Many IT strategists today are promoting the simplification of IT as a path to better business outcomes. The consensus among them is that complexity can hurt business. Siegel + Gale’s Global Simplicity Index says the world’s top 200 companies lose about 10% of their profits every year due to excess complexity. The SAP whitepaper “Leading Your Organization out of the Complexity Wilderness” evaluates information technology (IT) complexity as a major contributor to business inefficiency. Technologies like virtualization and multiple do-it-yourself public cloud infrastructures can give the illusion of simpler IT, but can often increase complexity and operating costs.
What sorts of complexities are common in IT?
- Technical debt: The extra work now needed due to shortcuts created long ago. Common in both applications and IT infrastructure, solving technical debt problems often means spending big on time and money in the present to unravel and eliminate these shortcuts.
- Application sprawl: Most mid-market companies have 100 or more applications supported by IT. It is not uncommon for some of these applications to have few or no users. Inefficiencies of older applications add complexity to a company’s product or service delivery, and increase additional IT workload that has no real business value.
- “Keep-the-lights-on” work: Some IT teams have lower headcount than in years before. This lower headcount often increases the amount of maintenance, tactical, or keep-the-lights-on work that the IT team manages. It’s not uncommon for 80% or more of the available FTE hours for IT to be consumed with tactical work, leaving little room for innovation or process improvement.
- Data center systems, hardware and service contract management: Most organizations dramatically underestimate the time spent selecting, acquiring, learning, implementing, and maintaining the hardware and software that make up the core infrastructure of IT. Cost savings may have been the original strategy for acquiring and maintaining these systems in-house, but the care, feeding, and responding to unplanned outages can easily consume all available time of IT teams.
What IT simplification initiatives are bringing success?
- Shared governance: Great organizations make sure their business side works closely with IT to drive project workload and priority. Shared governance allows the entire organization to better understand the current state, scope of work, and prioritization needed to reach desired business outcomes.
- Application surgery: Leverage the governance group to evaluate EVERY application in the company for its value, cost to maintain, and impact on the IT team’s workload. Once the applications are prioritized on these metrics, the governance team can replace or eliminate those that aren’t measuring up.
- Reducing “keep-the-lights-on” tactical work: Sometimes described as “core or chore,” this approach keeps core competencies of an organization in-house and uses outsourced providers to address “chores” or tactical workloads.
- Cloud, colocation, and connectivity: Both public and private cloud infrastructure can have immediate and lasting benefit of reducing tactical workload for the IT team. Depending on the cloud provider, many companies can realize performance gains as a side effect of migrating to the cloud. Colocation may still make sense for unique hardware platforms or high-volume storage requirements. Outsourced connectivity to multiple cloud infrastructures or disparate offices can dramatically reduce in-house IT staff workload and cover skills gaps. The key is to find a cloud service provider that can provide cloud, colocation, and connectivity from multiple geographic locations so IT teams can solve many problems with minimal finger-pointing among vendors.