Published: June 30 2010, 01:11 PM | 5 Comment(s)
by Robert Stroud

Is the economy recovering or are we set for a double dip?  Will demand in your business increase or decrease?  If you experience a rapid acceleration in business will the floodgates of IT funding open - probably not!.  These are all questions that I have been asked lately as I am sure you may have as well.  Last year with the troubled economy we all made severe budget cuts, automated process, invested in virtualization, delayed or cancelled much innovation and staffing was reduced.  Now, the requirements are changing, we are moving out of the recession (no discussions or predictions from me if we will experience a double dip or not) and the business is mandating that we get moving again with innovation, which is good, isn't it?  The challenge is how do we do it with our current resource levels, operational commitments and ever changing business needs?

When I spoke to the CIO of a large healthcare organization recently, she mentioned that their IT budget had grown by a small percentage this year (about 1%) and at the same time though the business was mandating that rather than simply automate processes she was being required to develop innovation to meet the business strategy of growth.  She is planning to leverage the usual cost saving areas of some application rationalization and potentially some outsourcing and rapid deployment of virtualization of servers, storage and desktops and these will provide relief this financial year but the real sustainable growth must come from the ability to understand, prioritize and deliver the strategic demand faster.  Now healthcare brings to mind the view that everything is as in the emergency room where doctors require immediate access to patient records, interact with monitoring equipment and so on but all of this needs be managed against the longer term benefit of the patient, the consumer and the financials that drive these critical services.  For instance, with better use of availability and systems, data from previous visits and tests could be immediately available to the doctor to allow them to both make a faster diagnosis. This is good for the patient and the ER room as they could avoid costly procedures which may not be funded by the insurance provider. With this level of visibility its easy to see why an upgrade to the network supports secure sharing of patient records and other important data.

The topic of strategic planning through to decision making processes to approving, tracking and managing both current workload and future innovation must be high on the list of all CIO's at this time as IT needs to manage the whole portfolio, end to end. The only way to do this is to manage all aspects of demand including tactical, strategic and business as usual and to balance this demand against the capability available and provide the business with the knowledge to make prioritization decisions on services offered and where the investment dollars should be placed to deliver the business strategy. 

Many organizations are on a Service Portfolio Management (SPM) journey. My definition of SPM is aggregating all demand and then balancing investments against the organization requirement choosing where to invest your dollars in IT enabled business, allowing the business to determine priorities. A key aspect of this is going to be delivering repeatable services through a service catalog where the consumer can balance the quality of service versus the business requirement, no different to an everyday decision that you might make to purchase a car. The secret sauce is the separation from the business or requested service to the infrastructure allowing IT to determine the most cost efficient method to deliver whether in-house, outsourced, cloud etc.

SPM is a journey that will include multiple components including Demand, Financial Management, SLM, Portfolio Analysis and Catalog. It's important to remember that you need to walk before you run.  You can start with any of the components and a good start is to simply look to your demand with a catalog and mature over time. For example, see below for a scenario that I borrowed from a client: 

Stage 1: Use the Service Desk for handling common requests.  Create simple processes that might simply require a manager approval.

Stage 2:  Establish a published Catalog\interface allowing the "user to request" services,detail service expectations and financial implications - the backend could be manual at this stage.

Stage 3:  Automate the backend process, deliver a hard commitment to delivery timeframes.

Stage 4:  Deliver a complete LOB role-based entitlement catalog with multiple levels of service based on costs with selection driven provision and billng.

More on SPM shortly with financial management the largest modifier of behaviours.