Serving IT on Demand

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    Just read “Managing next-generation IT infrastructure,” first published last year in The McKinsey Quarterly. If aspects of IT truly have become utilities, this article explains how to reduce the complexity of the IT infrastructure, encouraging companies to go “off-the-shelf,” metaphorically speaking. This involves specifying by service requirement rather than hardware configuration; using reusable services rather than building systems to order; and monitoring for capacity planning and sourcing purposes.

    As the article explains:

    With this model, filling an IT requirement is rather like shopping by catalog. A developer who needs a storage product, for instance, chooses from a portfolio of options, each described by service level (such as speed, capacity, or availability) and priced according to the infrastructure assets consumed (say, $7 a month for a gigabyte of managed storage). The system's transparency helps business users understand how demand drives the consumption and cost of resources.

    So how does an organization get there? The article includes a case study of Deutsche Telekom, which began its transformation to IT as a service in a phased approach. The first step focused “solely on storage services for a few key applications. Only later did they expand the model to computing services for mainframe applications. Today 80 percent of the relevant IT infrastructure has been converted.”

    Key to the initiative was defining two new job roles: a product manager to analyze user segments to identify common needs and create a portfolio of products for each user segment; and a factory architect to monitor infrastructure needs for capacity planning and sourcing, define processes and select appropriate technology to meet service needs; and develop automation plans. An enterprise-level infrastructure “council” sets architectural guidelines and guides product innovation.

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