5 ways to measure the success of a hybrid delivery strategy

Focusing on what you are good at

CIOs need to deliver more to their enterprises today. They need to be able to drive innovation, agility, and risk reduction. And they need to do this within the confines of a thinner IT investment envelope. These facts have CIOs and their leadership teams looking at a variety of sourcing options for their development and production environments. CIOs need, more than ever, to understand their organization’s core capabilities. According to Booz and Company, they need know where they can uniquely provide talent, knowledge, tools, and processes (http://www.strategy-business.com/article/10407?pg=7). Just like the rest of the business, this involves becoming focused and “clear minded” about their distinctive capabilities and their infrastructure and service portfolio.

 

Cloud computing demands CIOs make conscious choices about their capabilities and delivered infrastructure and services portfolio. As a “service provider”, they need to know where they have “the ability to reliably and consistently deliver distinctive business outcomes” (http://www.strategy-business.com/article/10407?pg=7 + http://hbr.org/product/the-essential-advantage-how-to-win-with-a-capabili/an/12358-HBK-ENG). Getting to this right sometimes can be simple as asking the question that Bill Crystal kept asking Curly in the movie “City Slickers”(http://actoroscar.blogspot.com/2011/12/best-supporting-actor-1991-jack-palance.html.)

 

 curly.jpg

This act of questioning will slowly but surely drive IT organizations to mix their traditional delivery model with private and public cloud delivery.

 

Matching the right service model to the right service for the right outcome

 

For many organizations, this demands that CIOs know their infrastructure and business service delivery costs and provider comparable to set as benchmarks in order to make proper sourcing decisions. A major Internet service provider recently told me that they use Amazon in their mix even though Amazon’s costs are higher. You might ask why as I did. They use them because Amazon is better at quickly spinning up development and test environments and at managing their Web Servers. Hybrid delivery is not just about saving money.

 

Taken together, this demands that CIOs have an IT delivery model that is flexible across sourcing options. Software, also, clearly can help choose which services to select and which infrastructure to leverage. Software can, also, provide 360 degree visibility into the organization’s IT environments regardless of how and where they were built. Finally, software can help in the deployment of development and production applications and in the control of the heterogeneous IT environment.

 

But it is also important that CIOs demonstrate back to the business that they have taken advantage of the benefits the hybrid world offers in terms of cost reduction and agility. We find that, for the IT organizations, cloud is about the speed of operations; but for the business, cloud is about business agility. Agility is important to CIOs because it is so directly related to tangible business improvement. “It means you can launch applications faster that have a material benefit on the business bottom line”.

 

Bottom-Line.jpg

Proving the business value from a hybrid delivery investment

 

When measuring prior state against current state and internal or external cloud provider models, measures that are most important include the following:

 

1) The average delivery time of new products because cloud is about reducing the development and implementation cycle time

2) The average project initiation time because if cycle times are reduced projects can be initiated more quickly

3) The percentage of projects that are on time because asset delivery schedule is not limiting the schedule for initiating and completing projects

4) The MTTR/MTBF (if a relatively mature capacity management is in place) because it capacity issues will be avoided and the time to do break fix should be reduced

5) The average time to procure hardware because it is available as it is needed

 

I have not included in this blog an explicit mention of cost benchmarking. This exercise is important as well. It looks at the labor and asset costs for applications, desktops network, servers, and storage. Understanding this is foundational to a hybrid delivery strategy. HP customer and partners wanting a complete review of these and other KPIs, please send an email to scorecard@hp.com.

Labels: IT strategy
Comments
HeatherMackey | ‎02-06-2012 11:31 AM

Great post, Myles! And fascinating story about the ISP that uses Amazon - even though it costs more. To justify that it seems like you really do need to be capturing the value of speed and flexibility to the business. These metrics should help. Are you finding that the organizations you talk to are able to do that for the most part when it comes to sourcing?

MylesS | ‎02-06-2012 12:09 PM

Most organizations are just distilling their total cost for IT services. This is where a product like "Financial Planning and Analysis" can really help. However, almost every organization that I have met knows how long it takes to provision. This is why cloud is "Crossing the Chasm" in development first. Let me get some experts to add-on to this.

 

Myles

meimer1962 | ‎02-11-2012 04:01 PM

Myles,

Great Post and yes I do agree that hybrid delivery models will be more prevailent in the yeras to come.  The cloud is a game changer and depending on the vertical you are in can definitely help with the IT velocity required for some businesses that need it.  You find most comodity services being placed into the cloud but the challenge is how to incorporate these services seamlessly with on premise services so that the end user experience is ubiquitious.

Nadhan | ‎02-29-2012 07:57 AM

Like the points you make, Myles.  This is why I say that the CIO is stretched in today's Cloud Computing World. http://bit.ly/nsjYis

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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...


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