Aligning IT with business objectives has been high on the corporate agenda seemingly forever, and it’s hyper-critical today. In the dynamic digital world, technology is often inseparable from the products or services it empowers. Yet in an age when many companies see their business as technology – and technology as their business – many IT organizations struggle to achieve pre-set business outcomes. One major reason for this: the sheer complexity of modern IT organizations.
IT complexity takes on a variety of forms, including:
- Heterogeneous environments. Business acquisitions can lead to an IT landscape of multiple vendors and systems, not all of which are easily interoperable.
- Legacy technologies. Business-critical applications often run on older systems that cannot be easily swapped out – and often contain data vital to new digital initiatives.
- IT sprawl. As technologies and applications multiply, it becomes more difficult to manage software, hardware and middleware.
- Ineffective governance. Without a detailed and comprehensive governance strategy, it becomes impossible to reduce inefficiencies and capture synergies among varied systems.
- Noncentralized IT “pockets.” Business leaders increasingly source their own business solutions, such as hosted cloud services, yet expect IT to integrate these applications within the existing infrastructure.
All of this complexity leads to higher costs, suboptimal performance, longer lead times, lower quality and an inability to achieve the speed and market responsiveness necessary to satisfy and exceed customer expectations in today’s always-on digital business era. What’s needed: IT simplification.
The Merits of IT Simplification
By simplifying the IT landscape and operations, businesses can achieve a more flexible IT backbone that efficiently supports traditional lines of business while also serving as a launch pad for new digital initiatives. IT simplification can result in the following benefits:
- Reduced/reallocated IT staffing needs.
- Reduced server footprint through consolidation on a hybrid cloud platform.
- An optimized server mix, with mission-critical applications running on best-in-class hardware, and rarely-used applications hosted on low-cost hardware.
- Consolidated vendor rosters and reduced licensing expenses.
- Improved system performance, including higher system and application availability and faster issue resolution.
- Unlocked value for investing in next-generation technology.
Some studies have suggested annual benefits exceeding $3,000 per user through IT simplification initiatives. Simplification can also free IT teams from maintenance tasks to focus on business-enabling activities.
How to Simplify
Instead, businesses need to deeply analyze the macro-level changes that can deliver a significant step-change in value. In other words, IT must drive its own change. Through our work with multiple clients, we recommend the following simplification tactics:
- Simplify processes and operating models. Identify non-value-added processes and reduce waste by leveraging Lean and Six Sigma methods and IT process engineering; create and maintain a standard operating model framework for delivery processes.
We worked with a leading telecommunications company to reduce its total cost of ownership (TCO) and increase the scalability of its heavily customized CRM application and integration layer. By streamlining the company’s entire information systems foundation and rationalizing its applications, we helped boost productivity by about 20%, increase operational efficiency by roughly 30%, improve application stability by 40% and reduce TCO.
- Consolidate applications. Eliminate redundant or complex applications to make the application portfolio simpler and more efficient.
We worked with a telecommunications service provider that was struggling with multiple products, bundles and services spread across multiple systems. This led to lengthy timeframes for new product launches and an elongated quote-to-order cycle. By consolidating the company’s 80-plus systems and transition the technology infrastructure through a unified order platform, we helped reduce process steps by 50%, improve the quote-to-order process time 65% and speed time to market.
- Automate and integrate. Automate repetitive and low-level tasks to reduce manual intervention; simultaneously integrate development lifecycle tasks into automation efforts with tools and/or platforms.
A leading insurer partnered with us to optimize its quality assurance (QA) costs, with a key focus on cycle time reduction and continuous testing. We developed an enterprise lifecycle automation solution with a view toward enabling end-to-end QA services across lines of business. The result: a 50% reduction in test cycle time across business portfolios.
- Adopt a converged infrastructure. Minimize compatibility issues between servers, storage systems and network devices by unifying infrastructure solutions.
A global software provider wanted to overhaul its IT infrastructure, with the goal of bringing compute, storage and middleware operations under closer in-house management. We worked with the company to execute its IT transformation and transitioned all of its remaining legacy environments, applications and toolsets to the new data center. This resulted in a 40%-plus reduction in IT operations expenses and a 50% reduction in reported issues.
- Reduce sourcing complexity. Free resources by turning over IT services management to a trusted partner that adheres to meaningful SLAs and outcome-based contracts.
A leading pharmaceutical company wanted to consolidate the maintenance of all key IT applications under a single vendor and move to a managed services model. We enabled ITIL-based IT Service Management and adopted several continuous service improvement and transformation levers. This resulted in manual effort savings of 3,072 hours, a 45% reduction in ticket volumes over nine months in the system maintenance area, a 52% reduction in average ticket age and a 45% reduction in problem ticket backlog.
The Mandate to Simplify
The bottom line is, simplifying IT is not just about helping IT run better. It leads to IT being in a better position to support business objectives and even become a center of innovation and revenue generation through new customer-facing services and experiences.
IT organizations that don’t streamline themselves will find business groups working around them and true business alignment a pipe dream. Simply put, complexity is neither competitive for the business – nor IT.
Vijay Francis (Senior Director, Cognizant Digital Systems & Technology) and Abhijit Bharadwaj (Senior Manager, Cognizant Digital Systems & Technology) contributed to this blog post.
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