A Buddhist Approach to IT Value

“There are only two mistakes one can make along the road to truth: not going all the way, and not getting started.” – Buddha

When technology leaders first illuminate the black box of IT costs to see how business consumption drives IT costs, lightbulbs go off.  

This isn’t really about cost.  This is a path for engaging business leaders around the value of IT.

But before they reach enlightenment there is at least one member in each of these IT organizations who began as a skeptic, convinced they didn’t have the data to power those bulbs.  They doubt they have all the depth and breadth of data about IT resources and costs to shed much light.  

Then there are those who feel confident they have good operational and financial data but doubt they can wire it all together in a way that produces useful insights. 

Daunted by their fears, they don’t get started.

Choosing Your Path

Imagine two IT leadership teams: 

Team 1: uses an “even spread” approach to calculate the total average cost per server.  Essentially this means adding all compute costs -- hardware, OS licenses, monitoring, support – and splitting the big lump evenly across thousands of servers so they each appeared to have the identical (average) total cost composition.   This is the IT business equivalent of showing a list of US households with 2.7 children and 1.2 Superbowl viewings of Bruno Mars and/or Beyoncé.

Team 2: they have plenty of good operational data, such as time tracking to link developer hours to application projects, maps of applications to infrastructure assets, invoice detail to relate vendor costs to assets, power and carbon usage by location…. They had enough data to slice and dice server costs in more ways than Trump generates headlines.

Which team do you think reached enlightenment?

If you already guessed that this is a trick question, you are a very old soul.  Both are the same team, at the same company –AOL’s James LaPlaine (CIO and SVP of Tech Operations) and Emily Rittenhouse (Director of TBM and Analysis).  

IT Cost is the Path, Not the Destination

James already knew the ‘cost of IT’.  After all, he signed all the big purchase orders.  What he didn’t know, and couldn’t show, was the cost of service consumption by AOL’s businesses such as Huffington Post, Tech Crunch and 2.1 million dialup users.  Where to start? 

“In our first TBM model we started very simply with things like dividing our total compute cost by our number of servers.” They did the same across the IT infrastructure—feeding Apptio only the most basic data about networks, storage, applications and the rest.

James enlisted the cooperation of a media property leader eager to understand what was driving their costs.  Showing each cost model iteration and all its assumptions engaged the business leader in a conversation about where to go next through a series of “what if’s”. What if we add the cost of Amazon Web Service use to the model? The cost of data center occupancy? Details about security? Disaster recovery? Primary vs. secondary storage?  And those questions led to others—more “what ifs” about other costs of services. Manpower. Environmental. Diagnostics. Training. With each iteration, the reports were richer, more granular and far more accurate. AOL could clearly see how much resources each business unit consumed, and it could understand—down to the cost of the cooling systems—how much it cost IT to deliver them.

An iterative process was also used to build a strong relationship with the CFO. When James’s team went to present to her, they didn’t bring all the answers—because they didn’t have them. What they brought was an early version of their cost and consumption model in Apptio. According to James, “We probably did five or six iterative meetings with our CFO to improve the model directly with her.  The CFO’s participation in the thinking behind the cost model, and seeing first-hand how it was evolving, proved essential to her support – and the Board’s support – of James’ Cloud-First strategy.

Mindfulness Exercise: Five Mantras for Attaining IT Value Enlightenment

1. Start Small. Whether you have a little data or a lot, begin service consumption models with simple approaches.
2. Stay Grounded.  Use the visual cost model instead of theoretical debates to keep the discussion bounded in practicality.  
3. Reveal Your Thoughts.  Be transparent about assumptions to engage business partners in the process of shaping the clay while it’s still wet.
4. Adopt a Growth Mindset.  Additions to your model will raise new questions that reveal what steps are most important.
5. Be Humble.  Shortcomings and mistakes are essential to the process. The goal is not to defend results to but rather to build understanding with the business.

Learn more from James and Emily by listening to this webinar discussion or reading their case study.