Fine-tuning the IT department
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IT managers are rarely granted the technology resources to automate and streamline their own operations - but could this be about to change?
The head of a large IT department spends his or her working life striving to automate and streamline the operations of other business units. Their remit is simple: to ensure that employees in the finance, human resources and sales and marketing departments, manufacturing operations and elsewhere are able to perform their jobs efficiently, at the lowest possible cost, in order to create a responsive, effective organisation.
But executive management have rarely granted CIOs the technology resources they need to automate and streamline their own operations. And the results are clear: a sketchy oversight of IT spending; a poor grip on performance metrics such as technology service levels, project performance and help desk quality; and no accurate way of identifying areas of strength or weakness.
Suppliers of professional service automation (PSA) software claim their products enable CIOs to do all these things - indeed, many of the earliest high-end PSA sales were to the internal IT departments of large multinationals, and several PSA suppliers, such as ChangePoint and Novient, made the requirements of the internal IT department their key focus in the early years.
"The project and resource management needs of a large internal IT department do not differ that much from those of an organisation that provides services to third-party clients. The IT department must be responsive, answerable and stick to service-level agreements," says Ayman Gabarin, vice president of Europe, Middle East and Africa at Changepoint, which derives around 30% of its annual sales from deals with internal IT departments.
So what are these needs? According to Tom Pohlmann, an analyst at IT market research company, Forrester Research, IT directors require applications that cover three key areas: Demand management applications that enable them to prioritise non-strategic work such as system fixes, plan strategic projects, and source outside services such as contract IT staff; Resource optimisation software that enables them to track projects at a detailed level, collaborate on documents and files, and assign work to employees on a more flexible basis; and Portfolio management applications that enable them to create budgets and link technology initiatives to enterprise-wide goals.
No one individual PSA supplier currently supports all the needs of internal IT management, says Pohlmann, although he cites PeopleSoft and Evolve as two suppliers offering particularly strong end-to-end function in this area, while others offer strengths in particular areas. "Business leaders won't engage IT, nor will adaptive IT succeed, until firms use technology beyond the realm of spreadsheets and email," he says.
The experiences of a number of early adopters back up the PSA vendors' claims to provide effective internal IT management, says Pohlmann. Telecommunications supplier Sprint Canada funnels strategic projects through a central project management office that reports to both the CEO and CIO. "With all project, resource and workflow data managed in their Changepoint app," says Pohlmann, "both business and IT know the gates through which projects must pass prior to approval - and the ground rules for allocating resources." Reduced reworking in the IT department has convinced Sprint to extend its purchase of Changepoint software and implement it in one of its marketing departments, he reports.
Similarly, automotive giant Ford uses PeopleSoft's Enterprise Services Automation (ESA) software to co-ordinate the efforts of its 6,000-strong IT department, of which 30% of staff are contract workers. "Ford needed to see what skills it has worldwide and to more efficiently tap into those resources," says Henk Nieuwenhuis, PeopleSoft's director of enterprise services automation in Europe, the Middle East and Africa. He claims that PeopleSoft ESA has enabled Ford to reduce and control its spending on contract workers and to deploy its vast resources more effectively.
Organisations such as Ford and Sprint Canada may be pioneers in automating internal IT service management, but increased competition between internal IT departments and outsourced IT services for project work, and the need for IT departments to meet more exacting service levels, will likely foster increased interest in tools that enable CIOs to address these issues.
