Post number 4 in a series of 12 from one of our provider partners, NTT.
Allocating Costs of Infrastructure across Multiple Project Sponsors has long been an issue because it has prevented many projects from getting started in the first place. One of the customers that I have been working with has been putting off an Active Directory domain consolidation and migration for over 5 years because of all the buy-in needed to get the project approved.
When I think of this topic I frequently think of an old Dilbert cartoon about “Battlin Business Units.” Nothing gets done because everyone has their own agenda and territory they are concerned with. Some managers use this as an excuse to forgo upgrades and “save” the company money. Some business decisions are made for the betterment of the organization as a whole but may have detrimental effects on individual divisions within a company. Other decisions may benefit an individual unit of the business but not be in the best interest of the corporation as a whole. For example, I worked in a company that has two lines of business that are in direct competition with each other. One sells a product that directly competes with another product in the company. From an overall company perspective it’s good because if either business wins then the company wins, but it doesn’t do much for organizational unity. This is not unusual for large organizations. There are also cases where new products are delayed because of a perceived deterioration of an existing product.
Some initiatives never get off the ground because when they get to the point of putting in the budget for the infrastructure, they can’t get buy-in because of the effect that it may have on the line-of-business budgets
Many business leaders make decisions about IT infrastructure based on the need sponsorship of multiple divisions to cover the cost of the infrastructure. IT executives may have to go to individual departments (and vice versa) to get approval for new projects. This was discussed briefly in the last post. One organization that we worked with had a process so complex to get approvals for new capital projects that I was constantly impressed that anything got done (and many times nothing did get done). That organization had the best of what was available for Y2K (yes they did really have hardware that old).
Some initiatives never get off the ground because when they get to the point of putting in the budget for the infrastructure, they can’t get buy-in because of the effect that it may have on the line-of-business budgets. There is a very high occurrence of this is large organizations because each division is given a budget that they must allocate as they see fit. Some good ideas get left by the wayside because of the costs of the infrastructure to support them.
There was an interesting article in the Sept 2011 Inc. Magazine titled “Why I Fire My Best Employees” about how Hubspot provides employees with a unique way to get projects started. Employees are allowed to work nights and weekends on their idea, and if it works then it can become their day job. This may not be what every business looks at, but cloud architectures can help scenarios like this to get a good start. Hybrid and Public clouds become a good fit for large organizations in:
- Initial phases of projects because initial stages of a product or service can be explored at a relatively low cost. This also helps keep the idea fresh by being able to take actions on it while the idea is new. A lot of bad ideas can also get weeded out early in the conceptual phase without expending a lot of capital.
- Large up-front infrastructure costs that do not need to be spread across multiple budgets.
- The relative low cost of the resources make it so less sponsors may be needed to get a project off the ground. The “Battlin’ Business Unit” scenarios don’t have to happen because the investments have less implications. Individual business units can make the decisions based on their own funding.
- There are some considerations that organizations may want to put in place in regards to investment in cloud resources. Opening up the panacea and letting anyone go out a create an environment could lead to cloud sprawl, so a formalized process should be put in place and preferred vendors should be chosen so there is accountability and an ability to track different costs.
Next Post: Moving Enterprises to a Public or Hybrid Cloud Part 5 – Projects with Tight Timeframes
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About the author: Ladd Wimmer
Ladd Wimmer is a valuable member of the NTT Communications team. He has over 15 years of experience implementing, architecting, and supporting enterprise servers, storage and virtualization solutions in a variety of IT computing and service provider environments. He worked as Systems Engineer/Solution Architect in the Data Center Solutions practice of Dimension Data, most recently serving as technical lead for the roll out of Cisco’s UCS and VCE vBlock platforms across the Dimension Data customer base. Ladd has also run two IBM partner lab environments and worked for an early SaaS provider that created lab environments for Sales, QA testing and Training.