Chief Digital Technology Officer & SVP
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Greatest Opportunity for Increasing IT Efficiency
Every IT leader today has at the very top of the old to-do list this daunting task: "Greatly Increase Operational Efficiency." IT, like all business groups today, needs to get leaner, meaner and more tightly aligned to business strategy.
On July 30, Harvey Nash shared one of the very best ways to achieve that critical goal to a group of executives attending our monthly Webinar. The topic was IT workforce-workflow alignment, and I had the pleasure of hosting this presentation along with Harvey Nash CTO Craig Guarnieri and Jim Halling, our Practice Leader for Workforce Strategy.
The event kicked off with a jarring number from Jim. A comprehensive workforce optimization process will typically identify and allow an enterprise information technology (EIT) department to save, avoid or reinvest up to 18% of its workforce costs. While 18% is a good number, I like dollar figures, which Jim explained this way: for every million dollars of workforce costs an organization incurs, a business will be able to redirect $180,000 through strategic workforce optimization.
Many businesses conduct their own workforce-workflow alignments and others outsource the process to third-party experts. Harvey Nash, both an IT and a workforce expert, has developed its own proven methodology to ensure IT organizations optimize this essential intersect. During the Webinar, Jim detailed how Harvey Nash optimizes workforce operations, which includes the employees, contractors and third-party providers working within the IT organization. Craig then explained Harvey Nash's process for optimizing the workflow--systems, applications and processes operated by the workforce within the IT organization. While the two processes in their own right yield tremendous new efficiencies and cost reductions, Harvey Nash has intersected these two to create a streamlined, comprehensive EIT optimization solution that results in even greater operational efficiency and excellence.
The places where opportunities to increase efficiency identified by the optimization process are far-reaching and extend from contractor hiring and resource usage to vendor processes, application overlap, governance, workforce planning and offshore strategies. One of the best ways for me to share with you the insights of this information-rich Webinar is to give you a sample. Below you will find the QA Summary from the Webinar, which you can read to better understand the benefits, opportunities and logistics of a workforce-workflow optimization. I encourage you to read it and let me know if you would like to learn more about this topic. I would be more than happy to bring our team together and review the presentation with you. In my view this is clearly one of IT's best shots at becoming a much better, more efficient and lower cost enterprise partner.
Q. How long does it take to complete a workflow-workforce alignment engagement?
It can take from three to 12 months depending on three factors:
- Size: The size of the enterprise (large, medium or small)
- Commitment: How much time, resources and involvement the client company will invest in the process
- Maturity: How mature the company is relative to its workforce practices, PMO practices, vendor management practices, etc.
A small company that adapts the passive workforce-workflow alignment recommendation can achieve it in about three months. A larger company that adapts a more aggressive alternative will have a longer time frame. If an organization wants to include management training, it will take longer in order to design and administer the training.
Harvey Nash alignment programs are tailored to specific companies and their specific needs. It's not a one-size-fits-all or cookbook approach. While we do bring a central philosophy and methodology, we need to understand your organization, the maturity of management, your technology, your applications and your business needs in order to deliver a successful plan and timeline for execution.
Q: How important is the alignment of the application systems with the business?
Aligning technology systems with the business is key to the success of the IT organization. There may be rare situations where it's not optimal, but in general the alignment of systems around the business is essential to delivering solutions and keeping IT leaders in touch with what business groups are doing.
Alignment is also key to ensuring the dollars IT is investing (which includes resource and infrastructure investments) are lining up with where the business needs are. This alignment inevitability should roll back up to corporate strategic initiatives. An IT leader's role is to translate those corporate strategic initiatives into tactical plans that can be executed by the EIT organization. When communicated effectively, it resonates through the entire business. A well aligned IT team will have development teams, project managers and vendors all delivering in a way that directly aligns back to the business organization. Everybody will be singing the same song. A lot of companies get a little confused, especially during these difficult economic times, which underscores how important it is to ensure alignment in terms of tactics and in terms of philosophy.
Q: Can workforce and workflow alignment processes be done separately?
They can be done separately. We would always suggest that if a company is going to do the workflow segment only, management must be certain the workforce is in pretty good shape. Conversely, the workforce portion can be separated from workflow alignment as well. However, in almost every case where we started with only one approach, the client organization quickly realized that the parallel review is in the best interest of the organization and a way to achieve bigger, better results.
Q: I am skeptical of a company getting a return on investment within the first 12 months. Considering outsourcing applications, software maintenance, complex legacy systems that may not be completely documented and the overlap of resources between the internal team and the offshoring team, how do you get an IT workforce-workflow alignment to break even within 12 months even with lower labor rates?
Often the workforce alignment part of this process creates the most immediate return. In Harvey Nash's real world of client experiences, the return created in year one is often 10 times the investment that was incurred to create that return, and that is in terms of workforce alignment only. As we are leading these kinds of initiatives, we often intentionally have the workforce part of the initiative running ahead of the workflow initiative. That way, when you get to the point of aligning workflow you have taken the noise out of the workforce prior to getting into alignment.
When you start realigning technology and start collapsing applications, it can become a multi-year process, which is why we begin with workforce alignment. Our moderate workforce-workflow alignment strategy offers minimal disruption to the current business and the current systems. That gives a company a12-month run time or less for results to start pouring in. Lagging just behind that process is the technology realignment stack, which offers results that will flow into the next 12 months where you will see another new chunk of savings.
Q: How important is an offshore strategy to the outcome of an IT workforce-workflow alignment?
In this day and age, offshoring has become a critical component of how IT delivers solutions and projects. When you think of it in terms of your workforce, the question becomes not whether you offshore but what you offshore. What is the right mix of on and offshore skills and resources? What is the right mix of talent required to get the project done and manage the workload? So, yes, offshoring is an important part of successful workflow-workforce alignment today.
Q: What are the primary offshore markets that IT organizations are tapping into?
It depends on the technology areas where you are looking to partner with someone. Clearly there are many countries today offering outsourcing services. It's no longer just India or China as the main options anymore. For example, you hear a lot more about countries like Vietnam and The Philippines today. The Philippines is doing a really great job when it comes to customer service and customer support skills. Vietnam has strength in application development, testing and QA--the full SDLC. India is definitely still a big player, but there have been challenges in terms of turnover and cost pressures. China is also a very big player, but there have been challenges when it comes to intellectual property protections, as well as turnover. We hear more and more about Central America lately. Certain regions are certainly gaining expertise quickly but language still might be a problem.
When it comes to selecting offshore markets, the bottom line is looking at what is a good fit for your environment and skill needs. And to make sure you look outside of the traditional default location--India. In the end, offshore location selection must be a careful process that works diligently to match a location and provider with what your IT organization needs to get done.
*Please note the summary of questions and answers below are not always a direct transcript of text. Modifications are made in order to increase clarity and make this a resource that is informative to readers who did not attend the event.