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Ray Paquet, Gartner Vice President and Research Director |
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Saving Money in Difficult Economic Times
Wednesday, 26 March 2003
Saving money is possible during economic difficulties. That message came Wednesday from Ray Paquet, Gartner Vice President and Research Director during a presentation at Gartner Symposium/ITxpo 2003 in San Diego. He said that savings and success can be reached with a formal return on investment (ROI) justification process.
In his presentation, "Saving Money in Difficult Economic Times," Paquet said that politics is often the enemy of sound investment decisions "Establishing an agreed-upon, formal return on investment justification process is the first step toward reducing the politics in each investment decision," Paquet said. He added that categorizing the costs and benefits goes a long way in determining the worth of IT investment.
The best intentions don't mean a thing if something is too complex. According to Paquet, the effectiveness of deriving ROI is linked to the complexity of the infrastructure. So more complex is better, right? Not necessarily. Go too far, and a "complexity boundary" may be reached.
"Some IT infrastructure may be too complex to manage, regardless of the budget, skill, resources or technology applied," Paquet said. "Highly complex IT infrastructures are difficult to manage.
"Reduce complexity wherever possible as the first step to any lowering-cost scenario."
What's a manager to do? According to Paquet, "Reducing complexity is the No. 1 return on investment strategy for management." He said that users should do their best not to compromise business performance while effecting this strategy.
Sometimes this implementation is a failure. Paquet said that the blame is "almost always placed on the vendor." However, he said, this is usually because the wrong solutions were used.
"In many cases, the vendor solutions are inherently too complex for the majority of organizations to implement," Paquet said. "Implementation failure is a more direct result of end-user complexity."
Paquet urged vendors to apply dedicated (full-time) resources to IT projects to reduce implementation time and increase rates of success.
Paquet showed a "risk register," which categorizes the risk, its impact (on a scale of 1 to 100), the probability of it occurring, its rank (which is the product of the impact and probability), the responsible manager and the actions needed to contain the risk. An impact of "1" signified a total cost of less than $50,000, while an impact of "100" signified that the continuity of the business would be affected.
Finally, Paquet stressed an emphasis on process development. "Clients must address organizational and process issues first," he said. "Process and organizational developments are the strategic investments; therefore, enterprises should invest strategically to reduce complexity by focusing on process development."
Joel Edelman
Gartner Staff
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