"Fit-for-purpose" infrastructure strategy: How companies can manage increasing IT demands

May 9, 2014

Executive summary

Despite the increased pervasiveness of technology across virtually all industries, many companies still use an outdated approach to IT infrastructure. In this approach, infrastructure strategy is relegated to a back-office function with little communication or coordination with business units. Given that infrastructure comprises roughly half of all technology spending, such an approach results in large inefficiencies. Worse, it obscures the true cost and service levels for products from business leaders, and leaves critical products and services vulnerable to disruptions.

By contrast, a “fit-for-purpose” infrastructure strategy aligns IT infrastructure proportionally with the relative importance of the business line, product, or service that it supports. Critical units receive greater infrastructure spending and higher service levels, and noncritical units receive less. This strategy offers several clear benefits: First, business and IT leaders have a better view of priorities and can collaborate more effectively to execute the company’s overall strategy. In addition, business leaders have a more accurate sense of the total cost of products and services across their portfolio, including IT infrastructure, and can therefore better manage it. Perhaps most important, the company prioritizes its disaster mitigation and recovery efforts, reducing the potential costs — financial, reputational, and regulatory — of an outage.

Implementing a fit-for-purpose IT infrastructure strategy requires coordination among business and IT leaders, with three distinct steps. First, the company must conduct a business impact analysis to determine the relative importance of specific products and services and establish the right priorities. Second, IT leaders must map the application portfolio to the company’s products and services with an aligned inventory of all IT infrastructure components and underlying cost — creating an end-to-end linkage between business products, applications, and infrastructure. This step includes both an assessment of the current state and a reprioritization to the targeted future state. Third, the company must establish a repeatable process, enabling constant adaptation to changing market priorities, evolving strategies, and new technologies.

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Conclusion

Regardless of industry or geography, technology drives business success, today and for the foreseeable future. To win in this environment, companies must better align their IT infrastructure strategy to the larger strategic objectives of the organization, not only at a high level but also for each product or service in the portfolio. A fit-for-purpose infrastructure strategy helps achieve this, giving both business leaders and IT leaders a better sense of how these elements of the company mesh. Given the rapidly evolving state of technology today, companies can give themselves a sizable advantage by getting ahead of this issue and building in mechanisms that allow them to flexibly adapt to changes on all fronts — in IT infrastructure, company priorities, and market needs. Conversely, companies that continue to cling to outdated infrastructure strategies will find themselves falling further behind.

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"Fit-for-purpose" infrastructure strategy: How companies can manage increasing IT demands

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