The dictionary defines the word utility as follows:
Noun: “An enterprise concerned with the provision to the public of essentials, such as electricity, gas or water.”
It’s safe to say for the majority of businesses primary utilities such as water, electricity, and/or gas are essential in supporting the day to day operations of their enterprises. Limit access to any of these services and most organizations would cease to function effectively. In the past few decades there has been a revolution in computing and communications, and all signs are that technological progress and use of information technology will continue to accelerate. I submit there is a case to be made in today’s data driven environment that information systems (i.e. servers, networks, mobile devices, tablets, etc.) and the applications support the business ecosystem have become a vital part of how an organization delivers its products and services.
IT Infrastructure: a New Reality
For most companies’ standard utilities such as electricity and water are normal cost of doing business. They don’t think twice about allocating the funds necessary to ensure these services are always available for use. Conversely, many of the same organizations struggle to rationalize the on-going cost needed to ensure its internet, servers, Wi-Fi, cell phones, network security and other important parts of their IT infrastructure remain scalable and uninterrupted.
Organizations must accept today’s reality that their IT infrastructure (the new utility) is critical for the dissemination of business intelligence (or informational currency) and is essential to remaining competitive. We must also begin to adopt a more intelligent approach to how to leverage this new utility and the costs associated with maintaining it. This approach means not just budgeting for your monthly technology expenses, but also ensuring regular system upgrades, hardware refresh, security testing, etc. becomes an essential part of the organization’s life cycle management strategy. This concept is no different than guaranteeing regular maintenance of a building’s plumbing and electrical systems.
Maximizing the Efficient Use of Resources
Investment in the care and feeding of a company’s technology investments should be balanced with an effective strategy for commoditizing its relative cost. When feasible, the goal should always be to redirect company resources in areas which bring greater impact to their bottom line and are clearly aligned with the organization’s core business. Instead of spending limited capital on maintaining data centers facilities, purchasing servers, network security and highly specialized technical staff companies should consider migrating high dollar IT infrastructure to cloud based solutions and begin adopting a utility usage purchasing model (i.e. infrastructure as a service). Like other types of on-demand computing such as grid computing, the utility model seeks to maximize the efficient use of resources while minimizing associated costs.
Approaching technology investments from this perspective allows leadership to acquire computing power based on actual demand. It also creates opportunities for redirecting capital to other projects and revenue generating investments. Gone are the days of allocating large amounts of capital to IT infrastructure projects whose maximum utilization is rarely realized and at best has a limited life expectancy of typically 3 to 5 years.
In today’s highly competitive business environment it makes sense for companies to begin to view their technology usage like a utility to the business (similar to water and electricity consumption). They should also adopt best practices that will allow them to efficiently manage the anticipated usage.
Of course, there has been confusion and concern by many organizations over the utility model. Such concern comes primarily because the model will require them to outsource critical or sensitive areas of their IT operations to third party vendors who, in turn, charge based on capacity or processing demands. In addition, businesses are also left to what they believe is the mercy of the vendor to provide them access to their critical business data.
This approach is not the only route enterprises are taking.
Private utility models
In fact, many businesses are deploying their own internal private utility models which accomplish many of the same goals as traditional outsourcing without giving up the keys to their data kingdom. Bottom line: whether you chose to leverage internal or external services, organizations adopting the utility model as their Information Technology management strategy will be best positioned to adapt quickly to their evolving business environment.
Finally, the cloud is just one aspect of what I like to call the “Data Management Utility Model”. It’s important to recognize that choosing which vendors to partner with is still very important to organizations making the commitment to this model. There are a plethora of service options, vendors and delivery models to choose from, which makes this road one that organizations should tread carefully down. One size doesn’t fit all and taking a conservative approach in its adoption is a wise strategy.
A successful adoption for the enterprise incorporates a practical service management strategy, with an effective data management and governance methodology in its implementation.
Has information services become the next utility? Not such a far-fetched concept anymore.