Are you ready for
the New Style of IT?
Why a new approach to your IT Investment Strategy is needed
Conventional wisdom [for IT]
needs to change. IT isn’t an
overhead expense; it’s an
organizational asset that
needs to be managed as an
investment, with a steady
hand and an eye fixed on
enhancing the company’s
long-term competitive
capabilities and options.8
You run a tight ship and take a calculated approach to the technology and IT investment
decisions you make. You ensure that technology is maximized to deliver a positive return on
investment for IT projects. And you always have a clear view into what is required for the future.
For years, this approach has helped deliver effective IT solutions that support the business
needs and services you provide customers.
But things are changing—fast. Old approaches may not support the new realities of your
business. Driven by technology trends such as cloud, mobility, big data and social media, this
can mean profound changes to the way your company uses and invests in IT.
•71% companies are in the process of using or considering cloud1
•35% of IT spending is happening outside of IT control2
•By 2017, the CMO will spend more on technology than the CIO3
This New Style of IT is fundamentally changing the way business is done. But you have an
approach that’s working. So why change what’s not broken? Well the reality is this.
Despite 74% of finance executives and 59% of IT asset managers stating they know exactly
what they are getting from their IT investments4, they typically run 45% over budget, 7% over
time, delivering 56% less value than predicted.5
Success is no longer driven purely by the technology you implement; it is defined by your ability
to adapt to change as it happens.
•70% of the companies that were on the Fortune 1000 list a mere ten years ago have now
vanished—unable to adapt to change6
•Through 2015, only 10% of infrastructure and operations organizations will be able to deliver
the speed of change required by the business process they enable which is an increase from
fewer than 2% in 20137
The simple fact is you need to take a different approach to your IT investment strategy.
Flexibility, agility, speed and control are now table stakes. The traditional ‘develop, build and
run’ mentality to IT is no longer sufficient. Today your IT investment strategy needs to:
•Respond to your business priorities
•Enhance operational efficiencies
•Drives to new procedures and policies
Stepping out of the Data Center and into the Boardroom—
Aligning to the Business Priorities
The New Style of IT requires investment strategies that go beyond just finance or IT. Connecting
IT spend to the business objectives is essential and will require you to step out of the data
center and into the boardroom.
It’s no longer about the costs or the technology, it’s about creating value. IT has to become
part of the business—and be totally integrated with the strategic goals. Collaboration will help
drive alignment on priorities, identify what investments should be accelerated and deliver the
best approach for funding. It can also help drive faster deployment times and lead to better
overall results.
Those that are successful in ensuring investment strategies are aligned to business
priorities are:
•55% more likely than other companies to foster innovation9
•56% more likely to outperform competitors in terms of annual revenue growth9
•59% more likely to deliver initiatives on time, on budget and within scope9
“Effective management of the
IT asset life cycle, from
purchase to end of life, not
only helps CIOs grasp the full
cost of existing investments
to allow for cost optimization,
but provides accurate cost
information to guide future
investments, such as cloud
sourcing decisions.”
– Gartner10
Create Additional Capacity through Operational
Efficiencies
To maintain your current infrastructure and invest in the innovative technologies your business
demands requires a different approach to how you manage your IT assets.
•Up to 60% of IT budget can be tied up in unused IT from pre-provisioning strategies4
•ITAM policies across 30 global enterprises were informal at best or existed simply because of a
historical precedent4
Before asking for additional budget to fund your transformation, look at your existing
operational practices to see if you’re maximizing current investments. Having a clear IT Asset
Management (ITAM) strategy with strong KPIs that tie back to the business can help you
create the flexibility and extra capacity you need with minimal change. Gartner clients who
successfully execute ITAM as a discipline typically achieve 30% costs savings in the first year of
their initiatives and at least 5% cost savings in each of the subsequent five years.10
With a strong ITAM strategy and certain level of operational discipline, you can help deliver on
the transformation initiatives you organization requires and still keep the lights on.
Mapping Usage Models to Business Needs—Driving to new
Procedures and Policies
IDC Maturity Model: Cloud—A Guide for Success,
March 2013, IDC #239772, Volume: 1
2
Search CIO, More technology spending in the
hands of the business instead of IT, Christina
Torode, November 7, 2012
3
Gartner, “Survey Shows Consumer Goods
Manufacturers Can Gain Competitive Advantage
Through Digital Marketing,” Don Scheibenreif,
March 14, 2013, ID: G00239734
4
HP Financial Services, ITAM KPIs and Company
Outcomes, May 2013
5
McKinsey, Delivering large-scale IT projects on
time, on budget and on value, Michael Bloch,
Sven Blumberg, Jurgen Laartz, 2012
6
Forbes, “Make Business Agility a Key Corporate
Attribute—It could be what saves you,”
September 9, 2013
7
Gartner, “How I&O Can Manage Change at
the Pace of the Business,” March 7, 2013,
ID G00250014
8
The Cost of a Competent CIO: Investing in your IT
Department,” Working Well with your CIO, a CFO
Publishing eBook, 2013
9
PWC 5th Annual Digital IQ Survey “Digital
Conversations and the C-Suite,” 2012
10
Gartner, “IT Asset Management Key Initiative
Overview,” Alexa Bona, Jun 2013, G00251385
1
Providing new usage, payment and delivery models for IT, businesses can now benefit from the
flexibility the New Style of IT delivers, from dial up and down capabilities to anywhere access.
However, despite the various consumption models available, taking a one size fits all approach
could end up costing you more in the long run. Cloud may be a natural fit for some applications,
providing the flexibility you need to burst or gain capacity when you need it most. However
these same benefits may not translate well to more standard applications such as payroll.
Your IT investment strategy should clearly map usage models to the application and
business need. Defining which model and investment structure is right for your business
will be important, and help reduce the likelihood of duplicative costs turning up across your
organization.
Additionally, any transition will require a proactive approach to the policies and procedures you
instill across the organization. Articulating a set of guidelines for each new model and how they
can be procured will be important to ensuring data compliance and other potential security risks
are limited. It will also set a clear framework that can help reduce Shadow IT from proliferating
across your organization.
Creating Better Business Outcomes
As the New Style of IT takes hold, having a flexible and scalable strategy will be critical and
help ensure:
•IT investments can be accounted for over the aggregate
•Reflect the global and local needs of your business
•Deliver the agility you require to adapt to change as it happens.
Revisit your IT investment strategy today to see how you can more effectively drive the change
under way. Done right, this new approach can help you support transformation and deliver on
business goals.
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4AA5-0336ENW, December 2013