The Ideal Standardization

Global IT at Air Products & Chemicals saved $3 million to $5 million a year from 2001 to 2007 by focusing on sameness—building an infrastructure that is 75 percent to 80 percent standardized, while still providing high-value services.

The Situation: Air Products—which serves global customers in industrial, energy, technology and healthcare markets—experienced significant growth from 1985 through 2000. In the process, the company accumulated 14 databases, five corporate networks and every flavor of server and desktop. With maintenance costs increasing 5 percent to 10 percent annually, this infrastructure became too expensive and complicated to manage.

What They Did: Senior IT and product managers agreed on the ideal number of infrastructure items needed to provide enterprise value at lower costs. The Standardization Index—a ratio of that number divided by the number of infrastructure items that existed—measured progress toward the ideal.

Elegantly simple, so too were the visuals used to report to the CIO and business. From 2003 to 2007, IT included the index in the global IT scorecard, which rolled into the corporate scorecard, giving it the highest-level visibility.

"Bottom-line cost savings were the centerpiece of all communication," explains enterprise IT architect Ron Crane. "From day one, the business understood that standardizing would save them 3 percent to 7 percent annually." According to Crane, although the index was simple to communicate, the effort it took to accomplish it was extensive.

When the company reached its standardization goal, the index was removed from the global IT scorecard. Air Products now has two types of databases, one corporate network, only four possible desktop images and one family of servers. Standardization has continued with virtualization of desktops, servers and applications.

Why It Was Unique: In trying to simplify their IT environments, many organizations attempt to boil the ocean. Air Products invested time prioritizing four infrastructure areas: databases, servers, desktops and networks. Demonstrating real cost savings in these first four areas allowed IT to gradually expand the concept to include every infrastructure item.

The Takeaway: Keep it simple and know when enough is enough. Air Products recognized that standardization within reason can reduce IT costs. Too much can stifle innovation.

Rick Swanborg is president of ICEX and a professor at Boston University. For more information, visit www.icex.com.

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Copyright © 2009 IDG Communications, Inc.

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