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ITIL, or Cloud, Do not go verbatim

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CIOL Bureau
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MUMBAI, INDIA: Biswajeet Mahapatra, Research Director at Gartner, helps us interpret a recent Gartner report on I&O operations, in this interview that underlines some specific bullets on compliance Vs governance, ITIL’s real worth and the snow-mower’s dilemma around obsolescence.

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Why this report? Does it pluck any fresh changes in the I&O terrain?

Indian IT organizations, especially in the infrastructure and operations (I&O) function, have been slow to adopt new best practices, methods, technologies and processes. The findings suggest that I&O have not received the attention and focus that it requires, compared with such initiatives as application implementation and integration.  IT organizations are often viewed as cost centers, with lump-sum budgets allocated at the beginning of the fiscal year. With difficult economic times, higher cost of capital and high attrition rates, I&O has suddenly become the focus of IT leaders and CIOs.

What do you recommend? Can IT shift these cost centres to a new place?

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Make capital-intensive investment decisions only after a detailed capital investment analysis shows positive cash flow. Move to better, more scientific cost management methods, such as activity-based costing (ABC). This will help I&O organizations move from pure cost centers to profit or investment centers.

The report also talks about ITIL and COBIT. What do you suggest in that context, specially when they have come under a not-so-effective arc, as surveys like the one by Compass point out. Is it because a heavy leaning towards third parties or a more fundamental cataract around compliance vs. actual governance?

As the report says, have a two- to three-year plan to adopt best practices, such as ITIL (IT Infrastructure Library)or COBIT (Control Objectives for Information and Related Technology). This will support faster adoption of best practices and make I&O more effective and efficient. Yes, IT is very slow in adoption of some best practice technologies and this is for reasons of vague or unclear approaches. Oversight adds to the situation. The entire process becomes auditing oriented. The entire objective changes and that is not how it should be in the first place. External consultants are often hired which is a case where they might deliver an imitated job. More so when the internal side is only partially involved and management is not showing adequate interest. That’s why it goes wrong.

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So what can correct the situation? And what about the different set of metrics and expectations when it comes to IT users Vs business users?



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Do not go verbatim when it comes to best-practice frameworks. Then, the next issue is that most of the times IT and business functions are running as parallel organizations. The lack of understanding that ensues should be sorted out. Most of these frameworks start with the fact that IT function is an enabler, and thus they tie up IT to business. Example- linkage between IT budgeting and corporate budgets. But as I said, verbatim is not the way to go about it. Implement a technique that is suitable to your organization. Every situation and every company is different, so pick up a framework according to the unique needs.

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You highlighted in the report that CIOs have been told to quantify investments. ROI encounters another spanner when we consider the constant, unpredictable and inevitable shifts that keep happening all the time. How does one ensure the vision of a complete ROI cycle with a fast pace of shifts and obsolescence?

Yes, every time a vendor comes and pushes a new approach or solution, one needs to ask some questions. Do not go for it every time there is something new unleashed. To give you an example, a company recently considered a shift to an external solution since its legacy application was years old. But the management asked, why the shift when it’s working fine? It was hard to justify the real returns of a change of that level and investments. The dichotomy of an upgrade has to be put out clearly in financial terms and that should put a lot of stress on long term cycle costs. Think in terms of long term, NPV value, payback numbers etc before you switch.

Investing with rigorous calculations, you say?

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Gartner has a model — Run, Grow, and Transform. Since IT in India is cost centre inclined, most of the investments go into ‘run’ bucket. One needs to have a cost management mindset in place but with a move to service-oriented scenario and decide cost measurement techniques accordingly. You have to justify your investments so calculate as per all the resources required in the software-hardware mix and cycles, decide whether to outsource or do it on your own or opt for the cloud. Have in place standards and best practices.

Does Cloud make accounting and ROI calculations easier?

Elasticity, pay-as-you-go model etc is what ideally makes it best. The model operates only when there is a service catalogue so it makes IT work in a different way and accounting gets a new orientation. But that’s a utopian land. Very few vendors actually give you a real elastic model. Ideally, and in the long run though, Cloud should iron out the cost calculation ironies. It would take a lot of change in mindset from both internal stakeholders, i.e. service orientation; and external ones, i.e. real elastic provisioning. I guess in about five years, that kind of change would happen.