Sidebar | The CIO is the CEO of IT . . .

and they need their own general ledger

Today's CIO should be considered the CEO of IT. And much like any company's CEO, who relies on the general ledger to judge the health of the business, the CIO requires their own unique brand of general ledger.

CEOs have financial systems in place that contain a general ledger, which itself contains a number sub-ledgers, fixed assets or receivables, for example. Further, CEOs regularly look at profit and loss (P&L) statements and balance sheets, and with all this information, they're able to effectively judge the health of the business from a financial perspective. Simply said, all that provides a 360-degree view picture to CEOs of what's going on with the company financially.

How do CIOs get this kind of complete insight into their "company" called "IT"? What assets (network, desktops and servers) are being used for what? What processes (the governance, management and security) are utilized to provide excellent service? What about the people and what projects are they working on? What service level agreements (SLAs) are in place and how are we doing? And most importantly these days, how does all of this relate to the objectives of the business?

Moreover, all of that information needs to be related to one another, just as with the CEO's financial view, where an asset purchase transaction needs to be mapped to an accounts payable invoice, which ultimately gets connected to a cash disbursement to a vendor, for example. CIOs need the very same ability with their IT information: IT's assets, servers, networks, SLAs, people and project components need to be mapped to the product that IT provides, which today is considered to be the business service.

When CIOs can map all of that information, suddenly they can be directing their "business" not only based on infrastructure components (database, applications, help desk) but in the opposite direction (vertical instead of horizontal) as well. This view says: "Yes, I need the database, I need the SLA agreements, I need the people, I need the projects", but it's all being connected to the business service that is being provided to meet the business objectives that executives agreed upon. That ultimately means that CIOs have their own 360-degree view of that business service as it relates to their IT department's financial aspects, infrastructure aspects, people aspects and process aspects. Such a 360-degree view can help CIOs make better decisions, by judging them in light of the overall business objective relating to the business service.

So, the model that needs to be worked toward is a unified service model (USM) which can track, for example, that a server can be mapped to an operating system or that a backup storage device can be connected to the server. All of these components have relationships to one another, they're feeding data to one another and all of that data comes together at the business service level.

A configuration management database (the CMDB) is the application that actually stores all that data, the configuration items (the raw material of IT) and their relationships to one another and the business service. But it should also have the ability to contain the model language (the unified service model) in it as well. Let's call that USM the "chart of accounts of IT". Because in a typical general ledger the order of how the numerical balances appear is determined by the chart of accounts. More simply said: Just as a CEO's general ledger has business intelligence sitting on top of it (that is, the chart of accounts), the CMDB, as a CIO's own unique general ledger, has business intelligence on top of it as well.

Further, with the CMDB's stored data, CIOs have the pertinent information they need on all IT's people, processes, projects, Unix servers, desktops, laptops, SLAs. And because of the USM the CMDB can quite literally "understand" the relationship all of those components have to one another, which, in turn, culminates up to the business service.

This effectively makes the CMDB the general ledger of IT (with the USM being the chart of accounts), which, in turn, means the CIO is the CEO of IT.

For the CIO today tasked with making sure the IT strategy is aligned with the business strategy, being the CEO of IT is about as aligned as you can get.

- Helge Scheil

Click here for Part 2 of CXO Priorities | COMPLIANCE