The IT Review Process – Part 3

by on 09/11/2009

This article is the third and final article in a series providing best-practice guidance for an effective IT review and covers topics seven to ten of the topics: projects, budget, strategy and IT management. Part one covered the IT environment, IT security and Business Continuity Planning and part two covered backup, IT support and environmental policy.

Part 1 of this series of articles can be found here and part 2 here.

A regular review of a company’s IT environment ensures maximum value for their IT expenditure and minimises the risk of IT failure. It highlights risks and inefficiencies in the current set up and details potential savings including those brought about by deploying new systems or technology.

FITM specialises in all aspects of the IT review process and provides an independent, cost-effective and thorough review, report and recommendations. Please contact FITM for further information.

IT Review Justification

Having a regular independent review of your IT environment is an excellent way to ensure that you are achieving the best value from your IT investment, that you are not exposing yourself to IT risks which you are not aware of and that you are taking full advantage of advances in technology.

Although nothing can guarantee that you won’t suffer from IT issues, having an annual review is a cost effective way to minimise this risk and to be able to prove due diligence should anything go wrong.

An IT review will frequently result in cost savings. It will show how to reduce system down-time, improve the performance of third-parties and highlight areas where the same or better services can be purchased at a lower cost.

Ten topics form the basis for a complete IT review. These topics form a complete and comprehensive view of a company’s current IT provision to stakeholders including the board of directors and other business heads. In order to carry out an effective and worthwhile review, these topics require a wide range of IT knowledge and experience.

IT Review Topics

Topic 7: Projects

Latest research shows that only a third of IT projects are delivered on time, on budget and with all required features and functions. With most, if not all, companies undertaking several projects in the course of a year, it is clear that choosing and managing projects effectively is critical.

It is important to review ongoing projects on a regular basis and evaluate whether you are doing the right projects and what health your active projects are in.

  • Are you doing the right projects? I.e. those that are strategic and will really make a difference to a business. Research from Computer Associates shows that 60% of companies consider that the majority of their projects are not strategic. Half of all companies use delivery on budget as the key measure for evaluating project success and only a third measure success in terms of alignment with business objectives.
  • What health are your active projects in? If you have up to date project plans, cost and budget forecasts and risk and issues lists, then it is relatively easy for evaluation of your project’s health. Even here however, it is worthwhile doing a periodic independent review as the team involved often be too close to the project to evaluate it dispassionately.

It is also important to look at what project management tools and techniques a company uses. Many consultancies make a good living from advocating complex project management methodologies and while these may be appropriate for larger organisations, they are generally overkill for SMEs and may actively inhibit project progress or obscure risks and issues.

What is needed for a successful project in an SME is simple to describe, although much harder to implement. First and foremost, it is important for a project to have a strong project sponsor who can steer the project, ensure that all participants are achieving their tasks in a timely fashion and be an escalation point for issues. A pragmatic and experienced project manager is also critical, although this can be the same person in smaller organisations.

The project management tools and methodologies used are not critical to project success, but as a minimum, FITM recommends having regular project meetings that review a project plan as well as considering costs, issues and risks.

Topic 8: Budget

An IT review needs to look at a company’s IT spend and compare that against the IT budget if one exists. The anticipated spend for the remainder of the financial year needs to be calculated so that costs can be cut or budget sought if necessary.

Cost control is not mentioned as a separate IT review topic as it is a crucial element of every topic. Within any IT environment, it is possible to make significant savings by reviewing IT usage, renegotiating contracts, changing suppliers etc. In addition, new technologies exist which bring significant benefit and also pay for themselves in less than two years.

The next year’s budget should also be considered, in line with the project pipeline and the IT strategy, to give advance warning of the likely levels that will be required.

Topic 9: Strategy

It is important for every company to have an IT strategy. I.e. to have a document describing the direction in which IT is moving, the timeframe and cost, and most critically how this supports the business strategy.

Setting the IT strategy firstly involves understanding the business strategy. For example:

  • Is the business going to double in size in the next year? Is it going to open branch offices?
  • Is the emphasis for the next year on cost reduction or on improving the service that is provided both internally and externally?
  • What is the demand for new technologies, e.g. social networking and smartphones?

Once the business drivers are understood, then an IT strategy can be formulated which underpins and supports this.

The other elements of an IT strategy are to consider technologies, especially new technologies, and evaluate whether they bring business benefit. In FITM’s opinion, at the time of writing, the technologies to be considering for 2010 and 2011 are:

  • virtualisation
  • data deluge
  • energy and green IT
  • consumerisation and social networks
  • unified communications
  • cloud computing

The key to having a successful IT function is that IT is involved in business discussions at an early stage. Not only can issues be identified and resolved early in the development process, but IT can frequently suggest new ways of achieving a business goal that are cheaper or have less risk.

Topic 10: IT Management

A common misconception is that IT management consists purely of IT support, and that this role is fulfilled when the IT support function is outsourced.

In fact, companies need an IT Director who has a complete understanding of the technology in use in the organisation, but who remains strategic. This person is then able to ensure that the IT strategy supports the business strategy, manage third parties, including the IT support company, manage projects, review costs etc.

The issue for the majority of SMEs is that they do not have the requirement or budget for a full-time permanent IT Director, but could gain immense benefit from having someone with the skills to perform this role on a flexible part-time basis. FITM provides this “virtual IT Director” service.

FITM’s IT Review Process

FITM specialises in all aspects of the IT review process described in this series of articles. FITM’s consultants are experienced in all aspects of IT Management and partner arrangements are in place which can provide specialised technical knowledge and experience if required.

FITM talk to your internal IT staff or external support company as well as independently reviewing all aspects of your IT. From this they produce a report which summarises findings as well as making recommendations to reduce costs, improve performance and resilience and make cost savings. This report provides a non-technical overview of a company’s IT, which is a useful input to board level discussions about expenditure, risk, budgets and projects.

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