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Using cloud? You’ve got systemic waste. Here’s how to find it


Ng.jpgLouise Ng has more than 25 years in multiple IT positions across a variety of industries. At HP, she specializes in leading large-scale projects that deliver quality services through process optimization.


In their rush to automation and cloud service delivery, I’ve seen customers take shortcuts that in the long run end up creating systemic waste. I’ve written previously about the need for governance around cloud creation. Unless you impose controls over cloud service delivery, the enterprise ends up spending money on more resources than it needs. So how do you find the waste?


IT is under pressure to be more agile, in order to meet business needs as quickly as possible. Application developers want to release application changes rapidly too, which often means going around time-intensive IT procedures and purchasing cloud services to allow them the velocity and freedom to take action on their own. This can solve the speed issue but create a cost issue due to resource spend in silos that often end up unnoticed due to lack of control and transparency of these flexible on demand transactions. IT management needs a strategy that enables it to be more responsive to the line of business, but also helps rein in rogue cloud provisioning to reduce waste.


Value chains – the manufacturing concept that pinpoints waste

The most effective strategy is to look at your operations in terms of a value chain. But what is a value chain? The concept is borrowed from manufacturing, in which the different workflow stages are broken down into a list of capabilities that drive a successful and optimized outcome. HP has worked with our customers to derive a set of four value chains. Despite how critical it is to business success, IT is still relatively immature when it comes to management systems. Examining IT services through a value chain lens can provide crucial insight into how well aligned your enterprise is to the critical capabilities that allow a prescriptive and focused path to optimization. This will reduce waste.


My HP Software colleague Erik van Busschbach (Professional Services IT Management CTO) is a big proponent of this type of thinking – Think Big, Start Small. Essentially the idea is that applying proven reference architectures and management disciplines to IT is going to expose the hidden waste in your operations so you can become radically more efficient and responsive.


In HP Software Professional Services we’ve boiled IT down to four essential value streams:

1. Strategy to portfolio — plan

2. Requirements to deploy — build

3. Request to fulfill — deliver

4. Detect to correct — run


Thinking in terms of a value chain is an effective way to discover your weaknesses and opportunities for improvement. (Read about the IT value chain and how you can use it to transform your IT organization in this free ebook: “Value streams: A user-centric model for the enterprise CIO.”)


Your waste-busting strategy for the cloud

In my recent experiences with customers they are in a race to get to cloud because they’re focused on the request to fulfill value stream. The real value to the enterprise is to provide a strategy for on demand consumption with a balance between velocity and cost. In other words, instead of skipping right to the “deliver” phase, don’t neglect the strategy for the enterprise. Spend time to develop the portfolio of services based on the requirements of the business that provide value.  


By focusing on the strategy to portfolio value stream, you can create a plan that will minimize the tendency for people to generate systemic waste in the first place. Implementing this plan enables IT to better foresee future resource needs, and to meet those needs more rapidly. As a result, the organization can produce higher quality applications, which can also save time and money by reducing the need for frequent application fixes.


Everyone wants capacity faster. The answer lies in taking a page from manufacturing and applying a value chain approach to cloud provisioning. I will be presenting on this topic at HP Discover Barcelona in a session titled, “Become an automated, agile enterprise while avoiding sprawl, waste, and management obstacles.”


If you can’t meet me in Barcelona, please check out the white paper, “From futile to agile,” which I co-authored with my colleague Miron Mizrahi. Or follow me on Twitter for more about how enterprises can become more agile—while avoiding waste.


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