Speak dollars not gadgets: How to get upper management to pay attention

Speak dollars not gadgets: How to get upper management to pay

attention Jonathan Koomey, Ph.D.

Research Fellow, Steyer-Taylor Center for Energy Policy and Finance, Stanford University

http://www.koomey.com Presented at DCD Converged

Seattle, WA September 4, 2014

1 Copyright Jonathan G. Koomey 2014

What do executives need to know about information

technology (IT)?


Modern businesses can’t succeed without IT

3

Brynjolfsson, Erik, and Andrew McAffee. 2014. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, NY: W. W. Norton & Company. [http://amzn.to/1gYHEGk]

Copyright Jonathan G. Koomey 2014

However…


IT is almost invariably fragmented and divorced from

business performance Only management can fix that


Almost all enterprise data centers are paragons of inefficiency, but

management doesn’t know it (and those who do know can’t fix it)


Inefficient IT increases costs, decreases revenues, AND

reduces the rate of innovation


What can management do?


I. One boss, one team, one budget!


II. Tie IT performance to business performance


How?


Metrics!


Creating the right metrics is not as easy as it sounds


Metrics drive organizational change

•  Focus on the whole system –  reducing total costs per computation –  increasing total value from computation

•  “Show back” the consequences of choices to every employee, then “charge back” if needed

•  Key Performance Indicators (KPIs) for management include both costs AND benefits


DSE http://dse.ebay.com


Can you assess IT costs and benefits at the project level?

Most companies can’t!


III. Use IT to transform IT

•  Standardized IT deployments •  Move from “sit down restaurant” to “buffet

style” IT •  Move many users to internal or external cloud •  Software should matter more, hardware less •  Measure, experiment, learn, and replicate •  Use computer modeling to anticipate effects

of changes in existing facilities


Conclusions

•  What management can do –  I. One boss, one team, one budget –  II. Drive institutional change using metrics that

tie IT performance to business performance –  III. Use IT to transform IT

•  Summary: Make IT serve the business!


IT should NOT be treated as a cost center, it should be a cost reducing

profit center that also improves corporate and customer

environmental performance


For more details on the upcoming (Nov 10 to Dec 12, 2014) online class titled Data Center

Essentials for Executives, see http://goo.gl/K4kJG2

Also see my 2014 article titled Bringing

Enterprise Computing into the 21st Century: A Management and Sustainability Challenge

http://goo.gl/WYFBjb


A case study of a company that has been successful at tying its IT performance to business performance

Schuetz, Nicole, Anna Kovaleva, and Jonathan Koomey. 2013.

eBay: A Case Study of Organizational Change Underlying Technical Infrastructure Optimization. Stanford, CA: Steyer-Taylor

Center for Energy Policy and Finance, Stanford University. September 26. [http://www.mediafire.com/view/8ema554a2ho9ifj/

Stanford_eBay_Case_Study-_FINAL-130926.pdf]


Business

Speak dollars not gadgets: How to get upper management to pay attention