VideoA Chinese proverb holds that to do good work one must first have good tools. Madeleine Fackler readily agrees. "Our whole job in IT is enabling the automation of the business," says the CIO of LifeScan, a unit of Johnson & Johnson that makes glucose-monitoring systems. "I am responsible for a huge budget, manage thousands of assets, and oversee spending on hundreds of projects. From a departmental perspective, I am second or third behind manufacturing, marketing, and advertising in the dollars I spend on outside vendors.
"Yet," Fackler adds, "I have had virtually no good tools to do my job." None, that is, aside from Microsoft Excel and Microsoft Project, two PC programs that have long served many IT shops as the main bulwarks against anarchy. "It's fascinating," Fackler says of this dearth of IT-specific management tools. "And crazy. Our world is pretty complex."
Indeed. Fortunately, help appears to be on the way. A growing raft of software makers — from start-ups to well-established firms, all eyeing a potentially huge opportunity — are scrambling to give CIOs and CFOs greatly improved visibility into — and control over — IT. Much of the data needed to accomplish this already exists, but it is typically scattered across the proverbial silos of information: disparate databases maintained by disparate management systems, with no easy way to assess the big picture. But now, software makers are trying to bring this data together, marry it to mainstream business-intelligence (BI) analysis techniques, and provide a depth and quality of financial understanding that just has not been attainable with stacks of ad-hoc spreadsheets. "Think of it as a consolidated system of record for IT," says AMR Research analyst Dennis Gaughan.
No software maker has all the pieces in hand yet, but many are converging on the opportunity. Start-ups such as Adaptive, BDNA, Blazent, and Relicore have introduced products that not only capture a user's full inventory of hardware boxes and software licenses, but also provide tools for analyzing each asset's current and historical usage, its associated costs, and the applications and business processes that rely on it. These products can help IT managers better understand the costs of running any specific software application now or in the future, perhaps after a major extension has been completed. They can also help identify idle gear and unused software, and help IT managers enforce standardization on selected brands and negotiate better prices.
Another group of companies, including New-Scale, Centrata, and Euclid, aims to help IT departments organize themselves around delivering predefined, fixed-price services. Through strict monitoring of a service, such as provisioning new employees with PCs, network access, and E-mail accounts, IT may substantially improve its internal efficiency and perhaps even fend off pressure from above to bring in outsourced help.
Meanwhile, ITM Software and Business Engine, both venture-backed start-ups, recently bolstered their suites of IT management tools with analytic facilities licensed from BI heavyweights Hyperion and Cognos, respectively. Even Microsoft, already the top dog in project-management software, is not sitting idle. It has begun to promote its Project Server and .Net integration scheme as a platform for tying together a spectrum of tools, such as programs that can calculate the optimum mix of spending across a portfolio of development projects.
Collectively, this amounts to a new breed of software that directly addresses hard-core business and finance issues associated with IT investment, going well beyond products that simply gauge the health of hardware or the productivity of programmers. Analysts have dubbed these programs "ERP for IT," "IT resource-planning systems," or "integrated IT management." Their common goal: give CIOs a cohesive set of tools that provides a "single source of truth" about all aspects of IT, particularly spending — past, present, and future.
Corporate IT warrants powerful management tools if only because of the sheer number and mind-numbing complexity of its parts: thousands of hardware and software assets, many of which carry costly maintenance contracts and complex licenses; scores, if not hundreds, of intensive design and engineering projects, all competing for scarce talent and other resources; constantly changing demands from business-unit "customers" who all compete for IT's attention; an increasing reliance on outsourced help; and a constant flow of external pressures, from Sarbanes-Oxley to the quest for strategic alignment.
The ideal IT resource-planning system would keep track of all these entities and constraints — and, most important, how they relate to one another. It would also provide a way to analyze spending by project, business unit, vendor, or any other view that might prove useful, just as BI tools do now for virtually every other group in the corporation.
Traditionally, says Steve O'Connor, co-founder and vice president of software products at ITM Software, BI companies have sold their wares to the people running the business lines: the vice president of sales, the head of manufacturing, the CFO. "Vendors tried to neutralize the CIO, who was brought in only as an evaluator," he says. But now, "there is an opportunity to go back and sell these products to IT, which needs tools to measure business performance as much as operational performance."
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