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Engaging Non-IT Executives in IT Infrastructure Decisions. Your own sub headline This is an example text. Go ahead and replace it with your own text. Presented By: Meaghan Carpenter. Agenda. Case Background. 1. Collaboration and Alignment. 2. Processes, Decisions, Strategies . ✓. 3.
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Engaging Non-IT Executives in IT Infrastructure Decisions Your own sub headline This is an example text. Go ahead and replace it with your own text. Presented By: Meaghan Carpenter
Agenda Case Background 1 Collaboration and Alignment 2 Processes, Decisions, Strategies ✓ 3 Productivity Paradox 4 5 Questions
Case Background: Insurance Co. • Insurance Co.: global insurance and financial service company • Three major business units (BU) • Global Technology Group(GTS)-shared IT infrastructure for Insurance Co. : Corporate and Business Units • Hardware • Network • Software • Storage • Output processing Your own footer Your Logo
Corporate Level IT Structure Corporate Insurance Co. 1 CTO BU 1 CIO Applications, Support, Products BU 2 CIO Applications, Support, Products BU 3 CIO Applications, Support, Products Your own footer
Rapid Expansion and IT’s Integral Role • From 2000-2007 multiple acquisitions of different financial and insurances companies, becoming 1/20 largest ins.co • Offered wide variety of products • Life insurance • Annuities • Savings products • And much more • IT’s role increased in operations: defining how applications interacted with one another and providing support for the applications Your own footer Your Logo
Susan Travis-Chief Technology Officer • Became CTO in 2002 • Spent first four years streamlining Ins Co. infrastructure • Transformed GTS into a service management organization • Adopted IT infrastructure library (ITIL) • Trained employees on project management • Strengthened governance bodies • Simplified chargeback system-transforming 125 plus products to two dozen products • Relabeled products and services into an easy to read language • Found dislocations in billing
CIO: Alice Benson • 2006-Benson became CIO of large BU • Application Development Group had issues • Felt AD Group was quick to fulfill requests, but the business had become a “product siloed organization” • “Speed over efficiency”, with multiple applications performing the same function • Non-IT colleagues wanted Benson group to be more cohesive and work with GTS (IT)
Travis (CTO) Reported Bad News to Benson • Annual bill from GTS, going to increase by $12 million. GTS undercharging due to errors • Increase demand for services: $20 million dollar estimate with only a $5 million dollar budget Your own footer Your Logo
Issues: • Managers complained they had no control over GTS or IT expenditures • Weak collaboration between GTS and Large BU’s • IT struggled to keep cost down with a wide range of uniquely tailored products • GTS and IT infrastructure costs taking away from other projects • Expensive and confusing platform • Multiple applications performing same function • Speed of development over efficiency • Limited reporting and visibility of costs and applications Your own footer Your Logo
The Vision: “The $12 Million Challenge” • Challenge to eliminate $12 million out of infrastructure costs and keep GTS costs consistent • GTS composed 45% of total IT expenditures • Collaboration of all stakeholders (Non-IT and IT) to manage interdependencies between applications and IT infrastructure • Increase communication and visibility of costs through reporting and company wide initiatives Your own footer Your Logo
Achieving Collaboration • Communication Campaign: spread awareness and create a common goal • Pins, buttons, coasters • Recognition and Initaitives • Personal letters • Public Recognition ”Wall of Honor” • Set a new foundation for working together • Shared responsibility and accountibility for establishing and effectively using resources
Governance Mechanisms • Client Delivery Organization (CDO)-each business unit had a service desk and a relationship manager, liaison between BU and GTS • Customer Relationship Executive (CRE) –position within BU that reported to CTO not CIO, each segment also had a Non-IT person representing interest • Board meeting(GTS) with IT and Non IT Executives once a quarter to review initiatives, numbers, and risk • Large BU Planning Board-meeting w/ key managers and BU; objective to create synergy between divisions • IT Operating Council-once a month CTO and one non IT Senior Vice President discussed project sequence/status Your own footer Your Logo
Managing Interdependencies: Total Cost of Ownership Reports • Information on how applications relate and interact with one another and the infrastructure costs (total cost) • Easy analyses of info and data in a number of different formats • Uncover applications they did not understand and expose unassigned applications • Develop a common understanding of how applications impact the entire business • Created a starting point, eliciting conversation and raising awareness • Most Importantly, increased visibility, making it harder to ignore expenses and accountability Your own footer Your Logo
What Did These Reports Provide? As we learned in Class: • Timely • Accurate • Relevant • To context • To subject • Just Sufficient • Worth its Cost
Alignment Picture: www.emeraldinsight.com
The Impact of Collaboration and Communication Within One Year: • $20 million dollars worth of demand was met with 3.8 million • Decreased ongoing costs by $14 million • Reduced the following years expenditures by $7 million • Increased communication and collaboration between departments and achieved platform alignment • Efficient management of shared resources
Strategies • Benchmark-IT investments • Diversify teams and collaborate • Align IT investments with overall business strategy • Sustain engagement: create accountability through clear goals
IT Organizational Considerations • No single organizational structure works across all companies or industries • Decentralization-projects funded within functional departments • Standardization-architectural and application standards throughout company • Internal IT capabilities-find ways to connect across department to achieve local and platform alignment
Management Decisions • Include Non IT Execs in IT Infrastructure Investments • Establish a common goal • Gauge impact of technology (cost/benefit analysis) • Question decisions/processes • Develop internal methods/reporting • Measure return on investments ROI • Mechanism to relate applications • Develop internal feedback system • Understand IT infrastructure • Pinpoint bottlenecks
Paradox: Four Explanations 1) Mismeasurementof outputs and inputs. Is this needed and what do we really need? 2)Lags: payoffs not easy to determine due to learning and adjustment (current cost vs. current benefit) 3)Redistribution: technology likely to be used in different ways, making it beneficial but does not add to output 4)Mismanagement –information or technology value misallocated, undervalued, or over used
Questions: • Why is it important to engage Non-IT executives in IT Infrastructure decisions? • Non IT managers are better at planning • It is too many decisions to make for one department • Working together will create synergy across the company increasing efficiency and decreasing costs • What mechanism or process was credited with helping the company the most? • The “Wall of Honor” • TCO Reports • Refined vocabulary for services • What is the most important move a company or project group should make when working on IT project decisions and infrastructure? • Include Non-IT Executives • Creating governance systems • Keep employees informed and engaged • Create and establish a common goal
THANK YOU! Your Logo