Monday, June 6, 2011

The Importance of Doing Less

The current global financial crisis appears to be getting to some of us. It is hard to see how we are going to climb out of this one. Sure, companies are reporting healthy profits again, but individuals are facing declining household incomes and inevitable tax increases. It is as if our standard of living peaked in 2007 and it is all downhill from here.

Fortunately, the reality is not nearly as gloomy. In fact there is every reason to be hopeful. Just consider some simple economics. To raise our standard of living, we need to increase our productivity. That sounds as if everyone needs to work harder, but I am proposing the opposite. Let's do less!

focusThere is a far more effective way to increase productivity. It is called specialization; making sure people work on what they do best. We have not even come close to exploring the boundaries of specialization. Just take a look at most medium and large organizations here in the States. Why are they still struggling day in day out to provide their own IT services?

Twenty years from now we will no longer understand why each organization had to know how to create an Oracle database or set up an Exchange server. The specialists who know how to do these things will be far more productive working for external service providers where they can support a few hundred organizations. This will free up people to improve existing services and to develop new ones. In turn, this will allow businesses to become more productive and thus more competitive. If we can concentrate on what we do best, and let others concentrate on what they do best, then our economy, as well as our standard of living, grows. So just stop doing what is not core.

Pretty simple, right? Well unfortunately, it is not quite so easy. This only works if you can find someone who is cheaper and better than you are at taking care of your non-core activities.

In the past it was difficult to determine whether an IT outsourcer was more cost effective than the internal IT department at providing a given service. Even today most IT departments do not track the costs or service levels they provide and many organizations do not trust the service level statistics they get from their external service providers.

All this is changing, though. IT service management applications now allow IT departments to track the services and service levels they deliver to the business. ITRP goes a step further and allows IT departments to also track the services they obtain from their external service providers. This new transparency, along with the fact that ITRP allows organizations to collaborate seamlessly with their ESPs, clears the way to successful outsourcing.

Although we only play a small part at the ITRP Institute, we are proud to be helping organizations focus on their core business. Ultimately, that is what will raise the standard of living for us all.