Cost Cutting Strategy

One of the questions I routinely ask my clients, mostly infrastructure managers, is where they would cut their expenses if called upon by their management to reduce costs. I am never surprised and always disappointed at the answer. One well-meaning director responded that his people understood how to reduce costs and would know where to cut. No, with all due respect, they will not. First of all, none of the staff understood IT’s role in generating value for the organization. Secondly, without training, they would cut the most visible, easily identifiable costs. This almost always means headcount reductions. Third, the organization had inadequate and poorly defined processes and process metrics. Lacking the ability to measure brings us right back to the second point - headcount. Finally, none of his staff had the tools and training to make good decisions targeting efficiency. In this all too common example, the organization lacked a framework within which good financial decisions could be made.

IT will continue to be viewed as a cost center unless we empower our people with the tools, knowledge, resources, insight and support they need to make good financial decisions. (Published as "Readers Comment" in CIO Magazine article, "Trimming for Dollars" July 1, 2006).

What About Configuration Management?

There is an incredible amount of confusion around Configuration Management. And, for good reason. It’s critical to IT process. It’s essential for efficient incident, problem, change and release management. Capacity and Availability have essential interdependencies with Configuration Management. And how about Financial Management? How do you implement Configuration Management when ITIL does little to counter the confusion. Well, look at how a current client approached ITIL in general and Configuration Management specifically. We started with an executive overview. We then did a vision/mission session. The vision session was followed 6 weeks later by ITIL Foundations Training. They built their own ITIL roadmap, which included configuration management, based on what we did to that point. Their people now understand how this all works and are beginning to take ownership. They determined they needed help with Configuration Management. I'm now working to help them with what I call the "Control Suite" workshop in which we look, in depth, at Change, Release and Configuration management with some additional time spent on Service Level, Capacity and Availability. In that workshop they will establish their configuration management process objectives, controls, processes and ultimately policies. This methodical approach helps them internalize ITIL best practices rather than me coming in and "doing it to them". And oh, by the way, they will do all this BEFORE they buy a tool to automate their processes.

What you see out of this is cost savings and efficiencies as the benefits, not primary objectives, of process improvement. The objectives are always customer-defined and the program is structured in such a way that the key milestones do have real, tangible benefits in the short term. This keeps the momentum running.

Quest for the Shortcut to Operational Excellence

The ongoing treasure hunt in this industry is the quest for the shortcut to operational excellence. Sorry to disappoint you treasure hunters out there but there is no shortcut. There IS a right way to do it but it will take lots of hard work of all levels of the organization. Structure, guidance and expertise are available to those organizations willing to make a commitment.

There is nothing wrong with moderate, modest changes and improvements. But this is only the start. Keep at it! Your goal is to put in place change that actually transforms the organization. Thus the treasure hunt should be the quest for the gold waiting in holistic and strategic organizational change. We’re talking about that overwhelming cultural transformation that proves the return on investment. Anything less is only buying time.

How & Where to Start Implementing ITIL?

The simple answer to the questions:
· Start because you need to meet a customer objective
· Start at the level that will help you meet the customer need.

This is why the ITIL Executive Overview is so critical. This is also why we feel very strongly about a kick-off workshop approach that precedes program implementation and design. Further, this is why a current client is having difficulty moving forward. A company called requesting me to define their configuration items "for them". Rather than blindly define the configuration items I proposed a six step roadmap suggesting first we do an overview - a short and simple but focused training session on the principles of ITIL - so they could understand the interdependencies and to isolate the driver(s) that would set the direction for the project. I could have simply said, "Sure, I'll do that for you. And then I'll send you a bill." But that approach wouldn’t have had a lasting effect on the company and it quite likely would have fallen short of their real needs. I can "ITIL-ize" a company but my job is to empower them to do it so they get what they need or perhaps, more precisely, what their customers need. Coming from the outside and building a point solution may get us through the next quarter but it won't withstand the scrutiny of time as scalability and internal buy-in would not have been incorporated into the “solution”. And, even though it is tempting to take the money, I won't be caught in that trap. There are plenty of other "ITIL consultants" out there that will take on this level of work and who don't give a damn about bastardizing ITIL, compromising their reputations or inhibiting the long-term success of their clients. These questions are insightful in that they bring out these critical points.

When to Apply ITIL?

This is a real question. As was pointed out to me, companies don't just all of a sudden decide they need to save money and then recognize that ITIL can help them do it. To answer this question, let me go back to my first experience in this space. In a previous engagment, we needed to do something differently. Our processes were out of control, we didn't have a handle on our service levels or the costs for our services. I was tired of getting paged at 9 AM on Sunday mornings. Something HAD TO CHANGE! We didn't decide to do ITIL. At that point in time we didn't have the guidance of ITIL best practices to guide us. We simply knew we HAD to get control. We went down a lot of dead ends but eventually got there. This is important. I fired a customer of mine one time because their interest was in "doing ITIL" not meeting business needs. It became apparent to me that I was being used to help a newly minted ITIL Master director make a name for themselves in the company by latching on to the hot topic of the day. When I pointed out that their objectives were off-target and were driving the wrong behavior, they pushed back. It was obvious I was spinning my wheels so I gave notice and politely excused myself from the contract. Two project managers within the program subsequently left.

So, to answer the question, where do you start...you start with what you want to accomplish as an IT organization in enabling the business. This sets the stage, then, for all activities that must follow. If what the business needs requires us to look at Service Level Management, Capacity, and Incident, then our job is to devise a program, based on the customer needs (Six Sigma calls the initial elements CTQ's - Critical To Quality - which are translated into business, functional and non-functional requirements), that identifies those tasks within the three functional areas that will achieve the objectives. It is important to understand, however, that one cannot address any one functional area in total isolation. If you are going to address incident management, you need to look at certain elements of Service Level, Problem, Change, Configuration management as well.