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By reducing technology complexity and realigning talent, among other things, world-class IT organizations deliver services at 22 percent lower cost with greater effectiveness and require 9 percent fewer full-time equivalents (FTEs) per employee, according to a report from The Hackett Group.
Companies earn The Hackett Group’s world-class IT designation by achieving top-quartile performance on a range of weighted efficiency and effectiveness measures as measured in an in-depth benchmark study, which examines more than 100 detailed IT metrics.
The report noted that while reducing complexity in the architecture is a key step that allows IT organizations to realign resources with higher-value activities that increase effectiveness, it is not a straightforward reassignment of existing resources into new roles, but involves developing the right skills and competencies.
“Automation is key. In infrastructure and operational areas, there have been a lot of advances in automation,” Hackett Group IT transformation practice leader and principal Mark Peacock told eWEEK. “For example, where it once took a full-time staff person to push the release of new software, there are apps that can handle that now. The same is true for a lot of work in system and network administration.”
Peacock said top IT organizations are also better at allocating resources to identify and pilot new technology trends. They stay ahead of the curve on cloud computing, data analytics and other areas, and figure out how to bring them in-house, pilot and work with them early on.
“Another key focus is on infrastructure and application development. World-class IT organizations do a much better job of identifying what activities are high value, then they have internal people doing that work,” Peacock noted. “Lower-value activities can be handled by outsourcers.”
Overall, world-class IT organizations universally reflect two key themes–they operate with lower technology complexity, and they are able to realign technology talent to support business strategy.
“If IT doesn’t have a strong relationship with the business, leaders are likely to keep demanding the latest ‘bright shiny object,’ despite the fact that it may not fit into the existing architecture,” Peacock said. “At the very least, when business leaders want to add something, IT needs to convince them to decommission something else.”
The research also indicated that IT funding is growing at a slower pace than demand for IT services, and IT cost per end-user equivalent is gradually declining, which means improving efficiency is necessary to free resources for the higher-value activities that drive effectiveness.
“It’s always a challenge to find good design and architecture people, particularly as companies take greater advantage of the cloud and other external capabilities,” Peacock said. “But it’s never going to be 100 percent cloud. There’s always a need to develop hybrid infrastructure and software solutions, and finding people with these skills can be tough. It’s key to identify the smart folks internally, and develop their skills.”