How IT Can Ensure the Transition from Cost Center to Value Center

| , EVP, Innotas

A recent article in Computer World asks ten questions of IT on how to stimulate discussions about technology creating and adding value to the business.  One of those questions resonated with us and speaks to why IT Portfolio management can be such a critical step in achieving the desired outcomes of business alignment. This was the question:

Do our business plans reflect the full potential of technology to improve performance?

Often technology expenses can be considered too high by the business partially because they don’t always understand the relationship between cost and value.  In reality, if those expenses are compared to the potential for performance improvement to the business, we are fairly certain that the expense woes would be mitigated by the “ROI” of the investment.

Easier said than done but you’ve got to start somewhere.  Planning work and allocating resources to the requests that align with the business goals is what PPM/APM was built for.  We often hear that companies and departments are “too busy” and there are “other competing priorities” to plan for a process and a tool that supports visibility to all the work IT is challenged with.   While we have no doubt this is true we also believe that history repeats itself if it’s not studied and challenged.  The old way of tactically approaching work has shifted by using Portfolio Management tools.

The article states that” on average, large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted”  There are many other studies that support this notion.

Performance improvement comes in a variety of ways with several data points and metrics.  The key is to start with the end in mind.  Understand what the desired outcome of any project is and be specific, how much time is required to build or develop, keep a sharp eye on costs and report on all of it. In short, understand the problems, and then begin to solve with defined quick wins.

Technology alone delivers no value. It’s the combination of a clear strategy, the right technology, high-quality data, appropriate skills, and lean processes that adds up to create value. Any weak link in this chain will lead to poor value delivery from IT.

All of this thought process is known and standard within the industry, but the challenge is real time visibility into all of the above. As the character Morpheus recounts in the movie the Matrix, “knowing the path and walking the path are two entirely different things”.  We see a lot of knowing and not enough walking in our industry.

APM/PPM tools are essentially an IT pipeline management tool for companies.  Today, very few firms would argue that real time visibility into the sales pipeline didn’t become beneficial to the way they forecast, market, and execute on the top line.  Why wouldn’t we apply the same rigor to the IT projects and work with a similar tool?

Innotas provides the application to help CIO’s turn their departments into value centers because by providing required visibility and accountability metrics with stated, managed, and proven performance indicators they will win the battles of uncertainty and poor perceptions of value add to the business.

We are certain that the time to act is now.

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