IT can prove its business value to the board by changing its metrics, making it easier to justify spend in the process, says Mike Lucas.
Gartner has forecast that IT spending should increase by 5% in 2004, and Computer Weekly's own spending survey found that IT expenditure has been increasing in 2003.
If the projections for an increase in spending are to be realised, organisations need to change the way they measure the performance of IT to ensure their spending is aligned with business value.
Typically the metrics used to gauge the success or failure of IT are still technical in nature. They are focused on how well the IT infrastructure is performing from a technical viewpoint, rather than measuring the value IT is adding to the business.
For example, the IT department will often talk about how well it is performing using terms such as uptime and utilisation, but this tells us very little about how well IT is supporting the business.
IT departments must change the way they measure performance if IT is to be seen as adding value that supports the business, rather than as a black hole of expenditure. It is not only about justifying IT expenditure to others. It is about making sure that the IT department is supporting the business in the best possible way.
Instead of measuring server utilisation, why not look at what applications are being used most often. If there is a an application that is being used frequently by 90% of employees, it makes sense for the IT department to focus on enhancing the performance of that application and to be measured on how well that application performs for end-users.
The performance of applications needs to be measured in a way that can be understood by everyone. End-user response times, for example, can be presented from an IT, business and end-user perspective.
Telling the end-user that they can expect a five- or six-second response time from a particular application allows them to better understand the level of performance that can be expected from IT.
Essentially, it allows the end-user to better judge how well IT is delivering a service that enables their efficiency. It also gives senior management the ability to see the impact investment will make on the overall productivity of the business.
Until metrics change, businesses will remain gridlocked by IT. Although most businesses know that IT adds value to their organisation, they have no way of measuring how it does this. Using easy-to-understand business-focused metrics should enable IT managers to demystify IT and become more transparent to others within the organisation.
These metrics will make it easier for senior management to measure whether or not IT is adding value to the organisation and allow them to assess whether extra investment in IT will result in tangible business benefits.
What do you think?
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Mike Lucas is regional technology manager of Compuware in the UK and Ireland