ITIM (IT Information Management) is a departure from familiar IT documentation and traditional document management. Such a paradigm shift begs the question: Will it be worth it in the short term, or at least the long term, or will it simply create more expenditure? Is there a positive business case?

As we all know, in a business case analysis, a specific scenario is examined with regard to the profitability of an investment. The analysis serves to present and weigh up the projected financial and strategic impact of the investment. The ITIM business case examined below is based on the following courses of action:

  • Scenario 1: Continue as before to maintain the status quo. Experience has shown that this involves document management with a low success rate and high associated expenditure.
  • Scenario 2: Introduce IT information management.

Business cases are often calculated over long periods of time and based on extensive assumptions. In addition to the direct financial impact, strategic consequences are often also considered and transferred to financial implications. At this point, however, we want to concentrate exclusively on the direct financial impact. Strategic improvements and long-term cost optimisations need only be mentioned here, and their impact will not be factored into the calculation at this point.

Status Quo: High Expenditure Associated With Documentation

Documentation is essential in IT. Regulatory requirements alone necessitate to some extent the documentation of IT. In addition, companies are increasingly recognising the strategic and operational benefits of this approach. But how is documentation traditionally done – why is the expenditure so high and the benefits relatively low? To explain all this, one only has to look at how and when documentation is usually created:

  • Documentation is created spontaneously and is a reaction to new and ever-changing individual requirements.
  • Documentation is at best an addendum to IT processes and IT operation, rather than an integral, conceptually well-thought-out component. It is often regarded as downstream, unimportant “residual or punitive work” and is usually carried out by the wrong people (new personnel/beginners) (“documentation as training”).

Can this expenditure be measured? How high is it and what does a typical model look like? Experience shows that there is no typical model. It ranges from “individual IT experts in the team carrying out documentation, while the others contribute” to “everyone documenting along the way”. It is difficult to quantify the overall expenditure involved. Evaluations of time records indicate figures in the double-digit range in part, however it should also be assumed that time expenditure, which is not clearly attributable, is also reserved for documentation to some extent. Experience shows that the actual documentation work of almost all IT departments ranges from 4% to 8% of the total time expenditure of IT experts.

If improvements are to be made here, there is the question of cost drivers and causes. One of the main factors is the ineffective and inefficient approach:

  • No requirements management. Documents are created for individual purposes in an uncoordinated manner.
  • Requirements that are to some extent difficult for the IT expert to understand. These are met to all intents and purposes, but the time put in by the IT expert increases dramatically in line with the growing complexity of the formal criteria.
  • No overarching concept, problems are shifted to individual IT experts. 
  • IT experts are not usually editors, but editorial work is expected. There is no support/guidance when it comes to conceptual and editorial questions.

The issue of the quality of the results of traditional documentation should not be included in the financial business case analysis. It is worth making just one point here: Quality is often found to be lacking. The reasons for this are to a large extent also due to the causes of the ineffectiveness and inefficiency described above. 

Business Case Analysis

As shown above, the overall expenditure involved in traditional documentation should not be overlooked. Depending on the area and scope, it represents between 4% and 8% of total IT staff costs. ITIM is now expected to significantly reduce the workload of IT experts, without requiring a similar increase in effort in terms of information management and program management.

Cost Items

The cost items that are to be compared in this business case analysis therefore relate exclusively to direct staff costs in both scenarios. Specifically, we are talking about:

  • Investment costs: Every ITIM project/program requires additional expenditure during its initial phase (Planning & Setup).
  • Ongoing reduced documentation work of IT specialists: IT specialists will still be needed, but the time expenditure for documentation work will be significantly reduced.
  • Ongoing program/project costs: In the long term, ITIM will replace traditional documentation work, but there will of course be expenditure associated with maintenance and operation.

The cost items in ITIM correspond to the cost items in traditional document management. The latter essentially comprise the documentation work of IT specialists.

The expenditure involved in traditional document management for release and document management is outside the scope of this analysis as it is difficult to quantify. This expenditure is eliminated completely in the ITIM approach. In addition, the time lost in traditional document management when it comes to obtaining information, coordination and the release process should also be omitted from the analysis.

Cost Savings

Having looked at the cost items, what are the cost savings of an ITIM approach? Essentially, cost savings are achieved due to the considerable reduction in documentation work carried out by IT experts. This is the result of two important components:

  • The use of ITIM editors reduces the documentation/information areas of IT experts to the essentials. With the help of editors, IT experts create a maximum of 50% of the original, traditional scope of documents/information.
  • ITIM editors relieve IT experts of editorial and conceptual work. Thanks to ITIM, the IT expert requires a maximum of 50% of the time expenditure per unit. This amounts to a maximum of 70% of the previous expenditure when combined with the expenditure of the editor.

In total, the overall expenditure in the long term (scenario 2: IT experts + information management) is reduced to a maximum of 50% of the time expenditure for traditional document management (scenario 1: status quo).

And what do you need to invest initially? How long is the investment phase? Clearly there are initial investment costs for the ITIM project/program setup at the start. The amount and duration largely depends on the scope and approach (professionalism) of the ITIM project/program. An example business case calculation is illustrated below.

Annual Potential Cost Savings, RoI

As already mentioned, the expenditure for ITIM and the potential savings per year depend of course on the scope of IT, the areas included and the current operating expenditure for traditional documentation. To give you an idea, various examples and their investment, the potential savings and return on investment are illustrated below. The parameters are:

  • Staff: Number of IT experts working in the relevant area. Our example calculations are based on 50 and 250 experts.
  • Time expenditure as a percentage: The time IT experts spend on documentation in the traditional model. Our example calculations are based on a total expenditure of 4% and 8%

 

As the number of IT employees increases, RoI will of course be later, which means that the annual savings subsequently will also be higher. In smaller environments, RoI can be achieved after just 2 months. If the risks for a positive RoI are considered to be too high in larger environments, and a modest individual investment is to be made, a larger IT area can be broken down into smaller parts and addressed sequentially one part at a time.

ITIM Project Phases

ITIM projects go through several phases before they replace traditional documentation and document management in regular operation. With regard to the business case, these 3 phases are:

  • Phase I: ITIM Planning
    Traditional documentation can continue unchanged; project/program management are set up.
  • Phase II: ITIM Setup
    ITIM approaches and methods are incorporated in the organisation, information managers begin to control the process. In the first areas, traditional documentation ceases and/or is replaced by ITIM.
  • Phase III: Implementation
    All procedure models and methods are specified, the information structure and tools are defined and ITIM is fully incorporated in the IT organisation. The entire process is streamlined, structured and controlled by information managers.

Based on a medium-sized scenario of 150 IT employees and an average 6% time expenditure on documentation, the following picture emerges:

 

Strategic Aspects and Benefits

Strategic, non-monetary advantages of ITIM have not been mentioned so far. As already indicated, we will not go into detail regarding the strategic advantages, but will simply provide an overview. They essentially comprise all areas of modern IT:

  • Risk analysis: Identifying risks (faster)
  • Facilitating service transformation (cloud)
  • Facilitating service transition
  • Basis for service optimisation

ITIM is Essential!

IT information management is essential. With modest investments and RoI after just a few months, direct cost savings are achieved very quickly and the strategic options for IT are improved.

Further Information:

Newsletter „Simplify IT Information Management“ 
Newsletter “(Un)informed About IT Risks?”  
Newsletter “What can Business IT Learn From Wikipedia?”  
Whitepaper “Making The Right Decisions Fast

Business Case ITIM (IT Information Management) (PDF)
Status Quo: High Expenditure Associated With Documentation

Please send us an e-mail for questions or feedback: marketing@avato.net

Imprint

Date: November 2017
Authors: Gregor Bister, Jennifer Gitt
Contact: marketing@avato.net
www.avato-consulting.com
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