Push IT to be seen as a profit centre, CIOs told

IT directors should push for the IT function in their organisation to be treated as a profit centre rather than a cost to the business.

IT directors should push for the IT function in their organisation to be treated as a profit centre rather than a cost to the business.

That means winning the support and sponsorship of the board and communicating IT's value clearly to the wider organisation.

This was the key message from Glenn Martin, former managing director and chief technology officer at financial services firm Cazenove, speaking to the City IT financial services technology forum last week.

He said IT directors needed to tell the right story about how IT can generate profit for an organisation, both directly and indirectly, and can also bring cost savings and productivity improvements while reducing risks.

Martin warned that, for IT to successfully promote itself as a business, IT chiefs would need to understand and keep tight control of the cost dynamics of the IT function. At the same time they should develop a true service culture that allows the rest of the business to judge IT's success by monitoring day-to-day service levels.

To forge this type of IT business, Martin said it was essential to employ business-literate IT staff with strong interpersonal skills - the type of individuals who could build strong relationships with key players within the business and communicate the IT department's achievements and its future plans.

The best staff should be well rewarded, he added, since the they were by far the most productive, so under-rewarding them is a false economy.

Alongside this service culture, Martin said IT heads also needed to deliver a competitive cost base.

He recommended that a professional business management unit be installed within IT, and insisted that it employ specialist IT negotiators to get the very best deals from technology suppliers. He also said it was worth taking steps to better monitor costs, by adopting user-friendly reporting and analysis software.

 

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