An innovative approach to IT investment and IT architectural design decision processes
Welcome to the itdec.eu web site, an open web site dedicated to the application of formal methods to the IT investment and IT architectural design decision processes.
This web site is open in the sense that whoever can contribute by sending articles to us.
See below for ITDec.eu manifesto.
Visitors of ITDec.eu in 2011
In 2011 according to Google Analytics 3,021 people from 125 countries have visited ITDec.eu. Top contributing countries were Italy (950 visits), United States (851 visits) and India (529 visits). Users spent on average 2 minutes and 49 seconds visiting ITDec.eu.
Traffic has been steadily increasing over the year 2011. Indeed there were 1,193 pageviews in the first quarter, while there were 4,034 pagevies in the fourth quarter.
Top traffic sources were Google (2,798 visits), direct (869 visits) and linkedin (154 visits).
According to Google Webmaster tools there are currently 473 links from 76 Internet domains pointing to ITDec.eu.
Most visited web pages were:
- ITDec.eu home page (1,654 page views)
- Capacity planning importance (766 page views)
- Capacity planning overview (710 page views)
- Workload Analysis for Server Farm Optimization (WASFO) toolset overview (560 page views)
- Server virtualization overview (516 page views)
- Server virtualization cost benefits analysis (479 page views)
- Server virtualization projects overview (447 page views)
- Intangibles overview (445 page views)
- Mauro Gatti home page (233 page views)
- IT decision process (218 page views)
So in summary ITDec.eu looks to be an important source of information for those interested in capacity planning and server virtualization.
An examination of the latest quarter of 2011 shows a growing interest in the following two web pages:
- Investment financial indicators (111 page views in 4th quarter)
- Server consolidation business case (108 page views in 4th quarter)
Business relevance of IT investments
Despite over twenty years of research doubts are still regularly raised about the capability of IT to support effectively business.
While firms' overall investements in IT are daunting there is little, if any, evidence of IT being capable of delivering a competive advantage; and doubts are even raised about the capability of IT to improve productivity.
As a consequence firms are more and more focused on cutting IT costs rather than on identifying new innovative ways to exploit IT. On the other hand, IT vendors and scholars are struggling to understand and explain the process through which IT investments produce business value.
Business analysis of IT investments
To cope with such a trend CIOs and IT professionals would need to move away from the application of heuristic approaches (e.g., gut instinct, rule-of-thumbs) and start rather applying rigorous techniques to the IT investment and IT architectural design processes.
Rigor should never be sought for itself, it is a means, not an end; the end is achieving business objectives. A well known example is provided by cost control.
You can either control costs with an axe or with a scalpel. The latter provides far better results but it is far more difficult to use.
Optimization of IT investments and IT architectural design
Clearly, whenever the application of rigorous techniques is no more expensive than the benefits achieved, it is quite sensible to try to use "brain" rather than relying on guess an approximation.
For instance by comparing the design of SAP server farms with optimization algorithms, rather than with rule of thumbs, we have proved that a cost reduction of up to 30% could be achieved even in very simple projects. We can reasonably guess that benefits will be far larger in complex projects.
Resistance to formal approaches
Any change attempt spurs resistance and the introduction of formal approaches is not and exception.The increasing ratio between server performance capacity and cost is often used to explain why formal capacity planning is not required. Fears of not meeting delivery deadlines is another frequent explanation for the use of rule-of-thumbs.
We would not be happy to know that the designers of the aircraft we are currently flying in, to meet the project deadlines, decided to replace formal analysis and tests with rule-of-thumbs analysis; but we are perfectly fine with requests of planning a new server farm using incomplete and unreliable data.
So it comes with no surprise that IT investments exhibit an extremely high failure rate and business executives perceive IT investments as sheer costs, rather than meachanisms to achieve competitive advantages.
Managing resistance to formal approaches
It is usually not a good idea to actively fight against resistance to change. It usually better to modify the change so that fears on which resistance is grounded are mitigated. It is not difficult to prove the business relevance of using a formal approach; hence if we can find a way to dramatically reduce the time and effort required by a formal approach we may be able to have the management to accept it.
The key point here is that the development of a formal approach, and of tools supporting it, may take a lot of time; but the actual use of it, including the collection of data required for the analysis, must require little time and effort. These are for instance the grounding principles on which the WASFO toolset development was based.
Optimization of the architectural design of server farms
In this web site we explore some of the topics related to the IT investment and IT architectural design decision processes we have been more focused in recent years. Currently, examples are very much focused on optimization of server farm design. Over the time a more comprehensive analysis will be provided.
IT investment decision process
In IT Investment Decision Process we introduce the process and a few techniques that have been developed to make it more effective.
In IT Optimization we focus on the more restricted problem of applying optimization techniques to IT, e.g., to the improvement of IT infrastructure. We explore in detail a few IT Infrastructure optimization techniques that are currently particularly relevant: consolidation and virtualization.
Most often CIOs base their decision on simple financial criteria (e.g., payback period) thereby glossing over the most important, strategic benefits that IT projects may deliver. This is due to the fact these projects produce intangible assets that do not appear in the balance sheet and are therefore ignored by many CFOs. While one the one hand firms are investing trillions of dollars in intangibles, they are often not considered as part of the decision criteria.
Business value of IT investments
Intangible assets are extremely important for any knowledge intensive company and therefore they are crucial for any company largely consuming or producing IT assets. Over the last twenty years significant progress has been made in the macroeconomic analysis of IT investments on productivity growth. We think the same cannot be said of the microeconomic (project level) effect of IT investments on the accomplishement of strategic and tactical objectives. This is largely due to the fact that the most important assets produced through IT investments are intangible. In the business value of IT investments section we examine the complex nature of IT intangibles and we provide concrete examples for the specific case of server virtualization projects.
IT infrastructure optimization
Over the last few years we have applied our basic tenets to the field of IT infrastructure optimization through the development of a tool (WASFO) that applies optimization theory to the process of server farm virtualization; thereby allowing companies to find the optimal (minimum cost) way to virtualize an existing server farm.
One of the most difficult areas of IT infrastructure optimization is capacity planning of server farms. Over the last ten years we have spent a lot of energies to make the capacity planning process efficient and effective. In capacity planning we introduce the reader to capacity planning with specific focus on server consolidation and server virtualization projects.
In Green IT we examine how IT, notably system virtualization, can contribute to the environment by dramatically reducing the power consumption.
This web site also publishes a few lectures we have given on various topics (notably virtualization).
Search Engine Optimization
Although this web site has no commercial purpose to make is visible on the web and attract users we have adopted a few SEO techniques. To assess the validity of the recommendations of SEO gurus we have run a few experiments that we describe in our A SEO experiment section.
Author: Mauro Gatti