Cost center or business partner? How to deliver on the right choice.

Author:Nyman, Vic
Position:TECH STRATEGY
 
FREE EXCERPT

The attitude expressed by author John Updike, "Americans have been conditioned to respect newness, whatever it costs them," is one that has permeated the technology industry, especially in organizations that rely heavily on information technology. This predilection to spend for new technology has put IT executives between the proverbial "rock and a hard place."

On the one hand, these executives are expected to be visionaries, carrying the technology torch well beyond the next quarter, driving innovation that will position the company for growth. They're supposed to be able to provide more applications and services, deliver them in a quicker cycle, have them operate at better performance levels and do so with a fraction of the budget or staff they had five years ago.

On the other hand, they are also expected to maintain the status quo with business services, achieve "five 9's" availability (or 99.999, a longstanding IT goal) using distributed computing components, and somehow contain the upward growing cost pressures that every department faces.

This dichotomy of goals can drive one crazy, but there is a way to break it down to a simple question about a company's IT operations:

WANT TO BE VIEWED A COST CENTER OR A PARTNER TO THE BUSINESS?

While a few executives might actually want the simplicity of a charge-back cost center, forward thinking IT managers are trying to work more in concert with business leaders, broaden requirements gathering and deliver better performing, new applications quicker than before.

To do this, IT executives must break the deadlock between the ongoing expectation of delivering strategic innovations that drive business growth and the reality of managing a complex set of technologies, all of which are prone to high-visibility failures. The first step is to ensure the proper delivery of current services, getting their production systems under control. In other words, stop the daily firefights.

COMPLEXITY AND NEW OPS TEAM

When looking at the reality of today's financial IT operations teams, two percentages stand out:

* 84 percent--the percentage of organizations that typically have five or more systems per application. A BlueStripe IT executive survey revealed that 84 percent of all organizations average five or more (and 64 percent have seven or more) discrete technologies within each business application.

Considering the hundreds of applications typically in production at large financial organizations, we can see why...

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