Technical Agility

The smart way for major companies to use their millions in IT spending power isn't just to hammer down the price of laptops and good service contracts, according to IT acquisitions specialist Jon Carrow. Buyers who can match the expectations of business planners with the architecture being built by IT make the company not only efficient but also technically agile, he says. Computerworld features editor Kevin Fogarty caught up with Carrow for a download on how his 15-person department in Radner, Pa., keeps IT purchasing agile for Madison, N.J.-based American Home Products Corp.'s 57-country, 35,000-user operation.

What do you mean by "technically agile"? Technical agility is a phrase I came up with trying to wrestle with the availability and change of technology - and the speed [at which] new technologies are released. Technical agility is the ability to quickly and smoothly adapt to or integrate current technologies with newer, different, disruptive, expansive or convergent technologies.

The faster that technology comes out, the faster you need to figure out how to bring it into the business and make use of it to get a return from the technology. Companies [that can] acquire that technology in a fashion that matches to their business strategy and their IT strategy and [who can develop] a plan for the eventual movement off of that technology will become more agile in the ability to change their business and adapt to changes in the market.

Behind the IT strategy, you have to have an IT architecture - infrastructure and tools that you're assembling today - that will be one step ahead of where your business strategy needs to be. If [in planning your purchases] you're looking at a one-year picture of an environment in a typical budget cycle, you can't tell what you're investing in, what you're divesting from.

The acquisition group that works with an IT architecture group unfolds that one-year picture into a map so that you can see multiple years of that same picture. If you have that picture when you make key investments in a database strategy or in bandwidth, you can ask whether it's something you'll be growing in size, whether it's a one-off project that has no other piece, or if it could become a potential standard within the business. If so, you can standardize that before the vendor knows they're becoming a standard and leverage your price down quite a bit. You can get terms in your agreements that allow you a lot of flexibility - things like platform independence or processor independence or version upgrades or the ability to prevent a vendor from splitting product enhancements in two and calling it two different products. You can really work the terms so that you have a very malleable agreement. And in IT, the more malleable your terms, the more technically agile you have made your organization.

What kinds of technologies and structures do you need in order to get that multiyear view? One of the cornerstones is enterprise asset management, which you use to really get a picture of your environment, and to some extent, [to] try to keep track of assets so that you don't lose an accounting of who's running what, where, how many you own, and ultimately, what it's really costing you to run that environment. The back end, of course, is, as you retire these assets, you need to know where they are, how to get rid of them [and] that you did get rid of them.

Other structures and tools would also include a business strategy and an IT strategy document. It's pretty tough to develop a multiyear investment picture unless the business has laid the groundwork. Organizational setup is also critical. Many organizations still operate in a decentralized fashion when it comes to IT management. While full centralization has its drawbacks, companies that adopt a shared-services IT organization with respect to the management of their infrastructure and global applications will have a better chance than others in developing executable long-range planning.

Do you have a ballpark figure for how much this approach saves compared with not handling IT acquisitions on a companywide level? Well, the hard savings that we can point-blank justify without getting into any of the soft savings is around $60 [million], $62 million over three and a half years.

On an IT budget of how much? My group has spent about $400 million over those three years.

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