Description: Christopher Lochhead of Mercury argues that running IT like a business, or optimizing the business value of IT, is the number one issue in IT today. How can IT deliver value back to the business?
Hi, my name is Christopher Lochead and I'm the chief marketing officer at Mercury. What we're going to talk about today is arguably the number one issue in IT, which is Business Technology Optimization. The big trend today is how do we run IT like a business? How do we optimize the business value of IT?
Now, why has this become such a hot topic? Well, first of all, according to the US Department of Commerce, 50% of capital spending is actually spent on IT. So, IT has become a major part of most companies. As a matter of fact, I would assert, there isn't a meaningful government organization or enterprise in the world that can hire a new employee, that can take an order or that can close its books at the end of a quarter without the use of software and technology. Now, Gartner tells us that 50% of capital spending as much as 20% is wasted and that's why today, the business value of IT is critical.
So, how are people addressing this? They're really looking at two critical questions. The first one is, is IT strategically working on the right things and that's called IT governance. That's about optimizing the demand, the resources, the projects and ultimately the portfolio of everything that IT is working on to make sure it's delivering business value.
The next is, today, almost 90% of business processes are automated in applications and so the way you might think about it is the applications are the business. And so once you realize that, what you realize is the quality, performance and availability of applications is the quality, performance and availability of the business and at Mercury, we think of the applications as the output or what IT delivers back to the business.
And so the question is, how do we optimize them? The first piece that we need to deal with is quality. After 40 years of software development, people have finally realized that it's not worth developing if it doesn't work. The next is performance. How do we make sure that applications that we build actually scale, that we can produce 250,000 transactions an hour and then once we move into production availability, how do we make sure that what the end user sees with an application is what the end user wants, that it's easy for them to place an order, that it's easy for them to hire a new employee, etc.
Another sort of interesting thing that's going on, the application environment is really changing. Today, we have CRM systems, ERP systems and now we're moving to Service-Oriented Architectures and so the level of complexity is increasing and we need the ability to make sure that quality performance and availability are high. As a matter of fact, today about 80% of applications are put into production with no quality and performance testing done to them and I can tell you, as a guy who travels about 300,000 air miles a year, I'm really glad that's not the way Boeing builds planes and so if you think about kind of BTO as a lifecycle, what you really get is the ability to tie together the strategic part of running IT and optimizing the quality performance and availability of the applications to deliver results back to the business and that's why running IT like a business has become such a top priority.
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