What’s the purpose of business IT? Historically, technology departments were regarded as necessary budget lines to ensure corporate tech stayed up and running. Even recent developments such as cloud computing and big data analysis have focused less on the value IT brings to the organization and more on the role of technology professionals in making sure these services were available on-demand.
The result? It’s no surprise that CIOs still struggle to align IT and business objectives, despite the increasing value of tech services to corporate strategy. Here’s a look at how chief information officers can effectively showcase the business side of IT and cast off the mantle of mere “cost center”.
Core Competencies and the Dark Art of Estimation
How do companies measure business value? They use their core competencies, represented by the products or services they sell. And unless you’re an IT firm, IT isn’t viewed as a core competency but rather a supporting role. As noted by CIO, for example, banking firms focus on the delivery of banking services such as customer Web portals, mobile app or investment advice. Manufacturing companies aim to produce the best version of current products possible while iterating on new designs. In both cases, IT serves as key underpinning — apps aren’t developed and new products can’t be effectively visualized without the use of technology but the tech itself isn’t seen as driving the value. Instead it’s a necessary, added expense that’s offset by revenue.
The CIO piece argues that companies use a specific set of criteria to measure value, which include:
- Increased revenue
- Decreased cost
- Improved productivity
- Company differentiation
- Improved client satisfaction
Linking IT to one of these criteria isn’t straightforward; according to Computer Weekly, demonstrating IT value to business leaders “has historically been a dark art, often based on the purchase price of products such as servers or storage and plenty of intelligent guesswork.” In other words, IT value often amounts to little more than gut feelings and vague generalities. But what if there’s a better way?
Metrics That Matter
The changing nature of IT services and the rapid rise of accessible technology is changing the narrative — almost 20 percent of companies have already invested in tools capable of monitoring business-relevant metrics, and the research firm predicts this number will reach 60 percent by 2021. The challenge? “Many infrastructure and operations (I&O) leaders don’t know where to begin when initiating an IT monitoring strategy.”
Gartner suggests several metrics which can help businesses align the role of IT in running the business (transaction response time, unplanned work and mean time to detect), grow the business (time to market, Web conversion rate and session “stickiness”) and transform the business (app downloads, multichannel integration and mean time to predict). Critically, the Gartner metrics all share a common theme: End users.
Data collected from end users about how they interact with technology, its impact on their day-to-day processes and how it empowers (or frustrates) initiatives is invaluable when it comest to aligning IT with overall business impact. Since end users — from staff to customers to stakeholders — form the backbone of all business value, access to real-time data about their experiences, expectations and the root causes of IT issues can help establish a firm foundation for business/IT alignment and drive mutually beneficial agreements.
IT isn’t a core competency for most businesses; relegating it to “cost center” instead of critical corporate collaborator. Tapping into the value of tech means finding the right metrics: Immediate, accurate and inextricably linked to end users.