PLANNING AND LEADERSHIP FOR A BETTER WORLD
PLANNING AND LEADERSHIP FOR A BETTER WORLD Finding a way to rationally monitor and manage IT service delivery can seem a pretty daunting prospect when tasked with the job at a global enterprise. To CIOs, the whole operation might seem a bit like mastering a marionette with hundreds of twisted wires, seeing as there are so many complex technology implementations necessary to support such a wide range of diverse and geographically dispersed business units.
Instead of reinventing the wheel to cope with the problem, what if CIOs took a page from the not-so-distant past? What if they used the lessons of simplification and standardization learned during massive ERP implementations and leveraged those principles for the IT organization?
According Jeff Johnson of Baltimore-based Constellation Energy, the answers to these "what ifs" just might hold the key to the next step in maturity of IT service delivery for the global enterprise. He’s embraced the ERP for IT philosophy and he says Constellation has made great strides in service delivery as a result.
As deputy CIO and vice president of operations and infrastructure for Constellation, Johnson knows all too well the challenges of complexity faced by IT decision makers within the enterprise. He’s in charge of providing IT infrastructure support to Constellation’s four diverse and fast-growing business units in a time of rapid change for the energy industry. Over the past seven years, Constellation has developed from a Fortune 400 company to a Fortune 125 company, ever-striving to fill in the vacuum created by the collapse of Enron and other energy service providers.
When Constellation was positioning itself for expansion in 2002, Johnson says one of the key executive requests was to reduce the complexity within the business through an ERP implementation that brought common processes onto a common platform.
“So we got rid of something like 17 general ledgers, [bringing them] into a single general ledger, and now we can close on a quarterly basis in less than a week,” he says.
At the same time, he and his IT cohorts streamlined IT into a shared service organization that reached across the business. While this certainly created a lot of efficiencies, Johnson says there was still something missing.
“As an organization we did a lot of the hard work organizationally, but we still had fractured processes and platforms,” he says. “So we'd done the work with the business to create their ERP and their common process and platform, but we hadn't done it for ourselves.”
Approximately two-and-a-half years ago, Johnson looked at the cards in his hand and realized that if his IT infrastructure organization was going stay in the game he would need to make dramatic changes to the way it delivered services. Hence the plan to aggressively pursue ERP for IT.
“I basically made the case that we had to embrace a similar strategy if we were going to be able to continue to scale with the growth of the business both in terms of absolute growth as a whole and increases in complexity and to do so in such a way that we can continue to drive high-quality service with declining unit prices,” he says. “We were close to being at the point where we were going to hit the wall and we could no longer continue to drive high-quality services without scaling our costs in a more linear fashion.”
The course of action Johnson has taken is to move Constellation onto the common process framework of ITIL Version 3 and leverage the common platform of HP’s Business Technology Optimization (BTO) suite to carry out his strategy.
Several years into the phased initiative, Constellation has laid all of the fundamental groundwork, and already the results have been game-changing.
“We've implemented most of the modules from the BTO suite that allow us to manage in a seamless holistic way,” Johnson says. “What that has allowed us to do is to begin actually measuring and managing IT operations in a more empirical way. So I actually now have metrics that I can obtain that demonstrate what our project delivery success rates are over time and how they're changing over time, our availability statistics for our core applications, and quality statistics around those applications and even in some instances for our business services.”
The information he is able to pull from the system enables him to make prioritization of projects, on staffing and even outsourcing founded on sound financial principles. He and his staff are able to talk to the business about making investments in the IT portfolio based on business value and past performance evidence rather than gut instinct or technology lust.
Such a high degree of statistical analysis is not only critical for improving efficiencies, but also for making the best business decisions for IT, something that has long been a challenge for more technically minded CIOs, Johnson says.
“Everybody is talking about business and IT alignment. You know, ‘How do you make IT relevant as not just a cost center, but as a strategic partner?’” he says. “Well, to do that you really need to manage IT like a business. And if you want to manage it like a business, you need to have a level of empiricism to understand your service delivery processes.”
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