Standards struggle puts ROI at risk

TORONTO — Enterprise companies that don’t standardize on hardware and software risk higher support costs and more difficulty in achieving return on their IT investments, experts told an industry symposium Wednesday.

Executives from Microsoft and research firm IDC Canada joined MicroAge and its customers to discuss the challenges of starting a standards initiative and maintaining it over a long period of time. Recognizing that many organizations are limiting the money they budget towards IT projects, the speakers said an obsession with return on investment (ROI) metrics may blind some companies to the dangers of non-standard systems.

Michael O’Neil, IDC’s Canadian country manager, said too many companies are trying to put dollar values on “”soft benefits”” like productivity and improved customer service. ROI, he said, refers to projects that lead to cost savings or generate new revenue. Many of the so-called ROI calculators — formulas to measure return that are posted on the Internet — include factors like “”increased content value,”” or the relevance and timeliness of a company’s message. “”Does that sound like money to you?”” asked O’Neil. “”This is the year ROI will hit the wall.””

O’Neil said ROI obsession often means only IT projects that come from individual lines of business can get a green light. A sales department might ask for a sales force automation implementation, for example, while marketing might seek a customer relationship management (CRM) application. These point solutions may solve some problems, but IT people are challenged to tie them together to do things like forecasting, O’Neil said.

The lack of standardization not only hurts ROI, said MicroAge president Allan Daitchman, it can raise the total cost of ownership for IT equipment. Help desk staff, for example, take longer to respond to requests because they first have to figure out exactly what a user is using, and in some cases may lack training on an individual piece of hardware or software.

“”When a new person starts at your company, do you ask them what kind of voice mail system they want to use? No, you tell them this is the voice mail system you use, because you’ve chosen it for a number of reasons,”” he said. “”Some organizations have nine e-mail systems. Why? Because we gave people a choice.””

Judy Saunders, an executive consultant with JHMS & Associates, discussed two standards initiatives she led in previous positions. At one firm — a large multinational that was growing rapidly — IT staff made four trips to her office to set up her desktop. “”I was the new VP,”” she said. “”I remember thinking, if this is what it takes to do this for someone they’re supposed to impress, what must it be like for everybody else?””

Saunders said the company (which she wouldn’t name) had developed a practice of purchasing whatever products were cheapest at the time. This technology became harder to maintain and grew more complex as it aged. “”There was six types of wiring under the floor,”” she said.

Eventually, the organization moved to pre-configured workstations and forbade business units to buy their own software, among other steps. The complete standards initiative took about a year and a half, she said.

Daitchman referenced another client, a financial services firm, which had standard hardware and software in its 15,000 user branch offices but no standards in its 8,000-user headquarters. When it came time to upgrade, the IT staff determined it would take about 11 months to complete the branch offices but approximately seven and a half years of man time to handle the headquarters.

Most business users will accept standard operating systems and hardware, Daitchman added. The contention comes when you try to standardize requested business applications. “”You can’t tell the sales group to run general ledger. You can’t tell production people to use a spreadsheet,”” he said. “”That’s where the negotiation comes in.””

Saunders emphasized that standardization needs to be ongoing, despite the office politics problems it creates among users who are accustomed to doing things their way. Though he said it is the business units and not IT that must take responsibility for these projects, Daitchman agreed they can ruffle some feathers. “”You can’t underestimate the marketing challenge of getting this across,”” he said. “”The people who see the benefits typically come from IT and finance — both have high accountability and like to be accurate. Think of Colonel Sanders and his crew. If the IT people and finance people were running KFC, it would probably be called, ‘Fried Dead Chicken in Grease.'””

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