A value focus for enterprise IT

30 Apr 2009 View Comments
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Andrew Parker

Recently, Forrester Research has been picking up signals of a shift in mindset among IT executives. For weeks after the credit crunch hit, most IT leaders welcomed “survive the recession” advice. But, after months of firefighting, downturn fatigue has set in. No one thinks our troubles are over, but apparently many IT leaders feel they have taken ­ or at least defined ­ the steps needed to support business stability in the short term. Now they want to refocus on more thoughtful topics.

Most senior IT leaders recognise that enterprise IT is in a period of sweeping change that does not simply reflect the economic crisis. As computing becomes ever more embedded in all aspects of business, the control of IT has moved out of the datacentre and into the hands of business leaders.

Further reading

Meanwhile, commodity IT has become more stable, for example through the adoption of infrastructure virtualisation, application rationalisation and the uptake of standardisation tools, such as service-oriented architecture. As IT leaders drive these ongoing shifts, they must focus on business issues and business architecture as well as maintain operational management of the rationalised systems they control.

For a typical chief executive or chief financial officer, cost containment may have been the dominant issue for managing IT in 2008, but longer term it is the business-value impact of IT that matters. IT leaders know that in future they will be judged on value impact, based on business performance metrics, such as time to market with new products, or improved customer retention.

Forrester believes this value-oriented agenda for IT will increasingly reassert itself over the course of 2009. To stay ahead of this, IT leaders must focus on three agenda items:

Linking what IT does to business value. All IT staff need to understand that their success will be judged in business terms in future. More business and IT leaders will jointly agree objectives, metrics, and governance structures that couple IT activity and outputs to overall business goals.

US financial firm USAA has used technology to support its drive for improved customer relationships. As a result, it consistently scores best among leading US finance firms in Forrester’s annual consumer survey on customer-centric finance providers. It is this kind of IT value outcome that leaders will expect IT to facilitate.

IT leaders must drive value individually. The CIO and direct reports must engage with business leaders to identify and execute on areas of value delivery. Inside the IT group this means leading by example ­ for instance, by devoting time to business issues and prominently featuring business impact in internal communications. Outside IT, building personal networks across the wider business, and marketing IT activities to business leaders.

Focusing IT’s collaboration with others on value outcomes ­ for example, building a business-value focus into relationships with external suppliers. For example, coaching the vendor management team to focus on value-generating supplier contributions. Linking supplier governance and performance criteria to value outcomes will support external partners that contribute to overall business objectives.

These three lines of attack represent a vital aspect of the renewal and rebuilt momentum that IT leaders need to achieve with their teams during the coming six to 12 months.

Forrester’s thinking about Redefining IT’s Value For The Enterprise is the overarching theme of its European IT Forum in Berlin, 3-5 June 2009. For more information on this event please visit www.forrester.com/ITForumEMEA2009.

For complimentary research from Forrester, visit www.forrester.com/computinguk.

Andrew Parker is vice president for sourcing and vendor management at analyst Forrester Research

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