5 Paths to IT Business Value

Earlier this year, Constellation Research identified four personas of the next- generation CIO, a CIO charged to deliver business value, not just keep the systems running. The four personas are: Chief Infrastructure Officer, Chief Integration Officer, Chief Intelligence Officer, and Chief Innovation Officer. Each delivers value in its own way.

The researchers also identified the top technologies that would create business value going forward. Topping the list was mobile, followed by cloud and data analytics/big data.  Rounding out their top five list were unified communications/collaboration and software enablement.

A similar Gartner survey asked CFOs which areas of technology they would like to see more investment and effort.  The top CFO choices: information and financial analysis followed by information management and knowledge sharing.  These were not much different than what Constellation found.

This shouldn’t be surprising. “IT provides a new source of opportunities for significant cost efficiency and organizational effectiveness that every business should exploit and leverage,” says Harry Wallaesa, CEO, WGroup, an IT management consulting firm. He goes on to cite 5 paths CIOs and IT managers should follow in pursuit of business value from IT.

First up, Wallaesa notes, is the convergence of ITO and BPO.  Technology and business process, long closely associated, finally are coming together in fact. From a business standpoint this translates into the simplification and standardization of sourcing deals and deal structure.  Standardization of contract components reduces cost of negotiating the contract, fewer staff needed to run the services because of similar contract structures, and easier control and analysis of cost since the contracts are done in like fashion. The payback: lower cost and better control.

Next comes the commoditization of IT and business services.  In fact, IT should position itself as a valuable service on par with other business services such as marketing and finance. This also, Wallaesa adds, can result in standardization and lower cost. A potential downside of the commoditization, however, may be loss of control. If IT cannot retain control of what systems and IT processes are used and the users can acquire systems their own the result may be the higher cost and loss of standardization,” he warns. In addition, the fact that technology has become so accessible has another downside, he notes—business units may go directly to the market, bypassing IT and controls altogether.

Similarly, the consumerization of IT may be a cost and control concern for the CIO. BottomlineIT first covered it here over a year ago. As previously noted, workers are bringing in their own smartphones and tablets, often paying for it out of their own pocket and downloading apps as they see fit. If workers can buy and bring in whatever they want to perform their work there arise both cost and control issues. At a minimum, it drives up the cost of IT support and governance as well as raising potential compliance and security issues.  In addition, the CIO should be concerned if people are not using consistent data systems and sources with consistent tools, which can result in apples-to-oranges comparisons.

Big data and analytics, Wallaesa’s fourth path, has emerged as so important to the business that CEOs are asking about it. The need for analysis of external and internal data to support the company is central to the success of the organization from a C-level perspective. Most CEOs view this as a specific part of their value-add. The CIO, then, is charged with ensuring valid, verifiable data is available for analytics. But again, the race to big data analytics using widely available tools any worker can access may lead them to bypass IT’s validation and governance role.  The CIO wants to ensure that the data is used consistently and controlled from a security standpoint.  This will be a big challenge for the CIO.

The growing interest in data analytics, big data, and mobility are clear signs of the overall convergence of IT and business, Wallaesa’s fifth path to business value, and maybe the one with the biggest impact on the CIO. The CIO has long struggled to earn a place as a peer among C-level execs. Yet, for too long many businesses have kept IT at arm’s length. No longer; astute business managers now realize that proactive use of IT can advance critical business objectives in terms of revenue, growth, and other strategic metrics, not just system uptime. Overall, this is a good thing, Wallaesa observes, because the business is taking ownership and responsibility for the use of IT. The CIO’s life may never be the same.

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