There is an adage that as a young company matures, its
leadership evolves from being barbarians to bureaucrats, and a
similar shift is currently taking place within the IT function of
many organisations.
Whereas in the past, IT has not been seen to be subject to quite
the same rules as other business functions, it is now being
required to demonstrate its value to the organisation, to maintain
the disciplines of planning, budgeting and cost management, and to
assess and mitigate any potential risks to the organisation, in the
same way as other departments.
As the leader of the IT function, the focus of the chief
information officer is therefore turning further away from the
detail of technology such as server availability, network
performance and application functionality. Instead it is moving
towards the strategic issues of IT budgeting and investment
planning, governance, service quality, risk management and
outsourcing.
Most business functions have well-established methodologies for
cost and value measurement. However, enlightened CIOs seeking to
prove their worth are finding a distinct lack of recognised tools
and procedures that can be applied to this task.
Where chief financial officers have the Generally Accepted
Accounting Principles, production directors have quality control
and improvement techniques, and sales directors can rely on revenue
figures, the tools available to the CIO still have a technology
bias.
At the lowest level, technology management tools abound - systems
management, application lifecycle management and performance
management being examples.
For IT service management there is the Information Technology
Infrastructure Library (ITIL), developed by the government's
Central Computer and Telecommunications Agency in the late 1980s,
and now managed by the Office of Government Commerce. ITIL defines
a best practice framework for the manage- ment and delivery of IT
services.
For governance, the Control Objectives for Information and Related
Technology (Cobit) provide a reference framework for IT governance,
information control and security. Issued by industry body the IT
Governance Institute, Cobit comprises a process model and 34
high-level controls to achieve, spanning all areas of IT
management.
Both ITIL and Cobit identify that cost and value measurement is an
important aspect of IT management, but neither do much to tell the
CIO how to go about it.
And although both methods help to define a framework for management
and control, they are also both IT-centric, doing little to help
close the gap between business and IT.
Giving a briefing on ITIL or Cobit to your chief executive is not
likely to convince them that you have a firm handle on how IT is
making an invaluable contribution to the business strategy.
Better methodologies for cost and value measurement in IT are now
emerging, but they have not yet reached the tip-over point where
there is broad acceptance, and where the techniques are
incorporated into widely available frameworks and the associated
tools.
For now, the CIO is therefore faced with something of a
best-of-breed approach, and the most effective step that an
organisation can take to improve the quality of its cost and value
measurement is to implement an IT portfolio management
solution.
IT portfolio management is a technique that applies formal methods
and quantitative analysis to the process of IT investment planning,
control and evaluation.
It allows senior executives in a business to compare the merits of
IT initiatives that are competing for limited resources, and make
an informed decision on where IT investment should best be directed
to achieve business objectives.
By linking portfolio management to programme and project management
functions, it is possible to complete the loop of planning,
executing, monitoring and optimising.
Tim Jennings is research director at analyst company Butler
Group Data protection law is a continuing headache for
international businesses
