In today's economic climate, it's more important than ever for IT to work with the facilities and finance groups...
for approval of IT initiatives. Without cross-department coordination of objectives, other areas of the business may not understand a project's potential to bring revenue or save costs. This tip makes the case for IT, facilities and finance to work together for the betterment of the business.
Athos, Porthos and Aramis. They really got it right. As the Three Musketeers, they stood by each other and had each other's backs. "Un pour tous, tous pour un," as they would say -- "all for one and one for all." They would have made a good management team.
In today's organizations, forget about covering each other's backs -- the IT, facilities and finance departments barely know what the other does. With the current business obstacles and marketplace urgencies, these departments need to align their objectives and activities.
IT, facilities and finance: Separate concerns
The first problem is that the three groups speak different languages and are focused on what appear to be mutually exclusive objectives.
For the CIO and her organization, it's all about servers, storage, virtualization and other technical concerns. It's about always having enough capacity while never having too much (can you ever have too many IT toys?). It's about keeping things cool and backing it all up. IT needs more power, more cooling, more space and more stuff, all of which requires funds and floor space.
Facilities is responsible for the overall site and building. It typically manages lighting; the heating, ventilation, and air conditioning systems; plumbing; electrical systems; security; cleaning; and more. More responsibilities have fallen on facilities recently, as regulations that impact power consumption, recycling and electronic equipment disposal (e-waste) are being enacted and expose a company to potential liabilities. Facilities is trying to drive down power consumption, reduce overall floor space, and keep the building open, operating, and safe.
Finance pays the bills and works to keep the shareholders happy. It helps support the CFO and his decisions on investments, services and sales. These decisions focus on budgets and managing funds. New regulations manage how finance operates and what it has to report. The CFO wants to maximize revenue by reducing expenses and making sound investments. Finance is constantly barraged with requests for capital and operational funding, and it's difficult to decide which requests to approve or deny. In public companies, the CFO is personally liable for the accuracy of the formal corporate financial reports.
The challenge is how to get these seemingly mutually exclusive objectives to line up and support initiatives that are ultimately good for the business.
The cost of not aligning objectives
As an example, virtualization, consolidation and enterprise sustainability (green IT) initiatives require the close alignment and participation of all three departments. The project cannot be successful without IT, finance and facilities working together on the initiatives from concept to closeout.
For one international reinsurance company, finance cut 14 major IT programs to "improve the bottom line." The initiatives included ITIL implementation; shared services migration; desktop refresh rollout; legacy and mainframe system environments optimization; product development; and life cycle efficiency improvement project. The only the project allowed to continue was one that addressed regulatory and compliance issues. Unfortunately, the company looked only at the overall costs and failed to consider the revenue generation of the projects and the benefits that its facilities could have achieved. From a holistic portfolio perspective, there are synergies that offer additional cost reductions that could justify moving forward with a program -- but because IT and finance weren't speaking to each other efficiently, they all got cut.
The business payoff of working together
To get those important IT initiatives approved and delivered on time, include facilities and finance as part of the team and involve them early. Don't look at them as necessary evils or adversaries, but as valuable and integrated contributors.
One company considering the rollout of a new virtual desktop architecture plans to create a comprehensive 60-month financial model with a consultant to justify the project. In addition to showing the impact of the new technology, proponents of the project are documenting the as-is, or do-nothing, solution represented by a base case. While collecting the necessary input, IT was able to identify its current spending with the assistance of the finance group.
Part of building the base case and the establishing the projected benefits involves understanding the power and cooling impact of the new host servers. Those discussions take place with facilities, which is able to provide details on how the new solution will impact the building. For the company looking into virtual desktops, some of the thermal impact comments came as a surprise to IT -- but then again, that's not IT's specialty, which highlights the need for communication between departments.
Detailed financial analysis requires quite a bit of source data on vendor payments and company financial targets. The finance team was impressed with the thorough virtual desktop analysis and provided data on past and current spending. The IT team has built credibility with finance and demonstrated that the desktop virtualization initiative should be approved based on the financial justification. There is now a finance representative who sits in on all meetings with the consultant -- not to be a naysayer, but because finance is truly interested in the potential benefits.
The IT team working to build the business case for its initiative has raised the expectation of how projects should be documented before being submitted for approval. Certainly there will be some IT groups who do not view this positively, but it's where we all need to be.
The new credibility that IT has demonstrated with the finance and facilities groups is helping this IT team get projects approved more quickly. IT now understands what finance and facilities need in order to give approval. There are fewer approval cycles and many potential questions are being addressed proactively.
Our IT skills need to be matched with business skills so we can talk the language of those impacted by technology. By working together, groups can start to understand the needs and pressures other groups are facing. As long as egos can be left at the door and teams look at this as a way to be more successful, IT projects can be more quickly approved and provide better business value.
About the author:
Lucian Lipinsky de Orlov is Director of Business Strategy for VIRTERA, an independent IT professional services and consulting firm that delivers virtualization technologies and services to companies across the U.S. VIRTERA's proven vSpectrum consulting method helps clients in the successful and rapid adoption of virtualization and green IT technologies while delivering optimum ROI. For additional information on how to reduce power consumption and costs in a virtual environment, please visit http://www.virteratech.com/index.php/site/solutions_overview.
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