How to Redefine the Business Value of IT in the Digital Space
By: Kaylie Gyarmathy on December 4, 2018
Many organizations have difficulty when it comes to assessing the business value of their IT infrastructure. Unless delivering IT services is the core function of the company, such as a managed service provider (MSP), it can be challenging to determine just how to measure the effectiveness and benefits that IT brings to the table.
As CIOs and IT managers assess their operations, there is an obvious temptation to view the process in a very compartmentalized fashion. What, for example, were the key initiatives for the IT department over a period of time? Did they meet those goals? Were deliverables produced on time and within budget?
While this “bookkeeping” approach to measuring IT value is undoubtedly important for evaluating the department itself, it also reduces IT to the status of an operating expense that’s disconnected from the rest of the business. At best, it introduces a status quo bias that views IT departments as something to be ignored unless they’re creating problems; at worst, it could lead decision makers to wonder if they could get the same results with a round or two of cuts to the IT budget.
Today’s IT is a Means to an End
Technology is crucial to most organizations today, but it often isn’t their core product or service. A manufacturing company doesn’t have a sprawling IT infrastructure because it’s in the machine to machine network business; they have that infrastructure in place because it helps them produce and ship their products more efficiently. Similarly, a healthcare company makes investments in its IT systems to facilitate better patient care, not just to have the sleekest software interface or smart devices.
Across most industries, then, IT infrastructure is a means to an end, not an abstract component that exists independent of a company’s core business model. Rather than trying to distill their IT operations into an objective metric that measures performance in a vacuum, CIOs must keep in mind how a successful IT department delivers business value by helping the company to improve its core operations.
IT as a Business Partner
A forward-thinking IT department can position itself more effectively by identifying areas where it can provide a clear business value. All too often, organizations think of IT only in terms of technical troubleshooting or systems implementation, but there are a variety of ways in which IT can play a critical role in delivering better products and services. Like an MSP, IT departments can function as a business partner focused on facilitating a broader mission.
Delivering innovative solutions to help the company reach new markets and customers, IT infrastructure has the potential to greatly increase revenue. Whether it’s upgrading existing online services, securing SLA uptime, or even optimizing a website to increase traffic and conversions, the opportunities for expanding revenue streams is significant. Those same innovations can also drive down costs throughout the organization by eliminating redundant and wasteful tasks.
The downstream benefits of these changes may not be reflected in the IT department’s performance metrics, but they can be transformative for a business. Every department within a company can benefit from IT initiatives to reduce costs and enhance productivity, such as adopting a cloud computing solution. Far more than a caretaker, proactive IT departments can work with stakeholders throughout an organization to identify opportunities to provide the support and resources people need to do their respective jobs more effectively.
With companies facing more competition and disruption than ever before, delivering a superior customer experience is fast becoming a key brand differentiator. An effective IT department has a prominent role to play in shaping the way a company sets itself apart from its competitors. By improving client satisfaction and making it easier to deliver services effectively, an innovative IT infrastructure can establish a clear sense of value to key decision makers within an organization.
Look at the Right Metrics
Organizations understandably want to make critical decisions based on available data. So while it’s important for IT departments to produce the conventional productivity and efficiency metrics that show how well they’re meeting expectations in regards to performance and budgeting, they should also find ways to tie their larger initiatives in with company performance.
For example, how much can the year’s revenue increase be attributed to the redesigned website that the IT team rolled out in the second quarter? What benefits resulted from the recent data center migration? Did productivity increase throughout the company after new software applications were installed on every computer? Did the streamlined sales and marketing portal lead to more conversions for those departments?
By identifying how IT performance drives business results throughout the organization, CIOs can create a much more accurate picture of the team’s overall business value. With technology playing such a critical role with companies across a broad array of industries, it’s more important than ever for them to find new methodologies that capture the true value of having a quality IT infrastructure.
About Kaylie Gyarmathy
As the Marketing Manager for vXchnge, Kaylie handles the coordination and logistics of tradeshows and events. She is responsible for social media marketing and brand promotion through various outlets. She enjoys developing new ways and events to capture the attention of the vXchnge audience.