Commentary
1/13/2005
10:39 PM
Commentary
Commentary
Commentary

SmartAdvice: Understand The Landscape And Players When Consolidating Servers

Approach the politics of server consolidation with solid research and executive backing, The Advisory Council says. Also, highlight intangible benefits and find the value others miss to get IT-project funding success.



Editor's Note: Welcome to SmartAdvice, a weekly column by The Advisory Council (TAC), an advisory service firm. The feature answers two questions of core interest to you, ranging from leadership advice to enterprise strategies to how to deal with vendors. Submit questions directly to [email protected]

Question A: We know that we could save money by consolidating servers currently scattered across business units. How should we address the political issues around getting the business units to give up their servers?

Our advice: One should approach this initiative with caution and practicality, and do a thorough analysis before implementation.

Some organizations are so dysfunctional that almost nothing works. I have come across organizations where employees showed up not to make progress but to block it. Past results are a clear indication of future performance. If the organization has a legacy of failed projects, there's need for analysis of the root causes, and for addressing them prior to any major initiative.

Barring these extremes, most organizational politics can be addressed through logic and negotiations.

The key to politics is in understanding the landscape and the players. Get a clear understanding of the history and dynamics of the organization. Also understand the personal agendas, motivations, and hot buttons of the players.

Start by getting executive sponsorship, preferably on the business side. Using the sponsor's help, approach other key executives to identify the team. This ensures that key players are engaged and supportive.

The first task of this team is to create a project charter that clearly lays out the vision, objective, scope, assumptions, approach, plan, and participants.

Get everyone--sponsor, executives, and the team--to sign off on this charter.

The team then prepares a business case that clearly articulates ROI. This business case is the basis of addressing the logical concerns of the key stakeholders:

  • Set realistic expectations
  • Conduct thorough business impact analysis
  • Identify key risks, their impact and mitigation strategy
  • Be prepared for a discussion on the following:

  • While setting savings objectives keep in mind these key trends
    • Hardware prices are falling
    • Business cycles are shortening
    • Service-level expectations are increasing
  • If cost savings estimates are based on hardware savings alone, then this is a losing battle.
  • Forward or backward consolidation? Why?
  • Logical or physical consolidation? Why?
  • Rationalization across servers? When and how? Why?
  • What are the key facts such as capacity utilization? Peak loads? Connecting pipes?
  • Now you're ready for negotiations.

    Remember, negotiations are a give and take process. Before you expect "them" to understand you, ask yourself, "do I understand them?"

    Executives may oppose this initiative for two primary reasons:

  • Logical reasons, such as security and service level concerns.
  • Budgets: How will this affect their ongoing budgets?
  • The former is addressed through the business case.

    The latter requires more work. Executives, like generals, do not concede territory. It cannot be taken by force, either. Hence, one has to try a combination of tactics.

    Stick:

  • Deftly use executive sponsor pressure.
  • Link compliance with compensation drivers.
  • Carrot:

  • Make it worth their while to lose some money and control. They can gain more in some other area.
  • Make sure that there's equity across the business units, i.e., one must not give up more than the other.
  • This political battle hasn't ended with the "go ahead" decision. The "go ahead" may be a strategic retreat in the face of overwhelming odds. They might wait to subvert the implementation and still achieve their objectives. For you, failure here will end the project and leave you damaged for future adventures. Hence, careful planning can and usually does save the day:

  • Set realistic expectations.
  • Keep all constituents in the loop.
  • Communications is the key.
  • Do not rush.
  • --Sourabh Hajela



    Question B: We're having difficulty getting money for IT projects we consider vitally important. What are some "secrets of funding success" for today's economy?


    Related Links
    20 Ways to Find Tangible Savings Others Miss

    Storytelling
    Our advice: In today's economy, CXOs demand to "see the ROI." Too often IT people misunderstand how to develop an irresistible return-on-investment analysis. An analysis of more than 300 highly diverse business cases has revealed these success factors:

  • Finding value others overlook: Align project benefits directly to issues that decision-makers care about. This requires knowing (1) the firm's visions, values, and goals, and (2) the decision-makers' favorite strategies for realizing such objectives. For example, to justify a CRM system, go beyond the obvious. Sure, salespeople can benefit, as can customers. But couldn't a better CRM system improve manufacturing and supply-chain efficiency via more reliable sales forecasting? Why couldn't CRM accelerate new product successes via more detailed insights into prospect and customer attitudes?
  • Highlighting intangible benefits: Certainly, include all the relevant tangible payoffs you can find. However, studies indicate that intangible (i.e., non-monetary) factors often influence executive decisions more than tangibles. Spotlight intangible factors to show you understand the full enterprise value of your IT proposal. Showing a payback period of 12 months may be great, but a well-explained intangible factor such as "improving marketplace image" could help convince wavering decision-makers.
  • Bullet-proofing value statements: How you explain value is as important as what the value actually is. Reinforce value statements the same three ways your favorite TV (or real life) attorney does when making his or her case before a tough jury. (1) Define the value in simple (non-IT) terms. For example, "better data" is not a business benefit. However, making better decisions because of better data could be. (2) Clarify the cause-and-effect. For example, your "jury" may not realize that credible studies show that IT systems that increase customer, employee, supplier, and/or shareholder loyalty can improve profits. (3) Explain your evidence. Tell them why they should believe you. Use your political knowledge and Google search skills to substantiate your assertions.
  • Being a great ROI storyteller: In the final analysis, it's the value conversation that sells IT projects, not the ROI calculations. Numbers are the ante for gaining decision-maker attention. Funding, however, is won when you explain those figures in a manner executives relate to. For example, I was involved with developing a HR system justification in a firm that famous for its penny-pinching ways. Once we calculated cost savings to the CFO's satisfaction, the project won funding only because the CFO recast the payoff in terms of using a better HR system to return the firm to its glory days, an irresistible appeal to an aging and anxious chairman and founder.
  • The good news: Finding full value is mostly about management education and commitment, factors well within your control.

    --Jack Keen

    Sourabh Hajela, TAC Expert, has more than 15 years of experience in strategy, planning, and delivery of IT capability to maximize shareholder value for corporations in major industries across North America, Europe, and Asia. He is a member of the faculty at the University of Phoenix, where he teaches courses in strategy, marketing, E-business, and leadership. Most recently, he was VP and the head of E-business with Prudential Financial.

    Jack Keen, TAC Expert, is a global authority on pragmatic ROI methods, providing tools, workshops, and consulting to clients worldwide. He is co-author of the top selling book Making Technology Investments Profitable: ROI Road Map to Better Business Cases, and co-founder of The Deciding Factor Inc., a ROI consulting firm.

    We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
    Comment  | 
    Print  | 
    More Insights
    Copyright © 2021 UBM Electronics, A UBM company, All rights reserved. Privacy Policy | Terms of Service