Computer Weekly roundtable: Budget for innovation

At a Computer Weekly roundtable, in association with Dell, IT leaders discussed the balance between spending on maintenance and innovation.

At a Computer Weekly roundtable, in association with Dell, IT leaders discussed the balance between spending on maintenance and innovation.

The debate drew focus on five key areas: standardisation, virtualisation, generating business interest, managing innovation spend, and managing users' expectations.

By ensuring they are aware of these areas, IT managers can make the most of their budgets, going beyond just maintaining systems.

One of the biggest challenges for many IT managers is to obtain a better balance between spending on innovation and the amount of budget that goes on operations and "keeping the lights on".

According to some estimates, as much as 80% of a typical IT budget goes on operations, restricting the opportunity for new projects and IT-led innovations.

Computer Weekly recently hosted a roundtable debate, in association with Dell, for IT leaders to examine best practice and share their experiences of redressing this balance.

The debate highlighted five key tips to help IT managers:

 

See also: Case study - Standardising Dell

 

  • Standardisation

The CIOs agreed that the benefits of standardisation are clear, but said introducing such a policy can meet resistance.

Dell CIO Robin Johnson (see case study) said to be prepared for "hand-to-hand combat", but that making standardisation "the path of least resistance" can help - at Dell, if users want to deviate from the policy they need approval from the CIO.

"A development team feels under pressure. Their modus operandi is the fastest way to an answer. If we say, here is the fast path and here is the go talk to a lot of people path, they will choose the happy path," said Johnson.

Lloyd's of London CIO Peter Hambling said the biggest challenge of standards is "ruthlessly enforcing them all".

An element of choice is necessary to avoid a backlash. Hambling advocates "rigidly defined flexibility", which he said has made conversations with the business much easier.

"It helps with the business engagement and allows some wriggle room," he said.

Achieving standardisation is one thing, but maintaining it is another and the message about compliance and standards must be clearly communicated. It is best to avoid negotiating standards on a project-by-project basis.

Chris Bayley, IT planning director for TUI Group, said, "Create the path of least resistance and plan to make sure that path exists, rather than getting involved in every aspect of architectural standards and application rationalisation. It is not a popularity contest and there is no pain without gain."

  • Virtualisation

Virtualisation can save money on hardware and power costs, but the need to refresh hardware more frequently is to be expected because the datacentre is worked harder.

Dell's Johnson suggested that energy savings are one of the biggest benefits of virtualising servers.

But David Bulman, CIO for Aegis Group, said, "The power saving will level off - whether it is in two years, five years or 10 years and that needs thinking about."

Dave Coplin, national technology officer for Microsoft, said that virtualisation alone is not enough.

"A virtualised server is still a server that needs patching, feeding and watering. It only really starts to pay off when you get into automated provisioning and modelling your environment," he said.

  • Generate business interest

Johnson recommended finding a hook to generate business interest in standardisation and virtualisation rather than focusing purely on cost.

In Dell's case the hook was speed, but Mike Tonkiss, IT director at Neopost, said IT leaders need to find "the key turn-on for your chief executive".

Que Tran, IT solutions director at Synovate, agrees that getting the chief executive on board is a good idea because "a lot of messages come only from IT".

TUI's Bayley said aligning IT with the business is key.

"There is a window of opportunity for IT to drive standards, which may close as the business focus has moved elsewhere, even though IT still sees value," he said.

He said finding the message "that is genuinely heard" by the business is necessary to bring the two agendas together.

Jonathan Kirby, business delivery manager for Network Rail, said, "Trying to work with the business so things are not done to them by the IT department is important."

  • Manage innovation spend

Money saved by reducing costs can be spent on innovation, but deciding where and how it is spent demands thought, and sometimes it is not just a decision for the IT leader.

"The strategy is to attack fixed costs and make [the money saved] available to spend on programmes," said Johnson.

There is a challenge for IT directors in what to do with savings; Tonkiss said he has to hand over any savings to the business.

For many IT executives, it should be a "contextual decision" with the business based on "where we are, what is going on and what needs to get done", said Johnson.

Microsoft's Coplin said it is important to understand the opportunity cost.

"Do you give it all back or keep some for yourself? Once you understand that, you can make an informed, holistic decision about where that money is better spent," he said.

  • Manage users' expectations

User expectations of IT performance in the workplace have increased because of their experience of technology at home, and this should not be underestimated, said delegates.

Lloyd's Hambling believes it is unwise to fight the "Sunday night/Monday morning" factor where users want to have the same sort of functionality and ease of use in the office as they are used to at home.

"What is exciting is users are asking for devices that do exist; they are not asking for the impossible. Give them the tools they want that fit the way they work, not the tools the techies love," he said.

Coplin said that users will simply do what they want if they do not get support from the IT department.

"IT should get ahead of the business and provide a solution that is safe and secure," he said.

Read more on IT innovation, research and development

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