Recent Surveys (reported in IEEE Computer, May 2009) suggest that US firms are changing their global perspective on IT outsourcing albeit slowly.  It seems that prices, tax regimes and new evidence of instability are putting companies off of more outsourcing to India at least for now.  They are taking an ambivalent view of China  - negative for similar reasons to India and positive because China is at least a reasonably mature alternative to India.

Two interesting points in the report: New outsourcing initiatives are less likely this year because of the start-up cost; and Idaho and Indiana are represented on the list of emerging outsourcing locations.  Hmmm!

With all budgets under scrutiny, In-house IT operations can expect to come under greater scrutiny and pressure.  In November’s Baseline Magazine, Michael Vizard argues that the only way for an internal IT organization can avoid being usurped by an external IT Service company is run itself like a business.  Vizard says, “The challenge facing most internal IT organizations is that they never really learned to operate as  businesses.  Instead, they are usually viewed as an opaque cost center that most business executives dont understand:  These execs don’t know how much money is invested in what technologies or how many people are needed to deliver what level of service.”

I agree wholeheartedly.  The solution is for IT organizations to think in terms of the value they deliver through the products and services that their customers (the business execs) consume.  This is why it is vital for IT organizations to measure their operations, provide value visualization for their customers and make improvements based on the decisions and priorities that their customers establish from the value visualization ( VVF ).

For Vizard’s full article go to:

IT Needs to run like a Business

In Phil LaPlante’s article in the IEEE’s “IT Professional” magazine (Nov/Dec 2008), he reviews his IT predictions for 2008 (some good, some bad) and is brave enough to give us another set for 2009.  Of the 2009 predictions, it’s hard to argue that we are facing a tough couple of years for IT staff budgets.  Phil suggests that the response will be increased automation and outsourcing and that may be true but both require investment and I cannot help but think that IT departments will simply be asked to do more with less.  It certainly seems that this will mean working smarter with more application of metrics and targeted searches for improvements.  Again, the unwillingness to take on investments will probably mean targeted improvements in poor performing areas that are compliant with best practices rather than the major CMMI or ITIL initiatives that we have seen in the past.

Interestingly, Phil predicts less money spent on business intelligence initiatives.  He does not expect to see activity decreasing in this area but rather expects to see more use of open-source solutions (of which, he claims, there are at least 263 instances on SourceForge).

To access SourceForge, visit:

SourceForge.net

If you want to access the article, go to:

IT Professional General Index

I was describing the value that DCG provides to its clients to a new acquaintance over the weekend.  He does not work in IT.  Naturally, he asked the question that we are all asking each other these days, “How will your business be affected by the recession?”  I responded with my usual statement that our business is pretty recession proof, in fact we are very busy right now, because our clients prioritize different things at different times in the cycle.  When times are good, our clients are interest in process improvement and measurement because they need to find ways to deliver more projects with a shorter time to market to keep pace with expanding business.  Productivity and quality? Yeah, sure - as soon as we get these projects out.  Now, the focus is on productivity and meeting the businesses expectations at the lowest possible cost or, at least, a comparable cost to our peers.  Quality is important now because of it’s impact on productivity.

My new acquaintance thought about this for a moment and said, “You would think that the most successful companies would have IT organizations that turned out the most projects at the lowest unit cost and the best quality.  That’s how most industries work.”

Anyone got any examples of IT organizations that do this consistently?  Does your company?

I recently read the first paper (with the above title) by Craig Symons and Alex Cullen with Tim DeGennaro in the Forrester series of articles entitled, “CIO Success Imperatives.”  This paper shares many messages with our book (Business Value of IT) which they sum up as the “common framework of “people, processes and tools.”

But what do they mean by “Culture?”  Interestingly, they assert that:

The Right People + The Right Measures = The Right Culture

At first glance, this seems too simplistic but the authors are really highlighting the interdependency between how people are measured (and, by implication, how people are rewarded) and how they behave.  They go to to argue that its how people behave that defines the culture.  All good stuff and the most succinct expression of this fundamental truth that i have seen.  Of course, easy to say, much more difficult to achieve.

If you want to download (and pay for) the Forrester report, you can access it at the following link:

G2A-WP-Forrester-Culture-N?ID=7010000000057Yv

Since our book was published, I am seeing the phrase “Business Value of Technology/IT” more and more.  I guess it’s a sort of affirmation or maybe even a compliment. I saw the above title on a short article by Faisal Hoque in the November issue of Baseline magazine.  Faisal asserts that “using the right metrics to assess the business value derived from technology is critical in demonstrating the effectiveness of business technology investments.”  I agree completely.  So what are they?  Unfortunately, while Faisal gives us some excellent pointer for a process to find the metrics, there are no examples of what the metrics might be.  Check it out for yourself at the link below:

Assessing-the-Business-Value-of-Technology

I was recently referred to a vlog (yes, that’s a video blog!) featuring an interview with Howard Rubin on Eric Chabrow’s CIO Insight Blog “Parallax View.”  In this very short interview, Howard perfectly captures the issues that drove us to write our book, “The Business Value of IT.”  Kudos to Howard and Eric!

You can see the interview yourself at:

vlog_are_cios_degrading_their_jobs.html

A recent report by the National Association of State CIOs highlights 10 areas in which IT has delivered value to state governments:

• Business continuity and disaster recovery
• Cross-boundary collaboration and partnerships
• Data, information and knowledge management
• Digital government: government to business (g to b)
• Digital government: government to citizen (g to c)
• Digital government: government to government (g to g)
• Enterprise it management initiatives
• Information communications technology (ict) innovations
• Information security and privacy
• IT project and portfolio management

I really like this report because it is attractively presented, features real people working in state governments (with their photos) and describes simple ways to deliver value.  You can read it or download it at:

http://www.nascio.org/publications/documents/NASCIO-2008Awards.pdf

Here at the David Consulting Group, we preach that “Value Visualization” is a necessary step in the cycle of operations, measurement and improvement in IT organizations because it presents information in a way that enables senior management to make business decisions - both strategic and tactical. For more information, check out www.davidconsultinggroup.com/vvf/.

So imagine my delight at seeing a news story in InformationWeek about the IT department at General Motors using visualization software to reate mock-ups of software for business users in the same way as they create mock-ups of cars!  My Dad worked at the Ford Research & Development Centre at Dunton, England, and I still remember seeing the clay models of cars they used to make when we were allowed in for open days.  Interestingly, Mary Hayes Weier, who wrote the print article commented that, “Its the pressure of globalization and outsourcing that makes visualization particularly well suited for IT work at GM.”  I couldn’t have put it better myself in the context of our VVF.

The relevant InformationWeek article can be found at

showArticle.jhtml?articleID=211200920#community

I just realized that I haven’t posted a link to our book yet …

If you have read it, I would welcome some feedback.  If you haven’t read it, please buy it and let me have your feedback or tell me why you won’t be buying it.

ref=sr_1_40?ie=UTF8&s=books&qid=1225243195&sr=8-40

Thanks