Getting executive backing for IT is no easy sell at Scottish Water |
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By Mark Brunelli, News Editor
16 Nov 2007 | SearchOracle.com |
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SAN FRANCISCO -- The IT managers at Scottish Water know how to plan ahead.
They have to, according to Malcom Hunter, IT business demand manager for the Edinburgh-based public utility, because it's the "only way" to get funding for key software projects, such as the upcoming migration from a legacy human resources system to Oracle-PeopleSoft Human Capital Management.
Scottish Water is on a rigid, four-year IT investment cycle that needs to be planned and approved well in advance, Hunter said during an interview at the Oracle OpenWorld 2007 conference. To ensure approval, he said, they do their best to tie that IT plan to the company's overall capital investment plan, which covers such things as putting new pipes in the ground or building new wastewater treatment facilities, and is also on a four-year cycle. The next IT budgeting and capital investment cycles begin in 2010, but the company is already well into the planning stages for both.
"We're extremely well constrained when it comes to buying software," said Raymond Smith, Scottish Water's applications development manager. "We have to go through an extremely extended process of requirement gathering and justification and evaluation and stuff like that, so we need a bit of time to prepare that properly. It gives us a chance to make sure everything is lined up within the business and that we're picking out the right requirements to suit everybody going forward."
But suiting the needs of the business is getting harder all the time, Hunter added.
"The challenge that we have is looking at the level of investment that's required and the impact on [Profit & Loss] for the organization," he said. "So rather than just saying, 'This year we're going to spend 12 million pounds on maintaining our IT infrastructure,' what business wants us to do is to actually take into consideration the depreciation of that [investment over time], so it's starting to get very, very difficult to get approval."
Cost is a major factor in getting approval for many projects, Smith said, but it's definitely not the only consideration.
"Rationalizing, consolidation and reduction of maintenance costs are the No. 1 [considerations] for software systems," he said. "However, a lot of our application development is based on business requirements from our customers within the company -- our operations guys, our asset management people or Human Resources people."
When it came time to get approval for the firm's investment in PeopleSoft Human Resources, Smith said, the "reduced-cost-on-IT-maintenance" card went only so far. They also had to prove that it would give Human Resources users a better understanding of their skill base and the means to fine-tune their training requirements.
Health and safety is another major consideration during all aspects of the process, he said.
"Being a water and wastewater treatment firm, there are some huge potential environmental impacts we can have on the community," Smith said. "That is a very, very big driver as well."
Both managers said they'll be getting back to some serious planning once they return to Scotland.
"I'm planning for the 2010 to 2014 cycle for the moment," Hunter said. "If we get there too late, then other parts of the business have already prioritized where the funding is going to happen."
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