffectivity IT Strategy Framework 

 Both references outline proven processes that generated great conversations. Some conversations were very supportive and appreciative of the structure while others were not and some stated  that the pace of change in their organization is too fluid to allow for a governance framework. Still others felt they were too small to need a framework. All of these arguments have some merit, but they can’t convince me that there isn’t a need for IT governance.   

So why are we back here?  

Simply, because too many of my recent conversations with IT Leaders revolve around IT budgeting and roadmap development struggles. Most people who spoke to me were raising concerns that their business was expecting more with flat or declining capital and operating budgets while still looking to grow the business. The last time I saw these heightened levels of concerns was right before and during the 2008 crisis. Realizing this caused me to ponder and research what might be happening. To my frustration, my research revealed conflicting positions.  

As I am not an economist by any stretch, I can only guess based on what I have been hearing, seeing, and reading. I believe that some of the issues are being generated by the uncertainty of the political climate in our world. One can only wonder and question how much of an impact trade disputes and other geopolitical tensions are having around the United States. How about the still-unresolved Brexit saga casting a shadow over the UK’s economic prospects in Europe or the trade tensions generated by China’s conflict with Hong Kong.   

 To further inform us of the impact of the economic situation and to inform of us of a state of contrast, Gartner published a report in July 2019 that provided a more in-depth analysis. I am sharing a few paragraphs here with encouragement to read the article;     

Gartner Says Global IT Spending to Grow 0.6 in 2019 

 Worldwide IT spending is projected to total $3.74 trillion in 2019, an increase of 0.6% from 2018, according to the latest forecast by Gartner, Inc. This is slightly down from the previous quarter’s forecast of 1.1% growth. 

“Despite uncertainty fueled by recession rumors, Brexit, trade wars and tariffs, we expect IT spending to remain flat in 2019,” said John-David Lovelock, research vice president at Gartner. “While there is great variation in growth rates at the country level, virtually all countries tracked by Gartner will see growth in 2019. Despite the ongoing tariff war, North America IT spending is forecast to grow by 3.7% in 2019, and IT spending in China is expected to grow 2.8%.” 

 “Although an economic downturn is not the likely scenario for either 2019 or 2020, the risk is currently high enough to warrant preparation and planning. Technology general managers and product managers should plan out product mix and operational models that will optimally position product portfolios if a downturn should one occur” said Mr. Lovelock. 

 Further research did not reveal any real surprises. I was expecting and found that cloud applications and cloud infrastructure are the top priorities for US companies with a net 80% and 61%, respectively increasing spending in these areas. Legacy systems integration (24%) and data center automation (1%) have the least spending options. None of this was out of alignment with what I am hearing from my clients.   

﷟HYPERLINK “https://www.hnkpmgciosurvey.com/press-release.php”  

Where I was surprised and perhaps disappointed was in learning that IT Staffing levels are expected to be fairly flat at a time where digitalization, A/I, and security concerns are driving the need for talent at record highs. The impact the budget had on both internal and outside resourcing resonates with my clients.    

 In my search for answers, I came across the Harvey Nash KPMG CIO Survey 2019. In it I believe I found a small piece of clarity behind the challenge. The press release opens with dramatic and insightful words:  

 “Almost two-thirds (63%) of organizations now allow technology to be managed outside the IT department, a shift that brings with it both significant business advantages and increased privacy and security risks, reveals the 2019 Harvey Nash/KPMG CIO Survey.

When IT spend is managed away from the direct control of the CIO, companies are twice as likely to have multiple security areas exposed, and more likely to become a victim of a major cyber-attack.

The largest technology leadership survey in the world, analyzing responses from organizations with a combined technology spend of over US$250bn, reveals for those organizations where the IT team is formally involved in decision making around business-led IT, business advantages include improving time to market new products (52% more likely to be ‘significantly better than their competitors’) and employee experience (38% more likely to be ‘significantly better than their competitors’).

However, four in ten (43%) companies are not formally involving IT in those business-led IT decisions.”  

 The report ends with conflicting statements:  

 More technology leaders reported increases in IT budgets under their control than at any time in the last 15 years.

The jump in those reporting increases (from 49%to 55%) is the largest seen, with the one exception of 2010, when organizations were still clawing their way out of the global recession.

For technology projects where the CEO prefers to ‘save money’ almost half (45%) of respondents report budget increases compared to just 38% last year, suggesting many CIOs are investing to save, for instance through automation.”  

 Why conflicted? Investing to save is an interesting concept. It assumes business understanding of the drivers behind the savings and the commitment of ownership to achieving it, including the trailing costs of transformation. There is a cost to every decision made along with tradeoffs and implications.     

 Investments made without IT involvement are pretty daunting as support costs are most likely not included in the ROI or operating budget planning until they are in production. This situation puts the burden on IT to absorb the expenses often under unreasonable expectations. This, too, resonated with my clients.   

Still, in 2019, I see business leaders with the aspiration of organic growth and expansion through acquisition without a real understanding of the operating cost impact of their decision. I’ve seen, in several cases, the genuine expectation that the existing staff can absorb expansion and growth without the need for additional resources.   

To CEO’s, CIO’s, and other business leaders that believe this can be – I caution you. I get that change is happening faster than most IT organizations can keep up with and in many cases than what organizations can afford. In these cases, strong governance becomes even more critical to maximizing investment and to assuring ownership and commitment to execution.    

I am happy to discuss with anyone who has an interest.   

 We will continue our discussion next week by looking at values.    

 Until next week!  

Mary 

Mary Patry 
IT Executive Advisor and Leadership Coach   
 480.393.0722 (AZ) 
 Mary.Patry@iteffectivity.com 
LinkedIn: http:// www.linkedin.com/in/mleonardopatry 

Let’s Talk sponsored by ITeffectivity.com an IT Executive Coaching and Advisory practice targeting CIO’s challenge of leading and delivering business solutions with a focus on effective people and process capabilities. Discover the possibilities by scheduling a complimentary strategy session with Mary Patry. 

Leading through IT Decisions

Leading through IT Decisions

“IT governance is the responsibility of executives and the board of directors, and consists of leadership, organizational structures, and processes that ensure that the enterprise’s IT sustains and extends the organization’s strategies and objectives.”IT Governance Institute 

How Do You Assure You are Leading through IT Decisions?  

IT Governance.   

In today’s world, IT governance can mean many things and refer to various IT frameworks. In many cases, IT governance is confused with simply implementing standards to report results and compliance. Fundamentally, IT governance is about establishing a structure to align your IT Strategy with your business strategy  

IT Governance is defined as the decision rights and accountability for assuring good behavior in our use of IT. The IT Governance Framework can be applied to any institution and is typically for use by CIO’s and top IT Management. It is a framework of decision rights and oversight that is intended to drive maximum value out of all information technology investments, minimize risks, use resources effectively, and assure alignment with a company’s most important strategic business goals and objectives. 

Why is IT Governance Important?  

The importance of IT governance is that it achieves desired outcomes and behavior. The relationship between IT governance and effective value creation of IT investments has long been recognized and is often recognized as the reason for achieving excellence in the management of IT. It provides a focus on cost and allows effective communication between IT and the business by establishing joint accountability for IT investments. Governance offers a formula for success which allows leaders to be active in the strategic management of IT and to make sure the following basic elements are in place:   

  • Alignment 
    Governance works hand in hand with IT portfolio management to align IT investments with agency objective which enables managers to improve responsiveness to challenges and manage current and future IT investments. It provides transparency into IT investments and ensures corporate resources are utilized in support of the business goals.    
  • Decision Making
    Governance allows leadership to actively commit to improving the management and control of IT activities and outcomes.  
  • Resource Balancing 
    Proper management of critical resources enables control in planning and organizing IT initiatives. This gives managers the ability to ensure adequate IT support is available for current and future IT investments. 
  • Risk Management 
    Proactive risk management ensures that IT managers and leaders are aware of the risks associated with the IT initiatives and provides the basis for the implementation of risk mitigation strategies. 
  • Execution and Enforcement 
    Governance provides IT managers with the framework to manage and prioritize IT initiatives and demands through a single point. It allows for the standardization of technology platforms and helps managers make informed decisions on IT initiatives. 
  • Accountability
    Effective governance is about accountability. It enables IT managers to enforce the responsibilities that relate to IT program management. 

What are the Challenges with Implementing IT Governance  

IT governance cannot exist in isolation and is a process by which IT decisions are made. Rolling up all IT investments and projects under the IT leadership provides a complete and comprehensive view of the IT portfolio. This enables leadership to make better strategic decisions and proactively manage and evaluate future investment as a group. IT portfolio management also provides the mechanism for effective IT governance and reporting 

Establishing IT governance is not a one-time implementation or achieved by a mandate; it requires commitment from executive leadership. It is an activity that requires continuous improvement. The challenges faced by CIOs are numerous and complex. 

In my experience, the following reasons are the most common factors prohibiting the effective implementation of IT governance:  

  • Lack of implementation and adherence to good portfolio management practices and processes
  • Undefined IT principles
  • Decision authority not properly defined and/or delegated
  • Poorly structured decision boards
  • Lack of alignment of IT Strategy to Business Strategy 
  • Decisions are not monitored
  • IT Policy not defined or adhered to 
  • Procurement of IT services, systems, and resources are not managed 

IT governance spans the organizations policies and practices that provide for IT management.  Effective implementation leads to effective communication, reliable data, clarity of accountability, and respected decision making. 

Conclusion 

It is not enough for corporations to have IT systems and expect them to deliver strategic value. IT governance is important and will ensure the effective and efficient use of IT to achieve the organizations business goals. Each company has unique needs, and the approach to governance will vary with the culture and structure of the organization. Implementing good IT governance requires a framework based on three major elements:  

  • Effective structure 
  • Effective process 
  • Effective communication 

To achieve maturity ensures that IT is working as effectively as possible to maximize cost savings and to recognize the benefits of each IT investment. It also ensures that the investments are consistent with the organization’s business strategy.   

I am here for you if you want to discuss your IT Governance needs and challenges. In the meantime, download our complimentary IT Governance Framework eBook to help you to regulate, monitor, and govern the value of your 2019 IT decisions. Check it out here 

Until next time, have an effective week! To further this week’s conversation, feel free to schedule time with me and let’s talk! 

Mary Patry 
IT Executive Advisor and Leadership Coach   
 480.393.0722 (AZ) 
 Mary.Patry@iteffectivity.com 
LinkedIn: http:// www.linkedin.com/in/mleonardopatry 

Let’s Talk sponsored by ITeffectivity.com an IT Executive Coaching and Advisory practice targeting CIO’s challenge of leading and delivering business solutions with a focus on effective people and process capabilities. Discover the possibilities by scheduling a complimentary strategy session with Mary Patry.