CIOs & Infrastructure Technology (IT) decisions
I received this short summary of how organizations have benefited from SEER for IT, written by Galorath’s Dale Martin, and thought it had some interesting points.
How does the Chief Information Officer (CIO) make the right decision regarding IT? Do they simply just keep buying every bell and whistle that comes out of the computer world or do they have a way to make intelligent decisions for their company? Believe it or not, there are rational ways to make solid organizational decisions regarding your IT projects. Let me show you 3 examples of organizations that have maximized IT resources using a parametric model called SEER for IT (Information Technology).
SEER for IT is a new parametric model developed by Galorath Incorporated to capture the Total Cost of Ownership for an IT project. The foundation of this model centers around 12 different types of work breakdown structure (WBS) elements and a group of Knowledge Bases (KB) built on industry standards. Knowledge Bases are a collection of historical data organized into a Windows template for ease of use. The user selects and/or enters data into structure and framework to characterize the environment. In most cases the user simply selects a WBS type and then selects the knowledge bases. After that, the user has to specify quantities and he gets a Rough Order Magnitude (ROM) estimate of the typical cost, effort, and schedule for this activity based on industry norms. If the user knows more information, then the model allows him to tailor the WBS element in more detail. It is a quick way to come up with cost, effort and schedule on IT projects with very little information up front, with a lot of industry data incorporated via knowledge bases to support the results.
Now let’s talk about how this tool can assist the CIO out in the real world. This model is being used currently by a major automotive manufacturer. This major company took the right steps to fully utilize this new parametric tool. It completed the initial training by Galorath and has already built and validated the results against internal historical values. It is in the process of piloting a Joint IT Estimation Process in North America for projects proposed to be included in their 2010 business cycle plan. This will allow them to integrate IT estimates into a unified project cycle plan for the requesting customer. Over time they will be able to look strategically across the enterprise and make decisions on dedicating resources to IT projects from a global view.
A large Federal agency employed SEER for IT across its enterprise. First they received training and built over 70 estimates in the first year. They developed a process where they collected and built catalogs of their major IT activities. Once all the estimates had been internally reviewed and validated, the estimates were merged into a portfolio. This estimate portfolio was then compared to available budget, resulting in a down select to about 30 projects. A further review identified 15 of those projects as being critical to the organization’s business objectives. This organization had been plagued with massive overruns in the past. They had failed to account for the operation and support of already started projects and the tail of activities and overlapping costs and activities. Using the SEER for IT tool as part of a formal estimating process brought about an organizational discipline that focused on a Total Cost of Ownership perspective. It was able to maximize economies of scale of purchased hardware and software. Now this organization has the complete picture of its portfolio of projects and also the added benefit of all the collected corporate knowledge regarding ongoing IT activities to make solid decisions for the future.
SEER for IT has been used to assist in making competitive decisions to develop price to win strategies. One major defense contractor employed this model to estimate the industry average for developing a major project. The client then placed the estimated competition’s rates into the model to develop a winning bid strategy. If you have a good idea of what your competition is going to bid, then you can develop strategies to win. Specifically, they decided to utilize cheaper subcontractors in key areas to seize the advantage with just a small impact on their profit margin.
In conclusion, the CIO can use SEER for IT to evaluate Total Cost of Ownership cost, schedule and effort of new IT projects in a systematic, logical fashion while capturing the corporate knowledge of its ongoing activities. It can help allocate scarce resources to the most critical requirements. In addition, it can help the organization to develop price to win strategies to seize new opportunities for new business and also realize economies of scale for hardware and software purchases for its own projects.
SEER for IT simply “works” when it comes to IT decisions. Take a look at what SEER for IT can do for your company.
Thank you for reading “Dan on Estimating”, if you would like more information about Galorath’s estimation models, please visit our contact page or call us at +1 310 414-3222.
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