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The Cost Allocation Challenge

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photo credit: me and the sysop via photopin cc

photo credit: me and the sysop via photopin cc

Following on from my last post about getting funding for your strategy, I am going to explore one of the big barriers to approval that you can face.

Strategy plans will often involve some kind of consolidation process; whether it be centralising a common service, or realigning architecture processes. This can often run into what I call the allocation conundrum. Typically, different areas in a business, whether departments or locations, will receive a cost allocation for the IT services they consume.  In terms of technologies and their champions, winners and losers will emerge from every consolidation programme; there will always be risk-takers and risk-adverse parties in any organisation. Where the challenge comes, is in handling the costs. The last remaining customer cannot be expected to carry the cost allocation of the whole service.

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Securing Funding for Your Strategy

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photo credit: Images_of_Money via photopin cc

photo credit: Images_of_Money via photopin cc

We have talked a fair amount about the planning side of building a strategy, but what about the funding?

It is not much use having a wonderful vision without at least some execution capacity, and that means hard cash. Any CIO or Project Manager will know, extracting money from a tight fisted Board with conflicting priorities is never easy, and grandiose plans do not always convince. I believe there are a number of things that you can do to help this process along.

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IT Strategy Development: a Quick Guide

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photo credit: DoNotLick via photopin cc

photo credit: DoNotLick via photopin cc

In my previous blog entry, I discussed the need to make time for creating an IT strategy. I have also discussed the need for balance between free, unstructured thinking, and structured analysis. Brainstorming all the possible approaches is a great start, but how should you structure these thoughts into a workable plan with measurable results?

Clearly, in a short blog post it is impossible to set out all the detailed methods that can be used to drive a strategy but I hope this is a useful overview for non-practitioners and a useful reminder to the strategists amongst readers.

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Even in the Quietest Moments

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photo credit: flatworldsedge via photopin cc

photo credit: flatworldsedge via photopin cc

Another nod to one of the well-listened-to tracks of my student days, but an interesting introduction to some thoughts on the challenges of today’s CIO.

The song starts:

“Even in the quietest moments I wish I knew what I had to do…”

Now, I am sure there are more than a few CIOs who would wish for a few quiet moments, and still more who wish they could predict what they had to do with accuracy.

What is clear is that CIOs (and therefore also CEOs) are facing ever more challenges of increasing complexity. The entry on this blog this week speaks of quite a number, and still more are discussed in our growing list of previous entries on this blog. For those facing up to the challenges of the IT marketplace today, it is essential that time is taken to examine the trends out there, and engage them actively within an overarching strategy. Sadly, too many executives are too busy fire fighting the challenges of delivering their current projects or ongoing service commitments, to be able to pro-actively plan ahead.

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Top-Down or Bottom-Up?

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Those who know me would probably say I am a top-down decision man. In many ways this is true, but anyone who has run strategy decision projects or programmes will concur that any top-down decision is only as good as its bottom-up validation. Getting this balance right is critical to the strategic processes in organisations. We all know of strategies and programmes that have failed because the top-down decision was never validated, and the initial feel was way too optimistic. We all know of decision making processes that have been stymied because the fact collection process has become endlessly drawn out, meaning that decisions never get made. So, how do you achieve the correct balance?

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Crisis, What Crisis?

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crisis what crisisFor those of you who have the same, rather bad, taste in music as me you might remember the Supertramp album from the 1970s with this title, referring to a man staying cool in a crisis.

Following on from a recent post on banks and the cloud, I wonder if we could take this title as a state of play for the banking industries take on the cloud. Are the banks sitting there saying, “I am regulated, so cannot change safely”, are they saying “I am so big I have already achieved economies of scale”, or, like the man on the album sleeve, are they just carrying on regardless, ignoring the problem? Whatever happens within these institutions,
I believe if they keep their heads in the clouds, they risk finding themselves in the middle of a desolate wasteland of defunct technologies.

Changing Paradigms in Banking – Cloud Computing

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photo credit: kevin dooley via photopin cc

photo credit: kevin dooley via photopin cc

It was interesting to see the announcement that BBVA are moving their mail and office services to the cloud. I have been debating with a number of colleagues from the banking industry the future of the cloud in banking.

In the wider services and financial services world, that is less tightly regulated than the big banks, it is clear that they are already making the journey to cloud based computing. Whether they have made the move to cloud based PaaS services such as Salesforce for CRM, or on Google or similar for document sharing and mail, or on an IaaS service for comprehensive corporate computing.

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An Approach to IT Costs

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One of the most compelling arguments for a transition to the cloud is transparency of pricing. The move from complicated internal charges for costs ranging from hardware depreciation to software license shares to the time of system admins all makes the simplicity of buying compute time direct off the network very compelling to a business consumer. The definition of a true cloud service being pay-as-you-go (PAYG in mobile phone industry jargon), buy what you need when you need it, gives the consumer scalability and choice at the best price…..at least in theory.

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The Challenges of Establishing the Financials for a Cloud Project

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photo credit: wwarby via photopin cc

photo credit: wwarby via photopin cc

All the technical cloud evangelists are going to hate me for dwelling on the practical financial matters of establishing a cloud project but I am afraid these issues cannot be ignored. If organisations cannot break the deadlock on the problem of first man in or last man out with an sensible approach to managing allocation of costs, then the organisation will be in danger of missing out this critical technology revolution.

In case you have not read my earlier posts, or in case it was not clear, then let us take a real worked example of the challenges faced by a typical organisation in transition to the cloud. Smaller, more nimble organisations may not face this issue so starkly, but certainly the medium to larger ones will.

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