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Jonathan Koomey gave this presentation at the Data Center Dynamics Conference in Seattle, WA on Sept. 4, 2014. It describes what executives need to do to modernize their IT operations, and describes an upcoming (Nov 10 to Dec 12, 2014) online class titled Data Center Essentials for Executives, see http://goo.gl/K4kJG2
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Speak dollars not gadgets: How to get upper management to pay
attention Jonathan Koomey, Ph.D.
Research Fellow, Steyer-Taylor Center for Energy Policy and Finance, Stanford University
http://www.koomey.com Presented at DCD Converged
Seattle, WA September 4, 2014
1 Copyright Jonathan G. Koomey 2014
What do executives need to know about information
technology (IT)?
2 Copyright Jonathan G. Koomey 2014
Modern businesses can’t succeed without IT
3
Brynjolfsson, Erik, and Andrew McAffee. 2014. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, NY: W. W. Norton & Company. [http://amzn.to/1gYHEGk]
Copyright Jonathan G. Koomey 2014
However…
4 Copyright Jonathan G. Koomey 2014
IT is almost invariably fragmented and divorced from
business performance Only management can fix that
5 Copyright Jonathan G. Koomey 2014
Almost all enterprise data centers are paragons of inefficiency, but
management doesn’t know it (and those who do know can’t fix it)
6 Copyright Jonathan G. Koomey 2014
Inefficient IT increases costs, decreases revenues, AND
reduces the rate of innovation
7 Copyright Jonathan G. Koomey 2014
What can management do?
8 Copyright Jonathan G. Koomey 2014
I. One boss, one team, one budget!
9 Copyright Jonathan G. Koomey 2014
II. Tie IT performance to business performance
10 Copyright Jonathan G. Koomey 2014
How?
11 Copyright Jonathan G. Koomey 2014
Metrics!
12 Copyright Jonathan G. Koomey 2014
Creating the right metrics is not as easy as it sounds
13 Copyright Jonathan G. Koomey 2014
Metrics drive organizational change
• Focus on the whole system – reducing total costs per computation – increasing total value from computation
• “Show back” the consequences of choices to every employee, then “charge back” if needed
• Key Performance Indicators (KPIs) for management include both costs AND benefits
14 Copyright Jonathan G. Koomey 2014
DSE http://dse.ebay.com
15 Copyright Jonathan G. Koomey 2014
Can you assess IT costs and benefits at the project level?
Most companies can’t!
16 Copyright Jonathan G. Koomey 2014
III. Use IT to transform IT
• Standardized IT deployments • Move from “sit down restaurant” to “buffet
style” IT • Move many users to internal or external cloud • Software should matter more, hardware less • Measure, experiment, learn, and replicate • Use computer modeling to anticipate effects
of changes in existing facilities
17 Copyright Jonathan G. Koomey 2014
Conclusions
• What management can do – I. One boss, one team, one budget – II. Drive institutional change using metrics that
tie IT performance to business performance – III. Use IT to transform IT
• Summary: Make IT serve the business!
18 Copyright Jonathan G. Koomey 2014
IT should NOT be treated as a cost center, it should be a cost reducing
profit center that also improves corporate and customer
environmental performance
19 Copyright Jonathan G. Koomey 2014
For more details on the upcoming (Nov 10 to Dec 12, 2014) online class titled Data Center
Essentials for Executives, see http://goo.gl/K4kJG2
Also see my 2014 article titled Bringing
Enterprise Computing into the 21st Century: A Management and Sustainability Challenge
http://goo.gl/WYFBjb
20 Copyright Jonathan G. Koomey 2014
A case study of a company that has been successful at tying its IT performance to business performance
Schuetz, Nicole, Anna Kovaleva, and Jonathan Koomey. 2013.
eBay: A Case Study of Organizational Change Underlying Technical Infrastructure Optimization. Stanford, CA: Steyer-Taylor
Center for Energy Policy and Finance, Stanford University. September 26. [http://www.mediafire.com/view/8ema554a2ho9ifj/
Stanford_eBay_Case_Study-_FINAL-130926.pdf]
21 Copyright Jonathan G. Koomey 2014
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