Bringing costs and quality into the right balance with IT service improvement programs
// IT Cost Reduction, IT Quality Improvement
IT must not just be considered as a cost object
Just like the call for order, safety, and planning, the call for quality in IT is always topical. This applies when large changes are ahead as well as when realignments and problems occur in normal operations. Each and every major change is followed by a consolidation, be it after a merger, a spin-off, an insourcing or outsourcing, or after periods of severe cost reduction. The next step is the call for an increase or reestablishment of quality.
Strategic changes, changes in management, or the desire for a stronger penetration of IT in the service of a uniform business alignment often lead to the call for a more sustainable quality approach. To comply with this many-voiced call for quality, IT needs a quality management system, methods for quality improvement and a clear view of the return on investment in quality. Marc Buzina, Service Manager Quality Improvement at noventum consulting, explains the position of the topic in business practice in a discussion with the editor.
novum: What is IT quality, actually, how do I determine it, and how can I be sure to deliver the „right“ quality?
Marc Buzina: The answer is in the eye of the beholder. I can take a look at functionalities or look at the output, meaning I‘d review the plannability and predictability of the IT production. For one company, stability is the highest good and change can [only] progress slowly. For another, the speed of adaptation is very important. The 3rd company needs both and will therefore also generate higher IT costs.
Investments into IT quality are business Investments
novum: What should a company do in order to achieve good IT quality?
Marc Buzina: The responsible parties in IT must fight for having their work perceived differently; away from being a pure block of costs, towards being the „enabler“ of the value generation chain of the company. They must specify clear quality and cost objectives and must make them plausible to [executive] management via reference to the company‘s objectives.
novum: But how do I manage to gain management‘s attention for quality in times of continually recurring cost reductions?
Marc Buzina: By reversing the way things are being looked at: Costs for bad quality definitely arise at the company. Downtimes are the most straightforward in the presentation, projects that go on for too long (e.g. projects that do not achieve their objectives), redundant system landscapes that force duplicate work have to be calculated in as cost factor. Missed opportunities, e.g. due to non-analysable data or due to IT response times that are too slow must be included in the review, too. A calculation of the Cost of Poor Quality provides an overview of this.
novum: Cost of poor quality? Isn‘t that once again a look at the costs?
Marc Buzina: This is basically about the ROI of investments into quality. The business case calculates these investments against the cost of poor quality. Unfortunately, nowadays we sometimes have to smuggle quality through the door as a cost factor – it is not always possible to reach a consensus on that quality represents a value in and by itself and must be part of the business philosophy.
novum: How, specifically, do you approach things when a quality improvement process must be established?
Marc Buzina: With our IT Service Improvement Program.
If possible, on three levels. Strategically, the question arises „Are we doing the right things?“, meaning a comparison of the claim and the agreed upon objectives. In practice, the business objectives and the IT objectives are being prioritised and connected to one another. On the tactical level, the question is, rather: „Are we doing things right?“, meaning an actual vs. target between the objectives and their fulfilment. In addition to the report analysis, here is where it is also being checked whether measures are derived from the deviations and implemented – is the IT organisation learning? Furthermore, operations comes along with the question „What are we doing wrong right now?“, an analysis of the operational processes.
On all three levels, potentials for improvement are identified which then are prioritised and consolidated into packages of measures. Each package of measures receives a clear specification of objectives which might need to be made measureable first, where applicable – I cannot improve that which I cannot measure. Additionally, there still is a strict project and program management and the particularly important verification of the fulfilment of the objectives.
novum: How does noventum support its customers in this?
Marc Buzina: On the one hand, noventum offers to carry out whole service improvement programs. This can refer to the own, meaning internal, IT service provider or to the quality improvement of a provider/supplier. I.e., we determine the fitting quality objectives, determine measurable criteria, specify sensible measures, and control their implementation. The adjustment of the organisation to new quality requirements can also be a component of such a program. For this, we are a specialist for the measurement of IT-relevant criteria such as IT quality and success. We offer our IT Service Performance Cockpit projects for this which makes it possible to always have an eye on the relevant indicators.
IT quality and success are measurable
novum: So, you are positioning yourself for the decisive discussion and measurement points?
Marc Buzina: We have, in a huge number of projects, not only determined the strategic and economic business improvement potentials but have also, beyond that, developed a considerable toolbox for practical issues. Therefore, we are very quickly specific and close to implementation. Which then, of course, also pleases the comptroller!
novum: Is there an ideal point in time for quality improvement projects?
Marc Buzina: For major changes, I always recommend they be carried out anti-cyclically. Did you just (meaning 6-12 months ago) carry out a larger merger, an outsourcing, or a strict cost reduction program? Then it is about time, thereafter, to check whether your IT quality is still satisfying the requirements. Most companies do, however, wait until a good amount of china has already been broken – i.e., the lack of quality in business has already resulted in dissatisfaction. Because that is the latest point in time – it is better, however, to be pro-active.
novum: Thank you very much for the interview!