The Business of IT® is an operational transformation that improves the productivity of Information Systems (IS) organizations by helping them deliver more value to the enterprise. The Business of IT® applies to any entity that combines knowledge workers with technology to deliver solutions.
What is The Business of IT®?
The Business of IT® begins by recognizing that the IS organization is a business. It has revenue (budget), assets and employees, but historically it has differed from typical businesses because it has been able to operate as a monopoly with locked in customers. As a business, the organization must manage itself in the context of its value chain. It must understand its customer’s needs and must deliver value across all business units. Additionally, the IS organization must manage its suppliers, the raw material of IT, rather than be managed by them.
The IS organization should strive to operate in an efficient manner, working like a professional services organization instead of as a cost center. It should work to deliver the right products and services to support the primary mission of the enterprise. This is the Business of IT®.
What are the benefits to my organization?
The primary benefit of The Business of IT® is increased business value. Most IS organizations devote only 50-60% of their time to deliverables that add significant value to their customer. It isn’t that IS isn’t busy; they just aren’t working on the highest value activities. When an IS organization learns to operate as customer-focused business unit, productivity improves to 80%, a dramatic jump.
This value gain is realized in three ways. First, by running IS like a business, organizations get more done. Second, by focusing on the products and services that create the most value for the enterprise, IS spends more time on the right activities. Third, with the IS organization focused on relationship management and problem solving, collaboration occurs. This alignment creates even more perceived productivity and throughput.
Running IS like a business yields other benefits. Relationships between the IS organization and its customers are transformed. Employees within IS are more motivated and satisfied. Also, the cost/value equation shifts towards value creation and the business begins to see additional ways where the IS organization can grow the enterprise. In some cases, budgets actually increase.
How will the outsourcing trend affect The Business of IT®?
Many enterprises explore outsourcing because their IS organizations are under-delivering. Poor IS productivity is often compounded by an inability to find, train, and develop qualified people. Seeking productivity improvements, enterprises turn to outsourcing. Unfortunately, many organizations that have outsourced some or all of IT are disappointed with the results – either the costs are too high or the service is disappointing.
The Business of IT® does not unilaterally accept or refute outsourcing as a value-adding tool. Outsourcing is just another tool in the toolbox; it is one form of sourcing that an IS organization can use to optimize operations.
Part of the Business of IT® is developing a strategy that specifies which IT services should be outsourced and which should remain internal to the enterprise. Those solutions which create competitive advantage for the enterprise should be closely guarded and invested in, while commodity technologies should be outsourced to free up financial and human capital to focus on delivering value.