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As businesses work to become more adaptive, and IT organizations more agile, availability takes on an even more critical role in enabling IT executives to address their priorities and meet their objectives. If the right resources in the IT infrastructure are not available on demand, rapid provisioning and scaling of services is not possible, and the business cannot respond quickly to new changes.
This heightened focus on availability raises crucial questions. For example, how can IT deliver the required levels of availability, using either existing internal resources or mission critical services provided by a technology vendor? And how can IT measure and report the return on investment in availability?
This paper discusses how availability serves as a building block of the adaptive enterprise and as an enabler of change and IT operational efficiency. The paper also explores methodologies to measure the return on investment in the mission critical services that help IT organizations increase service levels and maintain availability. Those methodologies include Return on IT Investment (RoIT) best practices gleaned from IT leaders worldwide. Lastly, it provides insights into the methods used by HP to help customers transform their business and derive measurable business value from their IT investment.
Meeting the challenges of the adaptive enterprise
The adaptive enterprise is one in which business demand is constantly matched by IT supply. An adaptive enterprise can "anticipate change in its environment and respond rapidly in ways that customers welcome and competitors are unprepared to counter." Information can be quickly collected, analyzed, and acted upon; decision-making processes enhanced; business performance improved; and profits increased.
To help enable the adaptive enterprise, IT must meet a number of challenges. For example, IT must work to eliminate operational inadequacies that can inhibit innovations in business practice and processes. Budgetary limitations are another factor, and there is intense concentration on ROI. "As the economy resists any sustained bout of good news, most discussions of information technology continue to center on how to get the biggest return for the least investment." This creates another challenge: how best to measure ROI on the massive investment many businesses make in technology solutions.
Top priorities for IT executives
IT leaders are acutely aware of these issues. In March 2003, Gartner polled 620 CIOs and IT executives worldwide to discover their top five objectives. Here are the results.
- Providing IT guidance to senior corporate executives
- Demonstrating the business value of IT
- Improving the internal governance of IT operations
- Taking steps to reduce total IT costs
- Developing or enhancing corporate IT architectures
Of these objectives, three issues-demonstrating IT business value, improving internal IT governance, and reducing IT costs-are related to increasing, measuring, and reporting business benefits and ROI. Yet in a survey of 130 IT executives conducted by the Kellogg School of Management, 82 percent of the respondents reported that estimating IT benefits is a major challenge.
New approaches for delivering value and measuring ROI
To meet these challenges, forward-looking business and IT executives recognize that new thinking is in order. They are embracing innovative strategic approaches that can enable them to rapidly adapt to changes in the business environment. It is no longer common business practice to develop a detailed five- or ten-year strategy, thoughtfully rolled out over time. Rather, most businesses recognize the need to launch incremental, shorter-term strategies, which can then be modified over time as needed to address dynamic business requirements.
The success of such strategies depends in part upon an IT infrastructure-technology, processes, and people-that is aligned with business objectives and timelines. Success also relies on adopting more flexible, responsive, and timely methods to evaluate and report ROI. According to CFO Magazine, examples of such new approaches to ROI and IT management "run from detailed scorecards to inventive reporting structures." Gartner, for example, has developed a comprehensive methodology, called Total Value of Opportunity (TVO), that provides a framework for determining the overall business value to be created by IT-enabled business initiatives.
The business impact of downtime
Equally significant is the growing awareness of the underlying IT issues that affect both agility and ROI. Examples of such issues include increased service level demands and the need for an always-on, service-oriented IT infrastructure.
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