Managing IT contraction

Given the economic climate, it’s not surprising that IT executives are looking for ways to do more with less. When it comes to their existing IT operations, the mantra of the day is consolidation and standardization. Yet, few IT organizations have the expertise, experience or objectivity to downsize their IT systems.

It wasn’t long ago that IT departments were scurrying to keep pace with extraordinary growth. Basking in the glow of the potential for the Internet and e-commerce to transform how companies did business, IT departments stockpiled PCs, servers and storage.

Times have changed. Cap Gemini Ernst & Young estimates that there is 40% more computing equipment and software in the U.S. than is necessary to run today’s economy. Meta Group expects IT spending to drop 3% this year and possibly fall another 5% in 2003.

Now IT departments are grappling with how to cut back. Many of these organizations lack systems and applications performance statistics to determine how well their operations support their needs. Others lack in-house skills to interpret and extrapolate the statistics. Even with the right tools to generate statistics and the right skills to interpret this data, few companies have a corporate policy and procedure for objectively evaluating their IT computing and application needs.

IT consulting companies are attempting to fill this void. These firms also benefited from the Internet boom and have suffered from its collapse. As a result, their number has dropped significantly. Their focus also has shifted from promoting new economy theories to providing practical help increasing the business value of IT.

Gartner’s recent Symposium Conference reinforced the timeliness of this shift. The most popular sessions examined best practices for prioritizing and measuring the return on investment of IT initiatives. While attendees were pleased with the attention this issue received, many were frustrated about the lack of solid steps offered to be successful.

A variety of IT consulting firms are seeking to supply the road map and the personnel to execute clients’ consolidation and standardization plans. IT decision-makers should evaluate potential consultants based on three criteria: depth of expertise and experience working with the technology and applications already installed in your environment; structure and flexibility of consultants’ service delivery methodology; and ability to quantify performance improvements of new operations and verify their effectiveness by providing strong client references.

Most importantly, IT decision-makers should be mindful of the bias of their consulting company. If you are relying on the consulting arm of an IT vendor, beware of consolidation and standardization strategies that favor their equipment or software. To be safe, when it comes to consolidation and standardization initiatives, getting a vendor-independent opinion is the best strategy.