Zero based IT planning

Thursday, April 13, 2006

One of the worst things that can happen to organisations is unprecedented or unplanned growth. Worst thing? Growth? Yes. You read it right. Unplanned growth is one of the worst things that can happen to any organization.

Why? Because systems and processes that were meant for a smaller or different scale of operations may just not stretch smoothly enough. Because the large number of new employees who come into the organization. Given that most organizations of the size we are talking of are today have significant investments in IT to automate their business processes, the strain on the IT systems could perhaps be the most damaging.

Krishna Kumar, Editor

The Indian economy is today one of the fastest growing in the whole world and Indian companies are posting growth like they have never seen before. All the experts that one comes across predict that this trend will sustain. Which is why, it is time for you to pause and take stock whether your IT systems are capable of accommodating and scaling up to the new business realities.

And when you look at it, there are many different levels that you need to consider. There may be platform issues that could limit your ability to scale. There may be tehnology and lifecycle issues. There will be infrastructure issues and there will definitely be old applications that have become a patchwork quilt of add-ons and workarounds.

It is the rare enterprise that will throw out everything and recreate the entire IT system from scratch, albiet over time. So, what you would end up  doing would be to add further to the complex patchwork that you already have in place, further weakening the setup and moving it even more closer to the breaking point.

What I would instead suggest is that you take a break, take a deep breath and (preferably on a blank stack of paper) sketch out what your IT infrastructure should actually be like and what it would take in terms of resources to build it.

The people over at finance call it zero based budgeting. In zero based budgeting, you do not look at the incremental figures, particularly expenditure over the previous year, but look at it from ground up, seeking justifications for every expense from scratch. Something like assuming that the business is being built afresh and then finding out what is it going to take to do it.

It is not every organization that does zero based budgeting. Nor do they do it every year. Why? Because, zero based budgeting, I am told, is an involved and time consuming activity, which requires a completely different mindset, altogether different from that required for day to day operations or regular budget making.

My submission is that your IT infrastructure, however large or small may it be, can also benefit from some zero based planning; some fresh thinking from the ground up.

Like the finance people do, you also do not have to do it every year. But every once in a while, it is important to get a different perspective of the same thing. If nothing else, you get a fresh perspective to what you need and where you need it. And that is important when you have to provide the infrastructure for double digit growth percentages for the business.

Good Luck.

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