the business of it
TRANSCRIPT
The Business of ITLauren Riley
Business IT Maturity Model
Understanding IT Organizations• IT organizations provide services based on the skills of
their employees and the focus of their management• 14 Core Activities:
• Develop/Maintain Information Systems• Manage supplier relationships• Manage data, information, knowledge• Manage internet and network services• Manage human resources• Operate the data center• General Support• Plan for business discontinuities• Innovate current processes• Establish architecture platforms and standards• Promote enterprise security • Anticipate new technologies• Participate in setting and achieving strategic goals• Integrate social IT
What IT Does Not Do• Perform core business functions• Work Alone• IT cannot independently make decisions about selecting
all IT projects nor can it independently select a business strategy
Chief Information Officer
• Senior most executive in the business• Manages IT resources• Implies a strategic focus
IT Business Case• Business cases are tools used to back a proposal
for a new type of investment • Ex. UK Telephone Company
Objective Type
Doing New Things
Doing Things Better Stop Doing Things
Financial
Benefit: Inc. customer retentionMeasure: Reduction in cust. DefectionsBenefit owner: Telechannel Sales Manager
Benefit: Stop call-backs to cust. After failed service callsMeasure: # of call-backsBenefit Owner: Call Center Operations Manager
IT Business Case (Continued)Objective Type
Doing New Things
Doing Things Better
Stop Doing Things
Quantifiable
Benefit: Eliminate call waiting times over 2 minutesMeasure: # of calls waiting over 2 minutesBenefit Owner: Call Center Operations Manager
Measurable
Benefit: Call Center staff able to undertake sales callsMeasure: # of sales calls per staffBenefit Owner: Telechannel sales Manager
Benefit: Cust. Do not switch to competitorMeasure: # of defections to competitotsBenefit Owner: customer Accounts Manager
IT Business Case (Continued)Objective Type
Doing New Things
Doing Things Better
Stop Doing Things
Observable
Benefit: Call center motivated by sales trainingMeasure: Increased motivationBenefit Owner: Call Center Staff Manager
Benefit: Abililty to develop future svcs based on cust. dataMeasure: quantity/quality of customer profile dataBenefit Owner: New Services Development Manager
Benefit: Stop rude/upset customers due to service failureMeasure: Call center staff opinionBenefit Owner: Call Center Staff Manager
IT Funding and ROI• It Investment Portfolio• ROI can be difficult to measure and may take time
to realize
Balanced Scorecard• Focuses attention on the organization’s value
drivers (including financial performance)• Balanced Scorecards answer:• How do customers see us?• At what must we excel?• Can we continue to improve and create value?• How do we look to shareholders?
IT Funding Methods• Chargeback• IT costs are recovered by charging individuals,
departments, or business units based on actual usage and cost
• Allocation• Recovers costs on metrics other than usage such as
revenues, login accounts or # of employees (easy implementation)
• Corporate Budget• IT costs go to the bottom line and do not attempt to
allocate them towards a specific business unit (does not make units immediately responsible for the money they spend on their IT projects)
Total Cost of Ownership
• Looks beyond initial capital investments• Includes costs associated with technical support,
administration, training, system retirement• TCO helps to evaluate which infrastructure
components to choose and understand how costs occur