Charging business units for IT services and new
technologies, such as
service oriented architecture (SOA), is creating a greater
understanding of the business value of
IT investment in companies, according to senior IT
professionals.
The latest findings from Computer Weekly's
CIO Index, which was
based on interviews with more than 100 senior IT leaders in May,
reveal that 77% believe it is getting easier to demonstrate the
business value of IT. This figure has risen from 66% in February
this year.
In addition, the number of IT directors systematically measuring
the business benefits of IT is increasing. In May, 54% were doing
so, up from 42% in November last year.
One way to demonstrate the value of IT to the business is to
make internal departments pay for IT services, said Paul Butler, IT
services director at
Rolls-Royce, who contributed to a Corporate IT Forum seminar on
the topic in March.
"By charging back IT, you are trying to highlight to business
managers what IT is valuable to them and what is not to make them
more aware of the consequences of their own IT consumption in a
simple, transparent way," he said.
"Charging back is also about trying to change the perception of
IT from being just an overhead or a cost centre, to being perceived
as a valuable contributor to the business. If people buy, they are
buying because they believe what they purchase has value, otherwise
they would not be buying it, and that has an important impact on
how IT as a whole is valued."
Valuing IT resources
Andrew Mellors, head of IT business management at defence and
aerospace company
BAE Systems, also contributed to the Corporate IT Forum
seminar. He said that giving business units information about IT
costs, such as the support costs for each business PC, can help
them value their IT resources.
"It is human nature to treat something with a high value
differently to something with a low one. Your pricing mechanism has
to reflect this when you are communicating to users the value of
their IT services."
Steve Burrows, IT director at laundry equipment firm JLP, said
measuring the business benefits of IT provided the ammunition
required for IT leaders to show the value of their input to their
business colleagues.
The more IT departments strive to measure the value of their
work, the more the business would be likely to appreciate the value
of it, he said.
"At the same time, it demonstrates to those colleagues that IT
is a business-focused function. So to see a correlation between
increased measurement of the business benefits provided by IT, and
a reduction in the reluctance of other business leaders to perceive
real value from IT, is unsurprising."
Business improvement
As packaged software becomes more standardised, businesses are
looking to IT to help with a more sophisticated approach to
business improvement, he said.
"More and more businesses are turning to their IT functions to
assist in business process improvement, particularly with concepts
such as SOA. In engaging with IT to achieve the process
streamlining and consistency that SOA-type approaches enable,
business leaders are seeing more deeply into the meaning of IT and
its ability to improve the management of the enterprise," said
Burrows.
"As IT professions were increasingly exposed to how the business
functioned as well as what it did, they became more involved with
the running of the business, rather than just the operation of the
underlying business infrastructure."
He added, "As these trends continue, we can expect to see an
increasing understanding from both business and IT leaders of their
common contributions, and the progressive erosion of the 'them and
us' cultures that have for so long characterised the relationship
between business and IT."
Computer Weekly's CIO Index bears out that IT departments are
investing more in SOA. Full deployments across organisations
increased to 4% of those surveyed in May, up from 1% in April.
Meanwhile, departmental deployments increased from 14% to 17% over
the same period.
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