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How do you create value by actively managing IT complexity?

Why your company should invest in the simplification of the IT landscape and what value can come from consciously managing complexity


In brief

  • IT is an essential enabler of business performance; therefore, additional complexity is inevitable as business demands grow.
  • IT simplification should be a high priority item on the agenda for IT and business teams alike.
  • Proactively managing IT complexity, by understanding its drivers, helps organizations to maintain a competitive edge.

As organizations strive to keep up with the pace of technological developments, advances often come at the cost of increased complexity within their IT organization, system landscape and infrastructure. Changes in strategy, business models and processes as well as increasing regulatory requirements introduce further complexity in IT which makes management thereof essential.

Complexity thereby refers to the intricate interconnection of components, processes, services, and systems within an information technology environment, often resulting in challenges for management, maintenance, and efficient operations.

Finding and preserving the right level of IT complexity thus is crucial for organizations as it directly impacts operational efficiency, cost-effectiveness, agility, and innovation.

Simple it and complex it chart image

Excessive complexity strains resources, increases costs and hampers performance. Conversely, oversimplified landscapes limit flexibility, agility, and may lead to missed opportunities. By actively managing complexity, organizations can optimize resource allocation, make efficient decisions, and align their IT investments with business strategy. This, in turn, means they are positioned to increase productivity, foster innovation, adapt to emerging technologies, and gain a competitive edge.

Identifying, understanding, and measuring drivers of IT complexity and their interdependencies are important steps in detecting root-causes of unintended complexity. Such insight / knowledge allows IT leaders to assess the broader impact of each driver, identify potential cascading effects and develop comprehensive strategies to address and manage complexity holistically across the organization rather than addressing drivers in isolation.

A key consideration when addressing IT complexity is that IT alone cannot steer complexity – the business must take an equal share in responsibility for this strategic endeavor.
 

A dual approach to measure IT complexity – quantitative and qualitative
 

Measuring drivers of IT complexity can be approached both in a quantitative and in a qualitative way, depending on the specific aspects that are being evaluated.

An assessment combining both quantitative and qualitative measurements allows organizations to gain a comprehensive understanding of IT complexity, considering both objective metrics and perspectives from consumers and stakeholders. An outside view and robust methodology can help provide the insights needed for a holistic assessment that enables organizations to identify areas of improvement, prioritize actions and develop effective strategies for managing and reducing complexity.

Assessment results can also serve as a baseline for future complexity evaluations, so organizations can track improvement progress over time and measure their complexity management efforts effectively.

Creating value by actively managing complexity

Learn about EY’s approach to measuring and managing IT complexity in our brochure:

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Summary

Effectively addressing IT complexity requires a multi-faceted approach that focuses on identifying areas of complexity and prioritizing them based on their impact and potential for improvement. Benchmarking can help to put the topic into perspective and support organizations in comparing themselves against peers. A current state analysis allows an organization to gain a more tailored, in-depth understanding of complexity drivers. Comparing them against a realistic/balanced target state will disclose tangible improvement measures. Implementing these measures paves the way towards IT simplification and improvement realization.

Acknowledgement

We kindly thank Stefan Häni, Martin Hasler and Mikkel Wahl for their contribution to this article.

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