Tags: Business, governance, intelligence, IT, spending
The dog days of 2001-2004 are finally behind us and IT spending is approaching post-Net Bubble, pre-9/11 levels (i.e. the sweet spot). However, the way money’s spent and approval of that spending has changed drastically. Free-wheeling CIOs are practically non-existent.
This slideshow from CIO Insight calls attention to a number of facts facing IT management in today’s business environment. Increasingly, CIOs (or more often, Directors of Information Technology) report not to the chief executive, but to the chief financial officer. The slideshow spells out one obvious aspect of this; the CIO, and by extension the IT organization are not privy to the formation of a company’s longterm vision.
A second, less obvious, but equally important aspect of this change in reporting hierarchy is this: Who’s writing the checks? By making the IT leader a direct report of the CFO, the company is sending a clear message to IT - “What have you done for me lately?” Whether its a request for a new server, the latest Windows OS, or hiring an additional developer, the IT leader must justify the expenditure and prove Return on Investment.
ROI is nothing new in the business world, but in my own personal experience at clients in multiple industries, it IS new for IT. Obviously, ROI for an enterprise resource planning application, a mainframe upgrade or replacement, or developing a new application is complex, with numerous factors to consider. But there’s a couple key points that can be boiled up into this:
1. IT leaders need to play the hand they’re given.
2. IT leaders need to clean up their house in order to prove to the rest of the organization that they’re as vital to the company’s success as the manufacturing, accounting, or service departments.
3. IT needs to prove ROI by leveraging what they have in their possession, which is arguably one of the company’s most important assets. Something so obvious, that its in IT’s very name and yet is often overlooked…
INFORMATION