CIOs & Infrastructure Technology (IT) Decisions

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How does the Chief Information Officer (CIO) make the right decision regarding IT? Do they simply just keep buying every bell and whistle that comes out of the computer world or do they have a way to make intelligent decisions that are for their company? Believe it or not there are rational ways to make solid organizational decisions regarding your IT projects. Let me show you 3 examples of organizations that have maximized IT resources using a parametric model called SEER for IT (Information Technology).

SEER for IT is a new parametric model developed by Galorath Incorporated to capture the Total Cost of Ownership for an IT project. The foundation of this model centers around 12 different types of work breakdown structure (WBS) elements and a group of knowledge bases built on industry standards. Knowledge bases in layman's terms means a collection of historical data organized into a windows template for ease of use. The user selects and/or enters data into structure and framework to characterize the environment.

In most cases the user simply selects a WBS type and then selects the knowledge bases. After that, the user simply has to specify quantities and he gets a Rough Order Magnitude (ROM) estimate of the typical cost, effort, and schedule for this activity based on industry norms. If the user knows more details then the model allows him to tailor the WBS element in more detail. It is a quick way to come up with cost, effort and schedule on IT projects with very little information up front with a lot of industry data incorporated via knowledge bases to support the results.

Now let's talk about how this tool can assist the CIO out in the real world. This model is being used currently by a major automotive manufacturer. This major company took the right steps to fully utilize this new parametric tool. It completed the initial training by Galorath and has already built and validated the results against internal historical values. It is in the process of piloting a JOINT IT Estimation Process in North America (NA) for projects proposed to be included in the North America 2010 business cycle plan. This will allow them to integrate IT estimates into a unified project cycle plan for the requesting customer. Over time by this industry will be able to look strategically across the enterprise and make decisions on dedicating resources to IT projects from a global view.

A large Federal agency employed SEER for IT across its enterprise. First they received training and built over 70 estimates over a year. They developed a process where they collected and built catalogs of their major IT activities. Once all the estimates had been internally reviewed and validated the estimates were merged into a portfolio. This portfolio of estimates was then compared to available budget resulting in a down select to about 30 projects. A further review identified 15 of those projects as being critical to the organization's business objectives.

This organization had been plagued with massive overruns in the past. They had failed to account for the operation and support of already started projects and the tail of activities and overlapping costs and activities. Using the SEER for IT tool as part of a formal estimating process brought about an organizational discipline that focused on a Total Cost of ownership perspective. It was able to maximize economies of scale of purchased hardware and software. Now this organization has the complete picture of its portfolio of projects and also the added benefit of all the collected corporate knowledge regarding IT ongoing activities to make solid decisions for the future.

SEER for IT has been used to assist to make competitive decisions to develop price to win strategies. One major defense contractor employed this model to capture what the industry average would be for developing a major project. From there they placed their competitions rates into the model and then devised a strategy to out bid the competitor for this business. They thought that if you have a good idea of what your competition is going to bid, then you can develop strategies to take away the business from them. Specifically they decided to utilize cheaper sub contractors in key areas to seize the advantage with just a small impact on their profit margin.

In conclusion the CIO can use SEER for IT to evaluate Total Cost of Ownership cost, schedule and effort of new IT projects in a systematic logical fashion while capturing the corporate knowledge of its ongoing activities. It can help allocate scarce resources to the most critical requirements. In addition, it can help the organization to develop price to win strategies to seize new opportunities for new business and also realize economies of scale for hardware and software purchases for its own projects.

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Bob Hunt has 1 articles online

Bob Hunt is V.P., Services for Galorath Inc - He has performed software program assessments, SEI Checklist evaluations, software sizing analyses, and software cost estimating. Get help with hardware cost estimation, software and manufacturing projects.

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CIOs & Infrastructure Technology (IT) Decisions

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This article was published on 2010/03/27