Is IT failing to contribute to business goals?

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In this guest blog from Hornbill Service Management, Pat Bolger, writes about research the company conducted with the Service Desk Institute to see what CIOs and service desk professionals think about IT's perception in terms of its strategic business value.

This is an important question for anyone buying IT services to address.

Demonstrating Business Value - Has IT Been Framed?

By Pat Bolger, Hornbill

"IT departments know the value they can give the business: not just providing services that keep operations ticking over and improving efficiency, but also helping their organisation make huge leaps in achieving its goals through new services and capabilities. However, there is a question over whether the rest of the business always agrees: indeed, whether IT is seen as more than just a necessary utility. To investigate this further, Hornbill and the Service Desk Institute (SDI) commissioned research to examine exactly how IT's contribution is viewed. While the SDI surveyed its members to get the views of workers 'on the ground,' a separate independent survey approached CIOs to see how the business views the IT department.

Demonstrating understanding

The research showed a clear difference in views: a whopping 98% of respondents from service desk teams believed IT can play an even greater role in supporting business goals. On the flipside, a mere 27% of CIOs said that senior executives viewed IT as contributing to strategic business goals. If IT teams wish to improve this, they need to show that they understand the wider business strategy. CIOs are more positive than service teams here: 67% say IT does understand business strategy, while only 57% of IT service teams said they understand. Even taking the more positive CIO figure, this leaves a significant chunk claiming not to know their employer's overall mission and strategy.

This is exacerbated if, instead of looking at the overall business strategy, we instead dig into individual business units: after all, these are the departments and groups that IT should be directly helping. 53% of CIOs, and 66% of service desk teams stated that teams didn't have enough time to spend with business units to understand how they could meet their goals. This has direct consequences: 57% of SDI members said they didn't understand the goals set for different business units; which means that proving IT's ability to help is something of an uphill struggle.

Measuring success

Another obstacle in this struggle is the way in which IT's performance is actually measured. According to CIOs, half of organisations either have no formal reporting mechanism for IT performance (17%), or have a mechanism focused entirely on metrics such as downtime (33%): leaving little space to show how IT's actions are aiding strategic goals. In comparison, 21% of organisations base their reporting metrics on user satisfaction, while only 29% explicitly link performance to strategic business objectives; such as improved sales and reduced customer churn. This split in reporting is part of a larger issue with communication: 68% of CIOs say that senior executives and business units themselves are not effective at communicating business strategy and individual 'line of business' goals to IT.

Achieving goals

The key to any successful relationship is communication and understanding. Without this organisations will never realise what IT can contribute to their overall strategy, while IT itself will struggle to demonstrate value and prove that it can do so much more than just keeping the lights on. However, any improvement in communication won't come out of the blue; service teams should already be acting to demonstrate they can do more than simple "utility" work.

Taking more time to understand the needs of individual business units will be crucial for service teams and IT departments who want to make the case for greater involvement in overall business strategy. CIOs should be sure they are pushing for improved communication, and for this to be recognised across the organisation: for example, by using collaboration tools to encourage discussion between IT and other departments, and making reports and measurement more accurately reflect IT's contribution to business strategy."

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This page contains a single entry by Karl Flinders published on June 26, 2013 1:14 PM.

The state of IT sourcing mid 2013 - a reflection of Forrester conference - Part two: digitisation was the previous entry in this blog.

Staff from IT suppliers are often perfect for in house relationship management roles, says Co-op head of sourcing strategy is the next entry in this blog.

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