Many CIOs will look at their IT Strategy as portfolio optimisation, choosing the most effective tools for each area of the business. However, an effective strategy with a holistic approach should also attempt to look at the way the tools are used and adapt the behaviour within the organisation. In this blog entry I am going to look at a couple of examples of ways that behaviours can influence IT cost-effectiveness. Let us start with a topic that is driving up costs in all organizations worldwide – storage. We are all guilty of poor storage management, myself included. For a simple presentation for the team, how many of us add a photo to the cover page of our PowerPoint presentations? Do we really need that degree of prettiness to create an impact? Perhaps for an external presentation but for our own team? Not really.
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.
In my last post I hinted at the dilemma of who covers the costs for a cloud project. There would appear to be few issues and some major advantages to scaling out to the Public Cloud, as you can pay as you go or pay for what you use. But is this really the case? The problem with transitions to any shared platform is that nasty subject of who pays. Typically organisations will allocate shared service costs with an allocation key for the costs to various groups using the shared service. This allocation key will determine how much each person pays. It is obvious that as the shared service grows the unit price will trend downwards and will eventually level to a free market unit price but the first or last user may for an interim period pay much higher prices. This “first man in” or “last man out” problem causes all sorts of grief for projects in the real world, not only for cloud but for many wider IT projects.