Forget user satisfaction - create fresh IT demand

The best way to align IT with the business is to run IT departments like a business, Frederic Wohl-wend, chief information...

The best way to align IT with the business is to run IT departments like a business, Frederic Wohl-wend, chief information officer at biotechnology company Serona told delegates at GigaWorld.

"Stop thinking customer satisfaction. Generate demand [for your services]," he said.

"Business value is only realised when a customer is ready to buy your product," said Wohlwend.

At Serona the IT department organised itself like a services company and established a research and development process to introduce new technologies.

Given that IT's role is to host applications, it made sense to treat the IT department as an application service provider business, according to Wohlwend. He recommended that the IT department be adept at marketing services, rather than focusing on meeting demand from end-users.

Wohlwend said the IT director should undertake market segregation and research to understand the different types of end-users and the type of services each will require.

He also emphasised the need to benchmark processes, costs and skills, not only with other parts of the business, but also against other businesses.

He recommended that IT departments implement a charge-back system where other departments pay for the services they use, and ensure that the cost of the service is competitive with what is available externally. Services which cannot be provided competitively in-house should be outsourced, he added.

Profit strategies

Link IT spending to the company revenue (from fixed budget to variable cash-out)

Protect your maintenance budget (non-negotiable)

Charge-back your clients (from cost-centre to profit-centre)

Put in place activity-based costing

Bring full cost transparency to your clients (service level agreements and re-billing details)

Do not use return on investment metrics for decision-making.

Source: GigaWorld Europe, Frederic Wohlwend, chief information officer, Serona

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