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Could Status Quo be your Biggest Innovation Enemy?

By John Williamson

Every decade or so a technology comes along that disrupts enterprise IT infrastructure. About 20 years ago, the hypervisor was a game-changer; in 2006, Amazon launched AWS, and 10 years ago, Nutanix introduced the next major innovation--hyperconverged infrastructure. Disruptive technologies do more than incrementally improve tools and products; they usher in new skill sets, new ways of doing business, new organizational structures, and new customer expectations. Perhaps it’s no surprise, then, that disruptive technologies often encounter resistance in the form of status quo biases.

These biases, if not carefully addressed, can prevent enterprises from taking advantage of technologies that offer a vital competitive edge.

Steve Kaplan breaks down the challenges posed by status quo bias in his new book, The ROI Story: A Guide For IT Leaders. To properly combat these biases, you need to know what they are, their true causes, and how to tell a different kind of story--one based in financial analysis--to rationalize IT decision making.

Exploring the biases

Status quo biases most often take two forms: confirmation bias and what Kaplan calls the “agency dilemma.”

Agency Dilemma

IT’s mandate is to make sure the enterprise is getting the best tools and services it needs in an efficient, safe, and compliant manner. Even so, there are occasionally cases when individuals within IT can oppose disruptive technologies because they feel threatened--their established particular skill set, experience, and certifications may risk becoming irrelevant.

Confirmation Bias

Far more common is confirmation bias, which unintentionally excludes information inconsistent with existing beliefs. This tendency is exacerbated with HCI because it requires rethinking infrastructure from the ground up.

Evaluating HCI Through a 3-Tier Lens

IT organizations often think about storage in terms of costs per GB or TB, but in reality, Kaplan says, they must buy a SAN as a complete, and expensive unit, while also paying not only for initial capacity, but quite a bit of extra capacity based on their best guess for what the business will need in three to five years. IT is forced to pay for excess capacity and associated rack space, power and cooling, deriving no benefit until it is needed--or, worse, if growth outstrips estimates, running out of capacity too soon, which impedes the business and forces an expensive out-of-cycle forklift upgrade.

In contrast, with HCI your purchasing decisions are based on demonstrable requirements, rather than guesses. Buy only what you need, and then expand as little as a node at a time as necessary. Moreover, thanks to Moore’s Law, as well as enhancements such as NVMe, Octane, and 3DXpoint, VM densities increase as hardware performance improves, which in turn leads to additional savings in rack space, power, and cooling. In short, Nutanix software-defined infrastructure steadily gives you more bang for your buck. A lack of experience with HCI can lead to a biased financial analysis that fails to account for improving economies.

Politics

Kaplan reminds us that politics are layer 8 of the 7-layer networking stack. Politics can run the gamut from individuals who worry about being replaced or displaced (see the agency dilemma above), to a CEO who is friendly with a status quo manufacturer executive, or a new CIO who is determined to make a name for herself by lifting and shifting IT to public cloud.

TCA (Total Cost of Acquisition) Focus

As noted in an earlier blog, IT professionals often make purchase decisions based primarily, if not completely, on upfront costs alone. Yet TCA is only one small part of a much larger TCO picture, and one that fails to properly account for operating expenses, which make up the majority of IT spend. HCI, and the Nutanix Enterprise Cloud in particular, dramatically reduces OpEx expenses such as IT labor, rack space, power and cooling, disaster recovery, backup, maintenance, and support.

Attacking biases head on

To combat these and other status quo biases, Kaplan recommends a thorough financial analysis that not only fully accounts for the costs, but also identifies and quantifies the business benefits, which are often ignored or discounted when comparing a disruptive (and less-familiar) technology with traditional approaches. 3-tier and HCI are not apples to apples, so what’s needed is a compelling financial story that captures the big picture. This practice also has the benefit of aligning IT and the lines of business. When IT and the lines of business are not aligned, the entire enterprise is less efficient, less productive, less innovative, and worst of all, less competitive.

Following are just a few of the ways that a comprehensive, HCI-aware, financial analysis can help mitigate status quo biases.

Greater Clarity

It is not uncommon for 3-tier infrastructures to include multiple brands and models of SANs, all lashed together with a dizzying amount of interconnections among the servers, storage arrays, fabrics, and switches. The financial analysis process forces IT to become more fully cognizant of the composition of the existing datacenter environment, particularly what it will cost to run and upgrade it during the next refresh cycle.

Reducing Risk

Kaplan concedes that big purchase decisions involve risk, which is amplified when a company is taking on a disruptive technology. A thoroughly researched and credible financial analysis can help allay concerns.

Quantifying the significant savings and other benefits an organization stands to achieve by migrating to software-defined infrastructure helps offset an overly risk-averse approach. It can also help the CIO address some of the challenges around legacy IT environments, including shadow IT, technical debt, legacy budgeting, outside pressure, and politics.

Shadow IT

Shadow IT can pose serious risks to an organization, but it also signifies an unfulfilled need. Rather than just policing the offenders, offer a compelling financial story that addresses the root of the problem, which is often the need for greater IT agility and responsiveness from the central IT organization.

Technical Debt

Technical debt invariably means complexity, which impedes innovation and costs money. Kaplan points out that a CIO can use a rigorous analysis to attack each area of technical debt with a fresh perspective that builds a case for deploying a superior technology.

Legacy Budgeting

CIOs can use their knowledge of finance, IT, and the organizational structure to craft a persuasive rationale for bringing an end to project-based funding, which only reinforces the problems.

Outside Pressure

A well-researched financial analysis can serve as the underpinning for a comprehensive organizational cloud strategy. This strategy serves as a countermeasure against pressure for IT to shift everything to public cloud or to stay the course with 3-Tier.

Cutting Through Politics

An analysis that involves all the key stakeholders, including ones from finance and the lines of business, and that clearly identifies organizational objectives and pain points, stands the best chance.

It takes more than a spreadsheet laying out fiscal advantages to dislodge biases, Kaplan contends. It typically requires a compelling ROI story--one that satisfies the human thirst for theme, plot, characters, adversity, and purpose. A well-crafted story not only lends credibility to the author, it pulls in the audience who is much more likely to remember the results. Personal engagement from stakeholders (from the C-suite to admins in the trenches) significantly increases the probability of getting a green light.

Kaplan’s The ROI Story: A Guide for IT Leaders breaks down these biases, as well as the elements of storytelling that can help you move your audience from “we’ll get back to you” to “wow.”

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