If you are a CIO or IT leader, you’ve likely heard about the changes that many organizations are making to transform their IT departments, from restructuring silos to implementing ITIL. Currently, most IT departments operate with about 70% of resources going toward maintaining the status quo and 30% toward innovation. However, thanks to virtualization and other advances, IT departments can enable themselves to operate smarter and more efficiently, thus refocusing efforts toward long-term strategies and improving IT’s direct impact on the organization.
As stated in a paper by the Economist Intelligence Unit, “The increasing convergence of IT and business processes is challenging the traditional organizational model, where IT and business units operate separately.” Despite this quote being nearly three years old, IT departments at many companies are still working to act on this sea change. In fact, a recent CIO Technology Business Management Council meeting put on by Apptio brought 60 IT leaders together to discuss the new approaches and technologies required to transform IT into a business-focused unit, and bring IT to a place where it can be “fully aligned and accountable to the business.” Though this may sound intimidating to IT veterans, there are many opportunities available for those willing to take the plunge. Here, we’ve compiled four of IT’s emerging best practices that can help you move toward being a business-focused unit.
1) Comprehend Data and its Value
This is a basic component of successfully running IT with a business infrastructure, yet it can be problematic for CIOs with long, tech-based backgrounds. This is why new IT leaders are increasingly coming into the department with more business knowledge rather than technical savvy. It may take some time, but learn to analyze the value of your department’s data and how it applies to your business. This will be crucial as IT’s responsibilities amplify, and your physical infrastructure moves to the cloud. A primary step in this process is determining the metrics that have the most value both in- and outside of the IT department. Unifying financial metrics with utilization metrics is critical. For example, analyzing ticketing or service usage data, interpreting that information and turning it into revenue-boosting ideas may take priority over technology-related issues.
2) Structure with ITIL
The concept of ITIL is quite useful because it offers a framework and implies a methodology, not a strict system to which you must adhere. IT leaders can use ITIL to facilitate business change, transformation, and growth, so adopting it could provide you with improvements in many areas including productivity, customer satisfaction and delivery of third-party services. Delivering on these promises, and reporting them accurately to executives, can help showcase IT’s business value.
3) Allocate Business Costs
Financials and performance management work hand-in-hand; it is necessary to understand what it costs to make the final product or deliver a service. Clearly outlining your department’s available resources and associated costs will help you generate ideas to improve efficiency and achieve organizational goals. This white paper from Apptio describes different allocation strategies that could work for you (requires form download). According to Forbes: “The lack of understanding of how IT impacts business makes IT vulnerable. At most companies, IT costs rose sharply in the past 10 years… But 10 years ago most companies handled a fraction of the transactions they do now. In most cases, the per-transaction cost has probably dropped dramatically.” Having insight into this information, and the ability to analyze and report what it means to your company’s bottom line is key.
4) Communicate with your Team
Before jumping in feet-first, your overall communication as a department must be top-notch. Speaking the same language between IT and the organization as a whole can be challenging, but effectively communicating within your own department often requires just as much effort. However, effective knowledge sharing can provide incredible benefits regarding efficiency and productivity. IT is no longer just about technology. CIOs are beginning to delve into corporate strategies and models, and challenges will continue to arise as duties for the IT leader shift. The ability to understand how your organization functions as a whole, and how it is impacted by IT, will be worth your time and effort. Learn more about how IT work management software can help provide you with the business insight you need to control costs and improve performance. Have you begun to look at your IT department from a business perspective yet? If so, what tips would you suggest to those just starting out? ITIL is a registered trademark of Axelos.