Improving IT infrastructure

High-performance businesses need a strong foundation.

In too many companies, IT is suffering from what Accenture refers to as the austerity trap. It's a trap that is triggered when companies, responding to short-term pressure for greater earnings - and suspicious at best about what might be seen as inward facing IT investments - focus only on cost-cutting and on replacement.

High-performance organizations avoid the austerity trap. Our research shows that high-performance organizations look beyond cost alone to the total impact of a technology project - to its ability to help build a superior cost position and faster response times and, as a result, greater market share.

A key criteria for high-performance is a solid IT infrastructure. It's always tough to get business executives excited or even interested in discussions about technology infrastructure. However, they might make this a greater priority if they understood the extent to which corporate agility can be hampered.

But more surprising is the extent to which many CIOs focus all their attention on application issues and push infrastructure down the priority list. This is not just ill advised; it is dangerous, verging on negligent.

Rigorous demands will be placed on IT infrastructure in the coming years. The systems and networks of a high-performance business or government must be able to do the following:

•  Handle enormous volumes of data from inside and outside the firewall.

•  Support new classes of applications - radio frequency identification or embedded systems, for example.

•  Deal equally with multiple types of structured and unstructured information.

•  Respond to new requirements for identity management and data security.

•  Accommodate quick and extensive changes in the requirements placed on it as the pace of doing business accelerates.

•  Support collaboration by global teams and an increasingly mobile workforce.

Beyond the new challenges, companies need to realize that their infrastructures to some extent have been neglected and now just aren't up to the task of supporting high-performance business capabilities.

That's the situation that many companies and governments have to deal with today. Overcoming that obstacle requires mastery of a discrete set of infrastructure skills in such areas as networking, data center operations and security. As IT departments graduate from basic to progressive and then to pioneering skills, they contribute greatly to the overall performance of their organizations.

Adaptation and innovation

Of course, much good work is being done already. Many organizations have recognized the need to view infrastructure as a strategic issue and are beginning to see the benefits.

For example, about two years ago, Accenture worked with a global mobile systems supplier on a global IT consolidation project as part of an overall infrastructure transformation. Over a 12-month period, this large-scale transformation effort generated nearly $200 million in cost savings and reduced annual IT costs by 40%.

Top technology priorities for 2004 CIOs recognize the importance of infra-structure investments in enabling innovation and delivering business value. Here’s how those issues were ranked in a Gartner survey.
1.Developing an efficient and flexible infrastructure.
2.Managing an efficient and flexible infrastructure.
3.Security enhancement tools.
4.IT performance management (efficiency).
5.Improving the total cost of ownership.
6.Applications integration/middleware/messaging.
7.Maintaining a standard desktop across the enterprise.
8.Building IT-enabled inter-business processes.
9.Network infrastructure/management tools.
10.Storage management and employment.
11.Enterprise portal deployment.
12.Business intelligence applications.

Or consider that in 2000, faced with fierce competition and declining operating profits, Accenture worked with one of Europe's largest grocers on a multi-year, radical business transformation program to improve its stores and customer service, its supply chain and, above all, its IT infrastructure. As a result of this program, the grocer improved IT service levels dramatically, and reduced associated operating costs through standardization and consolidation across a range of hardware, database, communications and applications systems, nearly halving its annual IT operating costs.

But it is not just about cost savings. This year, Accenture is embarking on an infrastructure-related project with the U.S. government. The rationale for this project is not cost reduction but enhanced capability: an identity-detection system to capture the entry and exit data of visitors through the use of digital-finger scans and digital photos at U.S. ports of entry.

Start with a plan

So what practical steps can be taken to improve the strategic value of your infrastructure? Accenture recommends a three-phase process for infrastructure transformation.

First, effective consolidation and standardization is a good start. It is both a prerequisite to further progress and is relatively simple to accomplish - major savings that can be achieved quickly or easily. Many companies are well on their way by standardizing technologies onto fewer platforms and eliminating outdated applications.

In the second phase, companies move toward infrastructure virtualization and utility-style IT delivery, essentially establishing a dynamic and scalable utility computing infrastructure within the firewalls of their company.

Finally, in Phase 3, companies extend this virtualization, and the dynamic provisioning it enables, beyond organizational walls to third-party IT resource providers. The business case is there to justify this approach to infrastructure transformation, and it can be done by reinvesting savings achieved from a more efficient infrastructure, in some cases without an increase in your spending.

By laying a strong infrastructure foundation, organizations can use IT to deliver innovation and achieve high performance.

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Copyright © 2004 IDG Communications, Inc.

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