What IT Can Learn From The Auto Industry - InformationWeek

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IT Leadership // CIO Insights & Innovation
Commentary
6/27/2014
12:06 PM
Sumir Karayi
Sumir Karayi
Commentary
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What IT Can Learn From The Auto Industry

There's too much waste in IT. CIOs should look to the car industry for examples of efficiency and innovation.

doing the same job over and over again. Automating IT processes such as OS deployments or software distribution will result in immense time and cost savings and will also create a future-proofed repeatable process.

We need to stop trying to reinvent the wheel. Sophistication in IT is about capturing and codifying complex processes and creating software so it can be repeated again, and again, and again.

The irony is that IT teams are failing to use computers for the very purpose they were designed for: to speed up and automate complex or lengthy processes. Many use these capabilities for their business processes, however our view is that too many companies fail to maximize the use of computers to distribute software or maintain their IT estates.

Efficiency is a choice
Being efficient is an easy choice to make if you're buying a car. The progress in car design means that fuel efficiencies can easily coexist with technology and high performance.

But for today's IT departments, it's not a very obvious choice. Few CIOs have a specific objective to reduce waste and make IT run more efficiently, because other tactical measures such as meeting project deadlines and rolling out new software soon take the spotlight.

The auto industry prides itself on fuel efficiency that cuts carbon footprints and reduces miles per gallon. Those responsible for enterprise IT infrastructure, hardware, and software are spending approximately 80% of IT budgets on just maintaining the status quo. Reduce this figure by just 5% by removing unnecessary technology cost from the business can result in the equivalent of adding another 10 miles per gallon. For example, by reclaiming unused software, an energy/oil company realized more than $12.2 million savings in software license costs.

It's time for IT professionals to stop accepting the waste problem in IT and start challenging the status quo. 

The first hybrid car won at Le Mans in June 2012, but the real winner was new technology that enabled this game-changing feat. Tools designed to remove unnecessary technology cost from the business did not exist a few years ago, but now they do. Let's put them to use. 

IT leaders who don't embrace public cloud concepts will find their business partners looking elsewhere for computing capabilities. Get the new Frictionless IT issue of InformationWeek Tech Digest today.

Sumir Karayi founded 1E in 1997 with the goal to drive down the cost of IT for organizations of all sizes by identifying and eliminating IT waste. Sumir pioneered PC power management and established a market-leading role for his company. He has driven 1E innovations to ... View Full Bio
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Mahender
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Mahender,
User Rank: Strategist
7/1/2014 | 2:22:47 AM
Good thought | enterprise IT transformation is needed
I avoid to be personal, Good thought and IT service sector is definitely saturated and need to go through consolidation because of challenge associated with license management and vendor management etc etc . Though industry consolidation will take time as enterprise transformation initiative generally takes 3-6 year of implementation. Moreover each enterprise has different IT service management hypothesis, which makes it challenging to transformed or optimized by any service or tool provider.mahender.
TecExec
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TecExec,
User Rank: Apprentice
6/30/2014 | 12:53:50 PM
Re: Heightened Competition?
From my personal experience I've noticed a great deal of waste in the automotive sector.  I observed a proliferation of Shadow IT and one-off applications throughout the enterprise. Obviously, there is a significant cost associated with a dysfunctional asset management model.  As a result, they are wasting millions on an annual basis.  I applaud their recent improvements in product quality and innovation.  However, there is still significant room for improvement internally.               
yalanand
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yalanand,
User Rank: Ninja
6/30/2014 | 12:08:49 PM
Re: Heightened Competition?
@Stratustician: Cutting budgets may have adverse effects. Severe budget cuts hamper the though process of engineering managers and software engineers in carrying out a project swiftly, thus reducing overall efficiency.
yalanand
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yalanand,
User Rank: Ninja
6/30/2014 | 12:07:56 PM
Re: Heightened Competition?
@RobPreston: rightly said. I suppose the competition is good, but not in all sectors. If the competition was for budgets, then that'd be an entire story altogether. Competing for proper budget and finding efficient means under the given budget would compel the IT industry giants to push their efficiency in software and products.
yalanand
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yalanand,
User Rank: Ninja
6/30/2014 | 12:07:13 PM
Re:What IT Can Learn From The Auto Industry
Automotive industry succeeds because the primary concern for them is to provide higher power output without compromising miles per gallon. That being said, the only concern for IT companies is innovation without efficiency and plans that are not passed with the Board authorities (also they want more profit with every year).
Stratustician
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Stratustician,
User Rank: Ninja
6/29/2014 | 11:00:13 AM
Re: Heightened Competition?
I think it could be that IT departments have traditionally been viewed as a cost centre, so until there is a reason for them to have to cut budgets and drive more efficiency, there isn't the same drive (no pun intended) to proactively look for ways to be more competitive the same way other departments might need to (sales and marketing for example).  Until there is an increased pressure for them to reduce their budgets and create more efficiencies through cloud services and other projects, I don't think we will see the same type of innovation or competitive response.
RobPreston
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RobPreston,
User Rank: Author
6/27/2014 | 2:14:25 PM
Heightened Competition?
Sumir, what drove the US auto makers to become more cost-efficient and technically advanced was the fact that offshore-based competitors were eating their lunch. Are you not seeing IT organizations facing heightened competition as well -- in the form of external IT providers as well as other internal departments (like marketing) that are getting their own IT budgets? I would expect that the increased external and internal competition for IT budgets would be enough to force IT organizations to get leaner and meaner. Not your experience?
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