2009: The Year Of Doing More With Less

What happens when your budget remains flat, your requisitions are frozen, but your workload continues to rise? This is the scenario many IT organizations face as they march into the financial uncertainty of 2009. As you approach this situation there are two choices:

• Continue along with business as usual, facing the realization that, despite your best efforts, you are not going to be able accomplish everything you need to.
• Work on efficiency: Prioritize work efforts; clearly define services and service level commitments; and streamline processes. 

I would not be surprised if there is some skepticism associated with the second point. If you’re IT organization is very mature, chances are you are already operating at a high level of efficiency. But if you are like many IT organizations that struggle with constant demands and everyday firefighting,  there can be significant, measurable gains by examining and refining your overall approach to delivering services.

For organizations immature in ITIL and IT service management (ITSM) disciplines, the opportunity for improvement in efficiency and cost reduction can be significant. Gartner’s analysis of two large organizations showed the implementation of process improvement and good practices as I described below led to a six to eight percent reduction in operating cost. There was also an associated reduction or redeployment of operating staff between 15% and 20% with consistent or higher levels of service.

Prioritized Work Efforts

Active management of your portfolio of services and the related portfolio of projects can help to assure that you have:

• Aligned your services and work efforts with the business.
• Appropriately categorized the high level business objective for transformation, growth and sustaining initiatives.
• Understand the projected cost of both service delivery and project delivery.
• Identified the risks and benefits of new or sustaining initiatives. 

Armed with this information, you have a mechanism for prioritizing services and projects. With this level of service and project intelligence and transparency, it is easier to make agile, objective, informed, and necessary adjustments to workload. Saving time in decision making for IT strategy groups can save money. More importantly, the cost savings associated with avoiding poorly informed decisions can be significant.

Clearly Defined Services and SLAs

In order to prioritize your services and actively manage your service portfolio, you must have well-articulated service definitions that are understandable to, and agreed upon by, the business. Accompanying this must be clearly defined service levels.

Understanding services and service levels can:

• Assist in understanding the cost of service delivery, e.g., higher service levels will always mean higher cost.
• Provide a mechanism for discussing realistic, required service levels with the business so they can be adjusted for ROI or business value. 

Often organizations that operate without formal service level commitments or even a fundamental knowledge of service level requirements provide levels of service that are misaligned with customer needs. Providing levels of service below what customers require results in customer dissatisfaction. Providing higher levels of service than what customers require can result in overspending due to over-provisioning of resources, technology or external services. This is a more subtle, but no less significant issue when you are trying to control spending.

Knowing what is really required, agreeing and committing to service levels and designing and maintaining services appropriately can assure both customer satisfaction and spending aligned with business needs. Of course, maintaining these services to the appropriate levels of availability, capacity and overall support requires active control service management processes.