IT resources planning

During the last few years the optimization of IT resources has become an extremely interesting topic. It is one of the main reasons for the introduction of technologies such as server virtualization, virtualization of disk arrays, cloud computing, concepts like thin provisioning, etc. But I want to touch on another topic that really often remains out of focus, but is undoubtedly at least as important - what optimization the IT resources of a company can give to it. Clearly it is important that internal IT departments optimize their work through better technology, systems, solutions but for me even more important is to offer more opportunities and optimizations for the company as a whole, because ultimately this is the major purpose of their existence.

One of the main optimizations that IT can bring to the company is with organizational structure and staff. IT and technology in general are among the main factors today, leading to increased labor productivity, reducing routine tasks and thus reducing staff dealing with them. The more complex the technology, the more qualified the staff doing maintenance and development of these systems should be, which indirectly leads to the replacement of a large amount of low skilled labor with a small amount of highly skilled and highly paid jobs.

Or at least that is the way things happen when projects are well developed. If for example you start a new business system - ERP, CRM or similar, and as a result the number of people who are employed in the company increases - because the systems are so complex that the current team can not use them easily enough, something is probably not done well. This does not mean that any business IT project should seek to reduce staff - projects such as BI rarely lead to reduced staff because their primary purpose is often better and more detailed analysis. Unless the company has a large unit dealing precisely with that, the effect of these projects comes from the good and timely information. In large ERP, BPM and other integration projects, that integrate across one or more company units, usually the number of employees with trivial tasks decreases.

How do you achieve this effect? Typically, because of at least two elements - the possibility for automation of the conventional problems and the possibility of eliminating duplication of data. Examples of automation tasks include automatic calculation of depreciation for tax and accounting depreciation plan accounting, or automatic generation and sending of reports at a specific time of day, or automatically import information from mobile devices in the ERP system regarding sales - all tasks that otherwise would require large amount of human labor. As for the duplication of information - perhaps the best example is the ERP systems that eliminated double entry of many documents - such as invoices for delivery. Before them the entry used to happen more than once - in Purchasing department and in accounting. So if before there was a need for two employees to work with a certain type of delivery documents, after the introduction of the system it is relatively easy to redirect the job to one of the two departments - either accounting, or purchases, with the other remain in control functions, leading to reduced workforce.

We should not forget that these complex systems however, require additional staff for administration, monitoring and development. Experience in general shows that if the project is done correctly, the number of additional people is not high, and even further optimization can be done by outsourcing this service to an external company. Effective personnel management is something that should be managed carefully with such projects.

The optimization of manpower is not the only element that IT can make work more efficient. Another one is the movement of inventory - goods, materials, finished products and others. The more activities in the company, the more complicated the movement of inventory gets, as well as their planning. Also as a rule the more complex and project oriented the production is, the more complex the supply of inventories and their delivery becomes.

Could this problem be solved without IT means? Of course - in fact, most of the purchase departments in Bulgaria would argue that it should be managed mainly in manual mode because conditions change, projects change, and generally visibility is too short. Even in that case they rely on information from systems such as ERP, which can give an accurate assessment of needed supplies in the foreseeable future (if planning information was entered), time of delivery of the goods and materials, production capacity planning, etc. As a result, the mix of automated information and subjective planning often does a good job.

Ideally , however, all the planning can be done directly with IT tools, which greatly reduces the likelihood of costly errors such as missed delivery of important elements, improperly planned and impossible to implement production - leading to penalties or unplanned supply of items.

Things become even more complicated with key contracts, which have guaranteed response time, or systems with enormous importance are serviced - e.g. technical systems in nuclear power plants. In these cases, proper planning of inventory and supplies, and the ability to react quickly, are very important - and no doubt IT resources can play a positive role here. Such an optimization can come from automatic supply planning, production and transportation, or better information about current needs, goods time and delivery time, or even just the fact that accurate real-time stock lists can be generated and the item be quickly opened or delivered, saving time and effort of the team.

Despite everything said however, perhaps the most important optimization factor that IT can give to companies is time optimization. If a report can be created manually for three days, and automatically - for 5 minutes, this is a major improvement. Not only because it will save manual work of people who will deal with the preparation of the report, but because it will save time of managers, who need this information in order to operate.

Often, the time value is ignored, but in fact it is one of the most expensive resources. Imagine that some manager in your company have an average daily wage of BGN 100. Imagine for making a decision five of them have to do first preliminary meeting to analyze the required information, then order the necessary for the generation of the report data, take the raw data and then processed it to the required level, then make at least one more meeting for the decision and then - execute it. Let's asses the time that it will take them at two days work. This means that the cost of this solution is 100 x 5 x 2 = BGN 1000.

Let's assume that an automated system can generate a report more quickly and easily bring it to a useable form in which the average loss of time for the managers is going to be just one day. This directly leads to a saving of BGN 500 of time of managers, enabling them to deal with more and more important tasks. It also provides an opportunity to accelerate the process of making key decisions, which is often crucial for the development of the company.

We can say that the higher up we climb the hierarchy of a company, the more time saving becomes important and IT can help significantly with this. Not only through the use of business systems, but even working directly with IT - with reliable and fast computer systems, high-speed access to Internet or Intranet resources, simplicity and reliability of the IT infrastructure, use of appropriate audio and visual aids in the company, quick and high quality response from the people servicing the systems, etc. In this case the good IT work can really save a lot of time and effort of employees, so that they can concentrate on the really important tasks.

Overall IT departments today are still too often seen as a cost center. And this is probably partly related to the approach of IT managers towards other departments - however, when it is clearly shown that IT solutions can do more than just provide a certain service, and actually lead to savings of resources of the company, this is a good way to turn IT projects from cost to revenue based - or at least projects which have added revenue benefits for the company. This changes the logic of the operation of IT, which should no longer be regarded as separate and supporting department but become an integral part of the company and actively assist in its development.


Stefan Markov, Manager at Rinamar Ltd.
Source: CIO

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