Making technology work to your advantage

Mark Leach and Jonathan Hirst discuss the benefits of an integrated approach to managing IT systems.

In Brief

Many organizations have redundant IT systems, which can lead to unnecessary costs. Rationalizing IT can help a company not only save budget but also allow them to become more agile in supporting their business plans.

Technology is a requirement in order to do business in today’s world, but having the right strategy can help Alberta organizations stay one step ahead of their competition.

One of the biggest information technology (IT) challenges in the province today is keeping costs down. “Organizations are looking to IT for help,” explains Mark Leach, a director of PricewaterhouseCoopers’ IT Advisory group in Calgary. “It’s a double-edged sword: they want the IT department to cut its own costs and at the same time, improve the efficiency of the entire business.”

Both the private and public sector in Alberta have unique challenges of their own.

In mining, a number of the large mines are co-owned by several companies. The majority shareholder may want to do one thing, but the others may simply not be prepared to put the money into it; they want to operate at the lowest cost possible, without understanding potential benefits.

Some energy companies have complicated IT issues as well, particularly the large integrated firms. An oil and gas company would have various technologies at its upstream (production, refineries, exploration, seismic, land management, and transportation), midstream (marketing and trading) and downstream (service stations) operations. “And the systems that are required in each of these three major areas are very different,” Leach says. "So IT is challenged this way."

The public sector faces very different challenges with a large number of disparate systems. “With government departments and the way they’re structured, they don’t always work well together, so there’s duplication and a lack of standards,” says David Vojacek, a director of PwC’s Advisory group in Edmonton.

Streamlining and integrating various IT systems is a major and complex undertaking as there are many different users, both inside and outside of government. Any IT system rationalization also has to meet the Office of the Auditor General’s rigorous privacy and security standards as well as appropriate governance and controls.

When Alberta’s economy was running on all cylinders in early 2008, consolidating IT systems was one of the last things on an organization’s mind. Now, with the economy showing signs of a turnaround, it’s time for the public and private sector to adapt and become more agile.

There are a number of steps to take care of when it comes to optimizing IT. In the short term, make sure you revisit service levels, vendor prices and software licensing agreements. “Generally, what we would recommend is that you do an inventory first of all your hardware and your applications,” Leach explains.

In the midterm, look for areas of overlap starting with the applications side and your total cost to operate them, he says. “These things might look like quick wins or no brainers but these are really difficult decisions to have because mainly people are emotionally invested in these applications and it becomes a problem.”

And over the long term, begin to transform the IT function. It’s vital to look at all key issues and needs that should be addressed by technology, but haven’t been. Help to establish that IT is aligned with both the organization’s short-term and long-term objectives. Doing so will bring many benefits.

The biggest advantage of an IT rationalization is cost reduction. The other big benefit is that it’s less complicated. “You often find there’s a correlation between complexity and agility,” says Vojacek. “By rationalizing the IT environment, you can reduce the complexity, which can actually increase your agility and ability to respond to emerging trends or new directions from the organization.”