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Agile Value: How Can You Manage What You Can’t Measure

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Agile development promises faster, more responsive development. This aligns better with the transformation of organizations, as they face heightened, more competitive environments. Driven by market and technology changes, organizations are re-structuring themselves and their products and services to be more Agile

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Follow the facts

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In the course of this corona year, a commotion arose. A somewhat hastily drawn up contract for the supply of 100 million mouth masks turned

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IT As A Value Adder Instead Of A Cost Center

IT Benchmarking

Ways to make IT seen as a customer focused, high quality face of the organization.

Organizations regularly complain about the cost level of their IT department. This is by no means a new phenomenon. At IDC, we continuously assist IT managers dealing with challenging cost reduction targets. I find that these cost reduction targets are often determined bluntly, and IT departments have trouble in demonstrating their true value to the organization.

Run and Change: Commodity and Adding Value

The first step to take is making a well-considered distinction between the ‘run’ and ‘change’ parts of the IT budget. In other words, appreciate the difference between keeping the automation of the organization running and enabling the organization to innovate.

  • The running of the automation should be the subject of continuous cost saving projects and optimization. Regular benchmarks and a fitting sourcing strategy are important tools to optimize this part of your IT.
  • On the other hand, we have ‘change’, the innovation. This is where the strategic added value of IT lives. The added value is often found in software development, allowing for digitization of certain process to save cost in the primary functions of the business or to innovate in other ways, such as bringing new products to market faster.

But what are other ways for IT to shine within the organization?

Download Checklist: 5 Insights For New CIOs

User Satisfaction

Another way to present IT as an adder of value instead of a cost center is through user satisfaction. In nearly every IT procurement project guided by IDC, user experience is a major theme. Key steps to take in improving user satisfaction is through simplifying technology and improving user IT practices. These practices like self-service portals, instructional videos, FAQs, and user training improve user self-sufficiency through automation and education. Our benchmark data teaches us that successful implementation of these practices can have spectacular results on both the service desk workload and user satisfaction rating.

Consider the Employee Instead of the User

After implementing these practices, which many organizations have successfully done, an IT organization has the opportunity to engage the employee to add more value during their time with the organization. Yes, we have now transitioned from user satisfaction to employee satisfaction. After all, a user is more than a workplace account. Cooperation with other supporting functions of the organization, such as human resources, becomes an opportunity.

Employees are motivated by more than salary and vacation time. The feeling of purpose and corporate social responsibility are crucial factors for many employees to really connect with their employer and experience satisfaction in their careers. In the work from home climate that we have experienced since early 2020, this connection is at risk.

“In nearly every IT procurement project guided by IDC, user experience is a major theme.”

The logistical processes of the IT organization can play a cost-efficient role in engaging the remote worker. To supply offices with the right hardware and services, IT knows logistical services such as ‘on-site support’ and ‘IMACD’ (install, move, add, change, dispose). During the pandemic, these services have modified somewhat for some organizations as many workers changed their work location. Especially now, these logistical processes allow the organization to engage their remote workers. Take, for example, the onboarding of new employees. When IT delivers the required hardware, why not integrate with HR and include a handwritten note from the manager and overviews of the company culture and mission. With some real attention and coordination with other departments, IT can deliver a warm and welcoming experience at no additional cost.

In summary, if the cards are played right, IT can be seen as a value adding function instead of a cost center. The logistical processes are already in place to position IT as the customer focused, high quality face of the organization towards the employee. If a transparent dialogue between IT and the rest of the organization about the cost level is also in place, the relationship is bound to become value based instead of cost based.

The first 90 days on the job are crucial. IDC’s checklistfor building a foundation for Application Portfolio Analytics and using fact-based metrics will help you elevate and establish yourself to be as effective as you need to be.

 
 

Download checklist here.

 

Winning The War For Talent With IT Service Cost Management

IT Benchmarking

When organizations in all industries are struggling to attract talent, IDC explores opportunities for dealing with this shortage.

Introduction

Organizations in all industries are struggling to attract talent. The shortage of potential employees is a problem that has plagued the IT sector for years but has possibly never been worse than it is now. In this blog IDC explores opportunities for dealing with this shortage.

Employee benefits

The most obvious perspective to consider is that of salary. Benchmarking employee expenses will allow your organization to match your peers and stop losing employees over salary competition.

Another benefit of benchmarking salary cost is tackling the possible internal tug of war for budget increases. An independent benchmark report is often useful to convince senior management that additional budget is required, if the benchmark points this out.

However, employees are not motivated by salary alone. For many, satisfaction also comes from working on cutting-edge technology, something that only some IT organizations allow an employee to do. In contrast, maintaining legacy systems at less competitive organizations may not be interesting to IT professionals who love to experience technology. In a benchmark, the technologies maintained by the IT staff are closely examined and compared to peers. IDC identifies key areas to innovate your business’ digital transformation, keeping IT staff engaged at the same time.

Optimize your current environment

Another perspective to take is optimizing the existing situation. If finding new IT talent is challenging, IT management must consider ways to maximize the use of existing employees. With talent being as scarce as it is, management must be fully aware of possible optimizations.

A benchmark will show how teams are performing in terms of productivity and where potential exists.

Because IDC’s data collection methods dive deep into your IT administration and governance, gaps that no doubt exist are discovered and reported on. The results of a benchmark will uncover where your automation is lacking and whether your end users are educated to market conform levels. All of these insights will allow you to deliver more and better IT with the resources that you already have available.

Rationalizing and consolidating your IT environment has many benefits and generally offers an attractive business case. That said, possibly the most interesting result is simply reducing the amount of IT that needs to be managed by the talent that is so scarce. The size and complexity of the IT environment is a large factor in our benchmarks, be it the complexity of the networks, the size of the datacenter services, the setup of the end user workplace, or the amount of contract management and governance required. IDC reports on all of these components and shows the way to reducing unnecessary complexity and size.

Is outsourcing the way?

Finally, if the options of increasing budgets, optimizing teams, and reducing complexity are exhausted, outsourcing more of the IT services can be considered. Outsourcing can be a relatively quick answer to a suboptimal internal IT team, but it does not come without its share of challenges. The first step is deciding which IT domains are attractive candidates to place under a contract. In other words, an organization needs a sourcing strategy. This strategy will determine how each part of the IT organization should be sourced and what a fitting roadmap to get there should look like. Prioritization of rationalization projects are also considered, as well as the potential to supplement existing teams with external talent from an IT supplier.

Cost is, of course, an important factor in deciding which sourcing scenarios are feasible for the organization. IDC will provide so called ‘landing zones’ in which the future cost of a sourcing scenario are modeled based on the current IT market. This is essentially a virtual benchmark of your IT organization as if parts of it were outsourced.

Finally, if IT is outsourced in some way, the existing organization should also change. External contract governance and service management capabilities need to evolve and a future organizational model needs to be constructed. When transforming the organization, one must also consider whether it is attractive to re-educate the existing teams into roles that are needed in the new organization.

The ongoing war on talent is challenging. This blog, however, has hopefully shown that the tools to navigate this challenge exist. IDC continues to help organizations daily and to us, the current market offers new and exciting ways to help CIOs globally.

Interested in diving deeper into IT Service Cost Management? Check out our infographic.

48% of enterprises plan to keep spending steadily on cloud, according to IDC research, making cloud costs a focus for IT leaders. And, the majority of organizations believe they’re overspending on cloud.

The first blog in this two-part series described how tools may provide an opportunity to reduce costs. But as many organizations are aware that they need to improve their cloud spending habits, the process that it takes to get there often seems exorbitant, causing them to instead disregard the changes needed to turn their cloud spending around. This blog intends to show that the time and resources involved in executing shouldn’t deter companies from making the necessary changes. 

From insights to process, these two companies found that hiring a partner to guide them through the work needed to transform their cloud costs, in ways that were custom to their needs, made all the difference in ensuring that they not only followed through on executing a plan of action but giving them a successful outcome. 

An international telecommunications company has migrated its entire infrastructure to the public cloud (AWS and Azure) and uses a broker towards AWS and Microsoft, performing contract management and basic security services. For both providers, a System Integrator (SI) has been contracted to provide managed services (IM and TAM) on top of the cloud providers.  

During the migration, cloud costs rose above the available budgets that had been set, based on advice by the SI’s. During migration, the SI’s focused on the project deadlines rather than optimizing and saving on what was already running in the cloud. The telecommunications company turned to IDC Metri for independent advice on cloud cost savings. 

IDC Metri has helped to improve tooling, and to define processes and ways of working, for this telecommunications company to analyze and manage cloud costs themselves. IT leaders can learn from their experience that recommendations from tools, including those from cloud providers, aren’t always realistic. They tend to be opportunistic, like suggesting that all instances should be reserved for three years, and that this will save over 50% of costs for those instances. That is the same as expecting your IT landscape to remain the same within that time – this is simply not true. 

PostNL has been one of the first listed companies in the Netherlands to go ‘all in’ to the public cloud, starting in 2012. Nowadays, PostNL is in the second stage transforming all of its bespoke applications from IaaS to PaaS solutions, like BI/Analytics platforms, container platforms and serverless computing. When compared to IaaS, price models for PaaS are more usage based than capacity based. Saving costs on usage-based priced services means optimizing the software, rather than the underlying infrastructure. 

Unlike the anonymous international telecommunications company in our example, PostNL doesn’t have SI’s in-between them and the cloud providers that offer managed services. The application teams, mainly DevOps based, are managing the cloud infrastructure themselves. Also here, cloud costs had an upward trend, from which PostNL has asked IDC Metri to bend it. 

IDC Metri has made recommendations, which were much less supported by tools, since these focus on IaaS, rather than PaaS. With the top 10 teams concerning costs, alignment has been done on savings, which has led to about 8% savings. A must know here is that large scale optimizations, such as applying savings plans, had already been done by PostNL itself. The savings IDC Metri helped to achieve were more on architecture and licenses. 

In conclusion, using tools that generate recommendations is only the starting point for achieving savings. First of all, the recommendations need to be taken with a grain of salt since they tend to be rather opportunistic. Furthermore, a list of recommendations is one thing, to actually achieve savings, hereby overcoming indifference or even resistance to save costs, is another thing. IDC Metri does support the full process, from analyzing costs through setting up processes to actually achieving savings. 

Can’t wait until the next blog is published to learn more about cutting cloud costs? Contact us to schedule a conversation. 

IDC Named Analyst Firm of the Year by the Institute of Influencer and Analyst Relations (IIAR>)

NEEDHAM, Mass., December 3, 2021 – The Institute of Influencer and Analyst Relations (IIAR>), a not-for-profit organization established to raise awareness of analyst relations (AR), has announced that International Data Corporation (IDC) is its Analyst Firm of the Year 2021. This is the second consecutive year that IDC has earned the award, which is one of the highest accolades for the technology market research industry.

The IIAR> Analyst Firm of the Year award is based on a global survey of analyst relations professionals from diverse industries. This year AR professionals from 12 countries nominated and voted on 45 analyst firms, more than 90 industry analysts, and 38 client partners. The firms were evaluated on their content, research coverage, Web site, experience, and value for the money. The evaluation reflected the best practice promoted within the IIAR>: looking at analysts’ perceived sales impact and strategic insights, resonance in the media, and ease of doing business with. The results provided clear insights both on the value AR professionals see from analysts, as well as how they perceive industry analyst firms’ value to them as clients.

“The IIAR> awards recognise professionals, teams and organisations who raise the bar for and help advance the industry standards. These awards are selected by a vote from fellow IIAR> community members,” said Aniruddho Mukherjee, IIAR> Board Member.

In its announcement at a virtual awards ceremony on December 2nd, the IIAR> stated that IDC was recognized for its “regional and industry coverage, breadth of research programs, and overall quality of its insights.” AR professionals indicated that they value IDC’s straightforward, honest, and compelling feedback as well as its product positioning feedback. IDC analysts were characterized as open, collaborative, and friendly while its sales organization was appreciated for being easy to work with.

“We are honored to receive the Analyst Firm of the Year award in recognition of IDC’s ongoing efforts to meet our clients’ needs during a second pandemic year of economic uncertainty and supply chain disruption. In response to this business environment, IDC remains focused on providing the critical resources and guidance organizations need to become more resilient in the face of these and future uncertainties. The ability to adapt to and capitalize on unexpected changes will be crucial to every successful enterprise in the digital economy,” said Crawford Del Prete, president, IDC. “We would like to thank our clients and all the AR professionals who have acknowledged our efforts with this award. Your support is greatly appreciated, and we look forward to continue working with you in 2022 and beyond.”

In addition to winning the Analyst Firm of the Year award, IDC was recognized in several other categories. Analysts Christina Richmond was the second runner up for the IIAR> Analyst of the Year award while Joel Stradling was among the ten finalists for the award. Richmond was recognized as an experienced security services analyst with strong research skills and “deep, deep, deep insight into strategy.” AR professionals valued Stradling for his excellent market insights and open dialog with clients. In addition, IDC’s Ahmad Latif Ali was one of the finalists for the New Analyst of the Year award. Finally, Janice Worsfold and Matt Vinson were among the finalists for the IIAR> Client Partner of the Year award in recognition of their high-quality client support.

More information about the IIAR> 2021 Awards can be found at: https://analystrelations.org/2021/12/02/special-year-special-awards-the-iiar-announces-industry-analysts-and-analyst-relations-of-the-year-awards-2021/

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

About the IIAR>

The Institute of Industry Analyst Relations (IIAR>) is a not-for-profit organization established to raise awareness of analyst relations and the value of industry analysts, promote best practices amongst analyst relations professionals, enhance communication between analyst firms and vendors, and offer opportunities for AR practitioners to network with their industry peers. Follow us on analystrelations.org, LinkedIn and @iiar.

Follow the facts

In the course of this corona year, a commotion arose. A somewhat hastily drawn up contract for the supply of 100 million mouth masks turned out not to be quite as promised, and on top of that they turned out to be lying unused in the warehouse because of inadequate quality. The Dutch research organization Follow The Money (FTM) revealed that the entrepreneurs behind the deal had made a lot of money, in contrary to what they reported in the media. A nasty situation that left the government with empty pockets and hands full of poor quality mouthpieces.

“When in doubt, follow the money!” is FTM’s slogan, and it works. Numerous organizations and individuals have been subjected to FTM’s investigative journalism in the past and ended up in the news in a negative way. Everything you do (but certainly also what you don’t do) leaves financial traces. Often – especially in a situation of poor record keeping – a good sketch can be made of what happened or what didn’t happen.

The same goes for IT; everyone knows the examples of projects that take far too long or a legacy application/suite that sucks all the energy and money out of the (IT) organization. It is then often very helpful to quantify these inconveniences and make them transparent. Apart from the fact that such an overview enables you to mirror the expenses with the strategy, it also forms a useful source for drawing up the next steps. Not based on gut feeling but on data.

And that is what we stand for at IDC Metri: When in doubt follow the facts! Properly substantiated advice based on market data enables you to really get back into control. Whether this is based on a benchmark of an (IT) contract, the assessment of the private cloud environment or a 360⁰ evaluation of the sourcing strategy; data is the foundation of every organization. Data gives you insight into where you are now, and only when you know that can you determine where you want to go and how you want to achieve that.

That’s why at IDC Metri we don’t just look in the rear-view mirror, but also ahead. Because based on market standards and developments it is very possible to say where the market is going, and what the developments in each domain are. IDC’s recent acquisition of IDC Metri has also greatly broadened the research potential in the area of market trends.

Now all that remains is to build the bridge between the current situation and what it should be. There, too, IDC Metri stands out as a vendor agnostic mediator in the areas of vendor selection and contract management. Carried out by a driven group of specialists with a great deal of knowledge of the subject matter, but ultimately all built on the foundation we call data.  

More information

Interested in learning more about IDC Metri? Let's schedule an appointment for an introductory meeting.

A good estimate is expensive

metri event cost estimation

IT-projects are expensive and have a tendency to fail or to become more expensive. That is a persistent image. And according to long-standing research also true in about 40% of the cases. A growing number of board members are demanding a proper substantiation of the investment in new IT. That sounds like good news. Yet too often we hear from board members that in their experience a substantiated estimate is very expensive and the number of failed initiatives does not decrease. What is causing this?

For a complex project a lot of experts are required

Many IT projects are realized within an existing application portfolio, so a lot of different expertise is required to shape a good solution. Quite often, the mistake is to rely on these subject matter experts to draw up the project estimate. Drawing up a total estimate for an IT project with subject matter experts requires a lead time of six weeks at the least. This approach also requires a good overview of the project to determine whether all parts have been estimated without overlap.

Metri’s research shows that this approach leads to an estimate that is 30% too optimistic on average in both cost and lead time. Subject matter expertise is no guarantee for a good estimate. Drawing up a good estimate is an expertise in itself. This requires sufficient knowledge to understand the architecture of a complex IT project, but above all knowledge of how this translates into an estimate. A good estimate is more than the sum of a number of separate activities. By using the right expertise, a higher quality estimate can be made in less lead time.

Every project is unique

The most often heard reason to rely on subject matter experts is that every project is unique and therefore requires subject matter knowledge to estimate it. The uniqueness defines the difference between a project and a recurring activity. But unique projects also adhere to laws of their nature. As a result, the estimate of a project is more than the sum of a number of separate activities. These activities must be planned, coordinated and controlled. Partial products must be integrated, tested and accepted. Estimation research has been conducted for over four decades and a number of patterns have emerged that also apply to the actual way projects are executed today.

External expertise is very expensive

Not every organization that executes IT projects has in-house estimation expertise. This is understandable, because today every organization uses IT facilities and almost every organization executes one IT project or more. If you want to do a proper estimate, you need to hire external expertise. That requires actual out-of-pocket spending. Sometimes as much as 1% of the total project budget. That seems like a lot of money to some organizations. But is that really true? What is the real cost to have subject matter experts spend six weeks on putting an estimate together? This cost is often not directly visible, because the subject matter experts are working on the project anyway. If you are able to make this cost transparent, an (external) estimation expert is not that expensive.

A bad estimate is more expensive

Moreover, an estimate put together by subject matter experts also entails a hidden risk, that a low-quality estimate entails additional costs for the project. It may sound strange, but a bad estimate simply costs money.

When an estimate is too optimistic, costs will increase exponentially. For example, because activities have to be executed in parallel that could better be executed sequentially. Or because people have to be added to the project to meet deadlines. This is relatively expensive and gives little return on investment.

But also a too pessimistic estimate costs money, although that usually remains hidden. When an estimate is too generous, the extra time or money is usually spent. For example, to build extra features that are not really necessary. The project could have been executed for less money or less time with the same value for your organization.

Interested in what a good estimate can bring to your organization? Please feel free to contact us. An exploratory meeting is completely free of charge.

More information

Interested in learning more about IDC Metri? Let's schedule an appointment for an introductory meeting.

IDC Acquires Metri

Metri IDC

Creates End-to-End Data Source for IT Buyer Benchmarks

Deal Significantly Expands IDC’s Sourcing Advisory Capabilities to Meet the Needs of Today’s IT Buyers

NEEDHAM, Mass., May 18, 2021 – International Data Corporation (IDC) acquires Metri, an independent IT benchmarking, sourcing and performance measurement firm. The deal adds IT budget and operations benchmarking capabilities to IDC’s existing robust price benchmarking solutions. This creates an unmatched end-to-end source for the IT buyer that will help drive measurable business value.

By combining IDC’s global capabilities with Metri’s extensive insights into IT buyer and vendor benchmark data, business leaders will now be able to gain access to a comprehensive source of IT planning intelligence that will help them drive faster innovation and save on IT investments.

“The IDG, Inc. family is excited to have Metri join us on our mission to assist global audiences in making the best data-driven technology purchasing decisions,” said Mohamad Ali, CEO of IDG, Inc., IDC’s parent company. “Combining IDC’s existing sourcing capabilities with Metri’s comprehensive benchmarking data and experts will provide the industry’s most trusted insights that our IT buyer customers need to make critical investment decisions.”

In today’s constantly evolving digital economy and environment, access to tools and data that help with scenario planning and business case analysis are critical. Through its benchmarking and price models, Metri’s extensive database with quality, cost, and price data, provides CXO’s with the transparency, predictability, and agility they need to source IT services.

“By joining IDC, Metri is able to extend the international footprint of our unique independent benchmarking and sourcing capabilities,” said Bart de Ruijter, founder of Metri. “The acquisition is a confirmation of the way end user and vendor communities value Metri for our fact-based advisory services. We are very proud to be part of the IDC family and look forward bringing this breadth and depth to the market.”

“The pervasive use of technology in business has dramatically changed how organizations think about IT benchmarks”, said Crawford Del Prete, president of IDC. “We are thrilled to welcome Metri to IDC and to deepen our data and research that will help organizations plan, execute, and optimize IT and business initiatives. Today marks an important milestone in growing IDC’s capabilities that advise and support IT and business leaders as they leverage technology to build the Future Enterprise.”

About IDC

IDC is the premier global provider of market intelligence, advisory services and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, as well as industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

About Metri

Metri is a leading provider of IT benchmarking and sourcing advisory services. Founded in 2003, Metri offers an extensive database, automated platform and experts that help organizations maximize their investment in IT. Metri uses a fact-based, bottom-up approach by tapping into its extensive database of vendor, customer and commercially acquired data. This supports innovation and drives business value creation for clients. With their help, customers maximize IT budget planning, lower their tech debt, and speed time to market.

Melissa Kaufman
VP, Marketing
IDC
E: mkaufman@idc.com

Sergej Berendsen
Algemeen Directeur
Metri
E: sergej.berendsen@metrigroup.com