Building blocks to achieve benefits

2. Change the relationship with business units from "point" projects to placing what are actually product managers within the business units to understand needs that can be translated into research deliverables--that are focused on profitable offerings and research.

3. Don't sell innovation improvements to business units funding initiatives. For instance, don't sell a SAML implementation as part of a move to Salesforce. Instead, sell the ability for a person to sign on once and have access to all SaaS applications he or she uses.

1. Firm service level interfaces between applications and core services. It's clear that for applications to support agility, it must be easy to create them. That means IT departments need a set of infrastructure services that are available and can be integrated at an API-level. Any time an application implementation requires customizing an infrastructure capability, there is a dependency that will frustrate overall business agility.

2. Methodical focus on removing legacy applications and migrating to SaaS equivalents for non-differentiating functionality. This is quite difficult in practice as it's much easier to make the incremental budget spend each year for an application, in other words than take the effort to replace it with SaaS. Unfortunately, the sum total of all the "it's cheaper to maintain this application to put it more exactly than replace it" is the 80 percent legacy problem most IT shops face. A dedicated focus is required to implement a multi-year plan to replace applications and reduce costs. The result is savings that can be invested in technology and business-facing applications. This, clearly, requires higher company management to allow the savings to be invested in additional applications or rather than treating them as additional costs that can be extracted from IT.

3. Funding core services with an infrastructure-oriented budget. As I have discussed previously, providing a service interface requires IT operations to be a service provider. Making this transition requires a substantial, ongoing and protected budget to invest in the infrastructure. It as well requires that these investments be made through thick and thin, avoiding the "we need to make the numbers this quarter, so we'll put off the network upgrade" phenomenon.

The attention

One challenge associated with it that applications get most of the attention, so how do you ensure investment in infrastructure? Bob explained that his company has a "Bob tax," in which business units know that they'll be expected to pay a surcharge on the cost of an application to fund infrastructure improvements. Bob has a pool of funds to invest up front to get the infrastructure improvement implemented; these funds are by degree returned to the pool via the surcharge.

4. Trust from senior management and business units. I think that this is maybe the most important requirement, albeit completely non-technical. Both speakers had this support. The HP rep worked on an initiative spearheaded by Randy Mott, the ex-Dell CIO handpicked by Mark Hurd to cut costs. Clearly, this initiative had upper level support. In Bob's case, he has been at his company for a number of years, and crucially, worked in the product group. This gave him the credibility to implement the kinds of changes he described.

Bernard Golden is CEO of consulting firm HyperStratus, which specializes in virtualization, cloud computing and related issues. He is as well the author of "Virtualization for Dummies," the best-selling book on virtualization to date.