Running your IT as a business

31.05.2005
Von Nicolas Callegari

The old cliché that "change is a constant" is the number one driving force behind most IT challenges experienced over the last three years, but the trick is to manage this change while delivering to the expectations of a business.

"If everything stayed the same for the last twelve months, costs would have been reduced dramatically," says Dr. Louis Blatt, senior vice-president for Unicenter at Computer Associates (CA), who was in SA recently to promote the company"s Enterprise Infrastructure Management (EIM) initiative.

However, he adds that the constant changes that both the IT and business communities have to endure, in the form of governance and compliance issues, add to complexity, and the need to manage the associated costs.

According to McKinsey research, the bulk of IT budgets are spent on infrastructure (60 percent) and application development (25 percent). So a strategy to address these costs from both a capital expenditure (capex) and operational expenditure (opex) point of view simultaneously, needs to be adopted to paint a true picture of IT costs, Blatt says.

Take the idea of utility computing for example. Spending money on a grid of virtualised hardware could have ripple effects on opex, by increasing complexity and the need for additional management and human resources. While this is not always the case, it is a possibility.

"There is a limit to the cost benefits of cost reduction," Blatt says, adding that while capacity is important for service delivery, it has become a commodity and that "IT" should have strategic business importance.

"The aim is to find the balance between strategic initiative and tactical imperative," he comments.

If change is causing increased complexity, the solution, Blatt says, is a unified and simplified platform.

But technology is not the panacea most vendors make it out to be. Many vendors, in fact, boast that they have solutions that aim to simplify processes, but often have their own little workflows built in, which produce disparate silos that need separate management.

CA says that if enterprises want to take IT back into the business, they need dedicated resources for continual system improvement, and a long term IT renewal plan linked to the business" corporate strategy.

"It is important for businesses to identify where increased efficiency can be achieved within the markets they serve, and funnel cost savings into R&D spend," Blatt adds.

It is similar to the debate about utility computing. While no more than an academic notion to most local businesses, utility computing (adaptive enterprise, on demand, organic computing etc) is not something that is achieved overnight.

Businesses need to start at the bottom as an active enterprise, being able to respond to faults efficiently. The next step is in automating these processes, which will lead to improved service level management, and, finally, to a fully virtualised enterprise able to share resources across the supply chain, and have applications delivered at the flick of a light switch.

The utopia that all businesses want to achieve is where costs are kept to a minimum, risk is mitigated totally and service levels for end-users are increased substantially.

"Nobody is there yet," concludes Blatt, "but it is a good roadmap to evaluate."