Monday, February 14, 2005

Planning IT Infrastructure

This is another fine example to demonstrate how IT management work has evolved from the technology-oriented approach a few decades ago to the present day management-oriented approach owing to the growing complexity of the technical details and the high demand of management skills to put the technology to effective use. This has in fact separated the IT technical stream and the IT management stream. EOs as management experts are capable and suitable for the latter.

Colleagues may wish to read the web article "Managing Next-Generation IT Infrastructure" in The McKinsey Quarterly February 2005 at http://www.mckinseyquarterly.com. If you are not a member, just register for a free membership.

Planning IT infrastructure is a big issue in an organization. While there are technicians and vendors proposing technical options, the emphasis on resource management and IT management is enormous. The article declares that the days of building to order are over and the time is ripe for an industrial revolution.

The prime mover is cost. Organizations have worked hard to reduce the cost of the IT infrastructure, i.e. the data centers, networks, databases, and software tools that support businesses. Some leading companies are beginning to adopt an entirely new model of infrastructure management—more off-the shelf than build-to-order. Instead of specifying the hardware and the configuration needed for a business application, developers specify a service requirement; rather than building systems to order, infrastructure groups create portfolios of "productized," reusable services. CIOs must also put in place novel governance mechanisms to deal with capacity planning.

The article advises that, to make sure the new infrastructure is running efficiently and to sustain performance improvements, IT managers should focus on five key areas:

1. Demand forecasting and capacity planning. A key goal of the new infrastructure model is to match supply and demand more closely, thereby minimizing the waste of resources. To achieve this objective, the IT group must work closely with business units in order to forecast demand and thus improve capacity planning.

2. Funding and budgeting. Product demand drives budgets. Since the new model uses real demand forecasts, budgeting is easier. Moreover, with pricing transparency comes knowledge. Business units will now know what their IT choices are going to cost; the infrastructure group will understand the budget implications of user requests and be able to create a more accurate capital plan.

3. Product-portfolio management. The infrastructure team should examine product-portfolio two or three times during the first year to ensure that they are appropriate given projected workloads and emerging end-user needs. Thereafter, a yearly review usually suffices. Teams should monitor all phases of the product life cycle, from planning and sourcing new products to retiring old services and redeploying resources.

4. Release management. To ensure that new technologies or upgrades are integrated effectively and that change causes less upheaval and lost productivity, leading companies carefully manage the release of both infrastructure products and applications in parallel. Moreover, to plan ahead, application developers need to know about any impending change in the infrastructure catalog.

5. Supply and vendor management. IT leaders must ensure that computing resources are available to meet the contracted service levels of product portfolios. Infrastructure managers should revisit their sourcing strategy annually, seeking opportunities to lower costs and improve productivity.

Colleagues will notice that the above principles are familiar management concepts applied to IT. It is not difficult to develop a team of IT professional managers in the grade, but we need to act fast and seize the opportunity quickly.

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