IT directors have to prove investments in technology add
to the company's bottom line, according to analyst company
Forrester.
At its GigaWorld IT Forum Europe conference in Barcelona next week
(7-9 June) Forrester will talk about how users should strive to
make IT more visible to the business.
Martha Bennett, vice-president of research at Forrester, said, "We
need to get away from IT having to prove its value and focus on
what IT can do for the bottom line."
During the conference, she said, Forrester would be looking at
management techniques for business alignment.
An example of a common problem users face is making the business
case to upgrade their software when a product they use stops
shipping.
As reported in Computer Weekly last week, users such as Homebase,
which has completed a SAP R/3 implementation, now face the prospect
of migrating to the MySAP platform.
"Why upgrade when you do not need to?" Bennett asked. She said
users should only upgrade when there was a clear business benefit
in doing so.
The IT director of a major UK retailer company told Computer Weekly
this was precisely the approach he was taking. The IT department
had postponed its upgrade from SAP R/3 until such time as the
business required MySAP's extra functionality.
Another area users can look at is charge-back, Bennett said, where
users charge individual business departments for IT services.
The idea is that a business unit can correlate a business
objective with the IT cost to achieve it. "Charge-back works to a
point, but you need to ensure the cost of administration does not
outweigh the benefits," she said.
In some cases charge-back is not possible, said Bennett. For
example, a small department cannot justify the cost of upgrading
the network - such infrastructure expenditure is better spread
across the business.
IT infrastructure projects are often difficult for IT directors to
justify, said Bennett, who suggested that IT directors treat IT
infrastructure as an exercise in risk assessment.
"With critical infrastructure, looking at cost will not get you
anywhere. You need to look at the risk," she said. "Ask how long
the business would survive - if Amazon went down for half an hour,
it could cost the company a month's profit margin."
Bennett's final piece of advice was to avoid using metrics such as
uptime and CPU utilisation when speaking to the business.
"Ensure your overall metrics are aligned," she said. There is
little point in having one metric for IT, one for the call centre
and another for sales. Business needs to look at how it treats IT.
If we do not make the effort now, we never will."
Web services lower integration costs
Web services will lower the cost of integration but there has
been little progress in developing standards for linking business
processes, Forrester warned this week. Martha Bennett,
vice-president of research at Forrester, said, "We are now moving
to lower-cost integration, but higher-level standards [for web
services] are lacking." Thanks to progress on standards, Bennett
said low-level protocols such as Soap were in pretty good shape.
She urged users to begin deploying web services in their own
businesses, where they can "make mistakes in private".