The way in which new IT tools such as the BlackBerry are adopted in corporate IT environments allows those of us who follow the alignment of IT with business value a glimpse into the varying management practices that are used by CIOs to get the best out of their investments.
The functionality of Research In Motion's hugely successful handheld is well understood of course. At a cost, it is a useful device for those with working patterns that involve them being away from the office without fixed internet access, and who have a demonstrable business need to have unwired access on the move, and to stay in constant touch with their email traffic.
Yet the hidden, dirty fact is that BlackBerries have often been issued on the basis of status rather than any in-depth analysis of business need or potential for productivity gains. That is, they are sometimes more of a fashion item or perk rather than an investment made with classical return-on-investment metrics in mind. Moreover, many organisations have no measures in place for assessing if mobile email is actually enhancing (or indeed hindering) overall productivity. This lack of clarity on how IT provision relates to business need is common to many IT services, extending well beyond mobile email and communications. The dilemma facing today's CIOs is between the pressure to manage and drive down costs while delivering increased business agility.
IT has achieved extraordinary reductions in unit costs through a combination of strong management and falling hardware costs. For example, in mainframe services, Compass has seen a reduction of 66 per cent in operating costs in the last five years, yet business demands have led to a 268 per cent growth in volumes over the same period. In storage, costs have come down 76 per cent but volumes have gone up a huge 379 per cent. Yet CIOs are still under pressure to deliver increased business value and operate at a competitive cost.
While mature, well-managed IT operations can reduce unit costs, the biggest contributor to growth in overall IT spend is runaway demand from the business for IT services. The emerging opportunity for IT managers is to move from a supply-management role to defining and managing business demand. Rather than merely transforming IT, the CIO is now in a position to help support the transformation of the business through IT.
This fusion of business and IT is a step change. It also reflects an acknowledgement that IT is no longer just a service provider but acts as a critical enabler of change and improved business performance. The best performing organisations differentiate between the type of performance they require from particular elements of their IT infrastructure and the nature of the business relationship required to deliver that performance. By understanding how the business need relates to IT provision, CIOs are specifying a segmented approach to provision and spend.
One approach to controlling the growth of IT demand is through application portfolio alignment, allowing priorities to be defined as follows.
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