Skip navigation
Twitter   Follow us  •   Share   Share    Become a member

Business Technology Strategy

2 Posts tagged with the financial tag
0


"What are you going to not buy?" That's a question I'd like you to consider as you read on...

 

Here's a case study of a CIO who handled some pretty drastic cost cutting in a really sensible, healthy way:
          http://www.ndma.com/resources/docs/Case_Study_Riverside_2.pdf

Matt Frymire, CIO of Riverside County, California, developed a product/service catalog with costs, and submitted his budget in a new format -- the costs of what he planned to "sell" the business, not just what he planned to spend.

 

This allowed him to manage demand. When faced with a 30% budget cut, he asked his clients, "What do you want to not buy?"

 

Once the tough business decisions were made, Frymire extracted costs from his IT organization directly associated with those now-cancelled projects and services.

 

Is anybody else out there running IT as a business and forcing clients to decide what they will and won't buy?

1

The CA Championship is underway, with 9 of the Top 10 golfers in the world taking their best shots at the vaunted Blue Monster at Doral.  As a lifelong golf aficionado, and one of those rare birds who finds equal satisfaction in watching, playing and analyzing golf statistics  – I read with keen interest Friday’s Wall Street Journal article titled “A Stat is Born:  Golf’s New Putting Measure”, which formally introduces the PGA Tour’s newest Metric of Success:   “putts gained per round”.

 

While this new metric could probably use a punchier name, the rationale for its creation lies in an age old question, previously unanswered despite golf being almost as old as the dirt on which its played, and despite the massive dataset which the PGA Tour has compiled over the past 30 years.  

 

The question:   Who is the Best Putter?

 

This is not an insignificant question, in a game which readily comes down to the old mantra:   Drive for Show, Putt for Dough.   Whether you are a scratch golfer or a Sunday hack, you are likely familiar with the knee-buckling, palm-sweating and heart palpitating symptoms of golfing’s “last mile”   Yet traditional measures have proved inadequate – despite their longstanding acceptance.

 

Putting Average – the current standard, computes only putts taken on greens reached in regulation.  This approach excludes the 30% of putts which are made on greens not reached in regulation.   Other accepted metrics have similar biases and variability which again makes them only marginally able to quantify a true measure of putting success.

 

“Statistics can just become a big splash of numbers and not mean anything.   But this, we think, will mean something,” said Steve Evans, the PGA Tour’s senior vice president for information systems.   “It’s complex to calculate, but simple to understand”.

 

Pretty well sums it up….simplicity and innovation in the face of complexity.  Of course, since this quote came from an IT guy, it got me thinking about how IT executives are (or aren’t) aggressively pursuing innovative new Metrics to keep pace with the massive datasets they’ve accumulated over the years, and to support the innovative technologies and delivery systems which they have created.   

 

A recent CIO briefing I attended touched on this –with the CIO himself challenging the long-standing financial baselines used by IT executives to measure earned value contribution.   I found this refreshing and yet as the conversation evolved, the real challenge was in establishing some consistent, standard and consensus measures of earned value.  

 

Put simpler – a normalized and standardized way of looking at IT Service Cost Models.   This becomes an essential metric:  “How much does X service cost” and “How much does that X service cost compared with Y competitor or Z industry or W service provider or cloud host”?.

 

Until an apples-to-apples service cost benchmark can be established, individual organizations will be at the mercy of service providers and cloud hosts who purport to be able to do it “better, faster and (most importantly) cheaper”.    While these delivery models certainly have the implicit advantage of economies-of-scale, they are able to do this by standardizing the services they provide (the “good enough” concept).   They have stripped out the variability and pet projects and customization inherent in so many organizations, and their cost-of-service baselines.   

 

But how then to determine which Service Provider to select?   Are they all using a similar standard set of Cost variables?   Are they all delivering the same quality of services?   Are they all delivering the same security or portability?

 

Similarly, while much of the discussion on Cloud Computing seems to cite the primary barrier of “security” and “quality” – in my opinion having a Cloud Cost Benchmark for a set of standard services will soon become the real barrier to comparing, selecting and switching service providers.   

 

And finally, as IT executives continue to innovate their own services, having a new set of metrics will be needed to fully communicate the value they are bringing.    Without these, they risk marginalizing their gains because of antiquated measures.

 

For what it’s worth, using the PGA Tour’s new putting metric, Luke Donald would be considered golf’s Best Putter.   I’ve got my money on another Brit to tame the Blue Monster this weekend:   Paul Casey.

 

What are some innovative metrics your organization is using?



We encourage your feedback. Reach out via the "Contact the Editor" and "Contact the Concierge" services for any needs, questions or comments. We look forward to serving you!

Paula Klein, Smart Enterprise Exchange Editor
e-mail

Ellen Lalier, Smart Enterprise Exchange Concierge
e-mail
phone 516-562-5727; fax 516-562-5466