How much does business value IT flexibility? The IT flexibility metric

Back in the day, IT was synonymous with flexibility.  "Software" meant exactly that - the ability to implement things is a "soft" way that could be easily changed.  Nowadays, in many cases, software is as rigid as hardware or even more so.  Similarly, the IT group is too often the least flexible department in the organization - "You want what? When?" Today, we find ourselves in times when businesses are looking to cut back.  Strong IT departments can flex their capacity and cost to meet their business needs.  Poor IT departments don't have a plan for changing capacity quickly - they have a gas pedal but no brake. I was reminded of this important quality of an IT department by a guest editorial by Edge Zarella in the ISACA Journal (Vol. 4 2009).  Edge neatly summarized the world that IT Professionals are facing:

  • Intense pressure to cut technology costs
  • Mandates to improve operational performance
  • A need for technology to realign to meet new business needs
  • A focus on cash management and a priority around liquidity

It was this last bullet that caught my eye.  It's not enough for the IT department to claim they have "scaled back."  They must be able to hand back cash.  How?  Much of the cost of IT departments is in the form of people.  Surely, head count is difficult to flex up and down  quickly, especially if the department is already running lean?  This is only true if there are no advance plans to flex size.  This has to be an important element of all outsourcing contracts and a key justification for starting an outsourcing engagement if you don' t already have one. How can we measure the strength of our IT department for flexibility like this?  How about the percentage of budget they could hand back given 3 months notice? We can take this further.  As we climb out of recession of if a terrific business opportunity presents itself tomorrow, we can turn this IT flexibility metric around and measure how much capacity can be added given 3 months notice. These metrics have to be supported with detailed plans that are reviewed and revised quarterly to reflect changing market conditions.

Written by Michael D. Harris at 13:42

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"It's frustrating that there are so many failed software projects when I know from personal experience that it's possible to do so much better - and we can help." 
- Mike Harris, DCG President

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