Slideshow Running IT Like a Business: 8 Questions to Ask

  • August 07 2012, 8:53am EDT
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IDC predicts “the emerging role of IT as a broker of business services as well as IT services. A new business services function will source services both internally and externally, enabling a broad market perspective on industry best practices and a greater focus on value and innovation. This will enable CIOs to shift their attention from technology managers to service brokers and possibly Chief Innovation Officers.”

1) What are the business perceptions of IT that need to be addressed when reorganizing?

Some CIOs feel compelled to restructure their organizations in response to the business perception of a need for change. Prior to moving to a services-based organization, the CIO should consider the objectives of the changes from the business perspective. These might include: the need to be more service oriented, a desire to build better business relationships or the perception that IT is too focused on technology and not serving the emerging business needs.

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2) What else is driving the interest in running IT like a business?

The concept of running IT like a business may have a range of financial, operational or emotion motivations for both the CIO and the executive team. In some cases, CIOs are striving to demonstrate that IT is a lean organization and fiscally responsible. One method to confirm this is to redefine business services and rigorously determine the total cost of service delivery. This can then be benchmarked or competitively bid by an outside service provider.

3) Other than the CIO, who owns business relationship management?

Most organizations are large enough that IT executives other than the CIO own the relationship. Many CIOs don't have someone with the title “business relationship manager,” so this may be someone in IT development, in IT architecture, IT strategy or even someone in the business. Whoever is fulfilling this role should reside in (or perform the functions of) this business services role. In some cases, we expect that this role is not defined or shared informally among many IT staffers.

4) What impediments are there to realigning roles, responsibilities and KPIs?

The creation of the business services role will require job realignment. There may be barriers to this including a cultural resistance to change, pre-existing relationships, and the existing responsibilities of those owning the relationship management role (e.g., the head of application development for the functional area). Knowing these impediments will guide the CIO in developing the change agenda.

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5) Which resources would be impacted by the creation of a business services management function?

This goes back to who owns the role today. However, this question is more about the assignment of work and the impact of an organizational change on resource availability.

6) Is there a service management framework?

An IT service management framework is a useful starting point for creating more discipline around business service management. We would review the scope of the ITIL to assess the processes that can be applied to business service management.

7) Does the service catalog include business services?

In some cases, CIOs have already defined some business processes in the ITIL service catalog. Though this has proven to be a challenge, we see that outsourcing firms have had more success in defining business services, service levels and service costs. This is the sort of work that is an ultimate goal in business service management.

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8) Are vendor contracts and service level agreements aligned to business priorities?

To be successful in services management it's important to connect the end-to-end supply chain. This means that the supplier’s performance should be measured by service levels that are aligned to the business services and the demands of the ultimate customer. In this case, the service provider could be internal IT, a managed service provider, a cloud service or an outsourcing firm.

For more information …

To access David McNally’s full presentation, click here. For more instruction, news and trends in outsourcing, click here. Or visit our sister site, Cloud Computing Exchange. All photos used with permission from ThinkStock.