Who “owns” the infrastructure?

Strategic Planning Assumption: Through 2008, midsize business IT departments that plan their spending in major application portfolio categories, such as utility, enhancement and frontier, will save up to five percent in ongoing portfolio support, following more substantial savings in initial application rationalization (0.7 probability).

Gartner’s Portfolio Management
Gartner’s Portfolio Management approach provides a visual representation of the entire IT budget, a valuable starting point for understanding how spending affects IT effectiveness. The applications portfolio classifies applications according to how they contribute to enterprise performance. The percentages reflect Gartner's spending survey results from 400 responding organizations in 2004.

Utility Applications 22%
Utility applications are often mission-critical, but do not have an impact on unit performance. An example would be payroll — essential but not contributing to better performance. The other application categories of enhancement and frontier do make significant contributions to enterprise performance (e.g., increased revenues, lower operating costs).

Business Enhancement Applications 22%
Business enhancement applications comprise 22% of the IT budget. These applications, which include Supply Chain Management and Customer Relationship Management, form the enabling foundation for business today. To most business unit managers, these are the high-visibility applications that deliver measurable performance improvements, and prove the value of IT.

Frontier Applications 11%
High contribution, known as "Frontier” applications, deliver a major improvement to enterprise performance, usually accompanied by high risk to accomplish. These applications are for the visionaries who look to the future and try to anticipate the needs they will have in two, five, or seven years. The chance of guessing wrong about technology, business, or a range of unforeseen incompatibilities make many of these initiatives risky gambles.

“The IT department must recognize that utility applications are an overhead cost; they do not produce value and are, frankly, boring to business managers.”

The “boring two thirds” is a vital foundation
According to the application portfolio, nearly two-thirds of the entire IT budget in midsize businesses is spent on the combination of IT infrastructure and utility applications. This perspective helps in the communication between the business and IT departments. Investments must be made here as well, so planners are wise to try to justify outlays by tying them back to the application portfolio. The IT department must recognize that utility applications are an overhead cost; they do not produce value and are, frankly, boring to business managers. None of these investments contributes directly to the improvement of the enterprise performance, nor do they contribute direct value to the business.

Don’t turn out the lights on your thriving enterprise
However, it would be a grave mistake to assume from the typical portfolio that this investment can be reduced. This two-thirds is almost all mission-critical operations (i.e. security), without which the organization would quickly grind to a halt. Its disruption would be equivalent to a power outage in the office — work totally ceases. Who should take ownership of this critical share of operations, which is actually a routine, non-strategic utility?

Only IT should own infrastructure
As a practical matter, business units do not really care about the majority of IT operations — except when something like e-mail is down. Because the business staff pays little attention to the non-value-adding tasks, it would be unwise to give ownership of this portion of IT operations to the business community. Of course, this portion affects the total cost of operations significantly, and certainly the CFO must track IT efficiency against other firms. But the task of achieving the critical performance factors of high reliability, low cost of ownership and adequate support takes enormous effort and is a measure of the quality of IT. Thus, the IT organization must own this territory, yet gain business unit support.