Can IT deliver tangible results and value?

As a CIO you are always looking to add value to the business. You want to deliver that competitive edge which will help your company overtake the competition.

In the current “credit crunch” climate, however, it is difficult to make significant new purchases. You are under great pressure to “stretch out your current resources and make do.” Add to this the probability that anywhere from 50% to 80% of your budget is pre-allocated to maintenance and support and you find yourself between the proverbial rock and hard place.

My natural inclination is to suggest you consider introducing BPM technology as a way of adding value. That, of course, is difficult to justify when you consider the inventory of other projects your team is focused on delivering. Even if you do try to introduce a more process oriented approach as a way of adding value it is likely that you are either operating in a culture where process is not part of the DNA of the Enterprise or the Business is already fully engaged in a six sigma business process improvement programme of their own.

My experience demonstrates that if IT can act as a showcase to demonstrate the value and approach, the Business is more likely to buy in, as they will see a less risky and more immediate release of value from an iterative approach to BPM deployment. What better way to deliver and demonstrate tangible results and value than by addressing your own IT process improvement challenges?

About Peter Borner

Peter is an entrepreneur and successful business leader. Currently leading a consultancy firm specialising in technical diligence for M&A and advising global firms on IT consolidation and migration to consumption based costing through the use of Cloud Technologies.

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15 comments
Sandy Thielamay
Sandy Thielamay

Peter,

Please take a look at my blog.

www.kliosoft.com/blog

I would appreciate your feedback on the subject.

Sandy

Sandy Thielamay
Sandy Thielamay

Peter, I concur that business process management and automation is one of the few opportunities organizations have to stretch out current resources and make do during tough economic times. However, many BPM/BPA initiatives fail to deliver sufficient return on the investment within a desired window of time. As a result, they are often viewed with skepticism when considered as a means to address the business challenges inherent with a contracting economy. These challenges originate not only from the variables created by the current economic climate but also from the constants that carry over. For example, from the CIO's perspective here are some very relevant variables: During times of economic downturn IT budgets decrease while security threats increase. On the other hand business mandates, such as keeping the information assets secure, represent unyielding constants. At the point where the variables and constants intersect organizations have no choice but to look to technology to automate mission-critical business processes. It has been our experience that BPM/BPA initiatives can be successful when tackled at an operational level rather than a strategic level. Allow me to use my own company as an example: Managing security threats has always been a very manually intensive discipline. Technologies such as log correlation, intrusion detection and security event management can be very effective at identifying potential security incidents however it continues to be the responsibility of security engineers to manually investigate and validate these anomalies. KlioSoft picks up where these security technologies leave off by automating the rest of the threat resolution process. We have developed a very unique approach that mimics the mind of a veteran security expert in the automated investigation, validation and remediation of security threats. By focusing on a specific operational problem we are able to successfully bring a level of automation to a process that is currently being done manually. In doing so, we not only free up much needed resources but we also enable IT organizations to provide improved service levels in the form of enhanced threat protection to their constituents.

I'd like to set up a time for us to talk. What is your availability later this week?

Best Regards,
Sandy

Trevor Cherry
Trevor Cherry

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Trevor Cherry wrote:

Whether its credit crunch or business boom is immaterial. The key to IT delivering benefits to the business is the relationship between the CEO (or MD), CFO (or Finance Director) and the CIO (or IT Director/Manager). If this works well and there is mutual respect then IT will be empowered to benefit the business. The CEO and CFO will challenge the CIO to find ways to help the business overcoming strategic and operational issues. If IT succeed then the backing of senior management will enable IT to deliver further change, be it process or other, throughout the business.

If the CEO, CFO and CIO don't have a relationship built on mutual respect then the CIO should either resign or else accept the fact that the IT Department exists only for maintenance and support purposes.

My advice to all CIOs is to understand the CEO and CFO's business issues, and look for ways to cost effectively use technology to tackle these concerns.

This is one area were a TOP DOWN approach is essential.

Jayant Joshi
Jayant Joshi

messages-noreply@bounce.linkedin.com; on behalf of; Jayant Joshi [jayant@vsnl.com]

Jayant Joshi wrote:

Yes, IT can deliver tangible results & value, if you
- Have well Documented Requirements
- Budget & Resource Allocation ( internal & external)
- Best Implementation Methodology
- Change Management to Support
then IT can surely deliver tangible & intangible benefits to help improve business performance & customer satisfaction
Jayant

Guillermo Lopez Felipe
Guillermo Lopez Felipe

messages-noreply@bounce.linkedin.com; on behalf of; Guillermo Lopez Felipe [glopezf@gmail.com]

Guillermo Lopez Felipe wrote:

For me, the value is change mind for change business. If one enterprise looks your business as all-in-box, they will think that market changes need long-time IT changes, and it is short-time IT changes from BPM aproximation, and really it is demonstrable on easy way.

G

Allen Falcon
Allen Falcon

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Allen Falcon wrote:

Peter,

I disagree with your premise about the current economic times making it more difficult to fund critical initiatives.

In our experience, if we, in serving as the CIO, can demonstrate value, the funding will follow. Additionally, we find that these same economic conditions provide excellent leverage with vendors.

Regards,
Allen

Ed Daniel
Ed Daniel

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Ed Daniel wrote:

Hi Peter,

I thought I had an epiphany of sorts back in 2000 when I was researching workflow and messaging architectures... I pondered that a workflow could price innovation - if you take that and couple the concept with an article I quote extensively that beats the drum of "monitor, measure, improve" (see link).

There's perhaps now plenty beginning of evidence around of what I had been thinking.

The word 'agile' is nowhere near overkilled as 'align' though if one can see how to align IT for business needs (rather than consulting speak on tactics, goals or strategies) and ensure there is transparency and accountability for the lifecycle i.e. from test driven / continuous integration practices through to real-time and historical cpu/storage/bandwidth metrics that 'align' with the value chain it IS possible to present tangible results...

USE CASES:

Storage utilisation halved and capacity doubled impacts TCO
Bandwidth utilisation halved and throughput doubled impacts TCO/ROI

TIME IS MONEY:

Mean-times-to-resolve/repair/re-mediate demonstrate responsiveness of service and provide tangible evidence of service quality and improvement - you might have gathered the ITIL KPIs are a great place to start.

INTERNAL EFFICIENCIES

Best practices abound but it's looking at the domain and thinking what do we waste/squander resource on. See my thoughts on SOA acceleration by de-duping source code at Finextra blog (I blush here as 'tactics' appears a bit too quickly).

So, in closing while it might sound like I'm pushing 'me' throughout the answer what I hope to share with you is that I've been able to discover how to present tangible arguments through the practice of monitoring, measuring and where possible improving.

The degree of success you will achieve will depend on how well you understand the business and what you can measure that changes the 'game' ;-)

HTH

ed.

Links:
http://advice.cio.com/paul_wallis/it_exists_for_one_reason
http://www.webtrends.com/Resources/WhitepapersAndGuides.aspx
http://www.finextra.co.uk/community/fullblog.aspx?id=535

Josh Chernin
Josh Chernin

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Josh Chernin wrote:

IT can absolutely deliver tangible results and value. The economic environment may be a spending constraint, but otherwise it is irrelevant to your question.

Either way, you need to demonstrate ROI. I would suggest that if you are not already, start a series of baseline measurements that are germane to your business. They can be as simple as time required to enter an order, or average waiting time for a customer to be served. Actually, simpler is almost always better.

Sachin Khairnar
Sachin Khairnar

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Sachin Khairnar wrote:

Peter,
I'll answer your question from data governance and integrated data management perspective.
When IT has a limited budget and compares a cost-saving initiative like a shared service for integrated data management against mandated “must do” initiatives – there isn’t much of a contest about which ones will win. And as others have addressed, it has to be business need driven and enabler.
The amount of money that most enterprises spend on creating new capabilities (versus keeping the lights on) varies by industry and by company size, but according to some industry analysts, the investment portfolio is an average of 30% of the total annual IT expenditure. That is a lot of money, but the biggest challenge is that the budget is fragmented across multiple functional silos. In a simple scenario, if the total budget is $500M and it is divided into 100 directors/managers, everyone gets $5M although they might have needs and/or plans for $10M. In this case, if you ask any one of them to set aside $1M for data management initiatives like data governance or BICC they will laugh at you although they will recognize the value of creating consistent information from siloed data.
Here is where creativity can be applied by consolidating each such business need into a "market". Since everyone would need good information derived from single view of siloed data, one can get good understanding of demand in internal market. Granted you'll need Initial funds for human and infrastructure/software capital investment to support data governance and management efforts. But it is a self funding approach and is different than asking for increase in operational budget as the approach of consolidation into shared service followed by consistent intelligent information, reuse and efficiencies by economies of scale will result into savings and business value.
If we do our homework and show that the internal demand for integrated information and data assets from new projects is real and that it will be paid for by a series of incremental project surcharge/chargeback, in my experience it’s not too difficult to convince the IT finance and business executives on value of such initiatives and get capital investment. If we do it when IT/corporate budget is under-utilized then it becomes even less difficult as in credit crunch, there is enormous value in making decisions based on the information that is holistic and that executives trust!

Carl Booth
Carl Booth

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Carl Booth wrote:

The credit crunch doesn't affect the ability to deliver value to the enterprise, so long as you remain focussed on the core goal of IT enabling the business, so rightly expressed by Matt.

However, when budgets become constrained, you struggle to demonstrate new benefits from technology acquisition so you need to work smarter with what you already have ~ look for options to consolidate licensing, energy cost reductions, improve system efficiencies through virtualisation etc etc.

At the end of the day cost savings are always welcome by the CFO, particularly where IT is concerned, and you can always channel savings back into new investment when the business needs it.

Phil Lauro
Phil Lauro

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Phil Lauro wrote:

If CIOs actually knew a little bit about technology they would realize that without it there would not be any return on investment in the current business environment.

IT is like gas, if you want to drive anywhere you have to fill up the tank. If you don't you just stay in the same place. I am beginning to believe the CIO title is a sham.

Michael Segel
Michael Segel

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Michael Segel wrote:

I'm confused.
How is today's economy a change factor for today's CIO?

The CIO has always been on the hook for delivering tangible and cost savings since day one.

Outside of the "mom and pop" single family store/restaurant, no company can exist without some sort of technology. The bigger the company, the more important the IT department has become.

The CIO constantly has to justify the expenditures of his/her department and has to show the value that it brings to the company. If not a source of income, but as a source of savings.

There is nothing new here, except for a way to present BPM as a further way to get IT's control in to the different parts of the business.

If you're looking at trying to use IT Technology to reduce costs, then you are better off asking the individual business units what their pains are and attempting to see if you can find a technological solution that fits their needs, rather than trying to shove your way in by saying that the IT department is needed more now than ever.

Sorry, but I'm that guy who things that its better to ask if they can help than to try and sell a methodology down their throats.

Matt St. Onge
Matt St. Onge

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Matt St. Onge wrote:

Enterprise IT Organizations MUST align their initiatives and goals to best support the Business' goals - this is where IT truly adds value. IT is an enabler, a facilitator, and a crucial team member in any business initiative.

In alignment with real business goals and initiatives, IT along with the supported Business Units reduce costs and becomes part of the overall ROI.

True, technology is not free. Failing to leverage it properly is even more costly.

Geoff Feldman
Geoff Feldman

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Geoff Feldman wrote:

I agree with James on this. I find your proposal to be passive and empty though perhaps it is simply the use of a passive voice and the presumptive "you". IT does not drive the business, it serves it. At the same time the economys and solutions in a resource tight environment are obtained from an understanding of the work, the tasks and the methods for streamlining them. Nowhere do you address who or what only a managment buzzword absent any real substantive connection to practice.

James McGovern
James McGovern

messages-noreply@bounce.linkedin.com; on behalf of; James McGovern [james@architectbook.com]

James McGovern wrote:

Maybe your blog should consider the backgrounds of those ultimately responsible for delivering. The developer who worked at a company for 30 years and became CIO has a different value proposition than one who worked at a global consulting firm vs one who came from the business...