By Andrew Clifford
You can cut IT costs and still deliver IT change and services if you can stop IT itself being so demanding.
In a naive view of IT, business demands IT change. The IT organisation makes changes to systems and services, which deliver added value to the business.
We know that IT is not that simple. Most of the demand for IT does not come directly from business. It comes from the IT itself. Most of the demand for IT spend is the requirement to run and change existing IT systems, and replace them when they are no longer supportable. This "internal demand" is much greater than the "external demand" to support business change, and accounts for perhaps 80% of the typical IT budget.
One view of internal demand, perhaps the common view, is that it is inevitable. It can not be reduced. Our job in IT is just to meet internal demand at the lowest cost and risk.
We can take a different view. The management decisions we make dictate the level of internal demand. If we skimp on design, if we modify systems recklessly, if we let test suites and documentation get out-of-date, if we do not constantly upgrade to supported technologies, internal demand rises to frightening proportions. If we are disciplined about the long-term management of systems, and if we demonstrate to the business the value of preventative maintenance, we can cut internal demand.
A historical perspective helps us understand why we find it difficult to manage internal demand.
When IT started, IT change was difficult and expensive, and there was very little existing IT. It made sense to focus management effort on meeting external demand as efficiently as possible. Internal demand did not matter, because there was so little of it.
As technology developed, it was possible to do more and more with IT. Management focused on the dash for growth, to meet new demands as effectively as possible. Existing IT did not matter, as it was frequently swept away by bigger, better systems. Internal demand was not relevant.
But as IT matures, there are fewer truly new requirements. We have a vast amount of IT that must be run and maintained. Most projects focus on replacing old systems that have become unsupportable. Internal demand has taken over from external demand as the major determinant of IT cost and risk.
Our IT management focus has not shifted to match the maturing of IT. We are still obsessed with change, with projects, with meeting external demand. We think of costs and risks only in terms of project costs and risks. We do not focus on existing IT. We have no handle on internal demand.
We need to refocus IT. We shouldn't throw away what we have learnt about managing change, but we need to add to it a way of managing the IT we already have. We have to reduce the demands that existing IT makes on the IT budget.
This is what system quality management is all about. System quality management identifies and justifies changes that reduce internal demand. It stops IT being so demanding. It lets you cut costs while still delivering IT change and services.
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