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Is Virtualization Clouding Your IT Cost Transparency?

Getting a handle on the true costs for IT services continues to plague companies even though many have implemented server virtualization and cloud technology as a cost reduction strategy.  While companies may have been able to consolidate physical resources to reduce cost and increase resource flexibility, these same efforts have only made it more complicated to determine the true costs of the services provided to the business.  In his recent CFO Magazine article The New Star of IT Cost Allocation, David McCann discusses the challenges with IT cost allocation methodologies and their utility for managing consumption of IT resources.   He cites a CIO Executive Board study that shows 72% of organizations surveyed who use a lump sum allocation method for IT related costs, which provides little or no connection to the amount of services consumed.  This provides consumers of these resources absolutely no incentive manage and consume fewer IT resources.  Only a small percentage of respondents indicated that they used a granular chargeback method based on actual resource consumption and a unit price for these services. 

Award-winning Risk (and Performance) Management

The Open Compliance and Ethics Group (OCEG) presented its GRC Achievement Awards to six leading companies last week.   Among the winners was Carnival Corporation, which was highlighted in Eric Krell's case study Inside Carnival Corp: A GRC Case Study last year for Business Finance Magazine.  Carnival's approach is worth considering because they have clearly integrated governance, risk and compliance (GRC) into their overall performance management framework.   Like the company I referred to in my blog post, How Well Do You Manage Your Risk?, Carnival has applied GRC management at every applicable level within the organization, essentially making risk "everyone's job."  There are a lot of similarities between leading companies' approaches to performance management and GRC management.  Let's take a look at how Carnival tackled the problem.

How Even The Best Strategies and Companies Can Fail

  One of my readers asked me if I'd read Jim Collins' book Good to Great in response to the story of a customer's winning strategy and how it related to the origins of strategy management consulting.  I had read the book many years ago and the author made some interesting observations that certainly ring true when I think about the customer's success.  I'd run out of reading material on the return flight from visiting another customer so I popped into the bookstore at Chicago's Midway airport to see if I could find a compelling business book and ran across How the Mighty Fall by Jim Collins.  The book identifies 5 step-wise stages of decline:

Is Excel Limiting Your Strategy's Success?

I can't tell you how many times I hear "Oh, we're already doing that..." whenever I describe my company and the solutions we offer.  When I ask them to descibe how they are accomplishing this, it will invariably involve a complex process wrapped around Excel.  What they really should be asking themselves is "what can I do with this information?'  Sadly, the answer would be not much.  They are often missing key linkages to business processes and can never be tied to strategy. 

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