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Fresh Thinking on IT Operations for 100,000 Industry Executives

I really like Twitter, I picked up that my friend Will Forest (@ayewill) of McKinsey & Co is quoted in a Computerworld article offering a number of key pieces of advice:

“Should CIOs get ready to add “energy czar” to their list of job roles? McKinsey & Co., a management think tank, seems to believe as much.”

Will issued a challenge — calling on senior executives at 10 companies to commit to implementing the three main recommendations of his firm’s study, which are these:

1. To improve and integrate asset-management capabilities in the data center.

2. To include the true total cost of ownership in business-case justifications for adding facilities or applications to the data center.

3. To formally move accountability for data center facilities and operations expenses to the CIO and appoint internal energy czars with operations and technology mandates to double IT energy efficiency by 2012.

Apparently no one stepped forward to take the bait.

This is such a shame – all three are very powerful techniques for taking out cost and driving good behaviour.

Asset Management done properly ensures that only valuable systems are managed and maintained. My experience is that as many as 20% of all IT assets are of no business value at all.

Most requests for capital do not include the full and total cost of ownership of IT systems and as a result businesses burden themselves with ever increasing costs and poor value investments that often produce negative business value. Fully accounting for these costs would drive behavioral changes with significant business value.

Merging accountability and responsibility for costs is business school 101. If the CIO owns the costs and is responsible for driving the costs then there is somewhat more chance of a positive outcome than if the responsibility and accountability are separate as at present in almost all businesses.

There Are 2 Responses So Far. »

  1. Steve, your preaching to the coverted here, how ever there is always this rush to get the big things done quickly and leaving , smaler and yet important job in there own right to either fix themselves or other tinkering to get the job done. Which in turn perpetuates the cycle. In addition a culture needs to be driven to managers and staff how and why they conribute to costs and they need to understand how they impact on others making everyone resonsible the positve outcome.

  2. […] Power struggle: What role should IT play in reining in energy costs? (1) […]

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