Four Steps to Standardize

by Jeff Tash

Reduce IT costs by standardizing equipment and infrastructure and consolidating software

Product consolidation will lower your training costs, your maintenance costs, your upgrade costs, your support costs, and even the costs associated with new product selection. Software consolidation will also promote hardware consolidation because standardizing means multiple applications can run on the same platforms.

Standardization and consolidation may sound like a simple, pragmatic approach that's straightforward and pretty obvious. Yet, given the myriad products, applications, and services already in use, how does an enterprise begin to tackle this Herculean task? Start by following this simple four-step process: 1) categorize, 2) standardize, 3) communicate, and 4) educate.

Adopt these four practices and, most likely, you will soon begin to reduce your IT expenses, improve your purchasing power, and provide better user support. The bottom line is that enterprises who look at their total IT costs holistically will invariably find ways to trim budgets, improve negotiating power with vendors, and increase productivity.

Categorization and standardization lead to consolidation, which generates savings. How much savings depends partly on how well IT communicates to, and educates, its constituency. Often the best strategy is for a centralized IT organization to pick standards and then for everybody else to follow those standards. This strategy may not always be possible, however, since different groups may have different requirements, which is why communication is so crucial to this process. Communication means not only notifying people what standards exist, but why they were chosen, where they apply, and when to allow exceptions.

Always, IT's primary challenge must be to think of technology in terms of meeting business needs. Beyond that, however, competitive advantage goes to those companies that grasp how technology can best be intertwined with business processes, or used to create new market opportunities. Failure to do a good job of managing your enterprise's technology architecture is both costly and risky.

It would be naive of any enterprise to deliberately choose to ignore their technology architecture. It's not possible to overstate how important IT has become in shaping how businesses are run. Moreover, the pace of change in the IT industry continues to accelerate exponentially. A smart management team carefully monitors and exploits the continual impact of Moore's Law on computing power, the relentless explosion of network bandwidth that fuels the growth of both the Internet and wireless, and digital storage's never-ending reduction in price coupled with its constantly expanding increase in capacity.

Even organizations that prefer an ostrich-like approach to technology—firms that would rather follow than lead—can benefit almost immediately by simply focusing on managing their technology architectures more effectively.

The best way to begin saving is by collecting data describing exactly where money has been spent on past IT investments. IT management should use whatever trend analysis or metrics they can to show how effective IT spending has been. Focus on the six key areas where firms spend the most money: infrastructure, software maintenance, hardware leasing, outside services, salaries and benefits, and depreciation.

Start by organizing your enterprise's existing IT portfolio. Do a quick-and-dirty audit. Make a list of your most important past information technology investments. Then categorize the list. Unless there's a meaningful way of organizing and classifying information about past technology investments, you're not going to recognize redundancy. An alphabetical list of products or vendors is not very helpful. What's required instead is a model—a categorization hierarchy—also referred to as a taxonomy. Personally, I find it extremely valuable to have a graphical image associated with a taxonomy. The visual representation provides a cognitive road map that improves a person's ability to both understand and remember the taxonomy.

The goal is to find cases where the enterprise currently owns products or systems with overlapping functionality. Any time you can eliminate an unnecessary redundant product, you will produce reductions in your overall IT spending. Discover what products or systems you no longer need, and get rid of them. Sometimes it's very enlightening to shut a system off and then wait to see if anyone screams at you to turn it back on. I don't recommend this approach, but some companies find that their knowledge of their existing portfolio only allows them this option.

The second step is to standardize. Standardization requires decision making—deciding which products should be chosen to become standards. Note that the standardization process itself involves a life cycle that includes steps such as discovery, evaluation, pilot, selection, rejection, retirement, and so on. Sometimes you may need multiple standards depending on such factors as business unit, or geographic region, or computing platform.

The third step is to communicate. It serves little purpose to establish standards unless there's an easy and effective way to communicate those standards to the constituency of people who use IT products, systems, and services. It's immensely frustrating, and costly, to have enforcement of standards occur in the purchasing department. By that point in the procurement process, a lot of expenses have already been incurred in the choosing and evaluating of the selected products.

The fourth step is to educate. Once capital expenditures have been made for a product or a service, the value pendulum swings. From that point forward, leverage is best achieved by increasing productivity. The key is to help people take full advantage of all the capabilities of software already purchased. Provide easy access to resources so that, as their experience grows, people can more readily expand their own knowledge and expertise regarding products and systems.

Nowadays everybody wants to justify enterprise architecture based on ROI. Standardization and consolidation will let you do that. By explaining the reasons for management's standardization and consolidation decisions, you will increase buy-in and compliance and thereby achieve your ROI objectives.