The Business of IT
After reengineering the rest of the business, IT’s children deserve some shoes
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When it comes to supporting business performance, IT has a thirty-plus-year record of delivering what’s needed. First it was the transition from manual processes to technology-driven solutions. Then, from standalone systems to integrated offerings. And now, IT is striving for similar returns from information, digital and innovation.
In the years ahead, however, IT’s value proposition will likely increasingly be shaped by how well it addresses its second mandate: to improve operational efficiency in the business of IT itself.
For many CIO organizations, operational efficiency is not a rosy story. As IT has focused on making line-of-business operations efficient, the underlying mechanics of the business of IT have often been ignored. From how solutions are built and managed to how resources are deployed to how accomplishments get measured and reported, it’s time for CIOs to invest in their own shops. That means driving tools to capture, report and manage their full portfolio of projects, vendors and resource pools – across planning, implementation and ongoing operations.
Hear Kevin Kessinger, Executive Vice President, CIO and Head of Corporate Shared Services, TD Bank Group, describe first-hand his perspective on The Business of IT.
Peter Vanderslice, principal, Deloitte Consulting LLP, shares his perspective on the importance of managing IT like a business through an example of a Fortune 50 bank driving a program to increase transparency and visibility into information technology.
Read more about The Business of IT
Where do you start?
Many IT organizations have done small amounts of business process reengineering and have some supporting automation in place, likely relying on fragmented, one-off, point solutions. The vision of a fully automated, integrated solution stack can seem daunting. But just as BPR, Y2K and SOX fueled a boom of ERP and line-of-business process standardization, there is a “burning platform” in the world of IT – the surge of technology spend to capitalize on the convergence of postdigital forces of mobile, social, cloud, analytics and cyber intelligence.
The business of IT should have an overhaul to address cost and efficiency sensitivities driven by changing macroeconomic conditions. This is important in order for IT to remain relevant in the new world of technology innovation. First steps should include:
- Services mindset. IT’s first concern should address taxonomy and ontology – being able to define what it does and why it’s important. Expressing the business of IT in a common language with tangible, measurable and attributable value is a required condition for higher-order finance management, portfolio management and process efficiency improvements. ITIL and CMMI compliance are likely less important than well-defined, discrete descriptions of how to interact with IT services, and what to expect as a result.
- Do it like you did with the finance or manufacturing function. Once a common vernacular is in place, take a pulse on how well the various piece parts are working today. A quick maturity assessment can shine a bright light on opportunities. Areas that are manually driven or based on aging, fragmented technologies may not be the primary pain points. Priorities are more likely to be defined by the split of IT spend between discretionary investments and “keep the lights on” activity, as well as the disposition of IT projects and assets across the organization.
- Slow and steady. Few organizations will have the luxury – or the appetite – for a big bang overhaul of their IT function. Instead, take a roadmap view with an iterative approach to improving individual business processes and their supporting technology to yield significant gains. Integrate, over time, the individual processes and data to drive broader effectiveness and efficiency.
- Outside-in. Recognize that tomorrow’s technology footprint will likely be even more complex than today’s – with less direct control over assets (increasing dependency on external and, likely, cloud-based services), more ambiguity around boundaries of data and offerings, and a desire to dynamically realign and recompose a broad set of business processes based on market conditions and research-based innovation. The net effect: disciplines like contract management, vendor management, release management and OSS/BSS of technical services will likely become critical (e.g., order management, provisioning, metering, billing, mediation). These may not even be a part of today’s IT charter, but will likely be the nexus of competition in the new normal.
The Postdigital era should be great news for IT – a chance to expand their scope of services and reinvent their brand as the business looks to technology to play a more strategic role. But fragmented IT processes and systems of the 1980s won’t allow IT organizations to effectively deliver on the changing demands of the business. IT should change its management disciplines to keep up with the pace of change and stay relevant against growing options for external fulfillment of technology services.