Validating IT spend

Most enterprises today lack a rigorous and disciplined process for servicing their internal customers -- and demonstrating the value. Instead, delivery of services, such as responding to IT trouble tickets or managing building maintenance, consists of different business processes that cannot match value with a charge back.

For instance, companies don`t have essential information about serviced assets -- information like what they have, how it is used or what they are paying for. And this means they are probably unaware of any disposition opportunities that could lead to savings.

Visibility into the service delivery process is impossible with no system for managing the thousands of contracts, terms and obligations related to service. And without standardisation and a disciplined process, service delivery is expensive and limits employee productivity.

Are you utilising existing assets for new employees or buying new equipment? It`s not uncommon for companies to continually buy laptops for new hires when scores of them already exist across the organisation - and are going unused. Likewise, companies are often unaware of hundreds, even thousands of unused software licences and maintenance agreements, buying still more software on an ad hoc basis.

There is a general feeling in the IT industry that measuring effectiveness is simply a matter of qualifying the cost involved. How can companies save on hardware costs? How do they cut software licence fees? Can they validate their IT spend? These are questions that remain unanswered for most companies.

Companies need to take a closer look at what they are paying for. They still need to measure costs, but how? An IT service management solution allows them to do this accurately. The tool enables them to calculate expenditure accurately, not just for hardware and software but on a wider front, including manpower statistics. It can give detailed information on which staff is doing the work and how long it is taking them to solve particular problems. Work study experts who used to go around offices with clipboards are now a distant memory for most organisations; they have been replaced by computing tools at the service of the computing industry itself.

WebINTELLECT`s 3blx gives enterprises one single solution to manage the entire service lifecycle, so companies can continually drive out costs while improving service delivery to customers. With 3blx, companies standardise and automate service delivery across the organisation, easily create customised services, improve asset utilisation and performance within service delivery, and ensure that service both internal and external suppliers fully comply with service level agreements.

One should view IT effectiveness from a different angle, not solely from the perspective of the cash being spent on equipment and resources. It is more important to view it from the standpoint of providing good customer service. It may well be that by cutting costs, one cannot provide a good service or satisfying the customer`s requirements. The service which IT delivers to the business is not always the main thrust of IT effectiveness and efficiency - although it should be.

Even though most companies strive to be cost effective, this doesn`t necessarily mean they are efficient or effective. The business needs to know it is getting what it wants when it needs it, in a cost-effective manner. An IT solution might be more expensive, but could also be more cost-effective. Return on investment (ROI) is a common criteria when making IT investments, but that again tends to be an analysis of cold, hard numbers. ROI doesn`t always cover issues like customer satisfaction.

IT effectiveness is not as simple as saying: "The budget increase this year will be 0.2% less than our sector`s inflation, so we`re being efficient and effective." A far better yardstick is: "We are providing a better service to customers, availability has increased. It may have cost us slightly more but the business is happier."

I`m not making a case for unlimited IT spending but if it gives the business a competitive-edge, it`s worth investing a bit more in it.

IT is usually not regarded as a revenue generator but a drain on cash so there is a temptation to maintain a lean and mean machine. This can be valid but sometimes one needs to increase costs in order to improve service. The overall IT budget does not have to rise. By prioritising the business` requirements, one can focus the IT spending on the areas that will benefit the customer most. The available budget should be spent on items with the greatest positive impact.

IT has always been expected to deliver better performance with fewer people so IT directors are constantly under pressure. With software getting cleverer and hardware becoming faster and more powerful, chief executives demand these to achieve higher results with the same or fewer staff.

Self-service tools such as Web interfaces and knowledge bases can help trim costs by allowing staff to resolve some of their own problems and take some of the workload from the help-desk and others in the IT department. Systems, however, are getting more complex which involves additional costs such as staff training.

A starting point for IT effectiveness is better communication between IT and the business. IT doesn`t always understand the business needs. It`s a two-way process, and the business must involve IT management at an early stage, explaining what it wants and why. The business should divulge its plans. How much does it plan to grow next year? How many extra staff are likely to be recruited? What are the implications for computing services?

Something which IT thinks is important may not be that vital to the business on a day-to-day basis. Issues which IT believes are relatively unimportant may be a crucial part of the business process or lifecycle.

Following IT Infrastructure Library (ITIL) principles is important because they include emphasis on the importance of communication between IT and the business, and delivery of service rather than just hardware and software.

ITIL`s Adherence to BS15000 - the first global standard for IT Service Management - is also very useful. This proves that the IT department has the right processes and documentation in place, and is therefore more likely to be efficient and effective because it is following the right routines and staff are undertaking appropriate responsibilities. This can be another way of saving costs through eliminating duplication and promoting consistent best practice.

In addition to comprehending their costs, IT directors need to understand the overall business. Above all, they must make sure that the service their department provides matches what the business requires. It may not always be possible to give it precisely what it wants but through negotiation there can be a settlement which leaves everyone more or less satisfied and provides IT with an invaluable understanding of business priorities.

It can help if IT people have worked in other parts of the business. In some organisations the IT help-desk is staffed not only by technical experts but also by people who have different experience and skills. This can help promote internal communication and the smooth running of the wider organisation.

To know where you`re going, of course, you need to know where you are. What does the business really think of the IT department? How mature are the organisation`s processes compared with ITIL guidelines? An organisation can either perform its own IT `health check` or call in external experts for an independent assessment.

IT needs to provide a service, if it is not achieving this objective it is simply not being effective.